Lords Sitting of 2 July 2001

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

Lord Chan
Michael Chew Koon Chan, Esquire, MBE, having been created Baron Chan, of Oxton in the County of Merseyside, for life—Was, in his robes, introduced between the Lord Dholakia and the Lord Parekh.

Lord Clark of Windermere
The Right Honourable David George Clark, having been created Baron Clark of Windermere, of Windermere in the County of Cumbria, for life—Was, in his robes, introduced between the Lord Carter and the Lord Hardy of Wath.
Several Lords—Took the Oath.

Football World Cup: Television Coverage
2.50 p.m.
Lord Gordon of Strathblaneasked Her Majesty's Government:
What plans they have to ensure that the football matches of the World Cup finals are available to viewers on a free to air basis on terrestrial television.
The Minister of State, Department for Culture, Media and Sport (Baroness Blackstone): My Lords, the whole of the World Cup finals tournament is a listed event under Part IV of the Broadcasting Act 1996. Under that legislation the Independent Television Commission will ensure that a non-free to air broadcaster—or a free to air broadcaster which covers less than 95 per cent of the population—can show any part of the tournament live only if a free to air broadcaster with at least 95 per cent coverage had either acquired similar rights or been given the opportunity to do so on fair and reasonable terms.
Lord Gordon of Strathblane: My Lords, I thank the Minister for her reply. She is, of course, aware that for the first time the rights for the World Cup have been won not by the EBU but by a private organisation which has indicated recently that it intends to hold an auction of those rights in the UK. That organisation, Kirch, has further indicated that it is taking the UK Government to the European Court of First Instance because it regards the listing of all 64 matches as unreasonable. In those circumstances is the Minister confident that we have sufficient statutory backing for the ITC to enforce government policy in this matter?
Baroness Blackstone: My Lords, I reassure my noble friend that the Government are confident that they do have sufficient legal backing. His comments contained one inaccuracy. Kirch, the media organisation that purchased the rights from FIFA, is not taking the UK Government but rather the Commission to the European Court. However, we and the ITC have made Kirch and potential UK broadcasters fully aware of the extent of our legislation and the ITC's code on listed events. That should be sufficient to guarantee that the legislation is adhered to.
Lord Faulkner of Worcester: My Lords, is the Minister aware that if neither England nor Scotland qualify for the finals of the World Cup in 2002, under the arrangements that exist at present with the German organisation Kirch it is likely that terrestrial viewers in Britain will see no more than four matches out or all those played? Will the noble Baroness make clear that the ITC is able to insist that the rights for free-to-view broadcasting will be retained with regard to the United Kingdom even if not elsewhere in the European Union?
Baroness Blackstone: My Lords, what my noble friend says is not entirely accurate. I understand that the BBC and ITV have bid jointly for the rights to broadcast the whole of the World Cup series and not just the final and semi-final.
Lord Brookman: My Lords, will the Minster agree that great sports are no longer able to be seen on terrestrial television? For example, the British Lions matches and Test matches are not available to the British public as they once were. Does the noble Baroness agree that that is not a good thing?
Baroness Blackstone: My Lords, as a sports fan I am all in favour of as many of these events as possible being shown on terrestrial television and available to as many people as possible. However, as my noble friend is aware, a number of the major events are listed. Perhaps my noble friend is a rugby fan and wishes to watch the British Lions. In 1998 the previous government extended for the first time to Rugby Union football, although not the British Lions, listed coverage. It is now possible to see, for example, the Rugby Union World Cup. It is on list B.
Lord McNally: My Lords, is it not a fact that those who administer those sports would rather take the fast buck of pay-to-view television than make the sports a national, shared experience? However, they will be the long-term losers. Will the noble Baroness clarify the point about the rights being on fair terms? Who defines the fair terms? If the terms are not fair, will the British Government block pay-to-view television in this country? It would be unacceptable for terrestrial television to pay through the nose, distorting their finances. Although it would be a shame, but not a national disaster, not to get the World Cup rights, it would be a national disaster to pay through the nose.
Baroness Blackstone: My Lords, I accept the noble Lord's tenor. I understand that the BBC and ITV have

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put in a renewed bid. They wish to negotiate with Kirch, the media company which holds the rights. They have offered somewhat more. However, I understand that they do not intend to increase their bid any further. They wait to hear from Kirch. It is possible that Kirch will want to proceed to an auction. I understand that it is very unlikely that any non-terrestrial company will want to bid in that auction.
Lord Luke: My Lords, I understand that in 1996 Kirch bought the rights for the 2002 and 2006 World Cup matches. Since 1998 negotiations have taken place between it and the BBC and ITV. Is the Minister aware of any progress on similar negotiations with other members of the EU? Surely we could get together and try not to be bullied into what has been suggested.
Baroness Blackstone: My Lords, I confirm that Kirch purchased these rights from FIFA a few years ago; I am not sure whether the precise date was 1996. The noble Lord makes a good point about the possibility of getting in touch with other terrestrial broadcasting organisations in other European Union countries. I shall see what the position is on that.

NHS: Private Sector Involvement
2.58 p.m.
Lord Clement-Jonesasked Her Majesty's Government:
What evaluation of past, and expected future, benefits of private sector involvement in the National Health Service they intend to conduct.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, the Government's policy is that where evaluations demonstrate value for money for the NHS and the taxpayer, the private sector will be involved through, first, the provision of facilities and certain support services to the NHS through the private finance initiative and other forms of public/private partnerships; and, secondly, the concordat with the voluntary and independent sectors under which NHS patients will receive clinical treatment free of charge, where appropriate in terms of cost and quality.
Lord Clement-Jones: My Lords, I thank the Minister for that reply. What evaluation is taking place? What services are proposed? The general secretary of the TGWU recently described the Government's policies as a cocktail of policy confusion. The IPPR has cast considerable doubt on the value of PFI for the NHS. The Minister is responsible for performance and quality in the NHS. Clinical doctors are required to evaluate their actions in terms of evidence-based medicine. If the Government do not have a proper system of evaluation, are there not double standards?
Lord Hunt of Kings Heath: My Lords, of course we have a proper system of evaluation. Every PFI scheme has to demonstrate that it is providing value for money. That is underpinned by the work of the National Audit Office.
On the general issue, it is clear that core clinical services will be provided and will be mainstream NHS services. However, in some instances the expertise of private partners can help the NHS to deliver expanded and improved services. That is the context in which we are taking the policy forward.
The Earl of Onslow: My Lords, will the Minister ensure that public/private partnerships remove some of the more ridiculous examples of restrictive practices in the NHS? Spanish nurses, who are sometimes employed in this country, have different skills from English nurses—and in some cases greater skills; for example, their Spanish qualification allows them to administer intravenous drips, but that is not the case in England. Furthermore, when English nurses in English hospitals qualify to do that locally, they have to get approval from London, even though they have been given approval by the local doctor in the hospital concerned.
Lord Hunt of Kings Heath: My Lords, foreign nurses would be employed directly by the National Health Service, because they would be part of the core services that we offer. The recruitment of nurses from Spain and other countries has been very successful and has gone down very well with patients. The protocols under which those nurses operate must be agreed by the National Health Service as a whole, underpinned by clinical governance within every NHS organisation. I certainly accept that we need to do all that we can to encourage nurses to take on a greater clinical responsibility if they have been trained to do so.
Lord Davies of Coity: My Lords, is my noble friend aware that the right honourable Neil Kinnock is reported today as saying that the Government are moving dangerously towards a privatised National Health Service? Perhaps the Minister would like to comment on Mr Kinnock's suggestion that we should consider ring-fencing certain taxation for the National Health Service.
Lord Hunt of Kings Heath: My Lords, I reiterate that the NHS will continue to be a core service that is publicly financed and in which the core clinical services will be provided by directly employed NHS doctors and nurses. There is no suggestion that we are going down the route of which my noble friend is fearful. We are seeking to use the expertise of the private sector when appropriate, but at no risk to the core values of our beloved National Health Service.
Baroness Gardner of Parkes: My Lords, what is the position of dentistry, which the Minister does not mention as a core service? Why is there no core National Health Service treatment available to patients in London and in most of the high-cost cities?
Lord Hunt of Kings Heath: My Lords, the noble Baroness will know that the Government published a strategy on dentistry 12 months ago, which is designed as a foundation for ensuring that NHS patients who require NHS dentistry receive it. At the moment, many dentists provide NHS services and private dental care. We are seeking to encourage greater provision of NHS services. We are in fruitful discussions with the British Dental Association. I am sure that the opening up of dental access centres and commitment payments to "incentivise" dentists will enable us to provide those services to the public when they require them.
Lord Barnett: My Lords, will my noble friend return to the issue of core values and value for money? Is the involvement of the private sector a short-term policy? If there were a comparison in the longer term with the ability of the public sector to provide those services, would it still be considered value for money?
Lord Hunt of Kings Heath: My Lords, we clearly need to take a long-term view when comparing a publicly financed NHS project and a private finance project. The history of the NHS developing its own capital programme is full of stop/start projects because of the vagaries of public finance, with the second and third phases of many hospitals never being built. Where a private finance initiative scheme is shown to be value for money, we can ensure that it will be completed on time and that there will not be the traditional delays. I am satisfied that we are promoting effective public/private partnerships in which the patient gains.
Lord Avebury: My Lords, does the Minister agree that the issue is not purely financial and that to leave it entirely to the National Audit Office to advise on the evaluation of such projects is not satisfactory, because there is a political dimension? Will the Government involve wide sections of public opinion outside the National Health Service in the evaluation, including the trade unions?
Lord Hunt of Kings Heath: My Lords, we are in the process of developing the largest capital building programme that this country has ever known, with 100 new hospitals. Private finance is one of the ways in which we are going to deliver that. Of course we want dialogue with the public and the staff. We constantly have such dialogue and we shall continue to do so. However, I think that the public would sign up to the proposals if they realised that they could deliver 100 new hospitals.
Lord Bruce of Donington: My Lords, is the Minister aware that it is highly necessary in the national interest that the Government's intentions on the issue should be as detailed as possible and available to the public as quickly as possible? There should be a full debate in Parliament about exactly what is involved in the generalities of definition that the Government have so far given.
Lord Hunt of Kings Heath: My Lords, I shall be happy to debate the issues with my noble friend if he cares to table an Unstarred Question at some stage. The Government's intent is clear. We have said that the NHS will continue to provide core services. We shall use the private sector where it has expertise to enable us to develop and expand services more quickly than we can at present.

Security Services Group
3.7 p.m.
Lord Burnhamasked Her Majesty's Government:
Whether they will provide further information about the Security Services Group and why it is proposed that responsibility for that group should be moved from the Cabinet Office to the Ministry of Defence.
The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Lord Macdonald of Tradeston): My Lords, the Security Services Group is an organisation of about 120 staff who design, install and maintain security systems for the Government, the public sector and private sector customers. It is part of a former executive agency of the Cabinet Office, but it no longer has significant links with any other Cabinet Office activity. The Prime Minister concluded that it made good management sense to transfer the group out of the Cabinet Office to the Ministry of Defence, which is the biggest user of its services and is better able to support its activities. The transfer of responsibility took effect on 8th June 2001.
Lord Burnham: My Lords, I thank the Minister for that factual reply. What plans are there to integrate the security services with the Ministry of Defence Police? When shall we hear a little more about legislation regarding the Ministry of Defence Police?
Lord Macdonald of Tradeston: My Lords, the SSG employs 120 staff, which is a small number in comparison with the ministry's Defence Estates Agency, into which it will be incorporated and which has 1,400 staff. We believe that it will combine well with the work of that agency, which has responsibility for the cost-effective management of the defence estate. I am not aware of the answer to the noble Lord's other question, but I shall write to him when I know.
Lord Elton: My Lords, are the members of the SSG security vetted? Is the security equipment around this House their responsibility or that of people who are not security vetted?
Lord Macdonald of Tradeston: My Lords, members of the Security Services Group are vetted to a high level. Most of their work is done for the Ministry of Defence, the Home Office and the Foreign and Commonwealth Office, but they are also responsible for royal palaces, including the Palace of Westminster.

NHS Action Plan on Racial Discrimination
3.9 p.m.
Baroness Whitakerasked Her Majesty's Government:
How they propose to take forward the National Health Service action plan on racial discrimination.
Lord Hunt of Kings Heath: My Lords, much work has been done through the Tackling Racial Harassment programme to develop and disseminate practical tools to tackle harassment. We shall shortly publish guidance based on that. We are now initiating a new phase of action to ensure that tackling harassment is performance-managed as a mainstream human resources priority.
Baroness Whitaker: My Lords, I thank my noble friend for that positive Answer. However, can he say whether, and, if so, when, he will publish the research on racism in the NHS that was carried out with the participation of more than 500 NHS staff by Lemos and Crane and completed last autumn?
Lord Hunt of Kings Heath: My Lords, the report of the analysis of staff attitudes to racial harassment will be published when it has been peer reviewed, as is normal practice for research commissioned by the department. As I said, we shall also publish guidance as soon as possible.
Lord Dholakia: My Lords, will the Minister invite the Commission for Racial Equality to mount a formal investigation, as has occurred in a number of other government departments—in particular, in the Prison Service—to examine the extent of racial discrimination? Once the extent of racial discrimination has been proved, and bearing in mind that a substantial part of NHS services is provided by people from ethnic minorities, will he say whether such an investigation could be backed up by statutory obligation through the issue of a non-discrimination notice that can be monitored regularly?
Lord Hunt of Kings Heath: My Lords, I do not believe that I am able to give that commitment. But I shall certainly commit the department to discussions with the Commission for Racial Equality, whose advice we often seek and greatly value. The noble Lord makes an important point in relation to the NHS workforce; for example, approximately 33 per cent of hospital medical staff come from black and minority ethnic groups. I believe that we must do everything that we can to ensure that the NHS has, and supports, an environment in which racial discrimination is not tolerated.
Lord Clement-Jones: My Lords, from the recent report of the King's Fund, Racism in Medicine, it is clear that in many cases the problem starts in medical
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schools. Can the Minister say what action he, together with his colleagues in the DES, has taken to ensure that the problem is tackled at that point?
Lord Hunt of Kings Heath: My Lords, the noble Lord raises an important point which I suggest applies as much to nursing courses at universities as it does to medical schools. He will understand that it is primarily a matter for universities. We are committed to a policy of diversity and equality of opportunity in the health service. Clearly we work in collaboration with our university colleagues. We welcome the fact that the Council of the Heads of Medical Schools is addressing those issues via their statement of guiding principles for the admission of medical students. However, it is certainly a matter which the Department of Health will continue to discuss with the relevant government departments and individual medical schools.
Lord Lester of Herne Hill: My Lords, is the Minister able to tell the House approximately when the new positive obligations that will be imposed on the health service and on universities, including medical schools, under the Race Relations (Amendment) Act will be brought into force?
Lord Hunt of Kings Heath: My Lords, I am not able to give the noble Lord a specific answer to that question. However, clearly it is most important that the amendment to the Race Relations Act, which will have such an important role to play in the provision of public services in the future, is taken seriously. It is also important that a full implementation programme is put in place to ensure that the provisions of the Act are seen to be as sensitive as possible to racial diversity in relation to the experience of people who work under and use those services.
Baroness Howells of St Davids: My Lords, if the Government do not propose to use the CRE, will the Minister tell the House how they will monitor and evaluate what happens during the modernisation programme? We are concerned about how the decision-makers will take into account what the professionals and patients say in relation to the delivery of the service.
Lord Hunt of Kings Heath: My Lords, we have set national targets for NHS employers to take effective action to tackle harassment. We shall also require local employers to publish information on progress in their annual equality statements. As part of the zero tolerance campaign, we are planning guidance and publicity materials on how to deal with NHS service users and members of the public who harass, bully or demonstrate violence towards NHS staff. We are also committed to issuing guidance on the withdrawal of treatment in the last resort from abusive and violent patients and members of the public, including from those who demonstrate racial abuse towards staff. I expect clear guidance to the NHS about how it is to take forward these issues to form part of our overall performance management system in the health service.

