Lords Sitting of 9 February 2000

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

Roadworks: Delays and Disruption
Lord Blakerasked Her Majesty's Government:
What steps they are taking to reduce the delays, expense and inconvenience caused to the public and businesses by roadworks.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, the New Roads and Street Works Act 1991 and in Northern Ireland the Street Works (Northern Ireland) Order 1995 balance utilities' needs against those of road users and the public. In October, shortly before the Question from the Earl of Kinnoull on a similar issue, my department consulted on incentives to minimise disruption and improve street works co-ordination in England. It ended on 31st January, and we are now considering the options in the light of the responses and further discussion with the highways authorities and utilities. Any solution will need to be workable and minimise bureaucracy.
Lord Blaker: My Lords, is the Minister aware that road works problems are getting worse by the month and are a major cause of frustration and rage on the part of drivers and their passengers, including at the present time Members of both Houses of Parliament? Am I right in understanding that the consultation to which the Minister refers, which provides for the introduction of lane rental and penalties for the late completion of works, excludes works done by the highways agencies and by the local authorities, including the London boroughs? If that is right, is that not a mistake? When do the Government expect to announce their decision?
Lord Whitty: My Lords, yes, the noble Lord is correct. However, he has put it in a strange conceptual fashion because the highways agencies own the roads and they must maintain and repair them. That is their statutory responsibility. The consultation was mainly with utility and cable companies, which dig up the roads, about their responsibility to the local authorities and highways agencies, the sanctions they might bring to speed up the traffic, and more optimised methods of reducing disturbance to traffic when digging up the road. They are not simple repair and maintenance jobs.
Viscount Tenby: My Lords, will the Minister agree that part of the problem is that contractors bidding for the possession of roads build in a generous time
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allowance which permits them to engage in other work during the course of the contract—perhaps on something a little more glamorous or profitable for them? What does he propose to do about that?
Lord Whitty: My Lords, in traffic sensitive areas, there are tight regulations as regards the notice that utilities must give to the transport authority and the time that they take. The problem is that there are a number of different demands, not all of which are co-ordinated, and the sanction on extending the period is not sufficient. Two broad ways of how we might deal with that were suggested in the consultation paper to which I referred.
Lord Stoddart of Swindon: My Lords, I am sure that my noble friend will agree that many roadworks are carried out during the day, not overnight or at weekends when traffic is much lighter. I hope that consultation is taking place on that. However, is it not true that one of the reasons why local authorities cannot undertake work at weekends and at night is the huge extra cost? Are the Government prepared to help meet those costs so that local authorities as well as private contractors can work at weekends and overnight?
Lord Whitty: My Lords, as regards the Highways Agency, we have developed a more structured approach to maintenance and there is now a greater use of night working by the agency on inter-urban roads. There are different problems in urban areas, where one must take account of the noise made during the night in residential districts. That applies even more so to the trenches which utilities are required to dig, given the heavy machinery which they frequently use. Therefore, most local authorities take the view that utilities' trenches in urban areas should not be worked on at night.
Lord Renton: My Lords, the most important factor is that the lives of men working on the road should be protected. However, is the Minister aware that highway contractors often seal off long stretches of road days before work begins, which seriously and unnecessarily slows down the traffic? Could not something be done about that without incurring risks to the road workers?
Lord Whitty: My Lords, the noble Lord, Lord Renton, is right to say that the safety of workers on the road is paramount and that they need to be protected. That is particularly important when they are working at night and visibility is limited. I believe that the noble Lord will find that stretches of motorways and trunk roads that need to be coned off in preparation for roadworks are nowadays much shorter. Furthermore, the speed with which roadworks are completed using the newest techniques on the inter-urban network is now far greater. The Highways Agency is determined to improve on that even more. However, the situation is much more complicated in urban areas.
Lord Jacobs: My Lords, does the Minister agree that a certain lack of common sense is shown when road

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repairs are carried out? For example, in the extremely important thoroughfare between Wigmore Street and Oxford Street, which usually provides five lanes in one direction, three lanes are blocked off by roadworks, one lane remains open for legal parking and a single lane is left for traffic.
Lord Whitty: My Lords, traffic management for such areas is for the most part a matter for the local borough council, which acts on advice from the police. Clearly, better and worse examples exist of how matters are managed. Nevertheless, I believe that the techniques of roadworking are improving, given the amount of traffic that has to be dealt with. As regards better co-ordination among contractors, noble Lords may not believe this, but one of the best examples of co-ordination is taking place in Parliament Square where no less than five groups are using the trench at the same time. That is a good example of how this sort of activity should be organised.
Lord Elton: My Lords, will the noble Lord encourage those involved in digging holes in the road to declare, on a readable notice, who has dug the hole, why it has been dug and when it will be filled up again?
Lord Whitty: My Lords, as regards the immediate local area, that is a matter for Westminster City Council. Furthermore, requirements differ across the boroughs. However, the point I wish to make is that if there were better co-operation between the utilities and the cable companies, the number of times that a road needs to be dug up would be reduced.
Lady Saltoun of Abernethy: My Lords, can the Minister tell the House why the roadworks in Parliament Square could not have been carried out during the summer holidays?
Lord Whitty: My Lords, a sequence of cabling is being carried out in Westminster involving the cable companies and the electricity provider. Westminster City Council has the responsibility of scheduling the work. As regards access to Parliament, on Monday last my noble friend the Chief Whip indicated the period of notice that was given of those works.

Specialist Schools
2.45 p.m.
Lord Dormand of Easingtonasked Her Majesty's Government:
What are the criteria on which specialist schools are established.
Lord Bach: My Lords, the criteria against which specialist schools are designated are published in four guidance documents, each dealing with one category of specialism: technology; languages; sport and the arts. These set out the considerations taken into account when deciding to designate a school as a
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specialist school. The criteria address, first, sponsorship; secondly, school and community development plans; and thirdly, location.
Lord Dormand of Easington: My Lords, I thank my noble friend for that helpful Answer. First, does he accept that the success of specialist schools depends on having available high quality specialist teachers? For the foreseeable future, there will be a shortage of such teachers in some areas. Secondly, does my noble friend agree that frequently parents submit more applications than there are places in such schools? How will children be selected or chosen from that list?
Lord Bach: My Lords, one of the ways in which specialist schools can contribute is by giving a clear message that the country values teachers in those specialisms. Of course, we should and do put those teachers high on our agenda and make it clear that their jobs are very important indeed. I can tell my noble friend that specialist schools do not have as much trouble recruiting teachers as they might have. The crucial point is that specialist schools will take on the responsibility for training other teachers. That is how we shall raise standards and, in turn, entice more able people into the profession.
In response to my noble friend's question about parents, as he indicated, it is a fact that specialist schools are popular. By September of this year, 86 per cent of local authorities will have a specialist school. At the moment, there does not appear to be any great difficulty for parents who wish to secure places for their children.
Lord Quirk: My Lords, taking as a measure the number of pupils who get five or more GCSE passes at grades A to C, is it not the case that specialist schools are doing twice as well as the rest of the secondary school system? If that is the case, is it not an indication that the present criteria are working pretty well and that we should in fact be vastly increasing the number of specialist schools?
Lord Bach: My Lords, I agree with the noble Lord. On average last year, the 330 specialist schools improved their A to C examination performance by 2.5 percentage points over 1998 compared with an average of 1.5 percentage points for all other schools. Some 16 specialist schools are in this year's list of top improving schools, which is 15 per cent of the list. As regards increasing the number of specialist schools, that is certainly something that the Government intend to encourage. We have already doubled the number of specialist schools from 222 when we came into office to 403 today. I hope that the noble Lord will be pleased to hear that we expect to double that number to 800 by 2003.
Baroness Blatch: My Lords, can the noble Lord tell the House the difference between selection for specialist schools and selection on the basis of ability?
Lord Bach: My Lords, I thought that I would be asked that old chestnut. I am only the last in a long line

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of Members of this House—even of those standing where I am now—to be questioned on the definition of ability and aptitude.
Baroness Blatch: My Lords, I did not ask that question.
Lord Bach: My Lords, there is no doubt at all that the noble Baroness implied that question. The noble Baroness ought to understand that all schools with specialisms—including specialist schools—can, if they so wish, select up to 10 per cent of their intake on aptitude; not on ability, but on aptitude. The fact is that, among specialist schools, it is thought that fewer than 5 per cent take part in any selection whatsoever. Furthermore, I should like to add that the record of the party opposite in government was appalling in this field and the country gave its verdict on that educational policy in May 1997. Things have moved on since then and it is about time that the party opposite—and in particular the noble Baroness—moved on.
Lord Mackay of Ardbrecknish: My Lords, taking mathematics as an example, perhaps the noble Lord can explain to me the difference between aptitude and ability in mathematics.
Lord Bach: My Lords, I certainly would not dream of taking on the noble Lord in the field of mathematics. However, I believe that the best definition of "aptitude" is that given by my noble friend Lady Blackstone in this House on 11th March 1999. Perhaps the noble Lord heard it himself. My noble friend said:
"Aptitude has nothing to do with prior or current educational attainment. The code '—
about which she was talking—
"makes it clear that children who will be able to benefit from teaching in a specific subject or who have demonstrated a particular capacity to succeed in a subject can be regarded as having an aptitude for that subject.—[Official Report, 11/3/99; col. 441.]
In other words, ability relates to attainment already reached; aptitude is as I have described.
Lord Tope: My Lords, did the Minister say in one of the quieter moments just now that only 5 per cent of specialist schools had applied the selection test? If that is right, on reflection will he agree that these Benches were right to argue that facilities in specialist schools should be available to all pupils, regardless of aptitude or ability?
Lord Bach: My Lords, in the real world, the ability to go to a school of this kind is practically universal. So far, the number of people who have been tested in this way is very small. That does not prove the noble Lord or his party right, but these matters are progressing.

Channel Tunnel Rail Link
2.52 p.m.
Lord Bradshawasked Her Majesty's Government:
Whether the developers of the Channel Tunnel Rail Link are required to design and build it so that it can accommodate conventional freight trains and whether freight facilities will be operational at the time that any part of the new railway is available for passenger trains.
The Minister of State, Department of the Environment, Transport and the Regions (Lord Macdonald of Tradeston): My Lords, the principal objective of the Channel Tunnel Rail Link is to provide a two-track, high-speed passenger line and any freight provision will need to be designed to ensure that that objective is not compromised. Union Railways has given specific undertakings to Parliament to provide certain facilities for freight from the outset. However, the main benefit to freight services will be through releasing capacity on existing lines in the south-east.
Lord Bradshaw: My Lords, I thank the Minister for that reply. However, the existing lines through the south-east require freight to take a circuitous route along lines which are already congested. I ask, the Minister in particular whether he is in a position to confirm reports in the technical press that the freight facilities which were to be provided under the Channel Tunnel Rail Link Act will, indeed, be provided on the Channel Tunnel Rail Link.
Lord Macdonald of Tradeston: My Lords, Union Railways gave undertakings to Parliament in 1996, and the new Kent line, when it is built, will be able to carry high-speed freight running at approximately 125 miles per hour. It has been built to the larger continental standards. Therefore, it should have the capacity for faster freight trains and, indeed, for medium-speed freight trains. A problem would arise with slower trains, which could compromise its operating and safety requirements if they run at around 50 miles per hour because a slow freight train takes up the pathways of perhaps three passenger trains. However, be assured that there will be no concessions unless we are utterly convinced that Union Railways is unable to meet its operational objectives.
Lord Faulkner of Worcester: My Lords, does my noble friend share my disappointment that the proportion of freight nationally which is carried by rail is not high? Is not one of the problems that at the time of rail privatisation no single organisation was placed in charge of the strategic development of freight? Is he satisfied that the take-up of track access grants and freight facility grants made available by the Government is adequate to make a difference?
Lord Macdonald of Tradeston: My Lords, I am pleased to say that since privatisation the growth of

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freight has been 34 per cent. It now stands at approximately 5 per cent of the freight carried. That is obviously quite a small proportion in comparison with road freight. However, there was 12 per cent growth in the year 1997–98. That has gone down slightly in the past year, but growth is continuing.
On the question of freight grants, it is true that we have had a record number of grants—34 last year. We look to improve on that figure this year. In the three years since 1997 we have spent approximately £80 million on grants. That has resulted in taking about 30 million tonnes of freight off the roads and on to rail. And, for a Minister, I am in the highly unusual situation of saying that there is more money there to spend if anyone wants it.
Lord Harrison: My Lords, will my noble friend confirm that the shippers of freight give as their main reason for not using the Channel Tunnel the very poor quality of freight services in and across France?
Lord Macdonald of Tradeston: Yes, my Lords. I share my noble friend's disappointment about the difficulty of growing freight through the Channel Tunnel. It amounted to just over 3 million tonnes in 1998. Unfortunately, a combination of the impact of the World Cup and a rash of strikes meant that SNCF gave priority, as it always does, to passenger services, and that figure is now below the 1997 level. However, EWS, the freight company, is co-operating with SNCF to try to improve the situation. We have been working hard by talking to the French in bilateral discussions and working with the European Transport Council of Ministers to try to encourage greater competition in Europe to tackle the bottlenecks and to obtain greater technical compatibility there. I hope that that will make a significant impact when it comes into force.

Farming: Long-term Strategy
2.57 p.m.
Lord Glentoranasked Her Majesty's Government:
What is their long-term strategy for British farming following the Prime Minister's visit to south-west England.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Hayman): My Lords, our long-term strategy remains as announced by my right honourable friend the Minister of Agriculture in another place on 7th December last year; that is, to secure a more competitive and sustainable industry with a strong market orientation; to reduce agriculture's reliance on subsidies based on production; instead, to reflect in public support the public benefits that agriculture provides; and to encourage restructuring for long-term economic and environmental sustainability.
Lord Glentoran: My Lords, I thank the Minister for that rather uninspiring Answer. Michael Meacher
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described the Prime Minister's visit to the West Country as being "very courageous". Does she agree with that? Furthermore, does she agree that the Prime Minister's visit was not only courageous but a well orchestrated, unrealistic, sanitised public relations study which kept him from seeing the worst crisis in agriculture this century?
Baroness Hayman: My Lords, I am less upset by being accused of giving an uninspired Answer when I hear the misrepresentation of the visit by my right honourable friend the Prime Minister to the South West. Far from being sanitised, he took the trouble to surprise some of the people who were with him, to meet, speak to, invite in and talk to some of the people who protested, those who were concerned and wanted to make their concerns felt about the crisis in agriculture. I believe that those who read his speech to the National Farmers Union last week would recognise that in that speech he was looking, as I believed the noble Lord was in his Question, to the long-term strategy and future of the farming industry in this country. That means change; it means painful change for many people, and no one would underestimate the amount of pain which exists at the moment. Equally, if we are to have an industry that is sustainable for the future, it is no good pretending that we can simply go on as we have done in the past or even at present.
Earl Ferrers: My Lords, I declare an interest in asking this question in so far as I am involved in agriculture.
Lord Stoddart of Swindon: My Lords—
Earl Ferrers: My Lords, when the noble Lord, Lord Stoddart, is kind enough to resume his seat, perhaps I may continue with my question. I am half way through my question and I think I did get to my feet first.
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, the Clock says 23 minutes. I am sure that even if the noble Earl and my noble friend Lord Stoddart were speak at some length, the Minister would have time to reply to both of them. As the noble Earl was on his feet first, perhaps we should hear from him first.
Earl Ferrers: My Lords, I am grateful to the noble Baroness. I shall try not to speak at length because my question is a simple one. Is the noble Baroness aware that the price of milk in places like Denmark and Holland is 26 pence per litre; in England it is 15 to 16 pence per litre? How does the noble Baroness intend to rectify that in what is supposed to be a common market?
Baroness Hayman: My Lords, the rectification of pricing which is the result of market forces is not something that a single market does. A single market does not imply that exactly the same price applies in every part of the market with which we are dealing. Of

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course there have been difficulties and I recognise that UK prices are at the bottom of a European price league. It is regret table but it is not new. The noble Earl should reflect on the history of the regulation of the milk market within this country over a period longer than the term of office of this Government.
Lord Stoddart of Swindon: My Lords, does my noble friend agree that the Government's agricultural policy cannot be anything other than uninspiring because it is controlled by Brussels through the common agricultural policy? Under those circumstances, would it not be far better for our agricultural policy to be repatriated to the nation states in order that they can assist agriculture in a way which suits their own farmers and economies?
Baroness Hayman: My Lords, I do not believe that my noble friend offers a realistic alternative for farmers in this country. I accept that the common agricultural policy has proved an impediment to agriculture developing in ways which are sustainable and market oriented for the future. That is why we have supported strongly both the reform of the CAP and the establishment of the rural development regulation, the second pillar of the CAP, as a basis for a sustainable EU agriculture policy.
Noble Lords who say that this is all so uninspiring should look at the £1.6 billion to be spent on rural development measures over the next seven years and the reaction there has been from the farming community and environmentalists to the opportunities which that provides. There is the possibility of redirecting expenditure towards environmental benefit. Therefore, it is not so uninspiring as they suggest.
Baroness Miller of Chilthorne Domer: My Lords, the Minister referred to a painful future. I presume that she meant in terms of restructuring the number of family farms which will disappear. Will she ensure that a family-farm support structure is put in place nationally in order to encourage young people into farming?
Secondly, some young people are unable to continue and diversification is the only option. Therefore, how will the continued procrastination of the Government in relation to Objective 1 funding for our most needy rural areas give any encouragement to young people who are looking to move into forms of employment other than agriculture?
Baroness Hayman: My Lords, the point which the noble Baroness made that we must see agriculture and employment in agriculture in terms of the wider rural economies and support for those rural economies is well made and important. That is why the rural White Paper later this year will be valuable in that respect.
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As regards the reference to "pain", I was talking about pain in the present rather than in the future. That pain exists for individual farmers, and tenant farmers in particular, who are having great difficulty. We are not seeing the possibility of only large non-family farms in the future. There are other possibilities under the rural development regulation—energy crops, marketing schemes, countryside stewardship, and the vast amount of extra money which is to be put into that, and skills training—which will benefit new entrants to farming and young farmers and will support a diversity of size in the agricultural industry.
Baroness Byford: My Lords, first, does the Minister believe that the United Kingdom should continue as a food-producing country? That is a very basic question which needs to be answered.
Secondly, will she confirm the Prime Minister's assurance, which I understand he gave during his visit to the south-west, that pig farmers may be compensated for the BSE regulations imposed upon them? If that is not done there will be no future for the pig industry either in the short or long term.
Baroness Hayman: My Lords, as regards food production, I can do no better than quote from the final passage of the Prime Minister's speech which was about the challenge facing agriculture. He said it was,
"a challenge to get away from the cycle of short-term crises and become again what British farming should be—a world-class industry in a world-class setting-.
Of course, food production is part of the agricultural industry. We must look at that within the context of a worldwide market. We cannot simply look back to the same policies and constraints which framed support either through the CAP, when it was first introduced, or for post-war agriculture in this country. If we do that, we ignore the present.
The Prime Minister made it quite clear that we have not ruled out further measures to help the pig industry. We are willing to continue the discussions which have been taking place for a long time. But there are difficulties on the question of state aid, and anyone who pretends that there are not is deluding either himself or the farming community. Any help which is forthcoming must be linked to a strategy that provides a long-term framework for that sector.
Lord Henley: My Lords, perhaps I may raise a matter with the Government Chief Whip which arose yesterday. At Question Time yesterday my noble friend Lord Rotherwick asked a supplementary question about asylum applications. He quoted various statistics in support of his question. In response he was told by the Minister, the noble Lord, Lord Bassam of Brighton, that those statistics were "fictional statistics".
I have since checked in what is described as Home Office Statistical Bulletin 20/99, the control of immigration statistics, and discovered that my noble friend's statistics were correct. Therefore, I ask the Government Chief Whip to ensure that the noble Lord, Lord Bassam, comes to the Dispatch Box at the

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earliest possible opportunity to offer his apologies to my noble friend and a correction to the House for his description of my noble friend's statistics as "fictional statistics".
Lord Carter: My Lords, the Opposition Chief Whip was kind enough to tell me just before Starred Questions that he was going to raise this matter. Clearly, I am not briefed to reply on the specific exchange to which he refers. I shall draw the attention of my noble friend Lord Bassam to the question which the noble Lord has asked.

Business of the House: Northern Ireland Bill
3.8 p.m.
Baroness Jay of Paddington: My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That Standing Order 40 (Arrangement of the Order Paper) be dispensed today to allow the Second Reading of the Northern Ireland Bill to be taken before the Motion on employment standing in the name of Lord Lea of Crondall; and that Standing Order 46 (No two stages of a Bill to be taken on one day) be dispensed with tomorrow to allow the Northern Ireland Bill to be taken through its remaining stages that day.—(Baroness Jay of Paddington.)
On Question, Motion agreed to.

Business of the House: Debate this Day
Baroness Jay of Paddington: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of Lord Lea of Crondall set down for today shall be limited to three-and-a-half hours.—(Baroness Jay of Paddington.)
On Question, Motion agreed to.

European Union Committee
3.9 p.m.
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 the Baroness Stern be appointed a member of the Select Committee.—(The Chairman of Committees.)
On Question, Motion agreed to.

Northern Ireland Bill
3.10 p.m.
Lord Carter: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Northern Ireland Bill, has consented to place her prerogative and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
I also inform your Lordships that a revised speakers' list for the Bill is now available. The noble Lord, Lord Molyneaux of Killead, will speak after the noble Lord, Lord Eames.
The Minister of State, Cabinet Office (Lord Falconer of Thoroton): My Lords, I beg to move that this Bill be now read a second time.
This is a Bill that the Government had hoped not to have to introduce. Even at this stage we hope that it will prove unnecessary to implement it.
Last Thursday, my right honourable friend Mr Mandelson made a Statement in another place in response to the latest report of the Independent International Commission on Decommissioning. He said then that, if further information came to light which rendered his Statement out of date, he would inform the House. Intensive discussions continue and there remains the possibility of a further report by General de Chastelain and his colleagues.
At the moment there has been no further substantive progress to report. Therefore, it is necessary to put this legislation in place so that, if it remains necessary because cross-community confidence is collapsing, we can create a pause in the operation of Northern Ireland's devolved political institutions from the end of this week.
There is no doubt that the necessary cross-community consensus has been severely dented by the absence of credible progress on decommissioning; indeed, the absence even of an unequivocal commitment to decommission or a specific timeframe in which it will occur.
On every other front the Good Friday agreement has brought a better way of life for the population as a whole than Northern Ireland has ever had before. It has brought an inclusive Executive, responsible to a locally elected Assembly. There are no longer any outsiders—no more second-class citizens—in Northern Ireland's administration. It places the principle of consent at the very heart of the Northern Ireland constitution and the Irish constitution has been amended to reflect that. It has enabled serious and practical North-South co-operation to proceed to the benefit of all parts of the island. It has strengthened ties within the United Kingdom and has built a new and vigorous relationship with the rest of the island of Ireland.
The devolved institutions are functioning effectively, proving that local minds are best applied to local problems. The new Ministers are working

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together in good faith, in the interests of all the people of Northern Ireland. They are working co-operatively with their counter parts in Dublin, London, Edinburgh and Cardiff. The vigour that they have applied to their new responsibilities proves conclusively that self-rule is far and away the best form of government for Northern Ireland alongside all the new institutions, and we must spare no effort to ensure their long-term survival.
But the Good Friday agreement is a finely-judged deal. Every detail, every word is there for a reason and contributes to its overall balance. That is why every part of the agreement has either been implemented, is in the process of being implemented, or a plan exists to implement it in the near future. Along with the new Executive, North-South ministerial and implementation bodies have been set up. Human Rights and Equality Commissions have been established. Reform of policing and criminal justice is moving forward. Prisoner releases are continuing, causing understandable anguish among victims' families. The normalisation of security arrangements grows as the threat subsides.
All those things are happening, and much else besides. They are all necessary to build confidence in the peace process. But confidence-building is not a one-way street. Members of both traditions need to feel that their commitment is being reciprocated and right now that confidence has slumped. Actual, verifiable decommissioning is vital if we are to retain the faith of all parties in the agreement, not just by the IRA but by all the paramilitary organisations.
In December last year, George Mitchell celebrated the success of his review of the agreement. He said:
"I believe that the basis now exists for devolution to occur, for the institutions to be established, and for decommissioning to take place as soon as possible".
He concluded:
"there is no other way forward".
He was right.
Against that background, Ulster Unionists always made it clear that, if there were no progress on decommissioning by the end of January, it would be very difficult for them to remain in the Executive. No commitments or guarantees were made on the other side. Indeed, Sinn Fein made it clear that premature public deadlines made its task harder. But it does not help to accuse others of acting in bad faith. Nobody has a monopoly of good intentions in this situation. None the less, it was made clear to all those involved in the Mitchell review that substantive, tangible progress in decommissioning would be needed to sustain Unionist commitment to the Executive beyond the end of January.
It is not simply the continued absence of actual decommissioning that is causing the current difficulty. It is the uncertainty about whether decommissioning will ever happen and, if so, when, and on what terms—not British terms, or Unionist terms, but any terms. All that remains unclear despite the availability of the de Chastelain commission to take matters forward.
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Of course, the Government welcome the fact that the Provisional IRA's guns are silent. Their ceasefire during the past two and a half years has been an indispensable condition for politics to work. The Government welcome their expressed desire far a "permanent peace". The absence of the word "permanent" was once an insuperable obstacle. Now it has been surmounted. If the war is over, why do arms need to be retained? If violence is a thing of the past, why cannot weapons of violence be put permanently beyond use? I know of no section of Nationalist opinion, anywhere, that disagrees with that sentiment.
Of course, anything that smacks of surrender is unjustified, but any cause that unites the Irish Government, the American Government, editorial writers in Dublin, Cork, Boston, Washington and New York, the leadership and rank and file of the SDLP together with public opinion in the North and South of Ireland cannot, surely, be wrong. Yet, as things stand at present, a way forward eludes us.
As my right honourable friend Mr Mandelson said last week in his Statement in another place, because of these circumstances the cross-community support necessary for the institutions to operate is fast ebbing away. We hope that the circumstances will yet change, but that requires clarity over whether decommissioning will happen, how and when. Without such clarity, we believe that the current loss of cross-community confidence is so serious that the Executive would simply fall apart. Where that is clearly foreseeable, we must ensure that good government for all the people of Northern Ireland continues.
We are not faced with a choice between suspension and imperfect continuation of the Executive. It is pause or bust. It is in no one's interest for these fragile institutions to be allowed to shatter irreversibly, simply because it is too hard or too painful to take the necessary action to forestall this now. Delay will not buy us time. It will only make the landing harder, unless between now and the end of the week a substantial turn-around of events occurs and we have answers to the essential decommissioning questions: whether and when?
A pause will preserve the institutions. It will allow all our efforts to focus on finding a way forward, through a review; a way—we hope quickly—to restore the institutions and make progress on decommissioning and all other aspects of the agreement. This Bill, therefore, enables what I hope, if it proves necessary, will be the temporary return of direct rule.
Under Clause 1, while the institutions, including the Executive, are on hold neither the Assembly nor its committees will meet. All Northern Ireland Ministers and the chairmen and deputy chairmen of statutory committees will cease to hold office. But under Clause 3 all Ministers, and other office holders who lost office, who are still eligible are automatically re-appointed to their previous office when the institutions are restored.

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Clause 2 allows the Secretary of State for Northern Ireland to make a restoration order to end the suspension, taking into account the outcome of the review.
The schedule sets out that executive responsibility will return to the Secretary of State and the Northern Ireland departments acting under the direction of the Secretary of State. Legislation that would normally be made by the Assembly will be made by Order in Council approved by Parliament. A restoration order—and its revocation—under Clause 7 must be approved by both Houses of Parliament.
Clause 5 requires the Secretary of State to return the functions of the implementation bodies to the relevant Northern Ireland departments, in line with arrangements agreed with the Irish Government. This reflects the underlying principle of the agreement that all those institutions are interlocking and interdependent.
These are serious steps, but steps which, in the absence of any progress, will preserve the institutions from collapse and enable us to revive them at the earliest possible date.
The bomb attack in Fermanagh on Sunday reminds us that there are still people who prefer violence and chaos to peace and stability. My sympathy goes out to all those in Irvinestown whose property has been destroyed and whose peace has been shattered.
These futile, cowardly assaults on the overwhelming will of the people are what the Good Friday agreement sought to end. It is the duty of the British and Irish Governments and of the political parties to deliver their will and put this process back on track. There will never be a better agreement than this one. With this Bill, the Government are moving to guard its integrity and the confidence of all sides in it. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Falconer of Thoroton.)
3.21 p.m.
Lord Glentoran: My Lords, I begin by associating this side of the House, and my party in particular, with the remarks of the Minister in relation to the bomb in Irvinestown. Sadly, executive or no executive, we shall still have to live with those maverick actions for some years to come. Those who live in Northern Ireland are well aware of that.
Dealing with this Bill and making decisions on it is rather more difficult than one might have thought. The whole basis of decommissioning depends on General de Chastelain. He reported to the Secretary of State, Mr Mandelson, and also to the Irish Government. But we in this Parliament have not had sight of that report; we do not know what it says. We were given a great deal of sound and objective information by the Secretary of State. But the fact that it has not been presented to Parliament leads to speculation as to what it may contain that is so negative that we are not allowed to see it. That tactic is perhaps not the right one.
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Perhaps the Minister will comment on that when he sums up, but tell us also a little more in relation to the attitude of the Irish Government to this Bill and its consequences. Apart from that, it is clear, as my right honourable friend made clear in the other place, that this party associates itself with the Government in bringing this Bill forward.
It is a sad day for the people of Northern Ireland because, after around 30 years, they had democracy back. They were being governed by their locally elected representatives. If we believe all that we are told I read most of the local press on most days—that was working in a sound and robust way. That stands to end. They were also living normal lives. People were crossing peace lines, even to work. Children and others were running about their normal business without the fear of a bomb round the corner or a sniper hitting their parents or somebody else. In other words, peace appeared to be reigning in most parts of the Province. Life was much more difficult in certain corners of Belfast and certain parts of Armagh. However, as has been made clear by the Minister, life was better than it had been for a long time in the Province. The need to end the executive is extremely sad.
Why are we here? For one reason and one reason only. The Good Friday agreement has been going very well. As the Secretary of State said in the other place, it has been fulfilled and followed in every way except one; that is, in relation to decommissioning. The people of Northern Ireland, this Government, this Parliament and the Dail have been badly let down by the provisional IRA and Sinn Fein.
The First Minister, Mr David Trimble, was courageous enough with his colleagues to jump first. Regrettably, the IRA has so far failed to follow. The Unionist Party made clear at the time that it could not sustain the position of power sharing with Sinn Fein fully armed. How could it? How can there be a democratic government with one party holding weapons under the table? Zero hour is now nigh and the Government's options are few. They have played most of their trump cards, though I hope not all. They stand to lose everything by standing by while David Trimble and the whole executive fall apart because he is forced to resign by his colleagues, or play for time and another breathing space by suspending the executive, thereby freezing the situation in a timeframe while others can think and negotiations continue.
We on this side of the House have said for some time that we support suspension if there is not a satisfactory report from General de Chastelain by the end of the week—I am nervous about Clause 9 of the Bill in that regard. We support the Government's efforts to bring the peace process on track again, and we support the Bill, though we regret the need for it.
If the Government decide to suspend the executive or are forced temporarily to do so—I hope only temporarily because perhaps decommissioning is coming forward—it may be time for a rethink; perhaps a look back in history. What is Sinn Fein's long-term objective? It is, of course, a united Ireland. Why has it changed?

