Lords Sitting of 17 June 1999

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Ripon.): The LORD CHANCELLOR on the Woolsack.
Viscount Margesson—Took the Oath.

Salmon: Environment Agency's By-laws
Viscount Trenchard Viscount Trenchard asked Her Majesty's Government:
Why the Environment Agency's national by-laws require the release of all salmon caught by rod and line until 16th June whereas net fisheries are only so restricted until 1st June in any year.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue): My Lords, these by-laws are designed to reduce salmon mortality in both rod and net fisheries and are justified by the decline in numbers of early running salmon. The difference in dates referred to by the noble Viscount is intended to ensure that fish which are denied to the nets at the end of May are not caught and killed by anglers when they move into rivers early in June, bearing in mind that salmon tend to be particularly vulnerable to anglers just after they have entered the river.
Viscount Trenchard: My Lords, I thank the Minister for his Answer and must declare an interest as a director of Endsleigh Fishing Club Ltd, one of the principal riparian owners of the River Tamar. I would agree that fish which have just entered a river are particularly vulnerable to being caught by rod fishermen, but does the Minister agree that fish which are about to enter a river are even more vulnerable to being caught by net fishermen?
Does he also agree that, by introducing measures which may well be justified in principle but are discriminatory and unequal in application, he runs the risk of alienating the support of the rod fishermen whose commitment and financial support, which maintain and improve the quality of the salmon's environment, are crucial to the future of the species?
Lord Donoughue: No, my Lords, I do not accept that the new by-laws are discriminatory, certainly not against rod fishermen. After all, the restraints on the net fishermen are seemingly greater in that they prevent net fishing between the start of the season, usually March, to 1st June. The purpose of the by-laws is quite clear. We have been advised by the International Council on the Exploration of the Sea that our salmon stocks, and those in southern Europe, are now so low that they do not support replication of the species. Therefore, we have to take urgent action. We believe that this action
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will increase the number of spring salmon spawning in the spring by between one-third and one-half. That is our purpose.
As the noble Viscount will know, the by-laws allow rod fishermen to catch salmon during the period from the opening of the season to 16th June, but they are expected to release them.
Lord Moran: My Lords, first, I declare an interest as the owner of a beat on the upper Wye. Is the Minister aware that allowing the nets to fish from 1st June, which I believe was a last-minute concession, will, according to authoritative estimates of the Environment Agency, result in the killing of 3,000 fish in the first two weeks of June, a loss which in present circumstances we ought not to contemplate?
Is the Minister also aware that when as chairman of the Salmon and Trout Association I saw his colleague the Minister for Fisheries, Mr Elliot Morley, I told him that we supported the broad thrust of these measures, draconian though they are, but that we thought it very important that there should be absolute even-handedness with regard to the nets and the rods, and that consequently the nets should not be allowed to fish while the rods are subject to compulsory catch and release? Will the noble Lord consider with his colleagues whether next year and in following years the nets should not be allowed to fish until 16th June when rods are allowed to take salmon?
Lord Donoughue: My Lords, a number of concessions were made following widespread consultation—and that was one of them. It resulted in an increase in the number of salmon which would be caught. However, it is small compared with the expected benefit of the new rules. The noble Lord mentioned a figure of 3,000, but we are talking of a stock of about 500,000. We shall of course continue to look at the situation. The new by-laws are for 10 years, but we shall review them after five years. Our view is that we have been even handed in the way I explained to the noble Viscount, Lord Trenchard.
Viscount Thurso: My Lords, first, is the Minister aware of the advice given to the Scottish Office by Professor Shearer that fish caught and released are more susceptible to terminal disease and therefore pass that disease to other fish? Secondly, does he agree that most advice now indicates that it is degradation of rivers and habitat which has caused the decline in salmon stocks and that that has been caused largely by intensive farming and forestry, and that the same riparian owners who now complain were the beneficiaries of those activities?
Lord Donoughue: My Lords, as regards riparian owners, I refer to the Question. The noble Viscount, Lord Trenchard, is related to the Tamar scheme, which I have visited. I should like to commend that magnificent scheme of co-operation between the various authorities and recommend that it be applied to other rivers. As regards disease in released fish, we are aware that there are disadvantages in allowing fish to be caught and then

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released. However, we still believe that the by-laws we have introduced will have the major benefit of resulting in a significant increase in the number of spring salmon spawning of between one-third and one-half. As regards salmon stocks, it is estimated that in the 1970s some 1·5 million salmon returned from the seas to our rivers. That figure is now only half a million. As regards the salmon catch, 20 years ago it was 25,000 a year; it is now below 5,000. Therefore, we believe that there is an urgent need for action—and we believe that we have taken it.
Lord Pearson of Rannoch: My Lords, of the total number of salmon caught, can the Minister tell the House what proportion is caught by nets and what proportion is caught by rods in the rivers?
Lord Donoughue: My Lords, I cannot give the noble Lord those numbers, but I shall certainly write to him with them—in so far as we can estimate them.
Baroness Byford: My Lords, bearing in mind the dwindling of the stocks of salmon, is not the Minister concerned that the Government have cut by £1.5 million the funding going to the Environment Agency, which would have been used on work to enhance the stocks?
Lord Donoughue: My Lords, it is true that under the financial settlement there were cuts in the fishing area and cuts allocated to the Environment Agency. However, I should point out that those cuts will take place in two to three years' time. We have given the agency an extra £0.5 million to deal with fish matters.
The Earl of Perth: My Lords, I declare an interest in that I have a beat on the Tay. I support what is proposed in general. However, I believe that it is unreasonable that the nets should have an advantage of 3,000 fish over and above what can be caught generally. I hope very much that in the next by-laws consideration will be given to ensuring that the rods and nets are equal from the beginning.
Lord Donoughue: My Lords, I thank the noble Earl for his support. I assure him that we shall undertake a review in five years' time.

Lamb Production: Meat Hygiene Service Instruction
3.10 p.m.
Lord Stanley of Alderley Lord Stanley of Alderley asked Her Majesty's Government:
Whether the Meat Hygiene Service's instruction that the head and ears of slaughtered lambs should be cut off and discarded prior to grading and inspection will discourage efficient lamb production and traceability.
Lord Donoughue: My Lords, the whole head of a sheep, including the ears, is removed and discarded
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immediately after slaughter to meet longstanding statutory requirements in respect of both fresh meat hygiene and specified risk material controls. However, effective means are available to enable sheep carcasses to be traced through the abattoir, usually on a batch basis, so removal of the head should have no effect on efficient lamb production or traceability.
Lord Stanley of Alderley: My Lords, I acknowledge the effort the noble Lord has put in to try to bring the agricultural market into the 20th century. However, is he suggesting by his Answer that I should personally follow my lambs from the time they lose their heads, in and out, round about the slaughter line until they get to the grading table? In which case, can he assure me that having outwitted the meat hygiene inspector, I will not be caught by the safety inspector? Will the Minister try to explain to his noble friends that, despite their pathological hatred of the hereditary principle, it is a necessary evil in improving my lamb carcasses?
Lord Donoughue: My Lords, I appreciate the links made by the noble Lord. I assure him that the last thing I would wish—I have not consulted my noble friends—would be for him to be "topped" in some remote Welsh abattoir. However, I would seriously point out that any noble Lord who comes to this House and puts down an agricultural question on Ascot Gold Cup day is putting his head on the block.
In response to his Question, there are no rules that require individual identification of sheep. We have rules that require temporary identification in movement. The rules require individual identification for export. In the abattoir there is no requirement for identification relating to the head. The carcasses, or the previous animals, can be identified in relation to batches. However, we do not have a requirement for individual identification. I accept that those such as the noble Lord, who are concerned with the breeding of sheep, would find that helpful.
The Earl of Caithness: My Lords, the noble Lord referred to "remote abattoirs". Is not that exactly the problem? All the local abattoirs to which the farmer could go and which would solve the problem referred to by my noble friend Lord Stanley are being closed down through excessive costs and bureaucracy. What is the noble Lord doing to ensure that they can stay open for the local farmers?
Lord Donoughue: My Lords, this most important question is currently of concern to us. As the noble Lord will know, we announced a review of the impact of charges on abattoirs. We have delayed the proposals to introduce charges for SRM controls at a cost to the Government of some £20 million. We are still considering an increase in the meat hygiene service charges. We wish the maximum number of abattoirs and small abattoirs to continue. It is a free market. This matter is for the industry. If there is an over-supply, some will disappear. We believe that small abattoirs in the remote areas such as those referred to by the noble Lord serve a very important purpose to the rural community and local producers.
Baroness Strange: My Lords, Is the Minister aware that we used to feed our dogs on sheeps heads, which were a valuable nutrient, and that we cannot now do so? The last time my husband went into a butcher's shop to buy a sheep's head, he said, "Have you got a sheep's head?" The butcher said, "No, it's just the way I part my hair".
A Noble Lord: Follow that!
Lord Donoughue: My Lords, I enjoyed that but I shall not attempt to match it, just as I have never seriously attempted to part my hair. For the record, perhaps I may point out that the exclusion of sheep's heads was introduced under the order of the previous government as a result of SEAC advice on the possible danger of BSE. It is a precautionary principle.
Viscount Montgomery of Alamein: My Lords, as somebody who has no hair and no problem in that connection, perhaps I may ask a question of my noble friend. Brains used to be a delicacy in restaurants. Can he say whether calves' brains are still allowed to be eaten, and, if not, why not?
Lord Donoughue: My Lords, the exclusion of various offals has been the result of scientific advice of where there is a possible danger of disease. We have not excluded anything that has not been the subject of scientific advice.
Baroness Mallalieu: My Lords, is the Minister aware that for those who keep livestock, and particularly those who keep cattle, torn ears and missing tags are an everyday feature? Can he tell us what, if anything, the Ministry is doing to try to devise some rather more up-to-date and less primitive methods, such as micro-chipping? That could be applied cheaply, would be tamper-proof and would not lead to the stress caused by the present system.
Lord Donoughue: My Lords, I thank my noble friend. We are very aware of the disadvantages of tagging and of the technical advantages of micro-chips. However, given the price of lambs, since the chips would cost £3 to £4, we believe that is an unacceptable additional burden.
The Duke of Montrose: My Lords, can the Minister clarify the long-term hygiene regulation about the removal of sheep's heads? It seems to me that it was not so very long ago that it was introduced mainly on the basis of an EEC regulation.
Lord Donoughue: My Lords, there was a regulation in relation to meat hygiene. But we, or the previous government, acted on the basis of scientific advice and introduced the 1996 regulation for the removal of sheep's heads in relation to sheep's heads being a specified risk material. That will be in force as long as there is that threat to health. We all look forward to the time when that threat is lifted.

Members of Parliament: Voting Rights
3.18 p.m.
Lord Ellenborough Lord Ellenborough asked Her Majesty's Government:
Whether they propose to restrict the voting rights of Members of Parliament for Scottish constituencies in the Westminster Parliament in relation to matters affecting England.
The Minister of State, Home Office (Lord Williams of Mostyn): No, my Lords. Members of Parliament representing Scottish constituencies will continue to enjoy their current voting rights.
Lord Ellenborough: My Lords, I can hardly thank the Minister for that Answer. Are the Government not concerned that the recent, somewhat lengthy and voluble report, with the grandiose title, Procedural Consequences of Devolution, totally ignored what has now become known as the "English Question" and produced absolutely no proposals to allow English MPs to vote on English matters? Cannot the Government by now wake up and realise the potential dangers to the United Kingdom? Burying their heads in the devolution sand causes resentment to the English and undermines England's very identity as a nation, not least with the Government's insulting proposals to fragment England into artificial regions.
Lord Williams of Mostyn: My Lords, English MI's will of course continue to be able to vote on English matters. The devolution agenda in no way attacks, impugns or derogates from the English identity. Indeed, it may assist the pride that Scots people rightly have in their national identity and undoubtedly is likely to do so in Wales. This is part of a constitutional change which I believe, as it develops, will have increasing support in every part of the United Kingdom.
Lord Cope of Berkeley: My Lords, with regard to constitutional change, I see from Hansard that some Answers to Questions in Parliament are now being refused on the ground that they cover matters devolved to Scotland, in spite of the fact that this Parliament remains ultimately responsible and the Government are apparently going to propose legislation to this Parliament covering some matters otherwise devolved to Scotland. On what criteria, therefore, are Ministers refusing to answer Questions?
Lord Williams of Mostyn: My Lords, I am not sure it is Ministers who decide to refuse; I believe it is a question for the House authorities as to whether the Questions are appropriately put. If I am wrong about that, the principle is perfectly well established that matters which have been devolved by the decision of this House as well as by the decision of another place. either in the context of Wales or of England, are properly to be answered by Ministers in the Scottish Parliament, in due time the Northern Ireland Assembly, or the Assembly in Cardiff.
Lord Monkswell: My Lords, is my noble friend aware of any case of Conservative Peers, during the

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existence of the Stormont Parliament, complaining about Members of Parliament from Northern Ireland voting on English affairs?
Lord Williams of Mostyn: My Lords, I am not aware of any such complaint. None has ever been drawn to my attention. I believe it was my noble friend Lord Sewel who said that the answer to the West Lothian question might be similar to that given to the West Belfast question, to which my noble friend Lord Monkswell is referring.
Lord Monson: My Lords, does not the noble Lord, Lord Williams, agree, first, that Northern Ireland under the Stormont Parliament had only 70 per cent of the seats to which it would otherwise have been entitled, which would give the Scots 39 or 40 seats at Westminster and not the number they now have? Secondly, if the MSPs were to vote to ban hunting in Scotland, as has been forecast, without the English or Welsh having any say in the matter, would it not be intolerable for Scottish MPs at Westminster then to be able to vote to ban hunting in England and Wales?
Lord Williams of Mostyn: My Lords, the figures put by the noble Lord, Lord Monson, do not go to the principle. I understood the Question of the noble Lord, Lord Ellenborough, and his supplementary, to be based on principle. So whether Northern Ireland Members comprised 70 per cent, 100 per cent or 50 per cent does not go to the point. I do not know whether hunting will be banned by the Scottish Parliament. The noble Lord is quite right that it is within its legislative competence. The fact is that we have come to a different constitutional settlement in the context of devolution. The Scottish people voted very substantially in favour of it. The Welsh people also voted in favour of it.
Earl Ferrers: My Lords, can the noble Lord explain, in his enthusiasm for devolution, the logic which permits Scots MPs to vote on English matters when the same English MPs cannot vote on some of the Scottish matters?
Lord Williams of Mostyn: My Lords, I am an enthusiast for devolution. I believe that if one takes a courageous breath and sees the consequences of over-centralisation, which was remarked upon by many Scottish Peers in this House as well as by many Welsh Peers, one will realise that that is the way ahead. I cannot pretend that any constitutional settlement will be of perfect intellectual symmetry, in the same way as I am unable to find any perfect intellectual symmetry about the continuation of the hereditary peerage.
Lord Stoddart of Swindon: My Lords, as someone who was born in the Rhondda Valley, and is therefore Welsh, can my noble friend say, if it is right that Scottishness should be represented through a Scottish Parliament and Welshness through a Welsh Assembly, why Englishness should not be represented through an English Parliament? Should we not put that to the English people by way of a referendum?
Lord Williams of Mostyn: My Lords, I have not detected any enormous movement of public opinion in favour of an English Parliament. The present Leader of the Conservative Party floated it as a question, but he never offered the answer and he does not seem to be asking the question any more. It is only right that the interests of Rhondda émigrés should be properly looked after and I believe that they are being properly and scrupulously attended to.
Baroness Oppenheim-Barnes: My Lords, can the Minister give an undertaking that no legislation which has passed all its stages in your Lordships' House and the other place can then be delayed by any requirement of the Scottish or Welsh Parliaments, and that this House and the other place are sovereign in that respect?
Lord Williams of Mostyn: My Lords, I am happy to reassure the noble Baroness that the sovereignty of this Parliament remains intact. That has been said on many occasions. As I answered in response to the Question from the noble Lord, Lord Roberts of Conwy, a few days ago, administrative arrangements will be required to be made by virtue of memorandums of understanding and concordats, all of which were abundantly discussed when the Government of Wales Bill and the Scotland Bill were going through.

Disabled People: Financial Support
3.26 p.m.
Lord Rotherwick Lord Rotherwick asked Her Majesty's Government:
Whether, in the light of current proposals to cut support for disabled people, they will consider switching resources from the national changeover plan to spending on disabled people.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, the Government have made absolutely clear our commitment to improving the opportunities and support for disabled people. We are spending now over £24 billion on disability benefits and over this Parliament we expect to spend £2 billion more. Small targeted investment on changeover planning is essential to give the UK a real practical choice to join the single currency should that be in the national interest.
Lord Rotherwick: My Lords, I thank the noble Baroness for answering the Question, although not for the Answer. Is the Minister aware that in another place today the Government are pressing Clause 121 of the Finance Bill, which gives the Inland Revenue, Customs and Excise and other government agencies the right to spend tens of millions of pounds before a referendum on the national changeover plan for the euro? Bearing that in mind, can the Minister explain why the social security department uses disciplines of budgets which have resulted in the loss of benefits to some people and the abolition of the severe disability allowance to others

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while the Treasury appears not to use those disciplines when throwing tens of millions of pounds at the national changeover plan?
Baroness Hollis of Heigham: My Lords, I do not accept either part of the noble Lord's question. What the Prime Minister said, repeated in a Statement by my noble friend Lady Jay on 23rd February, was that, if we wish to have the option of joining, we must prepare. If we do not prepare, the British people do not have a choice. As to the implication for DSS budgets, because the DSS accounts for one-third of the Government's expenditure one would expect some proportion of those national changeover plan moneys to fall on the DSS. In the current year—1999–2000—the DSS is expecting to spend £1.5 million out of its budget of £100 billion.
Lord Ashley of Stoke: My Lords, is my noble friend aware that, despite our differences on some aspects of the welfare reform Bill, the Government deserve great credit for the many constructive and positive actions they are taking to help millions of disabled people? Is she aware also that there is genuine misunderstanding about some of the figures involved in the gains and the losses for those who are disabled? For example, the Secretary of State said on 23rd February this year that we are spending £1 billion more on disability benefits this Parliament. Yet on 20th May he said that this year we have spent £25 billion on benefits for the sick and disabled and that the sum will increase by £2 billion in this Parliament.
I am sure that there are good reasons for the discrepancy. However, can the Government draw up a balance sheet which would help the House enormously to understand the gains and losses to disabled people?
Baroness Hollis of Heigham: My Lords, I should be delighted to provide any statistics or information that my noble friend Lord Ashley or, indeed, any noble Lord wishes to have on disability issues. It is clear that the Government's budget for disability is going up from £24 billion to £26 billion in the course of this Parliament. That is because, first, we are increasing the opportunities for disabled people to return to work, and secondly, giving extra help to children and young people, for example, through proposals for disability living allowance and mobility allowance for young children and through extra money from working families' tax credit to young children. Thirdly, we are spending money on the poorest disabled people, such as those with low incomes, by ensuring a minimum income of £75 a week—an additional £60 million of expenditure. So we are spending more money on disabled people over and beyond some of the demographic pressures that come, fortunately, with older people living longer and many of them drawing on disability benefits in their old age. As I said, I shall be delighted to share with my noble friend any information that he wishes to have.
Lord Higgins: My Lords, do not recent events, especially the result of the European elections and the resignation of various charitable bodies from the Social
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Security Advisory Committee, suggest that the Government have got their priorities wrong in both these areas? As far as concerns the national changeover plan, given the way in which things are developing, should we not at least also have a plan in anticipation of the fact that we may not join the euro? Further, as far as concerns the overall position on social security, although the Government have failed in their commitment to cut the total social security budget, they now appear to be reducing it by hitting particular groups of disabled people through the Bill now before the House which has been unanimously objected to in all parts of both Houses.
Baroness Hollis of Heigham: My Lords, I do not accept any of the noble Lord's points. First, the fact that we are not in the euro, and may not be. is the current situation. Therefore, in that sense, there is always the option of no change. But, equally, there will be no option of change unless we start preparing now. We want the people of this country to decide and not to have their choice inhibited by the fact that we cannot deliver because we have not invested in the work, computers, leaflets, staff training, and so on, to make such a move possible and smooth were we to go down that path.
Secondly, the noble Lord says that we have failed on a manifesto commitment to cut social security spending. What we said—and what we have delivered—is that we would cut the rate of growth. Under the previous administration the rate of growth of the social security budget was 4 per cent over the previous Parliament. Under this Administration the rate of growth is 2 per cent. The reason for that growth is primarily, and fortunately, because of the number of elderly people living longer. We have cut expenditure on the issues where the previous administration failed; namely, we have brought people back into work, unemployment figures are at their lowest ever, and more people are now in work than ever before. As a result, that frees resources to help those who cannot work and who need our support.

Immigration and Asylum Bill
3.33 p.m.
Brought from the Commons; read a first time, and to be printed.

Welfare Reform and Pensions Bill
Baroness Hollis of Heigham Baroness Hollis of Heigham My Lords, I beg to move the Motion standing in my name of the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Welfare Reform and Pensions Bill has been committed that they consider the Bill in the following order:

Clauses 1 to 6,

Schedule 1,

Clauses 7 to 18,

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Schedule 2,

Clause 19,

Schedule 3,

Clauses 20 and 21,

Schedule 4,

Clauses 22 to 31,

Schedule 5,

Clauses 32 to 46,

Schedule 6,

Clauses 47 to 54,

Schedule 7,

Clauses 55 to 65,

Schedule 8,

Clauses 66 to 69,

Schedules 9 and 10,

Clauses 70 to 76,

Schedule 11,

Clauses 77 to 79,

Schedule 12,

Clauses 80 to 82,

Schedule 13,

Clauses 83 to 85.—(Baroness Hollis of Heigham.)

On Question, Motion agreed to.

Freedom of Information: Select Committee
The Chairman of Committees (Lord Boston of Faversham): My Lords, I beg to move the Motion standing in my name on the Order Paper
Moved, That a Select Committee be appointed to report on the draft Freedom of Information Bill published in the Command Paper entitled Freedom of Information: consultation on draft legislation on 24th May 1999 (Cm 4355);
That, as proposed by the Committee of Selection, the following Lords be named of the Committee:

L. Archer of Sandwell (Chairman),

L. Bach,

E. Caithness,

V. Colville of Culross,

B. Crawley,

L. Dean of Harptree,

L. Freeman,

L. Goodhart,

L. Lucas,

L. McNally,

L. Morris of Castle Morris;

That the Committee have leave to report from time to time;
That the Committee have power to appoint specialist advisers;
That the Committee have power to adjourn from place to place;
That the minutes of evidence taken before the Committee from time to time shall if the Committee think fit be printed and delivered out;
That the Committee shall report by 29th July 1999; and
That the Committee do meet on Tuesday 22nd June at 10 a.m. in Committee Room 4.—(The Chairman of Committees.)
Lord Campbell of Alloway: My Lords, as a matter of practicality, this is a frightfully important subject. The Select Committee meets on 22nd June and the Motion says that it, "shall report by 29th July". If the committee has to take evidence from outside interests, which it will have to do in order to do its job properly, how on earth can this be done in that time? Moreover, if members of that committee do not do it, what will happen to them? Will they be taken off and put into the Tower, or what? It seems totally impracticable to me.
The Chairman of Committees: My Lords, I understand that the time limit proposed to your Lordships is comparable with that which was set on the Financial Services and Markets Bill. Perhaps I may assure the noble Lord, Lord Campbell of Alloway, further and say that I also understand that the proposed chairman of this committee, if your Lordships decide to set it up now, is happy with the suggested time limit. I commend the Motion to the House.
On Question, Motion agreed to.

Health Bill [H.L.]
3.36 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hayman): My Lords, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(Baroness Hayman.)
On Question, Motion agreed to.

Health Bill [H.L.]
  COMMONS AMENDMENTS
  [The page and line refer to Bill 77 as first printed for the Commons]

  COMMONS AMENDMENT
  1 Clause 2, page 2, leave out lines 8 to 11.
  Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1. We had extensive debates on the role of the primary care group in the process of establishing primary care trusts when the Health Bill was previously considered in your Lordships' House. Reflecting on what was said then, I am convinced that there is in fact little difference on this issue between the underlying aim of the Government and that of those on the Opposition Benches.
  I have read the official record again, and I agree with much of what was said by the noble Earl, Lord Howe. We share a common objective that the establishment process should be locally owned and driven. We also agree that the voice of the PCGs is crucially important.

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  My ministerial colleagues and I considered these debates very carefully and our decision to table an amendment in another place was not taken lightly. In our considerations, from whatever perspective we approached the matter, we always came back to the fundamental point of principle—whether or not the views of one local stakeholder, however important, could mean that the views of others are automatically set on one side or ignored. That would be the effect of the amendment that was made in your Lordships' House. It would give the primary care group a statutory right of veto over the views of all other local stakeholders. I believe that that would demean the importance of the views of partners in the local NHS, such as community trusts and their staff, and indeed patient groups.
  We also believe that it would be unwise to set down such a rigid rule on the face of the Bill. Complex and difficult situations may well arise which require careful and sensitive handling. I recall that the noble Lord, Lord Clement-Jones, recognised on Report, in the form of what was then Amendment No. 5, that there might indeed be exceptional circumstances which needed to be considered. We are aware, for example, that in some places proposals are under discussion to establish PCTs which cover the area currently covered by several PCGs. While it remains to be seen whether such large PCTs could effectively fulfil the functions that we have set out for them, we would not wish to prevent such proposals from being considered at this early stage.
  It is equally possible that such a proposal could have the support of all but one PCG—and perhaps be opposed by a very narrow majority of members of that individual PCG—and enjoy widespread support among clinicians and others in the local area. While very great care and sensitivity would be needed in deciding how to proceed in such circumstances, it is clear that a statutory PCG veto could mean that a very small number of people could potentially block an extremely beneficial development. It is precisely because we cannot fully anticipate all the possible scenarios that could develop, such as this one, that the Government brought forward this amendment in another place.
  I would like to make it clear, however, that the Government attach the greatest importance to the successful establishment of primary care trusts. They offer unparalleled opportunities for local stakeholders—including family doctors, nurses, midwives, health visitors, the professions allied to medicine and social services—to shape services to provide better healthcare and to improve health. They will bring significant benefits to patients, clinicians and the local NHS as a whole. But a PCT will work only if it builds on local enthusiasm and local commitment, in particular of those working at the front line of patient care: GPs, nurses, midwives and other health and social care professions.
  For this reason the Government have no intention whatsoever of establishing primary care trusts without broad local support from the very professions which will form them and give them the energy they will need to succeed. We believe that a voluntary approach is the only sensible way to proceed. I can be quite clear to the House today that we do not want, and are not
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  encouraging, a headlong rush to primary care trust status. Instead we are looking for measured and evolutionary change. We want progression to trust status to be locally driven at a pace that suits local circumstances.
  That desire is reflected in the Government's proposals for the establishment process. We have deliberately left it to the local NHS—the PCG board, GPs, nurses, other professions, a community trust or a health authority—to bring forward a proposal to develop a primary care trust. If a proposal has local NHS support—from a PCG or NHS trust providing community services—the health authority will be required to enter into a formal local consultation. This consultation process will be particularly important to hear the views of the wider community and local patients in particular.
  Once the local consultation process is complete, the health authority will submit the proposal to the Secretary of State for his consideration. I can assure the House that we intend that the Secretary of State will not simply be sent a recommendation. We intend that regulations will require all the responses to the consultation to be attached to the recommendation so that the Secretary of State has the benefit not only of the views of the local health authority, but also those of consultees, and at first hand. The views of primary care groups. local GPs and other professions, as well as those of the wider community and the NHS locally, will be key considerations for the Secretary of State in deciding whether to establish a primary care trust.
  I go further and say that the support of the relevant primary care group will he a critical factor in our consideration. The Government intend to establish primary care trusts in a way that is sensitive to local views, and primary care groups are key to that. For the reasons I have given and in the light of these assurances I hope that noble Lords will feel able to support the Government in this amendment.
  Moved, That the House do agree with the Commons in their Amendment No. 1.—(Baroness Hayman.)
  3.45 p.m.
  Earl Howe: My Lords, the House will be grateful to the noble Baroness for the clear way in which she has spoken to this important amendment. I am reassured that she feels there is little that separates us on this issue. If I do not misread her, I think that the Minister has modified her position somewhat from that which she adopted on the previous occasion when this issue was debated in your Lordships' House. In particular she seemed to me to have moved away from the guarded form of words that she used several times both in Committee and on Report. She said then that a decision to establish a primary care trust would,
  "take into account all local views".
  She also said that it was the Government's "assumption" that the support of the primary care group would be required by the Secretary of State before he approved a primary care trust.
  Those phrases did not seem to me to reflect one of the essential requirements in any transition to PCT status; namely, the need to have the prior, wholehearted

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  backing of those who are most affected by such a change. The previous Minister, Mr. Milburn, spoke about putting doctors and nurses "in the driving seat". At the time I thought I knew what that meant, but in the light of the Government's antipathy to your Lordships' amendment I realised that I did not. However, hearing the noble Baroness speak in the way she has today, in terms—if I do not misquote her—that referred to measured, evolutionary change, locally driven, I am considerably reassured.
  One of the arguments we debated at earlier stages was that it is pointless going out to wide consultation on a proposal to move to trust status if the health professionals themselves do not support it. But the important point is that the degree of support among health professionals should be established. Can the Minister say in what way this will be done? Would it, for example, make sense to involve the local medical committee in organising some kind of a ballot?
  I agree with the noble Baroness that when a PCT is established it is in all our interests that it should be a success. Without broad support among GPs and the key professional stakeholders, the chances are that it will not be. But the Secretary of State should, I suggest, be looking for other indicators as well. He needs to ensure that there is competent management in place, with tight financial management and proper accountability. Can the Minister be a little more specific about the criteria that the Secretary of State will adhere to when making his decision? If there is a dissenting group of health professionals among those in the proposed PCT, will he ensure that that fact is made publicly available?
  I have a further concern which the Minister may be able to help me with. We understand that the first wave of PCTs are expected to be in place by April 2000. In another place the Minister made it clear that the necessary orders to establish such PCTs would need to be finalised by about the beginning of December. Prior to that the Government are committed to consulting on the draft PCT orders. If that consultation follows the normal pattern it will be a three-month process. But prior to that, regulations will need to be laid, and they, too, will be subject to consultation, again over some three months. Working hack from the early December deadline—when the PCT orders are to be laid—it is clear that the draft regulations will need to be ready shortly indeed. Are those draft regulations ready now and, if they are, can the noble Baroness say why neither your Lordships nor another place has had the benefit of seeing them yet? If we were able to see them, I have little doubt that they would inform our debates considerably. Can the Minister say whether the timetable I have outlined is roughly right, or have I got it wrong?
  I thank the Minister for the added reassurances she has been able to give. They are important reassurances. It may be wishful thinking on my part, but in the light of what she has said I am inclined to conclude that we can be slightly more confident than once we were of the procedural safeguards that will be put in place. If the
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  Minister is able to answer my questions satisfactorily I would not propose to recommend to your Lordships that the House's earlier amendment should be insisted upon.
  Lord Clement-Jones: My Lords, I thank the Minister for the comprehensive notes that we have had on the amendments that are before us today. The notes have made it much easier to understand the Bill's progress through the other place. I also thank the Minister for what I thought was a considerable degree of movement on this amendment in terms of the broad spirit in which the department suggests that consultation takes place on the progress from PCG status to PCT status. I refer in particular to the Minister's statements that there is no intention of establishing PCTs without broad local support; that there is no headlong rush to primary care trust status; and that the support of relevant primary care groups will be a critical factor. All those statements reassure us that the primary care groups will be an intimate and essential part of the process.
  Certain issues should be addressed as we look at the details of the consultation process. It is clear that professional groups still have questions that need to be answered. The noble Earl, Lord Howe, asked a number of questions which it would be useful to address at this stage. We did not vote for the amendment when it was before this House on the previous occasion. We felt that a spirit of consultation was in place. However, we welcome the additional "mile" that the Minister has gone today. The only question I ask, in addition to those asked by the noble Earl, Lord Howe, concerns the reporting of the outcome of the consultation. Will there be a transparent process which makes it clear what objections have occurred during that process? Will that be available for all to see?
  Baroness Hayman: My Lords, I am grateful for the welcome that has been given to my statement of the Government's position. I do not think that I have modified my position; I hope that I have expressed myself with more clarity than I did in our earlier deliberations. Perhaps that is because of the time of day at which we are debating these matters.
  I wish to respond to one or two of the detailed points that have been raised, particularly by the noble Earl, Lord Howe. He is absolutely right to say that the timetable for the regulations is very tight. We are currently working on them and, although they are not yet ready to go out to public consultation, we hope that it will not be too long before they do. We are very well aware that we have to meet a tight timetable, as the noble Earl so eloquently reminded us.
  As to the mechanisms that the Secretary of State will put in place to measure the extent of local support for a PCT proposal, he will direct health authorities to select those proposals to go to consultation under what will be new Sections 16C and 17. We have said that the directions will require health authorities to select a proposal if it has been made or endorsed by a PCG or NHS trust which provides community services locally. This approach allows anyone to generate proposals but ensures consultation on any proposal which is supported by at least one of the relevant local NHS bodies.

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  The noble Lord, Lord Clement-Jones, asked about consultation. We want the consultation to be open and transparent, with the aim of capturing the views of all local stakeholders. The regulations will therefore specify who conducts the consultation—that will be the health authority—and what essential information must be included in the consultation document so that key stakeholders have sufficient detail to allow them to take an informed view. The regulations will also set out who must be consulted. This will include local GPs, nurses and other health and social care professionals as well as the wider NHS and the local community, including professional and patient representative groups. Finally, these regulations will set out the form and contents of the report which the health authority must make to the Secretary of State on the consultation. As I said earlier, the report will include the responses received.
  It will then he for the Secretary of State to consider the responses to the consultation and make a judgment on whether the proposal should proceed. This is a role with which Ministers are very familiar from, for example, consultations on proposals for major service reconfigurations. In considering the results of the consultation, we will of course pay particular heed to the views of local health professionals, on whom the success of a PCT will ultimately depend, if it goes ahead.
  The noble Earl, Lord Howe, asked specifically whether the consultation regulations will require or allow for ballots. Ballots are certainly one means of testing opinion, but they are not the only way. We are not proposing to make them an absolute requirement. The Secretary of State's decision on whether or not to establish a primary care trust needs to take account of all local views. Any requirement for a ballot would need therefore to apply to other stakeholder groups and not just, for example, to GPs or nurses. But a proliferation of ballots for so many different interest groups is clearly impracticable and unattractive. It is difficult to see exactly which groups should or should not have a right to be balloted. In some cases, the constituency would he extremely difficult to define. I refer, for example, to whether it should comprise patients or practitioners, who would be working for some sessions in a new trust and working elsewhere in a community trust. Our approach will therefore allow for ballots but not make them mandatory.
  We are proposing consultation on proposals to establish PCTs, not on the draft establishment orders. These will be drafted only following the Secretary of State's consideration of the responses to the consultation.
  As to the question about the criteria against which PCTs will be assessed, the outline criteria against which my right honourable friend the Secretary of State will consider applications for primary care trust status were set out in the White Paper, The new NHS, and repeated in the paper, Primary Care Trusts—Establishing Better Services, which we issued in April. They are: broad local support for its establishment, including among those GPs affected; a clear vision of the service and health benefits which establishing a primary care trust will bring, backed by agreed standards and targets to
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  make progress towards them: making an effective contribution to the local health improvement programme and working well with partner organisations: effective arrangements for developing clinical standards, including at practice level; proper arrangements for monitoring activity, sound financial management and accountability; a clear assessment of the local impact of change and reconfiguration; access to good, high quality human resources support; and, for level 4 primary care trusts, that the proposals take proper account of the wide range of community health services, including those which are more specialised.
  I hope that that gives a sense of the comprehensiveness. We are currently working with the NHS, GP groups and other organisations on developing those criteria. We plan to issue guidance on the application, consultation and establishment process within the next month or so, assuming, of course, Royal Assent to the Bill.
  I hope that I have covered the specifics. Perhaps I may now return to the general issue. It is one of principle: whether we should allow the Bill to remain in the position where the views of one local stakeholder, however important, could veto a potentially beneficial development. In his letter on this subject on the 19th February, my honourable friend the Minister of State made clear that,
  "The assumption will generally be that a Primary Care Trust would not be established without the support of the relevant Primary Care Group".
  I know that that wording does not appear sufficiently robust to some. If it would help to address some of the fears—which I think are about the semantics rather than the realities, although I have set out the reasons why we do not think it would be prudent to put an absolute and blanket prohibition on the face of the Bill—I can assure the House that it is very clearly the Government's general expectation that a primary care trust would not be established if the relevant primary care group opposed it.
  I hope that that is sufficiently reassuring and that I have made it clear that we need to reserve the position where we could use the care and sensitivity needed for the sort of exceptional circumstances that potentially could arise. The guidance that we are about to issue on primary care trusts will reflect the expectation I have just described: that a primary care trust would not be established if the relevant primary care group opposed it.
  We want primary care trusts to work well. The simple truth is that we cannot afford to alienate the very professionals who will be carrying out the PCTs' functions. On that basis, I hope that I have provided some reassurance to the House.
  4 p.m.
  Earl Howe: My Lords, I thank the noble Baroness for that very full reply.
  On Question, Motion agreed to.