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We are determined that the NHS will prove to be a model employer and provider of services in such circumstances.
Lord A.vebury: My Lords, does the Minister agree that the problem of violence against staff has been in existence for a long time? What advice has been given to hospitals about the growing menace of racially motivated attacks on ethnic minority staff in accident and emergency departments? Is that not an urgent problem which needs to be addressed before any guidance is issued?
Lord Hunt of Kings Heath: My Lords, I could not agree more with the noble Lord. I believe that violence towards NHS staff is reprehensible under any circumstances; how much more so when there are racist elements to it. Often the circumstances in which the attacks, either verbal or physical, take place are those in which staff are trying to do their best for people. As an employer, we have a major responsibility to ensure that staff are supported in all ways possible. Part of the work that we are carrying out in relation to the no-tolerance policy, which I commend to the House, involves offering specific guidance in those areas. Good practice is to be seen in many parts of the NHS. Clearly one of our aims is to ensure that that is shared across the service as a whole.
The Earl of Onslow: My Lords, before we become over-excited, my daughter, who works in the accident and emergency service, says that harassment and bloody-mindedness in accident and emergency departments is normally related to drink and has nothing to do with racism. It is a matter of yobbish behaviour by everyone, and it does not matter whether the nurse is white, black, pink or khaki. It is the yobbish behaviour that is important. Let us not become too hung up about the racial element, which distorts our judgment in these matters.
Lord Hunt of Kings Heath: My Lords, I do not agree with that. Of course, examples of yobbish and hooligan behaviour are to be seen in people from all backgrounds. It is something that we deplore and must take action against. However, there is sufficient evidence from any number of studies that some NHS staff from black and minority ethnic backgrounds have been subject to particularly scurrilous and disturbing attacks, whether physical or oral. As employers and citizens, we must do everything that we can to stamp that out, and it is why we must have a policy of no tolerance. It is simply not acceptable that staff should have to put up with some of the behaviour that they experience at present.
Lord Harrison: My Lords, does my noble friend recognise that there is a higher incidence of diabetes—both types 1 and 2—among the black and Asian community? Is it possible that some indirect racial discrimination is occurring in terms of the provision of resources?
Lord Hunt of Kings Heath: My Lords, my noble friend is right to identify particular aspects of illness among different groups in this country. We are developing a national service framework in relation to diabetes which I hope will tackle the issues that he has raised. In ensuring that we provide services to the whole of our community, it is important that we get right our employment policies and the issue of entry to medical and nursing schools. I believe that if we sort out matters relating to employment and the way in which staff are dealt with, that will have a major impact on service provision.
Baroness Carnegy of Lour: My Lords, is this not far too important a matter for the Government to try to micro-manage at the centre? One million people work in the National Health Service. How can the Government manage that? If the law is up to date, why do they not leave it to local t rusts to ensure that the law is enforced?
Lord Hunt of Kings Heath: My Lords, we do not micromanage the health service. We have a performance management system that focuses on the core targets that we expect local NHS bodies to deliver. We have to back that up with guidance and ensure that it is achieved. On the issue that the noble Baroness raised, action will of course be taken at the local level. We depend on leadership at that level to ensure that our aim is achieved. Our job at the centre is to provide helpful guidance and advice and to back that up with robust performance management in those areas in which it is absolutely vital to deliver a service throughout the country.
Lord Roberts of Conwy: My Lords, does the Minister agree that the most prominent form of discrimination in the health service involves postcode prescribing? Have the Government got new initiatives to deal with that?
Lord Hunt of Kings Heath: Yes, my Lords. Our initiative involves the National Institute for Clinical Excellence, which is designed to remove the postcode prescribing that we inherited. It helps to ensure that there is robust advice throughout the NHS about which treatments, drugs and clinical pathways of care work best. That is having and will continue to have an enormous effect in ensuring consistency of approach throughout the country.

Business
Lord Carter: My Lords, immediately after our debate on the Motion on the Code of Conduct for Members of the House, my noble and learned friend Lord Falconer of Thoroton will, with the leave of the House, repeat a Statement that is being made in another place on political developments in Northern Ireland.

Chinook ZD 576: Select Committee
3.21 p.m.
The Chairman of Committees (Lord Tordoff): My Lords, I beg to move the Motion standing in my name on the Order Paper. In doing so, I thank the noble and learned Lord, Lord Jauncey of Tullichettle, for allowing his name to go forward as chairman of the committee. I am sure that the House feels that this difficult problem is in good hands.
Moved, pursuant to the Motion agreed to by the House on 30th April in the last Parliament, That a Select Committee of five members be appointed to consider the justification for the finding of those reviewing the conclusions of the RAF Board of Inquiry that both pilots of the Chinook helicopter ZD 576 which crashed on the Mull of Kintyre on 2nd June 1994 were negligent;
That, as proposed by the Committee of Selection, the following Lords be named of the committee:

L. Bowness,

L. Brennan,

L. Hooson,

L. Jauncey of Tullichettle (Chairman),

L. Tombs;

That the committee have power to appoint specialist advisers;
That the committee have power to adjourn from place to place;
That the committee shall report by 31st January 2002.—(The Chairman of Committees.)
On Question, Motion agreed to.

Hybrid Instruments: Select Committee
  Personal Bills: Select Committee

    Standing Orders (Private Bills): Select Committee
    The Chairman of Committees: My Lords, I beg to move the Motion standing in my name on the Order Paper.
    Moved,
    Hybrid Instruments Committee—That a Select Committee be appointed to consider hybrid instruments and that, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the committee:

    L. Campbell of Alloway,

    E. Courtown,

    V. Craigavon,

    L. King of West Bromwich,

    L. Luke,

    B. Thomas of Walliswood,

    B. Wilkins.

    Personal Bills Committee—That a Select Committee be appointed to consider Personal Bills and that, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the committee:

    L. Faulkner of Worcester,

    B. Knight of Collingtree,

    L. Sandberg,

    L. Templeman,

    L. Wilberforce.

    Standing Orders (Private Bills) Committee—That a Select Committee on the Standing Orders relating to Private Bills be appointed and that, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the committee:

    L. Brett,

    L. Brougham and Vaux,

    B. Gould of Potternewton,

    L. Greaves,

    E. Liverpool,

    L. Luke,

    E. Sandwich.—(The Chairman of Committees.)

    On Question, Motion agreed to.

Code of Conduct
3.23 p.m.
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, I beg to move that the House do now resolve itself into Committee on the Code of Conduct for Members of this House.
Moved, That the House do now resolve itself into Committee.—(Lord Williams of Mostyn.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Lord Williams of Mostyn: I beg to move the Motion standing in my name on the Order Paper.
This approach had been thought to be the most convenient procedure for your Lordships' House. It allows us to have a more flexible debate than if there had been a speakers' list in the usual way. Perhaps it would be helpful if I indicated the intended procedure and order of discussion. The intention is that we take the Motion and each amendment in their natural place. I shall move my Motion and speak to it; then the noble Lord, Lord Kingsland, will move his amendment and make his speech; then we will have a general debate in which all who wish to intervene may take part, including, of course, the noble Lord, Lord Ezra, who has tabled his own separate amendment.
This is of course a matter for the House and we on this side approach it on the basis that it will be a free vote. My advice is and will remain that if noble Lords want it, we should agree to the amendment standing in my name not simply because it is in my name but,

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significantly, because it is, among other reasons, the majority recommendation of the group to which I shall refer in a moment.
Baroness Blatch: The noble and learned Lord tabled a Motion. not an amendment.
Lord Williams of Mostyn: The noble Baroness is as always quite right. I moved a Motion, and the noble Lord, Lord Kingsland, moved an amendment.
I shall place this subject in an historical context, although, unusually, the relevant developments occurred quite recently. In November 2000, the Committee on Standards in Public Life, which is usually called the Neill committee after its distinguished chairman, published its report on standards of conduct in the House of Lords.
In January this year, my noble friend Lady Jay of Paddington asked me to chair a small group on implementation. The group was assisted substantially by the staff of this House. I am sure that all those who served on that committee are extremely grateful for the assistance that we were given. We tried to secure a reasonably representative group. The noble Lord, Lord Wright of Richmond, who has enormous experience in public service and subsequently outside, was nominated, and I am grateful to the noble and gallant Lord, Lord Craig of Radley, for doing that. Also on the committee was the noble and learned Lord, Lord Archer of Sandwell, who, after all, is a former Law Officer and an extremely senior and respected Member of this House. The noble Lord, Lord Strathclyde, proposed the noble Lords, Lord Elton and Lord Kingsland, and I was very pleased to have their contributions. The noble Baroness, Lady Hamwee, from the Liberal Democrat Benches, brought substantial experience in the parliamentary and local government contexts. The latter should not be overlood as a reservoir of possible assistance.
We were told to report in three months and we did so in two-and-a-half. We had hoped to be unanimous but we failed to be. We produced a text that four committee members supported; the noble Lords, Lord Elton and Kingsland, dissented, but only in part.
To help noble Lords, I point out that the most useful documents are today's Order Paper and the cross-referenced paper that has been available in the Printed Paper Office. The cross references are most helpfully—I am grateful to the administrative staff for doing this—set out in three different colours. The original text is in black; when the original text is affected by the "Kingsland amendment", if I may refer to it in that way, that text has been emboldened in red and the proposed replacements appear in blue. That is a useful cross reference for those noble Lords who might want to see the difference between what was originally produced in the red bound volume by the committee that I chaired and the effect of the Kingsland amendment. I hope that that is of assistance.
One of the matters to which we put our mind and which I invite noble Lords to consider is: what should an adopted code hope to achieve? I suggest that it is a
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significant protection for individual Members of this House if we all know, in some degree of precision, the standards that we are obliged to maintain. Secondly, and perhaps more fundamentally, it is my deep belief that as this House develops—we have had short debates on the development of our composition and on the possible changes in working practice—we should look to securing wider public support for what is done and said in this House. I believe that a published, demonstrable code of conduct is very useful in relation to that second purpose.
In a code we want something that is clear, coherent, easy to understand and fair and simple to give effect to. I believe that the draft code realises each of those aims. I suggest that any code that we adopt should chime with the spirit of our times and the Neill committee recommendations and that it should command wider public support outside the narrow gates of Parliament.
I know that noble Lords have had an opportunity to examine the documents so I turn immediately to the essential recommendations. First, paragraph 1 sets out—I hope that it does so clearly—the, "Purpose of the Code". There is no dissent on this matter, so far as I am aware. That purpose is,
"to provide guidance for Members of the House of Lords on the standards of conduct expected of them in the discharge of their parliamentary and public duties".
The latter duty is important; the provision is not limited simply to parliamentary duties.
The second purpose in numbered paragraph 1 is,
"to provide the openness and accountability necessary to reinforce public confidence in the way in which Members of the House of Lords perform their parliamentary and public duties'.
Those Members of the Committee who have the cross-referenced, differently coloured paper will see that there is no dissent from those dual purposes.
The original proposal in the Motion, which I commend to the House, was that,
"Members of the House:

- must comply with the Code of Conduct;

- should act always on their personal honour;

- must never accept any financial inducement…

- must not vote on any Bill or Motion…in return for payment or any other material benefit (the 'no paid advocacy' rule)"

When we produced our code—I am always open to be corrected—and sent it to my predecessor, all the terms of paragraph 4 were agreed to. We spent a good deal of time looking at a number of different aspects and nuances of these matters. Paragraph 5 sets out the seven general principles of conduct and I do not trouble the Committee with those.
3.30 p.m.
Lord Waddington: Perhaps I may interrupt the noble and learned Lord and ask:who is the holder of a public office? There is no definition in the Motion. I am led to believe that we are all holders of public office. If that is correct, it is not a natural meaning of the term. It may be better to have the term defined in the Motion.
Lord Williams of Mostyn: I think not. In fact, all seven principles come from the Committee on

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Standards in Public Life. We simply adopted them. That is why I refer to them rather than consider the definitions. I understand from the noble Lord, Lord Neill of Bladen, that he will be offering his contribution to the Committee this afternoon.
Lord Waddington: But who is the holder of a public office?
Lord Williams of Mostyn: All those who are in public life who are remunerated one way or another by the public or, if not remunerated, are in a position where they affect significantly public life in this country; for example, judges. I do not believe that the noble Lord will be able to find a totally comprehensive definition. The committee said that these are the principles which should inform those in public life. I doubt that we shall ever obtain a satisfactory comprehensive definition. That was not a point at issue between any of the members of the committee, although that does not bind this Chamber.
We go specifically now to deal with the question implied by the noble Lord, Lord Waddington, and he may find his answer in the terms of his specific context in paragraph 6, which states:
"In the conduct of their parliamentary duties, Members of the House shall resolve any conflict between their personal interest and the public interest in favour of the public interest".
Paragraph 7 is another paragraph which was agreed to by the committee. It began, I suggest correctly, with the activity of registration and states that,
"Members of the House must:…register in the Register of Lords' Interests all relevant interests of their own or of their spouse, in order to make clear those interests that might reasonably be thought to influence their actions."
The committee's report then referred to declarations (when speaking in the House or communicating with Ministers, government departments and executive agencies) of any interest which is a relevant interest in the context of the debate or the matter under discussion. Your Lordships can see that I am omitting some words, not to be deceptive, but to be economical.
What happens in the context of the Kingsland amendment is that the declaration is put first, in different words, and registration is put second, again in different words.
Baroness Boothroyd: I am sure that Members of the Committee understand that, when making a speech, it is better to declare at the beginning of that speech any financial interest there may be in the subject. Will the Leader of the House make it clear to the Chamber what is intended with regard to tabling a Parliamentary Question and asking a supplementary question? It is sometimes difficult to make a declaration at those times. Perhaps that point should be made clear at this stage.
Lord Williams of Mostyn: The noble Baroness makes an extremely important point and one on which I have remarked in my own experience. Seven minutes for a Question is extremely short. Sometimes Members
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of the House say, "I declare my interest". But many of us remain baffled as to what that interest is. I agree with the noble Baroness that that is the virtue of registration. If there is ambiguity, one can go to the registration and clear that ambiguity out of the way. I am grateful for the intervention and agree with the thoughts behind it. That is why I was suggesting earlier, I hope acceptably to the Committee, that registration may well be a significant protection for someone who simply does not have the time to explain the interest when asking the supplementary question.
The question that develops naturally from that helpful intervention is: what is a relevant interest? Paragraph 8, which was agreed to unanimously, deals with that and states:
"The test of relevant interest is whether the interest might reasonably be thought by the public to affect the way in which a Member of the House of Lords discharges his or her parliamentary duties.
The test of relevant interest is therefore not whether a Member's actions in Parliament will be influenced by the interest, but whether others might reasonably think that this might be the case".
"Relevant interests" include both financial and non-financial interests. Members of the Committee will see that amendments have been made, but I repeat—I hope not at tedious length—that those were matters agreed by the whole committee.
The fundamental dissent in the letter from the noble Lords, Lord Kingsland and Lord Elton, related to paragraphs 11 and 12. Originally paragraph 11 read in the way that is set out. Again it does not help for me to read everything out. There is an addition to deal with visits paid for from public funds. It was thought inappropriate to require registration in that regard.
We then come to paragraph 12, which states,
"The list in paragraph 11 above is not exhaustive. For example, relevant financial interests may also include (depending on their significance)"—
and a list follows.
The Earl of Onslow: In relation to declaration of interests, I am on the Armed Forces parliamentary committee. Our air fares are paid for, I believe, by sponsorship. Does that sort of sponsorship count as public funds—I have nothing to do with it—or is it something which should be looked at?
Lord Williams of Mostyn: If it is commercial sponsorship, it is plainly not public funds. Perhaps I can help the noble Earl. There are bound to be questions of that sort which strike any of us, "Have I done the right thing? Where is the line drawn? Where does it fall?". The noble Earl will find the answer in paragraph 17. I accept that this comes later but I deal with his question as it arises.
Questions of that sort are bound to arise. The committee said that,
"The Registrar is available to advise Members of the House. A Member who acts on the advice of the Registrar in determining what is a relevant interest satisfies fully the requirements of the Code of Conduct".