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The IRA was founded around 1867 in support of the Irish Republican Brotherhood with the objective of putting the Brits out of Ireland. Its first insurrection failed. It was reconstituted for the 1916 Easter uprising. In 1919 it was officially recognised by Dail Eireann as the army of the Irish Republic. Between 1919 and now the IRA has been alternately linked to and divorced from both Fianna Fail and Sinn Fein and it has been both inside and outside of constitutional politics. It negotiated alliances on the back of prisoner releases as long ago as 1926. Nothing in its history is new. However, it never disarmed; never gave up its objective of a united Ireland under Republicans. Why should it now disarm and accept ministerial posts in one of Her Majesty's Governments on a permanent, constitutional basis?
We have to find an alternative to Sinn Fein/IRA as representatives of the nationalist people. Perhaps the time has come—I hope this will be taken in the positive spirit in which it is meant—for Sinn Fein to find a way to disassociate itself from the IRA violence and guns and fully join in the democratic process. A new way must be found. The people of Northern Ireland, nationalists and Unionists, have a right to democratic government; to be governed by their own elected representatives. They want it and are enjoying it. While we sincerely hope that it will not be necessary to use the powers in this Bill, we support the Government in introducing it and look forward, if it has to be actioned, to the day that democracy can be returned to Ireland.
3.29 p.m.
Lord Smith of Clifton: My Lords, we on these Benches wish to be associated with the Minister's sentiments regarding the people of Irvinestown and the atrocity that they suffered a couple of weeks ago.
It will generally be agreed that this is yet another very disappointing and sad moment for Northern Ireland and for the vast majority of its people. It is, alas, not unique. Over the years they have been forced to experience many such moments when setbacks have triumphed over progress that had been made towards an enduring, peaceful settlement. Having come so far in achieving that goal, the suspension of the Executive and the Assembly, as proposed in the Bill—after all, they have only been fully operational for eight weeks or so—is a terrible blow to those whose hopes had been raised that a more normal, democratic and inclusive system of devolved government was well on the way to becoming established.
The present impasse is all the more dismaying in view of the Herculean efforts made at all levels. The unstinting energies applied by the Prime Minister, the Taioseach and the President of the United States are unprecedented. Successive Secretaries of State have been equally assiduous in persuading all sides to collaborate. Individual political leaders in Northern Ireland, I think it is fair to say, have strained every muscle to keep the show on the road and to maintain the necessary momentum. In the event, the point has been reached, alas, where all those efforts risk being in vain.
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The suspension of the Executive and the Assembly and the consequential reimposition of direct rule are a massive step backwards and one fraught with dangers. The recent history of Northern Ireland cruelly reveals that progressive initiatives, once they falter, are never resuscitated. That is the real challenge for the immediate future. By one means or another—and it will not be easy—dialogue and contacts must be maintained by the main political actors so that history is not allowed monotonously to repeat itself. We must all hope that the suspension is of short duration.
It is vital, above all, if the proposed suspension is to have any chance of being speedily revoked, that Northern Ireland does not lapse back into the habit of intransigent, zero-sum posturings that masqueraded as politics for far too long. They must not be restored to their full futility.
Having lived in Northern Ireland for most of the 1990s, I can readily appreciate the exasperation felt by the unionist community on the one hand and, on the other, the fear among the nationalist community that many of their aims, such as the cross-border institutions, are now at risk. Above all, I recognise and share the dismay of most ordinary people in Northern Ireland that further progress at this stage does not seem possible.
However, we are where we are. Unionist opinion has reached breaking point. Almost everyone of good will and a fair mind, including the three most closely involved heads of government, agree that the time has come for the IRA to make a positive and substantive move towards decommissioning its weaponry if the Belfast agreement is to be implemented. The initiative now rests squarely with the IRA and its protagonists.
Accordingly, we on these Benches will support, albeit with a heavy heart, the proposals outlined by the Government in this Bill. In the current circumstances, as has often been remarked, suspension is the least worst option available. However, we hope that the reimposition of direct rule will be done with a light touch and that it will not be of the somewhat heavy-handed character that previously obtained. That will require all the imagination, ingenuity and dexterity with which the present Secretary of State is credited. In the Bill he has left himself with a good deal of flexibility and room for manoeuvre. We wish him well in his endeavours.
3.33 p.m.
Lord Tebbit: My Lords, it is indeed a sad day for us today as we face the enactment of this legislation. In his speech, the noble and learned Lord, Lord Falconer, referred to the damage that is being done by the uncertainty about the intentions of the IRA on decommissioning. Would that there was any uncertainty! I suspect that it is because there is no uncertainty about those intentions that this Government, who were once committed to a freedom of information Act and to open government, are refusing to let us see the most important piece of information—intelligence—which would help us to judge these matters today; namely, the de Chastelain report.

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It seems quite extraordinary to me that we should be asked to make judgments on this legislation and on the intentions of Her Majesty's Government while we are denied that information. Is it that the report is too optimistic and that we might get carried away and say, "Oh, the Government do not need this Bill; it's all going to come right"? Alternatively, is it so darkly pessimistic that the Government feel that it would cast a pall over our discussions and possibly tend to make us be more extreme than we hope is necessary in our reactions?
I suppose the shortest and, in some ways, the most effective speech that I could make on this subject today would be merely to say, "I told you so", because I did; and so did many others. But, sadly, the Government would not listen. For a start, had they listened to what some of us were telling them when the original Northern Ireland legislation setting up these institutions was enacted, they would have put into it the provisions that we are now being asked to make today. This Bill would then have been unnecessary. But at that time we were told that there had been "seismic shifts" in the attitude of the IRA. It is rare indeed to find a seismic shift that has done nothing whatever to alter the landscape all these months afterwards.
It is commonly held, and often said, that it is the IRA which has now precipitated this crisis by breaking its undertakings on decommissioning. Although it is absolutely certain that the crisis has been brought about by the refusal of terrorists in general—most notably the IRA—to give up their arms, it has to be said, as we must recollect, that the IRA has broken no promises whatever. It never promised to disarm; it never has; and, indeed, in the very recent past, it has made it plain that it will not do so. Perhaps that is why we are not to see the report. Nor is it customary for victorious armies to give up their guns. It was not the IRA but the Prime Minister who made the promise to the people of Northern Ireland that there would be disarmament if they voted for the Belfast agreement. It is his promise that has been broken, not the promises of the IRA.
The tragedy is that during the past two years the Government have deliberately and remorselessly thrown away every high card in their negotiating pack. Prisoners have been released; Sinn Fein is in government; and the RUC is to be dismembered. So let us not just blame the IRA for doing what comes naturally to it—what, in its own words, it "does best". We should blame those who have let the IRA get away with it.
Snatching back devolved government is surely more likely to be damaging than if devolved government had never been granted at all until there was clear evidence that the IRA was willing to disarm. There is one party that is, happily, not represented in this House and that is Sinn Fein. What we should perhaps be discussing today is: what are the intentions of Sinn Fein? Do members of Sinn Fein intend to divorce themselves from their army and behave as though they were democratic politicians? Alternatively, do they intend
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to sweat this one out reckoning that, on past form, it is the Government who will blink first and it is they who will profit once again by their association with a murderous, terrorist army?
3.39 p.m.
Lord Fitt: My Lords, this is the second time I have sat through a debate to bring about suspension of a power-sharing executive in Northern Ireland. In 1974 I was part of that executive and my noble friend Lord Merlyn-Rees was the Secretary of State who signed the suspension order. That executive was brought to an end because of a campaign of violence by both loyalist and IRA elements. They brought that courageous experiment in devolution to an end after a short period of five months. The noble Lord, Lord Glentoran, delved a little into Irish history. I want to take some time drawing parallels between what happened at the time I have mentioned and what is happening now.
During the five months of the existence of the executive, the SDLP—the party of which I was leader—insisted on what it called the Council of Ireland, the Irish dimension. It was that element in the Sunningdale Agreement which brought the bitterness of the unionist population onto the streets. I am quite certain that the unionist population would have accepted the power-sharing element, but under no circumstances would they accept the Council of Ireland proposals which they saw as an element on the road to an Irish republic and the beginning of joint authority.
Incidentally, just before the downfall of that executive, we in the SDLP realised that we would not get everything we had demanded by way of the Anglo-Irish Agreement, and we attempted to take it in stages. However, by that time, it was too late; the unionist population were totally opposed to the continuation of the executive. Today there are similar elements. The IRA believes that it can insist on its demands—namely, no decommissioning—and that at the end of the day it will get its way.
I have sat here over the past few years watching—sometimes with great anxiety—the concessions made to the IRA. Time and again I have viewed with awe the number of concessions that have been made, notably the release of prisoners. There are now 300 people roaming the streets of Northern Ireland who were sentenced to terms of imprisonment for murder. They have now been released. The Patten commission was established at the behest of the IRA and nationalism. The IRA has given absolutely nothing in return. The Unionist population view this as a step-by-step process until the IRA achieves all its demands.
The noble Lord, Lord Glentoran, mentioned the beginning of the IRA. I shall develop that further. The IRA claims that its authority stems from the Easter rebellion of 1916 and the subsequent massive vote it received—from which it obtained 72 seats—as a consequence of the tide of emotion which swept Ireland after the First World War. The IRA claims that the mandate it received then still exists and that it is the sole spokesman for the people of the Irish nation.

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However, everyone realises that the mandate given then to the IRA exists no longer. The only mandate which the IRA—and everyone else—has now is the Good Friday agreement. That agreement constituted a departure from previously held tribal loyalties. It was overwhelmingly voted for by means of a referendum throughout the island of Ireland. As the Liberal Democrat spokesman said, throughout the world it is recognised as the only element which can bring about peace in Ireland.
I wish to quote from two newspapers. The Irish News states:
"According to the IRA, the decommissioning crisis can be resolved but not on British or unionist terms".
There is no mention of the aspirations of the Irish people. The Irish people have demanded decommissioning as an attempt to bring about some form of normality in Northern Ireland. The IRA cannot claim to speak on behalf of the Irish people.
An even more pungent comment—I quote it bearing in mind the remarks of the noble Lord, Lord Tebbit—from the Irish Times states:
"The leader of the Ulster Unionists, Mr David Trimble, has issued an appeal to Sinn Féin to join in eleventh-hour talks. Mr Mitchel McLaughlin declares that his party will camp out all night if necessary to try to find a way forward. It is, perhaps, remotely possible that some formula will be found in the next 48 hours. … There must be no doubt as to where responsibility for delay—it is premature to speak of failure—is to be placed. The Provisional IRA has not only refused to begin the process of decommissioning its weapons. It has not only refused to discuss a timetable for decommissioning".
That editorial was not written last week but on 8th March of last year, Nothing has changed. The IRA is determined that it will not decommission. One has only to recall the words of Mr Gerry Adams on "Newsnight" yesterday evening when he made it quite clear that the IRA would not decommission.
We are now into the "blame game". Who is to blame for the present position? In my mind there is absolutely no doubt that the blame for the present situation lies with the IRA. The British Independent newspaper states:
"Mr Adams will persuade no reasonable person that the Ulster Unionist Party is responsible for the suspension which now seems inevitable".
Sinn Fein gave to understand in negotiating the Good Friday agreement that the IRA would begin to disarm. Unionist opinion, quite reasonably, cannot tolerate dealing with it any longer in the absence of decommissioning. Sinn Fein says that it wanted to take a part in the government of Northern Ireland. That was one of its demands. It said that if it obtained that, it would stop the campaign of violence.
As one from a different political background I must say that David Trimble has shown tremendous courage in what he has tried to do with the Unionist population in Northern Ireland. Reluctantly, but realising everything that was at stake, he decided last November to enter a power-sharing administration with Sinn Fein. Sinn Fein almost certainly had given an undertaking to General de Chastelain that if the power-sharing functions were established it would
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begin the process of decommissioning. David Trimble's party rightly viewed his attitude with deep suspicion. He wrote a letter stating that if IRA/Sinn Fein did not decommission he would resign. That was a courageous thing for him to do at that time. It led to the formation of the power-sharing Executive. I believe that the power-sharing Executive worked well and that its Sinn Fein members worked well within it. I have no doubt that given time, and with decommissioning out of the way, there would be effective, cross-party government in Northern Ireland, which would include Sinn Fein.
However, as I say, the IRA has not given anything in return. It has clearly stated that there will be no decommissioning. In that situation David Trimble cannot continue to be First Minister. Yesterday I listened to the debate in the other place. Members said that they were opposed to the suspension, but that if there was no suspension there was no chance of decommissioning. If David Trimble is forced to resign, the whole Executive will collapse and in the next quarter of a century there will be no hope—this occurred with the previous suspension—of resurrecting political institutions in Northern Ireland which have the support of the majority.
So one has to take a chance. Those who are opposed to suspension must be asked these questions: "Do you want David Trimble to resign? Do you want that resignation to bring about the downfall and the total collapse of the present institution? Or is it better to have a temporary suspension in order that, with the help of God, the Executive may return in far less time than it took to resurrect the previous one?"
We are at a time of crisis in Northern Ireland. As much as I do not want to be seen supporting the suspension of the power-sharing Executive, I believe that that is the only course left open to us Very reluctantly, the Government and the overwhelming majority of the Irish people want to see the Assembly, after a short period of suspension, return again in its present entity, with cross-party support, including Sinn Fein. From my knowledge of Northern Ireland, I would plead with Sinn Fein to do something within the next 48 hours which will possibly keep that Executive in existence.
3.51 p.m.
Lord Prys-Davies: My Lords, it is common ground that it is enormously disappointing that the very difficult circumstances in Northern Ireland have made it necessary for the Government to present this Bill to Parliament. But I am bound to accept—I do so with gratitude—that every effort has been made by the Government—indeed, by the two Governments and by the pro-agreement parties in Northern Ireland—to try to avert the position in which we are now.
Sadly, the decommissioning of weapons remains an unresolved issue. Given that fact, given Mr Trimble's post-dated letter of resignation from his office of Chief Minister, and given the absence of decommissioning, the Government were faced with a heavy responsibility—indeed, an appalling responsibility.

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Although I am nervous about the full consequences of this very important Bill—it has been rushed through Parliament and there may be consequences that we cannot foresee—none the less, there is common ground that this is the best way forward, and possibly the only way forward.
I join with others, again in gratitude, in noting that Mr Trimble, in good faith, made a brave decision and took a courageous step when in November or December last he entered into a power-sharing Executive with Sinn Fein representatives without prior decommissioning by the IRA. But there is also the other side. I, for my part, think that Mr Gerry Adams and the Sinn Fein leadership believe, in good faith, that they too have fulfilled their promises to the extent that it is within their power to do so.
I share the widespread concern that the IRA has not started the process of decommissioning. I welcome its recent statement, to which the Minister referred, expressing its desire for a permanent peace. It is more encouraging than its earlier statements, but the statement lacks precision and clarity about whether the IRA will decommission, when it will decommission and upon whose terms it will decommission.
However, one question still worries me. Given the history of the IRA, and given the history of the anti-colonial struggle in Ireland over centuries, is it possible that the demand that the IRA should yield up its arms—and that is what decommissioning means—has brought it to a threshold which it finds extremely difficult, if not impossible, to cross, at least today? If that is so—and only time will tell—that is an important issue that will not go away.
The Minister has explained very clearly that the effect of this Bill is to empower the Secretary of State to suspend devolved government. It does not abolish devolved government; the Good Friday agreement is not falling apart; suspension is not irreversible. That is why we are heartened by Clause 2 of the Bill. Under that clause the Secretary of State is to institute,
"As soon as is reasonably practicable"
after suspension begins, a review under the review section of the Belfast agreement. After taking account of the results of the review, he may restore devolved government, subject, of course, to parliamentary approval.
When my noble friend comes to reply to the debate, can he explain precisely what will be reviewed? Can he also give the slightest hint of the maximum period over which the review is to be conducted and who will conduct it?
Even if suspension comes into force during the course of the next few days, the search for a solution to the difficulties will, and must, go on. One must hope that suspension will not erode confidence in the democratic process but, rather, that it will provide a powerful incentive for all concerned to get on with the task of creating the conditions for restoring devolved government to Northern Ireland as quickly as possible.
3.57 p.m.
Lord Rogan: My Lords, it gives me no pleasure as an Ulster Unionist to rise in support of this Bill today.
I know that many noble Lords will not have had an opportunity to visit the Northern Ireland Assembly. While differences between Members of that Assembly are so great as to make the differences in your Lordships' House pale into insignificance, one could be forgiven for thinking over there that one was in any other parliamentary assembly in these islands. There is robust debate—yes, of course there is—but there is also a commitment, evident on all sides, to encouraging the kind of economic redevelopment, regeneration and social inclusion that Northern Ireland so desperately needs.
Perhaps I may give your Lordships one example. Last week, the Ulster Farmers Union—traditionally seen as the voice predominantly, but not exclusively, of Protestant farmers—held a rally at Stormont to draw attention to the crisis in agriculture—a crisis, I might add, which is having more severe repercussions in Northern Ireland than in any other region of this Kingdom. There were cheers for the Unionist speakers, of course. But there were cheers also for Mr Gerry McHugh, the Sinn Fein agriculture spokesman. Things have certainly changed in the Province—and changed for the better.
Going about my business, I detect no willingness whatever in any section of the community to return to the position that we were in two years ago, let alone in the darkest days of the troubles. Northern Ireland's new Executive and democratic institutions have begun to show signs of working despite those who would gladly see them collapse. But Stormont is not like any other parliament. One of the parties in the Executive has a standing army. Two Ministers in the Northern Ireland Executive are inextricably linked with the Provisional IRA. While I support the Bill, it would be folly to pretend that the prospect of the new institutions in Northern Ireland going into suspension for an indeterminate period does not concern Unionists, just as it also concerns nationalists.
While suspension is without doubt not the outcome we would have wanted, it is not the end of the world. I welcome the kind words that noble Lords have said about my party and my party leader. I especially welcome the kind words that the noble Lord, Lord Fitt, said about my party and the risk that we undoubtedly took to make the agreement work. Of course, it would have been far preferable for Sinn Fein/IRA to have followed the lead my friend, the right honourable Member for Upper Bann, gave and for them also to have taken with us a risk for peace. Even in the past 20 short weeks, significant progress has been made. The basic framework of a settlement—power-sharing devolution within the United Kingdom with a North-South dimension—has been vindicated. No convincing alternatives have been presented.
There is a new optimism on the streets of Belfast and in the countryside of Northern Ireland. Above all, lives have been saved. I even detect some progress from that

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most intractable of organisations, the IRA. Certainly its oratory has changed. Back in 1996, just after the Canary Wharf tragedy, its position was that,
"There will be no decommissioning either through the front or the back doors. This is an unrealistic and unrealisable demand which simply won't be met.
As I stand here today, that has been replaced at least by a softer-sounding commitment that the peace process is under no threat from the IRA.
However, the option of a return to war remains very real. Even the test set by Northern Ireland's nationalist Deputy First Minister—a commitment to decommissioning and a start date—still shows no signs of being satisfied. Even that would still be some way away from the understandings given last November to a start to actual dismantling of the structures of terrorism.
If the peace process is to succeed, it requires all of us to set aside traditional assumptions and ways of thinking. Even those who have committed the vilest acts must be given a chance to show that they have changed their ways. They have been given that chance. Almost as soon as the review of the Belfast agreement conducted by Senator George Mitchell was completed, two Sinn Fein spokesmen, Mr Pat Doherty and Mr Martin Ferris, were convincing their supporters in America that no commitment to decommissioning had been given. One assumes that they believed that even if the Unionists raised decommissioning again, Her Majesty's Government and the Government of the Irish Republic would cave in to the implicit threat of renewed violence.
It pleases me to see, therefore, that there is a determination on both sides of the Irish Sea that this issue be resolved once and for all. I trust that that pleasure will not turn into pain if that determination weakens in any way. The prospect of the only decommissioning occurring being that of the Northern Ireland Executive and the North-South and east-west institutions appals every section of opinion, including, I believe, many Sinn Fein supporters.
The pretence that the agreement did not require the weapons of war to be put aside has been shown to be just that—a mere pretence. While Northern Ireland and the Republic of Ireland both face confidently into a new future based on mutually beneficial co-operation and partnership, the people of the island of Ireland are being held to ransom by a small nucleus of militants who cannot accept the loss of status that decommissioning involves. I am glad that the decision to suspend the institutions if there was a default by the IRA was endorsed by the Taoiseach, Mr Ahern, on 23rd November 1999 in Dail Eireann. If the institutions are suspended, no one can predict with confidence when they will be revived. If trust it will not be for long.
However, for once, the paths of expediency and morality have converged. Once suspended, the chances of Mr Adams persuading his militants that the Sinn Fein Ministers can be reinstated without decommissioning occurring are nil. At the same time, weakness from Her Majesty's Government and the
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Irish Government at this stage would have convinced the militants that London and Dublin are open to bullying and threats. Mr Adams's job would be made all the harder, given that the process cannot succeed without unionist involvement. Support for the Belfast agreement has already fallen within the Unionist community. Be assured that any attempt to proceed again on the basis of vague statements will not carry majority support.
Even as this legislation comes to its final stages, we must not give up hope that the republicans will rescue the situation. Mr Adams must know that decommissioning is a necessary and inevitable part of the process of making peace. By supporting the Bill today, we can send a powerful message to the republican movement that all the people of Northern Ireland cannot be expected to endure what the Taoiseach called an "armed peace". I trust it will receive support from all sides of the House.
4.7 p.m.
Viscount Brookeborough: My Lords, I too strongly support the Bill as a necessity and the only way of preserving the progress so far of the implementation of the Good Friday agreement. I endorse the comments made with reference to the fact that we do not have the de Chastelain report to read. I join others in asking the Minister why that is so.
The vast majority—that is to say, everyone except those inextricably linked with terrorism—will be deeply saddened and devastated when our devolved administration is suspended. The sole reason for that is, of course, the lack of decommissioning at this stage. The reasons we are given are incomprehensible even to those of us who live in Northern Ireland. The danger, threat and ability to blackmail as a result of the retention of illegal weapons and explosives has been brought into reality too many times, including the tragedy of the Omagh bomb and, to prove that that was not the end of it, the bomb in Irvinestown a few miles from my home on Sunday evening. It was incredibly lucky that no one was hurt in that attack.
The requirement for decommissioning, which is at the base of the matter, is incumbent on all groups, whether they be so-called loyalist or Republican, within the Good Friday agreement. I should like to remind your Lordships why it is primarily the intransigence of Sinn Fein/IRA that has brought us to this sad day.
Sinn Fein is the only party which is inextricably linked with a terrorist group and which has a place on the Northern Ireland Executive. Therefore, it is Sinn Fein/IRA alone who can enable the immense effort, compromise and courage of others to bear fruit at this time. It is only they who seem determined to destroy the progress and hopes of so many, despite their protestations otherwise. Sinn Fein says that it did not

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agree in the Good Friday agreement to decommission any weapons. However, it did agree to paragraph 3 on decommissioning on page 20 of the agreement. It says:
"They also confirm their intention"—
as did everyone else—
"to continue to work constructively and in good faith with the Independent Commission, and to use any influence they may have, to achieve the decommissioning of all paramilitary arms within two years following endorsement in referendums North and South of the agreement and in the context of the implementation of the overall settlement".
That is what brings us to the date of 22nd May of this year. The key words in the agreement are "to work constructively" and "to use any influence". It is for everyone, including the two governments, to investigate and question rigorously whether or not Sinn Fein has carried out its commitment.
Let us look at the practicalities. Sinn Fein includes many members of the IRA and a few who have been members of the IRA Army Council. They know where many of the arms dumps are, or at least where they were until they were conveniently moved. I believe that, due to the sophistication of these hides, many of the weapons are still where they were when these Sinn Fein personalities were active members. However, can the Minister confirm whether or not any member of Sinn Fein has discussed these locations with the independent commission? Would that not constitute the very minimum of commitment required under the Good Friday agreement? Can the Minister tell us whether the commission has been shown the location of a single bunker or long-term store, albeit empty? I believe that the answer to that is "No", and that Sinn Fein has failed in every respect on decommissioning.
Although it has condemned in public the perpetrators of the Irvinestown bomb, it does not help in any way in discovering the recent origins of the explosives that were used. The perpetrators, we are told, are a splinter group—originally members of the IRA known to the Army Council. The explosives would have been held by the IRA until recently. Is this total lack of co-operation from these people acceptable when they say that they have embraced the democratic process and sit on the Executive? They will have to do better than that.
The Government have paid a high price and the people of Northern Ireland a higher one: immunity, prisoner releases, reduced military activity, and so on; and devolution and seats on the Executive. Sinn Fein has brought nothing with it. That is why this very sad day has come about. Incidentally, can the Minister tell us what the status of the prisoners released on licence will be if the entire Good Friday agreement falls apart?
With reference to decommissioning, my Lords, you may think that I oversimplify it all. I beg you to understand that I do not. Having been a member of the security forces for many years and having studied the modus operandi of the terrorists in depth, I know how quickly they can produce weapons should a target present itself. It is measured in hours, not weeks, months and years. If Sinn Fein lived up to its signed-up commitment, it could start decommissioning before
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the Bill completes its passage. It is to be hoped that the efforts being made by the Taoiseach and by the Prime Minister might enable that to happen. But I can assure your Lordships that it is feasible in the time-scale—before tomorrow evening.
I should like to ask the Minister two short questions. First, on the Good Friday agreement, in paragraph 3 on decommissioning, which I have already read out, the date given for completion is two years after the referendum, which gives us the date of 22nd May. If that fails to occur, can the review change that date? Is it empowered to do so?
Secondly, Clause 2 of the Bill states that if suspension takes place prior to a restoration order, the Secretary of State must take into account the results of the review. If decommissioning starts, how long will the review take and will all the parties have to sign up to it? Discussions may be used by many to hinder the progress and delay it. What is the possible time-scale and how will the Government get round this? Should decommissioning start—that is the last hurdle—between the suspension and 22nd May, can a review be avoided?
I support this Bill most strongly, but hope that even at this late stage its enactment might be avoided by some movement from the intransigent parties.
4.15 p.m.
Baroness Park of Monmouth: My Lords, I believe Sinn Fein/IRA have claimed that the Government's proposal to suspend the Northern Ireland Assembly and the Executive is unlawful. That this was, however, implicit in the agreement is evident in the validation and review provision in paragraph 7, which states:
"If difficulties arise which require remedial action across the range of institutions, or otherwise require amendment of the British-Irish Agreement or relevant legislation, the process of review will fall to the two Governments in consultation with the parties in the Assembly. Each Government will be responsible for action in its own jurisdiction".
The two governments, in their July 1999 statement, "The Way Forward", drew on this in what they described as a fail-safe clause, under which they undertook that, in accordance with the review provisions of the agreement, if commitments under that agreement were not met, either in relation to decommissioning or devolution, they would automatically and with immediate effect suspend the operation of the institutions set up by the agreement. The statement went on to say, in relation to decommissioning, that this action must be taken on receipt of a report at any time where the commitments now being entered into, or steps which are automatically laid down by the de Chastelain commission, are not fulfilled in accordance with the Good Friday agreement. The British Government would legislate to that effect.
For the first time, Sinn Fein/IRA were presented with a clear warning that it was time for them to act or to lose the major political advantages they had gained—and they were many. On 17th November the IRA said that it would appoint a representative to talk to General de Chastelain and his commission. By 5th December both

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the IRA and, incidentally, the Ulster Freedom Fighters had appointed representatives. On 10th December General de Chastelain reported that,
"initial contacts provide the basis for an assessment that decommissioning will occur".
So far, so good. Meanwhile, on 22nd November, the Secretary of State, noting the IRA's statement that it was committed unequivocally to the "search for freedom, justice and peace in Ireland", noting also both Sinn Fein/IRA's acceptance that decommissioning is an essential part of the peace process, to be brought about under the aegis of the commission, and the IRA's acknowledgement of the Sinn Fein leadership, had accepted Senator Mitchell's belief that a basis did exist for devolution to occur, for the institutions to be established and for decommissioning to take place as soon as possible. That was the build-up. Not least, the Unionists had courageously decided to jump first and enabled devolution to occur on the clear understanding that that would open the way for voluntary decommissioning by the IRA. But the IRA has become accustomed to getting away with statements—with words and not actions—and, moreover, statements which mean one thing to them and another to the ordinary man. It has not been accustomed to having its bluff called.
It must be said, however, that it has never at any time said that it would decommission. It even reinforced that in recent statements in the United States. The fault has lain with those who wished to believe that it had. Incidentally, the infamous bargain struck for it in the location of victims' remains Act, which produced only three bodies in return for total amnesty for murderers of many more, is an example. On this occasion, as so often before, it thought that they could get away with doing no serious business whatever with the de Chastelain commission. I am only amazed that anyone thought that it would.
The report has not been published, and I deplore that. It was, however, possibly because, according to the IRA's own statement of 2nd February, it has,
"never entered into any agreement or undertaking or understanding at any time whatsoever on any aspect of decommissioning".
That could hardly be clearer. It seems to have thought that it was having those discussions,
"to help move the political situation out of a vacuum"
very generous! Its representative passed his time, according to its own statement,
"stressing that we are totally committed to the peace process, that the IRA wants a permanent peace, that the IRA guns are silent, and that there is no threat to the peace process from the IRA".
That is what the unfortunate general seems to have been listening to for quite a long time, one assumes. Clearly, it has not, according to its own statement, discussed in the three meetings that have taken place the modalities, the timing or anything else practical at all.
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It is significant that another IRA statement says,
"The issue of arms needs to be dealt with m an acceptable way, and this is a necessary objective of a genuine peace process. For that reason we support it to secure the resolution of the arms issue".
The issue of arms is IRA-speak for demilitarisation of our forces, the removal of the legitimate Armed Forces and the disarming and disbandment of the RUC. That is what it means to them. Gerry Adams knows that, and knew it when the review was taking place.
The terms of decommissioning are so far absolutely non-threatening: those handing in arms benefit by an amnesty which has been extended year by year since the 1997 Act. Indeed, an order of 1999 extended the current amnesty until 24th February 2000—a fact of which I imagine the IRA will not be unaware. They will know, too, that as the decommissioning commission report of July 1999 states, in an annex, the 1997 decommissioning Acts in both the UK and Ireland specified,
"that methods and manners (schemes) to be used for decommissioning require the destruction of the arms being decommissioned".
I have gone into such detail because two significant things have now happened. The first is that Mr Seamus Mallon, leader of the SDLP and therefore a respected voice for the large Catholic and not necessarily republican community, has put the two questions that the IRA has never yet been asked to answer: "Will you decommission?" and, "If so, when?".
Some have argued that the IRA can go right up to the wire and make no decision until 22nd May, two years after the conclusion of the agreement. Sinn Fein/IRA are already arguing that the deadline should be two years after the institutions are in place and working. But the crucial questions which all those people in Northern Ireland and the Republic who voted for peace in 1998 (71 per cent of the 81 per cent turn-out in the North, 94 per cent of the 56 per cent turn-out in the South) are asking those two questions. What is stopping Sinn Fein/IRA from answering? And how, incidentally, do the IRA reconcile its claim in their latest statement that,
"the peace process is under no threat from the IRA",
and that its guns have been silent, with the importation from the US last year, and no doubt before, of significant quantities of machine- and hand-guns, not by the Continuity IRA or the Real IRA but, according to the Gardai, by the Provisional IRA (PIRA), whose local leaders have been telling the rank and file that these were new weapons to replace the old. I say nothing of the separate issue of continuing violence towards their its communities.
It is in any case fairly irrelevant whether it is the PIRA, the Continuity IRA or the Real IRA, since there can be no doubt that the army council would never have tolerated the existence and operations of those groups if they were not serving the interests of the Provisional IRA. They are very useful and will be deployed to threaten us; and they can then be disowned.