  COMMONS AMENDMENT
  2 Clause 2, page 2, line 25, after ("Act") insert ("(including this section)").
  Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 2. In doing so, I shall speak also to Commons Amendments Nos. 3 to 9, 16 and 17, 20 to 23, 73 and 74, 95 to 97, 101, 103, 105 and 106, 108 to 110 and 118. It sounds worse than it is!
  This group of amendments is a mixed bag of technical, consequential and drafting amendments and one or two other more substantive changes. I am afraid that they are all none the less essential. The common theme is that they each, in part at least, relate to primary care trusts and they all serve, albeit modestly, to tidy up and improve the Bill.
  The amendments in this group can be broadly considered under three headings: some important amendments concerning the role of primary care trusts regarding Primary Care Act pilot and permanent schemes; a group of amendments which tidy up the provisions in the Bill which deal with the delegation to and exercise of functions by health authorities, special health authorities and primary care trusts; and a rather more disparate group of technical and drafting amendments.
  I turn, first, to the amendments concerned with the primary care Act, Commons Amendments Nos. 9, 20, 73, 74 and 105. The primary care Act 1997 introduced a new option for the delivery of family health services and provides for primary care professionals to provide personal medical services and personal dental services under agreements with their health authority.
  Clearly it is important to carry forward the capacity to innovate and to improve services which this Act allows into the new world of primary care trusts. At present, health authorities manage primary care Act pilot contracts. In future, however, this function may be better exercised by primary care trusts. Primary care trusts will have a detailed knowledge of the primary care services and providers at a local level, and that is what is required to get the best out of any contract, benefiting both the primary care professionals and their patients.
  The Bill already makes provision for primary care trusts to be able to take on the role of providing personal medical services and personal dental services under the Act. The Bill also already provides for health authorities to delegate their functions in respect of primary care Act medical and dental pilots, including the function of contracting with service providers.
  Commons Amendment No. 9 sets out the circumstances in which health authorities may not delegate their functions in respect of primary care Act pilots and makes provision for the transfer of rights and liabilities where parties to the contract change. The Bill currently makes it possible for primary care trusts both to provide personal medical services themselves and to contract for personal medical services in place of the health authority.
  I think we would all agree that it would be inappropriate for primary care trusts to manage a contract for services which they were also involved in
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  providing. Commons Amendment No. 9 specifically prevents that from happening. It also limits the delegation of other functions in respect of personal medical services where a possible conflict of interest might arise. It provides that a health authority will not be able to delegate to a primary care trust the function of turning personal medical services applications into formal proposals to the Secretary of State. This includes acting as the recipient of applications and undertaking the formal local consultations. Nor will it be able to delegate the payment of funding to meet applicants' preparatory costs.
  Commons Amendments Nos. 20 and 105 are consequential on these provisions and Commons Amendments Nos. 73 and 74 make similar provision in respect of Scotland.
  A large number of the amendments deal with the delegation of functions to and the exercise of functions by health authorities, special health authorities and primary care trusts. These are technical amendments, Commons Amendments Nos. 16, 17, 21, 22, 23, 97, 106, 108 to 110 and 118, which tidy up and streamline the provisions of the Bill. I do not intend to take up the time of the House in describing them unless noble Lords wish to raise specific questions.
  I shall also try to be brief on the disparate group of technical and drafting amendments, Commons Amendments Nos. 4 to 8, which clarify the Bill's provisions concerning the provision of services by primary care trusts. Together they make clear that the goods and services which a primary care trust may provide to another NHS body include accommodation. Commons Amendments Nos. 95 and 96 make minor drafting changes. I beg to move.
  Moved, That the House do agree with the Commons in their Amendment No. 2—(Baroness Hayman.)
  On Question, Motion agreed to.
  Lord Renton: My Lords, as the noble Baroness said in her rapid but careful summary of this vast list of mainly drafting and technical amendments—
  Lord Hunt of Kings Heath: My Lords, we have now agreed to Commons Amendment No. 2.
  The Deputy Speaker (Lord Skelmersdale): My Lords, perhaps I may help. If the noble Baroness, Lady Hayman, would like to move Commons Amendment No. 3, the noble Lord, Lord Renton, could speak to it.

  COMMONS AMENDMENTS
  3 Clause 2, page 2, line 27, leave out from ("for") to end of line 41 and insert ("any functions to which this section applies to be exercised—

  (a) by another Primary Care Trust,

  (b) by a Special Health Authority, or

  (c) jointly with any one or more of the following: Health Authorities, NHS trusts and other Primary Care Trusts.

  (3) Regulations may provide—

  (a) for any functions to which this section applies to be exercised, on behalf of the Primary Care Trust by whom they are exercisable, by a committee, sub-committee or officer of the trust,

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  (b) for any functions which, under this section, are exercisable by a Special Health Authority to be exercised, on behalf of that authority, by a committee, sub-committee or officer of the authority,

  (c) for any functions which, under this section, are exercisable by a Primary Care Trust jointly with one or more Health Authorities or other Primary Care Trusts (but not with any NHS trusts) to be exercised, on behalf of the health service bodies in question, by a joint committee or joint sub-committee." ").

  4 Clause 5, page 8, line 32, after ("services") insert ("(including accommodation)"
  5 Page 8, line 44, after ("accommodation") insert ("or services").).
  6 Page 8, line 47, at end insert ("or services").
  7 Page 9, line 4, after ("accommodation") insert ("or services").
  8 Page 9, leave out line 17.
  9 After Clause 5, insert the following new clause—
  DELEGATION OF HEALTH AUTHORITY FUNCTIONS RELATING TO PILOT SCHEMES AND SECTION 28C ARRANGEMENTS
  (".—(1) After section 8 of the National Health Service (Primary Care) Act 1997 (variation and termination of pilot schemes), there is inserted—
  "Exercise of Health Authority functions relating to pilot schemes by Primary Care Trusts.
  8A.—(1) The following functions of a Health Authority are excepted functions for the purpose of section 17A of the 1977 Act—

  (a) their function of entering into pilot schemes under which personal dental services are provided, and, where they have entered into such a scheme, any functions arising under the scheme which relate to those or any other services provided under the scheme,

  (b) where a Primary Care Trust is providing any services under a pilot scheme, any functions of the Health Authority arising under that scheme (but the functions are only excepted in relation to that trust),

  (c) their functions under section 4 (preparation of pilot scheme proposals),

  (d) any function conferred under section 18 (funding work preparatory to pilot schemes).

  (2) The Secretary of State may by order make provision for any rights and liabilities arising under pilot schemes under which personal medical services are provided to be transferred from Health Authorities to Primary Care Trusts and from Primary Care Trusts to Health Authorities.
  (3) Subsection (2) is without prejudice to any other power of the Secretary of State to transfer rights and liabilities under the 1977 Act."
  (2) After section 28E of the 1977 Act (personal medical or dental services: regulations) there is inserted—
  "Exercise of Health Authority functions relating to section 28C arrangements by Primary Care Trusts.
  28EE.—(1) The following functions of a Health Authority are excepted functions for the purpose of section 17A above—

  (a) their function of entering into agreements under section 28C above under which personal dental services are provided, and, where they have entered into such an agreement, any functions arising under the agreement which relate to those or any other services provided under the agreement,

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  (b) where a Primary Care Trust is providing any services in accordance with section 28C arrangements, any functions of the Health Authority arising under those arrangements (but the functions are only excepted in relation to that trust),

  (c) any function conferred under section 28E of considering or approving proposals to provide services in accordance with section 28C arrangements,

  (d) any function conferred under section 28E(3)(k) above of making payments of financial assistance to fund work relating to section 28C arrangements.

  (2) The Secretary of State may by order make provision for any rights and liabilities arising under an agreement to provide personal medical services under section 28C above to be transferred from Health Authorities to Primary Care Trusts and from Primary Care Trusts to Health Authorities.
  (3) Subsection (2) above is without prejudice to any other power of the Secretary of State to transfer rights and liabilities under this Act." ").
  Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 3 to 9.
  Moved, That the House do agree with the Commons in their Amendments Nos. 3 to 9.—(Baroness Hayman.)
  On Question, Motion agreed to.

  COMMONS AMENDMENT
  10 Clause 8, page 12, line 12, after ("below") insert ("and'"').
  4.15 p.m.
  Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 10. In moving this amendment I shall speak also to Amendments Nos. 24, 25, 28, 52, 63, 68, 70, 75, 82, 83, 93, 94, 98, 99, 102, 104, 107, 111 to 117, 119, 120, 122 to 124, 126, 127, 129 and 131 to 143. The fact that I am dealing with another large group of amendments may give the noble Lord, Lord Renton, an opportunity to make his point.
  These amendments are mainly minor, drafting, technical or consequential amendments to tidy up the Bill's provisions in a number of places. I shall therefore keep my remarks on this group brief, merely indicating some of the issues which the amendments seek to address. Some correct slight drafting errors. For example, Commons Amendment No. 10 inserts a missing "and" into Clause 8 and Commons Amendment No. 25 corrects a grammatical error, involving the mixed use of the singular and the plural in the same context.
  A number of the amendments, Commons Amendments Nos. 75, 111, 112, 114, 122 and 129, are consequential to the provisions in Part II of the Bill concerning Scotland.
  A large number, Commons Amendments Nos. 102, 120, 123, 124, 126, 127, 134 to 139 and 141 to 143, are consequential on Clause 1 and the abolition, of GP fundholding. They remove existing statutory references to fundholding and fundholders.
  A further chunk of the amendments, Commons Amendments Nos. 28, 52, 63, 68, 82, 83, 98, 107 and 117, form a group of amendments that make changes to

  429
  the provisions in the Bill that set out the manner in which the powers to make directions may be exercised. The main amendment in this group is Commons Amendment No. 82 which inserts new subsections into Clause 55. Subsections (1A) and (1B) replace the various individual provisions in the Bill that set out how the powers of direction may be exercised. The amendments simplify the provisions and ensure that they are to be interpreted consistently. If one needs to know how the Secretary of State's powers of direction under the Bill are to be exercised, one will need only to look in one place—at Clause 55.
  Commons Amendment No. 99 seeks to clarify how the consultation process on a draft order under Clause 54 of the Bill concerning professional self-regulation, as set out in paragraph 9 of Schedule 3, will work when a draft order concerns matters within the legislative competence of the Scottish Parliament. That is where a draft order seeks to regulate a profession not currently regulated by statute. The intention is that such orders should, wherever possible, be made on a United Kingdom basis. This means that the drafting of the order and the consultation needs to be co-ordinated between the various administrations in the United Kingdom. This amendment serves to clarify how this process would work in relation to the Scottish Parliament. I commend the amendments to the House.
  Moved, That the House do agree with the Commons in their Amendment No. 10.—(Baroness Hayman.)
  Baroness Carnegy of Lour: My Lords, I should like to say a few words on this group of amendments because, as the noble Baroness has said, it contains a number of amendments which relate to Scotland. I am very grateful—as I know are other noble Lords—for the notes that the Minister was kind enough to send us on the amendments. The notes have made it very much easier to understand the procedure in which we are engaged.
  I should just like to comment again, because I did so during the passage of the Bill, on the timing of the passage of Part II of the Bill. The group of amendments relating to Scotland now under consideration are not entirely technical or minor. For example, Commons Amendment No. 75 affects the many employees in the Scottish National Health Service and their conditions of employment if they transfer between health service bodies. An entire new clause is being inserted into the Bill on the subject of health workers in Scotland when the health service in Scotland is already devolved to the Scots Parliament. Only yesterday, the First Minister in the Scots Parliament began to announce the legislative programme that it will consider. It did not, of course, contain this particular subject because Westminster is considering it.
  It has been established during the Bill's passage that this is a perfectly legal procedure. Under the Scotland Act, not only can the Westminster Parliament complete Part II of this Bill for Scotland after devolution, but the Westminster Parliament will be able to legislate for anything it likes, whether or not the matter has been devolved. So there is no question about the legality. But
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  I hope that the Minister will convey to her noble friends and to her right honourable friends the view that it is important that the Government do not continue in this way. We do not want Westminster deciding for Scotland matters which have been devolved to the Scots Parliament. It should not be necessary. Had the passage of this Bill been differently timed, it would not be necessary. It is a strange procedure. We hope that it will not be repeated. I hope that the Minister will take note of the fact that something is being done that should not be repeated often. A matter that has been devolved to Scotland should, once the Scots Parliament takes over, be decided in Scotland, not at Westminster.
  Earl Howe: My Lords, perhaps I may add to my noble friend's comments by putting another point to the Minister. I believe I am right in saying that this Bill is classed as a pre-commencement enactment. That means that any regulations laid under the provisions for regulation of the professions after the Bill is enacted will fall, in respect of Scotland, to the Scottish Parliament. Am I therefore right in supposing that there is no guarantee to this House or another place either that the regulations laid in the Scottish Parliament will be similar to those that may be laid south of the Border; or that the same professions will be regulated?
  There could be a wide disparity between the rules applicable north of the Border and those applicable south of the Border to the same type of professional individual. I see that as something of an anomaly. I hope that I am not departing too far from the views expressed by my noble friend. I shall be interested in the Minister's comments.
  Baroness Masham of Ilton: My Lords, coming from Scotland, I suggest that the regulations in Scotland may perhaps be better than those in England.
  Baroness Hayman: My Lords, during earlier discussions on the Bill we dealt with the challenges—I shall not say "difficulties"—that were posed by this piece of legislation given the timing of the inception of the Scottish Parliament. We have to manage that transition. Being as close as we are to 1st July makes it particularly pertinent and relevant. But in the future, as regards the broad issue of whether the United Kingdom Parliament will legislate for Scotland on devolved matters, it will be for Scottish Ministers to decide whether they want to implement any part of the Bill. The UK Parliament will not, by convention, be legislating for the Scottish Parliament without its permission.
  As regards the specifics of Commons Amendment No. 75, to which the noble Baroness, Lady Carnegy, referred, when NHS trusts were established in Scotland by the 1990 Act they took over a range of facilities—for example, hospitals and clinics—from health boards. Where facilities were transferred, the rights and terms of employment of the staff who worked in them were safeguarded and transferred to the new trusts by means of a staff transfer scheme under Section 12B of the National Health Service (Scotland) Act 1978. Paragraph 43 of Schedule 4 of this Bill sought to extend the

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  protection that these orders give to staff to situations where functions transferred to NHS trusts after their establishment. The inclusion of new Clause 13 renders paragraph 34 redundant and we seek to delete it. The Government consider that setting out the provision in a self-standing clause rather than a series of detailed amendments would introduce some clarity into the Bill in this area.
  As regards the order-making power in relation to Scotland, the Scotland Act 1998 provides that the regulation of the health professions, currently regulated by statute, is a reserved matter: that is, any profession regulated on 1st July 1999 by the Pharmacy Act 1954; the Professions Supplementary to Medicine Act 1960; the Medical Act 1983; the Dentists Act 1984; the Opticians Act 1989; the Osteopaths Act 1993; the Chiropractors Act 1994; and the Nurses, Midwives and Health Visitors Act 1997.
  The regulation of other professions, however, is within the legislative competence of the Scottish Parliament. Nevertheless, the departments will work closely together on the development of professional self-regulation. It is in the interests of all concerned that, wherever possible, we have a UK-wide approach to professional self-regulation. That view was aired on all sides of the House throughout our discussions.
  These working arrangements will be set out in concordats, agreements between the health departments. It is the intention to continue to make UK-wide provision for the professions so that patients, wherever they live, are afforded the same level of protection and there are no artificial barriers to the free movement of professionals within the United Kingdom.
  On Question, Motion agreed to.

  COMMONS AMENDMENT
  11 Clause 9, Page 13, line 40, leave out from ("he") to end of line 45 and insert—
  ("(a) shall consult a body appearing to him to be representative of persons to whose remuneration the determination would relate, and
  (b) may consult such other persons as he considers appropriate.").
  Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 11. In moving this amendment, I shall also speak to Amendments Nos. 12 to 14, 77 to 80, 100, 121, 128 and 130.
  When I introduced Clause 9 at Third Reading, I explained that the purpose of what was then a new clause was very simple. In essence, it was intended to put on a sounder legal footing the existing arrangements for remunerating the Part II practitioners who provide family health services. The clause will also enable the delegation to primary care trusts of the function of determining cash-limited payments to GPs. The clause will otherwise not signal any change to the existing remuneration system for GPS, dentists, pharmacists or opticians. None the less, the clause is complex, technical and long. Those features derive from the existing Sections 43A and 43B which the new clause replaces.
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  We have chosen to retain the structure of the existing sections to help to demonstrate that the intention is to regularise and not to change existing practice. However, in considering the clause in Committee in another place, the Government and the Opposition identified a number of points in the clause that needed amendment, either to make the legal provisions fully consistent with established practice, or simply to tidy up the drafting. These amendments represent the fruits of that constructive deliberation.
  The need to make the first amendment, Commons Amendment No. 11, was brought to our attention by the Opposition. Before a national determination of remuneration is made, we invariably consult the relevant representative body. That was also the practice of the previous administration. For example, before making changes to the GPs' statement of fees and allowances, we consulted the General Practitioners Committee of the BMA. However, in another place it was pointed out that the consultation requirements that paragraphs (a) and (b) of the new Section 43B(1) place on the Secretary do not quite reflect that practice.
  Subsection (1) of the new Section 43B of the 1977 Act requires the Secretary of State to consult at least one of either a suitable advisory body or an appropriate representative body of the profession concerned. In practice, the Secretary of State could discharge the duty to consult by consulting an advisory body rather than a representative body. Since it is not our intention to do so we took the opportunity at Report stage in another place to make this clear on the face of the Bill. Amendment No. 11 requires the Secretary of State to consult the appropriate representative body for the profession concerned and allows consultation with others.
  All the other amendments are technical or consequential and together they tidy up Clause 9. Amendments Nos. 12 and 13 provide consistent wording throughout the clause. Amendment No. 14 omits Clause 10(4) as the event for which this subsection provides cannot now occur. Amendments Nos. 77 to 80 repeat these changes for Scotland. The remaining amendments in the group, Amendments Nos. 100, 121, 128 and 130, are all minor or consequential. In particular, they secure the repeal of Section 10 of the 1966 Act for England, Scotland and Wales.
  Moved, That the House do agree with the Commons in their Amendment No. 11.—(Baroness Hayman.)
  Lord Walton of Detchant: My Lords, I express
  warm support for this group of amendments which I believe corrects an important omission from the Bill that originally left this place. The duty of consultation is extremely important. These amendments will be greatly welcomed by the professions involved.
  On Question, Motion agreed to.

  COMMONS AMENDMENTS
  12 Clause 9, page 14, line 5, leave out ("revised") and insert ("varied")
  13 Page 15, line 24, leave out ("revocation or revision") and insert ("or revocation").
  14 Page 15, line 39, leave out subsection (4).
  Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 12 to 14.
  Moved, That the House do agree with the Commons in their Amendments Nos. 12 to 14.—(Baroness Hayman.)
  On Question, Motion agreed to.

  COMMONS AMENDMENT
  15 After Clause 9, insert the following new clause—
  LOCAL REPRESENTATIVE COMMITTEES
  (".—(1) Section 44 of the 1977 Act (recognition of local representative committees) is amended as provided in subsections (2) to (4).
  (2) Before subsection (1) there is inserted—
  "(A1) A Health Authority may recognise a committee formed for their area which they are satisfied is representative of—

  (a) the medical practitioners providing general medical services or general ophthalmic services in that area;

  (b) those medical practitioners and the deputy medical practitioners for that area; or

  (c) the medical practitioners mentioned in—

  (i) paragraph (a) above; or

  (ii) paragraph (b) above,

  and the section 28C medical practitioners for that area,
  and any committee so recognised shall be called the Local Medical Committee for the area.
  (B1) A Health Authority may recognise a committee formed for their area which they are satisfied is representative of—

  (a) the dental practitioners providing general dental services in that area;

  (b) those dental practitioners and the deputy dental practitioners for that area; or

  (c) the dental practitioners mentioned in—

  (i) paragraph (a) above; or

  (ii) paragraph (b) above,

  and the section 28C dental practitioners for that area,

  and any committee so recognised shall be called the Local Dental Committee for the area."
  (3) In subsection (1), paragraphs (a) and (b) and "the Local Medical Committee, the Local Dental Committee," are omitted.
  (4) After subsection (2) there is inserted—
  "(3) For the purposes of this section and section 45 below, a person who meets the condition in subsection (4) below—

  (a) is a deputy medical practitioner for the area of a Health Authority if he is a medical practitioner who assists a medical practitioner providing general medical services in that area in the provision of those services but is not himself on a list;

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  (b) is a section 28C medical practitioner for the area of a Health Authority if he is a medical practitioner who provides or performs personal medical services in accordance with arrangements made under section 28C above by the Health Authority (whether with himself or another);

  (c) is a deputy dental practitioner for the area of a Health Authority if he is a dental practitioner who assists a dental practitioner providing general dental services in that area in the provision of those services but is not himself on a list;

  (d) is a section 28C dental practitioner for the area of a Health Authority if he is a dental practitioner who provides or performs personal dental services in accordance with arrangements made under section 28C above by the Health Authority (whether with himself or another).

  (4) The condition referred to in subsection (3) above is that the person concerned has notified the Health Authority that he wishes to be represented under this section by the appropriate committee for their area (and has not notified them that he wishes to cease to be so represented).

  (5) For the purposes of subsection (3) above—

  (a) a person is to be treated as assisting a medical practitioner or dental practitioner in the provision of services if he is employed by that practitioner for that purpose or if he acts as his deputy in providing those services; and

  (b) "list" has the same meaning as in section 46
  below."

  (5) Section 45 of that Act is amended as provided in subsections (6) to (8).

  (6) For subsection (1) there is substituted—

  "(1) Regulations may require Health Authorities—

  (a) in the exercise of their functions under this Part of this Act to consult committees recognised by them under section 44 above,

  (b) in the exercise of any of their functions which relate to arrangements under section 28C above to consult committees recognised by them under section 44(A1)(c) or (B1)(c) above,

  on such occasions and to such extent as may he prescribed.

  (1A) The power conferred by subsection (1) above is without prejudice to any other power to require a Health Authority to consult any committee recognised under section 44 above.

  (1B) Committees recognised under section 44 above shall exercise such other functions as may be prescribed.

  (1C) A committee recognised for an area under subsection (A 1)(b) or (c) or (B1)(b) or (c) of section 44 above shall, in respect of each year, determine the amount of its administrative expenses for that year attributable—

  (a) in the case of a committee recognised under subsection (A1)(b) or (c)(ii) of that section, to the deputy medical practitioners for the area;

  (b) in the case of a committee recognised under subsection (Al)(c) of that section, to the section 28C medical practitioners for the area;

  (c) in the case of a committee recognised under subsection (B 1)(b) or (c)(ii) of that section, to the deputy dental practitioners for the area;

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  (d) in the case of a committee recognised under subsection (B 1)(c) of that section, to the section 28C dental practitioners for the area."

  (7) In subsection (2), "(including travelling and subsistence allowances payable to its Members)" is omitted.

  (8) After subsection (3) there is inserted—

  "(4) Where a committee has made a determination under subsection (1C) above, it shall apportion the amount so determined among the deputy medical practitioners, section 28C medical practitioners, deputy dental practitioners or section 28C dental practitioners, as the case may be, for the area and each such practitioner shall pay in accordance with the committee's directions the amount so apportioned to him.

  (5) References in this section to administrative expenses of a committee include references to travelling and subsistence allowances payable to its Members; but the reference in subsection (2) above to a committee's administrative expenses does not include so much of the committee's administrative expenses as are determined under subsection (1C) above to be attributable to any practitioners mentioned in that subsection.''").

  Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 15. In moving this amendment I should like to speak also to Amendments Nos. 19 and 125. These provisions amend Sections 44 and 45 of the 1977 Act which provide for recognition of, and consultation with, local representative committees in respect of their statutory functions. The primary care Act made possible personal medical and personal dental services, and arrangements to pilot such services, but left untouched the provisions in the 1977 Act for doctors' and dentists' statutory consultation arrangements by which a committee is recognised by a health authority as being representative of medical or dental practitioners in its area.
  My right honourable friend the Member for Darlington undertook to put right this obvious defect to ensure that any doctors who had opted to provide services under the primary care Act could be reintegrated into the local medical committee arrangements if they wished, and that undertaking is honoured by these government amendments. In the light of discussions during the Committee stage in another place my honourable friend the Member for
  Southampton Itchen had extensive discussions with the chairman of the General Practitioners Committee of the BMA. The chairman asked us to go further than the original undertaking in order to strengthen the role of local medical committees so that they can represent not only doctors working as principals in general medical services and doctors in primary care Act pilots but also the many other doctors who contribute to our high-quality family doctor services as assistants and deputies.
  Having listened carefully to the arguments, my honourable friend brought forward government amendments to the clause to give effect to the more broadly based representative machinery; and after further discussions with the GDSC the Government took the opportunity to broaden the representative base of local dental committees in the same way. The details of the amendments were discussed with the national representative bodies of both doctors and dentists, and we understand that they have their support. A tidying-up amendment was also tabled to ensure that the statute
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  is in line with long-established practice and with what successive Health Secretaries and the professions' representative bodies have understood the position to be for many years.
  Section 45 currently requires local representative committees to be consulted but only where that requirement to consult is made in regulations. The requirement to make regulations to make or vary consultation requirements involves a very inflexible framework for developing a service which can, as now, evolve rapidly. In practice, successive Health Secretaries have made provisions for a health authority to consult locally on specific issues over and above any consultation requirements specified in regulations. These are mainly in connection with the questions of entitlement to certain fees and allowances and other matters to do with the remuneration of individual practitioners. Consequential Amendment No. 19 updates a cross-reference in Section 17A of the Act; and Amendment No. 125 details repeals consequential on Amendment No. 15.
  Moved, That the House do agree with the Commons in their Amendment No. 15.—(Baroness Hayman.)
  Earl Howe: My Lords, I welcome these amendments, in particular Amendment No. 15. I welcome especially the scope of that amendment. I understand that a government amendment on this issue was tabled in Committee in another place almost at the last moment. The clause as then framed was deficient, at least in the eyes of the Opposition, in that it did not cover, as the noble Baroness rightly said, the 7,000-plus non-principal GPs who have the right to expect their views to be represented in their local representative committees, if those committees are to perform their very important statutory functions in an effective manner. I am delighted that the Government tabled further amendments in Standing Committee to meet the concerns expressed. The very satisfactory result is what we now see on the Marshalled List as Amendment No. 15. I thank the Minister for her comments.
  Lord Clement-Jones: My Lords, in very similar terms I add my thanks to the Minister for the amendment. I know that the amendment is very broadly welcomed by the medical profession.
  On Question, Motion agreed to.

COMMONS AMENDMENTS
16 Clause 10, page 16, line 7, at end insert—
("() The Secretary of State may direct a Special Health Authority to exercise any functions of a Health Authority or a Primary Care Trust which are specified in the directions.").
17 Page 16, line 8, after ("specified") insert ("in directions under this section").
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 16 and 17.
Moved, That the House do agree with the Commons in their Amendments Nos. 16 and 17,—(Baroness Hayman.)
On Question, Motion agreed to.

COMMONS AMENDMENT
18 Page 16, leave out lines 19 to 23.

MOTION MOVED ON CONSIDERATION OF COMMONS AMENDMENT 18A
That this House do disagree with the Commons in their Amendment No. 18.
4.30 p.m.
Baroness Masham of Ilton: My Lords, I beg to move that the House do disagree with the Commons in their Amendment No. 18. As your Lordships will remember, the House agreed two amendments referring to out-of-area treatments where appropriate for the purpose of receiving specialist hospital treatment and after-care. The second amendment stressed the need for co-operation over this matter. There was a great deal of support for OATs to be written on the face of the Bill in another place, but the Government want them taken out.
I thank the Minister for her communication. The noble Baroness knows so well the need to be able to access the correct medical treatment when illness strikes. In the past few days I have been implored by patient organisations to table a Motion disagreeing with the Commons amendment. On Wednesday 9th June in your Lordships' House there was an Unstarred Question on the subject of artificial limbs. There is a great need for improvement in many National Health Service specialised services.
In the past few days every time I open a newspaper I read of some avoidable health disaster. The case of the Treasury official who was refused admission to a psychiatric hospital and then killed his wife illustrates the need for better communication between junior doctor and consultant and, with the shortage of beds, between health authorities. If there is not a bed in one area there should be easy access out of a person's home area so that he gets the correct treatment quickly. The Government will realise that serious illness can come to anyone at any time. I believe that the general public regard access to correct health treatment as a top priority.
Referring to the bottom of page 11 of the Notes on Commons Amendments to the Health Bill, perhaps the Minister can explain the following statement:
"adding wording of that sort … may have the unfortunate and unintended consequence of being construed as limiting the scope of the power".
Having discussed this matter with expert advice from your Lordships' House, the matter needs clarification.
In the modern world people who suspect complicated medical conditions turn to the Internet to see what treatments exist. The Patients Forum believes that longer-term service agreements replacing ECRs (extra contractual referrals), based on past referral patterns, will reinforce existing inequalities. Some areas will not plan to provide services at all. The transition from ECRs to the out-of-area treatments (OATs) is confusing users and practitioners.
The lack of clarity and poor communication run counter to the NHS code of openness, which emphasises the importance of users,
"having access to available information about the services provided by the National Health Service. The cost of these services, quality, standards and performance against targets … authorities must ensure that people know whom to ask for information".
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There seems to be no clear accountability.
Denying access to specialist services, through limiting OATs referrals, risks denying access to greater independence and other opportunities such as Welfare to Work and the New Deal. Referrals out of area should be made on clinical need. Refusals of OATs referrals must be monitored to ensure that they are not based on non-clinical factors such as PCG, PCT or health authority pressure.
Can the Minister give an assurance that rural health authorities, which often do not have many of the specialised hospital units within their local hospitals, will not be at a disadvantage when they have to send patients out of their local areas? The cost-inefficiency of losing specialist centres of excellence must be avoided.
Disability organisations, the College of Health and the National Consumer Council all support this matter and know the importance of getting expert treatment when needed and will continue to press the government on behalf of patients. To have OATs written into the Bill is a very reasonable request and I believe that it is the Government who are being unreasonable over this matter. I beg to move.
Moved, That the House do disagree with the Commons in their Amendment No. 18.—(Baroness Masham of Ilton.)
Lord Ashley of Stoke: My Lords, I speak in support of the noble Baroness, Lady Masham, and about genuine miracles. My concern is about the future of specialist services for deaf people. I wish to speak also about the provision of cochlear implants.
I declare a personal interest, but that does not mean that anything in the Bill will affect me because I already have a cochlear implant. A person with such an implant knows that it miraculously transforms his or her life if they have been, as I was, totally deaf. I am in no doubt that anyone who could benefit should get one. That is a very simple proposition, but it is one which is impeded and sometimes obstructed by health authorities. Cochlear implants are still relatively new and rare. Many people, including health professionals, simply do not appreciate that they are medical miracles.
Any loss of hearing can be a problem as many noble Lords in this House will know, but the complete loss of hearing is of a very different order. To hear nothing is a terrible deprivation because it ends easy conversation. It means that there is no music, no meaningful television, no radio, no birdsong and no children's laughter. It means exclusion and isolation.
To a large extent a cochlear implant remedies much of that. It is not perfect, but it returns a deafened person to near normal social living. The number of implants being carried out now is falling especially for adults. In 1997 there were 180, and 155 in 1998. The number of refusals is rising. For adults there were 27 refusals in 1997 and 65 in 1998.
Health authorities have discovered a shabby trick. If they refuse an initial assessment, that can stop a deaf person protesting, and that is being done. Out of 65 adults, 41 were refused assessments in 1998. That is the

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kind of shabby behaviour of some of our health authorities. That is a depressing and deplorable outlook facing people deprived of a major sense.
The first cochlear implants were funded by charities. Then came three-year central NHS funding, coupled with Medical Research Council research, which established that they are safe and cost effective. Then funding became a health authority responsibility and the problem started. I did a personal survey of all health authorities in January 1997. It showed a great variation in understanding of total deafness and willingness to relieve it. Since then I have received countless letters from deaf people despairing of ever getting an implant. Many health authorities have responded to my letters about this medical miracle and some have now agreed to fund. Even the most rigid health authority in Britain, which is Oxfordshire, was refusing to implant adults in the foreseeable future, but it has now relented. I congratulate that authority on its change of mind.
But it is still guerrilla warfare. Many health authorities are good; some are slow but tolerable; and others are deplorable. That is no way to treat the hearing needs of totally deaf people. As my noble friend the Minister knows, there were high hopes that we would get regional commissioning. Cochlear implants fulfil all the conditions in Annexe A of the HSC circular Commissioning Services, but they are not named in Annexe B, as are bone-anchored hearing aids. There is only a reference to "communication aids". Not naming cochlear implants gives scope for argument and disagreement and deaf people want and need certainty.
The new procedures of out-of-area treatment mentioned by the noble Baroness, Lady Masham, and service agreements may sound sensible to my noble friend and other Ministers and civil servants. All of them are trying to be helpful. But they are linked—at least initially—to previous levels of referrals. That is the weak element which needs to be remedied. There is a strong smack of lip service backed up only by promises that remedial action will be taken if necessary. That is a "wait and see" strategy when we can already see a highly visible problem for deaf people. I urge the Government to think again. I know that my noble friend will do what she can to ensure that cochlear implants are firmly based on the regional commissioning list. If they are not, the funding bodies will be able to duck, weave and swerve, and some deaf people will be left knowing that help is possible, but they cannot have it. If my noble friend can meet this provision she will have struck a major blow for the totally deaf. I support my noble friend.
Lord Renton: My Lords, I supported the noble Baroness, Lady Masham, when she moved that the words the Government intend to leave out should in fact be inserted in the Bill. When we were asked not to accept this amendment I read the notes and I am grateful for having received them.
In the notes, the Government suggest that the words are unnecessary. On page 11 the notes state,
"The Government considers the words which have been removed to be unnecessary".
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At the beginning of the next paragraph, they add:
"Nothing in this Bill cuts across GPs' existing freedom to refer their patients for whatever treatment is in their best interests, whether locally or at a specialist centre".
I believe that there is a doubt about this. The noble Lord referred to one, as did the noble Baroness, Lady Masham. When there is a doubt, it is best to remove it when legislating, especially when people's lives may be at stake.
In one or two cases in these amendments, the Government have been wonderfully overzealous. In Commons Amendment No. 2, the word "Act" is to include "this section". Every Act includes every section. Yet the Government use the specific wards saying that in that case, and in one or two others, the word "Act" includes a specific section of the Act. If the Government are willing to be so overzealous in such a small drafting matter—perhaps I may have the attention of the Minister; I know that the Chief Whip may have something very important to say—I suggest that it is a good thing for them to be overzealous about the removal of doubt in this important matter of specialist services. Specialist services these days are essentially localised. They are not in every health authority area, as we all know from personal experience. I think that in this important Bill, which the noble Baroness, Lady Hayman, has been so careful to explain to us in great detail, it would be regrettable if on this important matter there was the slightest doubt left.
I believe that the noble Baroness, Lady Masham, is doing a service in inviting the Government to remove a doubt.
Baroness Carnegy of Lour: My Lords, I shall listen carefully to what the Minister says about whether the House should accept Commons Amendment No. 18. I, too, read the Notes on Commons Amendments. I note that the Government consider the amendment unnecessary and that it might limit the powers of the Bill.
I shall listen carefully to the Minister. It is crucial that people should, as far as humanly possible, have access to the specialist services they need. I want to hear from the Minister what the Secretary of State will have power to direct. The notes state that the powers,
"are amply broad enough to enable the Secretary of State to issue directions to ensure appropriate access to specialist service".
That will depend whether the specialist services are available; whether the cost of getting the patient there can be paid; and whether it will be possible to fund the patient's treatment. If it is possible for the Minister to describe that which the Bill allows, it will be important to the House. That is what matters to patients, as I am sure the noble Baroness, Lady Masham, will agree. That is what she and the whole House will listen to.
As the noble Baroness also said, we all wish to know what the notes mean when they state that this amendment may have the unfortunate and unintended consequence of being construed as limiting the scope of the power. We want to know whether the amendment would be counter-productive. But we also need to know precisely what the Bill will allow to happen and how