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I shall develop that point later, but it is useful to mention it at this stage. There are bound to be some difficult areas where honourable people will honourably take different views. I hope that Members of the Committee will accept that we were looking for a light touch. I did not want to introduce the spirit of Savonarola into our affairs. If one looks at the situation free of all prejudice or preconception, as Members of the Committee always do on these occasions, and asks the Onslow question: "Which side of the line: am I on? I should not wish to be the object of criticism. Equally, I should not like to be overly fastidious", we find the answer is in paragraph 17, "Go and see the registrar". It is an important question and that is why we use a light touch. Even if the registrar is wrong, no transgression follows. That is important.
I turn to paragraph 12:
"The list in paragraph 11 above is not exhaustive. For example, relevant financial interests may also include (depending on their significance):

—shareholdings not amounting to a controlling interest;

—landholdings (excluding Members' homes);

—the financial interests of a spouse or relative or friend".

Lord Renton: That is extraordinary.
Lord Williams of Mostyn: As I said earlier, it is not extraordinary when one examines the possible mischief. Perhaps I may explain that and then it will not seem extraordinary. No one has yet had the great facility of listening to the argument. Perhaps I might be allowed to develop it. Paragraph 12 continues:
"—hospitality or gifts given to a Member which could reasonably be regarded as an incentive to support a particular cause or interest".
Members of the Committee will see that all of those have been struck out in consequence of the amendments tabled by the noble Lord, Lord Kingsland. With regard to:
"—shareholdings not amounting to a controlling interest",
I give an illustration which I stress is entirely hypothetical. I am not in the happy position of being a 1 per cent holder of a shareholding in BP, but if I were, two consequences would follow. First, I probably would not be doing this job and, secondly, I would be an extremely happy bunny. A 1 per cent shareholding in BP is not a controlling shareholding and cannot be under any definition of company law or City practice that I have encountered. However, it is a significant interest.
Lord Marsh: I am grateful to the noble and learned Lord for giving way. This is one of the matters which concerns me and one which is based on a total misunderstanding. The situation is inconceivable. First, in that particular case the noble and learned Lord would have to be a billionaire because BP is a multi-billion pound company. Secondly, it is inconceivable that anything that we debated here could have that direct effect upon any company, certainly not a multi-national.
Lord Williams of Mostyn: There are two points I should like to mention. First, I wish that the noble
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Lord had not been quite so incredulous about the prospect of my becoming a billionaire at some stage. Secondly, the noble Lord has excavated his own elephant trap and leapt willingly into it. It is not a question of "whether or not anything which could be done here could affect" but one of public perception, among other things. This Chamber may lack legislative power but it is extremely influential. Members have debates which lead to no legislation. I refer, for instance, to the stem cell debate. I do not believe that a debate of such high intellectual and moral quality could have been found in any legislature in the world. Members sometimes address public meetings. On occasions they write articles, give lectures and so forth. A good deal of the attention paid to noble Lords is because they are Members of this place, which is why I sought to stress earlier that we are not talking simply of parliamentary duties; we are also talking of public duties.
3.45 p.m.
Lord Strathclyde: The noble Lord—
Lord Williams of Mostyn: Perhaps I may deal completely with the point raised by the noble Lord, Lord Marsh. I would not like it to hang evanescently in the air. The perfect answer to it is in the caveat to paragraph 12:
"The list in paragraph 11 above is not exhaustive. For example, relevant financial interests may also include",
and then the further caveat,
"(depending on their significance)".
I am grateful to the noble Lord for his illustration. If one considers this matter, it is a light touch. It is supposed to be subtle and sophisticated enough to deal with a variety of different circumstances. Perhaps I may finish this matter before giving way to the noble Lord, Lord Strathclyde.
"—Landholdings (excluding Members' homes);
—the financial interests of a spouse or relative or friend".
My old friend and companion in arms, the noble Lord, Lord Renton, said that that was extraordinary; it is not. The question to be asked is whether there is a close enough relationship to give the impression to those outside who might come to a conclusion that we had not voted wholly impartially.
Some people have a large circle of friends; some have only one or two. It may be that some people are closer to their closest friends than to many of their relatives. I certainly know many in those circumstances. I am told that it may well be these days that people have friendly relations even with those who are not their spouses. That may not be true, but I heard it in the Bishops' Bar, so it is likely to be true.
The point here is not that every friend's modest shareholding or small amount of Treasury notes under the bed in North Wales has to be declared. The overarch here in paragraph 12 is:
"relevant financial interests may include (depending on their significance)",
those following matters.

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Again, if there is any difficulty or doubt, what does the puzzled or troubled person do? He or she goes to the registrar to see what is the conclusion.
I shall round off this part and then give way. Could hospitality or gifts reasonably be regarded as an incentive to support a particular cause or interest? There is nothing difficult about these matters if we recognise the enormous influence of this House.
Lord Strathclyde: I thank the noble and learned Lord for giving way. Perhaps I may take the noble and learned Lord back to the point about public perception, which is important. For some years the House of Commons has maintained a much tougher register than this House. Is it the view of the noble and learned Lord that that enhances the reputation of another place? Complaints are often made vexaciously and for political reasons. For example, we need only look at the recent examples of the Prime Minister's nanny, William Hague's use of a gym and John Major's lecture trips to the United States. Is it the view of the noble Lord that the House of Commons has a higher reputation in the conscience of the public than this House which has a far lesser regulatory regime but one which has worked extremely well since it was introduced by the noble and learned Lord, Lord Griffiths, in 1995?
Lord Williams of Mostyn: The noble Lord has made a number of points which are obviously important. Before the notorious scandals at the other end of the Palace, if anyone had said to me that Members of Parliament were in the habit of taking £2,000 for asking parliamentary questions I should simply have refused to believe it. But I was living in a naive world of my own.
The House of Commons has a different regime to the one proposed here. That is why I believe it is legitimate to say—I shall repeat it, waiting for the hollow laughter—that we have adopted a much lighter touch. I am not sure that it is proper for me to criticise what the Commons committee did or the preliminary conclusions arrived at by Miss Filkin. However, I understand that a number of the examples given by the noble Lord may well have found a degree of favour in thinking that there was a disproportion. We deliberately tried not to get out of kilter or be disproportionate. We do not have the elaborate regime which is in place at the Commons.
The noble Lord was good enough to mention the Griffiths resolution of 1995, which includes "friends". It is not we who have introduced "friends". I think that the noble Lord, Lord Renton, will have to agree that it is not entirely extraordinary. It is already in the declaratory rules on which we voted in November 1995. However, I shall continue.
Lord Marlesford: The noble and learned Lord chose to give us an example of a 1 per cent shareholding in BP. It is valuable to have such guidance. However, the example chosen was remarkable and perhaps does not apply to anybody in this place. Let us suppose that it
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was 0.1 per cent, 0.01 per cent or 0.001 per cent, all of which might pass his test as being seen by some as significant. As he chose to give us guidance in the case of shares of BP, would he not go further and give us a little more guidance? Frankly, the example he gave was not helpful.
Lord Williams of Mostyn: I was not giving guidance, I was providing a rationale for the rule. It may be that a small component shareholding in a large international company may be of significance, but I shall repeat what I said in answer to the noble Lord, Lord Marsh. Paragraph 12 specifically states that the list is not exhaustive and that
"relevant financial interests" may also include (depending on their significance)".
Their significance depends on the issue on which we might be voting. Some issues on which we might be voting might have a marginal tangential relationship to BP, for instance. On the other hand, we might be voting on a matter of great importance relating to the construction of a pipeline. In those circumstances, a significant large holding in BP might well fall to be registered.
If one wants a completely dictatorial Holy Writ approach, which I do not, one would have to have an enormous document—the New Testament, the Old Testament and the Apocrypha—in order to deal with all these questions. I hope that the more we develop the dialogue the more your Lordships will come to see that we have produced a light touch, flexible, subtle tool. All of these questions can be answered if one simply looks at what has been set out.
Baroness Park of Monmouth: I am disturbed by the phrase "public perception". First, are we talking about decent ordinary people or are we talking about the media? Secondly, I find the mention of "friend" difficult. I have an enormous range of friends but I do not have the slightest notion whether they have shares in BP or anything else. It has nothing to do with my friendship and I do not know it. I could easily stand and argue a case, wholly unaware that I was in the happy position of having the friendship of someone who owned the entire company. I do not know that kind of information about my friends and I do not ask them. I believe that most people feel the same.
Lord Williams of Mostyn: The question asked by the noble Baroness, Lady Park, drew the distinction between ordinary decent people and the media. I do not accept that distinction.
Noble Lords: Oh!
Lord Williams of Mostyn: Your Lordships will be kind enough to allow me to explain why. In the past four years, during which there has been a significant Government majority in the House of Commons, a significant even though irritating role has been played by the media in holding up government and executive to account. Some would say that that was a duty discharged by the media—although not every part and

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aspect from comics to broadsheets. A significant part of print and broadcast media work is to challenge, possibly even to raise questions which may seem to be unfair or cynical. Therefore, I do not draw the same distinction. I believe that in a civil democracy one needs a press to ask questions, even when they are disagreeable.
As regards the question relating to friends, having know the noble Baroness a long time I know that she has a vast circle of friends. If she does not know that they have any interests, the question does not arise. It could be of no significance because if one of her former students—and I know that she is in regular correspondence with students from far-flung areas of the globe—had an interest about which she knew nothing, it would never become relevant. I repeat that we have worked on the friends concept since Griffiths.
Lord Lester of Herne Hill: Perhaps I may—
Lord Williams of Mostyn: I know that the noble Baroness, Lady O'Cathain, rose first.
Baroness O'Cathain: I thank the Minister. My point was exactly the same as that raised by my noble friend Lady Park.
Lord Lester of Herne Hill: Is the noble and learned Lord the Leader of the House aware that the longer the cross-examination of him from the Conservative Benches continues the more some of us on the Liberal Democrat Benches become convinced of the need for the code, and for the general principles, as it seems that the principles are not well enough understood as they stand?
Lord Williams of Mostyn: The noble Lord, Lord Henley, said, "Give him a job", but apparently they have all been given. I am happy to answer these questions because if there are anxieties, even if they are not well based, I ought to try to deal with them.
Lord Renton: Before the noble and learned Lord sits down—
Lord Williams of Mostyn: I was not going to sit down for a moment or two but I shall do so. I was simply giving the reference to the resolution of this House, which stated:
"Such interests may be indirect or non-pecuniary, for instance, the interest of a relation or friend".
Therefore, the provision is no new thing but I shall happily give way.
Lord Renton: I do not believe that we have left paragraph 12, the controversial paragraph. Will the noble and learned Lord be so good as to give a definition of "friend", bearing in mind that all of us have many friends in your Lordships' House? Indeed, I like to think that the noble and learned Lord is a friend.
Lord Williams of Mostyn: Of course and I happily reciprocate. However, in all our many conversations
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about life, history and the civilisation of the western world neither of us has ever inquired what financial or real property interests the other has. Therefore the question would not arise.
I would not be able this side of Armageddon to produce a definition of "friend" which would satisfy all noble Lords, let alone a minority. I say simply that we have worked on this basis in a friendly way since the Griffiths resolution was adopted in 1995. If one approaches the matter in a sensible, light touch way, it is not difficult.
The Earl of Listowel: This is a serious point, whatever the precedents may be. There is an ill-natured element within the press and one can imagine it possibly abusing this particular aspect. Would it not be wisest to leave out mention of "friend" in order to prevent vexatious use? As regards my family, I can think of times when the press has not treated us particularly fairly and I am sure that noble Lords can quickly think of examples where some aspects within the media have taken advantage.
Lord Williams of Mostyn: Your Lordships will vote on this matter because it is part of the amendment tabled by the noble Lord, Lord Kingsland. I do not believe that there have been such disastrous consequences since 7th November 1995 when the Griffiths resolution was adopted:
"Such interests may be indirect or non-pecuniary, for example the interest of a relation-or friend … and they may include past and future interests".
Therefore the provision is quite wide.
Lord Ackner: Is not the problem this? In opening, my noble and learned friend said that he had tried to chime with the spirit of our time. If that is the proper approach, the word "spouse" ought always to be followed by the word "partner". "Partner" is an accepted term and I heard it referred to in a debate in your Lordships' House last week. If one is seeking to avoid that, I understand that "relative" or "friend" is meant to be a euphemism for "partner". I suggest to my noble and learned friend that he must include "partner" after "spouse" or he will not chime with the spirit of our time.
Lord Williams of Mostyn: When I was at the Bar and appeared in front of the noble and learned Lord, Lord Ackner, he always urged me to get my references correct. I said that we must chime with the spirit of Neill. In any event, the spirit of our time, to take the phrase used by the noble and learned Lord, Lord Ackner, is one where automatic response to those in authority is no longer the norm and there are serious questions about propriety.
I would be confident that in the overwhelming majority of cases in this Chamber the suspicion would be wrongly based. The way to deal with suspicion is to let in the clear air. I do not use "friend" as another word to describe a person who lives with another of the same or different sex without having been married. It is the nature of the relationship. A noble Lord might