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I spoke of two significant events. The second was the fact that the Government, and this Secretary of State in particular, are now confronting Sinn Fein/IRA and calling their bluff. They are not sheltering behind the Unionists, and they are at long last representing the large majority who do not want to live in a most fragile peace courtesy of Sinn Fein/IRA. Of course it is a risky policy, and Sinn Fein/IRA will make, and no doubt carry out, many dire threats, such as Gerry Adams's latest threat that this will make the IRA break off talks with the commission. So what? It has not discussed anything but its own agenda, which is not to give an inch.
There will be dangerous times ahead, and the maverick element in Unionism could still, alas, present problems, as could the loyalist paramilitaries. The Irish Government will want very badly to appease Sinn Fein/IRA for internal political reasons—and I fear that we may be trying to do so to some extent through the disqualification Bill and in possible legislation to allow Sinn Fein to raise funds abroad. The Bloody Sunday inquiry opens in Londonderry next month, to add to the possible flashpoints.
I strongly urge the Secretary of State—who has understood so well that the IRA, like any other negotiator, knows when it has met someone prepared to call its bluff—not to forget even now the need for confidence building in the wider community. It is not only Protestant Unionists who feel that this is not the time to make changes in the RUC, whose courage and professionalism we shall need more than ever, nor to consider tacit deals which might be proposed to equate paramilitary arms with those of the regular forces and lower our defences. Any move towards trying to find ways to please the IRA will only confuse the issue and weaken the Government's case. I beg them not to appease.
I believe that the Executive is strong enough to resume its work in due course, without loss of effectiveness, when the conditions are right and that, meanwhile, much can be done at local level. I hope that Northern Ireland Ministers will associate appropriate members of the Executive with the practical work, if that is possible.
After the commitments made, we have no choice but to suspend the process now. The Secretary of State has shown both courage and resolution, and I have confidence that the two governments will now find ways to enable the IRA to enter the real world, without, however, confusing that with further appeasement. I think we all recognise that there will be a dangerous period of uncertainty—and of course we may not solve the problem—but any other course than the one taken would have been far more dangerous. Meanwhile, it is not yet time for so-called normalisation. The IRA has not gone away.
4.27 p.m.
Lord Eames: My Lords, like many who have lived and worked in Northern Ireland for most of their lifetime, I find a mixture of emotions as I address the
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Bill. First, I find sadness that, after so much suffering in the Province, a period that appeared to offer the promise of hope appears to have been eroded. I find disappointment because the efforts of two governments and politicians, many of whom have shown exemplary courage, appear to have produced stalemate. I find frustration because the political process has been unable to produce fresh stability and hope for a long-suffering community. Above all, I find a sense of sorrow—for Unionists and Protestants, nationalists and Roman Catholics, who in overwhelming numbers trusted. Today they question whether that trust has been returned.
As a churchman of no party political allegiance who has ministered through 30 years of violence, death and destruction and who has seen the depths of loss suffered by so many families because of terrorism, I see the necessity of the Bill as a sharp reminder of reality. That reality is that the long, long journey to political stability in Northern Ireland has reached a point of sober reflection. Far from being the end of a journey in which so much has been invested, we have reached the point where a basic question has to be faced—but faced not through language of condemnation, victory or surrender, but with a realism born of experience. To me, that basic question is: how can we remove the negative, destructive and life-threatening forces from society and make political progress without losing all that has been gained in the past few years?
As the noble Lord, Lord Rogan, reminded us, much has been achieved, but beyond that progress, and even the Bill we are now considering, the one element that we have failed to achieve in Northern Ireland is the total removal of the instruments of destruction. They hang over us like a sword and appear from time to time in varying intensity. But they have a definite link with the two elements that must be stressed in the sense of reality: fear and trust. Even now, fear and trust go hand in hand in the Province. Until we build trust between and within communities and among individuals there is a continuing danger that these weapons—the subject of the decommissioning debate—will be used. Above all else, that is what brings us to this moment.
Beyond the established political realities for Unionists and republicans, we must remember the important moral issues as we address the Bill. If we are to see its implementation by the Secretary of State in the next few days I urge the Minister and, through him, the Government and all parties here and in Northern Ireland to do all they can to keep open the doors of dialogue. From my point of view, and I believe many others, the real risk is that if the Bill is implemented in the next 48 hours or so there will be a sense of déjà) vu and, with the lifting of pressure, the negative issues on all sides of our community, which have been so detrimental to party political progress, will come into full play. I beg both the Government and this House to recognise that that is the biggest single danger to be faced, not only during the further review, but when this Bill, with its consequences, is implemented.

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It would be very easy to close the door and walk away from discussion in the weeks ahead. Such action would be disastrous for us all. The door must stay open. If we are to have any real hope for the future, neither a return to direct rule nor real or imaginary excuses by any politician or party in Northern Ireland to withdraw into the perceived comfort of political closets will achieve anything. If we are to find democracy, shared responsibility, leadership and communal decency, all instruments of destruction and death must be removed from the scene once and for all. Too many lives have been lost for us to have any doubt in our minds that the removal of such instruments, whether in republican or—let us not forget—loyalist hands, would be a major step in building up the confidence and trust to which I have referred.
I recognise the difficulties that so-called decommissioning presents to both communities. I also recognise that there are times when we dwell in a fairytale world in which decommissioning appears to be the last obstacle to he removed. Let us be honest about: there are many elements of the armaments in Northern Ireland which could be replaced in less than 24 hours. Let us be honest about the existence of Semtex and the use made of agricultural fertilisers. That is not the point. As I travel between here and Northern Ireland and listen to debates in this House, I sense an unreality about decommissioning. We seek the decommissioning of a mindset, attitude and feeling on the part of some that as long as they possess these weapons they can get their way. That is immoral, undemocratic and, as the noble Lord, Lord Fitt, reminds us constantly in this House, one of the greatest underlying causes of mistrust and fear.
At the moment, within the Unionist as well as the republican community there is great confusion of thought. We are told that those in the republican community do not trust their Unionist neighbours. I make no apology for saying that within the Unionist community there is a deep and palpable desire for lasting peace and stability, but also a feeling that the pace and cost to them of the political peace process has resulted it a hardening of attitude to decommissioning. Whether we like it or not, that reaction is summed up in the perception that it has had to give, give and give again without achieving what it wants most: the removal of weapons.
Those are just a few of the realities that underlie the debate on the Bill. But those realities cannot be divorced from this debate or any review that follows in the days ahead. I refer to Clause 2 which bears the description "Ending suspension". As we debate this Bill, let none of us forget that if there is not a continuation of dialogue and a recognition of the cost of political failure in lives and destruction, Northern Ireland will face years of continuing danger and erosion. I genuinely believe that there is a will to progress in both communities, and the people of Northern Ireland of all shades of opinion deserve it. The Churches are ready and willing to play their part in practical ways. I pray God that we shall all find new courage and trust to see a way forward together.
4.37 p.m.
Lord Molyneux of Killead: My Lords, I am greatly relieved to follow my noble friend Lord Eames the most reverend Primate of All Ireland. In that role he is responsible for my spiritual well-being but cannot be held accountable for my words and actions in the temporal sphere, and for that he must be very thankful.
I intend to be brief because much has already been said. In any case, I have tabled amendments for the remaining stages of the Bill tomorrow which I hope will also be constructive and brief. I support the Bill for two reasons. First, if the Bill is speedily implemented, it will protect the United Kingdom from censure, and possibly expulsion, from the European Union. The EU is now threatening Austria because 27 per cent of its electorate voted for the Freedom Party which does not contain convicted terrorists or rely on a terrorist wing. That is the situation as I understand it. In comparison, Her Majesty's Government have placed in government—we all share in this responsibility—those whose record is plain to see. For some reason, the Foreign Secretary has ignored the highly dangerous position in which Britain finds itself. None the less, the Bill will remove that fault, provided it is implemented speedily.
My second reason for supporting the Bill is that it protects David Trimble from a very great peril. It has already been said—I join in the tribute to Mr David Trimble—that in the Mitchell review last autumn it was clearly agreed, without any fanfare of trumpets, that someone should blink first. By that, it meant the two main protagonists, David Trimble and Mr Adams. That was refined subtly to a further demand that some one should jump first. That David Trimble did—not in the recent few weeks but as far back as the end of November—by simply putting in a sealed letter the date by which he felt that he could sustain his position no longer if his jumping first had not been followed by that which Mr Adams implicitly agreed to do: to jump as well.
So noble Lords can be forgiven for resenting the treatment meted out by the Northern Ireland Office. I exonerate all the Ministers because they are not entirely masters in their own house. That department makes a practice of prematurely producing legislation in advance of what one might term reasonable proof that its exotic schemes are likely to survive the test of constitutional realism. It has become standard practice to dash ahead of mature consideration and hope that wishing will make the matter come true. That procedure worked originally two years ago when the Belfast agreement was endorsed by a population stampeded and bewildered by a propaganda campaign which would have reduced Dr Goebbels to the role of tea boy.
It is not surprising that the thousands of "Yes" voters now feel embittered by false promises made at the highest level and never delivered. It is inevitable that all the spin doctoring and brainwashing should produce a swings-and-roundabouts attitude even at collective party leadership level. Hence the demeaning

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impact upon the Parliament of the United Kingdom, this House and another place. Your Lordships will remember the year 1998 when we in this House were stopped in our tracks from considering a major Northern Ireland Bill because the Secretary of State had acted in contradiction of the department's decision 24 hours earlier. It has to be accepted that such behaviour is bound to damage the standing of governments and of Parliament itself.
Having made mention of those examples of the unworkability of schemes in general, it is surely now in the national interest to examine the problems which were apparently unforeseen. In all three regions—Scotland, Wales and Northern Ireland—there was much rejoicing over the phrase "power back to our own hands". Two years on, local leaders are judged not on their ability to exercise the power delivered back into their hands, but (to use an ominous phrase used in all three regions of the United Kingdom), "to stand up to London". That means to stand up to the policies of the supreme sovereign Parliament of the United Kingdom, and in particular to the Treasury.
As regards Northern Ireland, there will be much bleating about the vacuum. But with 30 years' experience behind me I propose with great respect and in all humility an effective remedy. I support the remarks of the noble Lord, Lord Eames: that dialogue must be kept going. But dialogue is very different from a form of scaled-down or upgraded Mitchell review. We need an upgrading of local government. That was promised over 20 years ago and rejected or sabotaged in the early 1980s on the ground that "it was not enough", although it had been endorsed a few weeks earlier by 14.5 million of the United Kingdom electorate. Yet still "it was not enough".
I know that the proposal was not enough for the ambitions of the Northern Ireland Office and its big brothers in the Foreign Office. For them there is no scope for international summits in doing something modest and workable. It is dreary stuff; it is not of interest to the press, television, and so on. We have been restricted to high-wire acts without even a safety net. But a remarkable scene has developed in Northern Ireland. The noble Lords, Lord Eames and Lord Fitt, touched on this issue. Local councils have made great progress despite the fact that they were deprived of much of their power—I have to admit by my own party, no doubt with my support in the early 1970s. But they have clawed back power which they were never meant to have. They are exercising that power in the best interests of the entire community.
I give noble Lords one example of a neighbouring council with an Ulster Unionist majority. It can outvote all the other parties put together. It has chosen as its mayor a Catholic from the SDLP Party. Not only did it give him a term for the sake of it; it re-elected him for the current year because it admired the way he was guiding the council with the full support of all but one tiny party, the identity of which noble Lords can guess.
However, perhaps most significant is the Belfast City Council which is only one step down from the Assembly. There, one has representatives of all the
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parties, including Sinn Fein, and others, so-called loyalist paramilitaries, sitting round the council table. Because they respect the wishes of the electorate who sent them there, they co-operate in the best interest of the entire community. My noble friend Lord Rogan is under their jurisdiction in the sense that he is a resident and a ratepayer. But that is a burden we all have to bear!
Let us give Belfast City Council—the largest one—and its fellow councillors in every other area a further range of responsibilities. I shall be rash and guarantee that within one year we shall see a transformed Northern Ireland. But we shall not achieve that if we go for yet another Mitchell review, the high-wire act, television cameras on the lawn, with journalists buttonholing all the participants as they enter and leave the council locality, and setting one side against the other. We need quiet, calm deliberation; trusting each other. Let there be private talk but, whatever else we do, let us make certain that we give real substance to that new spirit to which every speaker has subscribed. It does not owe everything to the Good Friday agreement. It was taking place long before that. Let us make certain that that is now underpinned and made to stick.
4.48 p.m.
Lord Hylton: My Lords, I share the sadness that has been expressed at the perceived need for the Bill before us today. That sadness is a little mitigated by one small item of good news: that the Springfield Road campus for university and further education is now, at last after many years, to go ahead. I know that local people on either side of the peace line have been widely and deeply consulted about that project. It has generated a great deal of worthwhile cross-community collaborative work.
I welcome the fact that this Bill provides for a restoration order. Like the two previous speakers from these Benches, I plead as strongly as I can for the maintenance in Northern Ireland of all possible channels for political dialogue. I should like to mention a few of them. First, the Executive is still in existence today, as I understand it. Could it not continue in shadow form during whatever interim period we may be facing? Secondly, the Assembly has been elected and set up at considerable public expense. Could it not continue in a consultative, if not a legislative, mode? It may be that the Assembly will have to be called something else. Perhaps it might be renamed the "Convention"; I know not.
There is so much that it could usefully discuss. For example, there is the reform of the criminal justice in Northern Ireland; the prevention of crime; and the development of restorative justice at local level. Those are issues in which I have a personal interest. Could it not also discuss the future of policing, which is another urgent and serious question? Could it not take much further than hitherto the accountability of the many quangos?
The cross-border bodies have been mentioned already. I hope and pray that the essence of their work will be continued by whatever means. They are

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important, possibly vital, bodies. It is most desirable that there should be no break in the continuity of that kind of work. The Belfast agreement provided for something called the Civic Forum, drawn partly from voluntary organisations and other bodies. As far as I know, it has not yet started work. I believe that it could have a role in developing and strengthening civil society.
As the noble Lord, Lord Molyneaux of Killead, mentioned, there are the district and city councils, particularly those, as he indicated, which have developed varying degrees of power-sharing among their political parties and membership. Surely ways could be found to enable them to undertake greater responsibilities.
What is the alternative if ways of continuing political dialogue are not found? In that case I believe that those outside politics, the splinter groups who have always rejected agreement, and the political parties who have not signed up to the Belfast agreement or who wish to see major changes and revisions, are the kind of people who will benefit. That would be most unsatisfactory.
I make two other points. I hope that ways and means will be found for having available conflict resolution processes to deal with the most contentious issues that exist in Northern Ireland. I mention one; namely, the routing of those marches on which agreement cannot be easily or readily found. By conflict resolution processes, I mean independent processes professionally assisted by qualified people. Methods of these kinds can lead to shared analysis and to problem-solving approaches.
Finally, I strongly support all that my noble friend Lord Eames said about the importance of building trust, the role of the Churches in helping to achieve that, and about building peace at every level of society. I am sure that he is only too willing to give a strong lead with a view to having all the Churches working in the same direction. I trust that this can happen.
4.55 p.m.
Lord Desai: My Lords, this is a sad, but not unforeseen, event. On the last occasion we spoke on this subject my noble friend Lord Dubs did himself out of a job while moving an order. I remember saying that if the IRA decommissioned there would be other IRAs. It is the nature of the IRA to have different incarnations. Last Sunday we saw that another splinter group has become active.
There has always been a difficulty to which I have alluded before. The central difficulty is that we have both a post-colonial situation and one within the jurisdiction of a sovereign country. History hangs on that question, as the noble Lord, Lord Glentoran, said. My noble friend Lord Prys-Davies spoke about the anti-colonial struggle and the noble Lord, Lord Tebbit, spoke about a victorious army. I do not believe that the IRA is a victorious army; it is an undefeated one. That is one difference.
On the one hand we have a settlement within the jurisdiction of the United Kingdom Parliament and on the other we have a kind of hangover from an old
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colonial struggle. That makes it very difficult to grasp the IRA situation properly. As already stated, the IRA was not part of the Good Friday agreement. I do not condone what it does. As also stated, it never promised to decommission. A number of leading people, responsible politicians on all sides, thought they understood there was a promise to decommission. As recently as last November David Trimble thought he had an understanding of some sort. It defies all the knowledge of history which these leading figures must have. An army which decommissions ceases to exist. The IRA would have to wind up if it decommissioned. I hoped that it would. But because that was never explicit we have now reached a situation where the present period of devolution has lasted for a shorter period than that of 25 years ago. I never thought that that would be the case.
We have to do what we have to do. There is no escape from that. There have been various hopeful suggestions which I wish to emphasise. The noble Lord, Lord Molyneaux, says that across Northern Ireland there are examples of co-operative power-sharing between the various factions. The noble Baroness, Lady Denton, is unfortunately not in her place. I remember her saying in a previous discussion that we have practical experience. It is a very healthy sign that that has not been marred by the high theatricals at top-level negotiations.
I endorse what the noble Lord, Lord Hylton, said. I was going to say it myself, but he took my point. I hope that, either officially under Clause 2 of the Bill or unofficially, my right honourable friend the Secretary of State for Northern Ireland will keep some form of Assembly and Executive going, perhaps in a shadow form or as a review body. It should not be dismantled, although it could be stripped of its powers.
However, there is a difficulty because Clause 1(3) states:
"Neither the Assembly nor any committee of the Assembly is to hold a meeting or conduct any business".
That is unnecessary and I wish it was not in the Bill. I can see that under subsection (2)—
"No Act is to be passed by the Assembly"—
it can meet every day to discuss issues, but it just will not have any legislative powers. I wonder whether it is a little too strong.
Lord Tebbit: My Lords, I am grateful to the noble Lord, Lord Desai, for giving way. He might have gone on to say that a further difficulty is that if the legislation is used, when the Assembly and Executive are restored, the procedure for re-electing the First and Deputy First Ministers will be precisely the same; and the odds are that they will be precisely the same Ministers, which means that it will be impossible to restore the Assembly and the Executive unless in the mean time there has been a real change over the decommissioning of arms.
Lord Desai: My Lords, I am grateful to the noble Lord for that intervention. I agree with him and I want to deal with that issue.

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I want to raise the problem of the constitutionality of the Bill. The noble Baroness, Lady Park of Monmouth, addressed the problem, but I want my noble friend to confirm that it is the case. In last Saturday's Irish Times, my colleague, Professor Brendan O'Leary, wrote an article in which he raised doubts on this score. I am not a constitutional expert, but he is. Therefore, I quote from what he wrote:
"In effect the Good Friday agreement made Northern Ireland into a 'federacy'—a self-governing unit whose constitution could not be unilaterally altered by the Westminster Parliament without the consent of the devolved Assembly. For the UK Parliament to assume that right of suspension would be consistent with the agreement only if it were to be supported by the Assembly through cross-community consent procedures".
I have quoted that passage because I should like my noble and learned friend to say that my colleague is wrong.
The relevant point is that when we passed the Act in 1998 we also repealed Section 75 of the Government of Ireland Act 1920. I have heard that that is what gave north and south Ireland a right to self-determination. No one else has raised the issue and it would be good to have clarification of it.
There is another issue in relation to the election of the First and Deputy First Ministers. I am told that it is contained in the Good Friday agreement. My colleague states in his article:
"However, within the letter and procedures of the 1998 Act, agreed by the parties as the UK enactment of the Good Friday agreement, the Assembly can propose, by weighted majority, any intro vires amendment to the procedure for electing the First and Deputy First Minister, which could then be sent to Westminster for ratification".
That refers to the point made by the noble Lord, Lord Tebbit. Politically, it would be impossible to get two different First and Deputy First Ministers, but there is a great deal of ambiguity about what is and is not possible under the agreement. After all, the Good Friday agreement is an international treaty; it is not a piece of UK legislation. Therefore, if we do not fulfil the obligations perhaps we can be taken to some European court or other. It would be bad luck indeed if that happened at this stage.
5.4 p.m.
Lord Armstrong of Ilminster: My Lords, I share the disappointment expressed by other noble Lords at the developments that have made it necessary for the Government to introduce the Bill. I wish that I could say that I was as surprised as I am disappointed. An hour or so ago, a noble Lord with whom I have in the past worked on Irish matters said to me, "We have been here before". Well, not quite here perhaps, but brought up short by similar set-backs.
We are told by the IRA that the problem of decommissioning can be resolved, but not on British or Unionist terms. I suppose that that means on IRA terms. But we are not told what the terms would be. Any agreement must involve give and take on all sides. It may be literally true, as the noble Lord, Lord Tebbit, said, that there has never been a clear and formal
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commitment on the part of the PIRA to decommission arms or explosives. But we have been allowed—I might almost say "encouraged"—to hope and believe that as part of the peace process there might at least be a measure of decommissioning in the time-scale of the Belfast agreement and what developed from it. As that is not to be the case, the course which the Government now propose is, as one noble Lord said, the least worse course open to them.
I am attracted by the notion that, even if it is necessary to suspend the new institutions, we should keep discussion going and keep the doors open, as the noble Lord, Lord Eames, said. Whether that can be done by keeping on the move in shadow form the institutions that have been suspended, I do not know. I rather doubt it.
However, on that score, I want to add one comment. The past 15 years, since the signing of the Anglo-Irish Agreement at Hillsborough, have seen a great and growing improvement in the trust and confidence that persists between the British and Irish Governments. We have had much less megaphone diplomacy and much more serious and business-like discussion, if need be in private. I hope that I may be forgiven for believing that that improvement was one of the results of the Anglo-Irish Agreement of 1985; both of the agreement itself and of the process of discussion and negotiation that led up to it.
If the new institutions in Northern Ireland, and between the two parts of Ireland and within the British Isles as a whole, now have to be suspended, it will be of the first importance that that growth of confidence, trust and co-operation between Her Majesty's Government and the Government of the Republic of Ireland should not be imperilled or impaired. That it should be maintained and improved is, and will continue to be, an indispensable element not only in resolving the present impasse but also in developing longer-term solutions to the problems of Northern Ireland.
Therefore, I hope that the Minister will be able to assure us that it will continue to be the care and object of Her Majesty's Government to make sure that their relationship with the Irish Government is not allowed to deteriorate as a result of suspension, but will be confirmed and strengthened.
5.9 p.m.
Lord Dubs: My Lords, I share in the sadness that this legislation is necessary, the more so as it contrasts with the hopes and excitement that some of us felt last December when devolution took place. That sense of hope and excitement was clearly marked in Northern Ireland, where most people felt that a new era had begun. For the two months of devolution, we have been able to watch the new Assembly at work and the new Executive has, by and large, functioned reasonably well. Furthermore, we have seen politics in Northern Ireland move forward to discussing the kind of issues that are the stuff of real day-to-day democratic politics. Whether that is the crisis in Northern Ireland agriculture or the location of a

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maternity hospital in Belfast, these are real and proper political issues. They represent a move towards democracy.
That is why the disappointment today is much more palpable because we have been able to see that the new institutions can work. We have seen the north/south bodies work, and yet, here we are, faced with the bitter pill that, overall, all parts of the Good Friday agreement have not come about. Nevertheless, I share the hope expressed by my noble friend Lord Fitt that, even at this late stage, with only a couple of days to go, might it not be possible for the IRA to decommission some of their store of weapons and explosives? If they were to do so, the whole situation in Northern Ireland would yet again be transformed.
Life today for the people of Northern Ireland is immeasurably better than it was several years ago. There is peace; it may not be total security, but there is a measure of peace. We can see more prosperity. As the noble Lord, Lord Molyneaux, pointed out, all over Ireland we can see better co-operation across the political divide at the local authority level. Positive works of co-operation are taking place in local partnerships. The noble Lord, Lord Molyneaux, mentioned Belfast City Council as an example of one local authority, but of course there have been many others.
The noble Lord also touched on local government reform. I agree with him that that reform is necessary. However, I am not sure that now is the right time to embark upon it. I had always hoped that the new Assembly and Executive would seize this issue and make progress en it. Certainly it is a matter that, sooner or later, must be addressed.
Over the years I have tried to understand the position of at least some of the main parties in Northern Ireland. One conclusion I have come to is that most of them have very little margin for manoeuvre, when one takes into account the constraints under which they operate. Certainly I am convinced that David Trimble, who has shown enormous courage in the moves that he has made, does not have much more margin for manoeuvre over and above what he has already done. I do not believe that he would have been able to set up the Executive through the support of his Ulster Unionist Council without agreeing that there would a further meeting of the EUC—the one that is to take place on Saturday—nor indeed without the draft letter of resignation that he has penned.
Over my time in Northern Ireland I often heard members of Sinn Fein saying that David Trimble must face down the Unionists; that was the phrase they used. On the few occasions that I entered into discussions on this, I would say that David Trimble had moved as far as he could—although that is not a phrase that I particularly like to use. Last November he then moved even a little further. He did so publicly. We know what is going on in the Ulster Unionist Party. It is public and out in the open, as it should be with a proper democratic party. For that reason, we can make our own judgment about how little room for manoeuvre is available to David Trimble.
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Last November David Trimble stated that he would be prepared to jump first, provided that the IRA jumped afterwards. As I understand it, he made it clear that he would not have long, after jumping first, before the IRA would need to jump, otherwise he would not be able to hold his position. Indeed, sadly, that has proved to be the case. The question that we should now ask is: why did the IRA not jump when it knew the position he was in and knew the basis upon which the Assembly set up the Executive?
Personally, I believe that the leadership of Sinn Fein does want decommissioning; or at least I think that I believe that. I am not certain because we do not know. Such discussions are not held in public, unlike those of the other parties in Northern Ireland. But I think that there is at least a chance that Gerry Adams and Martin McGuinness would like to see decommissioning come about. However, they have not managed to secure support for that within the Sinn Fein/IRA organisation.
I have heard senior members of Sinn Fein state in public meetings that they personally believe that decommissioning must take place. Indeed, perhaps I may refer to the IRA statement published a few days ago. Some parts of that statement are unhappy and uncompromising, but I should like to quote a few lines from the end:
"We recognise that the issue of arms needs to be dealt with in an acceptable way and this is a necessary objective of a genuine peace process.
For that reason, we support efforts to secure the resolution of the arms issue. The peace process is under no threat from the IRA"
If that means anything, I believe that it means that the IRA has moved on the position it held some time ago. How much it might mean, I cannot say, because there are certain enigmatic phrases in the statement. However, I believe there to be an element of movement, or otherwise what do the words,
"the issue of arms needs to be dealt with",
mean? That must mean something different from the present position.
Lord Tebbit: My Lords, I think that the noble Lord, Lord Dubs, is clutching at straws, and I can understand why. The statement of the IRA is not incompatible with the position that it will give up its arms when the British Army—the army of the United Kingdom—is disarmed in Northern Ireland and has left. That is what the IRA is saying in that statement; nothing more except to provide—shall I say?—hope to people like the noble Lord, Lord Dubs, in order that it may continue to take us down the road of granting concessions while it gives nothing back.
Lord Dubs: My Lords, I am not trying to take anyone down a road; I am only trying to make a speech giving my own views based on some experience of Northern Ireland. I did not say that I was certain that the statement meant anything, only that it was possible. We need to look at what is going on. In his speech, the noble Lord, Lord Tebbit, did state that perhaps we should spend our time today considering