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the Secretary of State can intervene. He cannot intervene about every patient. So we need to know the precise procedure.
4.45 p.m.
Baroness Berners: My Lords, I support the Motion tabled by the noble Baroness, Lady Masham. There should be more readiness to make other specialist options available to desperate patients. I hope that the Government will reconsider the Motion and agree to it.
Lord Patel: My Lords, I speak as a clinician. In the past a clinician had to fulfil the requirement to meet the extra-contractual referrals. That made out-of-area referrals difficult. Therefore, it is important that the Bill enables easier out-of-area referrals. I believe that the co-operation encouraged and enshrined in the Bill allows for that.
As a clinician, the other aspect I look for is the freedom and ability to persuade the trust—I work in a hospital—to develop specialised services. Therefore, I hope that the Minister can reassure the House that measures will be in place to ensure local monitoring of out-of-area referrals. That will help the development of new services.
I do not believe that the amendment is necessary because of the encouragement to co-operate. As a clinician, I have to tell noble Lords that in the past we were discouraged from referring patients out of area because funding issues were involved. We do not have that situation now. I do not want to see any restrictive measures in legislation acting as a disincentive for a trust to develop specialised services.
Earl Howe: My Lords, I add my support to the noble Baroness, Lady Masham, on these issues which she highlighted so ably. I do not want to repeat the points she made. However, some fundamental unanswered questions remain.
The first relates to doctors' clinical freedom. I refer to the section of the Notes on Commons Amendments picked up by my noble friend Lord Renton. At page 11 the assurance is given that,
"Nothing in this Bill cuts across GPs' existing freedom to refer their patients for whatever treatment is in their best interests, whether locally or at a specialist centre".
There is a touch of disingenuousness about that statement. There may be nothing on the face of the Bill which discourages out-of-area referrals. But we know the Government's intentions. The intention is that most specialist tertiary services should be funded through long-term service agreements between health authorities and PCGs or PCTs and an appropriate NHS trust. Sometimes an agreement will cover a number of health authorities and their PCGs and PCTs. There will be a move to establish agreements of three to five years' duration. That scheme of things may well assist planning and budgeting, but where does it leave the doctor who may not want to refer a patient to the hospital chosen by his or her health authority? As I understand the proposals, the long-term service
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agreement will govern his decision on where his patient is seen and treated. How is that not a diminution or fettering of a doctor's clinical freedom?
My second question relates to those 10 per cent of conditions which under the Department of Health's own estimate will not be subject to long-term service agreements. Ten per cent may be a minority proportion but it will not be an insignificant number of cases. If 10 per cent of services previously funded by extra-contractual referrals are now to be accounted for by out-of-area referrals, we need to be sure that the mechanisms to fund them are adequate.
In her helpful letter to me of 22nd March, the noble Baroness explained how a health authority, acting as the main commissioner of a specialist centre, will have funding added to its own service agreement with the trust to reflect past patterns of one-off referrals. My question to the noble Baroness is: how will this work in practice? If there is a service agreement between a health authority and a specialist centre and the margin built into that contract is exceeded as a result of a higher volume of referrals from out of the area, how is the centre supposed to cope with that? Under the duty of partnership it will be bound to accept those referrals, yet it will have no money to pay for them.
I understood Ministers in another place to say that money will not follow the patient. Indeed, that sort of arrangement is what the Government say they want to get away from in abolishing the internal market. An upwards adjustment in a trust's budget for the following year will not pay for the unfunded cases it has already dealt with. Can the noble Baroness shed further light on that conundrum?
Lord Clement-Jones: My Lords, having heard the debate so far, and in particular the speeches of the noble Lord, Lord Ashley, and the noble Baroness, Lady Masham, no one can doubt the importance of the points that have been made. There is also no doubt about the absolute importance of OATs working much better than extra-contractual referrals. The funding and the clinical freedom must be there in the future. We must have thriving centres of excellence and we have heard throughout our debates when the original amendment was before the House at Report stage and again today, problematic stories about how the centres of excellence are not thriving. It is our view that the working of OATs is of crucial importance. That has also been emphasised throughout the debate.
The noble Lord, Lord Patel, put his finger on one point. We are not persuaded on these Benches that the best way forward is necessarily by means of primary legislation. It is a matter of ends and means. What is the best means of achieving a system of well-managed OATs, a system that works where the funding is in place and where clinical freedom is important? I look forward very much to hearing from the Minister with assurances that perhaps go further than some of the points made in the notes about the working of OATs; and then of course we will take a view.
Baroness Hayman: My Lords, I am extremely grateful to the noble Baroness, Lady Masham, for once

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again making the House concentrate on an immensely important area. It has been echoed all round the House, particularly by my noble friend Lord Ashley, that patients should have access to appropriate services, particularly to appropriate specialised services, and the difficulties that might be inherent when those services are not available for very obvious reasons—because of their very specialised nature—at primary or even local secondary care level.
I have to say to the House that some of the anxieties mentioned spring from the very unfortunate experiences around extra-contractual referrals to which the noble Lord, Lord Clement-Jones, referred. I believe that the new arrangements actually provide a great deal more reassurance to patients in terms of how they can be referred, and to doctors about their clinical freedom to refer. I will deal with those matters in a moment.
I hope I shall be able to reassure the House that the amendment is unnecessary in terms of the need to give extra powers to the Secretary of State. Also and, I believe, more importantly, I want to assure your Lordships that we are taking appropriate action to see that specialised commissioning is available for out-of-area treatment, with the freedom to refer in order to ensure high quality services for patients. The point about mechanisms was made by the noble Lords, Lord Patel and Lord Clement-Jones. I will say a little more about the changes that we have already put in place and I hope to be able to give assurances about further steps in a moment.
One thing is very clear: there is still uncertainty as to the nature of the new arrangements we are introducing and how they will work in practice, together with the need for better communication. As well as the debates in your Lordships' House, ministerial colleagues and I have had the opportunity to hear directly the views of patient groups and, most recently, there was a very constructive meeting between my right honourable friend the Minister of Health and representatives of the Carers National Association and the Patients Forum last week.
Important issues were raised in the House and elsewhere, and I should like to respond to them. However, returning to the technicalities of this particular amendment, I should explain why it remains the Government's clear view that the amendments introduced by your Lordships' House on Third Reading, for which the noble Baroness has again argued today, are not necessary; nor are they the right way forward.
Those amendments amplify the wording of the general powers of direction and the duty of co-operation between NHS bodies to specify that they apply in particular to arrangements for referrals for specialised treatment. The key point is that the Secretary of State's general powers of direction, as originally set out in Clause 10 of the Bill, and the duty of co-operation between NHS bodies in Clause 23 are both wide enough to contain the arrangements needed for commissioning specialist services and for the so-called "out-of-area" treatments. Indeed, it is precisely because the Government attach such importance to partnership working between NHS bodies to ensure that all service
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are properly responsive to patients' needs that we have for the first time introduced the statutory duty of co-operation.
I can confirm that nothing further is needed on the face of the Bill to ensure that those provisions are indeed as wide as the noble Baroness intends them to be. Again, I should like to confirm, as has been pointed out in the notes dealing with the amendments, that nothing in the Bill restricts a GP's freedom of referral or stands in the way of commissioning services from whatever centre may be appropriate. I want to make that quite clear for the record.
I am also happy to give the commitment that, should it prove necessary, the Government would not hesitate to use the powers of direction and ensure that the duty of co-operation is complied with in order to ensure that arrangements in this area work as intended. The noble Baroness, Lady Carnegy, asked precisely what those powers were. The Secretary of State is able, under Clause 10(17) of the 1977 Act, as amended, to direct all NHS bodies—health authorities, SHAs, PCTs and NHS trusts—about their exercise of any functions. So this is comprehensive; it covers commissioning and funding arrangements should it be necessary to make directions on those. Therefore we believe that it is comprehensive enough.
We believe that reinstating the wording proposed by the noble Baroness would in practice add nothing to what the Bill already allows. The noble Lord, Lord Renton, to whom the whole House listens with great respect in these matters, suggested that it would remove doubt. I have to say to him that I do not believe there is doubt to remove, because of the breadth of the Secretary of State's general powers of direction. I believe in fact that it would create doubt in another area. That is because there is a danger that by introducing provisions regarding particular applications of a general power or duty—such as those in Clauses 10 and 23—we risk the unfortunate, and I am sure, absolutely unintended consequence of it being construed as limiting the scope of these general provisions.
I remind the House of a few of the other important purposes for which the powers may be used. For example, Clause 10 would enable the Secretary of State to issue directions, if necessary, to ensure an NHS body followed through speedily on the recommendations of the commission for health improvement. Clause 23 would cover local NHS bodies working together on the agreed priorities for local health improvement.
We must not run the risk of limiting the scope of the powers of direction and the duty of co-operation in respect of all matters that will advance patient care, given their intended breadth. This Motion is not the way forward. The noble Lord, Lord Renton, rightly said that it was important to get the legal framework right. But in this area it is essential to get more than the legal framework right. We must have the resources in place and smooth arrangements operating. We must ensure equal access for patients and remove some of the existing inequalities. That will entail a huge and comprehensive programme of work which we have already begun to undertake. For example, in the area of

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mental health, to which the noble Baroness, Lady Masham, referred, the national service framework will be the way forward in ensuring that there is greater consistency and better access to services for patients across the board.
Lord Renton: My Lords, I thank the noble Baroness for giving way. That is a very important point and I am anxious to help to make it clear. A difficulty arises under Clause 10 which states,
"The Secretary of State may",
I underline the word "may",
"give directions to any of the bodies mentioned in subsection (2) below about their exercise of any functions".
The authorities are then set out. But subsection (3), which the Government propose to leave out, says,
"The power conferred by subsection (I) shall be exercised so as to enable patients resident in an area, covered by a body referred to in that subsection to be referred out of their area".
"May" and "shall" are the operative words. It is the mere existence of "may" which raises a doubt, and the existence of "shall" which removes that doubt. That is what we must be careful about.
Baroness Hayman: My Lords, I understand absolutely the point to which the noble Lord refers. There is an issue in the drafting of legislation in these areas regarding putting "shall" into legislation where it may not be necessary for the Secretary of State to use the powers of direction. I hope that the noble Lord will accept from me that the power of direction means that the Secretary of State is able to follow through if necessary. I have today made a commitment that, should it prove necessary, the Government will not hesitate to use the powers of direction and ensure that the duty of co-operation is complied with in order to make sure that the arrangements work as intended.
Perhaps I may turn to the action we propose to take. I hope to reassure the House of the importance we attach to trying to improve the situation. Action continues on the specialised commissioning arrangements. National priorities for attention have been identified for attention in 1999–2000. We have already issued guidance on the commissioning of cleft lip and palate services. Guidance on medium and high secure psychiatric services will follow shortly. The two national service frameworks on coronary heart disease and mental health will include guidance on commissioning specialist services in those fields. So the rolling programme is under way as we promised.
At the same time, a process of peer review is under way across regions to ensure consistency of approach and to share best practice. My noble friend Lord Ashley spoke powerfully from his personal experience about arrangements for the provision of cochlear implants. He argued that they should be specifically included in the list of specialised services that had been issued in previous guidance. I should explain that this list is a working brief for the NHS Executive regional offices to use in reviewing current service arrangements over time. It has been deliberately framed so as to contain a
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measure of detail where necessary, but also to retain sufficient flexibility to be used in differing regional or local circumstances.
I hope that my noble friend will be reassured to know that the list is not set in stone. It will be refined as it is used, in discussion with the NHS. In the light of today's debate, I shall draw the attention of my ministerial colleagues to the importance which my noble friend attaches to this issue although I do not think that they are in any doubt as to that already. I shall ask my colleagues to ensure that the issue of cochlear implants is carefully considered as the list is developed. I say to my noble friend that we would expect an area which identified a particular problem over access to cochlear implants, or indeed to any other service, to follow that up, whether or not the service was on the list as a specialised service. I know that he is concerned about the number of implants that are taking place, particularly among people in middle years. Our figures show that the number of operations for cochlear implants in children under four and people over 75 has increased, but I accept absolutely the importance of keeping the figures under review so that the appropriate services for patients who would benefit from cochlear implants remain in place.
The noble Lord, Lord Renton, referred to the importance of getting the legal framework right. I accept that. But the issue raised by my noble friend Lord Ashley concerned an annexe to a circular which was issued before the Bill was introduced and which is still in force now. That reflects the need to get the arrangements right. The remedy to that does not necessarily lie on the face of this particular Bill.
Debates in this House and elsewhere have confirmed the need for better understanding of the new arrangements for out-of-area treatments. I am glad to say that since we last debated those issues in this House the department has issued further guidance on the arrangements under the cover of HSC99 171. Copies are in the Library. Regional offices of the NHS Executive continue to keep the arrangements under close review to ensure that any problems which emerge can be nipped in the bud.
The guidance also draws attention to the need for new or developing services to be identified and explicitly planned for. That point was made by my noble friend Lord Ashley and I think that the noble Lord, Lord Patel, would also welcome that provision. However, management guidance alone is not enough. We acknowledge the need to do more to ensure that local clinicians, patient groups and others understand and have confidence in all aspects of the new arrangements. Therefore, the department will be exploring with patient groups, managers and clinicians what sort of information will be helpful and how it can best be made available. It is especially important that those who depend on specialised services, whether for treatment for life-threatening conditions or for rare continuing illnesses, have confidence in the new arrangements. That is why I wish to confirm today that the Government welcome and accept the proposal that has come forward from user and carer groups in particular that we should arrange for annual reports to be

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published locally on the new regional specialised commissioning arrangements. We shall want those reports to explain which services are being commissioned through collective arrangements; to outline possible priorities for future in-depth review; and in due course to report on the operations already in place.
Baroness Masham of Ilton: My Lords, before the Minister leaves that point, will she say whether there will be a right to appeal for patients if they are not sent to the appropriate place of treatment?
Baroness Hayman: My Lords, perhaps I may deal with that issue in a moment. The way in which the right of appeal is defined and implemented in terms of clinical judgments about what is an appropriate referral is a difficult issue. However, we want the new regional reports to cover the interface between specialised commissioning arrangements and the arrangements for ad hoc, out-of-area treatment. In that respect, patients could consider that they fall between two stools.
The report will identify, for example, where an increase in the number of ad hoc referrals suggests the need to move to a planned long-term service agreement within the specialised commissioning arrangements. This will enable all concerned to reach clear understandings about the pace at which the service will develop and the types of case that it will treat.
Each annual report will of course be available to health authorities, primary care groups and trusts, NHS trusts and patient groups in the region concerned. But, recognising the interest in your Lordships' House, I can confirm that we shall ensure that a full set of these regional reports is available in the Library. The year 1999–2000 is the first for the development of the new arrangements and we therefore anticipate the first reports being available next summer.
It will also be important to take stock of national lessons emerging from these regional arrangements and ensure that good practice is shared; and we wish to ensure that the interface between the national and regional commissioning arrangements is working smoothly. The National Specialised Commissioning Advisory Group, which deals nationally with some of the most specialised services of all—for example, specialised psychiatric services for the deaf—already produces an annual report. We believe that the right way forward is likely to be to ask this group to extend its annual report to cover national lessons emerging from the regional arrangements so that there is a comprehensive and readily accessible account available. Again, copies will be placed in the Library.
Finally, I should like to reaffirm the importance we attach to ensuring that the users of these services are involved in the development of the new arrangements and have confidence in them.
Our debates have highlighted the need to look at strengthening user and carer involvement, not just in local commissioning arrangements, but in the new regional arrangements and indeed in the arrangements for the National Specialised Commissioning Advisory
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Group. In the light of our debates, I shall want the department to explore with patient groups and the NHS how best to secure greater user and carer input into the new arrangements; for example, through involvement in service reviews.
I return to the issue of a patient being unhappy with the decision not to refer. Of course, all patients can discuss with their GP a decision not to refer where the GP considers it clinically appropriate. If a patient is not happy, the GP can arrange a second opinion and the GMC guidance is very clear that it is good professional practice to arrange for that second opinion if the patient asks. However, in response to the issue raised by the noble Earl, Lord Howe, the principle that GPs have the clinical freedom to refer in the best interests of their patients remains. There is now greater scope than ever before for PCGs to align the available resources with those GP judgments. They are now involved explicitly through their PCGs in discussions about priorities and cost effectiveness to ensure that they achieve the best for their patients with the total resources available.
The basic principle for all the new commissioning arrangements is to promote the development of services that best match the needs of patients as identified by their GPs. As regards referrals where, for other reasons, patients are not met by the PCGs' service agreements, general practitioners can use the out-of-area treatment mechanism. Unlike the previous arrangements. there is no formal prior approval mechanism for out-of-area treatments, so we have a simplification of the situation rather than making it more difficult. There is nothing to stop a PCG, for example, making a service agreement to refer patients outside their own areas where that makes sense.
The noble Earl, Lord Howe, asked about the funding arrangements. They are designed to ensure that the issues are resolved while ensuring that patients receive the treatment they need. Clearly, it is key that over-performance within service agreements for more specialised services should not prejudice the delivery of more routine and locally based services. In managing their portfolio agreements, NHS trusts, health authorities and PCGs should ensure that that does not happen. Additional work is in hand in some areas to develop risk pools to which health authorities and PCGs will contribute to help manage in-year fluctuations under the OAT arrangements. Clinical units under short-term pressure could have access to cash brokerage in the usual way. That helps trusts both with their financial management and in imposing a measure of financial discipline as regards commissioners. The guidance we are issuing on those will encourage such pooling developments.
If there were a significant increase in referrals, the units concerned would need to explore with the referring PCG whether this trend was likely to continue In that case, it would be better handled through a planned service agreement using the usual specialised arrangements if appropriate rather than continued use of out-of-area treatment and having to deal with the financial consequences.

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In our earlier debates, including our debate at Third Reading when the House voted through amendments moved eloquently then, as again today, by the noble Baroness, Lady Masham, my sense was that the House wished to register the importance it attached to ensuring proper access to high quality specialised services for those who need them. That, rather than the specific terms of the amendments, formed the substance of our debate. Perhaps I may repeat that the Government share the views of the House and that the arrangements we will put in place are designed to achieve that end. I cannot pretend that they will be achieved overnight because we start from a position in which there is unequal access to some services.
I believe that the right response to the view your Lordships have expressed so strongly today is not to be found in fine-tuning the drafting of the Bill. I have explained that it already contains the necessary powers and duties and that there are no legal obstacles to referrals to specialist centres. I believe that in legislative terms there are dangers in leaving the Bill as it is and not agreeing with another place in their amendments. I believe that the right way forward is to ensure that the new arrangements fulfil their potential and that they command the confidence of the patients who depend on these services and the clinicians who provide them.
I pay tribute to the noble Baroness, Lady Masham, for the way in which she has kept our attention focused on these important matters as the Bill has proceeded. I believe that together the developments I have described represent a serious and constructive response to the debates we have held. I hope that the House will understand why the Government do not consider that the amendments passed in your Lordships' House at Third Reading offer the right way forward. But I hope that the noble Baroness and other noble Lords who have spoken, and those who have listened, will accept that the Government have listened and responded and that we intend to continue to listen and respond to the views of patients and clinicians as the arrangements develop further and that the commissioning of specialised services will be better as a result.
Baroness Masham of Ilton: My Lords, I thank all noble Lords who have supported the Motion and I thank the Minister for her full answer. However, I am concerned because often the tertiary referrals are from hospital to hospital and the GP is not even involved. I hope that that aspect is included.
We have had a useful debate. It was well worthwhile tabling the Motion because we have prised more information out of the Government. We will keep watching carefully, as will the bodies outside your Lordships' House and another place. I know that Members of Parliament are under pressure from their constituents over this matter.
It would not be right to divide the House on this issue. We have been able to put our views forward and to say how strongly we feel over this matter. We will go on feeling strongly. With that, I beg leave to withdraw the Motion.
Motion, by leave, withdrawn.
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 18.
Moved, That the House do agree with the Commons in their Amendment No. 18.—[Baroness Hayman.]
On Question, Motion agreed to.

COMMONS AMENDMENTS
19 Clause 10, page 17, line 1, leave out ("45(2) or (3)") and insert ("45(1C) to (4)").
20 Page 17, line 7, at end insert—
("or a function referred to in section 28EE(1)(a) to (d) below").
21 Page 17, line 33, leave out ("11,").
22 Page 17, line 40, leave out ("11,").
23 Page 18, line 1, leave out (""17" there is substituted "17B") and insert (""11 to 17" there is substituted "16 to 17B").
24 Clause 11, page 18, line 43, at end insert—
("() In paragraph 16(2) of that Schedule (general powers of NHS trusts), for "which is owned and managed" there is substituted "at or from which services are provided".")
25 Clause 12, page 19, line 7, leave out from beginning to ("be") in line 9 and insert—
("For section 5(9) of the 1990 Act (restrictions on exercise of certain powers) there is substituted—
"(9) A power conferred by paragraph 14 or 15 of Part II of Schedule 2 to this Act may only").
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 19 to 25.
Moved, That the House do agree with the Commons in their Amendments Nos. 19 to 25.—(Baroness Hayman.)
On Question, Motion agreed to.

COMMONS AMENDMENT
26 Clause 16, page 20, line 20, leave out ("Primary Care Trust, and each NHS trust,") and insert ("Health Authority, Primary Care Trust and NHS trust").
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 26. In moving this amendment I shall speak also to Amendments Nos. 27, 29 to 49, 76, 87 and 91.
These amendments deal with a variety of issues regarding the provisions in the Bill designed to drive up quality. Those issues are: the addition of further NHS bodies to which the duty of quality applies; joint working arrangements between the commission for health improvement and the Audit Commission; arrangements between the commission and Ministers of the Crown regarding other publicly funded health services and measures to clarify and strengthen the provisions on the accessing and disclosing of confidential information by the commission. I shall briefly address each of these matters in turn.
Amendment No. 26 extends the bodies to which the duty of quality in Clause 16 applies to include health authorities, in addition to NHS trusts and primary care trusts to which it already applies. It is in line with

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amendments debated during our own consideration of this clause, and has been largely prompted by that debate. We have no wish to be inflexible where we can see genuine scope for improvement.
We acknowledge that some health authority activity may be regarded as healthcare provision within the scope of the definition set out in the Bill. We have already made clear in guidance that we expect clinical governance to apply to health authority functions, such as communicable disease control. We believe that these are important and should be included within the scope of the statutory duty.
Amendment No. 76 applies the duty of quality for Scotland, set out in Clause 45, to the Common Services Agency of the NHS in Scotland. The agency is an integral part of the NHS in Scotland, providing a range of support services and activities which touch more directly on the treatment of patients; for example, breast and cervical cancer screening in Scotland.
Amendment No. 29 provides for joint working between the commission for health improvement and the Audit Commission. In A First Class Service the Government made clear that the commission for health improvement and the Audit Commission would be expected to agree a joint programme of national and local reviews in a way which makes best use of their particular expertise and combined resources.
I also recall that at Second Reading the noble Lord, Lord Clement-Jones, questioned what the relationship will be between the Audit Commission and the commission for health improvement. We believe that if your Lordships accept this amendment, it will be close and productive, not only for both commissions but also, and perhaps most importantly, for the NHS.
Noble Lords will know that the Bill provides for levels of assistance and partnership between the commission for health improvement and other bodies, but this does not allow for joint studies or joint reporting arrangements.
The amendment provides for joint reviews in two broad areas: first, joint reviews covering clinical governance and organisational risk, and, secondly, covering reviews of national service frameworks and value for money studies. In these joint studies the commission for health improvement will concentrate on clinical matters and the Audit Commission on those areas where it has longstanding expertise.
Subsection (2) of Amendment No. 29 provides for the commission to assist the Audit Commission in its wider programme of value for money studies by providing informed clinical expertise. The amendment also makes provision for joint reports and the recovery of costs by either commission for any assistance given to the other. The Audit Commission has expressed enthusiasm and commitment to working with the commission for health improvement and has given a particularly warm welcome to this provision.
I turn to Amendment No. 30. This enables Ministers of the Crown or a Northern Ireland Minister with responsibility for the provision of publicly funded healthcare services to enter into arrangements with the commission for it to perform functions in relation to
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those services. The amendment has been designed with three such health services in mind: the Northern Ireland Health Service, the Prison Medical Service and the Defence Medical Service which provides healthcare to members of the Armed Forces. However, the amendment is not limited to these health services.
Those Ministers with responsibility for the provision of these services may consider that the commission can make a valuable contribution in raising the quality of services. Where they wish to do so, we believe it is sensible to provide for arrangements to allow access to the commission's expertise. Amendments No. 87 and 91 are consequential to this amendment to ensure that it works properly.
Amendment No. 27 amends Clause 17 and is consequential to Amendments Nos. 29 and 30. which I have discussed. Those provide for joint working between the commission and the Audit Commission and for arrangements between the commission and Ministers of the Crown. Clause 17 establishes the commission for health improvement and gives it the functions set out in Clause 18. Subsection 17(2) states that the Commission is to have the functions conferred on it under Clause 18. The two new clauses confer additional functions on the commission. This amendment extends subsection (2) of Clause 17 to include those functions.
I turn to Amendments Nos. 31 to 49 on confidentiality. Noble Lords will recall that we had an important and well-informed debate on issues of confidentiality in relation to the commission for health improvement. The Government certainly share the concern expressed here that confidentiality is protected. Amendments Nos. 31 to 49 consist of drafting and technical amendments, an amendment to address your Lordships' concern about when individuals can be identified from various pieces of information and an amendment to address when information can be disclosed about a health professional's performance.
The drafting amendments, Amendments Nos. 31 to 41, 43 to 45, 47 and 49, attempt to clarify and tighten the provisions in Clauses 19 and 20 to give greater protection to the confidentiality of individuals. They also address some technical legal points.
On more substantial amendments, noble Lords will recall we debated the issue of confidential information being disclosed that of itself does not identify but, when taken in combination with other information, reveals or helps to reveal an individual's identity. Concern was expressed about the possibility of this scenario and I gave a commitment to look at these concerns.
I believe that Amendments Nos. 42 and 48 now adequately address those concerns. In combination they make it a criminal offence to disclose confidential information which would enable an individual to be identified from the information or from that information in combination with other information disclosed by the commission unless that disclosure is made with lawful authority.
Finally, on confidentiality, there is Amendment No. 46. This amends Clause 20(5)(g). The existing provision was intended to permit disclosure where there were concerns about a health professional's performance.

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However, in looking again at this provision we were concerned that the existing provision may be interpreted too narrowly; for example, only allowing disclosure of such confidential information in relation to a formal assessment of the health professional's performance.
In practice, this could mean that the commission could disclose such information to a regulatory body only where that body was already conducting an inquiry into the performance of the health professional concerned. Therefore, the commission would not be able to disclose such information to an employer or an appropriate regulatory body where it had emerged in the course of a review or investigation. This would hamper the commission's efforts to help to nip problems in the bud by informing relevant bodies of possible problems. Amendment No. 46 addresses that particular problem.
I am pleased to say that following discussions we have had, both the GMC and the BMA are content with this amendment, which brings the commission's operation into line with the GMC's code of conduct. The regulatory body's code states that a health professional must disclose information about a colleague if there is serious concern about his or her performance, conduct, or fitness to practice.
In previous debates on this Bill your Lordships expressed support for the provisions to improve quality in the National Health Service, although in characteristic fashion the House gave way to attention to detail. The result has been to help the Government to make many improvements in this and in other areas. These are a group of amendments which fall in that category and I hope that noble Lords will be happy to accept them. I beg to move.
Moved, That the House do agree with the Commons in their Amendment No. 26—(Baroness Hayman.)
5.30 p.m.
Earl Howe: My Lords, I should like to express my particular thanks to the Minister for Amendments Nos. 42 and 48 which respond to concerns expressed by my noble friend Lord McColl at earlier stages in the Bill that if the commission wishes to disclose confidential information about a person, it should ensure that that person cannot be identified from that information in combination with other information it has disclosed. It is good news that the Government found a form of words to address that concern and I am sure that all noble Lords will be pleased to see these new clauses in the Bill.
Perhaps I can ask the Minister one question relating to confidentiality as it applies to deceased persons. Is she in a position to update the House any further on the Government's thinking in that area?
Lord Clement-Jones: My Lords, I add my thanks to the Minister and my support for this important set of amendments, again particularly Amendments Nos. 42 and 48, bringing the duties of the medical profession in line with the GMC's code of practice. They are very welcome. Amendment No. 29 was unexpected. It does a good job of clarifying the relationship between the
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Audit Commission and CHI. It is always nice to be reminded of what one said in Committee even though it was some time ago—or feels as though it was.
There is the loose end on information relating to deceased patients. I understand that further consultation with the medical profession has been promised by the department and it will be useful if the Minister can describe the current state of play.
Baroness Hayman: My Lords, I am grateful to both noble Lords for their welcome for what we have been able to achieve. They are right to pinpoint the issue in relation to safeguards on information relating to deceased persons. We gave that matter specific attention and discussed it with the professions. It is a complicated area and we came to the conclusion that it would be inappropriate to use this Bill to make provision in that regard.
This is a complex area that goes far wider than the Bill. It needs to be tackled in the round, if that is seen to be necessary, rather than piecemeal in provisions that relate to the commission for health improvement. We hope to be able to develop guidance on the handling of confidential information in consultation with the professions. We will be keeping this under review to keep it in line with current law and practice, and the guidance issued by the professions. It is possible, as noble Lords will be aware, that directions can be issued to the commission on specific issues if that should become necessary.
There are real reasons—for example, the fundamental lack of legal clarity on how far the duty of confidentiality extends after death, if at all—that make this a complex area to tackle in the context of this Bill. But I accept that the wider issue needs to be considered and we hope to continue to do that with the professions.
On Question, Motion agreed to.

COMMONS AMENDMENTS
27 Clause 17, page 20, line 35, leave out ("section 18") and insert ("sections 18, (Arrangements with the Audit Commission) and (Arrangements with Ministers)")
28 Clause 18, page 21, line 35, leave out subsection (5)
29 After Clause 18, insert the following new clause—
ARRANGEMENTS WITH THE AUDIT COMMISSION
(".—(1) If requested to do so by the Commission in any particular case, the Audit Commission may join with the Commission in exercising—

(a) the Commission's functions under section 18(1)(b) or (d), or

(b) any functions of the Commission —

(i) which are conferred under section 18(1)(e),

(ii) which correspond to its functions under section 18(1)(b), and

(iii) which relate to Health Authorities or Special Health Authorities.

(2) If requested to do so by the Audit Commission in any particular case, the Commission may assist the Audit Commission in the exercise of its functions under section 33(1) of the Audit Commission Act 1998 so far as they relate to any body specified in section 98(1) of the 1977 Act.
(3) For the purposes of subsection (1), the Commission's functions under paragraph (b) or (d) of section 18(1) are to be treated as including the function of conducting and making reports on studies designed to improve—

(a) economy, efficiency and effectiveness in the performance of any functions of the persons mentioned in that paragraph, and

(b) the management of those persons.

(4) For the purposes of subsection (1), the Commission's functions mentioned in subsection (1)(b) are to be treated as including the function of conducting and making reports on studies designed to improve—

(a) economy, efficiency and effectiveness in the performance of any functions of the bodies mentioned in subsection (1)(b)(iii) to which those functions of the Commission relate, and

(b) the management of those bodies.

(5) Any report prepared by virtue of subsection (1) is to be prepared by the Commission acting in conjunction with the Audit Commission.
(6) The Audit Commission may not act as mentioned in subsection (1) unless, before it does so, the Commission has agreed to pay the Audit Commission an amount equal to the full costs incurred by the Audit Commission in so acting.
(7) The Commission may not act as mentioned in subsection (2) unless, before it does so, the Audit Commission has agreed to pay the Commission an amount equal to the full costs incurred by the Commission in so acting.
(8) Any reference in subsection (5) or (6) to subsection (1) is a reference to that subsection as read with subsections (3) and (4).
(9) In this section "the Audit Commission" means the Audit Commission for Local Authorities and the National Health Service in England and Wales."
30 After Clause 18, insert the following new clause—

ARRANGEMENTS WITH MINISTERS
(".—(1) Arrangements may he made between the Commission and a Minister of the Crown—

(a) for the Commission to perform any of its functions in relation to any prescribed health scheme for which the Minister has responsibility, or

(b) for the Commission to provide services or facilities in so far as they are required by the Minister in connection with any such health scheme.

(2) Arrangements may be made between the Commission and a Northern Ireland Minister—

(a) for the Commission to perform on behalf of the Minister any functions of the Minister which

(i) correspond to any functions of the Commission, and

(ii) relate to the Northern Irish health service, or

(b) for the Commission to provide services or facilities in so far as they are required by the Minister in connection with the exercise by him of any such functions.

(3) Arrangements under this section may be made on such terms and conditions as may be agreed between the parties to the arrangements.
(4) Those terms and conditions may include provision with respect to the making of payments to the Commission in respect of the cost to the Commission of performing or providing any functions, services or facilities under the arrangements.
(5) Any arrangements under subsection (2)(a) are not to affect the responsibility of the Northern Ireland Minister on whose behalf any functions are exercised.
(6) In this section—
"health scheme" means any scheme which appears to the Secretary of State to be a health or medical scheme paid for out of public funds,
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"Minister of the Crown" has the same meaning as in the Ministers of the Crown Act 1975,
"Northern Ireland Minister" includes the First Minister, the deputy First Minister and a Northern Ireland department,
"Northern Irish health service" means any of the health services under any enactment which extends to Northern Ireland and which corresponds to section 1(1) of the 1977 Act,
"prescribed" means prescribed by regulations made by the Secretary of State."
31 Clause 19, page 22, line 28, leave out ("relating to") and insert ("which are the subject of")
32 Page 22, line 32, leave out front ("provision") to ("identifies") in line 34 and insert ("with respect to the disclosure of confidential information which relates to and")
33 Page 22, line 36, leave out ("document or information is made available or produced") and insert ("information is disclosed")
34 Page 22, line 38, leave out from second ("the") to end of line 39 and insert ("information being disclosed")
35 Page 22, line 44, leave out ("make available or produce the document or") and insert ("disclose the")
36 Page 23, line 5, leave out from second ("the") to ("without") in line 6 and insert ("information should be disclosed")
37 Page 23, line 8, leave out from ("provision") to ("prohibited") in line 10 and insert ("with respect to the disclosure of information if that disclosure would be")
38 Page 23, line 10, leave out ("a document or")
39 Page 23, line 12, leave out ("document or")
40 Page 23, line 14, leave out ("as to the inspection, copying or production of the document or") and insert ("with respect to the disclosure of the")
41 Page 23, leave out lines 29 and 30
42 Clause 20, page 23, line 41, leave out subsection (1) and insert—
("(1) A person who, without lawful authority, knowingly or recklessly discloses information which—

(a) falls within section 19(2), and

(b) has been obtained by the Commission in accordance with any condition mentioned in section 19(2),

is guilty of an offence if the disclosure is made during the lifetime of the individual to which the information relates.
(1A) A person who, without lawful authority, knowingly or recklessly discloses information which—

(a) relates to and identifies an individual,

(b) has been obtained by the Commission on terns or in circumstances requiring it to be held in confidence, and

(c) does not fall within subsection (1),

guilty of an offence if the disclosure is made during the lifetime of that individual.")
43 Page 24, line 1, leave out from ("person") to ("liable") in line 2 and insert ("guilty of an offence under this section is")
44 Page 24, line 9, leave out from ("form") to ("or") in line 10 and insert ("in which the individual to which the information relates is not identified")
45 Page 24, line 23, leave out ("or any person authorised to act on his behalf")
46 Page 24, line 33, leave out paragraph (g) and insert—
("(g) in a case where the information appears to the Commission to reveal—

(i) that the performance of a health professional in his capacity as such has or may have fallen substantially below that which is expected,

(ii) that a health professional has or may have been guilty of serious professional misconduct, or

457

(iii) that the fitness of a health professional to practise as such is or may be seriously impaired by reason of his physical or mental condition,

and the person to whom the information is disclosed is a person to whom the Commission considers that it should be disclosed in order for appropriate action to be taken, or")
47 Page 24, line 36, leave out ("relates to a person who") and insert ("reveals that a person")
48 Page 24, line 40, at end insert—
("(5A) For the purposes of subsection (3)(a), information obtained by the Commission is to be regarded as identifying an individual if the individual can be identified—

(a) from that information, or

(b) from that information and from other information obtained by the Commission.

(5B) For the purposes of subsection (3)(a), information disclosed by a person is not to be regarded as being in a form in which an individual is not identified if the individual can be identified—

(a) from that information, or

(b) from that information and from other information disclosed—

(i) by the Commission, or

(ii) by any member or employee of the Commission.

(5C) Any reference in subsection (1), (1A), (5A) or (5B)(b)(i) to the Commission includes a reference to any person authorised by the Commission under section 19.")
49 Page 24, leave out line 42
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 27 to 49. I have already spoken to these amendments.
Moved, That the House do agree with the Commons in their Amendments Nos. 27 to 49.—(Baroness Hayman.)
On Question, Motion agreed to.