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have such a close friend that if he knows of a significant interest, to take the point raised by the noble Baroness, Lady Park, he might feel that he had discharged his duty more properly by saying, "I have to say that a close friend of mine is a very large landowner", or whatever, "and this will affect him". It is as simple as that.
If one has a friend whose interests one is wholly unaware of the question does not arise. One does not have to send a round robin catechising all one's friends about what they own and whether they have any money in the bank. One must be realistic about these matters.
I return to the central point that there was no one on the committee who was against the principle of registration and declaration. I am most grateful to the noble Lord, Lord Kingsland. The issue is set out in the letter of dissent which was bound into the red book. I hope that the Committee will not take it harshly if I say that if these principles are not accepted we shall do ourselves a very serious, critical disservice and harm the public interest, which is not always coincident with our own.
Lord Mayhew of Twysden: The noble and learned Lord has been very generous with his time. As the document is now drafted, may we not be in danger of doing a great disservice, to use the noble and learned Lord's most recent phrase, to friends of one or other of us who legitimately wish to keep private their own interests? The whole point is that under Griffiths it is declaratory and voluntary, but under the noble and learned Lord's proposals it is a "must". Therefore, as a friend with an interest which I may wish to keep private—I have none as far as I know, but I might—I have no means of controlling whether it is or is not to be blazoned across a public document and examined by the media, which the noble and learned Lord has so eloquently defended.
Lord Williams of Mostyn: That is not so if the hypothesis is that the noble and learned Lord has a friend with a private interest of which the noble and learned Lord is unaware. If I have misunderstood the point and the significant interest is known, by definition it should be disclosed. When one comes into this Chamber one has an enormous raft of advantage which does not come without a degree of discipline. The Griffiths resolution said that noble Lords with a direct financial interest should declare it, and they should also declare any non-financial interest. It goes on to say that such interests may include the interest of a relation or friend.
If the Committee is of the view that all is well in this world I must seriously dissent. I repeat that not one member of the committee, which sat a long time ago and spent a good deal of time on the matter, concluded that registration and declaration were not required.
The noble and learned Lord, Lord Mayhew, said that I had been generous with my time, which may mean that it is time I sat down and let the noble Lord, Lord Kingsland, speak. I have tried to respond to
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everything I possibly can. There are one or two matters of further detail. I ask your Lordships to look at old paragraph 15 and new paragraph 18. Since we are in non-controversial areas I may as well deal with the point. In case any noble Lord does not have the cross-comparator I shall refer to it. Our majority proposal was that,
"The list in paragraph 14 above is not exhaustive. For example, relevant non-financial interests may also include (depending on their significance):
—other trusteeships".
The amendment proposed by the noble Lord, Lord Kingsland, is "(excepting family trusts)". We have a plain disagreement. One example, not guidance, is that at one time I declared my trusteeship of the NSPCC. That post was not remunerated, nor did I claim or receive any expenses. I had to register and declare that, quite rightly. If the Kingsland amendment is agreed and family trusts are excluded, despite the doubts of the noble Lord, Lord Marsh, I may be a trustee of a family trust that controls hundreds of millions or perhaps even a billion pounds. I do not see the sense of having to disclose my unpaid trusteeship of the NSPCC but not being obliged to disclose a vast family trust.
If one wants to be cynical about the media, in any event many of these matters can be discovered one way or another. If one wants to research Companies House and shareholdings one way or another one can find them out. It takes a good deal of effort. When it is done after a good deal of effort normally it brings about the comment in some parts of the media that it was all hidden away and it has had to be squirreled out. I believe that we are all much better off being open about it. If one has nothing to hide, why seek to hide it?
Lord Strathclyde: What the noble and learned Lord proposes completely misunderstands my reading of the amendment to be moved by my noble friend Lord Kingsland. Family trusts are not excluded from the requirement to disclose. Let nobody in this Chamber believe that an interest in a family trust can be excluded, if that is what is being debated. Those are the existing rules and nothing is being changed. The impression given by the Leader of the House was that in some way my noble friends Lord Kingsland and Lord Elton sought to protect all noble Lords with an interest in family trusts from ever having to declare them. This has been a good opportunity for me to put the record straight.
Lord Williams of Mostyn: If that is right I am very pleased, but I remain in some doubt, which will obviously be the subject of explanation by the noble Lord, as to why there is an exception for family trusts. If the noble Lord, Lord Strathclyde, is correct in his guidance I am happy to bow to it and accept it gratefully.
The Committee will forgive me if I have overlooked anything which needs to be dealt with, because I shall return to it in winding up. The final matter of detail is the question of commencement. Originally, my Motion proposed the commencement date of January

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2002. The noble Lord, Lord Strathclyde, took the view that it should be 31st March 2002, and I believe that the Liberal Democrat Benches came to the same conclusion. Having reflected upon it, that seems a reasonable compromise. I do not know whether I can assist further at this stage. I shall reply to any questions in due time.
Moved to resolve, That this House adopts a Code of Conduct for Members of the House of Lords as follows:
CODE OF CONDUCT FOR MEMBERS OF THE HOUSE OF LORDS
Purpose of the Code
1. The purpose of this Code of Conduct is:
—to provide guidance for Members of the House of Lords on the standards of conduct expected of them in the discharge of their parliamentary and public duties;
— to provide the openness and accountability necessary to reinforce public confidence in the way in which Members of the House of Lords perform their parliamentary and public duties.
2. This Code applies to all Members of the House of Lords who have not taken leave of absence.
Public duty
3. By virtue of their oath, or affirmation, of allegiance, Members of the House have a duty to be faithful and bear true allegiance to Her Majesty the Queen, her heirs and successors, according to law.
Personal conduct
4. Members of the House:
— must comply with the Code of Conduct;
—should act always on their personal honour;
— must never accept any financial inducement as an incentive or reward for exercising parliamentary influence;
—must not vote on any Bill or Motion, or ask any question in the House or a committee, or promote any matter, in return for payment or any other material benefit (the "no paid advocacy" rule).
5. Members of the House should observe the seven general principles of conduct identified by the Committee on Standards in Public Life. The seven principles are:
Selflessness: Holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their family, or their friends.
Integrity: Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.
Objectivity: In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.
Accountability: Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.
Openness: Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.
Honesty: Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.
Leadership: Holders of public office should promote and support these principles by leadership and example.
Primacy of the public interest
6. In the conduct of their parliamentary duties, Members of the House shall resolve any conflict between their personal interest and the public interest in favour of the public interest.
Registration and Declaration of Relevant Interests
7. Members of the House must:
—register in the Register of Lords' Interests all relevant interests, in order to make clear what are the interests that might reasonably be thought to influence their actions;
— declare when speaking in the House, or communicating with Ministers, government departments or executive agencies, any interest which is a relevant interest in the context of the debate or the matter under discussion. This is necessary in order that their audience may form a balanced judgment of their arguments. In cases where Members of the House vote in a division where they have a relevant interest that they have not been able to declare, they should register that interest within 24 hours of the division.
What is a relevant interest?
8. The test of relevant interest is whether the interest might reasonably be thought by the public to affect the way in which a Member of the House of Lords discharges his or her parliamentary duties.
9. The test of relevant interest is therefore not whether a Member's actions in Parliament will be influenced by the interest, but whether the public might reasonably think that this might be the case.
10. Relevant interests include both financial and non-financial interests.
Relevant financial interests
11 The following financial interests are always relevant and therefore must be registered:
—any consultancy agreement under which Members of the House provide parliamentary advice or services;
A copy of any such agreement, and the remuneration received by Members for advice in relation to parliamentary matters, must be deposited with the Registrar of Lords' Interests, so that details are available for public inspection.
—employment or any other financial interest in businesses involved in parliamentary lobbying on behalf of clients, including public relations and law firms, but Members of the House involved with organisations that offer commercial lobbying services are not obliged to refrain from participating in parliamentary business in connection with all clients of that organisation but only their personal clients;
—any remunerated service which Members of the House provide by virtue of their position as members of Parliament, and the clients of any such service;
—employment as a non-parliamentary consultant;
—remunerated directorships;
—regular remunerated employment (excluding occasional income from speeches, lecturing, broadcasting and journalism);
—shareholdings amounting to a controlling interest;
—provision by an outside body of secretarial and research assistance;
—.visits with costs paid in the United Kingdom and overseas, made as a member of Parliament, except any visits paid for from public funds.
12. The list in paragraph 11 above is not exhaustive. For example, relevant financial interests may also include (depending on their significance):
—shareholdings not amounting to a controlling interest;
— landholdings (excluding Members' homes);
—the financial interests of a spouse or relative or friend;
—hospitality or gifts given to a Member which could reasonably be regarded as an incentive to support a particular cause or interest.
13. Except for remuneration received by Members for advice in relation to parliamentary matters, Members of the House are not required to disclose how much they earn from the financial interests set out in paragraphs 11 and 12, but they may do so if they wish.
Relevant non-financial interests
14. The following non-financial interests are always relevant and therefore must be registered:
—membership of public bodies such as hospital trusts, the governing bodies of universities, colleges and schools, and local authorities;
—trusteeships of museums, galleries or similar bodies;
—acting as an office-holder or trustee in pressure groups or trade unions;
— acting as an office-holder or trustee in voluntary or not-for-profit organisations.
15. The list in paragraph 14 above is not exhaustive. For example, relevant non-financial interests may also include (depending on their significance):
— other trusteeships;
— unpaid membership of voluntary organisations.
16. Members of the House are not obliged to register membership of Churches, religious bodies and quasi-religious organisations. But it may be necessary to declare such interests (see paragraph 7).
Advice
17. The Registrar is available to advise Members of the House. A Member who acts on the advice of the Registrar in determining what is a relevant interest satisfies fully the requirements of the Code of Conduct.
Enforcement of the Code of Conduct
18. Allegations of non-compliance with this Code are dealt with as follows:

1. Any allegation should normally be raised first with the Member complained against. However, there may be circumstances when it is more appropriate to raise the matter with a party Leader or Chief Whip, or the Convenor of the Cross Bench Peers.

2. If the complainant chooses to pursue the matter, he or she should refer the allegation directly to the Sub-Committee on Lords' Interests, through its chairman.

3. The Sub-Committee will then examine the allegation and may decide to investigate it further or to dismiss it.

4. In the investigation and adjudication of complaints against them, Members of the House have the right to safeguards as rigorous as those applied in the courts and professional disciplinary bodies.

5. If after investigation the Sub-Committee finds the allegation proved, the Member complained against has a right of appeal to the Committee for Privileges.

6. The conclusions of the Sub-Committee and of the Committee for Privileges are reported to the House.

19. The adoption of this Code shall have effect from 31st March 2002.—(Lord Williams of Mostyn.)
Lord Kingsland: I beg to move my amendment to the Motion moved by the noble and learned Lord the Lord Privy Seal. I understand that, if my amendment succeeds, the amendments of the noble Lord, Lord Ezra, would fall away. I hope that that is also his understanding.
I pay tribute to the noble and learned Lord for his conduct of the proceedings of the committee. With his (dare I say) characteristic blend of good humour and single-minded determination, not only were the proceedings of the committee brisk but the conclusions were reached very early. As chairman of the committee, the noble and learned Lord now finds himself reporting to himself. The Lord Privy Seal

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speaks to the Committee this afternoon both as chairman and Leader of the House. I am very relieved to discover that as Leader of the House he agrees with the conclusions of the chairman.
My initial instincts at the first sitting of the committee, which I believe were shared by my noble friend Lord Elton, were to stick with the noble and learned Lord, Lord Griffiths, whose code has been a remarkable success story for your Lordships' House. Since it was initiated in 1995, to the best of my knowledge there has not been a single hint of any one of your Lordships having contravened any part of it.
That is a remarkable record if one compares it with events in another place. Were it not for events in another place, which are casting an ever darkening shadow on the possession of any outside interests at all, much to the detriment of its deliberations, and for what the noble Lord, Lord Neill, said in his report, my instinct would have been to stand before the Committee and stick with the code of the noble and learned Lord, Lord Griffiths. However, I do not think that that is any longer possible.
In particular, the noble Lord, Lord Neill, has changed the test which noble Lords have to meet in relation to outside interests. The test has now shifted from being essentially a subjective test—was an interest in noble Lords' opinion likely to affect their conduct in the Chamber?—to an objective test. That objective test was read out by the noble and learned Lord, Lord Williams, and appears in paragraphs 8 and 9 of the multi-coloured text. I refer particularly to paragraph 9:
"The test of relevant interest is therefore not whether a Member's actions in Parliament will be influenced by the interest, but whether the public might reasonably think that this might be the case".
That is the most significant contribution of the noble Lord, Lord Neill, to the debate. I believe that it should change noble Lords' approach to the question of the relationship between your Lordships' political work in the Chamber and your Lordships' outside interests.
Having said that, and having accepted the principles set out by the noble and learned Lord this afternoon. I, and I believe that my noble friend Lord Elton will endorse this later on when he speaks, have some reservations about some of the details in the recommended code.
Why should the code in the Chamber be different from the code in another place? I believe that there are a number of quite obvious reasons why that should be so. First, so far your Lordships' House has an unblemished record under the previous code. Secondly, noble Lords' primary work in life is not in the Chamber, save for those who are Ministers, but outside. What noble Lords do in the Chamber is something that they do when not doing other things elsewhere; the main focus of your Lordships' lives are your outside interests. What noble Lords do in the Chamber is in addition to that. That is a quite different perspective from another place. That, in my judgment, should make a difference to the degree of intrusiveness that the code imposes on Members of the Committee.
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In my view, some of the detail in the code proposed by the noble and learned Lord, Lord Williams, and the majority of the Committee is excessively intrusive. It is disproportionate to the objective it seeks to achieve.
Perhaps I may mention the main headings under which my noble friend Lord Elton and I have reached that conclusion. But, before I deal with the detail, I would like to repeat that we of course entirely endorse the approach of the noble Lord, Lord Neill, and the majority of the committee to the promotion of the code as a matter of principle.
As far as concerns the principal areas of difference, first, in relation to any advisory work for money that any noble Lords might do in relation to the affairs of the House, my noble friend, Lord Elton, and myself believe that it is unnecessary to require noble Lords to declare sums of money received from giving such advice. We reach that conclusion because noble Lords who give such advice are automatically prohibited from either speaking in the debate or voting on the matter. In other words, in relation to the matter upon which noble Lords give parliamentary advice, they have no political life in the Chamber. If noble Lords have no political life in the Chamber, what possible relevance can any money that is earned from giving advice have in relation to noble Lords' integrity? That is our first difference.
Our second difference is in relation to the question of "spouse or relative or friend". We accept entirely that "spouse" should be included, so that is not a matter of disagreement between us. As to "relative" and "friend" we have a number of reservations. The first difficulty is the question of definition; how distant or remote should the relative be in order to be disqualified? What kind of friend are we talking about; in what circumstance, and how long, should we have known that friend?
The second difficulty is one to which the noble and learned Lord, Lord Williams, has partly referred. That is the question of knowledge. We will not necessarily know what interests our friends or relatives have. Thirdly, even if we do know, our friends and relatives might not want us to say anything about them in public because they are confidential to them. If we seek to say something about them in public, we ourselves may be subject to judicial proceedings on the basis of breach of confidence.
Therefore, enormous complications flow from including relatives and friends for very small return.
4.15 p.m.
Lord Lester of Herne Hill: I am very grateful to the noble Lord for giving way. Can the noble Lord explain why he accepts that a spouse should be included but a cohabitee who is not a spouse, whether or not the same sex, should not be included? What is the difference if the relationship is very close and if the interest in the facts of the case is relevant?
Lord Kingsland: I believe that the noble and learned Lord, Lord Williams, said that a cohabitee was not