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the views of the various parties in Northern Ireland. For that reason, I took him at his word and have done what he urged us to do.
This is my tentative conclusion. By no means am I certain that I am right, but there is some supporting evidence here. I believe that the leadership of Sinn Fein feels that there are more political dividends to be gained if it pursues the political option of seeking to increase its political support in Northern Ireland in the nationalist community and in winning a few TDs in the Republic. In this House I do not need to develop the benefits that would accrue to republicanism if it were able to do that. However, provided that it is done using peaceful democratic means—we may not share the objectives—we could agree on the methods used. I believe that there is some indication that that is a part of Sinn Fein's agenda.
I listened to parts of yesterday's debate in the other place. I know that Seamus Mallon does not want suspension to take place, although I would argue that, if the Executive collapsed, that would be a worse outcome for the future of the peace process than if we implement this legislation, because at least we shall keep the First Minister and Deputy First Minister in place. By doing that we shall be in a much better position to resume the review and the negotiations to get the mechanisms re-established as soon as possible.
I should like to say for the sake of those in Sinn Fein who attack this Government's record by suggesting that we have not played our part by the Good Friday agreement, that I believe that we have. We have introduced human rights legislation, the Equality Commission and we have tackled the difficult question of the RUC—perhaps not to everyone's liking, but we have certainly grasped that problem. The review of criminal justice will shortly be completed. We have reduced the military presence on the streets and there are now fewer troops in Northern Ireland. Furthermore, we helped to put the Executive in place, along with the north/south bodies, the Council of the Isles and the implementation bodies.
Above all, there is the question of prisoner releases, to which the noble Lord referred. That has been a painful and difficult issue for many people here, and, goodness me, so much more difficult for the people of Northern Ireland. They may be related to or friends of victims of the people who have been released. We received much opposition in this House, but we had to argue—certainly, I argued when I had some responsibility for these matters—that we should to do that because, difficult as it was, it was the price of achieving a peaceful settlement.
However, I say to the republicans in Northern Ireland that under the Good Friday agreement there was no starting date for prisoner releases, no starting date for dealing with the question of the RUC, no starting date for reducing the number of troops in Northern Ireland and no starting date for the criminal justice review. We, the Government, started all that. Therefore, when they say that in the Good Friday agreement there was no starting date for
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decommissioning, certainly, there was not. However, in terms of good faith and building up trust, it was clear that that was a proper expectation, and we achieved many difficult things. Therefore, it is reasonable for the Government to say, "Why can't you do your difficult things as well?" That, after all, is what we urged should happen. It has not happened yet, but perhaps it is still possible in the last few hours.
I talked to a person from the nationalist area of Belfast only the other day. He said to me, "People there are saying that decommissioning will happen sooner or later. Why not now?" Whether or not that is typical of the views of the community, I do not know. However, that was a view which was put to me.
Perhaps I may spend a moment or two discussing the way forward. I believe that it is important—and other Members of this House have said so, too—that we ensure that the process of trying to achieve the full implementation of the Good Friday agreement continues. We must encourage all the parties to meet the challenge of getting the Executive and the Assembly up and running again and the Good Friday agreement implemented in totality as soon as possible. I appeal to all the parties in Northern Ireland to enter into that review process as soon as possible because we must protect the many gains of the Good Friday agreement on behalf of the people of Northern Ireland. There are gains; we must protect those and move forward.
Therefore, I urge that the talks should begin as soon as possible and that the close co-operation between the British and Irish Governments, to which the noble Lord, Lord Armstrong, referred, should continue and form the basis of the move forward. I believe that the Good Friday agreement is the best—indeed, the only—assurance of permanent peace in Northern Ireland. We need the Good Friday agreement, devolution and decommissioning to happen. That must be the main aim of the Government in Northern Ireland over the coming period because the people of Northern Ireland deserve no less from us.
5.22 p.m.
Lord Cooke of Islandreagh: My Lords, we have heard some important and powerful contributions this afternoon which, I am sure, will be listened to and read with great interest. They have been most helpful in this difficult position in which we find ourselves.
I believe that we have no alternative to this Bill, for reasons that have been explained. However, unfortunately the suspension on Friday must take place so that the structure of the Executive can remain intact and, it is hoped, be reinvigorated after a short delay. It has been remarkable and pleasing to us all to see how well the Executive has got up and running, even for a short time, and how Ministers have shown the value of local control of Northern Ireland departments. For 30 years, we have existed in a democratic vacuum in Northern Ireland. As the years have gone by, the absence of local input has become increasingly obvious. Two months of devolved

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government have made clear how much there is to be done and how important it is that the Assembly and Executive are re-formed as soon as possible.
Even in a short time, devolution has shown that Unionists can work well with SDLP colleagues, and vice versa. However, I am not so sure about the members of Sinn Fein. They have had a political agenda of their own; for example, it is not helpful to order that the Union flag is not to be flown on the buildings of the Sinn Fein Minister's department.
I believe that devolution, in itself, was remarkable because we appeared to have reached an impasse in the late autumn. However, thanks to Senator Mitchell's intervention, the possibility—"opportunity" is perhaps too strong a word—which David Trimble grabbed showed that he had very great courage in jumping first and testing just how valid was the IRA's intention to decommission.
However, the problem which we now face goes back to the Good Friday agreement. That agreement does not require Sinn Fein/IRA to decommission. The noble Viscount, Lord Brookeborough, spelled that out in detail. Immediately the agreement was published, that vital flaw was seen and recognised, and various promises were made that the difficulties would be overcome. I need not go into the detail of that, but this basic fudge has had serious effects on people's feelings in Northern Ireland. There are now few people who trust the Government, and our new Secretary of State, Mr Mandelson, has a mountain to climb before people begin to believe what Ministers say. He has started very well; he has spoken very clearly in the other place, and I wish him well.
That lack of confidence is compounded by something else. For five or six years, governments have largely disregarded the majority in Northern Ireland who are proud to be citizens of the United Kingdom. Governments have offered Sinn Fein/IRA—clearly, a terrorist organisation—one inducement after another in the hope that that would persuade it to give up bombing and murdering and to destroy its weapons. Sinn Fein/IRA has pocketed each gift without a "thank-you" and has demanded more. When will government realise that that policy does not work?
The declared intention of changing the name of the Royal Ulster Constabulary is an insult which, to many people, is unbearable. It will not make any difference as to how Sinn Fein behaves towards our police service, whose duty it is to uphold law and order. Sinn Fein will not accept any police service, no matter what it is called. The intention has been to find a title which will be acceptable to the people of Northern Ireland, but it will not be acceptable to them. It is ironic that the only title which is acceptable to the majority in Northern Ireland is "the Royal Ulster Constabulary".
As a consequence of that and similar issues, the thoughts and feelings of peace-loving citizens of every type and creed are in turmoil—a mixture of anguish and confusion. My noble friend Lord Eames referred to that and I can only confirm that I believe that to be one of the problems. It is important that efforts be made to allow people to think clearly, and I hope that
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we now have an opportunity to do that. I beg government to realise that all the presents and inducements in the world will not persuade Sinn Fein to decommission. There are said to be only 200 or 300 hardcore republican terrorists in the island of Ireland. To suggest that there is not another way to deal with them is, I believe, absurd.
In recent months it has been suggested that we are now at peace in Northern Ireland. Yes, we have been spared widespread bombing and indiscriminate shooting, but there are many areas in our cities, and towns which are controlled either by Sinn Fein or by so-called "Protestant paramilitaries". In Sinn Fein-controlled areas, there is clearly a plan to retain control of the areas in order to prove that Northern Ireland is ungovernable. We must remember that Sinn Fein/IRA's declared objection is unchanged, and they have said that themselves: to get the Brits out and to have the whole of Ireland governed by Sinn Fein. Recently, Mr Adams projected that that would he achieved by 2016.
In those areas, intimidation, beatings, torture and expulsions continue on a daily basis. Witnesses dare not go to the police because they know what will happen to them if they do. To bring law and order to those areas will be a difficult job which will take years. But until it is achieved, we shall not have real peace in Northern Ireland.
For some people to suggest, as they have, that this suspension will lead to a break-down and that it will take a generation to recover the situation is, I believe, quite untrue. We now have capable, courageous politicians in Northern Ireland. In addition, there are many wonderful men and women who work night and day for peace and to bring people together. Things need not slip back and, with a little clear thinking, could move forward quickly.
I have noticed that there is still a thought that the IRA will decommission. I have lived a lifetime in Northern Ireland and have had all too frequent experiences of and acquaintanceships with the IRA. I believe firmly that it will never decommission on its own. We must face up to that. There are, perhaps, only 100 or so people but the belief is in their bones that they are the rightful army of the Republic of Ireland. That is their belief and they do not recognise that they are in any way defeated. That is a real problem. I do not believe that the IRA will decommission of its own will. It will make all sorts of statements, as it has done, but it has never said that it will decommission. We must take account of that.
5.31 p.m.
Lord Cope of Berkeley: My Lords, I suppose that by now, we should be used to the good days and the bad days of Ulster politics but, somehow, one never does quite get used to it.
I agree with all other noble Lords who have spoken that this is a sad day and we have had a sombre debate. But like everybody else, we support this Bill in the circumstances which face us. Nobody explained the sadness of the day more movingly than the noble Lord, Lord Eames.

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However, there is a wise political saying that things are never quite as bad and never quite as good as they seem at the time. Of all the areas of politics, that has proved particularly true of Ulster and I hope that it proves to be so again.
As has also been said, in any negotiation one must try to understand all the parties to the negotiation in order to see how progress can be made. Several speakers have attempted to unravel that. There has been a particular concentration on the Provisional IRA. That is not because we do not all recognise, as we do, the importance of the so-called loyalist paramilitaries as well as the Provisional IRA but because the loyalist paramilitaries have apparently said that they will decommission provided that the Provisional IRA does so. That is a long-standing position. It has not just arisen in recent months. So, naturally, attention has been on the Provisional IRA.
It seems that there are many in Sinn Fein/IRA who now believe, quite accurately in my view, that violence has not worked and will not work. The people of Northern Ireland and Great Britain have amply demonstrated their robustness in the face of terror over a very long time.
My noble friend Lord Tebbit asked about the intentions of Sinn Fein. Sinn Fein tells us that it is separate from the IRA. That is an important element of its argument. But if that is so, why can Sinn Fein not tell us what it thinks about whether the Provisional IRA should decommission?
The noble Viscount, Lord Brookeborough, read a passage from the Belfast agreement and I wish to read two other sentences from the same page of the decommissioning section. In paragraph 1 it states:
"Participants recall their agreement …on 24 September 1997 'that the resolution of the decommissioning issue is an indispensable part of the process of negotiation'".
Paragraph 3 begins by stating:
"All participants accordingly reaffirm their commitment to the total disarmament of all paramilitary organisations".
Sinn Fein agreed to that. It agreed to the whole agreement even if it is said that the IRA did not. I should add that I do not believe that any of us saw that as a total solution to the violence. I remember remarking to your Lordships' House that, among other things, fertiliser cannot be decommissioned, quite apart from the fact that other arms can always be procured. We all know, as Irish history tells us, that breakaway groups are extremely likely to emerge—I put it no stronger—in the situation that we face.
Of course, the importance of decommissioning lies not only in the contribution it can make to security problems but also in the signal that it sends that democracy has been accepted as the way in which this matter should be taken further forward.
But this Bill shows that concessions made by democracy in the course of the implementation of the agreement can be suspended. It provides for the suspension of a large part of what was agreed at that time. I hope that the Minister will not mind me remarking that a large part of his speech was word for
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word the same as that of the Secretary of State. Of course, we should have been critical had it been too different. But the noble and learned Lord said that all parts of the Belfast agreement have been moving forward except for decommissioning. It seems to me to follow that all parts of the agreement should be at least subject to the possibility of the same pause that is provided for the Executive and the Assembly by this Bill.
If one side of the agreement is not to work out—notably, decommissioning—then the other parts of the deal will certainly need rethinking very soon. After all, we were assured repeatedly at the time we discussed the measure to release the prisoners that released prisoners could be recalled to prison. We did not think that that would be easy, but we were assured that that could happen if the rest of the agreement did not go forward, as it apparently is not doing.
Sinn Fein says that the guns are silent and also that the IRA has not yet failed to decommission because we have not yet reached 22nd May. But, as has been said by a number of noble Lords in the course of the debate, apparently, it has not even started to make clear commitments about the process.
It is not entirely true that the guns have been silent. For example, we know that the IRA is held responsible for five murders since the Good Friday agreement. That is slightly fewer than the loyalists, who are held responsible for five murders and in addition the murders of the three Quinn children who were tragically killed. For shootings and mutilations, the score is slightly higher on the loyalist side but it is much the same. There have been beatings and mutilations and 749 people have been exiled by the IRA since the Good Friday agreement; a similar number have been exiled by the loyalists. Two thousand and seventeen families have been rehoused due to intimidation either by the IRA or the so-called loyalist terrorists since the Good Friday agreement.
As the noble Lord, Lord Cooke, said, all this is about control of certain areas within Ulster. I believe that it is also about the preservation of the financial rackets which I have long believed are part of the momentum of the Troubles, and they need to be tackled accordingly.
A few moments ago I said that the decommissioning has not started at all, even in the form of commitments, but we cannot be sure about that because most of us have not seen the de Chastelain report. It is a pity that we have not seen it, not least because that inevitably leads to speculation as to what is in the report and why it is that we cannot be told what is in it. I do not want anything to be published that may be security sensitive—I would never call for that—but I believe that that causes a difficulty for the House. We have also had hints of another report by the general. It may help if the Minister can tell the House something about that this evening.
The really sad point is that in other respects there has been great progress. In local government and elsewhere people are working together. Several noble Lords have made that point so I do not need to dwell on it.

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Meanwhile the Bill provides for the possible reintroduction of direct rule. I have had some experience of direct rule, as your Lordships know, and I believe that direct rule is benevolent dictatorship. I like to think that we managed to provide—I do not make a party point as I believe this is a view held across the board—good government, but it was dictatorship and again it will be, if only temporarily, a form of dictatorship. It certainly damaged the political life of Northern Ireland no end.
If direct rule returns, I hope that it will be for as short a time as possible. We want to see a return to devolution as soon as possible. We also hope that the pause will be used positively for the redevelopment of devolution and democracy. As the noble Lord, Lord Eames, said, the doors remain open. I am sure that they will.
Meanwhile with this Bill we are almost signing a blank cheque on the basis of a report that we have not seen. We are trusting the Government and I believe that we are right to do so in this difficult situation. I hope that there is sufficient momentum in the massive desire for peace of practically everybody in Northern Ireland and in the rest of the United Kingdom that this is a pause and not a full stop. In Northern Irish matters hope is always essential.
5.43 p.m.
Lord Falconer of Thoroton: My Lords, I thank all noble Lords who have contributed to a thorough and well-informed debate. Listening to the debate it is obvious that many of your Lordships have a great deal of experience from a whole series of angles of Northern Ireland politics. Over many years noble Lords have lived through the highs and lows of the political process in Northern Ireland and understand the bitter disappointment of the people of Northern Ireland when set-backs occur.
It is patently clear that I am not alone in saying that I wish this Bill did not need to be brought before the House today. We all want to see a peaceful and lasting solution to the problems that have beset the people of Northern Ireland for so long. None of us wants the political process, which has advanced further than many thought possible in recent years, to lose momentum.
We believe that the Good Friday agreement provides the only viable basis for progress and we are saddened by the prospect that a lack of cross-community confidence in the institutions may require their temporary suspension. The vast majority of people in Northern Ireland want the agreement to work. They want local politicians to take responsibility for local decisions. Many noble Lords referred to the quality of local decision making. They have been encouraged by the professionalism, energy and commitment shown by the new Northern Ireland Ministers. They want this to continue, and so do I.
There can be no doubt that the agreement remains the best option for the creation of a new society based on consensus and the peaceful, democratic expression of political aims. I believe that this piece of legislation
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before the House today, regrettable though it may be, will provide a means to keep that goal in our sights. It has not been drafted in response to pressure from one party and it will not be triggered because of a potential resignation or a back-room deal. It has been introduced because we recognise that the institutions cannot survive if they fail to command cross-party and cross-community support and confidence. If that confidence does not exist, the Assembly and all the other institutions will collapse in disarray. We would be left with chaos in the short term and little hope in the long term. That would be a tragedy for all the people of Ireland.
Instead, suspension, if that is necessary, will afford a breathing space by providing for a pause in the operation of the institutions. It will enable us to carry out a review and to provide a context in which it is possible for all parties to focus their energies on moving forward together. It will also serve to protect the integrity of the agreement. It will make it clear that the agreement is a complete package. All of its various parts must be implemented in order for it to retain the support and confidence of the people and parties across Northern Ireland.
Because that has not yet been the case, because there is still a crucial component of the agreement where little substantive progress has yet been made, that confidence is fast ebbing away. If clear and credible progress is not made within the next few days, there can be little doubt that we must act and the institutions must be suspended. Neither I, nor my right honourable friend Mr Mandelson in another place could have been much clearer on that point.
I turn to deal with specific points raised in the course of the debate. First, a number of noble Lords, in particular the noble Lord. Lord Glentoran, mentioned the position of the Irish Government. The Government are in daily, if not hourly, contact with the Irish Government. We want to see the closest co-operation continue whatever setbacks we face.
Our first and shared aim is to see whether a basis can yet be found, even at this eleventh hour, on which the institutions can continue to operate with cross-community support. The only basis for continuation of the institutions is cross-community confidence. Without some significant and substantive change in current circumstances that will ebb away fast. Clearly, if there is no such improvement made quickly, both governments face very tough decisions.
I cannot answer for the Irish Government. I do not want to say anything that may prejudice their and our efforts to find a satisfactory way forward. However, the position of the British Government is clear. We have a duty to act, to preserve good government for all the people of Northern Ireland. If, because cross-community confidence has gone, the new institutions are on the point of collapse, we shall act to make alternative arrangements for good government in Northern Ireland and to preserve the institutions so that as quickly as possible their operation can be restored.

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Inevitably that will have implications for the north-south institutions, as is recognised in the agreement, which states that the functioning of the assembly and the north-south council are so closely inter-related that the success of each depends on that of the other. We shall need to make provision, in consultation with the Irish Government, for the practicalities as far as the north-south bodies are concerned. The clear principle underlying the agreement on which we shall act is that all those institutions are interlocking and interdependent.
Secondly, many noble Lords referred to the non-publication of the de Chastelain report, dated 31st January. Last Thursday, in a Statement made in another place, my right honourable friend Mr Mandelson gave a full account of the contents of the report. He said yesterday in another place,
"no further useful purpose is served by publishing the report because it does not contain additional information, other than that which I have already given the House, that would inform the House".—[Official Report, Commons, 8/2/00; col. 128.]
He added,
"in the event of a further report being delivered to the two Governments by General de Chastelain, we shall publish both so that they can be seen alongside each other".—[Col. 129.]
In relation to the contents of the report he said,
"In summary, General de Chastelain and his colleagues reported that, as far as the IRA is concerned, to date they had received no information from the IRA as to when decommissioning will start".—[Col. 128.]
Bearing in mind that the report is to the two governments, they are agreed that its usefulness to the House will arise in the event of a further report being issued by the decommissioning commission. In those circumstances my right honourable friend said he would judge it appropriate and necessary to publish both the original and further report but only at that stage. In those circumstances, I ask the House to accept the judgment of my right honourable friend.
Lord Tebbit: My Lords, I am grateful to the Minister for giving way, but what he said leaves me even more puzzled. If the Secretary of State told us everything that is in the report fully, frankly and openly, what is there that prevents him from publishing it? What is the damage in publishing the report if there is nothing in it beyond what we have already been told?
Lord Falconer of Thoroton: My Lords, the judgment is that at this stage publishing the report would not materially assist the peace process, and I ask noble Lords to accept that judgment.
I was asked a number of questions in relation to the review referred to in the legislation. First, it will be a review under the validation implementation part of the Good Friday agreement. The timescale of the review will ultimately be a matter for the parties. It is they who must work together to find an agreed way forward. Our hope is that a solution will be found quickly enabling institutions to be restored as soon as possible. The Bill before the House requires steps to be taken as
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soon as is reasonably practicable after a suspension to initiate a review. I am obviously not in a position today to say who the chairman of any such review may be.
The noble Lord, Lord Tebbit, said that the promise in relation to decommissioning was given not by Sinn Fein, not by the IRA, but by the Prime Minister. It was not the Prime Minister who said that decommissioning should and would happen; it was the Good Friday agreement. The agreement says,
"All participants [including Sinn Fein] reaffirm their commitment to the total disarmament of all paramilitary organisations".
That is what the agreement required. That is what the people of Ireland, north and south, voted for. That is why clear and credible progress of decommissioning is essential to restore confidence in the devolved institutions.
The question was asked as to whether it was possible to move this Bill without the consent of the Assembly. I can assure my noble friend Lord Desai that it is perfectly constitutionally proper to do that.
A number of noble Lords, in particular my noble friend Lord Desai and the noble Lords, Lord Hylton and Lord Armstrong of Ilminster, asked why the Assembly cannot continue meeting in shadow form but still talking. As most noble Lords recognise, the effect of Clause 1 of the Bill prevents the Assembly from meeting or conducting any business during a suspension. That means that it will not be able to function in a shadow or consultative mode. The Bill is not about providing an alternative role for the Assembly; it is about providing a complete breathing space in order for people to focus their energies on resolving the current difficulties. Of course Assembly members will continue to hold their position and still be able to make representations on behalf of their constituencies. Similarly, it will be open to the Government to consult with any individuals or parties on any matter, but not meet in the formal setting of the Assembly.
I hope that I have dealt with all of the main points raised in the course of this debate. I express my gratitude on behalf of the Government for the broad measure of support for the promotion of this Bill in another place and here today. Once again, I commend the Bill to your Lordships.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Employment
5.55 p.m.
Lord Lea of Crondallrose to call attention to changes in employment patterns in the United Kingdom; and to move for Papers.
The noble Lord said: My Lords, on 23rd and 24th March in Lisbon there will be a special summit of the European Union to be called the Special Council on Employment, Economic Reform and Social Cohesion, for a Europe of Innovation and Knowledge—not exactly a snappy title—which is

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strange, because the conference was largely inspired by the British Government. But it is nice to know that the art of compositing is alive and well in Downing Street.
When Harold Wilson made his famous speech about "the white heat of the technological revolution" at the Labour Party conference in Scarborough in 1963, the first Labour Party conference I attended, all the lobby correspondents there thought it was brilliant. They knew about as much about the white heat of technology as I did. But it was a great leap forward for the Labour Party and I certainly approved of it, even though for the citizens of Scarborough he might as well have been talking Greek.
Nowadays he would certainly add a couple of references to "e-commerce" and the Internet, calling the whole package "the new economy", and the story would be complete. Let me make it clear; it is a valid agenda and I support it. The analysis is correct. But how do jobs fit into it and the lives that the next generation will lead?
When we talk of employment patterns we think of farmers in mid-Wales, steel workers in Scunthorpe through to call centres in Glasgow and musicians in the Barbican. It is important that we do not generalise too much from any one industrial sector. Britain has created an extra 700,000 jobs in the past three years, many of them in distribution and business services, hotels and personal services. The public sector has stabilised but there should be no presumption that the big growth needed in social, health, transport and environmental services should not be through public agencies, albeit no doubt with some degree of hypothecation.
My thesis this afternoon will be that, both for economic and social reasons, we now need to put as much emphasis on the quality of employment as we do on the quantity of employment. How can we set out the vision which accommodates that? Some noble Lords may be surprised to learn that there are now as many managerial and professional workers—38 per cent of the workforce—as there are manual workers, also now exactly 38 per cent. We should not regret that in any way in so as that in itself is a trend in society towards improving the quality of employment. There was never much quality of life down a coal mine, but the redundant miners to this day do not have the quality of life of most people living in Wokingham. That is another issue concerning structural change. It was Walter Reuther, the leader of the Auto Worker of America who told Henry Ford, when the latter said he would not need so many workers, that he sure as hell needed some workers, some place, to buy his cars. So let us agree that we are talking about structural change, not the collapse of work.
There are unsatisfied demands in society. Over the past four decades civilian employment in the UK has increased by around 4 million, raising the size of the total workforce to 27 million. Most of us will have to get used to hearing the buzz words, "the new economy". I commend an excellent pamphlet entitled, Behind the Buzzword—The New Economy, written by John Philpott, 'Director of the Employment Policy
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Institute being published next week, from which I derived great benefit and on which I shall draw from time to time in my remarks.
The underlying theme is that developed economies are increasingly knowledge dependent, founded on information and communications technology, and ever more geared to the production of weightless services rather than primary and heavy manufactured goods. The idea of "weightlessness" is, apparently, attributed to Alan Greenspan, who noted that in 1996 the physical weight of US output was then little different from the 1940s, but the real value of output was three times higher. You do not need to be Einstein, or even Alan Greenspan, to work that out.
The story of economic growth is one of technological change and continuity. As one so-called "industrial revolution" succeeds the previous one, we should remember that change will be our ally as long as everyone affected can see how it can improve his or her quality of life.
Standard national statistics record that manufacturing employment is now well under 20 per cent of the total. A great deal more of the value added is now incorporated at an earlier stage in production and the computer hardware and software is itself an excellent example. But business and financial services—often serving manufacturing—now constitute a larger sector than manufacturing itself in the national statistics of employment. The jury is still out on how far the Internet is likely to lead to any step change in productivity. One is reminded of the remark of the American economist Robert Solow:
"I see computers everywhere, apart from in the productivity statistics."
The question of how we measure the value added of Internet services was at the heart of the issue of the price agreed between Time Warner and America On-Line. There are massive industrial policy issues involved here, many of which have to be addressed in the context of Europe. I am very glad that this is one of the areas on which I understand my noble friend Lord Puttnam will focus his remarks.
In some industries Europe is more successful than America. I need only mention Nokia or Vodafone to make that point. On the question of e-commerce, through Sub-Committee B of the European Communities Committee the House has an important study under way. We look forward to hearing the contribution from that committee's chairman, my noble friend Lord Brooke of Alverthorpe.
We must engender confidence in change, while recognising that disruption in people's lives is not a good thing in itself. It was one of my responsibilities at the TUC to convene representatives of managerial and professional representatives. In recent years there has been a massive groundswell of concern among them about almost every aspect of the contract of employment—whether working time, holidays, health issues and, in some cases, new technology. It is actually a big growth area of trade unionism. According to one survey, two-thirds of managers are subject to restructuring in any one year. Performance-related pay may be here to stay, but not

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everyone thinks that he is on this earth to vie with Sir Alex Ferguson as far as concerns his contract of employment. However, people do want a benchmark of quality for their contract. I have been a member of a so-called "high level" EU group on benchmarking. It is clear that adopting best practice between the countries of Europe on such questions as contracts of employment and contracts for service provision is a very useful way forward.
Women's share of employment has perhaps been the most significant structural change in recent years: 46 per cent of the labour force are now women; and about 70 per cent of all women are now gainfully employed. In the presence of my noble friend the Leader of the House (and Minister for Women), I need hardly add that women's issues have been given unprecedented prominence by this Government. They have, for example, implemented EU directives on such issues as part-time workers, fixed-term contracts and parental leave, all of which are clearly of central importance in improving the quality of women's contracts of employment and are also part of what is now called, as a new buzz word, "work/life".
Incidentally, those directives were all agreed in Brussels during the past three or four years at the instigation of the trade unions and then negotiated with employers under the Social Chapter of the Maastrict Treaty—though you would probably never know that if you relied on the press releases of the CBI or, for that matter, those from the DTI. Moreover, they are one of the most popular aspects of Europe in Scarborough and Scunthorpe, and also perhaps—I would not be surprised—among readers of the Daily Telegraph.
If we want Europe to become more popular, then any idea that these are the kind of policies we should keep out of sight is eccentric to say the least. But we must not exaggerate the number of people who are on short-term contracts at this stage. In 1999, temporary employment—that is to say, fixed-term contracts—represented 6 per cent of the labour force, if anything falling slightly. More traditional contracts continued to dominate the labour market. In 1999, they accounted for over 80 per cent of all work. Part-time work has shown a slow rise, increasing from 19 per cent in 1984 to 22 per cent in 1999.
People often talk about the seven-day 24-hour society. It may have escaped the attention of some people that three shift systems have been the norm for some industries for the past 200 years. They are now less common rather than more, even if call centres now employ two or three hundred thousand people on that basis. About 25 per cent of people say that they usually work on Saturdays; 13 per cent work on Sundays and 17 per cent work evenings. The figure for people working nights is 6 per cent and, as we established in connection with the Working Time Directive, they are basically the same people who have always worked nights; for example, those who work in emergency services, hospitals and hotels, as well as those who work as security guards and cab drivers. There is anecdotal evidence of more unpaid overtime by
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managerial and professional workers, and, of course, by teachers. But working from home via teleworking represents less than 1 per cent of all work.
I turn now to the question of job tenure. Whereas occupational change is quite rapid, this should not be confused—as I am afraid it often is—with the length of job tenure. Currently, 11 per cent work for the same employer for over 20 years, 20 per cent do so between 10 and 20 years and 19 per cent do so between five and 10 years. If you add up all those numbers you end up with exactly 50 per cent, which means that exactly half of working people stay in the same job for over five years. There was no change in that figure between 1985 and 1999.
There are more problems for older men. I would flag that up as part of the debate that has never really got off the ground in a satisfactory way; namely, the relationship between retirement age, pensions and flexible work. I know that my noble friend Lady Turner of Camden, who will speak later, has often addressed those issues. It is, of course, older workers who fear most being left behind in the development of information technology, but a recent poll found that around half of all the UK workforce shares that fear.
We face a range of separate issues in relation to young people. The Government have shown considerable courage in their policies for young people and the socially excluded. The New Deal is now about to meet its target of 250,000 in the year 2000. The dramatic increase in the demand for skills is best illustrated by the remarkable statistic that only 5 per cent of jobs offered are now for the unskilled. The national learning and skills council will have a very impressive budget of £6 billion and must set a target to close the gap in intermediate level qualifications as compared with France and Germany.
We are just beginning to counter the worrying increase in inequality in earnings from work. The minimum wage will start to help, as long as it is regularly uprated. The working families' tax credit is also a big step forward. America is more unequal than Britain or the rest of Europe, but does create more low productivity jobs. Our education reforms will ensure that we do not need to head any further in the American direction, with all that goes with that—hire and fire and winner takes all. Whatever else it is, it is not the "third way". There must be a limit to how far "downsizing" is the one knee-jerk test by the Stock Exchange for shareholder value.
The other major dimension is the regions. Public resources are, of course, crucial in dealing with the gap between winners and losers within the regions, as well as between the regions, as demonstrated by the opportune study by the Cabinet Office on regional and inter-regional disparities. The fact is that we have to run faster to stand still on regional as well as sub-regional disparities.