COMMONS AMENDMENT
50 Leave out Clause 22.
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 50.
In moving Amendment No. 50 I shall speak also to Amendment No. 144. I am grateful for the opportunity of explaining the actions of the Government in removing from the Bill the former Clause 22 on the independent healthcare sector which was inserted during the Bill's passage through your Lordships' House. We had a lengthy debate on the issue at that time, but events have now moved on in ways which I believe—and I hope the House will agree—demonstrate the Government's clear commitment to meaningful action on private and voluntary sector regulation. I hope that much of what I have to say will reassure those who expressed concerns in this area.
Clause 22 essentially attempts to permit the Secretary of State for Health, by regulations, to extend some or all of the functions of the commission for health improvement to private providers of acute healthcare. The rationale behind the amendment was principally that the commission for health improvement might have an important role in the regulation of the independent
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healthcare sector, forming part of a new system to replace the current arrangements. Indeed, there are those who suggested that the commission would be an appropriate body to take lead responsibility for regulating the sector.
Perhaps I can say at the outset that I believe there is no disagreement that the current system for regulating the private and voluntary healthcare sector is inadequate. I should like explicitly to reassure the House that the Government believe they have a duty to ensure that private and voluntary healthcare is properly regulated and that we are committed to improving on the current arrangements. In particular, we believe that regulation is necessary to protect patients and to reassure those using private and voluntary healthcare sectors that they will receive safe services. Healthcare is not a service which should be bought and sold in an unregulated market, with individual patients being required to satisfy themselves about the safety of services being provided.
When we last debated these issues, I explained that our White Paper, Modernising Social Services made a commitment to establishing new arrangements for the regulation of both residential and nursing homes. Both are currently regulated under the 1984 Registered Homes Act which is now badly out of date. We have set out specific proposals to establish new commissions for care standards to inspect and regulate private and voluntary residential care premises and I can assure the House that when we legislate to implement this proposal, we intend also to make appropriate new arrangements for the regulation of private healthcare and the independent health sector.
Noble Lords will recall that I announced during our earlier debates the Government's intention to issue a consultation document on options for the regulation of the private and voluntary healthcare sector. I am pleased to say that this document, Regulating Private and Voluntary Health Care was published on Tuesday of this week. I should also like to pay tribute to the way in which debates in this House helped us in shaping and framing that document.
The consultation document re-emphasises the Government's commitment to effective regulation of the private and voluntary healthcare sectors and seeks views on three main sets of issues: first, the scope of regulation and specifically the range of establishments which should be covered by the new arrangements; secondly, the regulatory standards which should be applied and the sanctions which might be brought to bear when these are not met. The Government believe that those standards should go beyond those in the existing regulatory system which focus primarily on facilities. We suggested that they should include other issues such as complaints, information for patients and staff registration. Thirdly, we seek views on the regulatory structure for administering the process. Our favoured option here is a new independent statutory body, purpose-designed to perform this function.
The arguments against using the commission for health improvement to administer the new arrangements are well rehearsed and I shall not labour them this

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afternoon. Quite simply, the commission has been designed to operate as part of a managed healthcare system—the National Health Service. It is quite a different matter to perform a regulatory function in the context of a system which operates primarily on the basis of private contracts between individuals and healthcare providers. The same basic argument applies in respect of the duty of quality.
I know that it has been said in defence of Clause 22 that it does not compel the Secretary of State to act and that it merely leaves the door open for the commission to have some future role in the regulatory process should this be thought appropriate. I can only re-emphasise a point I have been at pains to stress since we first debated the issue: we cannot sensibly legislate in anticipation of a system we do not yet know. If we attempt to do so, we will in all likelihood get it wrong and have to amend the legislation again at a future date. I think that that point is amply illustrated by the extent to which Clause 22 harks back to elements of the 1984 Act, which I believe everyone will agree is becoming a little long in the tooth. For example, the effect of that Act is to define rather narrowly the healthcare providers to be regulated. We are consulting on whether the new arrangements should in fact cover a more extended range both of bodies and of premises.
Noble Lords will wish to note that, in line with the commitment I gave during our earlier discussions, the consultation document does, however, acknowledge that a regulator might wish to contract with another body, such as the commission for health improvement—or, indeed, the Commission for Care Standards or another private or public sector body—in order to help carry out local inspections. That is an issue on which we explicitly invite views.
The consultation will run until 17th September, which I believe is ample time for all relevant interests to make their views known. We shall consider very carefully the responses to this document before taking further action. Of course, we will also have the benefit of the report which is due to be made by the Health Committee in another place.
I hope that I have been able to explain to noble Lords' satisfaction why the Government felt it was right to remove from the Bill the new clause inserted by the House. Since we last discussed these issues, there has been significant progress. In line with both the White Paper commitment and my own assurances to the House, and with the benefit of your Lordships' debates on these issues, the Government have brought forward concrete proposals for addressing just the matters with which this House was rightly concerned. We are taking action to assure quality in the private and voluntary healthcare sector. I believe that there is little or no ground between us on many of the fundamentals. Given this progress, I hope that your Lordships will feel able to allow the amendment made in another place to stand.
Moved, That the House do agree with the Commons in their Amendment No. 50.—(Baroness Hayman.)
Earl Howe: My Lords, the noble Baroness has taken a great deal of trouble to set out the Government's
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thinking on this amendment; as, indeed, she did in our earlier debates on Report. I should like to ex press my appreciation for that. What she has said undoubtedly takes us further forward. There was much in her speech which gives me cause to think that at least some of the points of principle that I and other noble Lords tried to articulate at earlier stages have not fallen entirely on deaf ears. Nevertheless, the amendment carried by your Lordships, which gave the Secretary of State power to extend to the independent hospital sector both the duty of quality and the remit of the commission for health improvement, reflected, I believe, some extremely important issues of principle. It was approved by a very significant majority of your Lordships and won the support of noble Lords from both sides of the House.
Although the Government have chosen to overturn that amendment in another place, their amendment bringing about that deletion has not been debated in another place by the whole House of Commons. It has only been debated in Standing Committee where the majority in the Government's favour was the narrowest possible one. If an amendment to a Bill is approved by your Lordships—especially one of this significance—I believe that the Government owe it both as a duty and as a courtesy to this House to allow the issue to be debated on the Floor of another place. The fact that this was not done is, I respectfully suggest, most regrettable.
I started with the thought that it would be by no means unreasonable of your Lordships to ask the other place to look at the Lords' amendment again. The logic of the case that it advanced remains clear. Day to day, the NHS and the independent sector work hand in glove; indeed, in many areas, the NHS would simply not survive without the ability to contract out to the private sector. In mental health, for example, 30 per cent of the beds in the independent sector are funded by the NHS. There are many thousands of doctors who divide their time between the NHS and private work. If the duty of quality is to apply to one part of the healthcare system in this country, it should apply across all parts of it.
From the point of view of the patient, there is no case whatever for seeking to draw artificial divisions between the NHS and the independent sector in terms of the standards of care that each should be delivering. Those standards, and the standards of clinical governance overarching them, should be consistent right the way across the board. If they are not, it is difficult to see how the Secretary of State's duty to safeguard and promote the health of the nation—that is to say, the nation as a whole—is being properly fulfilled. But that is the rub for this Government.
I would never accuse the noble Baroness of being ruled by dogma. Her message today was couched in balanced and reassuring tones. But those were not the tones of the press release that accompanied the publication of the consultation document on Tuesday. The headline says:
"Regulatory Body to Tackle Failures in Private Health Care".
The release continues:
"Mr. Dobson said, `Today's document responds directly to widespread patient concern about poor care in parts of the private sector. The small number of people who go private deserve protection'".

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If that is what the Secretary of State believes this debate to be about, he really has lost the plot. But, of course, he does not believe it. He knows perfectly well that the concern of doctors and clinicians in the private sector is to see standards of care raised across the healthcare system as a whole. There is not a word in the press release to acknowledge that it is the private sector which has been campaigning for this regulation; not a word about the huge strides that it has made in establishing a coherent quality agenda alongside that being developed in the NHS.
"The small number of people who go private", in Mr Dobson's words, actually numbered 850,000 surgical patients in 1998. The total turnover of the private health and social care sector is £17 billion a year—a figure that includes 20 per cent of all acute elective surgery performed in this country. The truth is that the very existence of the independent sector is offensive to old Labour. If we want even more graphic evidence of that proposition, we need look no further than a recent statement by the chairman of the Health Select Committee in another place, Mr. Hinchcliffe. When asked to comment on doctors and other professionals who work in private practice, he replied:
"I hate the bastards, and you can quote me".
That is the sort of mindset we are dealing with. That is why I approach the new consultation document with a degree of scepticism. The whole thrust of the document is to propose what might be termed a "bargain basement" system of clinical standards for the private sector—a safety-net approach rather than a proper, fully-fledged quality agenda. That was not at all the thrust of the amendment approved by your Lordships.
In deciding my attitude to this amendment, I need to ask the Minister a few questions. Does she accept the suggestion that this consultation document, even if it does not usher in the kind of level playing field of clinical standards that I have been pressing for, nevertheless opens the door to such a level playing field. In other words, will she confirm that nothing in these proposals stands in the way of the adoption by the independent sector of clinical governance arrangements on a par with those in the NHS?
To be positive about this document, it does at least open up as a possibility that a new independent regulatory body could contract with the commission for health improvement, as the noble Baroness mentioned, to carry out inspections. It also suggests that clinical and professional standards in the private sector could be the subject of regulations or a statutory code of practice. All that suggests that there could be a de facto, if not a de jure, unitary framework of regulation. That is what the independent sector wants. It wants to come under the wing of CHIMP and NICE. It wants better regulation. It wants nationally consistent quality standards. I am the first to recognise that there may be more than one way of achieving those aims and I look to the noble Baroness for some further reassurance.
Lord Clement-Jones: My Lords, the motives of these Benches in supporting the original amendment
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were clear. Where healthcare and our hospitals are concerned, it seemed to us to be completely illogical and unfair that patients might be entitled only to minimum standards depending on whether or not they are treated in the NHS or the independent sector, or even whether or not they are an NHS or private patient in an independent hospital. Throughout the debates in both Houses our view has been that there should be consistency of standards between NHS pay bed units and independent hospitals and consistent standards when NHS and private care are provided alongside each other in independent hospitals, such as medium-secure psychiatric hospitals. We on these Benches believe that every patient should have the right to minimum standards of quality care and safety irrespective of the sector in which they are treated.
As we have seen from the consultation paper, which we read with considerable interest when it was published on Tuesday, the Government are moving towards consistent standards of clinical governance so that, for instance, suspensions can take effect in the independent sector on receipt of an "alert" letter. There is therefore a strong prospect of seamless clinical governance between the two sectors which we welcome.
Moreover, we on these Benches look forward to further moves. We look forward to a prospect of wider consistency of quality of treatment. While not agreeing with the precise mechanics suggested in the consultation paper, we welcome the commitments the Minister has given and some of the statements in the consultation paper, for instance the clear recognition of the inadequacies of the existing regulatory structure and the commitment to protect all members of the public, including private patients as well as patients in NHS hospitals. Further, we welcome a recognition that it is important that patients who choose to use the independent sector are reassured that they receive services that are safe. We welcome the further statements made today by the Minister explaining the paper, and the preference for a single regulator for the acute independent healthcare sector rather than putting him under the regional commissions. We believe that is at least a step in the right direction.
We also welcome the recognition that that single regulator of independent healthcare might well want to take advantage—and be able to take advantage—of the particular expertise of the commission for health improvement. We believe that there is considerable potential synergy between the responsibilities of that single regulator and the work of the commission itself. However, we believe that some further assurances are needed. For instance, we need the assurance that NICE guidance for doctors in the NHS on the treatments that they use can also be adopted by the new independent regulator, and that the independent regulator could also introduce all or part of the national service frameworks.
The Select Committee on Health in another place has carefully considered the matter, as the noble Baroness mentioned. However, we seek the assurance that if it recommends—it certainly appears to be moving in this direction—that a common duty of quality is extended across the two sectors, the Government will carefully consider that proposal as part of the consultation

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exercise. We realise that the Minister cannot give an undertaking to provide legislative time to introduce a new system of regulation for the independent sector in the next Session but we hope that we have grounds for optimism on that score.
Baroness Carnegy of Lour: My Lords, the Government's response to this amendment which your Lordships have made to the Bill is to me both disappointing and also surprising because it seems to me an astonishingly out of date attitude to have taken to the way private medical institutions should be brought up to quality. I am sorry now that we did not have a separate amendment relating to Scotland. If I remember rightly, the debate was a fairly general one. I expected the Government's response to be rather different and that Scotland would be able to follow what was decided for south of the Border. But in view of the fact that there is nothing about Scotland here—that is of course understandable—I wonder whether the noble Baroness can tell us the way the wind is blowing on this subject in Scotland, if she knows that, and whether the Government have been talking to the Scots Parliament about the matter. I hope she can tell us whether any consultation paper will he issued in relation to Scotland because it seems to me that this is an urgent matter north as well as south of the Border. I would have thought that potential—
Lord Patel: My Lords, I thank the noble Baroness for giving way. I reassure the noble Baroness that as far as I am aware there is no bar to the remit of the clinical standards board for Scotland extending to the private sector. It is responsible for quality standards in Scotland. I speak as a chairman of the standards board.
Baroness Carnegy of Lour: My Lords, I am grateful to the noble Lord for reassuring me on this matter. He is a neighbour of mine and he knows everything about what happens in Scotland. However, I am not sure that everyone in Scotland is completely happy about this situation. However, perhaps those comments exonerate the noble Baroness from replying to my question. I apologise if I have wasted noble Lords' time.
Baroness Hayman: My Lords, I am grateful for those comments. I always believe in cutting out the middleman if necessary!
Serious issues have been raised today and were raised in earlier debates we have had in regard to regulatory standards and how we ensure the protection of patients without there being any of the artificial divisions to which the noble Earl, Lord Howe, referred. I hope that I can give some assurances that the Government are not being ideologically obdurate in these areas. What we have said—I have said this to the House on many occasions—is that we must ensure that the processes that we have in place to ensure patient protection, quality of care for patients and the safety of patients, are appropriate to the environment in which they are receiving care. The processes and the structures which are applicable within the NHS—a managed service—will be different from the structures and processes that are in place within the independent sector. That is the argument I have been trying to propose.
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I say to the noble Earl that it is neither his fault nor mine that these issues were not debated on the Floor of the House in another place. I suggest in the gentlest of terms that if Members in another place had not decided to spend four hours debating the timetable Motion out of the five and a half hours that were available on Tuesday of this week, we might have been able to have a debate on these issues.
Earl Howe: My Lords, I am most grateful to the noble Baroness for giving way. Is she suggesting that Madam Speaker in another place was not regulating the Chamber as she should have been, because if she is suggesting that it is a disgraceful thing for her to say?
Baroness Hayman: My Lords, I would never suggest that. Madam Speaker was active on these matters. I believe that the Opposition had to be called to order 21 times in the course of Monday's debate. However, the allocation of time as between the timetable Motion and other discussions was in the hands of Members. Fortunately such considerations do not apply in your Lordships' House and we can return to the substantive issues before us.
The debate has focused on standards of care and the quality of care that is available and is to be ensured for all patients. In our consultation document we propose that as part of the regulatory framework we would establish a range of standards that would apply either to all private and voluntary establishments or to a particular kind of establishment. These might be set out in regulations or in a statutory code of practice but it will be a responsibility of the regulatory body to make sure that they are delivered.
We believe that this is much more than a safety net approach and that it addresses one of the weaknesses of the current regulatory regime: that standards and inspections tend to focus on facilities rather than on the quality of care available to patients. We are proposing that standards might be developed in a number of areas which relate more closely to the care delivered and which ensure that, where appropriate, there are parallels with the protection that is provided within the NHS.
Perhaps I may give specific examples. At present, staff working in private and voluntary healthcare can be employed in private and voluntary hospitals as, for example, chiropodists or physiotherapists, without being properly qualified and registered. The Government believe that all private and voluntary hospitals should ensure that they employ only state registered staff, as is already the position in NHS hospitals. So here we are bringing in a parallel that will increase protection.
It is also important that patients, their relatives and carers should have access to a comprehensive range of information about services being provided in a hospital or clinic where they may be treated. The Government consider that this should cover clinical as well as non-clinical services. It might include information on staffing, facilities available and the range of services provided. We propose that the provision of information for patients should be one of the standards for the new regulatory system—again ensuring some sort of parallel with what is available elsewhere.
6 p.m.
Baroness Masham of Ilton: My Lords, perhaps I may ask the Minister a question. There are assistants to physiotherapists who do valuable work both in the health service and in the private sector. It is well known that there are not enough therapists. It might be very serious if the private sector and the National Health Service were not allowed to employ such assistants, who work under a qualified physiotherapist.
Baroness Hayman: My Lords, I hope that I can reassure the noble Baroness that there is no intention that appropriate services should not be provided by staff who are not necessarily state registered within their profession. The issue is about protection of title, to which I am sure my noble friend Lord Morris of Manchester will respond. It is also about an assurance to patients that they are being treated by someone who, if he says he is a chiropodist, is indeed a state registered chiropodist. That is not to undervalue the assistance that can be given by aides both in the public and private sector, but it should be at the appropriate level and no one should be in any doubt.
The issue of the complaints procedure within the private sector has been raised. A number of patients have written to me about that issue. We propose that, as a condition of registration, private and voluntary healthcare establishments should be required to make available a complaints procedure to patients and their relatives. That procedure must allow, as does the NHS system, for independent review of both clinical and non-clinical complaints.
We also believe that providers in this sector should be required to publish information annually on complaints received and that patients should have the right to make representations to the regulatory body if they are dissatisfied with the way their complaints have been handled. This would give private patients access to a wholly independent mechanism comparable to that provided for NHS patients by the Health Service Commissioner.
The Government expect there to be appropriate standards set out for the care of vulnerable groups, including children. It is extremely important that staff working with children are subject to proper recruitment and vetting procedures, that appropriately qualified nursing staff are employed and that children are treated in suitable, preferably dedicated, facilities. Again, this is common practice in the NHS.
The noble Earl, Lord Howe, used the expression "a level playing field". We are ensuring that the areas where protection is given to patients in the NHS are also covered by an appropriate mechanism in the private and voluntary sectors. A good example of this concerns the issue of suspensions, to which the noble Lord, Lord Clement-Jones, referred. It is obviously not possible for an NHS employer formally and legally to suspend a doctor who is working for somebody else. But in terms of protection for patients it is important that other employers of that doctor are aware of the situation and are under an obligation to take appropriate action. That is what we intend to put in place.
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I was asked specifically about ensuring that there were no obstacles to looking at and learning from the NHS in terms of overall quality improvement. I agree with the noble Earl that it would be quite possible. What we are doing on clinical governance is very open; we believe that it is the right thing to do. It would be appropriate for a private sector provider to take it into account and to adopt similar structures of clinical governance that would give reassurance to the regulatory body that it was taking appropriate measures to ensure high clinical standards.
In exactly the same way, the noble Lord, Lord Clement-Jones, asked me about the possibility of NICE guidelines proving of relevance to the regulatory body when in the course of its regulatory and inspection work it looked at quality standards in the private sector. Equally, existing clinical guidance, good practice or relevant sections of national service frameworks might be the common source of material drawn upon by the regulator of the private sector in implementing clinical governance, as it is by NHS trusts.
But we cannot import wholesale the system of one area into the system of another; they are designed for different purposes. We accept that we have a responsibility for fundamental standards—for example, in relation to staff qualifications and premises. Were there to be wholly inappropriate clinical practice by an individual clinician within the private sector, that would be a matter for the relevant professional regulatory body. Whether or not a particular procedure was an appropriate treatment to provide is not properly a decision for the Secretary of State. In areas where there is such doubt, the professional regulatory body must take precedence.
The professional standards of those bodies apply to individual health professionals regardless of where they work. That is another element of commonality between the two sectors. Good professional practice is good professional practice, whether within the NHS or the private sector. Doctors, nurses and other health professionals are bound by the same professional standards wherever they work. The drive to strengthen and modernise professional regulatory mechanisms, which this Bill underpins, will have a positive impact across the board.
I hope that I can reassure the House that the Government are happy to acknowledge that they have responsibility both for patients treated in the NHS and for patients treated in the private and voluntary sectors. The Government's responsibility for NHS patients are patently different. In that context, they are themselves the care manager and the provider of services. We need to use different mechanisms for the two sectors-a matter of horses for courses, if you like-but the underlying intention is to protect all patients and to ensure that the same high quality care is available for all patients.
As I said at the beginning, healthcare provision cannot be an unregulated, unmanaged free-for-all. We believe that all patients need to be confident that wherever they are treated they will receive care that is safe and of good quality. We are taking action to ensure that that is the case.

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I hope that my explanation of the Government's thinking on these issues and our intention that the legislation for the commission for care standards should also cover the regulation of the private and voluntary sector will reassure noble Lords that we have made progress since our earlier debates.
On Question, Motion agreed to.

COMMONS AMENDMENT
51 Clause 23, page 26, line 10, leave out subsection (2).
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 51.
Moved, That the House do agree with the Commons in their Amendment No. 51.—(Baroness Hayman.)
[Motion 51A not moved.]
On Question, Motion agreed to.

COMMONS AMENDMENT
52 Clause 25, page 27, line 39, leave out subsection (10).
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 52.
Moved, That the House do agree with the Commons in their Amendment No. 52.—(Baroness Hayman.)
On Question, Motion agreed to.

COMMONS AMENDMENT
53 Clause 30, page 31, line 38, leave out ("(5)") and insert ("(4)").
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 53. In moving that amendment, I shall speak also to Commons Amendments Nos. 54 to 62, 64 to 67, 69 and 92.
I wish to say at the outset that it is the intention of the Government to continue to work with the pharmaceutical industry through co-operation and voluntary agreement. The clauses in the Bill which relate to the control and prices of medicines supplied to the NHS and the profits made by companies from those sales have been drafted against that background. A new voluntary agreement is in the final stages of negotiation. It is our sincere hope that this new agreement will be sufficient to ensure that the NHS obtains its medicines on reasonable terms which recognise, among other things, the costs and value of research and development undertaken by the industry. It is also our hope that we shall not have to rely on any powers provided in these clauses in respect of a statutory scheme.
During their passage through another place these clauses were further amended by the Government in response to some remaining concerns of the pharmaceutical industry. First, I refer to the matter of scheme membership and Commons Amendments Nos. 53 to 57. We have changed the nature of the test for removing a company from the voluntary scheme. The subjective test was not intended to enable the
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Secretary of State to remove companies for flimsy reasons. Given the concerns raised, we are seeking to make the test an objective one.
Secondly, Commons Amendment No. 57 requires the Secretary of State to consult the industry body before he can exercise the power provided in Clause 30 to require information from scheme members.
Thirdly, the aim of Clauses 30 to 35 is to control prices and profits of medicines supplied to the health service. The Government have no interest in interfering with the prices charged for medicines supplied privately or through exports. Commons Amendments Nos. 59 to 61 and 64 to 67 add a further limit on the face of the Bill in the expression of that aim. The powers to control prices are only exercisable with a view to limiting prices which may be charged for the supply of health service medicines for the purposes of the health service. The power to limit profits is similarly restricted; that is, they may be exercised with a view to limiting profits arising from the supply of health service medicines for the purposes of the health service.
Finally, I turn to territorial issues. Commons Amendment No. 92 enables the Secretary of State to control the prices of medicines supplied to the health services in Great Britain by companies based in Northern Ireland. Commons Amendment No. 69 includes the health service in Northern Ireland in the definition of the health service within the Bill. There are advantages, if Northern Ireland agrees, for the Secretary of State to control prices for the whole of the United Kingdom. That would avoid placing an extra burden on the pharmaceutical industry, would avoid creating extra administration costs and would avoid different prices for the same medicines within the UK. Commons Amendment No. 69 therefore makes it possible to make regulations which cover sales of medicines to the health service in Northern Ireland if the regulations stipulate that they shall apply to Northern Ireland. It also becomes a simple matter to reverse their application to Northern Ireland by superseding those regulations with others which would apply only to Great Britain. We will not make regulations covering Northern Ireland unless the Assembly chooses to opt in.
We are aiming to deal with the United Kingdom as a whole through the voluntary scheme. Should the Northern Ireland Assembly choose to opt in then we would similarly have a statutory scheme with equal application. If the Assembly decides to make its own statutory provisions then the statutory scheme made under this Bill will revert to application in Great Britain and Northern Ireland and will be dealt with separately under statute made by the assembly. This arrangement is entirely consistent with the devolution settlement and has the support of my right honourable friend the Secretary of State for Northern Ireland.
Moved, That the House do agree with the Commons in their Amendment No. 53.—(Baroness Hayman.)
6.15 p.m.
Earl Howe: My Lords, this is a welcome group of amendments, covering as they do a series of issues of concern to the pharmaceutical industry, some of which we debated at earlier stages of the Bill.

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The issue of how the Bill should define a health service medicine, which is covered by Commons Amendments Nos. 64 to 67, occupied us in Committee. I have no doubt that the Government's stated aim was no different from the aim that I endeavoured to express on that occasion. The amendments that I tabled were amendments to the definitions set out at the end of Clause 35 and were designed to ensure that the controls proposed in the Bill would apply to a medicine only when it was supplied to the NHS and not in other circumstances.
I note that the government amendments on that question adopt a somewhat different approach from the one that I tabled. I hope and trust that the amendments will achieve the same result, although I would point out that leaving the definition of health service medicine as it was appears to have an ambiguity about it which to my mind at least is unsatisfactory. However, I place my trust in the Minister and the department. I hope that no difficulties will emerge as a result of the government amendments to this part of the Bill.
On Question, Motion agreed to.

COMMONS AMENDMENTS
54 Clause 30, page 31, line 42, leave out (", in the opinion of the Secretary of State,").
55 Page 32, line 1, leave out from ("may") to end of line 2 and insert ("by a written notice given to the scheme member determine that the scheme is not to apply to him").
56 Page 32, line 3, leave out from beginning to ("has") and insert ("A notice under subsection (4) must give the Secretary of State's reasons for giving the notice; and the Secretary of State may not give a notice under that subsection until he").
57 Page 32, leave out lines 5 to 7.
58 Page 32, line 10, after ("may") insert ("after consultation with the industry body").
59 Clause 31, page 32, line 32, leave out from ("limit") to third ("to") in line 33.
60 Clause 32, page 33, line 10, leave out from ("scheme") to first ("to") in line 11.
61 Page 33, line 16, leave out from ("scheme") to third ("to") in line 11.
62 Clause 34, page 34, leave out lines 22 and 23 and insert—
("(b) in subsection (5) of that section, the references to interested persons as references to any persons and the reference to any decision to take enforcement action as a reference to any enforcement decision.").
63 Clause 35, page 35, line 5, leave out subsection (2).
64 Page 35, line 13, after ("limiting") insert ("by reference to the prices or profits which would be reasonable in all the circumstances—
(a)").
65 Page 35, line 13, after ("or") insert—
("(b)").
66 Page 35, line 15, after ("supply") insert ("for the purposes of the health service").
67 Page 35, line 15, leave out from ("medicines") to end of line 16.
68 Page 35, leave out line 29.
69 Page 35, line 30, leave out from ("service"") to end of line 31 and insert ("means any of the health services within the meaning of the 1977 Act, the 1978 Act or the Health and Personal Social Services (Northern Ireland) Order 1972").
S.I. 1972/1265 (N.I. 14).
70 Clause 36, page 39, line 31, at end insert—
("(8) Subsection (4) of section 122A above applies for the purposes of this section as it applies for the purposes of that."").
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 54 to 70.
Moved, That the House do agree with the Commons in their Amendments Nos. 54 to 70.—(Baroness Hayman.)
On Question, Motion agreed to.

COMMONS AMENDMENT
71 After Clause 39, insert the following new clause—
HEALTH SERVICE COMMISSIONERS
(".—(1) Section 15 of the Health Service Commissioners Act 1993 (confidentiality of information) is amended as follows.
(2) In subsection (1), at the beginning of paragraph (e) there is inserted "where the information is to the effect that any person is likely to constitute a threat to the health or safety of patients".
(3) Subsection (1A) is omitted.
(4) In subsection (1B)—

(a) for "such a case" there is substituted "a case within subsection (1)(e)",

(b) the words following "patients" are omitted.

(5) In subsection (1C), for paragraphs (a) and (b) there is substituted—

"(a) where he knows the identity of the person mentioned in subsection (1)(e), inform that person that he has disclosed the information and of the identity of any person to whom he has disclosed it, and

(b) inform the person from whom the information was obtained that he has disclosed it".").

Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 71. This amendment delivers on a commitment that I made during our previous consideration of the Bill. The Health Service Commissioner believes that the current legislation under which he works—the Health Service Commissioners Act 1993—unnecessarily restricts him in disclosing information that he receives. That issue was raised by my noble friend Lord Harris of Haringey. At present there are statutory limitations on the commissioner's discretion to disclose information that he obtains as a result of a complaint which leads him to believe there is a threat to the health or safety of patients. In particular, he has been advised that he cannot disclose information if he decides not to investigate the complaint or if the matter of concern fails to be disclosed in one of his investigation reports. If the commissioner obtains information which suggests that the health or safety of patients is likely to be at risk, he should be able to pass that information on to the appropriate authorities, irrespective of how he chooses to deal with the specific complaint made. This amendment makes that possible.
I reassure the House that this amendment seeks only to remove inappropriate restrictions on the commissioner's existing discretion to disclose information. He is not seeking powers to make more

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general judgments about professional competence and conduct. However, if a complaint indicates a serious threat to the health or safety of patients, it is right that he should be able to pass on appropriate information to those with responsibility for investigating and dealing with that threat.
Subsections (2), (3) and (4) of Commons Amendment No. 71 allow the commissioner to make appropriate disclosure of information where it is in the interests of the health or safety of patients for him to do so. It is equally important that he should not be constrained as to which responsible authorities he can disclose information. The latter half of Section 15(1B) of the Health Service Commissioners Act 1993, as amended, could be interpreted as placing such a constraint on him. Subsection (4)(b) of the new clause removes that element of uncertainty by omitting the list of examples of the type of body which might be passed information.
Subsection (5) of the new clause places an obligation on the commissioner to tell the provider of the information that he has disclosed it. In practice, he already does so, on the very rare occasions when he has exercised his discretion, but we believe it is appropriate to make that explicit.
The amendment clarifies the extent of the Health Service Commissioners' discretion to disclose information in the interests of the health and safety of patients. It responds positively to concerns raised in this House during our initial consideration of the Bill. We have worked closely with the current Health Service Commissioner, Mr Michael Buckley, in drafting the amendment. I confirm that he is happy with it. I commend the amendment to the House.
Moved, That the House do agree with the Commons in their Amendment No. 71.—(Baroness Hayman.)
Lord Harris of Haringey: My Lords, I merely wish to welcome the amendment and say how pleased I am that the Government have been able to bring a provision forward in another place on this issue.
There was an anomaly here. It potentially removed a line of protection for patients. The health service commissioner might come upon circumstances in the course of an investigation that really should be dealt with by some other body, but would be unable directly to pass the matter on. The amendment gives the Health Service Commissioner unequivocally the powers, where the health and safety of patients is at risk, to refer such matters to other bodies. I am delighted that the provision will now be on the face of the Bill.
On Question, Motion agreed to.

COMMONS AMENDMENT
72 After Clause 39, insert the following new clause—
("Rectification of transitional arrangements
POWER TO RECTIFY TRANSITIONAL PROVISIONS ETC
—(1) The Secretary of State may by order make such provision as he considers appropriate in consequence of the matters mentioned in subsection (2) (the "relevant defects").

(2) Those matters are—

(a) the omission from Part III of Schedule 2 to the Health Authorities Act 1995 (Transitional Provisions; Order 1996 (which determined the relevant Health Authority in relation to any Family Health Services Authority in England whose locality comprised or formed part of the area of more than one Health Authority) of an entry for Bromley Family Health Services Authority,

(b) the inclusion in Part III or IV of Schedule I to that order (which determined the relevant Health Authority in relation to any Family Health Services Authority whose locality comprised or formed part of the area of only one Health Authority) of an entry for any Family Health Services Authority in England or Wales whose locality comprised or formed part of the area of more than one Health Authority (and an entry for which should accordingly have been included in Part III or IV of Schedule 2 to that order),

(c) the omission from column 2 of the entry for any Family Health Services Authority in Part III or IV of Schedule 2 to that order (which together with column 3 of that entry specified the relevant Health Authorities in relation to that Family Health Services Authority) of any Health Authority whose area or any part of whose area forms part of the locality of the Family Health Services Authority and which was not included in column 3 of that entry,

(d) where—

(i) the locality of a Family Health Services Authority and the area of a Health Authority overlap but do not coincide, and

(ii) the Family Health Services Authority had compiled a list of persons residing in its locality,

the treatment, incorrectly. by a Health Authority of a person included in that list as residing. or as not residing, in their area.

(3) Provision that may be made under subsection (1) includes, in particular—

(a) provision amending the Health Authorities Act 1995 (Transitional Provisions) Order 1996,

(b) provision transferring, or adding, the name of any Part II practitioner to any Part II list in which he is (or, at the material time, was) not included because of any of the relevant defects,

(c) provision for treating anything done by or in relation to an acting authority or a person of any description identified by reference to an acting authority as having been done by or in relation to the proper authority or a person of that description identified by reference to the proper authority,

(d) provision for treating anything done by or in relaion to an acting authority or a person of any description identified by reference to an acting authority as having been so done in the exercise by them or him of functions on behalf of the proper authority or a person of that description identified by reference to the proper authority.

(4) Any provision made by an order under this section may be made with effect from any date after 31st March 1996 specified in the order.

(5) Provision contained in an order under this section by virtue of section 55(2) may include provision conferring functions on the Secretary of State.

(6) In subsection (3)(b)—

"Part II practitioner" means a person who provides (or, at any time since 31st March 1996, has provided) general medical services, general dental services, general ophthalmic services or pharmaceutical services in accordance with arrangements made or treated as made (or which, but for any of the relevant defects, would have been made or treated as made) under Part II of the 1977 Act,

473
"Part II list" means a list kept by a Health Authority under section 29(2)(a), 36(1)(a), 39(a) or 42(2)(a) of that Act (lists of persons providing general medical, general dental, general ophthalmic or pharmaceutical services).

(7) In subsection (3)(c) and (d), in relation to anything done by or in relation to a Health Authority or person identified by reference to a Health Authority—

"acting authority" means the Health Authority by or in relation to whom the thing was done or person was identified because of any of the relevant defects,
"proper authority" means the Health Authority by or in relation to whom the thing should have been done or by reference to whom the person should have been identified.").
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 72. It inserts a clause which allows the Secretary of State to correct deficiencies in an order made in 1996 which made transitional provisions to implement the Health Authorities Act 1995. The 1995 Act abolished family health services authorities and district health authorities and established new successor health authorities.
The deficiencies in the earlier order have the primary effect that no successor health authority was designated to replace Bromley Family Health Services Authority on 1st April 1996. Other deficiencies have meant that in some cases the designation of successor health authorities took no account of various small boundary changes.
It is only a technical oversight which means that Bromley and some other health authorities did not make decisions and payments concerning family health service practitioners in law. However, I should emphasise that patient care has been unaffected and no one will have received money that does not reflect a payment for a service which was provided.
It is not possible to remedy the situation solely by amendments to existing provisions, since that would not provide legal cover for the decisions and payments which have technically been unlawful since 1st April 1996. The clause therefore gives us the power to make a fresh order which will retrospectively amend the deficiencies that have been identified, and thereby validate all the decisions taken and payments made by the "wrong" authority since that date. I commend the amendment to the House.
On Question, Motion agreed to.

COMMONS AMENDMENTS
73 Clause 42, page 47, line 12, after ("functions") insert
("—
(a)")
74 Page 47, line 14, at end insert (";or

(b) relating to pilot schemes under Part I of the National Health Service (Primary Care) Act 1997; or

(c) relating to arrangements under section 17C for the provision of personal medical services and personal dental services."."

75 After Clause 44, insert the following new clause—
TRANSFER OF STAFF AMONG HEALTH SERVICE BODIES
(". After section I 2C of the 1978 Act there is inserted—
"Transfer of staff among health service bodies.
12CA.—(1) This section applies to any person who is—

(a) employed by a health service body (the transferor authority) and is transferred to another health service body (the transferee authority) because a function of the transferor authority is transferred to the transferee authority; and

(b) designated for the purposes of this section by a scheme made by the transferor authority.

(2) A scheme under this section shall not have effect unless approved by the Secretary of State.

(3) The contract of employment between a person to whom this section applies and the transferor authority shall have effect from the transfer date as if originally made between him and the transferee authority.

(4) Without prejudice to subsection (3)—

(a) all the transferor authority's rights, powers, duties and liabilities under or in connection with a contract to which that subsection applies shall by virtue of this section be transferred to the transferee authority on the transfer date; and

(b) anything done before the transfer date by or in relation to the transferor authority in respect of that contract shall be deemed from that date to have been done by or in relation to the transferee authority.

(5) Subsections (3) and (4) are without prejudice to any right of an employee to terminate his contract of employment if a substantial change is made to his detriment in his working conditions; but no such right shall arise by reason only of the change in employer effected by this section.

(6) A scheme under this section may designate a person either individually or as a member of a class or description of employees.

(7) In this section—

a "health service body" is a body mentioned in section 17A(2); and

the "transfer date" is the date on which the function is transferred from the transferor authority to the transferee authority."").

76 Clause 45, page 47, line 36, after ("trust") insert ("and of the Agency").
77 Clause 51, page 54, leave out lines 45 to 50 and insert—
("(a) shall consult a body appearing to him to be representative of persons to whose remuneration the determination would relate, and
(b) may consult such other persons as he considers appropriate.").
78 Page 55, line 8, leave out ("revised") and insert ("varied").
79 Page 56, line 26, leave out ("revocation or revision") and insert ("or revocation").
80 Page 56, line 41. leave out subsection (4).
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 73 to 80 en bloc.
Moved, That the House do agree with the Commons in their Amendments Nos. 73 to 80 en bloc.—
(Baroness Hayman.)
On Question, Motion agreed to.

COMMONS AMENDMENT
81 After Clause 54. insert the following new clause—
ENGLISH AND SCOTTISH BORDER PROVISIONS
".—(1) Her Majesty may by Order in Council provide for any functions to which subsection (2) applies which are specified in the Order, so far as exercisable in respect of the provision of services to persons in English border areas, to be exercisable (instead of any corresponding function to which subsection (4) applies) in respect of the provision of the services in question to persons in Scottish border areas who are specified in the Order.
(2) This subsection applies to any functions under the 1977 Act, or Part I of the National Health Service (Primary Care) Act 1997, which are exercisable by the Secretary of State or any Health Authority or Primary Care Trust.
(3) Her Majesty may by Order in Council provide for any functions to which subsection (4) applies which are specified in the Order, so far as exercisable in respect of the provision of services to persons in Scottish border areas, to be exercisable (instead of any corresponding function to which subsection (2) applies) in respect of the provision of the services in question to persons in English border areas who are specified in the Order.
(4) This subsection applies to any functions under the 1978 Act, or Part I of the National Health Service (Primary Care) Act 1997, which are exercisable by the Scottish Ministers or any Health Board or NHS trust established under the 1978 Act.
(5) In this section—

"English border area" means the area of any Health Authority adjacent to Scotland,

"Scottish border area" means the area of any Health Board adjacent to England.").

Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 81. In speaking to this amendment, I wish to speak also to Amendments Nos. 84 and 85.
This new clause, and the amendments consequential upon it, will enable sensible provision to be made for local healthcare services at the Border between England and Scotland. It is intended that similar provision will be made at the Border between England and Wales, but that does not require primary legislation.
A number of GP practices located near the England/Scotland Border have patients on their lists from both sides of the Border. Under the existing arrangements that means that the GPs concerned are part of both the English and the Scottish NHS systems. This clause will enable a GP practice and its patients to be dealt with by either an English health authority or a Scottish health board, rather than having to deal with both. It enables a more coherent approach to be taken to the planning of local healthcare services, simplifies local administrative procedures and avoids duplication of time and effort.
As the effect of the order will be to confer on the Secretary of State or English health authorities the ability to operate in relation to Scottish patients, and for Scottish Ministers and Scottish health boards to operate in relation to English patients, both Westminster and the Scottish Parliament will be able to scrutinise, debate and approve the order. Amendment No. 85 provides that the Order in Council must be laid before and approved by resolution of both Houses of Parliament and the Scottish Parliament.
476
While only relatively few patients will be affected by these provisions—around 3,500 on current estimates—they are important in ensuring that sensible practical arrangements can be made in respect of the provision of healthcare in Border areas. We have consulted those that will be most affected by the provisions—health authorities, health boards and GPs in cross-Border areas—and everyone who responded was in favour of the approach that we propose to take. I commend the clause to the House.
On Question, Motion agreed to.