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someone the noble and learned Lord had particularly in mind when the word "friend" was introduced into the debate.
Lord Williams of Mostyn: That is true, but I think that the noble Lord, Lord Lester, is asking why should they be excluded.
Lord Kingsland: The nature of the relationship between a husband and wife in financial terms is very specifically laid down in law. That is not true of the relationship between two people who are cohabitees.
Lord Marsh: Perhaps I may ask a question of the noble Lord because the problem of lawyers in this area is that they try to block every conceivable outlay. At any given time a great many spouses—wives or husbands—are in the process of getting divorced or have parted. They are actually paying money to find out what the other one earns. A wife who loses her pass to the Palace cannot get a replacement because the husband has to go to get a new one. As one of the attendants said to me when he refused my wife a pass, "There are many Members of your Lordships' House who do not want their wives to have passes".
Lord Kingsland: On reflection, perhaps I should not have included spouses. It might have made life much simpler.
The third category is shareholdings. We have included no shareholdings in the mandatory category, whether of controlling or significant interests in companies. The relevance of shareholdings will depend entirely upon the circumstances of the particular debate in question. Where a particular holding might affect a large number of deliberations across the Chamber, there may be a case for entering that interest in a register. Otherwise, our recommendation in the context of a particular debate would be that if noble Lords feel that owning shares in a particular company might be perceived as having an influence on their conduct during that debate, we would advise declaring that interest, or, if noble Lords fail to declare the interest in the debate, then registering it within 24 hours of the debate having concluded.
The fourth area of difference concerns family trusts. It has already been the subject of an exchange between the noble and learned Lord, Lord Williams, and my noble friend Lord Strathclyde. The noble and learned Lord's understanding of the outcome of that exchange is exactly my understanding and so I do not intend to say anything further about that.
The suggestion in the amendment that, whatever the outcome of today's deliberations, the new regime should not come into force before 31st March 2002 and in any event not before a resolution is connected with the imminent retirement of the proposed registrar is suggested for entirely technical reasons and not for any other reasons.
Lord Williams of Mostyn: I understood it to be a little more general; namely, that a certain amount of
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questioning will need to be done and a certain amount of advice will need to be taken. I took the point that some noble Lords might in any event want to rearrange their financial affairs. When the proposal came from both Benches that March was more reasonable and flexible than January, it seemed to be quite fair to accept it.
The Earl of Onslow: In other words, we want to rearrange our financial affairs so that they appear differently on the register. That sounds to me dead dodgy if nothing else does.
Lord Williams of Mostyn: Dead dodginess must be in the eye of the beholder. It is a fact that some noble Lords might wish to alter their financial affairs. If they want to do so and therefore not be obliged to register, it occurred to me that a cut-off point in January might be too tight and that the suggestion of March seemed reasonable. As I always want to be reasonable, I accepted it.
Lord Kingsland: My final point is in relation to the reporting to the appropriate committee of any suspected breach of the rules. I feel quite strongly that the act of reporting, and the act of seizing the responsible committee with authority to investigate a matter, should be done entirely in private. It is quite understood that if the committee decides to embark on an investigation, the investigation will have to be, at least in part, in public; but the initial reporting of an alleged contravention of the rules should be in private.
Those are the only differences between my amendment and the Motion proposed by the noble and learned Lord the Leader of the House. They are differences of detail and not of principle. They seek, in my submission rightly, to create a more proportionate relationship between the public lives of noble Lords and their private lives, which in many circumstances ought justifiably to be kept private in exactly the same way as happens with other citizens of the United Kingdom.
Lord Monson: Before the noble Lord sits down, perhaps I may question the assertion made at the beginning of his most persuasive speech that paragraph 9 provides an objective test. I submit that the word "reasonable" can never be wholly objective. If one asks 1,000 different people, one will get 1,000 different interpretations of exactly what is reasonable and unreasonable in terms of exactly where the line should be drawn.
Lord Kingsland: Many judges sitting in civil cases without the assistance of juries have had to confront that difficult problem and deal with it as best they can. At the end of the day, a committee of your Lordships' House sitting in judgment on a noble Lord who is alleged to have breached the code will be faced with exactly the same problem. The committee's view of reasonableness will be the majority view of that committee and is ultimately based on subjective perceptions. I accept that.

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But all propositions that are based on the concept of reasonableness have to confront and overcome that problem. What cannot be controverted is that the noble Lord, Lord Neill, has introduced a new test and that the House, for better or for worse, has to adjust with the times. That is why, in principle, my noble friend Lord Elton and I agree with the general approach of the noble and learned Lord the Lord Privy Seal.
Moved, as an amendment to the Motion in the name of the Lord Privy Seal, line 1, leave out all the words after "CODE OF CONDUCT FOR MEMBERS OF THE HOUSE OF LORDS" and insert:
"Purpose of the Code of Conduct
1. The purpose of this Code of Conduct is:

(i) to provide guidance for Members of the House of Lords on the standards of conduct expected of them in the discharge of their parliamentary and public duties;

(ii) to provide the openness and accountability necessary to reinforce public confidence in the way in which Members of the House of Lords perform their parliamentary and public duties.

2. This Code applies to all Members of the House of Lords who have not taken leave of absence.
Public duty
3. By virtue of their oath, or affirmation, of allegiance, Members of the House of Lords have a duty to be faithful and bear true allegiance to Her Majesty the Queen, her heirs and successors, according to law.
Personal conduct
4. Members of the House:

(i) should act always on their personal honour;

(ii) must comply with the Code of Conduct;

(iii) must never accept any financial inducement as an incentive or reward for exercising parliamentary influence;

(iv) must not vote on any Bill or Motion, or ask any question in the House or a Committee, or promote any matter, in return for payment or any other material benefit (the "no paid advocacy" rule).

5. Members of the House should observe the seven general principles of conduct identified by the Committee on Standards in Public Life. The seven principles are:
Selflessness: Holders of public office should take decisions solely in terms of the public interest. They should not do so in order to gain financial or other material benefits for themselves, their family, or their friends.
Integrity: Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.
Objectivity: In carrying out public business, including making public appointments, awarding contracts, or recommending individuals for rewards and benefits, holders of public office should make choices on merit.
Accountability: Holders of public office are accountable for their decisions and actions to the public and must submit themselves to whatever scrutiny is appropriate to their office.
Openness: Holders of public office should be as open as possible about all the decisions and actions that they take. They should give reasons for their decisions and restrict information only when the wider public interest clearly demands.
Honesty: Holders of public office have a duty to declare any private interests relating to their public duties and to take steps to resolve any conflicts arising in a way that protects the public interest.
Leadership: Holders of public office should promote and support these principles by leadership and example.
Primacy of the public interest
6. In the conduct of their parliamentary duties, Members of the House shall resolve any conflict between their personal interest and the public interest in favour of the public interest.
Registration and Declaration of Relevant Interests
7. Members of the House must:

(i) declare any relevant interest of their own or of their spouse, which is pertinent to a debate, when speaking in the House and otherwise pertinent when communicating with Ministers, government departments and executive agencies. This is necessary in order that their audience may form a balanced judgment of their arguments.

(ii) register in the Register of Lords' Interests all relevant interests of their own or of their spouse, in order to make clear those interests that might reasonably be thought to influence their actions.

What is a relevant interest?
8. The test of relevant interest is whether the interest might reasonably be thought by the public to affect the way in which a Member of the House of Lords discharges his or her parliamentary duties.
9. The test of relevant interest is therefore not whether a Member's actions in Parliament will be influenced by the interest, but whether others might reasonably think that this might be the case.
10. Relevant interests are capable of including both financial and non-financial interests.
Relevant financial interests
11. Relevant financial interests connected with the provision of Parliamentary services include:

(i) Parliamentary consultancies;

(ii) Receiving payment for advice in relation to parliamentary matters;

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(iii) Employment or other financial interests in businesses involved in parliamentary lobbying on behalf of clients, including public relations, accountancy and law firms.

12. Members are obliged to refrain from speaking or voting on any matter connected with the provision of parliamentary services. However, Members of the House involved with organisations that offer commercial lobbying services are not obliged to refrain from participating in parliamentary business in connection with all clients of that organisation, but only their personal clients.
13. All Members of the House must:

(i) Register in the Register of Lords' Interests any consultancy agreement under which they provide parliamentary advice or services;

(ii) Deposit a copy of any such consultancy agreement, excluding levels of remuneration, with the Registrar of Lords' Interests so that it is available for public inspection;

(iii) Register any financial interest in a parliamentary lobbying business.

14. Other relevant financial interests are:

(i) Remunerated directorships and partnerships;

(ii) Remunerated employment (excluding occasional income from speeches, lecturing, broadcasting, journalism and writing);

(iii) Provision by an outside body of secretarial and research assistance;

(iv) Any remunerated service which Members of the House may provide by virtue of their position as Members.

15. In addition, relevant financial interests may also include:

(i) Significant shareholdings;

(ii) Significant landholdings (other than Members' homes);

(iii) Any other financial interest or inducement, which might reasonably be thought to influence a Member of the House.

16. Members of the House are not required to disclose how much they earn from the financial interests set out in paragraphs 11 to 15.
Relevant non-financial interests
17. The following non-financial interests are always relevant and therefore must be registered:

(i) membership of public bodies, such as hospital trusts, the governing bodies of universities, colleges and schools, and local authorities;

(ii) trusteeships of museums, galleries or similar bodies;

(iii) acting as an office-holder or trustee in a voluntary or not-for-profit organisation, pressure group or trade union.

18. Relevant non-financial interests may also include (depending on their significance):

(i) other trusteeships (excepting family trusts);

(ii) unpaid membership of voluntary organisations.

19. Members of the House are under no obligation to register unpaid membership of organisations or membership of Churches, religious bodies and quasi-religious organisations. But it may be necessary to declare such interests. (See paragraph 20).
Interests relevant in specific contexts only
20. Some financial and non-financial interests may not be relevant generally, because they could not reasonably be regarded by the public as affecting the way in which a Member of the House discharges his or her parliamentary duties. But such interests may be thought to have such an effect in the context of a particular debate, division or correspondence. Such interests should therefore be declared as pertinent to that debate, division or correspondence. In cases where a Member of the House votes in a division where he has a pertinent interest that he has not been able to declare, he should register that interest within 24 hours of the division.
Advice
21. The meaning of "relevant interest" may depend on circumstances. The Registrar is available to advise Members. A peer who acts on advice of the Registrar in determining what is a relevant interest satisfies fully the requirements of the Code of Conduct.
Enforcement of the Code of Conduct
22. Allegations of non-compliance with this Code are to be dealt with as follows:

(i) Any allegation should, as a normal courtesy, be raised first with the Member complained against. However, there may also be circumstances when it is more appropriate to raise the matter with a party Leader or Chief Whip, or the Convenor of the Cross-Bench Peers.

(ii) If, after the above steps have been taken, the complainant chooses to pursue the matter, he or she should refer the allegation directly, and in private, to the Sub-Committee on Lords' Interests through its chairman.

(iii) The Sub-Committee will then examine the allegation and may decide to investigate it further or to dismiss it.

(iv) In investigation and adjudication of complaints against them, Members of the House have the right to safeguards as rigorous as those applied in the courts and professional disciplinary bodies.

(v) If, after investigation, the Sub-Committee finds the allegation proved, the Member complained against has a right of appeal to the Committee for Privileges.

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(vi) The conclusions of the Sub-Committee and of the Committee for Privileges will be reported to the House."

23. The adoption of this Code shall have effect from a date to be determined by a Resolution of the House, which shall not be before 31st March 2002.—(Lord Kingsland.)
4.30 p.m.
Baroness Hamwee: I welcome the opportunity to confirm to a sadly sometimes sceptical world the propriety of this House. What is proposed in the code will meet public concerns without overreacting. I entirely take the point about the difficult circumstances that we have sometimes seen at the other end of the building. That was very much in the minds of the members of the group in its work. The code will not constrain how Members of the House go about their business but will affirm the House's wish to be regarded as open and accountable and to ensure that others do so regard us. At a time when too often we hear from citizens and voters and not just from the media that, "You politicians are all the same; you're only in it for what you can get out of it", I believe that the code as proposed by the Leader of the House is "fit for purpose".
Like the noble Lord, Lord Kingsland, I thank the noble and learned Lord for his chairing of the group. He steered it with a light touch, which is reflected in the code, and with huge sensitivity. He was very patient with those of us who occasionally wished to revisit issues which he thought we had closed. Like other members of the group, I spoke in the group for myself—we shall of course have a free vote later today—but I hope that I reflected the concerns of my colleagues. I believe that the code as proposed is welcomed and supported by the majority of those on the Liberal Democrat Benches.
I shall not go through each section of the code because, as has been said, most of it has not attracted amendment, save to say to those who feel we should not have a code at all that, sadly, public life and politics in the 21st century require that we do. If rejected, the message would be that Members of this House think themselves above scrutiny and that they are not prepared to account for themselves.
Perhaps I may deal with the points of contention. I understand why, when introducing his amendment, the noble Lord, Lord Kingsland, reversed the references to the code and personal honour. There is much to be said for that. But I do not think that it was an issue in the group. A number of the noble Lord's proposals are primarily matters of drafting. I recognise, because I do it myself, the temptation for a lawyer to redraft and redraft almost to infinity in the continuing search for the most elegant phrasing. That should not be the basis of a vote today.
Many of the substantive points are answered by the provision, to which attention has been drawn so often, for advice from the registrar. In our debates in the group we kept coming back to that. We may have wanted to create a code without room for question but
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by their very nature these are issues of degree and judgment. Accepting that that is the context, what we have produced is a cogent and comprehensible code. It is not always easy to assess for oneself the term "might reasonably be thought by the public to affect the way in which a member discharges his parliamentary duties". It is not easy because Members do act on their honour and do not necessarily realise that the most innocent act may not appear to be wholly so.
The disclosure of remuneration for parliamentary consultancies should be a requirement. We are entitled to privacy in our private lives, but we must accept that where the private meets the public we are not private citizens. That is part of the price that we have to pay for accepting the position of public office that we hold by virtue of our membership of the House. The option to disclose other remuneration and the use of the register can nip in the bud any suggestion of improper influence. Furthermore, in a world which increasingly is moving towards complete transparency, where a great deal of information can be gleaned from other sources—the companies registry has been referred to and I would add to that HM Land Registry—it would be odd not to include this option.
I turn now to family trusts. I am one of those who took the view that the position of a trustee could be significant. It comes close to a personal financial interest. Many situations could arise where holding the trusteeship for a family trust would affect the judgment of a trustee. For instance, a trustee may have to consider his own grandchildren, who quite often can be the beneficiaries of such a trust.
Shareholdings which do not amount to a controlling interest may be significant. If a large shareholding forms only a small proportion of a company's shares, the shareholder could not affect the decisions reached by that company. However, if the test is how the shareholder regards himself and could reasonably be regarded as regarding himself, then dealing with regulations or legislation which come before the House or speaking on any public occasion could substantially affect the value of a shareholding, however small the proportion of that holding.
Perhaps I may turn now to hospitality. Again, I am not sure that any time has been spent on this matter so far, but I know that it is an issue which concerns noble Lords. I may not be alone in wishing that we were offered rather less hospitality than is the case. I do not believe that attending receptions in order to meet representatives of an organisation amounts to anything more than a matter of duty. Certainly one does not attend them in order to drink those glasses of lukewarm white wine and eat the greasy canapés—of course I do not refer to our own Refreshment Department here.
Nevertheless, some noble Lords are concerned that this requirement could mean that every cup of tea or lunch should be registered. However, I do not believe that every lunch attended to listen to matters of public concern in a particular sector constitutes hospitality that needs to be registered. The purpose of such hospitality is the passing of information; the