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Europe is starting to get its act together on active labour market policy, with guidelines on employment policy drawn up between national governments under the four headings of,
"Promoting entrepreneurship, addressing issues of employability, of equal opportunity and of adaptability".
Feedback from the TUC and the CBI has been positive both at the level of Whitehall and in the regions.
Northern Ireland has started to give a lead on this. I very much look forward to hearing the maiden speech of the noble Baroness, Lady Blood, who is from Belfast. I had some involvement with Jacques Delors leading up to the £200 million fund—300 million ecus—for Northern Ireland which, by all accounts, has led to a number of successful cross-community projects.
Regional disparities in prosperity are also at the heart of our macro-economic dilemma with what can be argued are inappropriate interest rates and exchange rates for one part of the country or another. Inward investment has made a huge contribution to keeping that problem under control and we must not put it at risk. Some 1,000 Japanese companies and 6,000 American companies already in Britain will soon run out of time for an answer concerning our future in Europe. Let us be clear, we are talking here about the British national economic interest.
We must find a stable, competitive and sustainable exchange rate. Many of us, of course, conclude that the zone of stability is the euro zone, after we have negotiated a soft landing. However, that is another debate for another occasion. I hope that I have raised enough issues for a useful debate. I beg to move for Papers.
6.11 p.m.
Baroness Blood: My Lords, it is with a good deal of nervousness that I rise to speak to this House for the first time, but also with a sense of wonderment that someone from my background should be afforded this privilege.
This House represents a world away from the one I normally work in, and I must confess that the thought of being part of your Lordships' House gave me some sleepless nights, but I need not have had such worries as the kindness and friendly welcome which I have received from your Lordships and from the attendants and other staff of this House since I arrived has made my task of entering this House painless and, indeed, a pleasant experience.
In Northern Ireland, as in other parts of the United Kingdom, employment has undergone profound change. In the past three decades, there have been changes in people's values and attitudes towards work—changes brought about by the speed of technological change and information technology, but change has also been brought about by the wider integration of global economies which has reduced the difference in time and distance.
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Within this House, and indeed within this debate today, many will speak from a wealth of experience and expertise on the subject of changing patterns of work, and will be able to quote statistics et cetera. I do not pretend to have this expert knowledge. Therefore, I beg your Lordships' indulgence; I should like to speak, for the main part, from personal experience.
When I first started work many years ago, it was commonplace for most people to stay within one company or trade for most or all of their working lives, but with the onset of new skills, new ideas and new management practice, that idea today would be the exception to the rule. Most people now work to fixed-term contracts, which afford flexibility to the company within the global market but make for a good deal of uncertainty for the workforce. If the employee is not multi-skilled and does not have the opportunity to move between companies or jobs, he or she faces unemployment over and over again.
For the past 10 years, I have worked within the social economy, working on the peaceline in north and west Belfast. It was interesting to note that the preceding debate concerned Northern Ireland. I was told that I should be witty in my maiden speech, but I do not feel witty this week. As I say, I have worked on the peaceline in north and west Belfast, seeking to influence companies to provide employment in an area of high unemployment and poverty, and working closely with government training schemes to train local people in the skills needed to secure employment opportunities when they arise. We have also looked at other ways of generating employment and bringing in funds to help to set up local employment. The noble Lord, Lord Lea, has referred to one of those. But as I have already said, many of these opportunities are short-lived. Because of the effect of change in working practices many people who take advantage of government training schemes and are lucky to secure a job find that, at best, the job lasts only one to two years and they then find themselves unemployed again.
I give an example; I know the young man concerned quite well. A young man (who has a wife and baby to support) is pleased to secure employment in a local supermarket. He comes off benefit and looks forward to supporting his family. The pay and conditions are not the best, but he views this as an opportunity to stop being an unemployment statistic. Twelve weeks later he is told that this will be his last pay packet. This has happened to this young man three times in two years. Can we imagine the loss of confidence to the whole family when once again the young man has to "sign on" the unemployment register?
That example could be repeated over and over again, but such are the daily happenings within the changing patterns of work in today's inner-city communities within the United Kingdom. We often read and hear about the breakdown of family life and social values, but can we wonder at that when so many of the values that we took for granted as we grew up would seem today to be built on shifting sand?

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It has often been suggested that Northern Ireland is particularly well placed to take advantage of the opportunity created by an extended European market, by its demographic factors and the excellent reputation of its workforce. It is also suggested that these positive factors must be matched by a perceived ability to adapt to the requirements of foreign-based companies in terms of their structures, organisation and industrial relations practices. However, we in Northern Ireland believe that this should not be an exclusive approach. There must be a continuing pressing need to develop Northern Ireland's indigenous sector as a fundamental part of our community.
Finally, the decline in traditional clerical functions within companies will impact more on women to a greater extent than on their male counterparts. In the recent past, it was women who tended to be part time or be involved in job-sharing schemes. They also tended to be mainly employed in what were regarded as non-core activities. The contracting out of these peripheral functions means that female jobs are more likely to be placed in jeopardy. As the noble Lord, Lord Lea, has already said, of course women have made progress and have established a foothold in managerial, supervisory and technical positions and within the political movement. While these gains are important as role models for other women at lower levels in organisations, unfortunately these are the kinds of jobs that are most at risk from de-layering and the present drive towards flatter organisations.
I am grateful for the opportunity to speak in your Lordships' House for the first time and I look forward to becoming a voice for the community of Northern Ireland in this House.
6.17 p.m.
Lord Howell of Guildford: My Lords, it is my great pleasure to congratulate the noble Baroness, Lady Blood, on an excellent maiden speech. She speaks with tremendously detailed knowledge, prescience and authority about a part of the United Kingdom which I know from the past. In the odd whirl of events that affect Northern Ireland, I was at one stage a Minister of commerce and of employment in Northern Ireland. Although that occurred many years ago I remember the positive qualities that the people of Northern Ireland showed, and continue to show, in adjusting to new labour market conditions. Over all the years and through all the bloodshed and difficulties I have never lost faith in the colossal ability of the people of Northern Ireland to be almost ahead of the game in adjusting to the new network age and to the new demands of global competition and of the global economy. They have done that in the past; they are doing it now; and they will do it in the future. The noble Baroness gives voice to the hopes and the immense weight of common sense which will see them through.
I turn to the broader themes of the debate. This is nothing very new. Some 25 years ago pioneer thinkers such as Charles Handy and James Robertson told a
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disinterested world that the whole pattern of the labour market was about to be transformed: that large blocks of employment were going to dissolve and whole categories melt away; that we were moving towards an era of portfolio jobs, of flexitime and of part-time and self-employment; and that there would be a huge rise in the participation of women in the labour market, but not in the traditional job patterns. They were telling us 25 years ago that the division in analysing the economy between manufacturing and services was already out of date. Manufacturing was shot through with services; services were intermingled with manufacturing; and the whole was permeated by the then embryonic information technology, which belonged to no category at all.
These matters were being set out in great detail by those seers, those prophets. They were telling us that the old familiar landscape of a job for 47 hours a week, 47 weeks a year and 47 years of one's life—which was the normal pattern, the one which all analysts, statisticians and policy makers tended to think about when they spoke about the labour market, employment and unemployment—was already dissolving.
Those ideas were highly uncongenial at the time, largely neglected and resisted. And they have continued to be resisted even to this day. I was reminded, reading today's newspapers, that one of the great citadels of resistance all along to the fact that the labour market has changed has been that noble institution, the Inland Revenue. Today what was supposed to be an avant-garde forecast has become the orthodoxy. Less than half the working population is employed in full-time, single jobs. That is confirmed by the Office for National Statistics and by the newspapers this morning.
But the Inland Revenue does not recognise that. It remains totally hostile to the self-employment patterns, to the portfolio working patterns, and to the new world which involves more than half of the working population. I spent 30 years of my life in another place as a Member of Parliament, year after year, on behalf of numerous constituents, trying to persuade Treasury Ministers to persuade the Inland Revenue that it should adjust the patterns of taxation and the schedules to take account of this totally new kind of labour market—broadly without success. Indeed, even now, according to today's Financial Times, the Inland Revenue is about to introduce a new series of rules in April which will make it much more difficult for this half of the working population to develop their skills and talents and to work properly. That is regrettable—I suppose it is understandable—and it should be noted by the policymakers, particularly those who are long on the rhetoric of the new flexible economy but a little short when it comes to making policy adaptations.
As Handy observed at the time—a quarter of a century ago—his ideas were met with "a complete conspiracy of silence" on the part of policymakers, politicians, sociologists and economists for the reason that they did not seem to fit any of the traditional preconceptions. They were not at all popular either.

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For most people, except the most independent-minded, energetic and entrepreneurial, the prospect of working outside the safe and predictable area of full-time, regular, heavily unionised employment—with a hierarchy of management from whom to take guidance and orders, and with the proper protection of labour laws and so on—seemed thoroughly frightening; they did not want to know about it.
Unfortunately, that was not the choice. Even while people were saying, "This cannot happen; it must not happen", it was happening. Policymakers found that these unwelcome events were confronting them with entirely new dilemmas. They might not wish it to be so, but huge new forces were coming together in the economy, dissolving the old patterns completely. Out of the window went the kind of image in the Lowry paintings of people crowding in their thousands through the factory gates in the morning in response to the siren. All that old world was vanishing. Encouraged by dawning new technology, as the noble Lord, Lord Lea, reminded us—I am still talking about the past—livelier firms were moving heaven and earth to contract out, to miniaturise their work units and to bring in more flexible work times and arrangements. Thousands, indeed millions, more women were working and home life and business life were being transformed. A huge expansion was under way of the informal economy—and, incidentally, of the black economy, hence the worries no doubt of the Inland Revenue—with new occupations and knowledge-based services developing of which the policymakers had not dreamed and of which no mention whatever was to be found in economic textbooks, nor yet in the works of best-selling authors like J K Galbraith and others.
A quarter of a century ago, no one had heard of the Internet or globalisation, and privatisation was in its infancy. Looking back, we can now see that a completely new network pattern was developing—held together by work and social relationships and other sensitivities—and that this was emerging with amazing rapidity and pushing aside the familiar hierarchical structures of business, politics, labour organisations and everyday life.
It was not doing that completely; I must not overstate what has happened. Indeed, the noble Lord, Lord Lea, warned against doing that. People such as Francis Fukuyama have reminded us that despite all this global networking and the rise and empowerment of the individual and so on, people prefer to work in hierarchies. Fukuyama presents us not with "Homo Economicus", who never existed except in hermetic and abstract economic theory, but with "Homo Hierarchicus", who by nature likes the world of status and place and is far more comfortable in that kind of situation than in the milieu of risk and ill-defined networks.
So motives for wanting to stay with the hierarchy concepts obviously differ, as do people. Some people want status, want to be the boss, want to be recognised as leaders and as exerting various authorities and so on, and there are those who want the familiarity and
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freedom from responsibility which a proper and safe place in the hierarchy brings. "Each in their place and a place for all", to quote the Duke of Wellington.
Businesses which are trying to drive through unsettling new arrangements or change direction sharply need leaders, strategists and generals; they do not need networks or flattened management structures. Those things which are all the fashion have to come later. So that is the counterpoint to the feeling that the entire world of labour is being atomised and unravelled.
Having said that, despite all those trends, Handy's predictions have now become commonplace. All around us this is now the new pattern. The only trouble is that the intellectual framework of debate has remained almost frozen. The thinking fraternity, sociologists, economists—especially economists—and academic analysts, with their supporting army of statisticians, have been unbelievably slow in appreciating and understanding, let alone explaining, what has occurred.
This is especially so among the social scientists and groups such as the progenitors of the so-called "Third Way", of which I have made a very close study. They seem to have alighted with surprise on trends such as the evaporation of traditional work patterns, the growth of voluntarism and the merging of manufacturing and services. These are trends, obvious to the people I have mentioned and to other people for 20 years, to which the Third Way enthusiasts seem to have arrived, breathless, very recently, as though they were new insights. In fact they have been long understood, debated and resolved outside the little world of the Third Way clique.
In the current debate the picture of what information technology is supposed to do to the labour market is deeply embodied in the public mind. It is fostered by much public comment—and it is almost entirely wrong. The conventional thinking insists that new technology is bound to eliminate jobs, replace people with incomprehensibly fast and powerful machines, replace unskilled and semi-skilled workers with fewer skilled technicians and create the foundations of a jobless society. In so far as a mass of workers has a future in such a scene, it is argued, it will be in low-skilled, low-paid service jobs, creating new divisions and social polarisation.
In the real world, the pattern now evolving before our eyes is going in a diametrically opposite direction. Jobs are disappearing and appearing, as we know. There is a pattern of gains and losses and winners and losers. But the much more significant pattern overlaying it is one of a vast new variety and complexity in which the old job classifications are meaningless and in which the labour market becomes a fragmented mosaic of new skills, flexible work times and spread out locations. I would not for a moment question the issue debated in your Lordships' House yesterday; that the totally unskilled need to be vastly upgraded to acquire skills and that all efforts must be thrown into that task. But one must keep the matter in perspective. Those prepared to perform jobs which

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require a mixture of hard physical work, as in construction, but also a good technical knowledge, will be increasingly valued. I was fascinated that the great manual of the network society, Manuel Castells' volume, The Rise of the Network Society, points out that work in agriculture—farm work and land related work—is actually rising in the advanced societies. All the textbooks stated that it would fall, but more and more people are being drawn into that sector.
The overall message is clear. Information technology and its widespread application to all walks of life has little net impact on levels of employment. It creates a world in which ponderous giant trade unions, locked into dying categories of skills and industry, have a dwindling part to play. That explains entirely the huge decline in trade union numbers in several countries, including the United Kingdom. It creates conditions in which the building blocks of class warfare and social division have crumbled. Bosses and capitalists are no longer the identifiable enemy, ever available for demonising. With the help of wider ownership, those distinctions have begun to blur. The information age has created massive popular ownership on a huge scale far more quickly than many of us dreamt of 10 years ago. That too has created totally new conditions.
Not only academics but also policymakers, political parties and leaders have been slow to the point of paralysis in responding to the new trends. Political speeches and vocabulary continue to be couched in terms appropriate to a vanished employment age. Pretensions of economic control over events remain undiminished. Officials and departments continue to serve up categories and concepts for parliamentary and public discussion which bear no relation whatever to the real world or to the everyday events and influences shaping work, business and society. I am glad that your Lordships' House—your Lordships' transitional House—has shown that it can address those issues in today's terms instead of the terms of yesterday's pretences.
6.33 p.m.
Baroness Turner of Camden: My Lords, I welcome the opportunity to participate in the debate. I am grateful to my noble friend Lord Lea of Crondall for introducing it and for the stimulating way in which he did so. I am extremely pleased that the noble Baroness, Lady Blood, chose this debate in which to make her maiden speech, which I found interesting and, indeed, extremely moving. I hope that we shall hear a great deal more from her in the future.
There is no doubt at all that there have been changes in the pattern of employment in the past 20 years or so. Those seem largely to have been brought about by changes in technology, by the information revolution and increasing globalisation—although of course political policies have played a part. We have seen the decline in Britain of heavy industry and the growth of technology-based industries. That has meant that some former centres of manufacturing industry have become impoverished, with high levels of
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unemployment—particularly male unemployment. It has led also to a growth in areas devoted to newer industries—notably, but not only, in the south-east.
There is a general perception that such factors have wrought a major change in the way in which working lives are spent. A belief exists that years ago, in some golden age, the majority of the workforce were employed by a single employer for all their working lives, but now this has been replaced by a new flexible pattern of constant mobility and movement from job to job. That view is overstated. I have a copy of an interesting report prepared for the National Association of Pension Funds, The flexible labour market: implications for pension provision, which also points out that that view is overstated. Such a lack of security was almost always the fate of lower earners and of manual workers, except those in communities such as that of mining, where people tended to remain rooted in their working environment.
In recent years, some areas of white-collar employment, hitherto regarded as safe and secure, have ceased to be so. That is particularly true of financial services, where the impact of technology and ever increasing competition has resulted in mergers, which themselves have caused job losses. Unions have often protested at the way in which such mergers have been carried out, with little advance warning for the staff involved. Sometimes the first that staff have heard of a merger has been in a radio announcement, together with a statement that there would be a loss of some 5,000 jobs. Unions believe it is wrong that the interests of staff should be entirely disregarded in pursuit of greater profitability. I share that view.
Those changes have for the first time had a major impact on white-collar male staff. Many such employees, made redundant in their mid-50s, do not join the labour market again. That often represents a loss of skill and experience that could be ultimately disadvantageous. We are often told that we are all living longer. Usually, we are told that in the context of discussions about how much the NHS is likely to cost later in this century. But one of the ways of keeping healthy is to have an active involvement in the world around one, in addition to being economically productive. So there are benefits all round in keeping older people in some sort of employment. I believe that there should be legislation against age discrimination, although I understand that the Government's preference is for a code of practice. Perhaps the Minister will enlighten the House on that point.
Another major change has been the involvement of women in the workforce in a way not envisaged 40 years ago. My noble friend Lord Lea mentioned that point. There has been an increase in part-time employment. In 1998, 25 per cent of employees worked part time—the majority of them women.
It is clear from recent research that most part-time employees work part time because they prefer it. Only 11.5 per cent said they would prefer to work full time. It is mainly women with young children who find such a work pattern acceptable. However, there is a need to improve the status and conditions of some part-time

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work and I therefore welcome the consultation exercise which I understand is currently being undertaken by the Department of Trade and Industry.
The Government have been particularly keen to get lone mothers into employment, believing, with some justification, that work is the way out of poverty. Recent research published in the November issue of Labour Market Trends indicates that while the employment of what are called "couple" mothers—that is, mothers who are married or in some sort of relationship—has increased to 68 per cent from 61 per cent a few years earlier, that of lone mothers has remained stable at around 44 per cent, having risen more slowly.
The survey points to a widening gap between the employment of "couple" mothers and lone mothers. A number of factors have been indicated for that difference: lone mothers' relatively low involvement in the labour market before parenthood; their lesser access to childcare; their concentration in areas with poor local job opportunities; and features of the tax and benefit system that limit their financial gains from employment. There have been several pilot schemes and it is notable that the lone parents who have most profited from them and secured employment are those who already possess educational qualifications which gave them access to reasonably well paid jobs.
On the other hand, it is my view—I have said this in social security debates from time to time—that pressure should not be exerted on lone mothers of young children to work outside the home unless they really want to do so. There seems little point in paying for expensive childcare if the mother would prefer to look after her children herself while they are young and perhaps take advantage of educational opportunities available, through home study, so that she can take advantage of job opportunities when her children are older. We should have in place social policies that make such choices genuinely voluntary.
Despite the increasing involvement of women in the labour market, there are still problems, as the recent survey of the Equal Opportunities Commission indicates. Women's earnings are still substantially lower than those of men, and most of the low paid are women. The Government have made a good start on this problem through the introduction of the minimum wage and the working families' tax credit. Although I think the minimum wage has been set too low, it has still benefited about 2 million workers—most of them women. Moreover, the predicted job losses did not take place. We must all welcome the Opposition's conversion to the cause of the minimum wage. It is largely due to its introduction that the EOC can report that women's earnings are now 80 per cent of men's rather than 77 per cent, as formerly.
Nevertheless, low pay still remains a major problem. A substantial minority of the British workforce spend their entire working lives in a cycle of disadvantage, moving between tow-paid jobs, often with spells of unemployment or inactivity in between. Those who are low paid tend to be older men, some women or people with few educational qualifications, and they
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are likely to experience persistent low pay. Young people may be among the low paid at the beginning of their working lives, but many tend, as they change jobs or make progress within an organisation, to become established on a stable upward trajectory which peaks in their late 40s.
It will be seen, therefore, that the emphasis on education and training, which has been such a basic feature of government policies, is correct. Incidentally, partnership with the trade unions is important. Unions are keen to ensure that their members take advantage of whatever employment training opportunities are available. I commend the Government on the improvements that have been introduced as far as concerns trade union recognition and trade union legislation. Those changes have not led to unemployment, as was predicted at the time.
We are currently in an economic boom. Unfortunately, not everyone is benefiting from it. Those who are not are likely to be from disadvantaged backgrounds, with poor educational attainment. Quite obviously, economic upturns should, as far as possible, offer benefits to all. So far, they have not done so. I believe that the Government have in place policies which help and which can be built on. Yes, the employment scene is changing. The changes will favour the skilled, the educated and the entrepreneurial. But disability, age, and social disadvantage should not lead to social exclusion. The changes in employment patterns—the subject: of today's debate—should not involve the creation of an underprivileged underclass.
6.43 p.m.
Lord Dahrendorf: My Lords, this is one of our Wednesday debates. I am delighted that we can continue to have them, and continue to have them in the middle of the week. It gives me an opportunity to take up the challenge offered to us by the noble Lord, Lord Lea of Crondall, and to discuss, at least briefly, a problem without actually offering a solution, which I suppose is what we usually do on Mondays, Tuesdays and Thursdays. The earlier debate today strikes me as having also been one which presented us with a problem without having a solution. But that is another matter. In the process, perhaps I can do a little to redeem the thinking fraternity, which attracted the gentle irony of the noble Lord, Lord Howell of Guildford.
Like the noble Lord, I believe it is a mistake to use traditional language and concepts as if the world to which they apply had not fundamentally changed. That is true for work; it is also true for a concept like unemployment; and it is certainly true for a concept like full employment. The major changes that have taken place have been mentioned, so I can be brief on this point. But perhaps I may remind the House of two processes which strike me as particularly important. The first has been mentioned by almost everyone who has spoken. It is the massive growth in non-standard employment. By that I do not merely mean part-time or fixed contract employment but also a new form of self-employment. It is not strictly self-employment as

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the term used to be used. It ties individuals to particular employment contexts but at the same time turns them into self-employed people, whether self-employed porters at a television station or self-employed drivers for a company.
I know that this is one of the cases where the glass is both half empty and half full. I shall use figures in my comments which come largely from what I regard as the most informative empirical study on the whole area of work and life. I refer to the British Household Panel Study, conducted at the University of Essex on behalf of the Economic and Social Research Council, and in particular to the publication by Jonathan Scales entitled The Future of Work and Lifestyles, which was produced for the Debate of the Age organised by Age Concern.
In 1970, 20 per cent of people were in non-standard employment. In the early 1980s, the figure had risen to 30 per cent. By the late 1990s, the figure had reached 40 per cent. I am not suggesting—and no one would suggest—that that can be extrapolated to 100 per cent. But it is an almost undeniable fact that we now have two types of employment. We have standard employment, with some of the certainties and uncertainties which it has always had, and we have a massive incidence of non-standard employment.
The other important trend—little has been said about it so far—is the strange reduction in the proportion of the economically active population. That is true both at the young end—at any rate for men, who find it difficult to enter the labour market—and at the older end; again, primarily for men but not only for men. Here we have some of the elements of two of the major social problems facing us.
In the case of young men who find it hard to enter employment, we are quite close to some of the problems of crime which worry us. At the older end, we have very considerable problems for our benefit system. The fact is that, of 61 to 65 year-olds, only 40 per cent are still in employment. Incidentally, compared with other European countries, that is a high figure. In most European countries, the percentage is even lower. The fact that only 40 per cent are in employment tells us a story about the role of work in the lives of our fellow citizens, especially at a time when, fortunately, life expectancy has gone up.
If there were more time, I would outline a third trend which was mentioned by the noble Baroness, Lady Turner, and other speakers. I refer to the strange new inequality which has emerged from changing work patterns. There are some, perhaps a growing number, who seem to have all the disadvantages while others have all the advantages. There are people with a low level of education and income; who are subject to greater health risks; who live in worse housing; and who participate less, generally.
Let me concentrate on the other two trends. The problem that I draw from their existence is that, nowadays, even paid work fails to solve some of the problems that work solved in the past, notably paid work. I do not suggest that that is necessarily a bad
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thing. I do suggest, however, that it forces us to rethink a whole range of issues. I merely mention two, which are of major, and in some cases immediate, significance. The first is entitlement to benefit—in a sense, the Inland Revenue problem, the non-acceptance of changes which have consequences for the way in which redistribution is organised.
Linking benefits to jobs is all very well but, given the new working patterns, it is not good enough. We must try to achieve a greater separation of people's entitlements from their employment. That means that the entitlements must be more closely associated with the individuals, and less directly associated with the jobs that they do.
We see the beginnings of that change in the Learning and Skills Bill that is before the House. I refer to the introduction of individual learning accounts. That is precisely what I have in mind when I argue that changing patterns of work require that benefits become transportable in a more effective way than was the case when they were totally linked to jobs. That is true also in the field of pensions, although I am hesitant to enter into a serious discussion of pensions in the presence of the noble Baroness, Lady Turner, who knows so much more about the matter. It seems to me that the separation of the redistributive elements of the welfare state from jobs is an almost necessary consequence of changing work patterns.
There is another equally serious, if less tangible, point. I speak about it with some hesitation. It is the fact that work no longer provides the degree of satisfaction, meaning or content in life for many that it may have done in the past. To take up the impressive language of the noble Baroness, Lady Blood, work no longer provides the kind of content in life to which many of us have been used.
The survey to which I referred includes an interesting table relating to life satisfaction. One set of figures may be interesting in this connection; namely, a category of people who were employed one year ago and are now unemployed. According to the survey, a third say that they are more satisfied with life; a third say that they are less satisfied; and a third say that life is much the same. I do not want to over-interpret the figures, but it is probably true to say that the relationship between the work that people do and the general satisfaction that they feel in life has become more tenuous. Indeed, work no longer structures people's lives as effectively as it may have done in earlier times.
By the same token—this point is relevant to those who make the provision of work one of the main planks of social policy—work also no longer provides the degree of social control that was implied in the past. I disagree with the noble Lord, Lord Howell, in his praise for hierarchy. Where there is hierarchy, there may be social control. However, one of the changing patterns is that there is simply not the same degree of hierarchy, and social control cannot be exercised through the employment system alone. That is where a very big problem arises in terms of social cohesion.