COMMONS AMENDMENTS
82 Clause 55, page 65, leave out lines 10 to 14 and insert—
("(1A) Directions under section 18 or 25 or Schedule 2, or by virtue of section 35(1)(b), are to be given by an instrument in writing.
(1B) Any such directions may be varied or revoked by subsequent directions under, or by virtue of, the same provision.
(2) Subsections (4) and (5) of section 126 of the 1977 Act (supplementary provisions about subordinate legislation) apply in relation to any power conferred by this Act to make Orders in Council, orders or regulations, or to give directions mentioned in subsection (1A), as they apply in relation to the powers which may be exercised as mentioned in subsection (4)(a) and (b) of that section").
83 Page 65, line 15, leave out ("subsection (2)") and insert ("subsection (4) of that section").
84 Page 65, line 16, after ("28") insert ("or an Order in Council under section (English and Scottish border provisions)").
85 Page 65, line 37, at end insert—
("() No recommendation is to be made to Her Majesty to make an Order in Council under section (English and Scottish border provisions) unless a draft—

(a) has been laid before, and approved by resolution of, each House of Parliament, and

(b) has been laid before, and approved by resolution of, the Scottish Parliament.").

86 Clause 57, page 66, line 9, at end insert—
("() "NHS trust" has the same meaning—

(a) in Part I of this Act as in the 1977 Act,

(b) in Part II of this Act as in the 1978 Act.").

87 Clause 59, page 66, line 16, at end insert (''but this subsection does not apply to section (Arrangements with Ministers)").
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 82 to 87 en bloc.
Moved, That the House do agree with the Commons in their Amendments Nos. 82 to 87 en bloc.—(Baroness Hayman.)
On Question, Motion agreed to.

COMMONS AMENDMENT
88 Clause 59, page 66, line 17, leave out from beginning to end of line 39 and insert—
("(2) The power of a Minister of the Crown under section 60 to appoint a day for any of the following provisions to come into force in relation to Wales—

(a) sections 1 to 5, (Delegation of Health Authority functions relating to pilot schemes and section 28C arrangements), 6, 7, 9, (Local representative committees), 10 to 16 and Schedule 1,

477

(b) sections 23 to 29,

(c) section 58(1) and Schedule 4, so far as concerns the following provisions of that Schedule: paragraphs 1 to 13, 20 to 23, 24(a), 25 to 32, 34, 35 (except sub-paragraph (2)(b) and (d)), 36, 37, 67, 68, 70, 71, 72(b), 73 to 75A, 76 (except sub-paragraph (2)(b)), paragraphs 78, 79, 80 (except sub-paragraph (2)(a)) and 82 to 85,

is exercisable instead by the National Assembly for Wales.

(3) In Schedule 5 to the Government of Wales Act 1998 (bodies and offices covered by section 74), after paragraph 12 there is inserted—

"12A. The Commission for Health Improvement".

(4) The National Assembly for Wales (Transfer of Functions) Order 1999 is amended as follows; and those amendments are to have effect as if made by an Order in Council under section 22 of the Government of Wales Act 1998 (transfer of Ministerial functions).

(5) In Schedule 1—

(a) in the entry for the 1977 Act, after paragraph (c) there is inserted—

"(cc) section 43C;
(ccc) sections 46 to 49E",.
(b) at the end of the entry for the 1990 Act, there is inserted—
"The references above to paragraph 1 of Schedule 3 are references to that paragraph before the amendments made by section 15 of the Health Act 1999.
The Treasury consent requirement under paragraph 8 of that Schedule (inserted by Schedule 4 to the Health Act 1999), so far as relating to the matters referred to in paragraph (b) of that paragraph, shall continue in effect",.

(c) after the entry for the National Minimum Wage Act 1998 there is inserted—

"In the Health Act 1999—

(a) Part I and Schedule 4, except sections 18(1), (Arrangements with Ministers) and 30 to 35 and Schedule 2 (other than paragraph 2);

(b) section 56, so far as it relates to any of the provisions which, by virtue of section 59(2), may be brought into force by the Assembly".

(6) In Schedule 2, after the entry for the Audit Commission Act 1998, there is inserted—

"Health Act 1999
The functions of the Secretary of State under section 18(1) shall be exercisable only with the agreement of the Assembly.
The functions of the Secretary of State under paragraphs 4 to 7 of Schedule 2 shall be exercisable only after consultation with the Assembly".").
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 88. I shall also speak to Amendment No. 90.
It may be helpful if I begin by setting the context for Clause 59. We made it clear before the devolution referenda in 1997 that there would continue to be a UK-wide National Health Service. However, as your Lordships are aware, the devolved bodies are charged with funding and administering the NHS in Northern
Ireland, Scotland and Wales according to the particular needs of those countries.
At present, Clause 59 of the Bill provides that the National Assembly for Wales will have vested in it all the new functions created by the free-standing provisions in the Bill appropriate to its role in managing
478
the NHS in Wales. So, for example, the Assembly will be able to make use of the new operational flexibilities at the interface between the NHS and local government, and will be able to exercise the powers conferred on the Secretary of State in relation to health improvement programmes.
But the Bill also makes substantial amendment to existing NHS legislation. There are some parts of the Bill which insert new sections into the 1977 Act, or which amend existing functions that are to be transferred to the Assembly by the National Assembly for Wales (Transfer of Functions) Order 1999—which has already been made and which comes into force on 1st July. For example, Clause 11 amends Section 5 of the 1990 Act, which provides for the establishment of NHS trusts. This is a function which is to be transferred to the Assembly by the transfer of functions order.
I indicated in Committee, in response to a question from the noble Lord, Lord Crickhowell, that amendments to deal with this issue would be required at a later stage. We wish to ensure that the functions created by the amendments to existing NHS legislation are as effectively transferred to the Assembly as new functions. It is important that the transfer of functions order can be interpreted in such a way that references in the order to existing NHS legislation are to be construed, where appropriate, as references to the legislation as amended by the Bill.
At the time the Bill was introduced into this House the transfer of functions order had not been made and so appropriate provisions could not be drafted. We have therefore brought forward these amendments at a later stage. They are technical in nature, but they deal with the issue. The clause as amended will ensure the proper transfer to the Assembly of the appropriate provisions in the Bill, so that it can manage the NHS in Wales in line with the reforms that the Bill effects. I commend the amendment to the House.
On Question, Motion agreed to.

COMMONS AMENDMENTS
89 Clause 60, page 67, line 5, leave out ("accordingly comes into force") and insert ("comes into force on 1st July 1999 or, if later").
90 Page 67, line 6, at end insert—
("() Subsection (1) does not apply to section 59, of which—

(a) subsections (1) and (3) to (6) come into force on the day on which this Act is passed,

(b) subsection (2) comes into force on 1st July 1999 or, if later, the day on which this Act is passed.").

91 Clause 61, page 67, line 15, leave out ("Section 21 extends") and insert ("Sections (Arrangements with Ministers) and 21 extend").
92 Page 67, line 16, at end insert ("and Northern Ireland").
93 Page 67, line 16, at end insert—
("() The Secretary of State may by order provide that so much of this Act as extends to England and Wales is to apply to the Isles of Scilly with such modifications (if any) as are specified in the order; but otherwise this Act does not extend there.").
94 Clause 62, page 67, line 18, leave out subsection (2).
95 Schedule 1, page 68, line 34, leave out ("any such") and insert ("the").
96 Page 68, line 35, leave out ("Primary Care Trust") and insert ("authority").
97 Page 70, line 46, leave out from beginning to end of line 7 on page 71 and insert—
("13.—(1) Any rights acquired, or liabilities (including liabilities in tort) incurred, in respect of the exercise by a Primary Care Trust of any function exercisable by it by virtue of section 16B or 17A above are enforceable by or (as the case may he) against that trust (and no other health service body).
(2) This paragraph does not apply in relation to the joint exercise of any functions by a Primary Care Trust with another body under section 16B(2)(c) above.").
98 Schedule 2, page 78, line 1, leave out paragraph 20.
99 Schedule 3, page 79, line 34, leave out from second ("Parliament") to end of line 35 and insert—
("(a) the Secretary of State's duty under sub-paragraph (1) must be performed also by the Scottish Ministers, and
(b) sub-paragraph (4) shall apply instead of sub-paragraph (2).

(4) After the end of the period of three months beginning with the publication of the draft, the draft as published, or that draft with any modifications which the Secretary of State and the Scottish Ministers consider appropriate, may be laid before Parliament and the Scottish Parliament together with a report made by the Secretary of State and the Scottish Ministers about the consultation.").

100 Schedule 4, page 80, line 31, at end insert—
("National Health Service Act 1966 (c. 8)
1A. Section 10 of the National Health Service Act 1966 (modification of prohibition of full-time salaried practitioner service) is omitted (and, accordingly, section 29(4) of the 1977 Act and section 19(3) of the 1978 Act continue to have effect).").
101 Page 81, line 8, at end insert—
("4A. In section 11 (Special Health Authorities), for subsection (1) there is substituted—
"(1) The Secretary of State may by order establish special bodies for the purpose of exercising any functions which may be conferred on them by or under this Act." ").
102 Page 81, line 10, at end insert—
("5A. In section 15 (duty of Health Authority in relation to family health services), subsections (1B) to (1D) are omitted.").
103 Page 81, leave out lines 11 to 17 and insert—
("6. For section 16 (exercise of functions) there is substituted—
"Exercise of functions by Health Authorities and Special Health Authorities.
16.—(1) This subsection applies to functions which are exercisable by a Health Authority under or by virtue of this Act (including this section), the National Health Service and Community Care Act 1990 or any prescribed provision of any other Act.
(2) Regulations may provide for any functions to which subsection (1) above applies to be exercised—

(a) by another Health Authority,

(b) by a Special Health Authority, or

(c) jointly with any one or more of the following: Primary Care Trusts and other Health Authorities.

(3) Regulations may provide for any functions which are exercisable by a Special Health Authority under section 16D below to be exercised—

(a) by another Special Health Authority, or

(b) jointly with one or more other Special Health Authorities.

(4) Regulations may provide—
480

(a) for any functions to which subsection (1) above applies to be exercised, on behalf of the Health Authority by whom they are exercisable, by a committee, sub-committee or officer of the Health Authority,

(c) for any functions which, under section 16D below or this section, are exercisable by a Special Health Authority to be exercised, on behalf of that authority, by a committee, sub-committee or officer of the authority,

(d) for any functions exercisable jointly under subsection (2)(c) or (3)(b) above to be exercised, on behalf of the health service bodies in question, by a joint sub-committee or joint sub-committee." ").

104 Page 85, line 38, after ("arrangements)") insert ("—
(a) in subsection (1), after paragraph (b) there is inserted—
"(ba) Primary Care Trusts,",.
(b)").
105 Page 86, line 3, at end insert ("section 28EE(2) above,").
106 Page 86, line 7, leave out from ("for") to end of line and insert (""11 to 17" there is substituted "16D to 17B".").
107 Page 86, line 12, leave out from ("(4),") to end of line 13 and insert ("for "incidental or supplemental" there is substituted "supplementary, incidental, consequential, transitory, transitional or saving".").
108 Page 86, leave out line 14 and insert—
(".—(1) Section 128 (interpretation) is amended as follows.
(2) In subsection (1)—").
109 Page 86, line 22, at end insert—
("(3) After that subsection there is inserted—
"(1A) So far as is necessary or expedient in consequence of a direction under section 16D or 17A above providing for the exercise by a Health Authority, Special Health Authority or Primary Care Trust of a function exercisable by another person, any reference in any enactment, instrument or other document to that other person is to be read as a reference to the Health Authority, Special Health Authority or Primary Care Trust."").
110 Page 86, leave out lines 39 to 47 and insert—
(""15.—(1) Any rights acquired, or liabilities (including liabilities in tort) incurred, in respect of the exercise by an authority of any function exercisable by them by virtue of section 16 or 16D above are enforceable by or (as the case may be) against that authority (and no other health service body).
(1A) This paragraph does not apply in relation to the joint exercise of any functions by an authority with another body under section 16(2)(c) or (3)(b) above." ").
111 Page 87, leave out lines 39 to 44.
112 Page 90, line 17, at end insert—
(". In section 85B(2) (bodies in respect of which schemes for meeting losses and liabilities may be made)—

(a) the "and" after paragraph (c) is omitted,

(b) after paragraph (d) there is inserted "and

(e) Special Health Boards".").

113 Page 90, line 25, at end insert—
("56A. In section 105(7) (orders, regulations and directions) for "incidental or supplemental" there is substituted "supplementary, incidental, consequential, transitory, transitional or saving".).
114 Page 90, line 34, at end insert—
("() in paragraph 16(c), the words from "which purposes shall include" to the end are omitted,").
115 Page 91, line 23, leave out ("for").
116 Page 91, line 23, leave out from ("special") to ("services") in line 26 and insert ("hospital" is omitted, after "above)" there is inserted "in a hospital at which high security psychiatric services are provided" and for "other special hospital" there is substituted "other hospital at which those").
117 Page 91, line 28, leave out from ("for") to ("which") in line 30 and insert (""which is not a special hospital" there is substituted "at").
118 Page 92, line 42, leave out (""13"") and insert (""11 or 13"").
119 Page 93, line 30, at end insert—
("75A. Section 18 (indicative amounts for doctors' practices) is omitted.").
120 Page 95, line 32, at end insert—
("Audit Commission Act 1998 (c. 18)
85. In section 5 of the Audit Commission Act 1998 (general duties of auditors), in subsection (I)(a), for "(2B) (NHS trusts) or (2B) (fund-holding practices)" substitute "or (2B)".").
121 Schedule 5, page 95, line 38, at end insert—
("1966 c. 8.
The National Health Service Act 1966.
Section 10.").
122 Page 95, line 38, at end insert—

("1973 c. 65.

The Local Government (Scotland) Act 1973.

In section 97, in paragraph (a) of subsection (2), sub-paragraph (iii), subsection (2A) and in subsection (2B) the definitions of "recognized fund-holding practice" and "allotted sum".").

123 Page 95, line 42, column 3, at end insert—

("Section 15(1B) to (1D).").

124 Page 96, line 4, column 3, at end insert—

("Section 28E(4).").

125 Page 96, line 4, column 3, at end insert—

("In section 44(1), paragraphs (a) and (b) and "the Local Medical Committee, the Local Dental Committee". In section 45(2), "(including travelling and subsistence allowances payable to its members)".").

126 Page 96, line 21, column 3, at end insert—

("In section 98, the subsection numbered (2B) which was inserted by section 20(2)(b) of the 1990 Act.").

127 Page 96, line 27, column 3, leave out ("definition of) and insert ("definitions of "fund-holding practice" and").
128 Page 96, line 31, column 3, at end insert—

("In Schedule 15, paragraph 37.").

129 Page 96, line 46, column 3, after ("6(2),") insert ("in paragraph 16(c) the words from "which purposes shall include" to the end,").
130 Page 96, line 52, column 3, at end insert—

("In Schedule 16, paragraph 22.").

131 Page 96, line 55, column 3, at end insert—

("In section 123(1), "in a special hospital".").

132 Page 97, line 17, column 3, after ("4,") insert ("subsection (2)(f),").
133 Page 97, line 28, column 3, leave out ("17") and insert ("18").
134 Page 97, line 28, column 3, at end insert—

("Section 20(2)(b).").

135 Page 97, line 28, column 3, at end insert—

("Sections 34 and 35").

136 Page 97, line 40, column 3, at end insert—

("In section 15, subsection (1A) and, in subsection (1B), the words following "patients".").

137 Page 97. line 46, column 3, after ("4,") insert ("6(c) and (d), 34, 50(c), 58(b),").
138 Page 97, line 46, column 3, after ("72") insert ("to 77").
139 Page 97, line 46, column 3, at end insert—

("In Schedule 2, paragraph 13(5).").

140 Page 97, line 46, at end insert—

("1995 c.31.

The National Health Service

Section 1.

(Amendment) Act 1995.

Section 2(2).

Section 3.

Section 7 and 9.").

141 Page 98, line 4, column 3, after ("paragraphs") insert ("4(3) and (4),").
142 Page 98, line 5, column 3, at end insert (", 65(3) to (10), 69, 71(4), 77 and 78.").
143 Page 98, line 5, at end insert—

("1998 c. 18.

The Audit Commission Act 1998.

Section 6(3).

In section 53(1), the definitions of "allotted sum" and "recognized fund-holding practice" and, in the definition of "health service body", paragraph (b) and "or" preceding it.

In section 53(3), paragraph (b) and "and" preceding it.

In Schedule 2, paragraph 3.").

144 In the Title, line 4, leave out from ("functions") to ("confer") in line 6.
Baroness Hayman: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 89 to 144 en bloc. I have already spoken to these amendments. I commend them to the House.
Moved, That the House do agree with the Commons in their Amendments Nos. 89 to 144 en bloc.
(Baroness Hayman.)
On Question, Motion agreed to.

Local Government Bill
6.29 p.m.
Report received.
Clause 1 [Best value authorities]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 1:
Page 2, line 18, at end insert—
("() No authority or body which budgets in any year to spend a sum not exceeding £500,000 or such higher sum as the Secretary of State may by order specify shall be regarded as a best value authority.").
The noble Baroness said: My Lords, Amendment No. 1 seeks to amend Clause 1. That clause is concerned with those authorities that are to be regarded as best value authorities. We had a debate at the previous stage on a de minimis provision. It appears to be generally accepted that a budget threshold of £500,000 a year is about the right sum. The Minister at that stage said that the Government were still considering the figure, although he informed the Committee that discussions with the National Association of Local Councils (town and parish) indicated that £500,000 was the right figure.
I have tabled this amendment in part to ask the Government whether further progress has been made in those discussions and in part because at the previous stage there was some little concern that the amendment as drawn—the noble Lord, Lord Dixon-Smith, moved the amendment and we supported it—did not allow flexibility. If that was the objection—I suspect that it was not the only one, but doubtless we shall hear from the Minister—I hope that I have dealt with it in the present drafting. If the Minister tells the House that he wants to allow for a lower limit than£500,000 we shall happily return to this matter yet again at the next stage. My point is as brief as that. Given the lateness in starting these proceedings, I shall not expand on the background to the amendment. I beg to move.
Lord Dixon-Smith: My Lords, when we debated this issue in Grand Committee the Minister in his response indicated that it would not be normal practice to put into legislation figures that might require subsequent adjustment in the light of inflation. I accept that that is a reasonable argument, but that was never the intended basis on which I moved the amendment. If I did not then make the matter sufficiently clear, or press it hard enough, I am in error. I always envisaged that it might he possible, in the light of experience in a year or two, that the limit now proposed—I believe that we
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should put as much on to the face of the Bill as possible, whatever may have been the custom and practice—would be unreasonably low.
The decision might be taken in the light of practice that £1 million was a perfectly acceptable figure, and that would have nothing to do with an inflationary increase. It seems to me that if we are considering the matter on that scale it is not unreasonable to see that on the face of the Bill. At that level a greater number of authorities would undoubtedly come within the exempt category, but in overall expenditure terms that would be very small beer in relation to the totality of local government expenditure. That would still be controlled by Part I of the Bill, which is concerned with best value authorities. I support the amendment.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, the Government have recognised throughout that the best value duties could be extremely onerous for smaller parish and town councils. The Bill therefore enables us to exempt them. This subsection gives the necessary powers. "Specified description" in this context may refer, for example, to parish councils with budgeted income of a particular amount. As the noble Baroness said, officials have met the National Association of Local Councils and the Audit Commission to discuss how best value can be applied. I confirm that it is the intention of the Government to set a de minimis level of £500,000, as indicated in the White Paper last year. On that basis, approximately 70 or 80 parish and town councils out of a total of 8,000 would be covered by that regime. Any parish council with a lower income would be entirely exempt, although we would like it to follow the spirit of best value.
For those few parishes above the threshold we can use the powers provided in the Bill to ensure that the duties are applied sensibly with regard to a parish's ability to fulfil those duties. We do not wish to impose excessive burdens on those best value parish councils. We shall be consulting on that matter.
We do not think that it is sensible to put a figure on the de minimis level on the face of the Bill because that will remove the capacity to alter the level up or down in the light of changing circumstances and seeing how it applies. Setting a figure by order provides us with the flexibility that we need. The amendment gives us the flexibility to raise the threshold but it would not provide the flexibility to lower it. Were we to take the noble Lord's advice and go to £1 million, next year or the year after we might find that that turned out to be too high and we wished to lower it.
There is an additional problem. The amendment as drafted does not achieve our intention as discussed with parish councils, since we propose to set the threshold with reference to budgeted income in line with existing audit thresholds rather than budgeted expenditure as the amendment provides. With that reaffirmation of our intention and the reason why we seek this flexibility, I ask the noble Baroness to withdraw the amendment.
Baroness Hamwee: My Lords, I am grateful to the Minister for the information with which he has provided

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the House. If the discussions with the parish councils have been related to budget income rather than expenditure I do not wish this amendment to be applied. I do not want to upset those discussions. The Minister referred to lowering the threshold. I do not believe that my amendment would preclude coming back to £500,000 or a slightly higher figure had it gone by order to, say, £1 million. It certainly would preclude coming back to £300,000. I said that if the Government suggested they might want to lower the limit we could be tempted to return to the matter at Third Reading. We shall wait and see. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 [The general duty]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 2:
Page 3, line 6. leave out ("and").
The noble Baroness said: My Lords, in moving Amendment No. 2 I should like to speak also to Amendments Nos. 3, 11 and 12. These amendments deal with the criteria that apply both to the best value duty in Clause 3 and the performance indicators and standards in Clause 4. The clauses explain that the criteria to which authorities are to have regard are, in combination, economy, efficiency and effectiveness. "Economy" probably speaks for itself, as do the other two. However, it may be worth pausing for a moment to reflect on their precise meaning. I believe that "efficiency" is about producing the desired result with the minimum wasted effort, and "effectiveness" is about bringing about a result. Neither of those is entirely original. I looked them up in the Oxford English Dictionary last night.
We do not believe that those are adequate criteria. We do not challenge their inclusion but seek to add to them. This group of amendments seeks to add the criterion of fairness. At Committee stage we spent a little time on whether the term used then—"equity"—was the right one. The Minister volunteered that he preferred "fairness", perhaps simply as a matter of elegance of language; I am not sure. I noted his criticism about switching between "equity" and "equality" in a rather seamless fashion, and I accept that there are differences. I believe that fairness is a good. plain and straightforward term. It embodies concepts of being just and equitable and of providing an equal chance of success. There was quite a lot of support in the Grand Committee for the concept of equity, as it was referred to then. It was regarded as being integral to the best value duty. The Minister argued then that there were difficulties in writing equity or fairness into the criteria as distinct from ensuring the concept of the criterion under the effectiveness banner.
On 10th May the Minister said that the Government,
"have not thought it appropriate to write in wellbeing provisions. [The Bill] is primarily about the way in which local government conducts its management and delivers its services and, to some extent, its financial control rather than the broader objectives of local government".
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He went on to say,
"The Government consider it essential that as a result of introducing best value, our local authorities concentrate on service outputs and outcomes".—[Official Report, 10/5/99; col. CWH 22.]
Our concern is that effectiveness may not be interpreted as being capable of including fairness. If fairness is outside economy, efficiency and effectiveness, then guidance, which it was suggested would deal with fairness, cannot bring fairness within it. I accept that there are a number of occasions where guidance can be used to expand on a matter, but if the primary legislation does not allow for it then I would be worried that guidance could not properly provide for it.
We on these Benches are not alone in believing that the promotion of the well-being of one's community in which fairness is absolutely central is the most important part of local government. I believe that the noble Lord, Lord Dixon-Smith, said that promoting the well-being of one's community was the only reason for being involved in a local authority in the first place. I am sure that at a personal level there are a number of noble Lords in the Chamber at the moment who have been—and some still are—in local government. I believe that most of us would identify with that.
I mentioned the Minister's point about outcomes rather than process. But we do not believe that it is possible to separate process and outcome quite as easily as the noble Lord's speech suggested. However, even if one accepts that best value is only about outcomes, we say that fairness is an outcome that a local authority should seek to achieve. We are not arguing that it should take priority over the criteria set out in the Bill, but we believe that it should have at least equality with them.
The anxieties about fairness are dealt with in other constitutional legislation. Understandably it is extensively dealt with in the Northern Ireland legislation. It is also dealt with in the recent Welsh legislation. Therefore, I do not believe that it would be out of place in this Bill.
Economy, efficiency and effectiveness are terms with which local government has lived for quite some time now. I believe that they carry the baggage of referring fairly narrowly to financial concerns. The reports that one sees from the Audit Commission are substantially concerned with financial matters. Looking at performance indicators where the Audit Commission is involved, they certainly have a distinct financial flavour.
The Minister may tell me tonight that this amendment is not necessary. Perhaps the rather trite response to that is to ask what is the harm in it. I believe that there is a message that one wants to give as regards the whole modernisation programme for local government concerning fairness being very important and absolutely central. Sadly, it is a current issue. I have not described the different areas of gender equality, social justice and so on that come within it, but I would like to mention one point, which is racial equality. The Macpherson Report concerning the inquiry into the death of Stephen Lawrence and what happened afterwards recommended that the police service, local government and the relevant agencies should specifically consider implementing community and local initiatives aimed at

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promoting cultural diversity and addressing racism. There is also a need for focused, consistent support for such initiatives. This and the other amendments within the group are squarely within that spirit.
Notions of economy, efficiency and effectiveness have now been applied in local government and elsewhere for more than a decade and a half. As I have said, I believe that they are generally regarded as being financial. If the Minister can assure me that they are wider than that I shall listen to that with care. But I am particularly concerned as to how local authorities, those scrutinising them, the wider community and if necessary the courts interpret the term "effectiveness" and whether fairness can be encompassed by what we have on the face of the Bill. I beg to move.
6.45 p.m.
Baroness Miller of Chilthorne Domer: My Lords, my noble friend has put so well why we are trying to move away, as the Government are, from the ethos of CCT and develop a way of thinking which is removed from that. After the Grand Committee stage I spent some time mulling over the point of outcomes, process and so on. I went back to the fact that the aim of this Bill is to promote improvement in the way that functions are exercised. The Minister's statement during the Grand Committee was that fair access to services could be regarded as being equity under another name.
Having researched the matter a little more, without including fairness—I agree that we should decide on one term that is going to be used and fairness seems to be a good one—on the face of the Bill we shall have continual misunderstanding about it not only from the local authorities involved but also from those who are supposed to measure outcomes, such as the Audit Commission, and those who are supposed to give guidance.
I would like to give a brief example. It comes from development control, which is usually one of the most contentious areas. I believe that the example shows that it is riot just a question of fairness as to whether people feel able to take up that service or have access to it, but about the very design of the service. The example comes from a letter from the Department of the Environment, Transport and the Regions dated 19th February. It was checking on how people felt about the various indicators. The letter states:
"Under the fair access indicators this category of indicator is concerned with the ease of gaining access to particular services both physically and by having readily comprehensible and usable procedures. We are not required to have a best value indicator under all five headings. Our initial view is that this aspect of the planning service may not warrant a whole indicator. Instead we suggest that fair access be addressed within the proposed quality check list."
I believe that as that is one of the most contentious of services it deserves the most scrutiny. If that is the feeling about fair access for that service, I do not believe that it augurs well for the rest.
It is not just a question of whether people can understand the notices about development control, or feel able to put their cases well at meetings. It is also a question of the way the service is designed within the
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authority and its ethos of fairness. If one is articulate, it is easy to put one's case well. Unless we include "fairness" within the Bill, specific services will suffer.
I do not believe that community planning will be the answer overall. By their nature, communities have articulate people as well as those individuals who do not know how to use the system and are inarticulate. Sometimes that inability to express oneself may be exploited by an authority should it not wish to hear the other side of the argument.
I support my noble friend. I hope that the Minister will reconsider the view that it is unnecessary to write "fairness" into the Bill. The situation cannot be addressed simply by indicators.
Lord Whitty: My Lords, as the noble Baronesses have indicated, we have had some discussion that "equity" and "fairness" raised similar issues. I have some sympathy with the aim of the noble Baronesses. But I do not believe that writing "fairness" into the Bill in that form would achieve their aim.
It is important that we have clear duties and that those duties are put in a new context. The best value regime is designed to achieve that. It is also important that those duties are not so diffuse that they mean different things to different people. The noble Baroness is correct to say that the three Es are familiar to local government; and that there is a downside in that they have been familiar in the context of tight budgetary controls and CCT provision. But they are also clear within a regime which intends to take into account broader matters under the best value regime. Those are the guiding principles of delivery of services under the new regime. In so far as there is a downside, we are changing the whole context in which the regime operates, but we retain a degree of clarity.
We tend to go into semantics in these debates! However, fairness can relate to method and outcome. Does one treat people fairly in trying to achieve an objective; or is the objective fair? Those are two different concepts. They are perceived by different groups as being two different things. That is why we believe that fairness must be one aspect of effectiveness. An effective service must meet its objectives and satisfy the various groups' requirements. If services are good for one section of the community and poor for another, common sense dictates that, all other matters being equal, that would be unfair and the service cannot claim to be effective. On the other hand, in some instances all other things are not equal. Therefore if we allocate action and resources on the basis of need, those who receive on the basis of need may consider the system fair; those who have less need may consider the outcome unfair. To introduce "fairness" in this context is a somewhat confusing concept, although the ethos of fairness underlies the whole structure of best value.
The noble Baroness says that one cannot achieve these aims by guidance. But in reality the statutory guidance can relate the operation of those powers to specific outcomes and performance management structures. It also requires people to consult and deal with those groups which are judging whether or not

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these matters are fair. It is important that the guidance lays down that authorities consult not only the articulate but all those who have an interest whether or not they are represented by articulate spokespeople.
Best value indicators will include indices of fair access and customer satisfaction. All authorities will need to set clear targets in respect of both those dimensions in key service areas and will be held to account in achieving them by their annual best value performance plans. Detailed guidance will ensure that explicit consideration of fairness is placed at the heart of best value. We shall consult shortly on the draft indicators.
The noble Baroness related this concept to that of well-being. Fairness is one aspect of well-being. Well-being is a wider concept. I indicated in earlier discussions that the overall concept of well-being is not primarily for this legislation, which is about the management of local authorities, but may well arise in subsequent consideration of reform of local authorities. As noble Lords know, we shall have a debate next week to discuss the issue of well-being.
I believe that we have provided a flexible approach to the way in which the performance reviews will be conducted. We have given local authorities the ability to set priorities locally. But we have also made clear that we expect poor performance to be confronted promptly; and the performance framework is designed to assess authorities against common goals in a consistent way. That in itself is an element of assessing fairness.
Best value authorities which fail to apply that concept in a reasonable and fair way would be susceptible to challenge if they did so fail. Indeed, best value auditors and inspectors will be challenging authorities to comply with both the letter and the spirit of the legislation as part of their scrutiny of best value performance plans.
I hope, therefore, that the noble Baroness is reassured that the concept of fairness is central to the issue of best value. But its inclusion as one of the objectives in this clause, as she suggests, would confuse and could give rise to conflict in this area rather than helping to clarify how the best value regime should be delivered.
Again, one aspect of fairness is equality. It is our intention that all these matters should be subject to equality legislation, both current and potential, and that equality issues, whether of gender or race, will be part of the best value regime as well. However, that is not easily written into the Bill at this stage. It is clear that all best value authorities will be subject to those criteria as well.
I hope that our intentions are clear. I hope I have indicated enough to say that adding fairness to the criteria of the three Es would be more confusing than helpful. I hope that my indications of the Government's intention in this area are sufficient to enable the noble Baroness to withdraw the amendment.
Baroness Hamwee: My Lords, I thank the Minister for the care he has taken over the reply. I hope that I may pick up the points he made. In doing so, I hope that I shall not sideline any issue of importance.
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The noble Lord suggested that the term may be somewhat diffuse, and referred to "well-being". I do not suggest importing well-being. He mentioned that the three Es are familiar in financial regimes and argued that because the regime is changing the application of the three Es will also change. That is my problem. I am concerned that the three Es will not be seen or understood to be changing.
The noble Lord spoke of fairness being within effectiveness: that local authorities would be expected to achieve fairness, and that therefore effectiveness would cover fairness.
I do not believe that unless an authority articulates one of its objectives as being fairness the term "effectiveness" can apply. In other words, I do not think you can argue backwards from being effective to saying what the objectives should be: you have to sort out the objectives first. My concern is that if an authority does not particularly address itself to fairness it could be effective in achieving its own objectives, with that issue not featuring very highly. That is why I am concerned that one may not get as far as guidance and the performance indicators in the way the Minister mentioned.
He said, too, that sometimes what local authorities do is not equal in the way that different groups of people are treated. I accept that, but I would say that, for instance, it would not be fair if wealthy groups were treated in precisely the same way in certain matters as poorer groups of people. I do not think one would argue that the spread of council tax through bands was not fair. One could argue about the detail of it, but one would not say it was not fair that people who live in band H houses are paying more than those who live in band A houses. I do not accept that point from the Minister. I agree with him that fairness is, to use his words, "central to best value." I accept also that we are very close on the point of principle but I do not agree that including the term would lead to conflict and confusion.
The Minister said that the Government's intentions are clear. I would not wish, having moved this amendment—and I shall in a moment test the opinion of the House—to suggest that the Government do not believe in the importance of the concept. My concern is to get it into legislation and on the face of the Bill. I therefore seek the view of the House on this amendment.
7.2 p.m.
On Question, Whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 29; Not-Contents, 90.

Division No. 1

CONTENTS

Addington, L.

Hamwee, B.

Carlisle, E.

Harris of Greenwich, L.

Dahrendorf, L.

Leigh, L

Dholakia, L.

Liverpool, E.

Glenarthur, L.

McNair, L.

491

Maddock, B.

Shrewsbury, E.

Marlesford, L.

Stewartby, L

Miller of Chilthorne Domer, B.

Taylor of Warwick, L.

Milverton, L.

Thomas of Gresford, L.

Norrie, L.

Thomas of Walliswood, B [Teller.]

Pearson of Rannoch, L.

Redesdale, L. [Teller.]

Thurso, V.

Rodgers of Quarry Bank, L.

Tordoff, L.

St. John of Bletso, L.

Torrington, V.

Sharp of Guildford, B.

Willoughby de Broke, L.

NOT-CONTENTS

Acton, L.

Hollick, L.

Ailesbury, M.

Hollis of Heigham, B.

Allenby of Megiddo, V.

Hughes, L.

Alli, L.

Hughes of Woodside, L.

Amos, B.

Hunt of Kings Heath, L.

Ampthill, L.

Janner of Braunstone, L.

Archer of Sandwell, L.

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

Ashley of Stoke, L.

Bach, L.

Jeger, B.

Bassam of Brighton, L.

Jenkins of Putney, L.

Berkeley, L.

Kirkhill, L.

Blackstone, B.

Lovell-Davis, L.

Bragg, L.

Macdonald of Tradeston, L.

Brooke of Alverthorpe, L.

McIntosh of Haringey, L. [Teller.]

Brookman, L.

Burlison, L.

Mackenzie of Framwellgate, L.

Carter, L. [Teller.]

Mallalieu, B.

Clarke of Hampstead, L.

Merlyn-Rees, L.

Cledwyn of Penrhos, L.

Molloy, L.

Clinton-Davis, L.

Monkswell, L.

Crawley, B.

Morris of Castle Morris, L.

Currie of Marylebone, L.

Nicol, B.

David, B.

Peston, L.

Davies of Coity, L.

Pitkeathley, B.

Davies of Oldham, L.

Ponsonby of Shulbrede, L.

Dean of Thornton-le-Fylde, B.

Ramsay of Cartvale, B.

Desai, L.

Randall of St. Budeaux, L.

Donoughue, L.

Rendell of Babergh, B.

Dubs, L.

Renwick of Clifton, L.

Evans of Parkside, L.

Richard, L.

Falconer of Thoroton, L.

Rogers of Riverside, L.

Farrington of Ribbleton, B.

Sainsbury of Turville, L.

Fitt, L.

Sawyer, L.

Gladwin of Clee, L.

Scotland of Asthal, B.

Goudie, B.

Sewel, L.

Gould of Potternewton, B.

Shepherd, L.

Graham of Edmonton, L.

Simon, V.

Green way, L.

Stoddart of Swindon, L.

Grenfell, L.

Symons of Vernham Dean, B.

Hacking, L.

Thornton, B.

Hanworth, V.

Uddin, B.

Hardie, L.

Whitty, L.

Harris of Haringey, L.

Wllliams of Elvel, L.

Haskel, L.

Williams of Mostyn, L.

Hayman, B.

Winston, L

Hilton of Eggardon, B.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendment No. 3 not moved.]
Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer moved Amendment No. 4:
Page 3, line 6, at end insert ("and sustainability").
The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendment No. 4. These amendments seek to provide that we should include "sustainability" as a prime part of the Bill immediately after "economy, efficiency and effectiveness" and also as one of the main indicators.
Your Lordships may think that the arguments in relation to sustainability will be a rerun of those in relation to fairness. Indeed, some, but not all, are similar. I start by pointing out one of the main differences, which I hope will cause the result of any Division to be rather different. Sustainability is a long-term issue. Economy, efficiency and effectiveness are seen as fairly short-term issues, both by councillors and council officials. Councillors have a duty to look beyond their term of office but, to be frank, they find it difficult to do that and certainly find it difficult to look at matters in the extremely long term. Sustainability is certainly not a short-term issue.
During the debate on fairness we touched on why we should move away from the ethos of CCT and the way in which councils have conducted themselves in the past; indeed, the way that they have been made to conduct themselves. What has been striking about councils in the past 20 years has been their short-termism. Sustainability is very much about how we pass on our environment to future generations.
Between the start of the Bill's passage through this House and now, the Government have published the very impressive A Better Quality of Life: a Strategy for Sustainable Development for the United Kingdom. In a very good introduction, the Prime Minister said:
"We have failed to see how our economy, our environment and our society are all one and that delivering the best quality of life for us all means more than concentrating solely on economic growth".
I believe that that could have been adapted—although I expect the Minister will give me reasons why it could not have been—to say that sustainability is equally applicable to local government services and that concentrating simply on economy. efficiency and effectiveness will not deliver sustainability.
I said that it is not an add-on. If those services are to reflect the sort of society and environment that we wish to see in 20, 30 or 40 years' time, sustainability must be on the face of the Bill.
In Committee, we discussed the Local Agenda 21 mainstreaming of sustainable development. The Minister said the Government expect local authorities to give expression to those principles primarily through the process of community planning. I believe that we need to do something different. We should go beyond expecting. We should require those principles. The way to achieve that is by including sustainability in the Bill.
I turn now to indicators of sustainability. Because sustainability must be considered in the long term, it needs indicators which measure in the long term. So far, those indicators have not been developed. Being of a fairly cynical frame of mind, I wonder whether sustainability indicators have not been included in the Bill because they are extremely difficult to develop. Those who have worked in local government trying to develop those sustainability indicators would agree with that. That is so even in relation to fairly simple issues; for example, how one measures how local authorities are doing in terms of sustainability.
The indicators referred to in Opportunities for Change are extremely basic. The first is in relation to how many local authorities have LA21 plans in place.