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hospitality is not being used to influence the Member. If it could be regarded to be that—perhaps because it is not only lunch, but a week's holiday in the Bahamas (not that I have ever been offered anything of that kind)—then of course it should be registered. But often one meets for lunch to listen to information simply because lunch offers the only time available to do so.
I turn to the matter of whose interests should be taken into account. I have to say that, for myself, I think that I would be influenced if, for example, the financial interests of my closest and oldest woman friend—I do not refer here to a synonym for a constant companion—were to be significantly affected, because, if I knew about them, they would be relevant. The test is whether the interest would be significant to me personally. I do not believe that, under this provision, I would be required to question everyone on my Christmas card list. But if I felt that I would be affected, I would take advice as to whether I needed to register for myself and whether I needed to register the identity of the friend. That would depend on many different circumstances. I do not believe that the detail of such a proposal can be legislated in advance.
Ironically, it has already been pointed out that the term was used in the guidance resulting from the Griffiths report, under which noble Lords have been operating since 1995. I take the view that to omit this provision would be a backward step and perhaps would convey a message that we have something to hide which we should have been disclosing over the past six years.
I turn finally to the question of procedure. The noble Lord, Lord Kingsland, proposed that a matter must be raised first with the Member concerned, the leader or Whip of his party or the Convenor. I believe that the requirement to do so "normally", the term used in the proposed code, is correct. Very rarely there may be circumstances in which a Member would not raise a matter at all unless he could approach directly the chair of the committee, but I do not think that that would amount to putting the matter into the public arena. But in my view it would not be right to set up a procedure unless that procedure could also facilitate the pressing of a complaint and its pursuit in the measured way proposed.
As regards the date, I do not believe that my noble friend the Chief Whip felt it necessary to go to March 2002. I should say that it is not a matter on which we feel strongly.
Taking part in the work of the group made me review for myself how easily I might dismiss as insignificant what could be viewed quite differently by others. Even though I have a local government background—the noble Lord the Leader of the House referred to that—which applies stringent rules requiring Members to leave the Chamber when certain matters are under discussion, taking part in the work of the group has made me think seriously about how we may appear to those outside.
I welcome the code and I believe that it is a fitting step to take at the start of the first full Parliament of the 21st century. It is important that today we reaffirm
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the awareness of this House and how conscious are noble Lords of the need to uphold the highest standards and to be entirely open—indeed, to be ambitious to tell the world that we do so.
Lord Neill of Bladen: I speak as a former chairman of the Committee on Standards in Public Life—I demitted office at the end of February this year. The report that led to the Williams report was produced during my term in office. Perhaps I may say that I very much welcome the debate taking place today. I welcome, too, the code being put forward by the noble and learned Lord, Lord Williams, and the bound red volume of the report, to which reference has already been made. It is true that, to a substantial extent, that report did adopt recommendations made in the report from my committee.
We were in the privileged position of hearing extensive evidence from Members of this House. Written submissions were made by 71 Members of the House and oral evidence was submitted by some 39 Members. That put the committee in a strong position to understand what were the views. It would be true to say that the great preponderance of opinion—although it was not unanimous—was that a code is now required to be put in place, because the House of Lords stands out as an exception to what has become more or less a universal rule for any public body, be it the House of Commons, the Scottish Parliament, the Welsh Assembly, the administration in Northern Ireland and, of course, local government as well as public services and business.
A code will gather together the scattered strands to be found in various places, such as in the 1995 resolution as well as the tremendously important principle of honour by which all noble Lords are bound (although it proved rather elusive because it was taken out of one edition of the excellent books on guidance) and will be stated plainly.
First, I shall sketch briefly the work of the committee and where I stand in the debate. The committee put forward a recommendation for a code. Secondly, we stated that the time had come to end the voluntary nature of the current Part 3 of the code; it should now be put on a compulsory basis. Thus, noble Lords' interests should be declared by prescription.
The code should cover financial and non-financial interests, as is set out in the proposal put forward by the noble and learned Lord, Lord Williams. Furthermore, we produced a new test of what would make something registrable. Perhaps I may refer to paragraph 8, which uses our language, and states in regard to the test of relevant interest,
"whether the interest might reasonably be thought by the public to affect the way in which a Member of the House of Lords discharges his or her parliamentary duties".
We need to be conscious of the public perception of this House. It stands enormously high. No allegations, charges or suspicions were brought before the standards committee. However, to me that is not a

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reason for inaction, but rather a reason for moving ahead and putting in place a code containing suitable provisions.
We then left it to your Lordships' House to compose the fine print. Noble Lords may consider that that was cowardly, but I did not think that it was appropriate for an outside committee to define for noble Lords what should or should not be included as regards financial interests and other matters. We offered a few hints in paragraph 5.55, but we did not write the rules. Today's debate concerns essentially two different versions of the way in which financial and other interests ought to be defined. All the detailed points about friends and colleagues and so forth can then be included in the consideration of what would be the desirable way forward.
One thing we were clear about was that it was not necessary to declare quantum—that is, what people earn from the various interests they declare—with the exception of earnings from parliamentary consultancies. If people are being paid to do that job, we believe—we may be wrong, but it is our view—that that is something the public are entitled to know.
As regards enforcement, we thought that there should be just and fair procedures, accompanied by the maximum of simplicity. We saw no need for any standing office and the hiring of new public servants. That would be completely unnecessary in this House. There has been no trouble ever, as far as I can tell, and nothing like that is necessary.
If a case should ever come to light, it would be tried and dealt with by the sub-committee on Lords' interests. We recommended that there should be a right of appeal, which is now standard in virtually every kind of disciplinary or professional body. The Williams group accepted that recommendation, and we suggested that the Select Committee for Privileges should be the appropriate appeal body.
The question of penalties has recently been looked at by the noble Lord, Lord Nicholls of Birkenhead, and his committee dealing with the issue of contempt. Our view broadly coincided with his that there is no need to take any further action on penalties, that they are quite adequate. Your Lordships have already the most deadly remedy at your disposal—that is, naming and shaming. In our view—which is subject to correction by your Lordships—that is the most effective way of bringing someone to book if ever such a case should arise, which it has not.
To sum up, we were looking for simplicity, proportionality—avoid the overkill; nothing in excess—and courtesy. For example, if there were to be a complaint where someone said to a Member that he had left out from the register something he surely should have put in, the first the Member would hear about it would be a phone call or a letter; he would not read about it in the News of the World on a Sunday. What has gone wrong is that that kind of mechanism can be used for political purpose, the only result of which is to do enormous damage to the people who sit in the other House, if I may speak of another place, I hope not in disrespectful terms. When the noble Lord,
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Lord Sheldon, appeared before the Committee, he advised us that we should avoid this game of tit for tat; that it has been a disgrace.
Lord Elton: Does the noble Lord therefore see reason in the wording which has been included in the amendment tabled by my noble friend and myself but not included in the amendment of the noble Lord, Lord Ezra, that references to the sub-committee should always be made in private so that they cannot get to the press until they have been resolved?
Lord Neill of Bladen: Although I cannot speak for the committee, it would be my view that a matter should be dealt with in private, unless there is a hearing where the defendant may want the advantage of publicity. My own personal opinion is that matters should be dealt with in private.
Many points of detail cannot be dealt with today. However, perhaps I may deal with one point that is not covered by what is before us today but is covered in the Williams report, and that is the question of who is to be the investigator. If a case arises which has to be investigated, the proposal is that that should be done by a group or a panel, possibly of retired Law Lords. It is an excellent proposal but it is not difficult t o imagine circumstances—this is hypothetical but, based on experience, one does not have to look very far to find examples—where a case may arise which is inappropriate to the investigatory skills of a Law Lord and where it might be necessary for the investigator to have other skills. The Law Lords have judicial skills, but their terrier and hunting skills may not be so strong.
I hope that your Lordships will be able to agree a code today and that we will move forward into a new era.
4.45 p.m.
The Lord Bishop of Wakefield: I am grateful to the noble and learned Lord, Lord Williams of Mostyn, for what he said about the proposed code of conduct, and to the Neill committee for highlighting the seven principles of public life, which the Minister mentioned, though briefly. I believe, however, that he had no intention of diminishing their importance. Selflessness, integrity, objectivity, accountability, openness, honesty and leadership are values close to the heart of the Christian faith, as they are to other faiths.
Personally, I should like to have seen spelt out the element of servanthood, which must always exist within leadership—not least for us because we are here to serve the nation. I believe that noble Lords will agree that that should always be in our minds, particularly so in this debate.
I have sympathy with the reservations which have been eloquently expressed by the noble Lord, Lord Kingsland. I accept, for example, that it could be deemed superfluous and a breach of confidentiality to identify the extent of financial relationships where the rules of the House already prevent a noble Lord from

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exercising any influence on behalf of those relationships. That is right. However, I do not believe that it is enough in this situation merely to do what is right. At a time when all institutions are under the utmost scrutiny, we must be seen to be doing right; to be, as the Bible puts it, whiter than snow, in so far as that is humanly possible.
We all agree that there is a need to restore public confidence in Parliament and parliamentarians, and to submit to greater openness and accountability. I hope that some of the detailed concerns which have been properly expressed in the debate will not deflect us from supporting the Motion before us.
Lord Wright of Richmond: In the light of earlier exchanges, I should start by declaring an interest: I have very recently retired as a non-executive director of BP. My friends will know that I do not have to declare either a controlling or a significant interest in BP shares. As the only Cross-Bencher on the group, I need hardly say that I represented the views of no one else on these Benches other than myself.
I join in the tributes which have been paid to the Leader of the House for the way in which he chaired our group, and I join in his tribute to the administrative staff, particularly to our clerk, Mr Brendan Keith.
I understand very well the reservations underlying the amendments put forward by the noble Lords, Lord Kingsland and Lord Ezra, some of which I shared at an earlier stage of the group's deliberations. But I have concluded, with one reservation, to which I shall return in a moment, that the Motion proposed by the Lord Privy Seal is on the right lines and that I shall support it if it comes to a Division today.
My one reservation, which I have already brought to the attention of the Lord Privy Seal—and which has been echoed in the debate—is whether it is wise or necessary to include in paragraph 12 of the Motion a reference to "friends" in the context of financial interests. This seems to raise insoluble definitional problems, as the noble Lord, Lord Kingsland, suggested, and even the faintly ludicrous prospect of noble Lords having to decide or defend the distinction between whether a mere acquaintance should or should not be regarded as a friend. I would have much preferred the reference to "friends" to be omitted altogether.
However, in view of the permissive—or, in Latin grammar, subjunctive—nature of the wording of the introduction to paragraph 12 and the possibility that, in rare circumstances, the interests of a close friend might be perceived as genuinely significant, I do not wish to press my reservation.
The Earl of Onslow: When I read this report I thought to myself that the noble and learned Lord, Lord Williams, is the most honest man I know. It does not cross my mind that he does anything other than selflessly, with integrity, with objectivity and accountability, so why do we have to say it? The
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moment we have to say it, it is like someone saying "Oh no, guy. I promise you I'm honest". The moment we have to stand up and state that we are honest, we smell a rat and count our change.
It has been said time and again that this is an honest House. I genuinely believe that to be the case. Only once in all the time that I have been here has anything to the contrary happened. Someone asked me to introduce a private Bill—which I did not do. He said to me, "Of course, you can have what expenses you like". If that was not a bribe, I do not know what was. Of course it was a bribe. I have never been so angry. I believe that I am here on my honour. That may be old-fashioned, but the proposal amounts to a barrack-room lawyer's charter.
To be possibly a little unkind, would the interests of Gaynor, then Mr Cook's girlfriend, have had to be registered before her existence could be publicised by Mr Alastair Campbell? If that had not happened, would Mr Cook have been hauled up in front of whomsoever one is hauled up in front of? I am sorry, but I do not believe that to be in the interests of anyone. On the matter of this "friend" caper, I do not, for example, know what shares my wife owns because I am too idle to ask her and I am not sufficiently interested. Should we need to write such matters down?
This proposal suggests that we are not honest. I find it deeply offensive to imply that there is any lack of integrity on the part of the noble and learned Lord, Lord Williams of Mostyn—I say that from the bottom of my heart. The same can be said of the noble Lords, Lord Carter and Lord Shore. I shall leave aside my side, but certainly on the other side of the Chamber I do not believe that there is a scintilla of lack of integrity. So why do we have to proclaim it from the mountain top? That strikes me as saying that we do not have confidence in ourselves.
This is a great House. Yes, there was Lord Kagan; yes, there was the Duke of Norfolk who was executed for treason during the reign of Queen Elizabeth I. But those were exceptions. We may want to execute someone—mostly on the Liberal Benches, I hasten to add, but that is another story. But surely we are grown up and honest. If anyone is "iffy", we know as much. This is a lovely, honest House. We do not have the dishonesty of France or Germany. We do not even have that lovely quality of Clive of India who, when accused of helping himself from Surajah Dowla's treasury, said,
"Gentlemen, I stand astonished at my own moderation".
We have grown up since then. This House is basically an honest place. To go around proclaiming it on our breasts makes me think that we are to be a little less honest than we have been hitherto.
Lord Archer of Sandwell: As we are discussing declarations of interest, perhaps like the noble Lord, Lord Wright, I should begin by declaring what might be thought to be two interests. The first is that I had the privilege of being a member of the working group

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so delightfully chaired by my noble and learned friend the Leader of the House—as he then was not. If ever there is an experience of enjoying hard work, it happens when one is a member of a group chaired by my noble and learned friend. The second declaration is that I was privileged also to be a member of the Select Committee for Parliamentary Privileges, chaired by the noble Lord, Lord Nicholls of Birkenhead.
I have inflicted my views on the House more than once on this subject—the previous occasion being some 10 days ago. For that reason, I did not propose to intervene in this debate. However, it was strongly recommended to me this afternoon that silence on my part might be misconstrued as suggesting that there was some difference of view between my noble and learned friend and myself. If there is such a misconception, I can dispel it with a concise declaration: I agree unreservedly with the initial report, and I agree unreservedly with every word spoken by my noble and learned friend in opening the debate—that has not always been the case in the past, but it is the case today.
Perhaps if I were wise I should leave the matter there, but it is a pity to stand up in order to say so little. Therefore, perhaps I may add just one comment on some of the points that have been made. The noble Lord, Lord Kingsland, said correctly that we reached a wide measure of agreement in the working group. I am bound to say that at the time I thought it to be rather wider than subsequently transpired; however, most of the differences aired this afternoon are, as the noble Lord said, differences of detail.
Certainly, on one vital question we were in total agreement. There has been no deterioration of standards in this House, and—subject to the few historical exceptions mentioned by the noble Earl, Lord Onslow—we have an unblemished record. The differences that have emerged relate to the corollaries that are to be drawn from that. The noble Earl, Lord Onslow, says: in that case, why bother to change anything; why not just leave matters as they are?
The other possible way of looking at the subject is to say that, if there is nothing to conceal, why not make that transparently clear? There is nothing more calculated to give the impression—one that we know to be false—that there is something to hide, some skeleton in the cupboard, than to seem to be trying to conceal something. It was that which greatly troubled my noble and learned friend and some of us on the committee.
The differences that we are discussing are matters of detail, but they give rise to questions of style. If we give the impression that we embrace with enthusiasm the suggestion that there should be a code, that we accept obligations, that we are quite prepared to make these matters known, that gives one impression. If the idea is that we are doing so reluctantly and grudgingly and that on the whole we would rather not be compelled to declare matters, that gives another. If, as I believe, this House has nothing to conceal, I should have thought that our best course would be to draw aside the curtain and let the truth speak for itself.
Lord Ezra Lord Ezra had given notice of his intention to move, as an amendment to the Motion in the name of the Lord Privy Seal:

1. In paragraph 12, line 3, leave out "shareholdings not amounting to a controlling interest;".

2. In paragraph 12, line 5, leave out "or friend".

3. In paragraph 12, line 6, after "gifts" insert "of a substantial nature".

The noble Lord said: I feel that it may be opportunist at this stage to refer to the amendments standing in my name. My reason for tabling them was to seek clarification of some of the issues raised in paragraph 12 of the proposed code, on which there has already been some debate. I shall take that into account in my remarks. I was led to table the amendments by a careful reading of the admirable report by the working group chaired by the noble and learned Lord the Leader of the House.
The report states on page five:
"A code of conduct can help to reduce Members' uncertainty and possible confusion about their obligations to reveal their interests".
When I read paragraph 12, my uncertainty increased somewhat. Therefore, I thought I ought to see whether it could be improved by drawing attention to it.
I was struck also by the statement in paragraph 16:
"The principle of openness requires a balance to be struck between disclosure and personal privacy".
The question of personal privacy arises on the issue of friends and whether we should have an obligation to reveal our friends' personal financial interests. It is for those reasons that I tabled the amendments. Perhaps I may refer to them briefly.
On the question of shareholding, I was in some doubt as to what we should do about that. Clearly, if we hold a controlling interest, it must be declared. If we hold a substantial interest—the term has to be defined; the noble and learned Lord's idea was that a "substantial" interest is 1 per cent of BP. so no doubt that would have to be declared—what if it is a perfectly modest investment in, say, BP, which would bear no relationship to the total capital value of the company but which might benefit at some future date from a particular debate or legislation which we were discussing which could affect such an interest? Would we have to register that modest, say, few thousand pounds worth of shares in the anticipation that there might be a debate at some unknown date in the future that could raise the value of those shares by some indeterminate amount?
I should like to raise the distinction between the words "declaration" and "registration". In the case of modest shareholdings, which most of us hold, can I take it that if the situation were to arise where we became involved in a debate in which that modest shareholding could benefit, we would then declare our interest; but that we would not have to register our interest in advance just because such an eventuality might arise? Quite frankly, I should have found it much simpler if we had been told that we had to