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Changes in work patterns make it extremely hard to see how societies are knit together and how they are supposed to hold together.
Many proposals might be discussed in the practical field. There is the question of basic incomes and their effect on cohesion, as well as on the transportability of benefits. I am one of those who regard the working families' tax credit as a step in the right direction. It does not get us there, but it is a step in the right direction, and that is better than staying put or going back.
There is the great issue of voluntary activity. I am pleased that, in a speech today to the National Council for Voluntary Organisations, the Chancellor of the Exchequer made an effective plea far strengthening voluntary activity and supporting it, in part, through the instrument of a modernised Inland Revenue and through other means at his disposal. There may be other things that can be done. However, my problem is that work does not do the trick. Given changes in expectation and working patterns, the view that jobs can still be used to the same end as they were often used in the past is misguided.
At present, many trends work against social cohesion. The new inequality certainly does not help. Unless we take the matter as seriously as it needs to be taken, we run the risk of creating societies that call for authoritarian leaders rather than relying on civil methods. Against that background, tackling the consequences of changes in the world of work is essential.
I conclude with, an abject apology. Owing to shifts in the timetable for this debate, for the first time since joining this House I may not be able to be present for the entire debate. However, I promise that, for me, this occasion will remain the singular exception.
6.59 p.m.
Lord Puttnam: My Lords, I, too, am grateful to the noble Lord, Lord Lea, for introducing this timely debate. It has far-reaching implications for the future of all of us. I should like to congratulate the noble Baroness, Lady Blood, on her maiden speech. It was wonderful to hear an authentic voice of experience in this House. I am delighted that the noble Baroness has joined us and look forward to hearing from her on many future occasions.
I think I detected a sense of frustration in the remarks of the noble Lord, Lord Howell. I share that frustration. It is odd that in the year 2000 we have to reiterate and anticipate facts which have been relatively common knowledge for 20 years. We all share some blame for the fact that as a nation we are not better prepared for the changes in the workplace that overtake us.
The world of work is undergoing some fundamental changes, and I believe that they will affect every aspect of our lives. "The Internet economy", "the wired world" and "the learning society" are no longer just buzz words; they increasingly define the world that we inhabit. The days when any nation such as ours could remain competitive based on large manufacturing
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industries, or a largely agrarian economy, are rapidly drawing to a close. There will still be a place for those industries; we still need refrigerators and food to put in them, and cars and the fuel to power them, but these industries can no longer serve as the locomotives of our particular economy if we are to have the remotest chance of remaining competitive on a global stage.
I suspect—in fact I know—that some noble Lords remain sceptical about the new e-economy. They imagine that it is simply a blip along the timeline of the ordinary working world and that somehow things will eventually settle down and return to the world lamented by John Mortimer in last Sunday's Observer where life revolves around the village post office, grocer and local craftsman. If one looks at the ordinary lives of many in the country it is true that things seem to be going on much as before. People quietly go about the same or similar jobs that they have had for the past 30 years. Every time there is a dip in the share price of Yahoo or Amazon.com it is reassuringly possible, somehow, to dismiss the Internet revolution as yet another "over-hyped, over-here" phenomenon created in the fevered imagination of some American futurologist.
I no more wish to be viewed as an alarmist than to stand here 20 years from now shaking my Zimmer frame and saying, "I told you so!", but in our anxiety about the future we are in danger of becoming almost a nation in denial. We must acknowledge and adjust to future realities, or we shall be left floundering in their wake. Growth in the western economies is now being driven by the astonishing rate of the development of the world-wide web and e-commerce generally. When President Clinton came to office there were just 50 websites in the entire world; now pages are being added at the rate of over 100,000 per hour. Another 100 million users will come online this year. But in the end it is not the technology itself but the way that it is used and regulated which will define the scale and nature of these changes.
In some respects it is reminiscent of the development of the railways in the 19th century, only much more rapid and, to some extent, profound in its implications. It is well worth remembering that, in the end, what changed rail travel into a genuinely mass form of transport was not any particular technological development but a simple piece of parliamentary legislation which required every public railway to run trains on a daily basis, and at appropriate times, to enable working men and women to travel to and from their places of work at a flat fare of a penny a mile. It was perhaps the first recognition of the benefits that can flow from what we have come to call "universal access".
The value of the railways in both social and commercial terms lay precisely in the notion of universal access. In the space of a very few years cheap travel swept away those factors which had, since time immemorial, kept the vast majority of the population at home or close to the place in which they were born. The railways made it possible for one to travel further afield for work; to read the same morning newspaper, even in rural areas; to send a letter to the other end of

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the country overnight; and to visit a friend or have a day out. It even made possible the development of today's Football League. The greater the access to rail travel, the more varied became its impact on society and culture; and the more varied that impact the more it became an indispensable part of the life of the whole nation.
The stock prices of the railway companies soared and tumbled just like the Internet start-ups of today, but the railways themselves were here to stay. They changed our economy and the social fabric of the nation for ever. I believe that the impact of digital communication on the information age will in many ways parallel this, albeit in a very different form, perhaps on an even more dramatic scale.
I shall try to illustrate the scale of change in another way by using the London Stock Exchange as an example. In a recent article in Science and Public Affairs, David Potter, chief executive of Psion, observed that in 1984 the 10 largest firms by value quoted on the London Stock Exchange were: BP, Shell, GEC, ICI, BAT, Glaxo, Marks & Spencer, Grand Metropolitan, BTR and Beecham. Their combined market value at that time was £40 billion and their net assets were also £40 billion. Between them they employed a little over 1 million people. Today, the 10 largest firms are: BP-Amoco, Shell, BT, Glaxo-Wellcome, HSBC, Lloyds-TSB, Smithkline-Beecham, Vodafone, Diageo and AstraZeneca. Their combined value is £340 billion and their net worth is £90 billion. They employ about 750,000 people. Six of those companies deal in intellectual property rights (IPRs) and are not valued for their capital stock; nor is any of them an "industrial" in the accepted or traditional sense of the word.
I give another more topical illustration: Vodafone's 113 billion dollar acquisition of Mannesmann last week. As Lex observed in Saturday's Financial Times, this new company will be worth 16 per cent of the entire Footsie 100. If one adds together the food, drink and tobacco sectors, throws in electricity, gas and water and then aerospace, defence, steel, engineering and construction, all of those sectors together just about equal the value of the newly-enlarged Vodafone—which was a company that did not even exist a few years ago.
One of the implications of all this is that the new economy is already with us. Regardless of the share price of Yahoo today, tomorrow or even a year from now, like the railways this is an economy that is here to stay. It is a global economy which tears down trade and cultural barriers alike. Just watch the impact that Vodafone's bid for Mannesmann will have on other long-sheltered titans of German industry. Suddenly, they are as vulnerable to predators from across the world as anyone else.
In this new "knowledge economy" value resides overwhelmingly in intellectual property rights—human knowledge—which are now termed intangible or weightless goods. The noble Lord, Lord Lea,
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explained exactly what that term meant and from where it came. In the new economy competitive advantage increasingly means knowledge advantage.
As I said in this Chamber only two weeks ago, all of this has an enormous impact on patterns of employment. The job for life, the nine to five working day and the single male breadwinner are very much things of the past. Whole industries are being restructured; payroll, procurement and pensions are all moving online. Gone are the days of the set, but comforting, pattern of education, work and then retirement. Increasingly, individuals must adapt to the rapidly changing demands of the job market.
I offer a couple of small but quite telling examples. Between 1979 and 1998 the number of self-employed people among the managerial and professional classes in the UK grew by 300 per cent. I was told only last week that today one person in six in Britain works for a business that did not exist five years ago.
All of this throws up enormous challenges for policy makers. How can we provide for such a varied pattern of work? What will these changes mean for the non-work aspects of our lives, including our families and leisure? How can we ensure that people have the opportunities to act flexibly to meet the new demands of the future workplace?
I listened with real interest to the noble Lords, Lord Dahrendorf and Lord Howell, and my noble friend Lady Turner, who spoke about the commercial and social impact on society. Above all, it poses a massive challenge for our educational system. We need to tie our learning institutions ever more firmly to the world of business. Many of our universities remain relatively dislocated from industry; and that is certainly not so in the United States, where business and higher education work hand in glove with industry and government. The result is an economy that plays fully to its strengths, where the academic world meshes with business and government to create a seamless web of support for America's strategic and commercial interests. I do not pretend that it is an immaculately conceived fact of life, but it is the net effect of industry, government and business working together with the academic world to ensure that they move forward as a coherent modern economy.
President Kennedy once said of his country,
"Our progress as a nation can be no swifter than our progress in education".
At the beginning of the 21st century that statement carries a ring of truth that he and his advisers could scarcely have imagined possible.
It is a cruel fantasy to believe that the UK can maintain a competitive economy without embracing the fact that our entire economic infrastructure is being transformed by the digital technologies. Increasingly, we as a nation will be judged by the quality of our skills and the depth and versatility of our knowledge-based workforce. That is why the quality of our education system, and of our educators, is of absolutely fundamental importance to any future prosperity of this country. Change, not just in

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employment patterns, but in the economy more generally is all around us. We diminish it or, worse still, ignore it at our peril.
7.11 p.m.
Lord Haskel: My Lords, I, too, congratulate my noble friend Lord Lea on introducing the debate. Employment patterns are changing. I welcome this opportunity to debate these changes which affect the working lives of us all.
It seems to me that the elements causing these changes are a commitment to enable all to work in the face of the harsh realities of the global market; and the realisation that a healthy economy and a fair society are not opposites but the same side of the coin. So how will those factors affect employment patterns in Britain? What changes will they bring about?
Some of the pieces of the jigsaw are already apparent. My noble friend Lord Lea told us about the new economy. He is right and I thank him for explaining it to us. It is crossing the Atlantic from the United States—and why not? Look what it has done for the United States over the past 10 years. Ten years ago the American economy was in decline. Today it has outpaced us all in productivity and job creation. The key to the new economy is information technology and the Internet.
I agree with my noble friend Lord Puttnam about the importance of e-commerce. That is important in the real world. However, I differ from the conclusions he draws about the stock market world. The stock market world is distorted by crazy share prices, the current fashion for high technology, and by opportunistic financial short-termism. That is why Amazon.com is 40 per cent off its peak and Yahoo is 35 per cent off its peak while, in the rest of the world, life goes on as normal. These are huge changes.
Information technology and e-commerce is only just starting here. However, its impact on employment patterns will be enormous and inevitable. Last week British Airways announced that 50 per cent of its ticket price sales will be via the Internet by 2003. The Prime Minister has undertaken that 25 per cent of government business will be transacted over the Internet by 2008. He obviously means it because he has appointed an information technology czar to ensure that the skills and technology to carry that out are firmly in place.
We no longer need computers. Our family-friendly television sets are beginning to serve just as well; so are our mobile phones. As British firms try to compete with low labour costs overseas, the pattern of jobs is changing in the manufacturing sector. The noble Lord, Lord Howell, reminded us that that has been happening for 25 years. But today the situation is different. British firms have turned to information technology and mass customisation. Indeed, the division between manufacturing and services is becoming more and more blurred. Mass customisation is itself becoming a service, while in the world of the new economy, services become experiences which have to be available seven days a week, 24 hours a day.
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Therefore, I think that we can discern a more ruthless economy based on attacking the status quo and the entrenched players with new technologies and working methods that improve or replace earlier ones. That ruthlessness will certainly change the pattern of jobs, particularly in retail. It will mean many lay-offs as the old skills become obsolete and new ones are needed. The noble Baroness, Lady Blood, told us that in her excellent maiden speech. More change, more insecurity and more stress will be the pattern; perhaps all with the same employer, not because of job protection which has no place in the new economy, but because employment nowadays is continued at the same firm by continuous learning and training. Quite rightly, the Government are making that a cornerstone of their policy.
But if the new economy is to be successful, it requires not only new skills, but also a higher degree of commitment and responsibility from both employers and employees; for example, trusting people with sensitive information which has been kept previously confidential. The new economy demands new attitudes towards team working and loyalty. The new 24-hour service economy does not require the long hours that seem prevalent in this country. My noble friend Lord Lea reminded us about shift working. It requires flexibility, but not the flexibility of easy hire and fire. It requires employers to be flexible and helpful over hours, and employees to be reliable.
I expect the future pattern of work to be one of flexible hours with job-sharing instead of a long working week, especially as more women work. Social trends tell us that a quarter of women working full time work flexible hours.
I do not believe that we shall all be working at home on computers. The case for teleworking has been overstated. It may mean that some highly talented people may work at home perhaps for more than one company, but in general people need to react with people. Creativity and innovation rarely happen in isolation. Human contact cannot be replaced by information technology. Indeed, according to recent figures, the percentage of the workforce who telework has been pretty static for the past couple of years.
Neither do I see any great increases in leisure time. Ten years ago we were told that the biggest social problem today would be filling our leisure time. Instead, we are working the longest hours in Europe. What I think is inevitable is rising employment in personal services, as we all become better off—that half of the economy which is not affected by information technology. The noble Lord, Lord Dahrendorf, referred to it as the non-standard employment.
Information technology is more likely to replace financial trading before it replaces gardening, childminding or recreation. That will mean working all hours, but not necessarily for low pay.
That is how I think that the new economy will change our patterns of work. But there will he other effects. It will increase the inequality of earnings. My noble friend Lord Lea told us that 5 per cent of jobs

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offered are for the unskilled. Looking at social trends, it appears that self-employment is becoming the pattern for the unskilled. Sixteen per cent of men in work in the spring of 1999 were self-employed. One-quarter of these worked in construction and were mainly white. Of the remainder, by far the most were from the Indian sub-continent and worked in distribution, hotels and catering. They are victims of the ruthless economy—the socially excluded—referred to by my noble friend Lady Turner. The stress of the ruthless economy will increase pressure on personal and family life. To make it all worth while people will want a government who deliver a sound economy with low inflation, low interest rates and tough regulations from competition.
But social justice and fairness are also part of this sound economy. That too will affect the patterns of work. Indeed, the effect has already begun. My noble friend Lady Turner told us about the minimum wage, the Working Time Directive and the working families' tax credit.
All that points to an enormous amount of power in the hands of the leaders of business and industry. Perhaps these are the authoritarian leaders to whom the noble Lord, Lord Dahrendorf, referred. How can this be balanced so that employment patterns are not just a matter of their whim? Regulating employment is fine and necessary, but it is only part of the answer because after a while diminishing returns set in. Regulation has to go hand in hand with the creation of quality jobs and quality work in maintaining a healthy economy so that Britain is a good place for business. That is a far greater incentive than any kind of protection.
Employers then have every encouragement to provide training and opportunities for lifelong learning and to provide work because they need the staff and have a loyalty towards them.
But power is increasingly held in the global private sector. Decisions taken outside our borders affect employment patterns here in Britain. What can we do about that? In addition to a sound economy, perhaps the Government could look at the United Nations report on business and human rights, which was released at the end of last month. It outlines nine core principles on standards of labour, human rights and the environment. It seems to me that the economically powerful would be happy to accept these principles in return for the sound economic conditions provided by the Government. That seems sensible to me because, after all, the business of business is to serve society.
7.22 p.m.
Lord Eatwell: My Lords, I must confess that at first I was a little puzzled as to how to approach the topic of this debate, for changes in employment patterns are essentially the outcomes of the interaction of a complex range of processes. It is those processes which are the determinants. It is the patterns of employment which are simply determined.
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So it seems to me that the real issues at stake in this debate are those determinants of the patterns of employment, predominantly demographic, economic, technological, and political, and the relationship between those determinants and the economic well-being of the British people. It is therefore no accident that many noble Lords who have spoken already have focused on technical, economic, political and demographic changes in describing the changes in the patterns of employment in the UK.
I do not intend to deal at length with the demographic issues, important though many of them are. The increased labour market of participation of women, the ageing of population and the high mobility and economic flexibility of the immigrant population have all had, and are having, a significant impact on the performance of the economy and on the pattern of employment. They are, if one likes, the supply side of the employment equation as, to a certain extent, is the important issue of the quality of education and training the major determinant of the flexibility of the labour force as a whole.
Instead, I wish to concentrate on what is really the fundamental economic factor which determines the pattern of employment and indeed its overall level. That fundamental factor is the demand side of the labour market. Later on, I shall turn to some of the political and policy issues.
The size and composition of the demand for labour depends, so far as the private sector is concerned, on the growth and decline of industries. But even here there is no one-to-one link between the growth of a particular industry and employment in it or indeed between the competitiveness of an industry and the pattern of employment in the economy as a whole.
For example, a vital component of the UK economy today, as indeed for many years past, is our manufacturing industry. That is because it produces a very large proportion of our tradeables—that is, the goods we sell abroad and/or the goods which compete against imports from abroad. It is also because the performance of manufacturing industry is one of the prime determinants of the overall growth of productivity and hence of the competitiveness of the economy.
The peculiar importance of tradeables is that, at high levels of domestic demand which are enough to secure something like full employment, the balance of what Britain buys and sells must be sustainable. That means that we must be able to compete. If we cannot compete, then high levels of demand will simply suck in more and more imports and we shall run up larger and larger foreign debts to pay for them. So a competitive industry producing competitive tradeables is one of the basic components of any sound employment policy.
But, while a competitive industry is the indispensable foundation of a sound employment policy, it does not matter at all how many people are actually employed in our competitive manufacturing and other industries. All that matters is that they should be competitive. For example, let us suppose

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that only one person were employed in all manufacturing industry perhaps to switch on in the morning and switch off in the evening. That would not matter so long as that one person were backed by sufficient capital to ensure that he or she produced the requisite exports to pay for the goods and services that we import at full employment levels of demand. Only one person would be employed in manufacturing, but the competitiveness of that individual would be the key factor that permitted the full employment of the labour force in other sectors of the economy, including the public sector with perhaps more nurses and policemen or perhaps more university teachers.
So the fundamental issue in the modern highly competitive world in which we live today is whether our economy is competitive. If it is not, then it will be increasingly difficult to sustain full employment and such employment as can be sustained will tend to be increasingly low skilled and low paid. If the economy is competitive, then not only will it be possible to sustain full employment but also the pattern of employment will tend to consist of more highly skilled, more fulfilling and more varied jobs.
It is important to notice that attaining competitiveness is not just about ensuring that existing industries invest in the people the capacity and the innovation that will place them at the forefront of international markets. It also demands that there is a framework of ownership, of corporate government and, where appropriate, of regulation within which the industries of the future can flourish. That is why our approach to the development of the electronic media is so important today. That is why the speech of my noble friend Lord Puttnam was so important.
The growth of information systems, of electronic commerce and telephony and the link between all these and the traditional media of radio, television and film, is transforming today's economy as radically as the introduction of the steam engine did in the 19th century or indeed widespread electrification in the 20th century. Those great technological innovations created entirely new industries and revolutionised the old ones.
That is what is happening again today—with one added ingredient. Today, innovation in information technology, in telephony and in broadcasting is happening in the context of a highly competitive international economy. In that international economy, location—where you physically happen to be—is becoming far less important than it has ever been in the past. If we here in Britain are to compete in the future—if, that is, we are to maintain full employment and generate a fulfilling pattern of employment opportunities for the British people—we must ensure that there is a framework of industrial policy in place that will secure for Britain a position at the forefront of innovation in industries, new and old, fashionable and unfashionable, on an international scale.
That leads me on to the issue of policy. The rapid changes to which noble Lords have referred create major difficulties for policy makers. To illustrate those
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difficulties, I shall concentrate my remarks on a distinctly unfashionable—indeed, old-fashioned—industry: radio. In doing so, I declare an interest as chairman of the Commercial Radio Companies' Association, but what I have to say will apply as much to commercial radio as to the BBC. I also declare an interest as a director of Anglia Television, a component of the United News and Media group, because I shall have something to say about television later.
Radio plays a large role in the lives of the people of this country. Nine in every 10 people listen to radio for an average of 24 hours a week. Compare that with the average television viewership of 27 hours a week. So, in terms of consumption, radio is roughly as important as television. Yet radio is neglected in government and by the upper echelons of broadcasting policy makers. For example, last year there was a DCMS survey of household attitudes to BBC services. There was no question at all on radio. Why not? Perhaps the Minister will explain when he sums up. In the Davis Report on the future of digital broadcasting, there was again no mention of radio. Finally, last year at the Prix Italia broadcasting awards, a world showcase for all that is best in broadcasting, the Chairman of the B BC devoted all his remarks to television at what was supposed to be a television and radio event.
Those examples are rather limited and represent a regrettable neglect. But they also represent a folly. Radio is part of the electronics revolution. Indeed, as noble Lords are probably aware, mobile telephony is referred to in the United States as "wireless".
Perhaps most important of all, like all electronic media, radio is facing the digital revolution; a revolution which embodies the potential not only of very high quality sound, transmission and reception, but also could, if there were a total switch to digital broadcasting, permit a far more intensive use of that most scarce of all commodities in both broadcasting and telephony: the radio spectrum.
Digital radio will also produce a huge increase in choice for listeners and, by making more effective use of the spectrum, a huge increase in access for broadcasters of all kinds; that is national broadcasters, community and ethnic groups and all kinds of social interests.
Digital radio will also simplify broadcasting by Internet. In a few years' time, as many people will receive their radio programmes via the Internet as via a conventional radio set. The origins of those radio broadcasts could be anywhere in the world. In just a few years, competition between British commercial radio and the BBC will be a minor side show in a world-wide competition for audiences.
In this country, we have the opportunity to succeed in that global competition. Crucially, we have the product in quality radio broadcasts across the range of music and speech produced by the BBC and by our commercial broadcasters. We have the industry skills to make this a very British success story. Only outdated legislation stands in the way.

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First, successive Secretaries of State, acting under the Broadcasting Act 1990, have allocated only sufficient spectrum to digital radio for it to reach 75 per cent of the population. Do the Government simply not care about the other 25 per cent of listeners? Perhaps the Minister will tell us. Is it not clear that lack of access to digital radio will stifle investment in the industry?
Let us take another example. In order to encourage investment in digital radio, the 1996 amendments to the Broadcasting Act permits foreign—that is, non-EU—investment in the digital sector. But at the same time, highly restrictive ownership rules severely handicap domestic commercial companies from achieving the size which would generate the revenues to fund the investment that is necessary. While welcoming foreign investors with open arms, current legislation leaves the British radio industry fighting competitive battles with its hands firmly tied behind its back.
Thirdly, the sensitive and complex issue of a switch-over date from analogue to digital services is being neglected by the Government. Without consideration of a switch-over date, there is little incentive to invest, particularly in the production of reasonably priced receivers.
The radio industry is working hard to achieve digitisation. The BBC and commercial radio are working together in a public-private partnership to persuade the equipment manufacturers to commit to the scale of receiver production that will bring prices down. We are all grateful that the Secretary of State for Culture, Media and Sport has agreed to support this campaign at an event in May. But it is not just support that is needed.
The dilemmas facing the industry and the straitjacket of outdated legislation that is inhibiting its growth demand that government policy be modernised now. Throughout broadcasting, radio and television, many of today's regulatory structures have been rendered irrelevant by the new information age. We must modernise. An example of the urgency of the situation we face may be found in yesterday's referral of the planned television merger of United and Carlton to the Competition Commission. The Competition Commission will inevitably assess the merger through the lens of competition alone without referring to wider broadcasting issues. Its conclusions, however wise, can be only a partial solution.
Before the election, the Government promised a new regulatory structure to envelope all the electronic media—radio, television and telephony. That new, modern structure of regulation is required to support investment. It is needed to secure competitive success for all our media industries in the new international media environment. And it is needed now. The year 2002 will be too late: too late for industry; too late for jobs; and too late for the future of employment in the industries of the future.
7.37 p.m.
Lord Brooke of Alverthorpe: My Lords, I am grateful to the noble Lord, Lord Lea of Crondall, for introducing the debate and I extend my congratulations to the noble Baroness, Lady Blood, on a marvellous maiden speech.
I make my contribution as a simple general secretary of a couple of Civil Service trade unions. My contribution comes from great experience of dealing with the many changes which came at us from many different angles. I also speak as someone with an interest in the future of work. I was involved in the review of the future of work, sponsored by the Churches in 1997. It was chaired by our colleague, the noble Lord, Lord Sheppard, who was then Bishop of Liverpool. I refer to that this week when we in this Chamber have heard a great deal about morality, principles and religion. I regret that more noble Lords are not expressing an interest in today's topic because I believe that work, or service, is at the heart of things, leading to the physical and spiritual well-being of individuals, families and the nation as a whole. It is that which motivated the Church review when it was set up in 1996–97. It took place against a background of a good deal of trouble within the labour market. People were experiencing difficulties which had arisen as a result of following, over the preceding 15 years, the policies of our colleagues on the opposite side of the Chamber.
I shall take a political stance for a short period. It is worth remembering, when considering major changes in the pattern of employment, that the major change we are now experiencing is a shift from having great numbers of people unemployed to having much higher levels of employment. During the period of the previous government, the number of full-time jobs fell by over 1.18 million. When they left office, unemployment still stood at over 2 million. For the first time in decades, we saw over 3.25 million people living in households where no one had any employment whatever. In terms of remuneration, 50 per cent of the vacancies advertised in job centres throughout the United Kingdom were offering hourly rates of £3.50 or less. Indeed, in many cases people working from home were being offered as little as £1 an hour, in particular women employed in piecework.
In the period from 1979 when the Conservatives came to power, incomes of the bottom 10 per cent fell by 30 per cent in real terms. Against that, at the other end of the scale, we saw a phenomenal growth in the salaries, incomes, dividends, share options and so forth of people who were able to progress using the freedoms given to them under that administration. We watched that big divide develop and we are now tackling it. It is now a fact of life: people in the bottom 10 per cent of income levels are worse off in relative terms. Perhaps I may remind my colleague, the noble Lord, Lord Howell of Guildford, that during the 1980s a line was taken that stated that nothing could be done about the growth of unemployment. A phrase parroted by everyone stated that high unemployment was inevitable and that we should adjust to it accordingly. However, I am glad to say that right

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around the Chamber, that fatalism has been rejected. Now a good deal more optimism about what the future holds for us is evident.
Lord Howell of Guildford: My Lords, perhaps the noble Lord will allow me to defend myself. What we were saying was that, in a period of transition and restructuring that was necessary for all modern economies, there would indeed be areas in which large numbers of jobs would be lost and the entire job pattern redistributed. We went through that. It was very painful, but the net effect is that the British economy is now one of the most agile and flexible in Europe with the lowest levels of unemployment. It is not a question of rejecting or accepting levels of unemployment; it is a question of having the courage to go through a period of great difficulties and emerging in an advantageous position. Does the noble Lord dispute that Britain is now in an advantageous position? How does he think we got to this point?
Lord Brooke of Alverthorpe: My Lords, Britain is now in a more advantageous position than it was before. However, I wished to make the point that a view was held in many parts of the country—particularly on the side of the Opposition—that a high level of unemployment was inevitable. Even the Labour Party, when it came to power, was cautious about the extent to which it would make the commitment to seek the reintroduction of full employment.
Lord Haskel My Lords, I thank my noble friend for giving way. To enlarge upon what he was saying, the philosophy that prevailed at the time was that the price of a sound economy was high unemployment.
Lord Brooke of Alverthorpe: My Lords, I shall move on. While global competition and markets, along with technological change, are bringing even faster challenges, we should continue to reject the scaremongering that went on for a good many years. I believe that the future of work is a matter of choice and priorities for the Government. Unemployment is not something that is inevitable, nor do we have to endure it if we choose not to do so. I also advance the view that it is not inevitable that the current deep divisions in society should continue.
In this difficult week for the Government, I should like to congratulate them on their efforts and for the considerable progress they have made in the short time since they came to power. I repeat that the major change we have seen in working patterns has been the shift in the numbers moving from the unemployment register into work. This has been achieved through skilful economic management—and with a little legacy left by the previous government; I am happy to acknowledge that.
High employment has also been achieved through the New Deal, which, I believe, my colleagues opposite are not prepared to embrace. It has also been achieved by encouraging people to move from benefits and into work by making work pay better than benefits. This
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has been aided by the introduction of the minimum wage, the working families' tax credit, a gradual approach to welfare reform, and reductions in income tax and national insurance contributions for those at the bottom end of the wage scale. These should all be set against the background of the priority and attention being given to education, which has been discussed by my noble friend Lord Puttnam and others. It is likely that the benefits that will accrue from changes in education and training will not be immediately apparent. However, we can trust that if we have got it right and appropriate education and training is being provided, those benefits will flow in the longer term.
Perhaps some critical friends from within the Labour Party cannot yet see quite how all this adds up for our supporters and for the electorate. But I believe the picture is now becoming clearer and I hope that increasingly we shall have the opportunity of putting the message across to the country. At the very least, it is good to see that the forces of conservatism within the Opposition are now beginning to recognise what is happening. We all welcome the recent U-turns in the Opposition's approach to economic and employment issues. We look forward with interest to see what further changes they may make in order to move closer to what we have been advocating.
To return to changing work patterns and the supply of labour, I recall that only 20 years ago—I am speaking primarily of the public service—we still had an overwhelming majority of males in the workforce. There was little part-time or flexible work available and most employees still, in the main, stayed with one employer for most of their careers. The view was held that people had jobs for life. Self-employment was still a small-scale activity.
Many of those factors have changed over the past 20 years, as several speakers have pointed out. Self-employment has increased from around 1 million to the current 4 million, with projections that the figure will rise to over 5 million in the not-too-distant future. The distinction between gender roles and work has been and continues to be eroded. There is now an increasing number of women in paid work—either full-time, part-time or on a flexible basis. Regrettably, many of them still seek to fulfil two roles: looking after the home and being in employment. Those are issues which need to be addressed.
On the other hand, on the male front, there are more young men who are no longer entering the labour market. That point has been mentioned by other noble Lords. An increasing number of men are withdrawing from the labour market in middle age. The problem of the young unemployed and of the middle aged needs to be addressed. The noble Lord, Lord Lea, mentioned the need to examine the inter-relationship between middle-aged men being made redundant and factors linked to pensions.
In addition, a significant proportion of the population are now working longer and harder. Other noble Lords have mentioned that, and it is a topic to which we should turn our attention. I believe that