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On the face of it, that is an indicator. However, having those plans in place is not the key issue. The key issue is how many authorities have started to implement those plans and how many are doing so effectively. Therefore, I agree that effectiveness is one measure but without the sustainable angle, it does not add up to much action.
The other two factors mentioned are community spirit and voluntary activity. Rather touchingly, after both of them, in brackets it says, "to be developed". I am not sure whether it is the indicator that is to be developed or the community spirit. The paucity of indicators in that section indicates to me that those who are developing the indicators are finding it very difficult. They must be extremely sophisticated and I am not surprised that those who must draft them have balked at including them in the Bill.
If the Government are as committed to sustainable development as this document suggests they really need measurable targets which have sustainability at their heart. I should try to explain that in different words. I see best value as a mirror into which local authorities look to see how they are performing. The local authority may be dressed up in certain indicators and may be wearing certain standards. But if the mirror into which it is looking is distorted—and I believe it is distorted without sustainability being included—the reflection will not be accurate.
That may be a slightly difficult analogy but that is the nearest that I can come to explaining why not having sustainability and sustainable indicators in the Bill will distort the way that local authorities think about themselves and the ethos that drives them. New councillors will be directed to a new way of working which has at its heart economy, efficiency and effectiveness. As I mentioned before, they are already struggling with short-term issues. They find the long-term view difficult. They need something to indicate to them that sustainability is a long-term aim for which they must strive. Having it tacked on in guidance and performance indicators is not sufficient. I beg to move.
Baroness Young of Old Scone: My Lords, I urge the Minister to consider the amendment with some seriousness. Perhaps, first, we can get some semantics out of the way because those of the previous amendment were enough to last us for the entire evening. The amendment refers to sustainability. I intend to talk about sustainable development and I hope that the Minister will accept that they are intended to be the same thing and we do not argue about whether they are different.
The point I wish to make was made by the noble Baroness, Lady Miller. The ink on the Government's sustainable development strategy, which has only recently been published, is barely dry. The Deputy Prime Minister launched it with a great, if brief, flourish. It stresses the importance of the integration of sustainable development into the roles of a whole range of bodies, particularly statutory bodies, and is an excellent example of joined-up thinking and joined-up government.
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Best-value authorities are among the most important for the delivery of sustainable development in this country and this Bill provides the key opportunity to build the sustainable development requirement into the roles of the best-value authorities. In legislative terms, this is probably the only opportunity we have in the near future. The only other local government Bill that is likely to come forward in the immediate future in its current draft form appears not to take the opportunity to build in sustainable development duties.
There are of course other examples of sustainable development duties being laid on public authorities on the face of their Bills that have not brought them crashing to their knees with the weight of over-statutory requirement. Indeed, the Environment Agency has operated perfectly satisfactorily with a sustainable development duty which was on the face of the Bill establishing that agency for a number of years and doing perfectly well.
If the amendment were to be accepted, it would not lay any more onerous requirements on best-value authorities than I hope they would morally and spiritually feel was laid upon them by the sustainable development strategy. However, it sends an important signal about how seriously the Government are taking the sustainable development strategy. Therefore, I urge the Minister to encourage us all about the Government's commitment to sustainable development so that we can believe that the drying ink of the sustainable development strategy is not simply ink and is not drying too rapidly.
Baroness Hamwee: My Lords, I support my noble friend and thank the noble Baroness, Lady Young, for her comments, with which I heartily agree. As my noble friend said, sustainability, or sustainable development, is about the long term. It is also the big issue for now and for the start of the next century. I regard it as the sine qua non not only for local authorities but for all authorities and bodies which are within the Bill as best-value authorities.
I do not pretend that dealing with sustainable development issues is easy. It is very much about reconciling interests and finding the right balances. The point my noble friend made about the performance indicator referring to Local Agenda 21 was most telling. An indicator asking whether LA21 is in place supports my arguments that the term "effectiveness" is insufficient to promote everything that we would like to see promoted by the Bill. I endorse what the noble Baroness, Lady Young, said about the importance of the signals that the Government give, using this opportunity, which may well be the only one for a while. It is important to have legislation in place which, bearing in mind how the debate on sustainability is going, is fit for the purpose in the sense of being the right legislation for the developing debate concentrating on the importance of the issue.
Lord Bassam of Brighton: My Lords, I had not intended to enter the debate, but having heard the arguments previously and not being entirely convinced, I, like any other council leader, have a great deal of

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sympathy for ensuring that we place sustainability at the forefront of our thinking in the way in which we procure, run and operate our services. I believe that the movers of the amendment are missing an essential point. The point about sustainability is to make it a practical and effective tool with which to service procurement in local government. While I have some sympathy with the amendment, it does not take us any further along that path.
For that reason, I believe that the issue should be dealt with in the form of guidance. I say that as the leader of an authority which has a best-value pilot status. During the past 18 months we have systematically worked through our services and through the process of review—to a degree, screening—beginning to look at ways in which we can train procurement processes and acquire new and different services by putting sustainability into our thinking.
It did not require legislation for us to do that. Perhaps it required a nudge and a wink from central government that that was what they wanted. But we got there before and earlier in any event. I believe that that is the most practical way to deal with the matter and we can take the issue further when the Government construct guidance and talk to the Local Government Association and other external expert bodies. We shall therefore get the guidance, support and back-up right so that sustainability begins to have a practical effect rather than being seen as a token gesture or motion described on the face of the legislation.
On those terms, I am unable to support an amendment with which in a more practical form I would perhaps have greater sympathy.
Lord Whitty: My Lords, I expect that Members on the Liberal Democrat Benches are inured to the fact that I shall say that I have considerable sympathy with what they are intending to do but I cannot believe that the legislation is appropriate to their sustainability argument.
Clearly, local authorities must put sustainability as part of their strategy, but they must also turn it into reality in relation to particular policies, projects and service delivery. We have emphasised that the Bill is about how local authorities are managed and not about the outcome of that management. It is clear from government policy, and the policy of most local authorities, that sustainability is not only increasingly important but probably the most important aspect of their activity. An authority is neither effective nor efficient if it conducts policies which do not deliver sustainability. Actually, sustainability is a bigger issue than how and to what outcome one delivers. Any best-value authority which failed to take into account sustainability could not be said to be meeting the best value criteria.
On the other hand, it is important that we turn sustainability into something clearer than merely writing it as an additional criterion in the Bill in a list of aspects which are well understood. We need to make sustainability understood at various different levels. There are many points at which best value and
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sustainability come together and are pursued on different fronts. As I indicated in Grand Committee, our whole approach and quality-of-life indicators and the department's sustainability, which runs across government and is much wider than my own department, are part of a new approach to sustainability. But we need to develop those quality-of-life indicators in a fashion which can be used effectively by local government.
We are urging best value authorities to draw up Local Agenda 21 strategies which. as the noble Baroness said, have sustainability at their heart. We are altering the planning system in order that sustainability is more maintained in that area. We are working with the Audit Commission and others to identify clear performance indicators which tackle this cost-cutting issue of sustainability and which can be included explicitly in the best value suite.
So we are taking all kinds of measures to put the practical indicators and measures of sustainability into the best value regime. In terms of the legislation, we believe that the principles are best dealt with through the promotion of economical, social and environmental well-being at the local level in recognition of local authorities' community leadership role.
We have done this with the Greater London Authority Bill where contributing towards sustainable development is contained within the principal purpose of the GLA to promote social and economic development and environmental improvement for London. We are considering how best to apply similar provisions to local authorities in England and Wales. That relates to the point raised by my noble friend Lord Bassam; namely, that it is our intention to bring forward legislation as parliamentary time permits. as they say, and to ensure that that does happen, but not in a Bill which is primarily about the management systems of local authorities. As I have already mentioned, we also have the opportunity to discuss well-being in your Lordships' House next week.
We therefore concur with the remarks of a number of noble Lords in relation to sustainability. However, we do not believe it is appropriate to write it in this way into the Bill. We already have in train a number of developments in association with local authorities which will give meaning and reality to sustainability criteria, sustainability indicators and measures which will help to make a reality of this dimension of best value. Introducing this new element at this stage would dilute the focus of the management systems. However, the Government are certainly committed to introducing it as an overall concept. We are trying to develop the tools to turn it into a reality. I therefore hope the noble Baroness will not consider it necessary to pursue her amendment in this context.
7.30 p.m.
Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for his reply. I am fairly new to your Lordships' House and as yet I am not inured to the disappointment of never seeing anything go through. I hope that I shall always continue to live in hope.

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The Minister referred to the duty to promote social, economic and environmental well-being as that upon which we should pin our hopes to see sustainability duties introduced in a different form. However, as he indicated, it does not seem as if parliamentary time will allow for that either this year or next. Much as we may debate it next week, and I am sure the debate will be interesting, that does not mean that it will be on the statute book in the near future. I am sure the Minister knows more about that than I do. I would not wish to depend upon that to see a greater promotion of environmental well-being.
The noble Lord, Lord Bassam, referred to the fact that in tune with government thinking, the best authorities—of which, of course, his is one—are piloting best value. The Minister also referred to that. I remind the House that best value is intended to address the problems of the worst authorities; those which are not able to address the issues of sustainability or virtually anything else. It is to those authorities that we should be sending a message to put it at the heart of their delivery, not to the splendid authorities which have been chosen as best value pilots.
The Minister said that sustainability was a most important aspect of local authority service. I thoroughly agree. However, when we go out to our communities and involve them in community planning, how seriously can we ask them to take the question of sustainability? How seriously can we expect them to regard that as a duty to put first if local authorities do not have it as one of their basic duties?
I disagree with the Minister when he states that the Bill is fundamentally about how local authorities are managed; it is about more than that. It is about how their policies are developed and their priorities driven. If it was only a question of management, we would leave it mostly to the officers. We would not have councillors undergoing a massive training exercise with the Improvement and Development Agency making every effort to make councillors better at developing policy and priorities. I do not accept that the Bill is only about management. If we do not put sustainability on to the face of the Bill we shall be guilty of not thinking that it is fundamentally the most important aspect of local authority service. With all due regard for the wish of the Minister that we do not pursue the matter further, I should like to seek the opinion of the House.
7.35 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 18; Not-Contents, 85.

Division No. 2

CONTENTS

Addington, L.

Goodhart, L.

Carlisle, E.

Hamwee, B.

Dholakia, L.

Harris of Greenwich, L

Glenarthur, L.

Hooper, B.

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McNair, L.

Redesdale, L. [Teller.]

Maddock, B.

Sharp of Guildford, B.

Thomas of Gresford, L.

Meston, L.

Thomas of Walliswood, B

Miller of Chilthorne Domer, B.[Teller.]

Thurso, V.

Tordoff, L.

NOT-CONTENTS

Acton, L.

Hughes, L.

Alli, L.

Hughes of Woodside, L.

Amos, B.

Hunt of Kings Heath, L.

Archer of Sandwell, L.

Janner of Braunstone, L.

Bach, L.

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

Bassam of Brighton, L.

Berkeley, L.

Jeger, B.

Blackstone, B.

Jenkins of Putney, L.

Bragg, L.

Kirkhill, L.

Brooke of Alverthorpe, L.

Leathers, V.

Brookman, L.

Lovell-Davis, L.

Burlison, L.

Macdonald of Tradeston, L.

Carter, L. [Teller.]

McIntosh of Haringey, L. [Teller.]

Chandos, V.

Mackenzie of Framwellgate, L.

Clarke of Hampstead, L.

Mallalieu, B.

Clinton-Davis, L.

Merlyn-Rees, L.

Crawley, B.

Milner of Leeds, L.

Currie of Marylebone, L.

Molloy, L.

Davies of Coity, L.

Monkswell, L.

Davies of Oldham, L.

Morris of Castle Morris, L.

Dean of Thornton-le-Fylde, B.

Nicol, B.

Desai, L.

Peston, L.

Donoughue, L.

Pitkeathley, B.

Dubs, L.

Ponsonby of Shulbrede, L.

Evans of Parkside, L.

Ramsay of Cartvale, B.

Falconer of Thoroton, L.

Randall of St. Budeaux, L.

Farrington of Ribbleton, B.

Rendell of Babergh, B.

Gilbert, L.

Renwick of Clifton, L.

Gladwin of Clee, L.

Richard, L.

Goudie, B.

Rogers of Riverside, L.

Gould of Potternewton, B.

Sainsbury of Turville, L.

Graham of Edmonton, L.

Sawyer, L.

Greenway, L.

Scotland of Asthal, B.

Grenfell, L.

Sewel, L.

Hacking, L.

Shepherd, L.

Hanworth, V.

Simon, V.

Hardie, L.

Stoddart of Swindon, L.

Harris of Haringey, L.

Symons of Vernham Dean, B.

Haskel, L.

Thornton, B.

Hayman, B.

Warner, L.

Hilton of Eggardon, B.

Whitty, L.

Hollis of Heigham, B.

Williams of Mostyn, L.

Howie of Troon, L.

Winston, L.

Resolved in the negative, and amendment disagreed to accordingly.
7.43 p.m.
Baroness Hamwee Baroness Hamwee moved Amendment No. 5:
Page 3, line 6, at end insert—
"() The duty arising under subsection (1) shall not apply to a best value authority when working in partnership with another public body unless that body is under a similar duty.")
The noble Baroness said: My Lords, I shall speak to Amendment No. 5 and my noble friend Lady Miller of Chilthorne Domer will speak to Amendments Nos. 6 and 10.
Amendment No. 5 seeks to provide that the best value duty will not apply to an authority,
"when working in partnership with another public body unless that body is under a similar duty".
We moved a rather different clause in Committee in connection with partnerships when we proposed that public authorities working in partnership with best value authorities should themselves be subject to the duty of best value. This amendment disapplies the duty when the authority is working with another public body unless that body is under a similar duty.
The Minister explained in Grand Committee what the Government are doing in various sectors to apply best value or something like it, but there will not necessarily be blanket coverage of the duty. The noble Lord, Lord Harris of Haringey, in Grand Committee made some interesting points in relation to partnership working which increasingly local government is undertaking. He said that he could,
"envisage all kinds of anomalies as to whether the principles of best value have to operate under those various sets or circumstances".— [Official Report, 10/5/99; col. CWH28.]
The noble Lord used examples of health provision; increasingly health trusts working jointly with social services, sometimes notionally under the aegis of the health trust, sometimes under that of the local authority which, as he rightly said, is often simply a matter of convenience. What prompted me to table the amendment at this stage was his comment that he would hate to see the structures determining which authority became the lead authority rather than what made sense for practical reasons in the subject area.
If the Minister can help us a little further in this area I would be very interested. I beg to move.
Baroness Miller of Chilthorne Domer: My Lords, first, shall speak to Amendment No. 6 which addresses the question of formally constituted groups. It seeks to define who should be consulted under subsection (2).
Obviously the duty of best value depends on authorities consulting with their residents and the Bill defines those people who should be consulted. I have to make the point again that best value seeks to address in particular those authorities which are not performing well. We tabled this amendment because we fear that it could be easy for an authority which is not particularly keen to consult, to consult in a minimal way. As we know., it is much quicker and easier, and likely to produce more predictable results if consultation is confined to formally constituted groups. It is often known what those groups will say and who makes them up and therefore it is popular to stay within the parameters of groups whose make-up is known and whose representatives have the same view. In fact, in many councils, when representatives come from those groups, the mutter goes round, "It's the same old suspects".
Even with the advent of such things as public opinion panels, focus groups and citizens juries, all of which have a very worthy place, they still can become a "formally constituted group". I believe that public opinion panels are a very good thing. However, such people will be consulted year after year. Even if you roll on different people over time, they will, after they have been consulted a few times, become very familiar with the way that the council works. They will probably take a greater interest in what it does, arid so on.
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Therefore, councils should have a requirement to consult those who are of no group—in other words, a very random selection of the population. For that reason, this amendment seeks to ensure that the temptation to take a quick and easy route of consulting only formally constituted groups would not be allowed under this Bill. Otherwise, as the Bill is drafted, a council could get away with only ever consulting formally constituted groups, which I believe would be most unfortunate arid not really in the spirit of the legislation.
I turn now to Amendment No. 10, which seeks to include representatives of best value authorities when the Secretary of State wants to consult on what the performance indicators should be. Indeed, it is possible that it could be claimed that there were certain time constraints. Therefore, the differences of opinion between government and local authorities could lead to a disinclination on the part of the Secretary of State to consult.
Further, I can imagine the scenario, although perhaps not at the moment, where the Government would not want to consult on performance indicators. Perhaps I may draw on history for a moment. I am not sure that I could have imagined the government of the time consulting on performance indicators, for example, for poll tax collection, or on how to measure client views on the efficiency of the enforcement procedure for that tax.
Therefore, for all of those reasons, it is absolutely essential that the Secretary of State is required to meet and take the opinions of representative best value authorities. After all, they are the practitioners. There is no likelihood that their views would not be forthcoming in terms of much practical experience of what has happened on the ground. I believe that the fact that they are not included in the Bill might be an oversight. They are the obvious people to consult first; indeed, best value authorities are those which are already carrying out best practice. It is not as though representatives of local authorities which may not be practising best value would be consulted.
Baroness Thomas of Walliswood: My Lords, once again, I should like to lend support to Amendment No. 5. I spoke to this in Committee and I also included it in my original speech on Second Reading. My concern all along has been that there are difficulties in partnerships anyway because different authorities approach their work in different ways. The different accounting, reporting and planning systems and the whole paraphernalia of best value that we see in Clauses 4, 5 and 6 could, if they were rigidly applied, have the effect of rendering some of the work which best value authorities do with their partners open to criticism by, for example, the Audit Commission. That was behind my support for our original amendment in Committee.
The phraseology of the current amendment is better. It is more practical in its approach and it would enable local authorities in particular, but also other best value authorities, to go into partnership with external authorities or external groups which are not liable to the same laws and audit processes.

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I am looking for some indication that the Minister understands the subtlety of the problem and that the Government have thought of ways, either through guidance or in some other way, of ensuring that this possible conflict does not arise. Alternatively, I should like an assurance that best value authorities acting in good faith in partnership with others cannot be criticised on the grounds that they have not in every detail followed best value codes in what is always a compromise arrangement.
Baroness Farrington of Ribbleton: My Lords, the noble Baroness, Lady Hamwee, will not be surprised to learn that we are not attracted to Amendment No. 5. However, I am grateful to her for identifying some very important practical issues. The Government have consistently said that the duty of best value will be all-embracing. It will apply to all of the functions which best value authorities carry out.
Perhaps I may now correct what may have been a misunderstanding on my part as regards a point made by the noble Baroness, Lady Miller. Best value applies to all authorities and not just the worst, as I understood the noble Baroness to say. There were pilots from 1997, but the duty of best value is not merely for the worst authorities. It will apply to all of the functions which best value authorities carry out. Nevertheless, I appreciate that the noble Baroness may wish to probe further about how the duty of best value will apply in situations in which only one of the partners is subject to the formal duty of best value in delivering the function.
One of the fundamental questions which the best value authority in question will need to determine before entering into the partnership arrangement will be: will this arrangement deliver best value for local people? If the answer to the question is yes, and there is no alternative arrangement which offers better results, clearly the authority will be free to enter into the partnership and bound to meet the duty of best value while doing so.
Although the Government wish to encourage best value authorities to think innovatively about such partnerships, it makes no sense to exempt the best value authority partner from its statutory duties when it enters into a partnership. Local people are still entitled to expect excellence in the quality of services, regardless of which particular vehicle is used to deliver them. In the light of that explanation, I hope that the noble Baroness will feel able to withdraw the amendment.
I turn from the issue of partnerships to that of consultation. The statutory duty of consultation is clearly an integral part of best value. I am grateful to the noble Baroness for this opportunity to explain the Government's approach. I am sympathetic to what I believe to be the thrust of Amendment No. 6, although I do not believe it to be necessary.
The noble Baroness, Lady Miller, made the very fair point in Committee that we needed to ensure that all voices were heard during consultations, and not just those of persons or bodies who were the best organised, most articulate or who had access to the best technology.
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These are sentiments which I am pleased to embrace and endorse. I am confident that the approach that we are taking is most likely to ensure that consultation is all-inclusive. In our view, the requirement in the Bill that the authority should consult with those who are representative of a group is not merely confined to those who speak on behalf of others but will include those who are representative of a group in the sense that they are a good example or are typical of that particular group. Therefore, I am confident that the Bill already achieves the practical effect which the noble Baroness seeks.
However, Amendment No. 6 would place conditions upon the way in which best value authorities confronted a task which calls—and I believe the noble Baroness's contribution recognised this fact—for the maximum variety in terms of approach. Further, such conditions may well be inappropriate in some cases. Although I understand the thinking behind it, the amendment is viewed by us as being unnecessary. I hope, therefore, that the noble Baroness will not move it.
I am sympathetic to Amendment No. 10. I have given your Lordships assurances in Grand Committee about whom the consultation will include. I have said that it will include those known to the Secretary of State as representatives of best value authorities and specifically the LGA and WLGA.
However, my concern here is that placing this amendment on the face of the Bill will place the onus on the Secretary of State to identify all those bodies who claim to be representative of best value authorities. The wording of the amendment is concise; namely, that the Secretary of State shall consult with representatives of best value authorities. But the term "representatives" can be drawn widely. How will the Secretary of State know if he has included all ad hoc groups that claim to be representative?
I understand the intention behind this amendment and indeed support the principle, but the wording of the amendment could have the undesirable side effects which I have discussed. In the light of the noble Baroness's comment about not yet having become cynical as regards having any point that is raised accepted, I hope that she will not move the amendment on the understanding that we shall produce a suitably drafted amendment on Third Reading that will both meet the noble Baroness's wishes and address my current concerns.
8.00 p.m.
Baroness Hamwee: My Lords, perhaps we had better not divide the House on any more amendments as the result of not doing so is far more satisfactory! We thank the Minister for those remarks. As an amendment is to be produced for Third Reading I shall not make the comments that I intended to make in response to what the Minister had to say on Amendment No. 10, and on Amendment No. 6, the thrust of which is similar if not absolutely the same.
My noble friend Lady Thomas of Walliswood made the important point about the detail of the best value obligations in speaking to Amendment No. 5. Her

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concern—which is also my concern—is that the best value duty and programme could become too formalised, too cumbersome and too difficult to apply. The various public authorities which are the subject of the best value duty—and which may work in partnership with other authorities—have over the past few years adopted a partnership approach with increasing enthusiasm. I do not believe that any of us disagree about the value of that.
The Minister said that people are entitled to expect that their authorities will always be excellent. That is to be aimed at and to be hoped for but politics are about priorities. As my noble friend said, partnerships often have to embody compromise. That is why we wished to pursue the amendment. We shall consider what the Government had to say on this matter. I believe that they understand our concerns. We shall want to be sure that we have not made the situation rather worse—as one sometimes does—by exploring it in detail. For the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 6 not moved.]
Clause 4 [Performance indicators and standards]:
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 7:
Page 3, line 31, leave out ("different")
The noble Lord said: My Lords, this amendment is grouped with Amendments Nos. 8, 9 and 15. With the leave of the House, I shall speak to Amendments Nos. 7, 8 and 9 together. I shall then speak to Amendment No. 15 as although it addresses a related point it is slightly separate.
We have now reached a rather fundamental issue in the Bill, small though these amendments may appear to be. Whatever the errors of my party when it was in government—before noble Lords opposite begin to crow about the possible errors that my party may have committed while in government, they would do well to remember that it will only be a matter of time before much that they do is likely to be seen as erroneous—there are now clear signs that my party is moving towards a situation in which it begins to treat local authorities as grown up and responsible rather than as babes to be wrapped in the swaddling clothes of regulation. That is a rather important point of principle.
Clause 4 as drafted gives the Secretary of State immense power over individual local authorities at any and all times. We are not here discussing whether the Secretary of State should have power to intervene in emergency situations, or where services might be perceived to be breaking down, or indeed where there has been some tragic disaster perhaps in the social services field—the kind of thing which we have heard so often. Clause 4 of the Bill gives the Secretary of State power, by order, to specify performance indicators and, more significantly, performance standards for local authorities; different performance indicators or standards for different functions for different authorities to apply at different times. If the Secretary of State chooses to exercise the power, he can set a performance standard for an individual authority to apply tomorrow morning. The Minister may say that he would never do
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such a thing and of course it is wholly unreasonable, but it is not impossible under the Bill. I know that the Secretary of State will act under conventions. However, even the most reasonable people sometimes behave unreasonably for what appear to them to be good reasons.
Amendments Nos. 7, 8 and 9 set out simply to restrict somewhat—it is only to restrict somewhat—the power of the Secretary of State to specify different performance indicators and standards for different: functions and so on. If the amendment were accepted. individual local authorities would have less to fear from the possibility of irrational action from, say, a Secretary of State who happened to get out of bed on the wrong side one morning. That concept may be completely foreign to government but in my experience we are all human and occasionally we are susceptible to error.
Amendment No. 15 seeks to give an individual local authority the right to appeal against the application of a standard if it feels that the standard as specified by the Secretary of State in an order is unreasonable in its particular circumstances. This amendment is slightly different from the other three amendments in the group. I ask the Minister to consider this matter extremely carefully. It would of course be a gross exaggeration to say that a local authority's circumstances were infinitely variable. When all is said and done there are some 400 local authorities and there are probably another 400 authorities that might be considered to be best value authorities of one kind or another. The numbers are not significant in themselves and therefore to claim infinite variability would be, as I say, a gross exaggeration.
However, their circumstances are all different; their histories are different; their locations are different; their development over the years has been different; their patterns of investment in infrastructure, in buildings, in schools and so on are different; and so their financial circumstances are different. While I have a great deal of confidence in Secretaries of State, they are not omniscient and they cannot know every circumstance. I can conceive of circumstances in which a local authority feels that the application of a particular standard is unjust, even though the standard was set in good faith and in the light of the best information that the Secretary of State's civil servants could produce for him. I see that some of them are sitting in the Box; it is good to see them there. Amendment No. 15 seeks to give a local authority which finds itself in that situation the opportunity to go to the Secretary of State and say, "Please, in our particular circumstances this is unreasonable. Can we do something about it?" I beg to move.
Baroness Hamwee: My Lords, we explored in Grand Committee the question of different responses for different authorities. I had been concerned initially about the provisions in the Bill and I was very glad to have the Minister's assurance that the Secretary of State does not retain powers to discriminate. He specifically said that the Secretary of State does not have the open-ended power to pick and choose. As I say, although we were initially bothered about that matter, we were pleased to have that assurance.

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As far as concerns Amendment No. 8, we support it in principle. I have more difficulty with Amendment No. 9, which would leave out paragraphs (a), (b) and (c) of Clause 4(2). The subsection would then simply remain,
"An order may specify different performance indicators or standards".
As far as concerns Amendment No. 15, quite apart from the practicalities, we would rather keep the Secretary of State out of the workings of local authorities. We would not want to bring him in by way of appeal. We cannot support the noble Lord on Amendment No. 15.
8.15 p.m.
Lord Whitty: My Lords, the noble Lord, Lord Dixon-Smith, will know that I do not hold him personally responsible for any of the policies of the previous regime. I am not one to crow over sinners that repenteth. The problem with his enunciation of the current position of the Conservative Party is that it has repented a little too much; it has moved away from the kind of Napoleonic centralisation of the previous regime to outflanking the Liberal Democrats in terms of local authority autonomy. Several noble Lords on this side of the House find that bewildering.
The Secretary of State needs subtle powers for the reason, in a sense, to which the noble Lord referred. Some mistakes will be made; we need therefore the powers to put such mistakes right. There will be some broad categorisations which will prove to be inappropriate; we will need to judge that. Hopefully we can judge it in advance, but if we do not have the flexibility to adjust we will not be able to tailor the whole framework to the delivery of best value. We need the powers and we need the flexibility.
These distinctions are not arbitrary. Distinctions could be made between authorities by different category—unitary authorities, district authorities and so on; by the various functional activities of the local authorities; or by different circumstances, such as sparse populations, island authorities and so on. Perhaps I should say to the noble Baroness, Lady Hamwee, that this is not discrimination or cherry picking but sensible flexibility. It is important to help the Secretary of State tailor the performance measurement to the needs of best value authorities and their electorates. Taken as a whole, the amendments would completely remove the Secretary of State's ability to tailor a performance framework to take account of those different situations. They would take a major subtlety out of the best value regime we are trying to introduce.
I appreciate that the Conservative Party in its new mode would rather not have the powers at all. However, we consider that we need the powers, which should be operated with a degree of sophistication which past financial regimes of all parties have not had.
Amendment No. 15 refers to a formal appeals process, which, so far as I am aware, has not existed under any prior financial regime. It would bring the Secretary of State into making judgements in areas where that may not always be appropriate. It would give
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him a quasi-judicial function in what is supposed to be an administrative system. Moreover, the iteration between the individual authorities, plus the flexibility of the powers, means that the Secretary of State has the flexibility to recognise particular situations. He is required under Clause 4(3) to consult before specifying performance indicators. That regime should give best value authorities and others the opportunity to comment before the proposed standard is laid down.
With that kind of partnership between the Government and local authorities, I do not believe that we need a formal appeals procedure. Allied to this, the flexibility provided under Clause 4(2)(a), (b) and (c), would mean that in exceptional circumstances the Secretary of State could specify a standard for only certain types of authority. That would meet the exceptional circumstances with which the appeal procedure was intended to deal. Introducing a formal appeal system into the Bill as distinct from an on-going partnership between local authorities and central government is unnecessarily bureaucratic and legalistic in an area where we are trying to introduce a new ethos. I hope that the noble Lord will not press his amendments.
Lord Dixon-Smith: My Lords, I am grateful to the Minister for his reply. I will study it with considerable care. I think he has probably answered me in a way which will satisfy me. The House will be pleased to hear that I may not therefore bring the matter back at Third Reading.
The Minister should beware that he is appearing now to be the Conservative in this matter. Time and thinking are moving on. Earlier today or yesterday there was a question on the Floor of the House in which the subject of subsidiarity arose. As is usually the case, it arose in relation to Scotland and Wales, but subsidiarity was always a relevant issue between Brussels and London. The noble Baroness, Lady Farrington, will recognise that a very long, unending and never satisfied debate existed between Westminster and local government. It was to address that particular subsidiarity that I brought forward the amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
[Amendments Nos. 8 to 15 not moved.]
Clause 5 [Best value reviews]:
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 16:
Page 4, line 5, at end insert—
("() Any additional costs falling on an authority as a consequence of this section shall be included as an addition to the authority's Standard Spending Assessment in the subsequent financial year.")
The n oble Lord said: My Lords, Amendment No. 16 seeks to ensure that the costs of the best value system incurred by local authorities are recognised for the purposes of calculating their revenue support grant through their standard spending assessment. We have pressed the Minister on the issue of the cost of the best value system. I accept that from the point of view of public expenditure overall there is not a problem. We can be reasonably confident that the savings which accrue as a result of the best value system will in fact

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be greater than the costs. Therefore, from the point of public expenditure as a whole the sum of expenditure will not increase. That is fine when one calculates at the national level. But I am concerned about what will happen at the local authority level. There is no doubt that when best value is introduced in every authority costs will increase.
In a Written Answer, the Minister said that it was not a matter of concern. However, at the individual authority level it should be a matter of concern. The Minister also said in the Written Answer that the Government expected that as a result of the onset of the best value system they would he able to build in to the revenue support grant system a 2 per cent efficiency factor. We have all been used to efficiency factors in the past. They have been built in for a long time and, by golly, we have complained about them too. They do in fact drive efficiency. But a 2 per cent efficiency factor built in as a result of best value, which one has to assume might be in addition to other efficiency factors that are already in existence, implies a 2 per cent reduction annually in government funding. That is one adverse result at the local authority level. But the authority might experience a 1 per cent increase in costs as well because it has to administer the whole of this system. That would have a 3 per cent effect on the local authority's budget at the local level, and so would cause a great deal of difficulty.
From the public expenditure point of view, the system can do nothing but good. If one looks at the issue of local! government expenditure in overall] terms, again the system can do nothing but good. But at the individual authority level the effect might be perverse unless all these costs are properly taken into account in the revenue support grant system. The Minister could answer my point quite easily by giving me a sufficient assurance that that is what will happen. I beg to move.
Baroness Hamwee: My Lords, I too am concerned about the assumption that efficiency savings will be adequate to fund the best value work. Earlier today we dealt with the best value criteria. They cover not only economy and efficiency. We have talked about effectiveness meaning each authority achieving its objectives. Achieving certain of its objectives, though they may be worthy and be what the community would support, may carry a cost. The best value duty in Clause 3 recognises the different criteria. I shall be interested to hear what the Minister has to say on this amendment.
Lord Whitty: My Lords, I understand the concern in local government circles that the best value system will introduce costs, at least initially. However, it is not our assessment—I do not think it is local government's assessment either—that the costs would be disproportionate to the efficiency savings or that special provisions in the financial regime, which in general we are trying to move to a non-earmarked system, should be specifically earmarked for best value reviews and the introduction of best value systems.
The kind of efficiency gains that we are looking for—it does not have a direct read-across to the level of central government finance but is nevertheless 2 per cent—offers more than enough scope for any
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up-front costs that are needed to introduce the best value regime. After that the regime should, as well as delivering non-financial benefits, be more than paid for by that. It is true that some costs will be entirely within the control of the individual authority. However, as I explained at an earlier stage, we are already taking steps to ensure that resources are made available to meet the costs of audit and inspection. My colleagues in another place have given a number of assurances that we intend to ensure that authorities are not financially penalised by that aspect of the best value framework. For instance, we have already explained that additional funding to meet the cost of inspections will come from the revenue support grant or from a direct grant to the Audit Commission to meet those costs. In so far as there is a differential impact between local authorities on costs over which they have no control, noble Lords already have that assurance.
As for reviews, reviews should be conducted in any case as part of the management system. What matters is that they produce the plans to deliver the continuous improvements so that we have a more efficient delivery of the objectives. Therefore, I do not think there is a need for a specific new grant to cover the cost of those reviews.
In many ways this amendment runs counter to the spirit of the best value ethos. I hope that on reflection the noble lord will not pursue it.
Lord Dixon-Smith: My Lords, I am grateful to the Minister for that reply which goes some way towards meeting the points that I raised. I shall study with great care exactly what he said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Hamwe Baroness Hamwe moved Amendment No. 17:
page 4, line 10, at end insert—
("() Nothing in such an order shall restrict the term of any contract let by an authority to perform any of its functions.")
The noble Baroness said: My Lords, Amendment No. 17 proposes that nothing in an order made under Clause 5 covering best value reviews,
"shall restrict the term of any contract let by an authority to perform any of its functions".
I have tabled the amendment in order to seek an assurance from the Minister. Can he confirm that the five-yearly reviews will not mean that contracts cannot be let by authorities for more than five years if an authority considers that to be appropriate in the case of a particular contract. Some functions of an authority require considerable investment, both by the authority and by the contractors. For instance, dealing with waste and waste disposal are capital intensive functions. Contracts need to be structured on a fairly long-term basis.
A particular authority has drawn to my attention its concern about the continuing inherent tension between the Bill's requirement for regular periodic reviews of an authority's functions, and the benefits in some circumstances of letting contracts over a significant period of time in order to attain wider policy objectives.