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register all our shareholdings. That would be perfectly straightforward: one would send in a list and then it would be done with. I suggest that perhaps the idea of declaration in the case of "modest shareholdings" that might be affected at some future date should be brought into place. I put that proposal to the noble and learned Lord.
The use of the word "friend" in the code has been discussed. If I had a friend—let us say, a school friend who, through dedication and hard work, ended up as a chairman of a very large manufacturing company—I must say that I would find it slightly distasteful if I had to declare that I had such a friend. It might be that I meet this person purely on social grounds. We need further clarification in that respect. It also raises the question of the invasion of privacy; not so much ours, but that of our friends. They may have no wish to be associated with a debate in which they took no part; and, indeed, upon which they might even disagree. I also put forward that point.
Finally, I turn to "hospitality" and "gifts", to which my noble friend Lady Hamwee referred. At certain times of the year, we are all subject to receiving many invitations—to receptions, lunches, dinners, and so on. As those are of a "modest" nature, I take it—and hope—that they certainly will not have to be declared. But at what stage do they have to be declared? I hope that the registrar will know the answer to that question. We also receive many gifts from companies of a small nature; for example, calendars, things to put on our desks, and so on. Similarly, I take it that they would not have to be returned; indeed, that would be an insult to the donor. I trust that we are really talking about major gifts, as outlined in the wording of my last amendment.
The whole point of my intervention is that I wish to obtain clarification. However, should the situation arise, it would not be my intention to move my amendments. I hope that the noble and learned Lord the Lord Privy Seal will be able to give me some of the answers for which I have asked.
Lord Elton: Perhaps—
Lord Marsh: As a member of—
Lord Elton: In the circumstances, perhaps I may follow the noble Lord, Lord Marsh, with my contribution.
5 p.m.
Lord Marsh: It is most kind of the noble Lord to give way.
As a former member of the Griffiths committee, it seems to me that this debate has a sense of déjà vu because the speeches today are almost identical to those of that time. The reassuring effect of that is that nothing terrible has happened in the past six years since then. However, that is not to say that something will not happen. The main value of the code, as produced, is that it demonstrates the awful
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consequences of drafting by committee. In my view, we are making a colossal mountain out of the proverbial molehill.
We should aim for a sense of proportion. I shall be very brief. The only problem that I have with declaring my own shareholdings—I also practise as chairman of an investment company, which has a sizeable amount of shareholdings—is that I would be horrified if more people than necessary knew how the shares had performed over the past two years. Indeed, the sheer shame of it.
I have been in this place for 20 years. Throughout the whole of that time I have been either chairman or chief executive of publicly quoted companies. I hope that I have always declared that interest. There has never been an occasion where my participation in any debate in this Chamber could conceivably have affected any of those companies in any way. That is the real world. There have been several occasions when I have been involved in intensive negotiations and lobbying with government departments about legislation, but they have always been conducted between civil servants and representatives of the industry. It simply is not true to say that if one really wants to help BT, BP or any other company, that the best way of doing so—or the most likely way to achieve that aim—is through the Committee stage of a Bill going through this Chamber. One might make some speeches, but, in my experience, such companies have direct access with a specific official who is responsible for that particular industry, and who is well known by that industry. Therefore, I do not see the problem as being a big one in that respect.
I also have a strong objection to both the inclusion of friends' and spouses' interests. For reasons that I gave recently, there are practical problems about including spouses. Quite seriously, not everyone's marriage is as happy as mine. Indeed, because it was convenient so to do in other ways, we have even gone to the extent of having power of attorney over each other. That is not normally the position. In most cases, it is just not real to think that one spouse knows what the other one has, or that he or she should have such information in a modern world. I have not the faintest intention of announcing to this Chamber at any time the private affairs of any friend I happen to have. In fact, if I were that worried, I would end the friendship before I did so. Again, I do not believe that that proposition is practical.
Having said that, in the current climate of public opinion I believe that a code of the type proposed has to be accepted purely because of the picture that it would provide the public, who are sold a very different view of this Chamber than is the real position. Therefore, as far as that is concerned, I shall vote for the Motion. However, I give one warning: the more that one tries to define the loopholes—this always happens with committees that are dominated by lawyers—the more loopholes one finds. Judging by my experience, it seems to me that people know when they

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are doing the wrong thing. Indeed, in my experience of both places, colleagues around them know it at the same time—
Lord Strathclyde: Perhaps the noble Lord could clarify a point for me before he sits down. He just said that he would not declare any interests of his friends, but I believe he then went on to say that he would support the Motion of the noble and learned Lord, Lord Williams. Therefore, if the Motion is passed, does that mean to say that he will not stick to its provisions?
Lord Marsh: As I understand it, this is a voluntary procedure and one does so if one wishes so to do.
Lord Strathclyde: It is binding.
Lord Marsh: I believe that that applies, whether or not it is binding.
Lord Williams of Mostyn: The noble Lord is quite right. The position is that "relevant financial interests", including those of a "friend", may include—depending on their significance—the financial interests of a spouse, relative or friend. That is the formulation in Griffiths.
Lord Marsh: In those circumstances, whatever is in the code of conduct, I should make it clear that I would not declare it because I believe it to be wrong and immoral. I repeat: I would end the friendship before I would do so.
Lord Elton: The noble Lord would not have the freedom of action that he supposes. The word "may" applies to the quantum; but if the noble Lord had a "substantial interest" he would then be under an obligation to declare it. Therefore, from what he has said, we may expect him in the not too distant future to take leave of absence because only thus could he escape the requirement. Indeed, we should be the poorer for that consequence.
I am the last of the members of the group who combined to write this report, and the dissenting report, to rise to his feet to contribute to the debate. I do want to be different from the others by not starting my speech by saying what a perfectly splendid chairman we had. I do not lay at his feet the blame for the fact that his air-conditioning, books, or something, infected me with violent hay fever for most of our meetings, I just wish that he would move a little further from the natural place of his office; namely, the other end of the corridor towards this Chamber.
I have two interests to declare. I have a small—at least I think your Lordships would consider it small—family trust which I may or may not declare in the future depending on how noble Lords vote later today. My own advice does not depend on that interest. My other interest is the same as your Lordships; namely, the welfare of this House and the welfare of the country. The two are bound together but they take different points of view. The House is convinced of its
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probity; the public, under the goading of a gutter press, are eager to discover wickedness in every cranny and lobby.
I suppose I should say that my noble friend the leader of my party invited rather than instructed me to join the group we are discussing. He will testify that I was extremely reluctant to do so. But, having done so, I put my shoulder to the wheel. It seemed to me that our task was, first, to recognise as a fact of political and historical life that the House had given the go-ahead to the Neill inquiry and that it had made it clear that it wanted some kind of a code to result from it. I was not of that view when I joined the group but I soon came round to it. Therefore, I support my noble friend's amendment. I shall not support any who try to overthrow the whole system.
Secondly, I considered that it was necessary to try to find a code which your Lordships would not throw out unanimously or by a vast majority. The temperature of the debate has shown that there is a real danger of such a code being produced. We tried as a group to arrive at a consensus but eventually the judgment of my noble friend Lord Kingsland and mine diverged from that of the rest of the group as to what was acceptable to the majority of your Lordships. We are here this afternoon simply to determine which of us is right.
There could have been a third course. The noble Lord, Lord Ezra, has tabled a scattering of amendments but he has said that they are probing only and that he will not press them. Even if he did, he would leave out two very significant changes which we propose to the code. The first of these I alluded to in an exchange with the noble Lord, Lord Neill. Only in our version will your Lordships find a requirement that references to the sub-committee on the part of someone who suspects a malfeasance by someone else must be made in private. Where has this sickness in the other place spread from? I refer to people who make references to their adjudicating body and then tell the press about it. For month after month, while some unfortunate and perfectly blameless person is under investigation, the papers are full of the fact that that person is under investigation and is alleged to have done such and such. That kind of mud sticks. We do not want it here. Therefore, if your Lordships want to protect us, they should vote for the amendment of my noble friend Lord Kingsland.
The other significant difference concerns the exclusion of relations. Your Lordships have concentrated their remarks on friends. Rabbit's friends and relations were all of a kind. In your Lordships' better regulated affairs, friends and relations are different. However, some noble Lords have many relations. The term is not defined. Is it restricted to cousin, first, second or third cousin, child or grandchild? Without definition the proposal is dangerously vague.
My noble friend suggested that a relevant date has now been agreed between the supporters of the Government and the supporters of the Liberal Democrat Benches. The only difference between us is that we have provided for a resolution of the House

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before implementation of the measure. I think that that is prudent as circumstances change rapidly in this field. It may well be that what we have now which we consider perfect may be proved to be highly imperfect, and dangerously so, on the eve of implementation. A debate would then be appropriate.
The noble and learned Lord, Lord Archer, said that it is important that we should be seen enthusiastically to embrace a code. In so far as that is feasible, I shall enthusiastically embrace the Kingsland code. I believe that your Lordships should do the same and should be a little cold towards that of the Leader of the House.
5.15 p.m.
Lord Shore of Stepney: I wish to pursue the matter a little further. I declare an interest as I served on the committee under my noble friend Lord Neill. I wholly endorse his contribution. I have been struck by the comments made by my noble and learned friend Lord Archer on the extraordinary extent of agreement that exists. I do not think that anyone who has read the committee's report and the red-covered report of the working group under my noble friend's chairmanship and then considers the two resolutions before us can fail to be struck by the enormous area of common ground and agreement that exists. I wish to say a few words about the differences that exist, but let us for a moment rejoice in the agreement that exists.
I like the emphasis—which covers such a wide area—on the importance of agreement. I refer to paragraph 4 of the code entitled "personal conduct" which states:
"Members of the House … should act always on their personal honour".
I am sure that the noble Earl will feel that that is a correct statement to make. I do not dismiss it. The only problem with acting on one's personal honour these days is that its different nuances are a little ill defined. However, I am sure that the phrase I have mentioned is as meaningful to me as it is to the great majority of my fellow citizens. Every boy scout is brought up to "do his best on his honour". The phrase is meaningful but it requires greater definition.
We have drawn up a code of conduct in general terms. However, absolutely at the centre of our commitment is the fact—as stated in paragraph 4—that we,
"must never accept any financial inducement as an incentive or reward for exercising parliamentary influence".
There is not a person in this House who disagrees with that and who would not think it shameful if someone acted contrary to that pronouncement.
What a sanction there is in this House—I was not aware of it—which does not exist in the Commons. Paragraph 4 states that Members of the House,
"must not vote on any bill or motion, or ask any question in the House or a committee, or promote any matter, in return for payment or any other material benefit".
That is an extremely powerful prohibition, including the voting, which I do not remember was a prohibition similarly attached to the "no paid advocacy" rule in the Commons. As I say, that is a powerful prohibition.
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I and, I am sure, many of my fellow committee members were struck by the Griffiths rules and the previous report. There was no sense of our coming from the outside and pretending to know better in laying down the law for Members of this House. That did not enter our thoughts for a moment. We had a great area of agreement. What, then, of the points of difference? I have tried to note them down. Perhaps I am a little easily swayed by the arguments put forward both by my noble friend and to some extent by the noble Lord, Lord Kingsland. However, I give a personal view on the various points of difference, tiny as I consider them to be and therefore not matters of great concern to this House. The matter of sums received for paid advocacy ought to be included in the code of conduct. That is something the public have a right to know. I might even concede that they could be included within bands of width, for example, sums under £5,000, £5,000 to £10,000, if that was considered more acceptable.
I wholly agree with the common-sense point put by the noble Baroness, Lady Park, with regard to friends. It is an absurdity to ask us even to know about, let alone report on, the interests of our friends. The difficulty is that the provision is already in the rules. I hesitate to say that we should take it out, but I would never have put it in.
I agree with the dissent of my noble friend. I do not believe that relatives should be included. Spouses, yes—or spouses and partners if that is what people want—but the term "relatives" is too wide. We cannot possibly bring them in; and it does not matter anyway.
I agree entirely that we should not go public at the initial stages of complaint. It has been poisonous in the Commons and done great damage to the procedures set up there. If my noble and learned friend can take account of that in his response and in the code, we should all be very grateful.
Finally, with regard to enforcement and ensuring compliance, the procedures of this Chamber are admirable. The great advantage of having Law Lords in this House is an asset of which we should take full advantage, particularly on investigation of a difficult complaint.
Lord Renton: I venture to suggest—
Baroness Carnegy of Lour: Perhaps I may—
Noble Lords: Lord Nolan.
Lord Carter: Perhaps we may hear from the noble and learned Lord, Lord Nolan, the noble Baroness, Lady Carnegy, and the noble Lord, Lord Rees-Mogg.
Lord Nolan: I shall be brief and, I hope, uncontroversial. I speak as the proposed chairman of the Sub-Committee on Lords' Interests, a subcommittee which noble Lords will note now has much heavier responsibilities under paragraph 18(2) of the code. I say "proposed" because my nomination has not yet been approved by the House. If I am asked to