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latterly there has been a change in attitude to the issue of job security. Although change is occurring, people now feel more relaxed than perhaps was the case some time ago.
Of course, we are faced with big changes arising from e-commerce. I believe that that will present a big challenge for the workforce and for employers. Inadequate research has been carried out into the consequences of e-commerce on the labour market, and work needs to be done there in the near future. Those are the big drivers which we must address. Overall, I believe that we are now in a much more confident position with regard to the labour market than we were some years ago and that we can look forward with a great deal more confidence than has been the case for a number of years.
7.52 p.m.
Lord Avebury: My Lords, perhaps the noble Lord may look forward to a day when Mr Portillo endorses the New Deal. Having, as he said, made a couple of U-turns already, that would be a small step for him to take. While he is about it, perhaps he can help those of us who believe that the national minimum wage is rather too low and should be increased, at least to take into account the effects of rises in wage levels. Thus, the people who receive the national minimum wage may receive the benefits of the growth in the economy which apply to others in earnings.
I begin by saying how much I have learnt from listening to this debate, which falls outside my usual political horizons. I join with those who have already congratulated the noble Lord who initiated the debate and who, I believe, got it off to a tremendous start.
I was particularly impressed by what he said about the work of the trade unions in Brussels in trying to improve the working time directives there and in having labour practices examined more thoroughly than they would otherwise be. Like the noble Lord, I believe that that is an unsung story and perhaps it should receive a wider audience than it receives in this House. I should like to join the noble Lord in thinking of a way in which we can arrange for the achievements of the trade unions in Europe to be more widely known. I believe that noble Lords would like to hear about that, and that, not only those on the Tory Benches, but some of the residual anti-Europeans in his own party, such as the noble Lord, Lord Bruce, should pay attention to what can be done by those who represent the workers in the corridors of power in Brussels.
I also add my few words to those already expressed in admiration of the maiden speech of the noble Baroness, Lady Blood, to which I enormously enjoyed listening. I believe that we have something to learn from Northern Ireland in relation to both work and social exclusion. Last summer I was in Northern Ireland at the invitation of the noble Lord, Lord Dubs, to look at the activities of the Government there in relation to the travelling population. I saw several
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things which impressed me and which I believed were done much better in Northern Ireland than in this country.
In particular, in Northern Ireland travellers are regarded as being the most socially deprived of all the minority communities in the Province. However, in this country not only has the Social Exclusion Unit made no recommendations on how to tackle the social exclusion of gypsies, including their exclusion from the world of work, it has not even begun to consider making such recommendations for the future. Therefore, I hope that we shall hear a great deal more from the noble Baroness about Northern Ireland and about aspects of life in the world of work there from which we may learn something to our advantage.
I refer to the comments made by the noble Lord, Lord Howell, concerning the fallacies of information technologies. He said that a great many people still believed that those technologies would replace unskilled and semi-skilled workers, and that, generally, they would have a harmful effect on the labour market. I remember my friend Bruce Page talking about the effect of information technology on the publishing industry. His point was that in every advance in technology in publishing, more people have been employed, from the days of Caxton onwards. If one thinks of the latest developments as being, in a way, an advance in publishing, I believe that the same thing is true now.
The noble Lord, Lord Puttnam, talked about the expansion of services that can be provided by the Internet. Of course, he is absolutely right. More products will be offered on the Internet. There will be more entertainment, more goods and more information in terms of the uses that are made of it by other businesses—I include the Government in that. It is absolutely right to say that the Government are one of the chief beneficiaries of the IT revolution.
I believe that the only person who touched on that point was the last speaker, the noble Lord, Lord Brooke of Alverthorpe. As he said, the Prime Minister has undertaken that in the next four years 25 per cent of government transactions will be carried out over the Internet. That represents an enormous revolution for the people who will provide that work.
We have already seen that information technology creates upheavals. I refer, for example, to some of the unfortunate glitches in the delivery of computer systems to government departments. Almost every week, there is a Question or a comment in your Lordships' House or another place about the tragedy of the Immigration and Nationality Directorate's computer, which is way behind schedule and still has not been delivered. However, that does not diminish the importance of people who work in the Immigration and Nationality Directorate. They still have to make judgments on who is entitled to enter this country and to whom they must issue a notice of refusal. If it is ever delivered, the computer system will provide the civil servants—the immigration officers—with the equipment and information at their elbow to

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be able to say whether a certain person comes within the rules which have been laid down by Parliament to decide who can enter this country.
In addition, I believe that we see the beginning of a period in which the boundaries between government departments will melt away. It is common façon de parler to speak about "joined-up government". That becomes possible with information technology because there are no boundaries between the information provided for tax services, social security services or for any other purpose, except those which Parliament chooses to impose. Provided that we can overcome people's natural anxieties about the security of personal data, there is no reason whatever in future why we should not have a joined-up system of taxes and national insurance. When that time comes, it will also mean that the individual consumer will be able to access his information very easily via any office of the DSS or any tax office. It will be immaterial where he goes because all those terminals will have equal access to the same information which, of course, will have adequate protection in terms of passwords and so on. The benefits here are enormous for the consumer and I think that they are enormous for the workers in those industries as well.
If anything, the noble Lord, Lord Puttnam, underestimated the extent of this revolution when he compared it with the railways because, after all, the railways are concerned only with getting from one place to another. But this technology will enter into every single nook and cranny of a person's life. It is not just a question of being able to shop more easily; being able to get information off the Web more easily; and being able to send e-mails; because devices which can be embedded in ordinary household articles are now on the threshold of development, technology can be extended into virtually anything. Already noble Lords have spoken about the joining up of television with the Internet. That is going to be one of the major developments of the next few years.
The other development which, I think, is really going to take off is the use of a larger band width by consumers. At the moment, the chief inhibiting factor is the time you wait to get a download or even sometimes to get on the Internet. If that process becomes instantaneous, not only will you be able to log on, send an e-mail, write an order to Tesco's, or download your SETI all in five minutes, but it will be possible to do all that without any skill. When I speak of SETI, perhaps I may just put in a plug for it because I think it is so wonderful. Last May Berkeley launched a system for allowing people with personal computers to process small quantities of data from the radiotelescope at Arecibo. Now, 1.6 million people are signed up to that world-wide. You just download a piece of software on to your personal computer and you are sent chunks of data, 330Kbytes at a time. Your computer processes it and sends it back to the University of Berkeley where it is analysed. If you have found the little green men, you will be told about that six weeks later.
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The wonderful thing is that instead of having to have one enormous computer centralised in Arecibo, it has managed to harness the power of all these millions of computers in people's private houses all over the world. I think—
Lord Haskel: My Lords, I thank the noble Lord for giving way. Perhaps I may comment in view of the noble Lord, Lord Eatwell, saying that most people logged on to the University of California at Berkeley on that system because they heard about it on the "Today" programme.
Lord Avebury: My Lords, that may well be so, but it has now received very wide currency in all the computer magazines. I doubt whether there is a single owner of a PC who has not heard of it by now.
I conclude by making this serious point. In Britain we have a great interest in this changing structure of employment, which has been one of the themes of today's debate, because of the shifting patterns of employment. From the jobs-for-life of the past, which have been spoken of by several of your Lordships, to the routine job changes and rise of short-term contract work, it is something which I think we have experienced more drastically than most other European countries. Many industries are shifting towards lean employment structures in which they rely on others for everything but their core operations.
One businessman to whom I was talking the other day had gone the whole way. He was engaged in providing airline catering. Initially, he brought in the food, cooked the meals, put them into the plastic packs and sent them off himself to the airlines who were his customers. Gradually, he contracted out all those operations until the only thing he had at the middle was a computer. He was writing out schedules which said that X meals had to be delivered to airline Y at such and such a time on Monday morning and other people were doing all the work. He has one individual sitting at the middle, masterminding the whole programme. We could reach a situation where we have a core of people who are very well educated and very well trained but, outside that, there will be a penumbra of people who are on short-term contracts, brought in from agencies on temporary hire, or are self-employed and contracting their services to the larger companies. That is Will Hutton's 30:30:40 world in which he says that 30 per cent of the population of working age will be in core jobs and will be highly skilled, highly trained; 30 per cent will be in contract jobs; and 40 per cent will not participate in the workforce at all for some reason, such as early retirement, motherhood or being a student.
It is the small and medium-sized firms that on the whole bear the brunt of the economic cycle, the ups and downs of the switchback. So it is going to be the 30 per cent of short-termers who bear the employment up and downs and what used to be referred to as "the lump" in the construction industry where self-employed workers have long been the norm. It is now common in the more starchy areas of banking and

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finance. It is, of course, rife in the information technology industry itself, as a glance at the ads pages of the computer press discloses.
I should like to make a plea to the Government not to boast too much about the flexibility we have achieved. There have been genuine gains in employment, and from these Benches we welcome and endorse the Government's emphasis on helping the long-term unemployed back into work, even if the New Deal has not been quite as successful as they have claimed (because of the strength of the pound and the endemic mismatch between the overheated south-east and other parts of the country, which are still relatively in the doldrums). That flexibility in the labour force has come largely from the shifting patterns of employment which I have described and the large numbers now working on short-term contracts. That has transferred the risk in the economy away from capital and on to the workers; indeed, often on to those workers least able to bear the effects of any downturn.
That carries potential long-term dangers. It is quite common in the UK to hear the Germans being criticised for their lack of flexibility and to point out their falling productivity. Those critics overlook two matters: first, that German productivity statistics since 1992 have incorporated the East German Länder whose productivity was always below western standards. Secondly, West German productivity in terms of added value per worker per hour has been, and remains, about 30 per cent higher than its British counterpart. One of the main reasons is that German workers are trained better and for longer than British workers. German employers invest in training because generally German workers stay longer in their jobs and, if not for life, at least long enough to pay back the cost of training.
I suggest that the changing structures of employment which we have witnessed over the past 25 years are part of a long-term and dynamic situation. We as a nation have very little control over it and we have chosen for one reason or another not to use the few controls that we have. Whether that is a wise decision, time will tell. It has resulted for the present in an imbalance in regional terms (which I have mentioned, but which has been dealt with at length by others) between the core and the periphery of the workforce—that core workforce and the penumbra of part-timers and contract workers. In both senses, flexibility has its upside and its downside. I urge the Government to recognise the downside and perhaps to be a little more humble when they preach the British solution to our partners in the rest of Europe.
8.9 p.m.
Baroness Miller of Hendon: My Lords, this has been a most interesting, stimulating and informative debate. Perhaps I should apologise to noble Lords for my grating voice. It is certainly grating inside my head.
I congratulate the noble Lord, Lord Lea of Crondall, on introducing such a good debate and one which has provoked so many interesting and
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informative speeches from all sides of the House. I also congratulate the noble Baroness, Lady Blood, on her fine maiden speech. I was most impressed by the fact that she said that she wanted to speak from personal experience. Noble Lords know that when they speak from experience they always speak better because they know what they are talking about. I do not suggest that in this Chamber any noble Lords do not know what they are talking about, but in other places that is perhaps the case.
Changes in employment patterns have been taking place not just in the past couple of decades as many have said, but for thousands of years. Nine thousand years ago man stopped being a hunter nomad and became a farmer. Later he developed into an artisan, working in wood and metal, devising alphabets and discovering mathematics and all forms of science, so creating the world of ideas. Everything accelerated at the time of the Industrial Revolution, which changed the whole balance of employment from agriculture and small craft work into the gigantic industrial conglomerates and the major industries that existed around the world at the beginning of World War II.
In 1901, 12 per cent of the population of the United Kingdom lived in the countryside and were engaged in agriculture. By 1991 the number of agricultural workers had fallen to 2 per cent. In contrast, the number of people working in office jobs rose from 18 per cent to 40 per cent in the same period more than double. Currently the number of couples with dependent children where both partners are in employment is three-fifths, compared with around half in 1979–80. A relevant fact is that between the spring of 1971 and the spring of 1999 the proportion of economically active women rose from 56 per cent to 72 per cent. One reason for that is that since 1901 there have been more office jobs than manufacturing jobs and the gap widened from 10 per cent to 20 per cent in the years between 1971 and 1991.
In other words, the nature of the work available has changed. More women are prepared or are physically capable of carrying out the jobs that are on offer, so more and more have paid employment. Their ambitions for themselves and their families, quite apart from their economic needs, are putting more women into the labour market. Several noble Lords, particularly the noble Lord, Lord Lea of Crondall, and the noble Baroness, Lady Turner, have mentioned that that is one of the greatest changes in employment patterns that we have seen over the past quarter of a century.
Without industries on the scale that existed in the first half of the 20th century, the unsurpassed savagery of the two global wars would simply not have been possible. After the Industrial Revolution the greatest accelerator to invention was the two world wars, which demanded new processes like mass production and incredible new inventions that today we take for granted, like radar, jet planes and Henry Kaiser's Liberty Ships, which transformed shipbuilding from rivets to welding. The list is almost endless and I shall not take up the time of the House by reciting a catalogue of them. After the war, the development of

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new inventions, new materials and new techniques arrived at a speed that even then was bewildering. The noble Lord, Lord Puttnam, told us about the present rate of change in relation to the digital economy and so on. Look at the difference between our old 7-inch black and white television sets and the new digital, all-singing, all-dancing interactive ones that we use today, not merely to watch a favourite soap opera, but to instruct our bank, for example, to pay the gas bill. Anyone who has bought a new computer in the past few years knows that it is virtually obsolete the minute it is taken out of its box.
What about telephones? The other day I was watching a not so old film when I was struck by the character laboriously turning the dial of the telephone and I compared that to the push button machines that we all use now. Those will soon be replaced by voice-operated telephones, which are already on the market. In 20 years' time—possibly less—I suppose the telephone kiosk will have disappeared completely in exactly the same way as the street gas lamp.
That leads to another example of changing employment patterns. When the gas lamps went, so did the jobs of the men who used to light them every night, along with the many jobs lost in the gas industry. Inventions have brought about changes in employment patterns, destroying old jobs, but at the same time creating new ones. One of my sons is a software engineer. When he was born there was no such thing as a software engineer.
Social considerations and international politics have also played a major part in the changing patterns of employment. The entire former British Empire has been decolonised and practically each new emerging country wanted to add industry to its predominantly agricultural economy. So we helped them to establish textile factories and in no time "King Cotton" was killed off by cheap imports from the developing world. In some cases, steelworks were developed and our steel industry suffered as a result.
Our steel industry was also decimaled as a result of fierce competition in the developed world and changes in manufacturing techniques in other industries. Reduction in demand caused by changing car engines from steel to aluminium and introducing plastic into car bodies is one such example.
In economics there is a new buzzword, "globalisation". International trading companies have been with us for long time. Those companies now have the opportunity to manufacture or to buy components in one country, assemble them in another and sell them in a third country.
Inability to compete with overseas industries working with cheap labour and less restrictive environmental regulations have all long played their part in virtually destroying old, traditional industries in which we were once the leaders. In four great centres we were the world leaders in shipbuilding. That industry has virtually disappeared. Overseas competition and domestic restrictive trade union practices played a major part in that I am not being judgmental because I believe that under-investment and had management were also to blame.
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The fact is that the industry has gone and it has gone for ever, which brings me to geography. Why was it so hard to introduce new industries to the North East to replace shipbuilding, despite there being a ready-made skilled, versatile workforce on the spot? Another reason for this situation is the transport costs. A business that has to move its goods from Newcastle to Dover is inevitably at a disadvantage in relation to one that is based somewhere on the M2.
Even that factor is beginning to change. We have just entered a new world—indeed a new planet—"Planet.com". The other day I ordered something by mail order and found myself talking to a lady in Cornwall. I can buy books, compact discs and all sorts of things from America without speaking to anybody, and far more cheaply than I can buy them here. There is even a website operating out of Cyprus that sells cars at thousands of pounds less than in the United Kingdom.
What I call electronic work can be done anywhere. Call Directory Enquiries from London and you are likely to be answered by someone in Northern Ireland or Scotland. Data can be processed just as easily and speedily in some provincial town.
Lord Avebury: My Lords, perhaps the noble Baroness will allow me to intervene. UK Info, which costs about £25, contains every name and address in the United Kingdom and all the telephone numbers, so one never needs to ring Directory Enquiries. It is cheaper to buy UK Info.
Baroness Miller of Hendon: My Lords, I thank the noble Lord for his advice. Data can be processed just as easily and speedily in some provincial town or even in India or South America, as in one of the big cities, at less cost in wages and rent.
That is yet another change in employment patterns. How many ordinary, day-to-day financial transactions are now done long distance rather than face to face? Utility companies encourage us to pay by direct debit, giving advantage to those who can afford to compared with poorer people who do not have a bank account. Pensions are now paid directly into accounts.
It used to be regarded as a secure job for life to work in a bank. But not any more. The noble Baroness, Lady Turner of Camden, spoke of the change in businesses that were once regarded as being there for a long time. Counter clerks who aspire to become bank managers grow fewer in number. Money comes out of a hole in the wall. And a vast proportion of what people used to pay in the form of dozens of cheques each month, or by cash, is settled by one cheque to the credit card company. That is how things work these days.
The subject of the debate today is so vast that it is impossible, even with all the contributions made tonight, to cover every topic and ramification: they are endless. However, one of the great things about today's debate has been hearing of the experiences of different people who have spoken about different industries from different knowledge bases. I confess,

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as did the noble Lord, Lord Avebury, that I learnt an enormous amount from the noble Lord, Lord Puttnam. Apparently, my granddaughter knows far more about these matters than I do, but that is one aspect of the modern age. I have tried to show that it is clear that there has always been change. It is important therefore to have flexibility in the labour market to allow people to move from one job to another as circumstances require.
I should like to talk a little about what the future might hold—but only a little because with the enormous changes taking place one would need to be extremely brave to predict what will happen, and I certainly cannot.
The noble Lord, Lord McIntosh, would be surprised if I said that I had written a speech containing no political content; he would not expect that of me. But when I listened to the speeches around me I crossed out the political parts. I felt it was an extremely informative debate and did not want to move into the realm of politics. However, the noble Lord, Lord Brooke of Alverthorpe, tempted me to go back and read a couple of paragraphs which I had crossed out.
Despite the way that new Labour likes to turn facts on their head, this Government inherited a thriving economy, and one which continues to thrive because of the momentum which was already in place. I will not have the noble Lord, Lord Brooke, say, unanswered from this side, that it is down to what has taken place within the past two or three years. Far from it. The economy had not come to a shuddering halt by 1997.
Lord Brooke of Alverthorpe: My Lords, I know I have not been on the best of form today, but when the noble Baroness reads Hansard tomorrow she will see that there was a qualification in my remarks concerning inheritance.
Baroness Miller of Hendon: My Lords, yes, and the noble Lord made other remarks which I shall also read carefully. I felt it was a pity. Can I say more? This is not a political debate. The patterns of employment change throughout history and the problem for us all, whether we are in government or in opposition, is to do our best to try to create markets and work hard. It is essential and right that citizens of this country should be able to move from one area to another to find work. I felt that particularly when the noble Lord, Lord Puttnam, mentioned the number of people working in the Vodafone management organisation. I believe he said it was a business involving 400 million people but with 750,000 employees, as compared to the 10 at the top of the Stock Exchange which he mentioned earlier.
Lord Puttnam: My Lords, what the noble Baroness is trying to say is absolutely not accurate and I shall write to her with the precise figures.
Baroness Miller of Hendon: My Lords, that is the worry—not that the noble Lord is going to write to me; I shall be waiting for his letter with bated breath. But
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the problem is that the larger the organisation, the bigger the changes, the fewer people appear to be required. That will be a challenge for us all in the future.
With that little diversion I have passed over pages of my notes. But I shall let them go. I made my point with the noble Lord, Lord Brooke of Alverthorpe, and say no more in that regard. But I conclude by mentioning something that Adair Turner wrote in an article last September. He said that he felt that our labour markets were doing well, which was reflected in the impact of the profound labour market liberalisation which was introduced by the previous government—I emphasise "previous government"—in the 1980s and 90s. He said it is a liberalisation that the new Labour Government have left in place. There we have it. On both sides of the debate I have tried to be extremely fair.
8.25 p.m.
Lord McIntosh of Haringey: My Lords, this has not been a debate at all; it has been a seminar, and much better for that. We have all learnt things, thanks to the excellent choice of timing and subject of my noble friend Lord Lea and all the contributions that he attracted to his debate. I am a little disappointed that my noble friend intends to write to the noble Baroness, Lady Miller. He should send an e-mail and copy it, if he does not mind, to mcintoshar@parliament.uk.
We benefited greatly from the contributions today. In the limited time available to me, I want to say something about patterns of employment which is the subject matter of this "seminar", and something about the way the Government see them. Whether or not I go back the full 9,000 years that the noble Baroness, Lady Miller, did is doubtful. Then I want to talk about the economic aspects, particularly the macro-economic aspects, then the micro-economic and social aspects. A theme running through the debate has been, quite rightly, the quality of work as well as the quantity.
The pattern of employment in this country was described by the noble Lord, Lord Howell, as a "demented mosaic".
Lord Howell of Guildford: My Lords, "fragmented mosaic".
Lord McIntosh of Haringey: My Lords, my hearing is going. But the noble Lord is right in the sense that the employment market in this country is much more diverse, much more fragmented—to use his much improved word—than in other European countries and other parts of the world. For example, if we take the standard 40-hour week, only 10 per cent of people in this country work that 40-hour week compared with over 50 per cent in Germany and 40 per cent in France and Italy. As has been said, we have more Saturday and Sunday working, more shift working and more part-time work than anyone else in Europe.
Diversity is a good thing in the sense that it enables people to find a pattern of work that suits them. That is relevant to what the noble Baroness, Lady Blood,

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said in her excellent maiden speech; that is, that we have one of the highest rates of female participation in the world because the range of jobs, particularly part-time work, allows many women to combine paid work with domestic responsibilities. Whether we go from that into the more rarefied zones of treating our careers, as Charles Handy would say, as portfolios rather than as jobs is another matter.
Of course there have been changes, but we are still in the position where 87.5 per cent of those in employment are employees and only 11.5 per cent are self-employed. We have seen dramatic changes in the nature of jobs but, as the noble Baroness, Lady Miller, said, that has been true for a long time; indeed, for the past 20 years 7 million people have been changing jobs every year. It has always been the case that what appears at any particular moment in time as dramatic can be found to have been so at many points in our history.
So we do have a rather healthy pattern of employment in terms of its suitability for the wide range of uses that people want to make of employment, whether as a source of income, a source of meeting people or for what other purpose may be appropriate. We also have a very dynamic employment pattern. Again, these things have been going on for a very long time. The one clear measure of dynamism is the amount of change that is taking place within the UK labour market. In numerical terms, over 2.5 million vacancies are notified to the job centres of the Employment Service every year and perhaps twice as many more arise through newspaper advertisements, private employment agencies and the Internet. The Employment Service alone fills 1 million jobs every year.
There is a role for government in this process. It is valuable that we can contribute to oiling the wheels of the employment market. At the same time, the "flexibility"—which is a very fashionable word—in the labour market has many different meanings. Yes, flexibility is essential when you have a dynamic and diverse labour market, but it does not necessarily mean—and in most cases it should not mean—a hire and fire policy. It should mean jobs that are smart, in the smart card sense, efficient and well resourced with adequate capital behind them.
I shall not go into the history of what kind of economy the Labour Government inherited in 1997. However, this Government have a different idea not only about the quality of work and its social effects but also about what our objectives and our choices should be. It should be noted that Gordon Brown, as Chancellor of the Exchequer, is the first Chancellor not only to have talked about full employment for many years but also to mean it; and, indeed, clearly to have plans in place for achieving full employment.
There was a certain amount of party political discourse between my noble friend Lord Brooke and the noble Lord, Lord Howell. However, I am sure that the noble Lord would not deny that it was his noble friend Lord Lamont who said that a high level of unemployment was a price worth paying for the
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changes that were taking place in labour markets. Indeed, I think he was largely justifying that in his speech. But whatever may have been the case in the past, the point we want to make is that a high level of employment and a low level of wasted lives and talents is a proper objective of government. Governments are free to make that choice and it is one which this Government have deliberately made. I give way.
Lord Howell of Guildford: My Lords, I thank the Minister for giving way and I am sorry to delay noble Lords further. The Minister speaks so persuasively, but he still has not grasped the point. The capitalist system is evolving. We now have a brand new system of capitalism globally. This country has been through a revolution and will go through further revolutions. These things take time. During the time in question there had to be a rise in unemployment, with great regret, before the level could come down and settle in the new job pattern. It was not a question of accepting high unemployment as a permanent feature and later welcoming some new and different model: we had to go through that period to get where we are now. It was inevitable; as other countries are now finding out, it cannot be done any other way.
Lord McIntosh of Haringey: My Lords, I hoped that I had chosen not to go backwards and I trust that the noble Lord will listen to the rest of the argument, because it is about an evolving economy. As reflected in the instructions of the Chancellor of the Exchequer to the Bank of England in setting interest rates, what is important is a high and stable level of employment—indeed, to be quite precise, high and stable levels of growth and employment. This means employment opportunities for all, and that is the definition of "full employment" for which we should be looking; in other words, work for those who can work.
There has been a change in emphasis from previous definitions of full employment from levels or rates of unemployment, which is the way that the previous government always chose to look at the figures, towards rates of employment, supplemented by a fair and inclusive distribution of employment. We have done that quite deliberately to enable us not only to help the unemployed but also those who are currently economically inactive, including some of the most disadvantaged people in society, so that they can reap the benefits of work.
If we look at the figures of the breakdown of the labour market, we can see that of the working age population of 36 million something like 27 million people are in work; something like 1.7 million are unemployed (under the ILO definition which is what we use in this Government); and something like 21 per cent are economically inactive, of whom 30 per cent say they do not want a job but very many would want a job if it were possible for them to do it. The whole thrust of government policy on employment has been to make it possible, desirable and attractive for those who are not economically active to get back to work and make that work pay. That moves me from my macro-economic objectives to the social objectives.

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However, before I continue on that track, I should like to say a few words about the knowledge economy, which has been a theme of so many well-informed and fascinating speeches this evening. The noble Lord, Lord Howell, was right in much of his analysis of the knowledge economy. I believe he described a pattern where many rotten jobs—boring and unskilled jobs—have disappeared, will disappear and will not come back. But the question is: how can we ensure that they are replaced by interesting, worthwhile and well-paid jobs, which will contribute to the quality of life of everyone? Before I finish agreeing with the noble Lord, I have to say how much I disagree with his "Homo Hierarchicus" model. It sounds very much to me like the rich man in his castle with the poor man at his gate. I do not think that the noble Lord would like to think of himself in that way.
I am not in any way trying to go back—certainly not 9,000 years. Indeed, I am not even going back to what my noble friend described as "John Mortimer's village" of 70 years ago, with the lonely barrister plodding homeward on his weary way. I hope that we are looking forward and that we are taking seriously the technological changes that are taking place.
My noble friend Lord Puttnam made a very good analogy with railways. The point about railways is not that the employment there in the last century was enormous but the fact that it made possible the movement of goods to and from markets; it expanded markets; and made possible the movement of people to and from work by train. The analogy ought also to be thought of as being valid for e-commerce. It is not that e-commerce itself will be a huge employer, nor should we be misled by the stock market valuations of high-tech companies. Surely the effect of e-commerce will be as a tool for all other businesses. Unless those other businesses make use of the technologies available, they will go to the wall. There will not be such a dramatic change in the pattern of employment, but simply—we hope—in the quality of the jobs that will be made available.
I found my noble friend's analogy of Vodafone to be less valid. If we take stock market valuations as a significant factor, we could be misled. But he got back on track, as always—
Lord Puttnam: My Lords, I thank my noble friend for giving way. The point I want to make—I think that it is a terribly important point—is that I am no fan of the ups and downs of the stock market. However, as the noble Lord, Lord Howell, pointed out, we live in a capitalist economy whereby the value on paper allows a company of no intrinsic value, but with a lot of future, to purchase assets on the open market. I believe that we have not fully come to terms with the fact that the new economy is able to purchase the assets of the old economy and move forward. That is not fully appreciated in this country.
Lord McIntosh of Haringey: My Lords, I do not deny the facts. I am not at all certain what the political and economic implications are. Perhaps I am just confessing a failure of analysis. I do not think that the Government take a view on these matters. As I said, I think that my noble friend was back on track when he talked about education and our educational policy. That is what we debated this week when we discussed the Learning and Skills Bill.
I ought to say a few words about the employment policies of the Government. I shall do so briefly as there was not much comment on it except from the noble Baroness, Lady Blood, who described a young man with a wife and baby who was offered work in a supermarket that turned out not to be permanent. The point which ought to reassure the noble Baroness is that, according to the statistics, those who find such work—even if their first job does not work out—often eventually obtain full-time jobs. The difficulty is to get the first job. Often people who are successful in obtaining their first job find that their subsequent work prospects improve.
As regards the comments of my noble friend Lady Turner, I point out that we have set out a legal framework of decent minimum standards through the Employment Relations Act, the national minimum wage, the Working Time Directive, the social chapter measures and provisions to protect part-time workers through giving them comparable rights to those of full-time workers. Those provisions appear to be working. People are more confident about seeking work. Those whom I have described as being inactive but who want to work are being encouraged to seek it.
That leads me to the other labour market measures that have been almost an obsession with this Government during the past three years. We have heard about the New Deal for the young unemployed. That has been extended to those aged 25 and over and, from April this year, will be extended nationally to those aged 50 and over.
My noble friend Lady Turner mentioned lone mothers. I shall not mention any further statistics but take up that point. The programme for lone mothers is voluntary. Some 90,000 people, nearly all of whom are women, have taken up the offer of an interview. Some 23,000 have found jobs and an additional 5,000 have entered education and training. If one extends those statistics to the other parts of the New Deal, one can see that the increase in employment in this country of over 700,000 in the past three years is not a matter of chance but has occurred because deliberate and effective government policies have been introduced to make that possible.
Before I leave the issue of older people, my noble friend will know that following consultation we issued a code of practice in July of last year on ageism in employment policies. We shall see how that works before we take any decisions as to whether anything further needs to be done. These considerations apply to all aspects of the labour market, particularly as regards women, which I do not have time to refer to, even in the 40 minutes that remain in which I may speak!