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Waste collection, as I mentioned, is one area that concerns the authority. IT procurement is another, where letting a contract for a longer period improves value for money. Contracts are usually let for at least five years and, I understand, in the case of this particular authority possibly much longer.
I am assured that most of the contracts in question include a requirement for a year-on-year quality improvement. In that sense, these services have in effect been "best valued" as part of the letting of the contract. If they have to be re-let under the terms of a best value review, as the Minister will well understand, the council will be likely to incur a heavy financial penalty for breaking the contract.
Those who have raised the point with me are not clear as to who would be responsible for paying the compensation claim. I am fairly clear that it would be the authority. I am not concerned only about contracts that may be in existence or which may be brought into existence in the future, but about each authority's ability to plan for the long term. I beg to move.
8.30 p.m.
Baroness Farrington of Ribbleton: My Lords, I hope that I can reassure the noble Baroness, Lady Hamwee, that the amendment is unnecessary. As I have explained on previous occasions, our intention is that best value authorities should fundamentally review all functions over a five-year period to ensure that continuous improvements to all services are made. Reviews will involve challenging the way in which, and the level at which, the function is being exercised, comparing performance with other authorities and bodies, consulting local communities and assessing competitiveness.
The noble Baroness also raised an important issue relating to the review of service contracts. Whether a service is reviewed every year or every five years should not affect the term of the contract. Authorities are well aware of the need to build in appropriate flexibility to ensure that their arrangements secure continuous improvement and can be adapted to meet changing local and national priorities. To do otherwise would not achieve best value.
Orders made under Clause (5)(2) allow the Secretary of State to specify the time period within which best value authorities have to review all their functions. Such orders cannot in themselves restrict the term of any contract let by an authority. I do not believe that the amendment would work in quite the way that the noble Baroness intends; but I can in any case assure her that it is unnecessary, and I urge her to withdraw it.
Baroness Hamwee: My Lords, I shall certainly withdraw the amendment at this stage because I want to read carefully what the Minister has said. In drawing attention to subsection (2) of Clause 5, she alerts me to the fact that an order can make different provision for different authorities and can require specified functions to be reviewed in specified financial years; but the subsection does not—although one might be able to read
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the point across from other provisions, a point that we shall have to examine—state that the order may make different provision for different functions. We shall want to consider the point carefully. I believe that the Minister takes the point that I have been making. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 [Inspections]:
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 18:
Page 8, line 25, at end insert ("and inform the authority concerned")
The noble Lord said: My Lords, Clause 10 gives the Secretary of State power to order a best value inspection by the Audit Commission under what might be described as emergency circumstances. In establishing such an emergency inspection, the Secretary of State "shall consult the Commission" before giving a direction. I believe that the Secretary of State should also inform the authority concerned.
In reality, it is probably inconceivable that one would arrive at this situation without the authority knowing that it was in trouble. I do not think it would be surprised. I suspect that such a direction would arise at the end of a year or two, or even as many as five years, of descent in satisfaction with the administration of a service. But as the Secretary of State is obliged to consult the commission before establishing a special review, it would not be unreasonable to require him at the same time to inform the authority concerned formally that that was going on. I beg to move.
Baroness Farrington of Ribbleton: My Lords, as we discussed in Committee, I recognise that generally speaking it is important for authorities to know when they are to be inspected. However, we believe Amendment No. 8 to be unnecessary and undesirable, as it would constrain the Secretary of State's ability to act swiftly to investigate a seriously poor-performing authority.
For routine planned inspections as provided for in Clause (1)(1), it would be sensible working practice for the authority about to be subjected to inspection not only to be informed but also to be consulted about timing. That will help to prevent duplication of effort by inspectors and will avoid authorities being subject to too many inspection visits at a time, and will ensure that key personnel are on hand to assist in the process.
In most instances, in the interests of inspector and inspected alike, authorities will also be notified in good time of inspections directed by the Secretary of State. Sometimes, however, where serious failure has occurred, inspectors may be asked to act swiftly to gather evidence in order to establish facts and identify problems. If vulnerable members of the community may be at risk, we need to ensure that the system can work effectively to uncover the problem so that it can be addressed as a matter of urgency.
Placing a requirement on the face of the Bill that a notification be given before a directed inspection is ordered would therefore place an unnecessary restriction on the flexibility of the Secretary of State to respond quickly where such urgent investigation is needed.

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In addition, the Bill already provides under Clause 11 that inspectors themselves should give authorities three days' working notice of the actual inspection. That should be sufficient to ensure that, even in the most urgent of cases, a proper balance is struck between the need to achieve prompt scrutiny in the interests of people who may be vulnerable and the need properly to protect the interests of the authority and its employees. I hope that that reassurance will encourage the noble Lord to withdraw his amendment.
Lord Dixon-Smith: My Lords, I am grateful to the Minister for that reply. It gives me some solace. I shall need to study it with care. I find it somewhat fascinating that informing the local authority—which, after all, takes no more than a telephone call—might actually constrain the powers of the Secretary of State. If that is all it takes to constrain the powers of the Secretary of State—which were the words of the noble Baroness—I must phone him more often. I believe that that would be an excellent thing to do.
When one considers vulnerable people in particular, certainly nothing that I say is intended to reduce the power to carry out such investigations, properly examine the position and put right whatever is wrong. But where there are really urgent cases—it must be faced that in the past some have arisen—almost invariably they are likely to give rise to criminal investigations, which are probably already under way by the time we get to this procedure. I find that reason for rejecting this particular amendment somewhat strange. However, I undertake to study carefully what has been said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 [Inspectors' powers and duties]
Baroness Hamwee Baroness Hamwee moved Amendment No. 19:
Page 9, line 1, at beginning insert ("Subject to subsection (4A),")
The noble Baroness said: My Lords, in moving Amendment No. 19 I should like to speak also to Amendments Nos. 20 and 21. Amendment No. 19 is a paving amendment. Amendment No. 20 provides that normally notice of at least 28 days will be given before an inspector goes in. Amendment No. 21 provides for extraordinary inspections where shorter notice of not less than three days, which is the notice provided in the Bill, will be given.
We were assured in Committee that the provision giving three days' notice would be used very rarely. The Minister said it was,
"anticipated that the period of such notice will normally be greater not only than the three days set out in Clause 11 but also than the 10 days proposed by Amendment No. 61 ".—[Official Report, 5/99; col. CWH 63.]
That was the amendment I then moved. She went on to say that the provision in Clause 11 mirrored the conditions for extraordinary audit in Section 25(4) of the Audit Commission Act 1998. That tempted me to look up the section. As the Minister said, the section provides for three days' notice but explicitly where the Secretary of State considers it desirable that, essentially, short notice should be given.
The provisions that I seek to include in the Bill now mean that normally at least 28 days' notice will be given. That picks up the point that more than my previously suggested 10 days' notice would be given. The new subsection (4A) in Amendment No. 21 mirrors Section 25(2) of the 1998 Act, which provides:
"If it appears to the Secretary of State that it is desirable in the public interest that there should be an extraordinary audit of the accounts of a body subject to audit he may require the Commission to direct such an audit by an auditor or auditors appointed by it".
The section contains particular provisions that apply to an extraordinary audit. I have attempted to reflect that approach in these amendments. I believe that it would be appropriate for the meaning of the Bill to he more detailed rather than allow for very draconian powers to be used which, by common consent, will not be applied in ordinary circumstances. I beg to move.
Baroness Farrington of Ribbleton: My Lords, as I explained in discussing the previous amendment, we consider that the minimum notice period of three days currently set out in Clause 11 will ensure that a proper balance is struck between the need to achieve prompt scrutiny and the need properly to protect the interest of best value authorities and their employees.
It may help to reassure the noble Baroness if I explain that the intention of subsection (4) is not to fix the amount of notice at three days—I believe that that has become clear at Report stage—but merely to specify the minimum period which can be given. We anticipate that significantly more than the 28 days' notice specified in Amendments Nos. 19, 20 and 21 will normally be given to the authority being inspected.
However, we believe that the question of a standard period of notice to inspect authorities is an important one. The Audit Commission is currently looking at the question of notice periods as part of the process of setting up the new best value inspectorate. It will be taking into account the current practice of existing inspectorates and opinions such as those expressed in the recent Work of Ofsted report issued by the Education and Employment Committee in another place. This report also suggested a notice period of 28 days. The noble Baroness will be aware that existing inspectorates have quite different notice periods, from the Benefit Fraud Inspectorate at three months through to Her Majesty's Inspectorate of Constabulary at six months and the Fire Service inspectorate at 12 weeks.
We envisage that very short periods of notice will be needed only in extreme cases, for example, those where there is serious failure or where an authority has not responded to a normal notice of inspection. In such cases, the ability to move quickly will be invaluable. Clause 11 as drafted provides an appropriate mechanism to achieve this. I hope that, reassured by these comments, the noble Baroness will not feel it necessary to press her amendments.
8.45 p.m.
Baroness Hamwee: My Lords, I am not entirely sure that the Minister's response has taken the matter a great deal further. The noble Baroness spoke of the importance of a standard period of notice. It seems to

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me that if the legislation provides for three clear days' notice—I accept that that is a minimum and that generally, in normal circumstances, much longer notice will be given—and it is known that very often it will be far longer than that, that goes against providing a standard.
The Minister spoke of the need to deal with extreme cases. I believe that that is precisely what Amendment No. 21 does. I have followed as closely as I can the language of the Audit Commission Act. I shall not press the point further; it would be tedious to do so now. However, while I am reassured by the thrust of the Minister's response, I am not satisfied that best value authorities have the protection that they are entitled to see on the face of this legislation as to what the normal situation will be. Only the abnormal and extreme appears to be catered for. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 20 and 21 not moved.]
Lord Whitty Lord Whitty moved Amendment No. 22:
After Clause 13, insert the following new clause—
INSPECTIONS: HOUSING BENEFIT AND COUNCIL TAX BENEFIT
(" .—(1) The following shall be substituted for section 139A(1) and (2) of the Social Security Administration Act 1992 (reports on administration of housing benefit and council tax benefit)—
"(1) The Secretary of State may authorise persons to consider and report to him on the administration by authorities of housing benefit and council tax benefit.
2) The Secretary of State may ask persons authorised under subsection (1) to consider in particular—

(a) authorities' performance in the prevention and detection of fraud relating to housing benefit and council tax benefit;

(b) authorities' compliance with the requirements of Part I of the Local Government Act 1999 (best value).

(2A) A person may be authorised under subsection (1)—

(a) on such terms and for such period as the Secretary of State thinks fit;

(b) to act generally or in relation to a specified authority or authorities;

(c) to report on administration generally or on specified matters."

(2) In section 139C(1) of that Act (reports) for the words from "in particular" to the end there shall be substituted "in particular—

(a) in the prevention and detection of fraud relating to benefit, or

(b) for the purposes of complying with the requirements of Part I of the Local Government Act 1999 (best value)."").

The noble Lord said: My Lords, the amendments in this group are technical and clarify the position. The new clause in government Amendment No. 22 is designed to put the Benefit Fraud Inspectorate's powers on a clear statutory footing. The inspectorate's work on
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the administration of housing benefit and council tax benefit is very much in keeping with the whole ethos of best value. But the existing powers are described in very specific, rather than general, terms. By the new clause we wish to make absolutely sure that this very important area of local authority work is subject to the same best value scrutiny as will exist elsewhere.
Amendment No. 30 provides an opportunity to commence certain provisions promptly where it is sensible or helpful to do so. They will ensure that there can be, if necessary, early commencement of provisions relating to police and fire authorities in both England and Wales.
Amendment No. 33 will ensure that Clause 28(2)(b) correctly identifies those provisions which confer powers which have been reserved to the Secretary of State and which will not be exercisable by the National Assembly for Wales. It therefore adds two new references to Clause 28(2)(b). The first makes provision for inspection and other arrangements in respect of police authorities. The second reflects the new clause included in Amendment No. 22 as regards inspection of council tax benefit administration and housing benefit administration. I beg to move.
On Question, amendment agreed to.
Clause 14 [Secretary of State's powers]:
Lord Whitty Lord Whitty moved Amendment No. 23:
Page 10, line 16, leave out paragraph (d).
The noble Lord said: My Lords, in moving this amendment I shall also speak to Amendment No. 24, among others. They have been introduced to make a technical change to Clause 14. They would have the effect of making what was Clause 14(2)(d) a free-standing section. Your Lordships will note that the wording of the new provision remains identical to the original and does not extend the powers of the Secretary of State or the National Assembly for Wales in any way. The amendment has been brought forward simply to clarify the scope of the existing provisions.
Amendment No. 26 is also in this group and it is a slightly more complex matter. I mentioned at Committee stage that we had identified a number of situations where the exercise of Clause 14(5) powers by the Secretary of State or the National Assembly for Wales might cause difficulties in cases where there was a right of recourse to the Secretary of State or where he had an existing role or power in relation to a best value authority.
Amendment No. 26 is designed to clarify the operation of the clause in those situations and addresses this problem by introducing two new subsections to Clause 14.
I would like to emphasise that the circumstances to which this provision would apply are exceedingly rare. We have always maintained that intervention under Clause 14(5), where the Secretary of State takes over responsibility for a function, would be the exception and not the norm and that it would be to address the very worst failure in service delivery. In the handful of cases where a direction is issued under Clause 14(5) we envisage that in most cases the Secretary of State would

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not exercise the function himself but would appoint an independent person to carry out that function. Where a nominee was appointed that nominee would in most cases be considered independent from the Secretary of State and the difficulties outlined above in relation to the Secretary of State's powers would not arise.
However, although the circumstances in which these provisions would be necessary are very rare, this amendment is essential for ensuring the proper functioning of this clause in al] circumstances. Amendment No. 26 is not about increasing the powers of the Secretary of State or of the National Assembly. It is about ensuring that existing powers and roles can continue to be exercised in a sensible way. When the Secretary of State takes over a function he is doing so on behalf of local people to ensure that a higher standard of service is delivered. Local people's rights of appeal, therefore, and other such entitlements should not be compromised to enable that to happen.
Amendment No. 35 is also in this group. It is a technical amendment to ensure that the new regulatory powers we have proposed to introduce at subsection 14(5A)(a) can be used effectively in Wales. Amendment No. 31 is another technical amendment. Subsection 27(2.) lists those order-making and regulatory powers which, in England, should be subject to the negative resolution procedure in either House of Parliament. Amendment No. 31 adds the new regulatory power in Amendment No. 26 to the list about which I have just spoken. I beg to move.
On Question, amendment agreed to.
Lord Whitty Lord Whitty moved Amendment No. 24:
Page 10, line 25, at end insert —
("() Where this section applies in relation to an authority the Secretary of State may direct the authority to take any action which he considers necessary or expedient to secure its compliance with the requirements of this Part.").
On Question, amendment agreed to.
Baroness Hamwee Baroness Hamwee moved Amendment No. 25:
Page 10. line 26, leave out subsection (5).
The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendment No. 27. These amendments deal with the powers of intervention of the Secretary of State in Clause 14. We made no secret at Committee of our distaste for that and particular elements of it.
The first of the amendments leaves out subsection (5), which is the provision allowing the Secretary of State to put in a nominee to exercise certain functions or to take them over himself, which I guess is a less likely scenario. If that were so, trying to get the Secretary of State on the telephone would become well nigh impossible. It also provides that the authority will comply with the Secretary of State's instructions or those of his nominee, in relation to the exercise of certain functions.
We protested about that provision at Committee stage and it is appropriate to do so on the Floor of the House. We were told then by the Minister that the powers would be exercised sparingly, but that in a sense this
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provision is the teeth of the Bill because of its deterrent powers. We protest again because of the principle of democratic accountability. We deplore the trend which became increasingly apparent under the previous government—sadly, we see similar tendencies now——to centralise or at any rate to provide very substantial reserve powers to central government to the detriment of the powers and autonomy of democratically elected local authorities.
We accept that there may be some very particular occasions when things go so badly wrong at local level that on any view matters need to be taken out of the hands of the local authority. An example is when abuse comes to light in a children's home. I believe that such matters are dealt with by other legislation particularly by criminal legislation.
Clause 14(1) applies this provision when the Secretary of State is satisfied that the best value authority is failing to comply with the Act. Reference was made at the previous stage to the protocol. I do not know whether there is a draft of it as yet which does so, but it will set out the step by step application of increasingly vigorous measures to deal with an authority. It will begin with the not so tough measures before moving up to direct intervention. As I say, I do not believe there is a draft yet providing a hierarchy. The Minister may correct me on that.
The draft protocol has been published. Its appendix provides for failure of process and of substance, which are examples of triggers which would allow intervention powers. It seems to us that the failures which are listed are capable of being so minor that for the Bill to allow them to be triggered with such major powers seems quite unbalanced. I shall refer to just a couple in the failures of substance. There is the failure to improve service standards or deterioration. Failure to improve could be a very minor failure and barely deserve such a term in normal parlance. Under the list of failures of process, there is the failure to set performance targets which, in the opinion of the external auditor, are sufficiently challenging. It seems inappropriate to permit these extreme powers. Clearly, there will be differences of opinion as to whether the performance targets are sufficiently challenging. One may say that the degree of challenge within the targets is outside legislation.
We believe that it is for the electorate to respond to an authority not being quite as good as it should be—which is what some of the failures amount to. The Government have proposals for annual elections. Those opportunities for the electorate to express its views may leave some of us feeling that we have barely recovered from one election before being faced with the next. In summary, that is our objection to Clause 14(5).
Amendment No. 27 deals with the urgency provisions. Under Clause 14(8) the Secretary of State is able to give directions without complying with the provisions which require him to give the authority opportunities to make representations. There is no requirement to have regard to an authority's statement if he considers the direction is "sufficiently urgent." We are concerned about the lack of criteria on the face of the Bill and in the draft protocol as drafted as to what constitutes urgency.
When we discussed the matter in Grand Committee, the Minister was not satisfied that the amendment was appropriate. It referred to immediate danger of substantial harm or substantial financial loss. He made the point that financial loss could be long term. He believed that the provision was over rigid and wanted to be more flexible. I take issue on that. If the Secretary of State can set aside the provisions in Clause 14(6) and (7), it suggests to me and my noble friends that the criteria should not be flexible. To suggest that they could be flexible or variable is wrong.
For their own reputation, as well as for other more principled matters, the Government must spell out "sufficiently urgent." To leave the matter to the Secretary of State's discretion without the words being put on paper to describe what is sufficiently urgent does not achieve what the Government and those of us who provide constructive criticism of this part of the Bill should achieve. To that extent, I align myself with the Government because, if we have to have this provision, I want to get it right. I beg to move.
9 p.m.
Lord Whitty: My Lords, I appreciate the way in which the noble Baroness proposes the amendment. However, there is a fundamental disagreement between us on the first part. We believe that the full effect of the best value regime will be available only if there are ultimately some deterrent powers. The noble Baroness refers to my colleague's earlier commitments that those powers will be used only in proportion to the failure established and that the more extreme powers will be used only after attempting to deal with it in a different way and only in the very worst circumstances. The powers would rarely be used and only after other options had been fully explored.
There is a difficulty. The noble Baroness does not accept that we need these powers. However, we believe that we do. There may be evidence in future of serious and long term systemic failure where an authority has conspicuously failed to act despite having been given several opportunities to do so and following other forms of intervention. I am sure that the ultimate power would be relevant to only a handful of cases, but if we do not have it those cases may persistently obstruct other forms of assistance. In those cases, we shall need to take the difficult decision, including the decision to intervene with the direct provision of that service. However, as our White Paper indicated, in those circumstances we should need to have the power for,
"responsibility to be transferred to another authority or third party".
The provisions contained in Clause 14(5) may never be necessary. I hope that they will never need to be used. However, to remove them from the face of the Bill would undermine the best value concept and take away the ultimate means of ensuring that it is enforced in all cases. I believe that in practice the Secretary of State or the National Assembly for Wales would have a range of options available to it before it reached that stage. It is to be hoped that the local authorities would respond to those other interventions. But at the end of the day the
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Secretary of State and the National Assembly for Wales have to have these powers. I cannot, therefore, accept the amendment and I ask the noble Baroness to withdraw it.
Amendment No. 27 deals with intervention powers in cases of urgency. The noble Baroness recognises that there may be such situations and we need some provision to deal with these wholly exceptional circumstances. As she indicated, we are in the process of producing a protocol on intervention in conjunction with the LGA which will set out the principles underpinning intervention and the broad procedures to be followed. It will clarify the provisions contained in the Bill and will contain, as the noble Baroness asks, an agreed definition of the circumstances in which we envisage the fast track procedures would be used. We consider that it is better to lay out what she has said is desirable in terms of definition of circumstances in a protocol because we are in a rapidly changing situation and in a new form of regime. We do not believe it is necessary, or indeed that we are able, to lay that out on the face of the Bill which introduces that regime. The protocol will state clearly that the fast-track procedures would be used only in exceptional circumstances where the severity, the urgency or the persistency of failure or the continuing risk of harm or financial loss show that urgent intervention is necessary.
It is noteworthy that the wording of the noble Baronesses' amendment does not include the whole of the wording that is in the protocol. It would exclude the situation where the Secretary of State could use the fast-track procedures to address persistent and systemic failure where the local authority has failed to take action. I would not regard that as a helpful restriction on what we have already agreed, or almost agreed, with the Local Government Association in the protocol context. I think it takes away a power to intervene in continuous defiance of the whole objectives of "best value" from the Secretary of State or from the national assembly.
Therefore I would hope that the noble Baroness would recognise the desirability of proceeding via the protocol, an approach which meets many of the objectives she has spelt out in relation to the fast-track procedure, rather than attempting to lay down provisions on the face of the Bill. She should also recognise that the exact words she is suggesting do not meet the range of circumstances which are already envisaged, in partnership with the local authorities, as being included in the protocol still in draft.
Baroness Hamwee: My Lords, with regard to Clause 14(5), I accept that the Government believe they need the powers. As for Clause 14(8), one of the criticisms is that my amendment does not allow the Secretary of State to address systemic failure. Since this is the fast-track procedure and systemic failure, by definition, is not something which springs up overnight and becomes suddenly and obviously urgent, I think it is entirely right that the Secretary of State should not be able to apply the urgency provisions in such a case. The

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only reason he might want to take urgent action in the case of systemic failure would be if he noticed at a rather late stage that the failure existed.
With regard to the protocol—and I am glad to note the Minister's assurance—I wonder whether, with the leave of the House, he could tell us when the further draft will be available with the definition for the fast-track procedure. It would be helpful to the House if we could know tonight if the draft might be available soon——and at any rate in connection with this point—before Third Reading. This is a matter with which we on these Benches are particularly concerned. If the Minister is not able to tell me tonight, may I ask him to write to me?
Lord Whitty: My Lords, I am not immediately able to give an indication about the draft tonight. It is already widely available in local government circles, but I am not able to give a date for the final version. I will write to the noble Baroness.
Baroness Hamwee: My Lords, I thank the Minister for that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Whitty Lord Whitty moved Amendment No. 26:
Page 10, line 35, at end insert
("(5A) The Secretary of State may by regulations make provision which—

(a) relates to an enactment which confers a function on him in respect of a function of a best value authority, and

(b) he considers necessary or expedient for the purposes of cases in which he makes a direction under subsection (51(a).

(5B) Regulations under subsection (5A) may, in relation to the cases mentioned in subsection (5A)(b)—

(a) disapply or modify an enactment of the kind mentioned in subsection (5A)(a);

(b) have an effect similar to the effect of an enactment of that kind.")

The noble Lord said: My Lords, I beg to move Amendment No. 26 formally.
On Question, amendment agreed to.
[Amendment No. 27 not moved.]
Clause 15 [Power to modify enactments and confer new powers]:
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 28:
Page 11, line 13, after ("enactment") insert ("made before the passage of this Act")
The noble Lord: My Lords, Clause 15 of the Bill begins:
"If the Secretary of State thinks that an enactment prevents or obstructs compliance by best value authorities with the requirements of this Part he may by order make provision modifying or excluding the application of the enactment in relation to those authorities".
It goes on:
"The Secretary of State may by order make provision conferring on best value authorities any power which he considers necessary or expedient to permit or facilitate compliance with the requirements of this Part".
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Those are very sweeping powers indeed over all legislation. The first amendment that I have put down in relation to this clause, Amendment No. 28, is grouped with Amendment No. 29, which I will come to in a moment. It puts a minor restriction on this particular power in that the Secretary of State would only be able to apply the power to legislation which is presently in place. In other words, new legislation coming in the future will not be able to have this power applied to it. That is a perfectly reasonable proposition. There may well be existing circumstances and laws which could rightly require to be set aside for best value to work well. Anyone who has been involved in local government will know of individual circumstances which already exist here and there, where the ability to make use of this power will indeed be welcome. To that extent it is good, but the power is so wide in its present application that some restriction on it would perhaps be desirable.
That is why I also tabled Amendment No. 29. which limits the application of this particular clause to five years. If we have not found out what the problems are and where the shoe pinches within five years of passing this Bill, it will be remarkable. It will be even more remarkable if some ambitious Secretary of State's department as it presently exists, or whatever its successor department may be, has not by then decided to pass some other local government Bill which then might supersede this one. That being so, it is not unreasonable to put a time limit on the application of this clause. In any event, it will have the wholly beneficial effect of concentrating people's minds so that, should there be issues which they feel are worth exploring because the shoe of existing legislation pinches too tightly, they will raise them within a reasonable timescale.
It is with those thoughts in mind that these amendments were put down on the Marshalled List. I beg to move.
9.15 p.m.
Baroness Farrington of Ribbleton: My Lords, Amendment No. 28 will prevent the Secretary of State from amending local authorities' powers in respect of future legislation. We recognise that this amendment reflects a concern about how far we intend to amend existing legislation so as to enable local authorities to deliver best value. The paper produced by the department on possible uses of this clause indicates to some extent the sort of legislative changes that may be necessary. We are now developing that thinking and will be consulting on our proposals later this summer.
We recognise that we are in a changing world, and despite our best efforts it will not always be possible to forecast those changes. We feel that future Secretaries of State must have powers to tackle changing circumstances. Amendment No. 28 would unduly fetter their hands. Therefore I hope that the noble Lord, Lord Dixon-Smith, will feel able to withdraw that amendment.

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The noble Lord also moved Amendment No. 29 which reflects concern about the use of Clause 15 powers. He may consider a five-year period a sufficient time to change legislation, and that within that period it will quickly become clear which changes are necessary.
However, his argument does not take account of the sort of regime which we expect to emerge for delivering best value to local communities. We expect best value authorities to develop new forms of service delivery with others, including the private and voluntary sectors. Such new ways of working will not spring up immediately after local authorities have their new duty of best value from 1st April 2000. Indeed, they may not become apparent for some years; for example, advances in information technology will not suddenly stop in 2005. There will be an incremental process as many partner organisations implement new ways of working. The time limit proposed by the noble Lord would create unnecessary pressure. A finite period may not allow us to identify current as well as future barriers. It could also encourage authorities and others to seek immediate legislative solutions to perceived problems. Amendment No. 29 could prevent partnerships from evolving naturally at a time during which difficulties could emerge and hopefully be resolved without the need for legislative changes.
We believe that it is better to have sufficient time to identify correctly the problems and to develop effective administrative or legislative solutions over the full lifetime of best value. When the power under Clause 15 is needed, it will be used to improve authorities' ability to achieve best value. That may be at any point when this duty is in force. I therefore hope that the noble Lord will not press this amendment.
Lord Dixon-Smith: My Lords, I listened with great interest to the Minister's response and she made some interesting points. However, I am afraid that I can envisage a situation in which one might conclude that the most efficient way of delivering best value might be to remove all legal constraints from local authorities and let them get on with it. But I suppose that it would be a little too idealistic to conceive that any government would give local authorities that degree of freedom.
However, the Greater London Authority Bill is going through this House and it has within it the power of general competence. It is possible to conceive that in the not too distant future we shall be passing a Bill through this House, which I and the noble Baroness would welcome, giving local authorities the power of general competence. If that were to occur the need for Clause 15 might disappear. It is not impossible to conceive of such a situation, but I shall study the Minister's response with great interest and in the meantime beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 29 not moved.]
Clause 26 [Commencement]:
Lord Whitty Lord Whitty moved Amendment No. 30:
Page 16, line 23, leave out subsections (2) and (3) and insert—
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("(2) The Secretary of State may by order provide for—

(a) any of sections 1 to 13, 14, 18, 19, 21, 22. 24 and 25 to be brought into force in relation to England before the time appointed by subsection (1);

(b) any of those sections, in so far as it relates to an authority falling within section 1(1)(d) or (e), to be brought into force in relation to Wales before that time;

(c) any of sections (Inspections: housing benefit and council tax benefit), 15 to 17 and 23 to be brought into force before that time.

(3) The National Assembly for Wales may by order provide for any of the sections mentioned in subsection (2)(a), except in so far as it relates to an authority falling within section 1(1)(d) or (e), to be brought into force in relation to Wales before the time appointed by subsection (1).")
On Question, amendment agreed to.
Clause 27 [Orders]:
Lord Whitty Lord Whitty moved Amendment No. 31:
Page 16, line 35, at end insert ("14 or").
On Question, amendment agreed to.
Clause 28 [Modifications for Wales]:
Lord Thomas of Gresford Lord Thomas of Gresford moved Amendment No. 32:
Page 17, line 1, after ("2(6),") insert ("15(4),").
The noble Lord said: My Lords, your Lordships may recall that during the Grand Committee's considerations of this Bill I expressed my concern about the obscure way in which the provisions relating to Wales were drafted in Clause 28. I was pleased to see in the Health Bill, which was debated today, that in Clause 59 progress had been made and a greater degree of clarification obtained. There is a long way to go, but the parliamentary draftsmen are working along the right lines.
Clause 28 excludes the National Assembly for Wales from exercising any powers under Clauses 15 and 16. Your Lordships will recall that those clauses give to the Secretary of State the power to amend primary legislation by order by means of secondary legislation, which is subject to the affirmative procedures in this Parliament. What is the purpose of giving these extensive powers to the Secretary of State? It is said to be flexibility. In an article written in Public Finance on 5th March, the Local Government Housing Minister, Miss Hilary Armstrong, stated:
"No one can claim to know or even understand all the ways in which Best Value might be achieved and developed over the coming years. For example, significant developments in technology, in customer preferences and in business methods are likely to transform the way services are provided and delivered in future years. There will be new ways of working, new forms of partnership and new standards to meet as public services continue to modernise. The last thing councils need is primary legislation written now in a way that would need further primary legislation to update it year after year. Also, the numerous small-scale measures that will be appropriate locally would never be appropriate for a national legislative programme. It is only by providing flexibility of legislative response that we can assure flexibility in local delivery".
I ask the Government to pause and consider that that flexibility, that legislative response, is one of the reasons that has caused this Government to introduce the Government of Wales Bill to set up the National Assembly for Wales. It is right for the National

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Assembly to consider these changes which are hardly the subject matter for primary legislation in the Westminster Parliament.
What is the reason for excluding the National Assembly from exercising these powers? I strongly suspect that it was because there was a fear that Ministers should not grant any primary legislative powers to Wales. The whole ethos of the National Assembly for Wales as opposed to that of Scotland is that its powers are limited to the passing of secondary legislation.
If we look at the National Assembly for Wales Transfer of Functions Order, which comes into force on 1st July, and with which I was concerned in its passage through this House, there are no less than 100 functions passed to the National Assembly for Wales to amend, repeal or modify primary legislation. It is already within the power of the National Assembly to modify primary legislation so why not within the circumstances of this Bill?
The Government have been asked this question and have given no reason. Miss Armstrong said, in Standing Committee B in another place on 11th February:
"The power to make orders which have an effect in relation to Wales will be exercised by the Secretary of State for Wales. That is because we do not think it appropriate to confer these powers on the National Assembly for Wales. Of course, where the Secretary of Stale for Wales exercises his powers under Clause 15 there will be full consultation with the Assembly".
The only reason that the Government have given for withholding these important and extensive powers from the National Assembly is, "We do not think it appropriate". I should like to know why it is not appropriate.
Let us pursue that a little further. Why is it that the Secretary of State for Wales alone is to exercise these powers? This was a matter I raised in Grand Committee. In a very courteous reply to me, the noble Lord, Lord Whiny, pointed out that the precise identity of the Secretary of State who operates powers under this legislation in practice will vary from case to case according to circumstances. As nobody envisages how this legislation is to be changed, I cannot see why the Secretary of State for Wales should be designated as the person to exercise powers under Clauses 15 and 16 as opposed to the many other ministers who may be concerned in the various points that arise from time to time.
There is confusion, a lack of clarity and, I suspect, simply a lack of thought as to the function of the National Assembly, as to why the powers are withheld and how they are to be operated.
I turn to the amendments. I shall speak also to Amendments Nos. 34 and 36. Amendment No. 34 gives the Assembly the powers of the Secretary of State in relation to Clauses 15 and 16. Amendment No. 32 removes the parliamentary procedures for Assembly orders under Clause 15. Amendment No. 36 sets out what is proposed as alternative assembly procedures, how the National Assembly for Wales would exercise these powers to amend legislation if the best value provisions are found to need that sort of amendment.
I do not propose to seek a vote on this issue tonight but I ask the Government to consider carefully the points that I have made. I beg to move.
9.30 p.m.
Baroness Farrington of Ribbleton: My Lords, the noble Lord raises an important and complex issue, because of his breadth of knowledge of the subject. As a Whip, I am aware of the depth of detail he followed during the passage of the Bill establishing the National Assembly. Should I fail to answer any of the details he raised, I shall write to him and send copies to all noble Lords who have been present and taken part in the debate. I know it is unusual to start with that, but in the light of the depth of knowledge of the noble Lord, I felt safer doing so.
Clause 28 makes provision for the application of Part I of the Bill in Wales. It provides generally for powers in Part I of the Bill to be exercised by the National Assembly rather than the Secretary of State. However, the clause gives some powers to the Secretary of State rather than to the Assembly. These include the powers to modify primary legislation contained within Clauses 15 and 16 which are the subject of Amendments Nos. 32, 34 and 36. These amendments would give the order-making powers in Clauses 15 and 16 to the National Assembly rather than to the Secretary of State in relation to their application in Wales. They would also provide for these orders to be subject to the Assembly's procedures for making secondary legislation rather than to parliamentary procedures.
Clauses 15 and 16 provide for potentially wide-ranging powers to modify primary legislation and for orders made under these powers to be subject to rigorous scrutiny procedures. This Government feel strongly that the order-making powers in Clause 15 should be exercised by Ministers accountable to Parliament and that it would not be appropriate for these powers to be given to the National Assembly. We also consider that orders under Clause 15 should be subject to affirmative resolution by both Houses of Parliament in relation to their application in England and Wales. Clause 15 provides for this and we do not believe that these procedures, which are set out in Clause 16, should be different for Wales.
While we recognise that the Assembly's procedures for making secondary legislation are rigorous, the Government are strongly of the view that all orders made under Clause 15 should be subject to the stringent scrutiny provided for by Clause 16. However, the Bill builds in safeguards for the National Assembly. Clause 28 provides that the Secretary of State must consult the Welsh Assembly about using his powers under Clause 15 to modify primary legislation which has effect in relation to Wales. It also provides that the Secretary of State may not use his powers under Clause 15 to modify secondary legislation made by the Assembly itself without its explicit agreement.
The provisions in Clauses 15 and 16 are consistent with the principles of devolution in that the powers to modify primary legislation are retained by the Secretary of State and are subject to parliamentary procedures,

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while recognising and protecting the position of the National Assembly. I hope therefore that the noble Lord will not feel it necessary to press these amendments.
Lord Thomas of Gresford: My Lords, I have already indicated that it is not necessary to take this matter to a vote. But let me state this as a matter of principle. The National Assembly in relation to Welsh matters is a far better instrument for scrutiny provided by the Government of the day, with the grateful thanks of the Welsh nation, than the affirmative or negative resolutions of Westminster. Anybody who sits in this House knows just what sort of safeguard those procedures actually are in practice. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (Lord Ampthill): My Lords, if Amendment No. 33 is agreed to, I shall not be able to call Amendment No. 34; it will have been pre-empted.
Lord Whitty Lord Whitty moved Amendment No. 33:
Page 17, line 4, leave out ("sections 15 to 17 or section 26") and insert ("any of sections (Inspections: housing benefit and council tax benefit), 15 to 17. 23 and 26")
On Question, amendment agreed to.
[Amendment No. 34 not moved.]
Lord Whitty Lord Whitty moved Amendment No. 35:
Page 17, line 10, at end insert —
("() Section 14(5A)(a) shall apply to Wales as if the reference to a function conferred on the Secretary of State were a reference to a function conferred on the National Assembly for ales or the Secretary of State; but the Assembly may not make regulations under section I4(5A) which relate to a function conferred on the Secretary of State without his approval.")
On Question, amendment agreed to.
[Amendment No. 36 not moved.]
Clause 29 [Limitation of council tax and precepts]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 37:
Page 17, line 16, at end insert—
("(2A) Schedule I shall cease to have effect on 1st April 2005 unless previously extended by order made by statutory instrument and laid in draft before, and approved by resolution of both Houses of Parliament.
(2B) An order laid under subsection (2A) shall not apply for a period exceeding five years.
(2C) If an order laid pursuant to subsection (2A) is approved, Schedule I shall cease to have effect on the date specified in the order subject to any subsequent order or orders approved by both Houses of Parliament none of which shall extend its effect for more than five years.")
The noble Baroness said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 38 and 40, which are tabled in my name and that of my noble friend Lady Miller. This grouping also contains Amendment No. 39 in the name of the noble Lord, Lord Dixon-Smith. With these amendments we move to the question of council tax capping and the substantive amendment in this group, although the Minister may think that knocking out Clauses 29 and Schedule 1 is
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pretty substantive. However, the point I want to address in particular is what one might call the sunset clause which, at this time of night, is perhaps appropriate.
We have received assurances that the capping powers retained by the Secretary of State in respect of local authority expenditure are very much reserve powers, but we have made no secret of the fact that we are against capping. If any powers are to be retained, we want to test how necessary they are. We are moving into a regime for local authorities of best value and increasingly, as I have said several times this evening, of partnership. It is possible that there may well be new experiences over the next few years.
At the last stage of the proceedings, the Government said that they were not confident that their modernisation programme would be completed by the year 2005, which was when we proposed that the provisions for capping should sink without trace and with no possibility of being continued. On reading that comment, it seems to me that that may imply that local authorities are dependent on central government to modernise. I do not think that that is so; indeed, we all know of examples where local authorities are very much making the running and are doing some very admirable things. Although the extent to which we admit it may vary, we all know that the concern is about a limited number of rather old-fashioned authorities. I have said before in another context that I think it is a matter for the electorate to decide the way that it responds to such authorities.
In Amendment No. 37 we propose that the capping provisions should cease to have effect after 2005 unless they have been extended by affirmative resolution of both Houses; in other words, the testing of whether the reserve powers are necessary will be a matter for Parliament. The proposed subsections (2B) and (2C) would provide for a rolling five-yearly extension, if necessary. It seems to me that it would be illogical in the year 2005 to allow the powers to be extended without limit. Therefore, I have simply sought to replicate the five-year provision.
I believe that the existence of the capping powers itself constrains what local authorities want to do and not in a positive or helpful fashion. The very impact of the threat of a cap can constrain innovation and good practice. I think we are all agreed that best value is not necessarily cheapest value. We all seek good value for money but that may not be achieved by the expenditure of the lowest amount. I beg to move.
Lord Dixon-Smith: My Lords, Amendment No. 39, which is included in this grouping, would of course be a trifle unnecessary if the House were to take a decision at some point to accept Amendment No. 40. However, having said that, my amendment was tabled to give me the opportunity, so to speak, to explore the mind of the Secretary of State through the words of the Minister sitting opposite on one or two matters.
The first and most simple one is the issue of whose view is the most important as regards local expenditure and the budget of local authorities. Is it the view of the Secretary of State, or should it not rather be that of the

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local electorate, provided always, of course, that they have no power to commit the Secretary of State's expenditure? That is an important proviso.
Recently, it was drawn to our attention that a local referendum was held in, I believe, Milton Keynes. The local community voted for a particular level of precept increase. Nonetheless they were issued with a "yellow card" warning by the Secretary of State; they were told in effect that they might be going too far and that any further misbehaviour might result in a "red card." That may be the way the system works but I wish to explore why that is so. In the great, wide macro-economic world I have long held the view that current expenditure is current expenditure whether it is undertaken by a local authority or by private individuals. If the council tax rises, all that happens to the volume of current expenditure is that private individuals spend less and the public authority spends more. The impact on macro-economic expenditure is neutral.
That has been a belief for which I have not had supporting evidence in the past. However, I now have in my hands a paper which supports that view. The paper is written by Mr Peter Watt, senior lecturer in economics at the Department of Local Government Studies, University of Birmingham, and by Mr John Fender, professor of economics at the same university. The study was commissioned by the Local Government Management Board.
I shall not bore the House with all the details of the report as that would take an interminably long time. It would be unbearably rude to do so at this hour of the night. However, it may be worthwhile drawing attention to the beginning and the end of the document. It starts by saying that there is a tension with regard to local expenditure,
"between a desire to remove control and a desire to retain it".
The study states that that,
"is evident in the drafting of the Comprehensive Spending Review".
That is a well-established and well-known document. The study continues,
"Crude and universal capping will no longer constrain local government finance. But…the Government will protect people from excessive council tax increases…Given this strong desire to retain controls over expenditure, it might be expected that there are strong macroeconomic arguments to support such controls. However, this briefing paper argues that this is not the case".
As one would expect of a good academic paper, the study describes the arguments for, and the arguments against the measure. The study concludes:
"We have surveyed a range of arguments for central control of locally financed local government expenditure put forward by the Treasury firstly to the Layfield Committee and in subsequent years. The overall conclusion from this paper is that the government has not established sound macroeconomic arguments for the control it has imposed over many years on local government self-financed expenditure".
That is an interesting paper to read in view of my prejudice. Therefore I would like to explore with the Minister why he believes that the Secretary of State—I understand entirely why he should wish to support him—has right on his side in feeling that his opinion in these matters has greater validity than that of the locals who will have to pay the bill.
9.45 p.m.
Baroness Miller of Chilthorne Domer: My Lords, we on these Benches share the sentiments of the noble Lord, Lord Dixon-Smith. In the light of all that has been said about public consultation and how best value will move authorities much further towards delivering the kind of things their communities wish, and for all the reasons that the noble Lord has said, this amendment is very much in line with that objective.
Lord Whitty: My Lords, some interesting matters have been raised in the debate. As to the Liberal amendments—the Liberal Democrat amendments—Amendment No. 37 is a sunset clause which would end the powers in 2005. One could probably term Amendments Nos. 38 and 40 as total eclipse clauses; they wipe out the powers entirely.
It is probably too late at night for me to discuss principles of public finance and macro economics with the noble Lord, Lord Dixon-Smith, much as I would like to do so. At one level he makes an arguable point; no doubt the papers will illuminate that.
Both financially and politically it is very important to recognise that even locally financed expenditure by local government has an impact on the national taxpayer and that the national government have a responsibility to protect the local taxpayer. We take both responsibilities seriously. We believe therefore that we must have reserve powers in that regard. We do not believe that, in extreme circumstances, national government should be without powers to constrain an increase in the local taxpayers' burden. We obviously expect and hope that all local authorities will behave sensibly and prudently; that is why we have removed crude capping measures and why we did not use this year the powers that we have under the existing legislation.
We believe that we need some reserve powers. We are making clear that we wish to change the system of financial control of local authority expenditure and to give more freedom to local authorities. We said quite explicitly in our manifesto that we needed reserve powers for precisely such an eventuality. If local authorities act responsibly and reasonably the powers will not be used.
Amendment No. 37 would require us to have a kind of abstract debate every five years as to whether we needed the powers. Under the provisions of the Bill, in every instance when the Secretary of State invokes these powers—and we hope that such instances will be extremely rare—the affirmative procedure will ensure that we have a debate on the particular circumstances in which the Secretary of State decides to set a cap on a local authority.
At the beginning of the debate I was deeply in sympathy with what the Liberals were after—the Liberal Democrats, I beg your pardon—even if I could not accept the way they were going about it. In this they are pushing too far the issue of local authority autonomy. These are powers we do not wish to use but, nevertheless, they are powers that any responsible government must maintain.

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As to the amendment of the noble Lord, Lord Dixon-Smith—Amendment No. 39—it effectively says that where there is a referendum supporting what would otherwise be seen as an excessive council tax, that should exempt the local authority concerned from that provision. Milton Keynes was under the old regime, but under the new regime the Secretary of State will very strongly take into account the outcome of such a referendum.
But of course a referendum is not the only kind of consultation with local people; there may be other kinds. As your Lordships will know from other debates, all kinds of issues arise as to how a referendum is put—the questions, the options, the turn out and so on—before a decision is taken that will always result in non-intervention by the Secretary of State. However, I can assure the noble Lord that a referendum result would be taken very strongly into account, as would the results of other kinds of consultation with local people. We recognise that in most circumstances local people are best able to judge the precise level at which the tax would be raised and at which they would continue to elect their existing authority. However, we need those powers in extreme circumstances. The result of a referendum is only one aspect of how such extreme circumstances would be judged by the Secretary of State.
With that assurance that we would take such a result into account, I hope that the noble Lord will not pursue his amendment. I hope also that the noble Baroness will see fit not to pursue her amendment, although I understand her commitment to this dramatic change in local authority financial regimes.
Baroness Hamwee: My Lords, the Minister need not apologise for referring to my noble friends as Liberals, because we are, and, as it happens, the amendment is about democracy. The Minister said that central government have an obligation to protect the local taxpayer. Our response is to ask why, to what extent, and when. At this late hour I will not pursue the matter further. However, with regard to the referendum amendment, I think I am right in saying that the turnout in the Milton Keynes referendum was rather high. These powers are referred to as reserve powers. Yet again, the problem we are faced with is that there is nothing to say, "Oh, but the Secretary of State will use these powers only in the most extreme circumstances". We accept that they have not been used this year. There are very good political reasons for their not being used this year. This is somewhat the equivalent of Mandy Rice-Davies—he wouldn't, would he, not this year.
We may wish to come back to this point, knowing that there are fundamental differences between us which I do not think we will resolve. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 38 not moved.]
Schedule 1 [Limitation of Council Tax and Precepts]:
[Amendments Nos. 39 and 40 not moved.]
Clause 30 [Major precepting authorities: further regulation]:
Lord Dixon-Smith Lord Dixon-Smith moved Amendment No. 41:
Page 17, line 17, after ("applies") insert ("for the purpose of eliminating any liability of a billing authority as a consequence of the limitation of council tax benefit subsidy resulting from a decision taken by a precepting authority").
The noble Lord said: My Lords, I have tabled Amendment No. 41 because in my view Clause 30 is outwith the Long Title of the Bill. Therefore, some explanation as to why it is here should appear within the Bill. The Long Title states:
"Make provision imposing on local and certain other authorities requirements relating to economy, efficiency and effectiveness; and to make provision for the regulation of council tax and precepts".
Clause 30 has nothing to do with economy, efficiency and effectiveness; nor does it have anything to do with the regulation of council tax precepts. It is in the Bill to put right a wrong. It is necessary because the Government have acted in haste and have thereby created an anomaly.
Until the Government introduced changes that have made Clause 30 necessary, all social security benefits were paid exclusively by the Exchequer. That is no longer the case. Council tax benefit, which 6.5 million people receive in England, Scotland and Wales, is dependent on the level of a locally determined tax. Because of that fact, the Government decided that they would pay council tax benefit only up to limits that they decided to determine. After that, if the council tax rises to a greater degree, that national benefit falls on the local taxpayer. That is a major change in the way in which the country does its business.
There may be plausible arguments as to why that change should have been made. But in making it, the Government have found that they have created an anomaly. Council tax benefit subsidy is paid to council tax billing authorities, which pass it on to the recipients. But council tax rises not exclusively at the behest of the decisions of the billing authorities. There are precepting authorities which precept on the billing authorities. If their precept rises too far, the power exists and can be used to hold up the subsidy. But because the subsidy is paid to the billing authority, that leaves the billing authority with a hole in its finances. Under the existing law there is no power under which the precepting authority can pay that deficit—it does not have the legal power to do so—when it has actually caused the problem. That is the reason why Clause 30 is in the Bill. This is a convenient place to put it. It is relevant in that it is a local government matter in part.
I am grateful to the Minister for meeting me earlier this week, during what has been a very busy time for him. We had some fruitful discussions. The noble Baroness, Lady Hamwee, was also present. I was grateful for the time and consideration that were given. I do not know whether we can come to a satisfactory conclusion to this matter, but I have still not seen a better one than the amendment that I have proposed.
There were suggestions that the matter might be dealt with by some clear explanation in the Explanatory Notes to the Bill. But having examined them further, I do not

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think that that would be satisfactory. Paragraph 1 carries with it a government health warning in the final sentence; namely, that the notes,
"do not form part of the Bill and have not been endorsed by Parliament".
So to attempt to go down that route would not be satisfactory.
I am therefore looking for some provision, not merely by way of assurance but on the face of the Bill, that gives a sufficient explanation as to why this particular clause should be here. As I have said, it is my view that it is outwith the Long Title of the Bill. I beg to move.
Lord Whitty: My Lords, the noble Lord correctly describes the anomaly which required this clause to be included and the reasons behind it. Therefore, I believe that he recognises the need for this provision. His concern is that the legislation is not clear. I fear that much of our legislation may not be particularly clear and that lawyers need legal encyclopaedias, let alone the innovation of our Explanatory Notes to explain what was intended. The noble Lord dismisses the role of Explanatory Notes. However, it is important to recognise that this innovation was brought in in order to help the reader of new legislation. The notes will not alter the purport of the legislation but they will clarify what it is about. Since the noble Lord seeks to clarify the position rather than change the effect of what is already in the legislation. I would have thought that the Explanatory Notes met his objective.
At present paragraph 12 of the existing version of the Explanatory Notes seeks to explain that any shortfall in council tax benefit arising from large increases in council tax falls on the authority responsible rather than— if we do not have this change—solely on the billing authority. Any reader who needs clarification of Clause 30 can therefore look at the notes. I take the noble Lord's point that perhaps that explanation is not sufficient. However, I do not accept his point about the status of the notes. If he is concerned that the status of the notes is not sufficiently clear, or that the disavowal makes them inappropriate for the purposes of clarification, as distinct from the purposes of substantive powers or functions, there is a longstanding tradition that Hansard has some effect in clarifying the intent of the provision. Therefore, for the record we intend to revise paragraph 12 which, subject to minor drafting changes, would read along the following lines:
"In addition, the Bill will contain provisions to require major precepting authorities to make payments to their billing authorities. Under the Council Tax Benefit Subsidy Limitation Scheme, local authorities which make increases in council tax above a guideline set by the Secretary of State are required to make a contribution to the council tax benefit costs. Clause 30 is needed to ensure that, where a major precepting authority exceeds the guideline, it pays the contribution to its billing authority since they are responsible for the administration of council tax benefit".
I believe that that extends the explanation. It is now in Hansard and I hope, therefore, that if clarification is all that the noble Lord seeks—he has never said that he seeks anything else—that is extant and he will not pursue the amendment.
Lord Dixon-Smith: My Lords, I am most grateful to the Minister for his explanation, which I shall study
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carefully. He may well have answered every point that is of concern to me; if so. he will hear no more of the matter. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

The Scottish Parliament (Assistance for Registered Political Parties) Order 1999 The Scotland Act 1998 (Modifications of Schedules 4 and 5) Order 1999 The Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.)Order 1999 The Scotland Act 1998 (Border Rivers)Order 1999 The Scotland Act 1998 (Cross-Border Public Authorities)(Adaptation of Functions etc.) Order 1999 The Scotland Act 1998 (Functions Exercisable in or as Regards Scotland Order 1999 The Scotland Act 1998 (Modification of Functions) Order 1999 The Scotland Act 1998 (Consequential Modifications) (No. 2) Order 1999
10.2 p.m.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel)The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel) rose to move, That the draft orders laid before the House on 26th May be approved [21st Report from the Joint Committee].
The noble Lord said: My Lords, I beg to move en bloc the Motions standing in my name on the Order Paper. We are reduced to a happy but merry band. We have come to the end of a long road which started in September 1997 when we first debated the referendum Bill. Tonight we are debating the final set of orders that implement the devolution settlement. It has been a long road with many twists and turns upon it. Some of those who have participated in the debate have finished up at their desired destinations; others, alas, have not.
The eight draft orders under the Scotland Act for approval today form a vital part of the legislative package required to deliver devolution for Scotland. To reflect the interface between the Scottish Parliament and the administration several of these draft orders require

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the agreement of this Parliament and the Scottish Parliament. The orders before us this evening were debated and approved by the Scottish Parliament on 2nd and 3rd June.
Perhaps I may briefly describe the main contents of the various orders. The Scotland Act 1998 (Modifications of Schedules 4 and 5) Order 1999 adjusts in a number of areas the matters in relation to which the Parliament will have legislative competence so as to extend or clarify its powers.
The Scotland Act 1998 (Functions Exercisable in or as Regards Scotland) Order 1999 assists in ensuring the devolution of functions to the Scottish Ministers either through Section 53 of the Scotland Act, because they relate to devolved matters, or by the Executive Devolution Order under Section 63. In particular, it clarifies cases where there might be doubt as to whether a function is or is not exercisable as regards Scotland. This clarification is necessary to ensure that the relevant function will or will not devolve. Your Lordships may consider that that is a fairly fundamental point.
The Scotland Act 1998 (Modification of Functions) Order 1999, modifies enactments to facilitate the transfer of functions to the Scottish Ministers under Sections 53 or 63 of the Scotland Act.
The Scotland Act 1998 (Transfer of Functions to the Scottish Ministers etc.) Order 1999 provides for what has generally become known as "executive devolution", that is the devolution to the Scottish Ministers of powers and duties in relation to reserved matters. It is important to note that these functions will be additional to those relating to devolved matters which will transfer to the Scottish Ministers automatically by virtue of Section 53 of the Scotland Act. What we are concerned with in this draft order is the transfer of executive powers and duties in areas where primary legislation will continue to be a matter for this Parliament. In exercising these functions, the Scottish Ministers will, of course, be accountable to the Scottish Parliament.
The Scotland Act 1998 (Consequential Modifications) (No. 2) Order 1999 makes a variety of amendments to legislation to take account of the Act for the simple reason that a great deal of legislation that had been previously enacted was obviously enacted at a time when devolution was but a glimmer in the eye. Therefore, these provisions take account of the fact that devolution is now a reality.
The Scotland Act 1998 (Cross-Border Public Authorities) (Adaptation of Functions etc.) Order 1999 puts in place customised arrangements for the control and accountability of certain public authorities which have been specified as cross-border public authorities.
The Scotland Act (Border Rivers) Order 1999 makes provision for whole river management of the Tweed and Esk Rivers. Briefly, it means that the Tweed will be treated as a Scottish river while the Esk will be treated as an English river.
The Scottish Parliament (Assistance for Registered Political Parties) Order 1999 provides for the Scottish parliamentary corporate body to make payments to
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qualifying political parties for the purpose of assisting members of the Parliament who are connected with such parties to perform their parliamentary duties.
At this stage it is sufficient for me to have given that brief account of the content of the orders and their purpose. I shall respond to matters of detail that noble Lords may wish to make. I beg to move.
Moved, that the draft orders laid before the House on 26th May be approved [21st Report from the Joint Committee].—(Lord Sewel.)
Lord Mackay of Drumadoon: My Lords, the notes that I have in front of me begin with the words, "I am grateful to the noble Lord, the Minister for having explained these various orders in his usual helpful manner". But as I was listening to him it suddenly struck me that he went through them in a different order from that on the Order Paper. Therefore, the first question is whether that procedure is competent where each order he has spoken to is incorrectly entered on the Order Paper. That gives him plenty of time to find an answer to that very searching question.
Lord Sewel: My Lords, the answer is that the orders are perfectly in order. I do not think that we should be detained by the point made by the noble and learned Lord.
Lord Mackay of Drumadoon: My Lords, I have to take up the Minister on another point. It was not in September 1997 that we started talking about the referendum Bill. That was the month, as I recall, when we voted in the referendum. It was some months previously that we set out on this long and, by and large, happy and interesting path.
Lord Sewel: My Lords, that joyful experience is somewhat compressed.
Lord Mackay of Drumadoon: My Lords, these repeated interruptions might turn this into one of my longer speeches, for whatever purpose that may be necessary!
I am grateful not only to the Minister but to his officials for having sent me copies of these orders in advance of the draft orders having been tabled in this House. That courtesy is typical of the courtesy shown by Scottish Office officials to Peers on all sides of the House throughout the devolution project. It was of great assistance to us when the Bill was going through Parliament and to me recently in setting aside the necessary time to read through the considerable volume of paper-work which the orders constitute.
It is also appropriate to pay tribute to those who were involved in the drafting of these orders. I take it that the Minister does not intend to take personal credit for that. Some of these orders are lengthy and highly technical. There can be little doubt that many hours of research and drafting must have been involved in their preparation. They may be being nodded through your Lordships' House this evening in a comparatively short period of time, but it is right to place on record our

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appreciation of the expertise, ability and labours which went into producing these major documents. They may have rather dry titles but they provide many of the necessary nuts and bolts to make the devolution settlement work in the way we all hope.
There is only one order about which I wish to say anything in detail. I refer to the order which appears first on the Order Paper; namely, the order relating to the provision of financial assistance for registered political parties. That is an order which would normally require the approval not only of both Houses of Parliament but also of the Scottish Parliament. I appreciate that in terms of an order previously made, it is not necessary to take the approval of the Scottish Parliament at this stage. However, if the order comes to be amended in due course, that may be required.
There are a number of grounds for regretting both the manner and the terms in which the draft order has been brought forward for approval, which may explain why its approval was put to a Division when debated in another place. Contrary to the practice which applies in this Parliament when decisions are being made as to what financial assistance Opposition parties should receive, there was not, as I understand it, any consultation between the Scottish Executive and opposition parties before the amounts set out in the order were determined. Quite why that happened is unclear to me. I believe that it has never been fully explained in public. I should be most grateful if the Minister could do so now, in particular in view of the fact that since in the terms of the order the Liberal Democrats are to receive some payments it is reasonable to assume that there was at least a measure of consultation with them, if only through the Deputy First Minister, Mr Jim Wallace. If he were consulted, why were the leaders of the other parties not consulted also?
Viscount Thurso: My Lords, I thank the noble and learned Lord for allowing me to intervene. So far as I am aware there is no evidence that any such consultations took place. I am unaware of their having taken place. No one has ever said that they took place. Therefore I do not see what ground the noble and learned Lord has for putting forward the case that such consultations did take place.
Lord Mackay of Drumadoon: My Lords, I think it is a matter of reasonable inference. As I understand it, the Liberal Democrats are in coalition with the Labour Party in the Scottish Executive. I suppose it is technically possible that even the First Minister was not consulted about the terms of this order in that it did not require to be approved by the Scottish Parliament itself. No doubt the noble Lord the Minister can enlighten us about that in due course. I would have thought that as it is now getting on for two months since the election was held and this order has only been brought forward in the month of June, it is reasonable to assume that at the numerous meetings of the Scottish Executive, or the Scottish Cabinet as they call themselves, this matter was touched on. Of course I may be entirely wrong in which case the Minister will correct me.
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The concern which I feel, and I am not alone, is that neither the Scottish Conservative Party nor the Scottish National Party, as far as I know, was consulted. It seems to me that if one is seeking to embark on a form of new consensus politics this is one area in which full and co-operative discussions might profitably have taken place. That is particularly so in view of what was commended in the Neill Committee's report on the funding of political parties. Your Lordships will be aware that it was primarily concerned with the funding of those political parties who operate in the Westminster Parliament and who receive what is colloquially known in the other place as "Short money" and sometimes, in your Lordships' House, as "Cranborne money".
The Neill Committee took the view that it was necessary that all the political parties involved in the work of this Parliament should review the matter to ensure that the Opposition parties received sufficient resources to enable them to perform their functions adequately. The committee went on to recommend that both Short and Cranborne money should be increased substantially. It is my understanding that after discussion, not only through the usual channels but with all the parties, agreement was reached and the payment of such funds has been increased.
The Neill Committee also recommended that the political parties who would be functioning in the new Scottish Parliament should consider making provision for financial support for the purpose of the better performance of their parliamentary functions: in other words, the committee put forward its views as to what should happen at Westminster and suggested that a similar approach should be taken not only in the Scottish Parliament but also in the Welsh Assembly, as I recall.
It is therefore most regrettable that the Government have not followed the practice currently adopted at Westminster nor taken the advice of the Neill Committee in seeking to achieve agreement with all the political parties involved in the Scottish Parliament as to what funds the Opposition parties should appropriately require to ensure that they can properly discharge their duties. Parliamentary democracy depends not only on the government in power but on opposition pubes who can test legislation and policies as the months and years go by.
I ask the Minister to explain how the figure of £5,000 was decided upon as the relevant amount for the purposes of Article 2 of the draft order. What criteria were taken into account when the Government decided that £5,000 was the appropriate figure? On what factual basis are the Government satisfied that £5,000 per MSP will meet the test recommended by the Neill Committee that Opposition parties should be in a position adequately to discharge their parliamentary functions?
As far as that figure is concerned, why should we do anything other than believe that it was plucked out of the air as a number which the Government felt was the minimum they could get away with, particularly AS it is a figure substantially less than the figure per MP in another place which is used, I understand, II the calculation of Short money?

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The concern that I express is even more acute when one considers the army of special advisers that the 22 Scottish Ministers are employing. As I understand it, their salary and support will cost the taxpayer somewhat in excess of £0.5 million per annum. Under this draft order, the sums which the Scottish Conservative Party and the Scottish National Party—and many believe that those are the only parties truly in opposition—will receive will be less than half the figure I mentioned.
I am fully aware that the terms of Section 97(3) of the Act permit payments to be made to a party which is in coalition. Therefore, I do not challenge the competency of the terms in which the order is framed. Nevertheless, I cannot refrain from expressing the view that the fact that the Liberal Democrats are to receive money may make it difficult to dispel the increasing concern felt in many quarters about the coalition deal which has been entered into and about how long that will last.
While I do not expect the Minister to answer for the very difficult, if not impossible, position in which the Liberal Democrats now find themselves in Scotland, it would be helpful for your Lordships to hear the Minister's view on why that whole topic was not the subject of proper consultation prior to the draft order being tabled.
Before I pass from the order, perhaps I may take the opportunity to mention one practical difficulty that I have encountered in preparing for the debate this evening, of which I have given notice to the Minister; that is, the difficulty of obtaining in this House hard copies of the Official Report of the Scottish Parliament—the Scottish Hansard, if I may describe it in such terms.
The Minister may recall that I tabled a Written Question in regard to that some months ago. I asked about the arrangements to be made for Members of both Houses of Parliament to have access to the parliamentary papers of the Scottish Parliament. By that I had in mind the daily Hansard, draft Bills, reports and so on. The written reply that I received was that copies of the papers would be placed in the Library and that the full proceedings of the Scottish Parliament would also be on the Internet.
In the event, since the Parliament started to hold debates, delay has been experienced in the arrival of the Official Report in the Library, although we have not yet reached the stage when draft Bills, notices of amendments, reports and other documents have started to be produced.
I fully accept that searching the Internet may be one way of locating the parliamentary material which one is interested to consider. But it is not the only way and, for my part, it is not necessarily the quickest way. In my experience, skimming through the report in Hansard may be a far quicker way of finding what one is looking for rather than searching page after page on the Internet. When one is using documents as hard copy, as one must, particularly when one is in opposition, it is essential to look at more than one document at the same time. That is not at all easy.
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Therefore, I hope that the Government will look further at that issue and will see whether arrangements can be made to ensure that Members of your Lordships' House can have speedy access to hard copies of all the parliamentary papers of the Scottish Parliament. In view of the fact that the Parliament will be enacting primary legislation which will amend legislation which has passed through this Parliament, it is essential that that should happen.
I am happy to say that I have very few detailed comments to make about the other orders. I recognise that some are very important indeed; in particular, the third order on the Order Paper relating to the transfer of executive functions to Scottish Ministers. I have read through that order in detail. It seemed to me that if I started to ask questions about individual paragraphs, we might be here all night and, therefore, I do not propose to do so.
I appreciate that in deciding what additional executive powers had to be devolved difficult choices had to be made. Time will tell whether the correct decisions have been made. However, I recognise that there are procedures under which the order can be amended should that prove to be necessary in the light of experience.
Finally, I turn to the order dealing with the modification of Schedules 4 and 5 to the Act. Will the terms of paragraph 5 allow the United Kingdom Government to veto the release of information held under the Scottish executive if that information had been supplied to the appropriate body on a confidential basis by a Minister of the Crown? If the answer to that question is yes, as I suspect it will be, does that not mean that the Scottish Parliament's power to legislate on freedom of information will be significantly restricted by the new provision entering a new reserve matter into Schedule 5? Does it not mean that the Scottish executive and the Scottish Parliament will be prevented from releasing information which they consider should be released? Does that not mean that they may be required to act contrary to the public interest as they perceive it? If the Scottish executive or the Scottish Parliament wished to take a more liberal attitude to freedom of information than the Home Office currently wishes to do, why should they not be able to do so?
In conclusion, I again thank the Minister and his colleague the noble Baroness, Lady Ramsay of Cartvale, for their assistance throughout the long process. After the conclusion of the Bill the Minister held a party in Dover House which will go down in the annals of Dover House as one of the better and longer parties. I do not look forward in anticipation to a similar event tonight, but I hope that once the orders are approved, as no doubt they will be, it may be possible to raise a glass to the end of a long and interesting parliamentary experience.
Viscount Thurso: My Lords, I, too, thank the Minister for his excellent introduction to the orders and extend those thanks to the officials who drafted them. Broadly speaking, we support all the orders before the House tonight. Despite my great dislike of secondary legislationn, it is clear that in matters as complex as those

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we dealt with within the Scotland Act, it would not have been possible to do so in any other way. I believe that the drafting of the orders has been of a high standard and we are grateful.
I want to raise only two small points and one of slightly more substance. The first relates to the Border Rivers order. My honourable friend in another place, Alan Beith, made the point that the Government are as careful as possible, both in this Parliament and the Scottish Parliament, in respect of consultation. There was a considerable degree of confusion following the passing of the adjacent water boundary order, which had not been properly scrutinised by some Members in another place and had unforeseen consequences in terms of the change of the border for the fishing zones. In fact, it moved the border so that it went right through the centre of the Berwick bank, and that has caused great difficulties. There have been considerable reports in the Scottish Parliament about that, all of which I have managed successfully to obtain from the internet and print out on my printer. I am not sure how one refers to a friend in the Scottish Parliament. Is it "my Scottish friend"? I have honourable friends next door, noble friends here and now Scottish friends. If that be the case, my Scottish friend Euan Robson has taken the matter up and is pressing very hard for the Secretary of State and relative Ministers in the Scottish government to have that issue rectified. It has had considerable consequences for the fishermen, which were probably unintended.
The second point relates to the cross-border public authorities order that we have before us today. That order goes back to a previous statutory instrument from this year, No. 1319, which defined the cross-border authorities. As I understand it, today's order goes further in defining some of the functions as between the two governments and the Ministers in each government. I was rather surprised by one omission. It is late at night and I shall not give too many examples, but on page 17 the order we have before us tonight refers to Food from Britain. Page 9 refers to the British Wool Marketing Board. These are very similar to the British Tourist Authority, which is not contained or mentioned in the orders we are discussing tonight.
When we discussed the Bill, all those many long days ago and for all those many long hours, I am sure the Minister will remember that on a number of occasions I jumped to my feet to inquire whether tourism was a wholly devolved issue. I was given assurances on several occasions that that was the case. 'Unfortunately, some time after the Bill had become an Act of Parliament it became necessary for the Minister to write to me to inform me that, although tourism was wholly devolved, the mechanism by which international tourism would be controlled would be through the British Transport Authority, which would then necessarily, through Section 88(5), become a cross-border authority.
Lord Sewel: My Lords, I thank the noble Viscount for giving way. I am sure it was a slip of the tongue, but I do not think it was the British Transport Authority; it was the British Tourist Authority.
Viscount Thurso: My Lords, I am grateful to the Minister for that correction. Despite having been obliged
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to spend the whole afternoon in the Library reading the various Acts, that slip of the tongue, probably Freudian, came out.
I return to the British Tourist Authority. There are a number of questions where the definition of the functions and capabilities of the relevant Ministers have not been clearly defined; for example, the responsibility for international tourism rests firmly with the Scottish Parliament yet its function will be conducted by the BTA. However, the money for that function is to be provided through the Department for Culture, Media and Sport, which is the responsibility of the Secretary of State. The BTA will report wholly to him. How, in that circumstance, does the Scottish Parliament verify how much of the BTA's budget is to be spent on promoting Scotland internationally? Will the Secretary of State be called before the relevant tourism committee or will the chairman of the BTA be called before the committee?
I recognise that at this stage it is probably too late for this Parliament to do much about that. However, I should be grateful if the Minister would at least have some regard for those concerns.
My third point, of somewhat more substance, concerns the points made by the noble and learned Lord, Lord Mackay of Drumadoon, with regard to the registration of political parties. He and his noble friends, or rather his honourable friends in another place, made a considerable brouhaha over this matter. We discussed it before we came into the Chamber. I asked him whether he had any points of substance and lie said, "No, just the usual cheap jibes against the Liberals". True to his word, as ever, he has come and he has delivered. Very simply—
Lord Mackay of Drumadoon: My Lords, I wonder whether the noble Lord would be prepared to give way? Perhaps I may suggest that, as I understand it, we do not refer to each other in this Chamber in quite such colloquial terms?
Viscount Thurso: My Lords, I am grateful to the noble and learned Lord. I apologise to him most profusely if I have offended his sensibilities in any way.
This is a fairly straightforward and simple mater. As far as I am aware, no consultation took place between our parties. This order was presumably drafted some time before or around the time of the election when all of these matters were being put through. It is accepted that if we want our political system to work effectively it requires to be funded. Furthermore, it is accepted that in this very different kind of Parliament there will be circumstances where the funding has to be done somewhat differently.
The noble and learned Lord, Lord Mackay of Drumadoon, drew attention to the Neill Committee. Perhaps one ought to read some of that report, which said,
"The Committee is aware of the differences which will exist between the forms that the devolved bodies take".

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It went on to say,
"the political parties may well have functions related to the transaction of business, whether or not some of their members are part of the Executive".
I am aware that his colleagues in the Scottish Parliament, and indeed in the SNP and the Opposition, have written to the Neill Committee and the noble Lord, Lord Neill, responded in fairly straightforward terms to say that he believes that what is going on is perfectly appropriate. I believe that that letter has been placed in the Library of your Lordships' House though I was not able to get my hands on it this evening.
It is a perfectly straightforward piece of business and it is reasonable that Back-Benchers in a small minority part of an administration be permitted to exercise their functions. Broadly speaking, I agree that it is a shame that the consultation process did not go ahead with all three parties, other than the Government; that there was not more broad consultation. I assume that there simply was not time available.
The heart of the matter is that the Conservative Party has not yet realised that devolution is here and is a fact. It wishes simply to try and put the boot in wherever it can. It has not realised that twice the Scottish people have expressed their view at the ballot box and their settled will is that, in relation to domestic matters, they want to be in the UK, but not ruled by the UK.
Lord Sewel: My Lords, given the hour, your Lordships will realise that there may be a certain deliberation in my words as I proceed. Perhaps I can deal with the points raised by the two noble Lords who spoke in the debate. First, I thank them sincerely and associate myself with their kind, but justified words in relation to the skill and application of members of the Scottish Office Civil Service and the way that they have advanced and progressed the whole business of the legislation relating to devolution. It has been an enormous challenge. It is a new area in the constitutional history of the United Kingdom. It is important that legislation, both primary and secondary, is properly crafted and in many cases it has had to be worked out from first principles. So, I too, pay tribute to members of the Scottish Office and the civil servants who serve it for their work, and thank both the noble and learned Lord, Lord Mackay of Drumadoon, and the noble Viscount, Lord Thurso, for their comments in that regard.
I deal now with some of the substantive points that were raised. The noble and learned Lord, Lord Mackay of Drumadoon, asked about the nature of consultations, if any, that had taken place with the opposition parties on the figure of £5,000. I say straightaway that there was no consultation. Obviously, in a perfect world there would have been, and I am sure that there will be in the future, but this was a project which was moving forward at an extremely rapid pace. It was necessary for the executive to come forward with firm proposals. They were discussed, debated and voted upon by the Scottish Parliament and on that basis we have to accept that the Scottish Parliament was content with the figure arrived at.
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The arrangements that are in place at the moment are purely transitional. They are really a sticking plaster job and it will be up to the Scottish Parliament, as a result of the orders we are discussing tonight, where we are transferring legislative competence to the Parliament in relation to these areas, to go through the whole process itself. Clearly, that would give the opportunity for a much more deliberate approach to be taken and for consultation to take place. However, on this occasion, with the speed of the whole process and the setting up of the business, things moved so quickly that proposals were brought forward rather in haste. I accept that fact. I give way.
Lord Mackay of Drumadoon: My Lords, I am grateful to the Minister. I do not wish to play lawyers' games at this time of night, but this order was not in fact approved by the Scottish Parliament in terms of a transitional and transitory provisions order made some months ago. Although this order was the subject of discussion in a debate in the Scottish Parliament, it was not approved. On that basis, it certainly would be of some reassurance to the Opposition parties involved if the Minister would be prepared to undertake to draw to the attention of the First Minister and his colleagues the measure of concern about the lack of consultation.
Lord Sewel: My Lords, the noble and learned Lord is quite right. My words were not carefully chosen. I accept that the Scottish Parliament did not debate the Short money order as such, but the subject was covered in the debate on the order for the modification of Schedules 4 and 5. Therefore, it has been before the Scottish Parliament and, in substance, a view was reached. Nevertheless, I take the point that the noble Lord made. I am sure that the First Minister will be aware of what the noble and learned Lord has said this evening as regards the way in which matters are taken forward in the future.
Perhaps I may now deal with the business of the amount being made available to the Liberal Democrat Party—a party which, as has been indicated, is in coalition. However, I have to say that I see the most consistent coalition in the Scottish Parliament as being that between the SNP and the Conservative Party. I suppose there would be those, although I do not for a moment count myself among them, who would say that the Liberal Democrat Party needs all the help that it can get in order to reach a considered and coherent line. But I would not make that cheap and nasty comment.
The noble and learned Lord made a point about the provision of hard copies of the Scottish Hansard. I suspect that these may be settling down, teething issues. It is clearly the intention that the record of the Scottish Parliament and the Bills with which it deals should be made available to Members of this and the other House, as quickly as possible. I am sure that we can look forward to seeing improvements in present arrangements being put in place.
The noble and learned Lord also drew attention to the problem regarding the freedom of information Act. As he indicated, freedom of information is devolved so there will in fact be the possibility of having a freedom

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of information Act that applies basically to Westminster/Whitehall and one that applies to Holyrood. Clearly there will be a difficulty if there is a difference between those Acts. The noble and learned Lord posited the view that one regime may be more liberal than the other. It would not be right and proper—and this is purely for the sake of argument—if, say, a Whitehall department made available to Scottish Ministers information in confidence that was exempt under the freedom of information Act of this Parliament, while an individual could obtain access to it by using the provisions of a Scottish freedom of information Act. That would be an unacceptable kind of back-door route to undermining the legislative provisions of this Parliament. I believe that there is rightly and properly a safeguard in place against that happening. I do not believe that that is a matter which affects the good government of the state in any way at all.
The noble Viscount mentioned fishing borders. He will not be surprised to learn that I have some considerable interest in this matter. The simple case is that the boundary that has been decided upon, and which has been accepted by this House, is drawn on the median line principle. That simply means that all waters north of the boundary line are nearer to Scotland than to England and rightly subject to the regulation of the Scottish Parliament and all waters south of that line are nearer to England than to Scotland and rightly the subject of regulation by this Parliament. Those who
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argue a different case have the difficult task of arguing that waters that are nearer to England than to Scotland should somehow rightly be regulated by a Scottish parliament. I think that is a difficult case to sustain. However, my right honourable friend the Secretary of State and I have indicated that we are happy to discuss this issue with members of the Scottish Fishermen's Federation.
As regards tourism, the noble Viscount made an interesting and important point. We have to recognise that tourism has grown from some decades ago from being a relatively Cinderella industry to being one of Scotland's premier industries. The point the noble Viscount made is well taken. This is a matter for the two governments to sort out—which I am sure they will—in a way which is to the benefit of both the United Kingdom and Scotland. I see no automatic conflict between those interests.
I believe that I have covered the points raised by noble Lords and I hope that the House will feel able to pass these orders this evening and, as I say, bring to an end£and reach our final destination in this respect—the process of putting in place all the legislative blocks. I should have said bricks rather than blocks; that is a Freudian slip if ever there was one. As I say, I hope we can put in place all the legislative bricks that build a sound and secure basis for devolution to Scotland.
On Question, Motion agreed to.
House adjourned at thirteen minutes before eleven o'clock.