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All of these measures are not job creation measures or measures to provide an alternative to work. They help people to help themselves to get a job and avoid the problem of being stuck out of work. The measures ensure that when people go back into work that is beneficial to them in social and economic terms and is beneficial also to society. I do not have time to discuss working families' tax credits, the national minimum wage or all the other aspects of government policy which are relevant to the subject matter of this debate. I conclude by saying that it is our objective to achieve full employment in this country, not only for moral and social reasons but because that is the way for this country to thrive. We believe that we have made a good start.
8.45 p.m.
Lord Lea of Crondall: My Lords. I am glad that noble Lords have found this a rewarding debate. I understand that one does not respond at this stage to points that have been made in the debate. However, I wish to make a couple of points.
I share the view of the noble Baroness, Lady Miller, that forecasting the future is rather difficult. Some of us have heard a good number of forecasts. I refer to the forecast of my noble friend Lord Eatwell. He said that he envisaged a scenario whereby the whole of manufacturing industry was run by one man. I add that the man has a dog. I know about this as I went on a VIP visit to the place where the man is employed. At the end of the visit we were asked whether we had any questions. We asked, what the man did. We were told that the man was present to feed the dog. That was fair enough. We then asked what the dog did. We were told that the dog made sure that the man d id not touch any of the equipment.
This debate has not been political. I was particularly glad to hear the range of contributions. I was interested in the speech of the noble Lord, Lord Howell. I point out that membership of the trades unions increased by 100,000 last year. Therefore I believe that the trades unions will be around for a long while yet. I say to the noble Lord, Lord Avebury, that a request from him for information on how social partners arrange negotiations in Brussels arising from the Maastricht Treaty would be well received. They have involved the TUC and the CBI in those matters. That is an important development which few people seem to appreciate.
Finally, I echo the comments of everyone who has said that the noble Baroness, Lady Blood, made a notable maiden speech. I thank the noble Baroness for choosing this debate in which to make her maiden speech and for mentioning her personal experience and her reflections on some aspects of her work in Northern Ireland. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Industrial Training Levy (Construction Board) Order 2000

  Industrial Training Levy (Engineering Construction Board) Order 2000
  8.48 p.m.
  Lord Bachrose to move, That the draft orders laid before the House on 16th December 1999 be approved [6th Report from the Joint Committee].
  The noble Lord said: My Lords, it may he for the convenience of the House if I speak to these orders together.
  The proposals before your Lordships seek authority for the Construction Industry Training Board (CITB) and the Engineering Construction Industry Training Board (ECITB) to impose a levy on the employers in their industries to finance their training activities, including grants schemes, and to fund the operating costs of the boards. Provision for this is contained in the Industrial Training Act 1982 and the orders give effect to proposals submitted by the two boards.
  In each case, the proposals are based on employers' payrolls and their use of subcontract labour. Each board has included the provision to raise a levy in excess of 1 per cent of an employer's payroll. The Industrial Training Act 1982 requires that in such cases the proposals must be approved by affirmative resolution of both Houses. The other place has approved the proposals.
  As required by the Industrial Training Act, both boards have provided for the exemption of small firms from the levy. The level at which this exemption takes effect aims to strike the right balance between helping small firms to grow and giving them unfair commercial advantage. However, the boards are committed to supporting the training efforts of small firms, whether or not they pay the levy. All companies need a skilled, competent workforce if they are to be competitive, and small firms in these sectors are encouraged to take advantage of the services offered by the boards and to provide opportunities for trainees and apprentices.
  In the case of the Engineering Construction Industry Training Board, which assesses off-site establishments—that is, head offices—and construction sites separately, the proposed levy rates are 0.18 per cent of the total of payroll and net expenditure on labour-only subcontracting for off-site employers, those employers with combined payroll and net labour-only payments of £1 million or less not being liable to pay the levy; and 1.5 per cent of the total of payroll and net expenditure on labour-only subcontracting for site employers, those employers with combined payroll and net labour-only payments of £75,000 or less not being liable to pay the levy.
  The proposals are different to those approved by your Lordships' House last year in that the small firms exemption levy for off-site employers is based on

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  payroll rather than on numbers of employees. This ensures a more reliable and accurate measure of a company's levy liability and brings the arrangements in line with those for site employers. The change has been introduced in such a way that there will be no drop in levy income for the board. Nor will any additional employers be brought into the levy net.
  Turning to the Construction Industry Training Board, the proposed rates are 0.5 per cent of payroll for direct employees and 2.28 per cent of net expenditure by employers on labour-only subcontracting. Employers with combined payroll and labour-only payments of less than £61,000 will not be liable to pay the levy. This represents an increase for directly employed labour on last year's rate of 0.38 per cent. The board has explained that the increase is necessary because of important changes that are taking place within the industry.
  New rules have been introduced by the Inland Revenue and the Contributions Agency which are causing major changes in patterns of employment. There has been a large swing from using labour-only subcontractors back to direct employment. Because the levy on labour-only subcontracting is charged at a higher rate, this swing has led to a reduction in the board's income. The industry has agreed to increase the PAYE levy to 0.5 per cent to maintain the necessary levels of income. This is part of moving to a single rate of levy for all employees over a five-year period to 2003.
  At the same time, the industry is significantly increasing its investment in training. The CITB will be making additional grants and other resources available to support employers' efforts. This will be wholly financed by cost reductions, an increase in non-levy income and increased levy income from growth in the industry.
  For both boards, the proposals involve levy rates in excess of 0.2 per cent, with no provision for exempting employers who make their own training arrangements. In such cases the Industrial Training Act 1982 requires boards to demonstrate that the proposals have the support of the employers in their industry. I am satisfied that each board has obtained that support. All of the key employer federations have been consulted about the levy rates and have agreed that these rates are necessary to fund the boards' training plans.
  The proposals I have outlined are expected to raise between £75 million to £80 million for the Construction Industry Training Board and around £10 million for the Engineering Construction Industry Training Board. Both boards will use the money to fund a range of training activities, including grant and initiative schemes, new entrant training and operating costs.
  Your Lordships will know from previous debates that these are the only two statutory industry training boards. They exist because of wide support from employers and employer interest groups in these sectors who believe that without them there would be a serious deterioration of training.
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  Both boards are committed to ensuring that employers in their industries receive a quality service and each places great importance on a forward-looking strategic planning process based, importantly, on regular analysis of the labour market. This is crucial if they are to ensure that the education, training, skills and qualification needs of their sectors—both now and for the future—are met.
  Each board is also the government-recognised national training organisation for its sector and is fully involved with the national network of sector-level training organisations. They are making a significant contribution to workforce development. For example, the nationally recognised labour market assessment systems developed by the boards inform the important work of the National Skills Task Force, the regional development agencies and, from April 2001, subject of course to the will of Parliament, the new national and local learning and skills councils. That Bill, of course, is making its way, perhaps somewhat slowly, through your Lordships' House.
  The draft orders before the House will enable the two boards to carry out their training responsibilities in 2000. I believe it is right that the House should agree to approve them. I commend them to the House. I beg to move.
  Moved, That the draft orders laid before the House on 16th December 1999 be approved [6th Report from the Joint Committee].—(Lord Bach.)
  Baroness Blatch: My Lords, I am grateful to the Minister for his careful explanation of the two orders and for moving them together.
  We all know that the engineering and construction industries are crucial to this country's economic regeneration and employment policies. We know that regulations which affect the industries can be a force either for progress or for inhibiting progress. As I understand it, these are the only two training boards in the whole of the country. Just as the previous government moved away from industrial training boards, the present Government are now moving away from the levy subsidy scheme and forward training.
  The exemption for small firms is welcome, although I know that the levy still causes some grief to many small employers. I note from the debates in another place that there are still some small companies wending their way through the tribunal system in order to seek exemption.
  I wish to emphasise a point raised in another place by my honourable friend Mr Tim Boswell, when he pleaded for more user-friendly language in these documents. I am sure that the Minister will agree with that. I have been reading regulations for many years and I have found them almost impossible to understand. Along with my honourable friend in another place, I do not plead for my own purposes but for small businessmen, particularly for those in the construction industry and sometimes for those in the engineering industry. Such people do not have access to expensive legal advice and to interpreters of legalese. Efforts were made by the previous

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  government, and will continue to be made by this Government, but it is important that we persuade the counsel who draft legislation to remember that, at the end of the day, it has to be read, understood and—a point often missed—that such legislation has a very practical impact on the workforce of many companies.
  The increase proposed in the orders will be seen as considerable by some employers. Can the Minister say how many employers do not meet their levy payments? What loss to the training boards does this represent? I am fascinated also to know to what extent the increase is in place to compensate for such losses.
  There are considerable new burdens on business as a result of much new legislation, which results in extra workloads that are costly for many companies; small ones in particular. I refer to the administration of the national minimum wage, the working time directive, the parental leave directive and many other pieces of legislation.
  An important point was made in another place by Mr Richard Allan, the MP for Sheffield, Hallam, and endorsed by my honourable friend Tim Boswell, about the cost of engineering courses. I know that the issue will feature in the debates on the Learning and Skills Bill, but those courses are important. For obvious reasons they are relatively more expensive than many others for further education colleges and training providers to mount. During the Second Reading debate on the Learning and Skills Bill, I asked—and I shall certainly refer to the matter during the course of amendments to the Bill—on behalf of the Engineering and Marine Training Authority whether the Government will include proper differential funding for such courses under the new post-16 proposals. That is a vexed issue.
  My final point was made in another place. None of us seems to be able to put his hand on the regulatory impact assessment. Alongside the regulatory orders it is important to have some understanding of what the impact would be on those subject to the order. I understand that it is not readily available in the Library or in the Printed Paper Office It will be helpful if it is made more available so that we may access it when we come to discuss these matters. I conclude by thanking the Minister again for the way he explained the two orders.
  Lord Avebury: My Lords, I welcome the two orders. I am grateful for the explanation the Minister has given for them. Perhaps I may pick up one of the points made by the noble Baroness: the question of the exemptions for small businesses. If one looks, for instance, at the Engineering Construction Board Order, the exemption applies to businesses where the sum of the emoluments in respect of labour-only payments for all off-site employees does not exceed £1 million.
  Has the Minister had any representations about that figure? Do small businesses believe that it is a correct figure as a cut-off point or would they prefer it to be somewhat higher? What exactly is the argument by which the cut-off point is determined, in relation
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  both to that order and to any other? I am not arguing that the figures are wrong; I simply point out that the Minister in his explanation did not specify how the Government had calculated that a "small" business was one which came below that limit and was therefore entitled to the exemption, whereas a business with payments of £1,000,001 could be labelled in the other category and would be subject to the full force of the levy.
  I do not want to make suggestions that make life for businesses even more complicated than it is already, but I wonder whether it is right to have an absolute cut-off point as a result of which a business £1 below the cut-off point does not pay anything at all whereas a business £1 above it is subject to the full force of the levy. That seems rather anomalous. In the real world it might have been better to have a graduated system of payments phasing up to the full amount, just as, for example, happens in the income tax system. One does not pay the full rate immediately one comes within the income tax band; one pays a reduced rate on the first tranche of one's earnings.
  If one looks logically at the philosophy of dealing with small businesses, a business does not suddenly graduate from being a small to being a large business once it passes a particular point in its operations. It moves slowly from being small to large over a wide range of activity. Therefore, one would have thought that the levies should take account of that fact of life.
  Lord Bach: My Lords, I am grateful to the noble Baroness and to the noble Lord for their support for the orders and for their helpful remarks. It is good that the orders, which are important, are uncontroversial to the extent that they are.
  I agree with the noble Baroness that these two industries are important. She is absolutely right about that. She is right also about the issue of using more friendly language. I am delighted to be able to tell her that the statutory instruments are being reviewed this year. It may be that those reviewing them had some prior notice that the noble Baroness was going to mention that point this evening. Both boards also issue plain English leaflets and guides at the same time, which is useful.
  The noble Baroness asked, fairly, for figures with regard to the increases. I shall write to her in due course and place a copy of the letter in the Library. In relation to any shortfall that may occur if someone does not pay up or pay up in time, I understand that both training boards keep reserves in order that such an eventuality may be taken care of.
  With regard to courses and their cost—both matters that we are debating this week in our proceedings on the Learning and Skills Bill—the last FEFC report found good quality facilities. The LSC, when it comes into being, will set tariffs to reflect different course costs.
  The noble Baroness asked about the regulatory impact assessment. It was an omission, but it was placed in the Library immediately after the debate in the other place. I am again grateful to the noble Baroness for her comments.

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  I turn to the points raised by the noble Lord, Lord Avebury. He mentioned the £1 million figure in relation to the Engineering Construction Board Order. That is for off-site establishments; the head offices. The exemption is as high as it is because it concerns some extremely large firms and their offices. The people on the payroll in the offices of large firms are often fairly well paid. So the 0.18 per cent of their salaries, as it were, is a larger amount than perhaps it would be of the salaries of those who are not so well paid. As I understand it, there has been little complaint about—indeed there has been support for—the £1 million limit.
  The noble Lord made one other important point. He asked why there is a cut-off point. The cut-off point simplifies matters. The noble Lord will know that when a firm moves gradually into having to pay the levy it will pay a percentage. As it gradually grows, the total amount that it has to pay will become larger and larger as its payroll increases. There is a gradualism about this, even though there is a specific cut-off point. I hope that my answer makes some kind of sense to him.
  I once again thank the noble Baroness and the noble Lord for taking part in this short debate. I commend the orders to the House.
  On Question, Motion agreed to.

  Contracting Out (Functions in Relation to Petroleum Royalty Payments) Order 2000
  9.8 p.m.
  The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, I beg to move the Motion standing in my name on the Order Paper.
  We are here today to debate an order, under the Deregulation and Contracting Out Act 1994, which will permit the transfer of royalty collection functions from the DTI's Oil and Gas Royalties Office to the Inland Revenue's Oil Taxation Office. As your Lordships may know, the administration of direct government revenues from UK Continental Shelf production is currently split between the Inland Revenue and the DTI. The Oil Taxation Office administers petroleum revenue tax and corporation tax while the Oil and Gas Royalties Office, which has 14 staff in Aberdeen, administers the 12.5 per cent royalty paid on oil and gas produced from older—pre-April 1982—fields.
  The effect of a transfer will be to consolidate all these functions in one unit—albeit with two sites, in Aberdeen and in London. The proposed rationalisation should bring significant benefits to producer companies. The intention is that the administration of petroleum revenue tax and oil and gas royalties will, with industry input, be gradually conformed, to bring a more streamlined service,
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  building on the substantial similarities in royalty and PRT. The Government believe this proposal to be both worth while and uncontroversial.
  It may help noble Lords if I give a little of the background history. The current division of responsibilities between the DTI and the Revenue has its origins in the earlier years of the UK's oil and gas production industry. Before 1975, oil and gas producers were liable only for production royalties and for conventional corporation tax on any production profits. Oil and gas royalty first began to generate substantial sums at the time that commercial production of gas began, in the 1960s, and, at that time, royalty administration sat naturally with the licensing authority itself—initially the Department of Energy, and latterly the DTI.
  The special taxes on North Sea production profits came somewhat later with the introduction in the 1970s of petroleum revenue tax, ring-fenced corporation tax, and the extra-territorial charge on the profits earned by offshore contractors operating in the UK sector. These taxes have been administered since 1975 by the Inland Revenue's Oil Taxation Office.
  The royalties office and the Oil Taxation Office have worked more or less closely together ever since 1975, but their respective sizes and responsibilities have changed substantially over that time, reflecting the development of the province and successive changes to the North Sea fiscal regime. Thus, the role of the Oil Taxation Office has steadily grown and now includes overall responsibility for the oil and gas industry, upstream and downstream, valuation of product for both tax and royalty, relations with overseas fiscal authorities, and the provision of technical support to the Know-How Fund and to the Falkland Islands Government.
  For present purposes, perhaps the most significant of these changes was the effective abolition of royalty for post-March 1982 fields. Although the royalties office's workload is stable at present, the medium and longer-term future of the royalties office and its staff is, as matters currently stand, an uncertain one. Furthermore, the collection of royalty does not sit particularly well within the DTI's general area of responsibility.
  While there are no guarantees for the long-term future of either office, the Government have concluded that worthwhile benefits are to be had from a merger of the two offices. First, a merged operation will facilitate a conformed approach to the administration of royalty and PRT. Both are forms of resource rent, levied on very similar licensee populations. For historical reasons, the approach of the respective offices has been different. That difference has been a source of concern to licensees, and a key objective of the merger will be to secure as much commonality in the future as is practical.
  Secondly, the new merged operation will have sufficient critical mass to manage the inevitable eventual run-down of royalty and the other duties with confidence. Thus we are looking as much to secure good, effective administration in the medium and longer-term as for the present.

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  In sum, there are substantial similarities in royalty and PRT on which the transfer will build, leading to simpler administration of royalty. Furthermore, the royalties office and the Oil Taxation Office currently have different skill bases and the expectation is that both will gain from further integration. The producer companies, which have been aware of the proposal for some time, stand to gain from closer integration of royalty and PRT administration, and have given their support to the idea.
  Responsibility for royalty policy will remain with the DTI. An order under the Deregulation and Contracting Act 1994, rather than a Transfer of Functions Order under the Ministers of the Crown Act, is being used in this case because the Inland Revenue is not a ministerial department. I commend the order to the House.
  Moved, That the draft order laid before the House on 16th December 1999 be approved [6th Report from the Joint Committee].—(Lord Sainsbury of Turville.)
  Lord Avebury: My Lords, perhaps I may ask the Minister one question. Are there any implications for the pension rights of employees in the two halves that are coming together? Are their pension rights at present identical; or will there be a scheme to assimilate the rights of both sets of employees? If that is so, will there be there a "no detriment" clause?
  Lord Sainsbury of Turville: My Lords, I believe the situation is that employees will retain the pension rights that they currently have and that there will not be a change. There is no significant difference between the DTI and the inland Revenue on that point.
  The Government believe that the transfer will be warmly welcomed by the oil companies which pay royalty on their production from North Sea oilfields. The established success of the province owes a great deal to the pragmatic partnership that government has formed with producers. This modest proposal is very much in that spirit of practicality and pragmatism. The order will permit an important rationalisation of royalty collection functions. I commend it to the House.
  On Question, Motion agreed to.

Competition Act 1998 (Determination of Turnover for Penalties) Order 2000

  Competition Act 1998 (Land and Vertical Agreements Exclusion) Order 2000
  9.15 p.m.
  Lord Sainsbury of Turvillerose to move, That the draft orders laid before the House on 19th January be approved [7th Report from the Joint Committee].
  The noble Lord said: We are here to debate two orders which will complete the overhaul of our competition regime that we promised in our manifesto. We said that we would adopt a tough "prohibitive"
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  approach to deter anti-competitive practices and abuses of market power. The Competition Act, when it comes into force on 1st March 2000, will deliver that.
  The two orders before us are concerned with helping to build an efficient, focused and effective regulatory system to enforce the prohibition. One obstacle to that is the risk that the competition authorities, the Director-General of Fair Trading and the utility regulators with concurrent powers under the Act, will be faced with the notification of a large number of benign agreements and will inevitably spend their time processing those rather than, as we would wish them to do, tracking down cartels. It is, of course, in the nature of cartels that they themselves will not be notified!
  There is practical evidence of the existence of such a risk of excessive precautionary notifications. When what are now Articles 81 and 82 of the treaty came into force, the European Commission received thousands of notifications. And when the Irish Government introduced a domestic prohibition modelled on Article 81, their Competition Authority was inundated with notifications of leases for shops.
  I know that your Lordships recognised that risk during the passage of the Bill, and Section 50 was incorporated to give express power to define and exclude land and vertical agreements from the Chapter I prohibitions.
  The Land and Vertical Agreements Exclusion Order does that. Its purpose is to remove any need to notify such agreements to the OFT or regulators on a precautionary basis, while putting in place mechanisms to deal with any agreements within the categories that do raise competition concerns. The regulatory system will be more efficient if the competition authorities are able to focus on and deal with those agreements that do affect competition significantly and adversely.
  So far as land agreements are concerned, the order will disapply the prohibition in respect of agreements which create, alter, transfer or terminate an interest in land for—example, a lease—together with certain obligations or restrictions which are part o f the agreement and which are accepted in the party's capacity as holder of an interest in land, or benefit him in that capacity. Examples of these are the usual covenants in commercial property agreements relating to the payment of rent, service charges, obligations to insure the property and clauses on the use to which the property is to be put. Our purpose is to exclude the normal restrictions and obligations to be found, for example, in shopping centre leases which we do not think are likely to affect competition appreciably but which may well be notified to the OFT on a precautionary basis.
  There is, similarly, a good case to exclude vertical agreements. Broadly, these are agreements between a supplier and business customer or dealer concerning the use or marketing of the goods or services supplied. They are less likely to raise competition concerns than horizontal agreements between businesses at the same level of trade, for example, two manufacturers of a

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  product. The prevailing view among economists is that vertical agreements will have only beneficial effects, such as stimulating inter-brand competition, except in some cases where one or more of the parties has market power or, sometimes, there is a network of similar agreements. Even in such cases careful examination of the market and the other circumstances is needed to establish whether the vertical agreement has a harmful effect. We need to exclude the mass of vertical agreements from scrutiny while providing powers to investigate and deal with those which may cause competition concern.
  The text of our definition of vertical agreements is closely modelled on the new Commission block exemption for vertical agreements which will apply from 1st June. In particular, I draw your Lordships' attention to the definition of price-fixing, which we have largely drawn from the Commission, in Article 4 of the order. It is the possibility that vertical agreements may facilitate price-fixing, such as resale price maintenance, which has led some to look at them suspiciously. We and the Commission have adopted wide definitions to ensure that not only the most overt forms of price-fixing but also the more subtle forms of pressure or incentives cause an agreement to fall outside the exclusion and hence within the prohibition.
  We have, however, thought it right to go wider than the Commission in excluding vertical agreements. We have not adopted all of the qualifications that the Commission has in its block exemption, such as market share tests, and that approach was supported when we consulted on a draft order. We can be more relaxed than the Commission because its concern that vertical agreements do not divide the single market on national grounds is not relevant to the Chapter I prohibition. In almost every case in which the Commission has taken action against vertical agreements single market considerations have been the predominant or only concern.
  We also believe that we have more effective safeguards than those available to the Commission to deal with any vertical agreements that cause competition concerns domestically. In particular, we have provided a more effective withdrawal power in Article 7 which will enable the director-general to "clawback" from the exclusion and deal with individual agreements that raise competition concerns. We also have the complex monopoly power in the Fair Trading Act, to which there is no real equivalent at Community level, which will enable networks of vertical agreements, which may in combination have an effect on a market, to be investigated and remedies imposed.
  With these powerful safeguards in place, we conclude that to exclude land and vertical agreements will enable the new competition regime to be more effective and efficient in dealing with matters of real competition concern, including any vertical and land agreements which fall into this category, than it would be if the OFT and the regulators became bogged down in the detailed scrutiny of what will usually prove to be benign agreements.
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  I turn now to the turnover for penalties order. Section 36 of the Act enables the director-general to require an undertaking to pay him a penalty in respect of an infringement of either of the Act's prohibitions. Subsection (8) provides that no penalty fixed by him may exceed 10 per cent of the turnover of the undertaking as determined in accordance with such provisions as may be specified by the Secretary of State. This order specifies how the turnover is to be determined.
  I should emphasise that the actual penalty in any particular case will be determined by the circumstances and in the light of the DGFT's guidance on the appropriate amount of any penalty. This sets out the steps which the director will follow when calculating the amount of penalty in any case. The steps encompass, among other factors, consideration of such matters as the undertaking's turnover in the relevant product and geographic market, the nature and duration of the infringement, and the size of any gain made. One step involves adjustment for any aggravating factors such as the involvement of directors and senior managers and repeated infringement, and any mitigating factors such as acting under duress, genuine uncertainty as to whether an agreement constituted an infringement, and negligent, as opposed to intentional, infringement. Any penalty may then need to be adjusted to take into account the ceiling of 10 per cent. The order is concerned with determining that ceiling.
  Under the corresponding EC regime, the maximum fine is 10 per cent of the undertaking's world-wide turnover in the preceding business year. We have departed from that approach in two significant respects, just as elsewhere in the Act we made changes where we thought the EC regime could be improved.
  First, we have decided that, since this is a piece of domestic legislation concerning trade within the UK, the turnover should be confined to turnover arising in the UK. Secondly, subject to a minimum of one year's and a maximum of three years' turnover, turnover is to be that arising for the entire period of the infringement.
  We know from the cartels that the OFT has uncovered under its existing powers that they can be long lived, often enduring for years. We believe that the punishment should fit the crime. Those who have engaged in a long-running cartel should face a higher potential penalty than a business which commits a one-off infringement.
  I said at the start that these orders were about creating an efficient, focused and effective regulatory system. The provisions in the Act and this order will provide a regulatory system with real teeth. Taken with the other order and the Act, we shall have established a modern competition system, one which is efficient and effective in dealing with matters of significant competition concern and one which is able to punish those who transgress and to deter those minded to follow in their path. I commend the orders to the House.

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  Moved, That the draft orders laid before the House on 19th January be approved [7th Report from the Joint Committee].—(Lord Sainsbury of Turville.)
  The Earl of Courtown: My Lords, I thank the Minister for his description of the orders. Usually when I debate such orders I am in full agreement with the Government. On this occasion, I am not.
  The Minister must be aware that there is concern in the industry about the effect of the orders on the part of no less a body than the CBI. As noble Lords are aware, these orders originated from the Competition Act 1998, which states that the penalty for contravention of Chapter I, which covers cartels and price fixing, and Chapter II—abusing a dominant position—will result in fines of 10 per cent of the UK turnover for up to a maximum of three years. Perhaps the Minister will confirm that. That will no doubt force industry to think very carefully about how its actions will affect its competitors. It will be able, of course, to apply to the Director-General of Fair Trading for guidance on its actions. That could result in any number of applications. Can the Minister tell the House whether it is planned for a fee to be paid on such applications? If so, how much will that be?
  As regards any fine, will the Minister confirm that the figure is 10 per cent of UK turnover over the maximum period of three years; or is it 10 per cent per year? I do not argue that there should not be a penalty. However, do the Government realise the knock-on effect of imposing such onerous burdens on industry?
  I understand that part of the reason for the orders is to bring us into line with the European Union. However, its imposition of fines is limited to one year and, if imposed, is subject to extensive consultation throughout the Commission, and final approval by the entire Commission. Has there been any indication from the Commission that the one-year period is not enough? Even though the fines imposed by the Commission will be worldwide, UK companies with a large turnover could be disproportionately affected. A fine of 10 per cent of turnover could easily turn a profit into a loss and could even force substantial companies into liquidation.
  As regards the Competition Act 1988 (Land and Vertical Agreements Exclusion) Order 2000, that is once again a very significant measure. It would emasculate the Competition Act in relation to distribution agreements and agreements relating to land, including tenancies of tied outlets such as pubs and petrol stations. That could be contrary to the public interest.
  The proposed order would exclude exclusive and other restrictive agreements between suppliers and retailers from the Act's prohibition on anti-competitive agreements. It would thus permit a wide range of anti-competitive agreements restricting competition between both distributors and suppliers,
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  to the detriment of consumers and the economy. I have made a number of points and I look forward to hearing the Minister's response.
  Lord Avebury: My Lords, perhaps I may ask one question before the Minister replies. As I understand it the figure of 10 per cent is the maximum and that it is not an automatic fine. The Minister said that the punishment would be made to fit the crime. Presumably, therefore, where it is imposed, if the fine was of such a nature that it put a company into a serious financial position then presumably there would be some leeway and mitigation of the 10 per cent maximum.
  I am ashamed to have to ask the next question because I was not here when we dealt with the Bill itself. Can the Minister say whether there is an appeal against the fine? If a company believes that the amount imposed is unreasonable, can it go anywhere else to get a judicial or any other kind of review?
  Lord Sainsbury of Turville: My Lords, if the infringement has continued for three years the 10 per cent maximum level of fine applies to that period. As has been pointed out, the fine is placed only on UK trade as opposed to the situation in the EC, where it is placed on worldwide turnover. We have made adjustments both ways. Our view is that in these circumstances, if there is a long period of infringement, that should be taken into account when deciding the penalty. That suggests that the punishment should be proportionate to the crime. The point must also he made that there is a 10 per cent maximum fine. Whether it reaches that maximum depends on the nature of the infringement. I gave some of the reasons why it may vary.
  The fees are £5,000 for guidance or £13,000 for a decision. Clearly, where companies believe that they may be trespassing, they will take very careful account of the matter. There is also a right of appeal to the Commission.
  The final point that I should make is that as regards EC law, and in America also, very substantial fines are being imposed by the Justice Department and the Commission in order to make it very clear that infringements will be taken very seriously. I believe that everyone agrees that American law has probably been the most effective. In the case of the company Hoffman La-Roche, there was a fine of 500 million dollars.
  We believe that firms as well as consumers will benefit from a strong Competition Act. Competition is the life-blood of a competitive economy. We cannot afford weak, uncompetitive domestic markets. We allow cartels, abuses of dominance and other anti-competitive behaviour to hold back business at our peril.
  That is why the Government embarked on a radical strengthening of our competition laws. A key part of that strengthening is provision for penalties. Under the competition regime we inherited, when a cartel is uncovered, all that happens is that the businesses concerned are asked to stop.

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  By contrast, our proposals, of which the Determination of Turnover for Penalties Order provides an important part, will give the new regime real teeth. As I have said, the penalties in any case will depend on the particular circumstances, but they are intended to act as a deterrent. They should encourage firms to think twice before entering into anti-competitive agreements or abusing a dominant market position. By taking into account the period of the infringement, the Determination of Turnover for Penalties Order will discourage a cynical cost-benefit analysis that the potential profits might outweigh the penalties provided that the anti-competitive behaviour can remain secret long enough.
  I do not accept the proposition that such an approach will be bad for business. On the contrary, strong competition in our domestic markets makes for strong businesses. It provides a spur for firms to innovate, increase productivity, and provide real choice for consumers. It equips them to compete in the global market place. Conversely, anti-competitive behaviour is a burden on the economy and on businesses which want to grow by offering better
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  value. It is certainly a burden on new small businesses and on ordinary consumers who have to pay more for less.
  The US economy shows that strong competition laws vigorously enforced can contribute to growth, innovation and investment. Is it suggested that American businesses have been made less competitive by their authorities' long-standing, tough approach to anti-trust enforcement? I believe that we all know the answer. It is the rigour of the competition authorities in pursuing anti-competitive practices which has contributed to the success of US businesses. Furthermore, fines there are seen as an essential component of anti-trust enforcement. Certainly, that is the lesson drawn by the US Department of Justice, which has been increasing the level of the fines it imposes.
  I hope that the House will support these important proposals. They will help to make the new competition regime efficient and effective; and that regime is a key part of our strategy for modernising the British economy and helping it to become more competitive. I commend the orders to the House.
  On Question, Motion agreed to.
  House adjourned at twenty-two minutes before ten o'clock.