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serve—I am sure the same goes for my colleagues on the committee, the noble Earl, Lord Ferrers, the noble Baroness, Lady Serota, the noble Lord, Lord Wigoder, and the noble Lord, Lord Marsh—I shall do so.
First, whatever form of resolution or amendment is adopted by the House, please let what has to go in the register be as clear as possible. The burden placed on the registrar will be very heavy. Many instances have been raised when, with the best will in the world, it will be difficult to say that something should or should not go in.
Secondly, the registrar is the final arbiter of these matters. I ask your Lordships to consider whether it is fair that such a heavy burden should be placed on an officer of the House without formal provision for recourse to other advice. I have held the post for some years. Naturally, I am pleased to be approached informally by the registrar, as were other members of the sub-committee. I believe that that may be his personal 'view. I hope that it may commend itself to your Lordships' House that there should be a formally recognised limit on his personal responsibilities: that he may refer disputed questions through the chairman to the Sub-Committee on Lords' Interests for advice and can rely on its ruling.
I refer briefly to a point made by the noble Lord, Lord Waddington. In the first formation of a committee on standards in public life, we were told that Members of Parliament were not thought to hold public office. They came in under the wider words of the definition which included those in public life, a phrase which expressly included Members of Parliament. I raise the matter so that, if necessary, it can be considered and put right.
Lord Renton: It is highly desirable that we should be unanimous in our decisions on this important matter, which affects the constitution and reputation of this Chamber. There is a great deal of unanimity already. As the noble Lord, Lord Shore, pointed out, the amendment by my noble friend goes a long way towards agreement with the government measure moved by the Leader of the House. Unfortunately, however, there have been serious criticisms of paragraph 12, and slightly less serious criticism of paragraph 11.
Rather daringly, I suggest that we do not reach decisions today on the matter. In view of the serious criticism by the noble Lord, Lord Wright, the noble Lord, Lord Ezra, and other noble Lords, we could not accept paragraph 12. It is also clear that paragraph 11 should be toned down. I hope that I am not being too daring; I seek to help. However, I suggest that the Front Benches should agree an adjournment today. They should get together very soon in order to see whether they can get even closer on the views put forward. Eighty per cent of what has been suggested by my noble friends on the Opposition Front Bench is in agreement with what the Government put forward. It would he most unfortunate if we simply reached agreement after Divisions.
Lord Rees-Mogg: I am sorry that I did not speak before the admirable speech of the noble Lord, Lord Shore. He assumed that there was total agreement in the Chamber on most of these matters with only minor points of difference. That is not so in my case. I think that this is a bad code. It is too complicated and will cause a great deal of trouble in the future. I have no confidence in the code.
The process by which it has reached this stage has involved too much coming from outside—in particular from the troubles of the other place—and too little from inside this Chamber. That tends to undermine the independence of this House and self-regulation. I shall not press the point. I have made it before, kept the House until after midnight and annoyed almost everyone. That approach is a strong argument against the way in which we have proceeded. The code will lead to confusion and harassment. We shall regret having so many little boxes of information to be filled, many of which will be used to the embarrassment of the Member who filled them in.
The worst aspect is the extraordinary phrase "might reasonably be thought". What meaning can one attach to that phrase? Of the four words, three express ambiguity. "Might" means "might not". "Reasonably" is a matter of pure subjective judgment. I regard my speech as highly reasonable, but a large number of Members of the House will regard it as wholly unreasonable. How are we to determine which opinion is right?
The next problem word is "thought"—not even "stated" or "said". We cannot read the thoughts in other people's minds. We now have to guess what other people might think and what thoughts they might have that might be held to be reasonable. That is a preposterous basis on which to build a code of conduct.
As the noble and learned Lord, Lord Nolan, said, the process will put undue weight on the registrar. The registrar cannot make up my mind for me about whether what I am doing is honourable in the terms of the traditions of this House. It must come back to whether I think that what I am doing is right. I cannot put it on an official of this House, however distinguished and however helpful his advice.
There is a reference to the Convenor of the Cross-Bench Peers. If I fail to declare something that I ought to have declared, I shall be reported to the Convenor of the Cross-Bench Peers, who will be treated for these purposes as though he were the Leader or Chief Whip of the Cross-Bench Peers, which he is not. It is no business of the Convenor of the Cross-Bench. Peers, admirable though he is—and he is a very good Convenor—to intervene if I am criticised for having failed to disclose something that it is held I ought to have disclosed.
Finally, there is the problem of spouses, relations and friends. How should we know about them? The provision is not in the spirit of the times. The spirit of the times, for what it is worth—and it is a pretty ridiculous concept—is that wives and husbands should be free to pursue their own careers with considerable

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independence from each other. The Prime Minister and his wife are widely regarded in the country as admirable examples of two people who have made a marriage with separate careers. If the current Prime Minister comes to this House—as I hope that he eventually will—will he have to ask his wife to tell him everything that she is doing in her legal profession so that he can be sure that he has declared it in the register of interests? Is that how we believe that married life ought to be pursued at this time in our national history?
This is a pitiful nonsense. I intend to continue to consult my conscience about what is honourable and what is not and to attend to the traditions of this House.
5.30 p.m.
Baroness Carnegy of Lour: The comments of the noble Lord, Lord Rees-Mogg, are welcome. He has been honest about his view and has echoed what a number of noble Lords are probably thinking. I understand why the various committees arrived at their conclusions. That is what happens when committees discuss such issues. They end up with a lot of ideas, all of which seem to have to go into the report, but the end product may not serve the purpose for which it was originally designed. Such a code—even as proposed by my noble friend Lord Kingsland—will probably damage that which the public most value about our House, which is the fact that it is made up of people who know about a lot of aspects of life from their personal involvement and declare their interests when they speak. That is why we have not had any trouble in this House. I believe that we shall continue without such problems.
However, we are being cornered by the Government's procedures into having a code. If we have one, I hope that noble Lords will take note of what the noble Lord, Lord Marsh, said. His comments seemed to make it difficult for him to support the recommendations of the Leader of the House. I am not sure whether he said that he would support the Motion, but he seemed to put a lot of difficulties in the way. The comments of the noble and learned Lord, Lord Nolan, also made it difficult for him to accept the proposals of the Leader of the House.
I have a question about one detail that may also be in the minds of other noble Lords—unless I am the only one who has misunderstood. We are told that we have to register our relevant financial interests. The report says that such interests may include,
shareholdings not amounting to a controlling interest".
I have not the foggiest idea what my shareholdings are at any given moment and I do not hold the same shares at the beginning of the year as I hold at the end of the year. I do not have large shareholdings, but I leave it to someone else to deal with them. My interest is that the shares should be worth more at the end of the year than they were at the beginning.
Looking around the House at faces opposite me and at the backs of the heads of some of my noble friends, I think that most people here have been fairly
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successful in their profession or their business and my guess is that they have shares. Unless they think that they understand the stock market better than anybody else, I imagine that most have someone else to invest that money, or they have financial trusts that change their holdings all the time. I know very little about the subject, but in some cases those holdings are very big and in others they are rather little.
I do not know what I would declare. It may be said that it is not relevant, but it might turn out that it was. Some financial trust in which I had a few shares might have a huge interest in an issue. That might make me biased. I suppose that I could look it up before we had a debate or keep quiet. I think that we shall all find the requirement difficult. I am not even sure that people with unit trusts or ISAs know what their investments are at a given moment. The recommendation is not practical.
If I had been on the committee, I would probably have gone along with the suggestion, because it sounds good, but I suspect that it is not. I see the Chief Whip in his place. He has done quite well in his profession and probably has a share or two. He might have a problem. Indeed, there is a further problem for Ministers, because I believe that they hand over the handling of their belongings to somebody else while they are in office. How do they know what they have, and if they do know, should they?
Unless I have got the whole issue wrong, it is somewhat unhelpful. Perhaps the Leader of the House will put me right.
Lord Dubs: Having listened to the debate, I shall obviously have to widen my circle of friends, because I do not think that I have any who are registrable under the declaration of interests.
Seriously, I have listened very hard and I cannot agree with the noble Lord, Lord Rees-Mogg. What we are doing is right and proper. It is what the public expect and have a right to demand of us. If we protest too much, we will make it look as if we have something to hide from the public. It is our duty and obligation not to do that.
If this were a cosy club, we could say that we all know and trust each other and we do not have to declare. However, we are not a cosy club. Many people in the world outside do not know us as well as we know each other. They surely have the right to know whether we have any interests that affect what we say and how we vote. That is the minimum.
Those of us who have served on a local authority are used to a rigid declaration of interests. The noble Lord, Lord Kingsland, said that this was all a bit onerous. Local government has a much more onerous declaration of interests.
Lord Strathclyde: Perhaps I may take up the noble Lord on that point. Is it true that local authority members let sometimes substantial contracts to local people about whom the councillors may genuinely have a personal view? That, of course, would be impossible in this House. As the noble Lord, Lord

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Marsh, said, in his experience nothing that is ever done in this House could possibly be construed as having an effect on any of his interests. That is the difference between local government and the operation of this House.
Lord Dubs: I understand the distinction. However, if one takes the noble Lord's argument too far, we shall be wasting our time in that we shall have no influence on anything. I do not believe that the situation is quite as bad as that. My point is simply that, if people serve as councillors on local authorities, they are used to making detailed declarations of interest. That is all I am saying.
In addition, those of us who have served on public bodies are also used to making declarations of interest. I served on a hospital trust. As a precondition of being allowed to do so, I had to make a declaration that I had no interest in any organisation or business which might have a relationship with a hospital trust. The same applied in relation to the Broadcasting Standards Commission, of which I am currently a member. I seek only to point out that the concept of quite tough declaration is fairly widespread. It is not so novel that we should treat it as an enormous departure from what happens in other aspects of life in this country.
My second point concerns a key phrase—"dependin g on their significance"—which runs throughout the proposal. I do not believe that some of the concerns expressed are relevant because, due to that phrase, they would not have to be declared; they are not sufficiently significant to come within the scope of the issue.
I turn to my third and final point. I listened very carefully to the noble and learned Lord, Lord Nolan. Are we imposing so much detail on the registrar that his or her task will be too difficult? I hope not. However, I want to ask my noble and learned friend to answer one question when he replies to the debate. If, with experience, we find that ambiguities or uncertainties arise which the registrar must constantly resolve, and short of another debate such as this, would it be possible for the registrar to issue a code of guidance to Members which would simplify matters for the avoidance of doubt? I ask that because we do not want to have to return to a debate such as this other than after a long period of time. Perhaps the process could be fine-tuned. That would simplify the matter and make the registrar's task easier.
Baroness Williams of Crosby: I shall be brief. I believe that the great reason for the Government's Motion, which we on these Benches broadly support, is that the reputation of the House of Lords is its major source of influence. The House of Lords does not have great power in comparison with another place. However, the power that it has with the public arises from the respect that the public has for this place and which it is important that the public maintains. I agree with those who have said that, sadly, times have moved on. There is not the same respect that there once was—perhaps there should not be—for those who "live and work above us", so to speak.
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Another factor is that, whether we like it or not, we live in a world of increasingly sophisticated criminal activity which has already, in the case of other legislatures, given rise to extremely difficult situations. It is essential that we build for posterity and that we recognise the pressures upon even this place.
My second brief point is that, without any doubt, the great majority of Members in this place uphold, in every possible sense, the honour of the House. However, frankly, one needs only one or two bad apples for the media to go to town on the subject of Peers and then to collectivise that to suggest that the whole House is affected, as I believe it not to be.
Thirdly, I want to ask a question of the Leader of the House. Is it possible that the registrar, in building up case law, could be asked to provide an annual report which would provide additional guidance as cases came up and were resolved as a result of his advice?
Finally, I want to register two concerns which I believe are reflected in the amendments put down by the noble Lord, Lord Kingsland. They do not go so far that I would at this stage regard them as a basis for supporting the amendments, but I worry a little about the definition of the word "friend". I believe that concerns exist in relation to confidentiality, and I strongly support what the noble Lord, Lord Kingsland, said about the term "in private"
It would obviously be extremely unfortunate if someone's case were to be reported by an individual to the chairman of the Committee for Privileges and if it were done publicly in such a way that the person was judged by the media before his case was heard. I also want to ask the Leader of the House whether he can give an assurance that nothing will be made public unless and until a hearing takes place, unless it is the wish of the Peer who has been criticised to make it public on his own behalf.
5.45 p.m.
Lord Williams of Mostyn: I believe that that is a perfectly reasonable point, and it has been made by a number of noble Lords. It is only right that I say that at that stage I shall do what is required to bring about that conclusion, assuming, of course—I hope that that is not presumptuous—that the Motion in my name is carried.
Lord Williamson of Horton: I shall be brief. There is one other difference between the text presented by the noble and learned Lord the Lord Privy Seal and that presented in the amendment of the noble Lord, Lord Kingsland. It has not been referred to at all in the debate thus far. Under the heading of "other relevant financial interests", the amendment presented by the noble Lord, Lord Kingsland, refers specifically to remunerated directorships and partnerships.
Personally, I consider it to be very wise to include the reference to partnerships, which are a source of substantial revenue for persons in some professions. It is not included in the text presented by the Lord Privy

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Seal and I should like to have a comment on that point. I believe that we should avoid any ambiguity on revenues derived from partnerships.
Lord Marlesford: My own position is simple. When I came here 10 years ago, following 16 years as a parliamentary journalist, I was surprised that there was no register of interests. I suggested that there should be one and I was glad when it was introduced. I believe that it was a good idea that it should, for a while, be a voluntary register. However, I consider that the time has come for it to be mandatory, and I gave oral evidence in those terms to the committee of the noble Lord, Lord Neill.
I believe that one of the most important points has been made by the noble and learned Lord, Lord Nolan: that the code will be totally unworkable if it is not clear what is required. I believe that, in a sense, the Leader of the House himself made the "unworkable" point when he referred to our declaring friends who have substantial landholdings. I do not know why he chose to give that example, but he did.
There is published annually a list of the rich. I declare an interest at once, not because I am in it—of course, I am not—but because I am an independent national director of Times Newspapers Limited, which publishes it. I suppose that that is relevant. The list is widely published—over a million copies are circulated—and it includes details of the landholdings of a large number of people. Therefore, if the proposal of the Leader of the House were to be introduced, it would be necessary for those of us who have friends in that list to go through it carefully and register their interests. Frankly, I believe that that is absurd.
Secondly, I make one point about another place, where I believe that this whole issue has become a ludicrous obsession. I shall give one example relating to the Prime Minister, for whom I have much respect. Under the heading of "gifts, benefits and hospitality" in the current list of the House of Commons register, Mr Blair has put:
"31st December 1999: tickets for four adults and five children to the Millennium Dome's new year celebrations provided by the New Millennium Experience Company, registered 9th May 2000".
Frankly, if the Prime Minister of this country is required to declare such drivel in the register, it discredits not just the register but the other place itself.
I believe that of the two proposals, the one put forward by my noble friend Lord Kingsland is infinitely more workable. It covers the entire spirit of what we need in order to reassure public opinion. I shall vote for it enthusiastically rather than for the proposal of the Leader of the House.
Lord Strathclyde: Perhaps I may make a brief contribution at this stage. I begin by thanking my noble friends Lord Kingsland and Lord Elton for having served on the committee chaired by the Leader of the House. Both my noble friends did so reluctantly but I know that once they started their work they realised its importance. This is an important issue
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because it affects every Member of this House. It is for every Member to ponder, having listened to and weighed up the arguments and read the documents provided for us.
The House has always been respected for its sense of fairness and proportion. In life, a solution should always be in proportion to the problem. Uncharacteristically, the solution of the noble and learned Lord the Leader of the House has for once lost some of that sense of proportion.
I follow the comments of the noble Lord, Lord Shore. This debate involves not what we agree about but what we disagree about, and we disagree about quite a lot. Noble Lords must ask themselves whether a code that could involve prying into every nook and cranny of the life of every Member of this House and into the lives of their families and friends is proportionate to the perceived problem of standards of conduct in your Lordships' House. Noble Lords also have to ask whether such a code—which is potentially irreversible because, under the noble and learned Lord's Motion, there will be no further opportunity for the House to examine the code before it comes into force next March—is likely to enhance this House's standing. Is the code appropriate to a House whose strengths lie in its interests and whose Members are in most cases part-time? Finally, noble Lords have to decide whether it is in the wider interests of this House and its present and future membership for us to adopt today a code that is in many respects more draconian and intrusive than that which was adopted in another place. If the answer to those questions is yes, noble Lords should of course support the noble and learned Lord's Motion, but I emphatically cannot do so. There may be differences of detail between us but they are still very important differences.
I turn briefly to the question of friends and the 1995 resolution of the noble and learned Lord, Lord Griffiths. Although that resolution made reference to friends, it was a non-mandatory provision. It was up to each Member to decide whether the interests of their friends impinged. To my knowledge—which admittedly is not certain—I have never heard anyone declare the interests of a friend during the past six years.
Lord Goodhart: I am grateful to the noble Lord for giving way. Does he accept that the Griffiths report referred not to the registration but to the declaration of an interest, and does he agree that such a declaration was compulsory?
Lord Strathclyde: As I understand it, whether we agree with the noble and learned Lord or with my noble friend, oral declaration in this House will still be required. I have always believed that oral declaration is far more important than registration because it is made at the time of the relevant debate and it is therefore entirely and at once visible.
Lord Goodhart: I am sorry to interrupt the noble Lord again, but does he agree that the effect of the "Kingsland amendment" would be to remove any obligation to declare an interest of friendship?
Lord Strathclyde: My noble friend Lord Kingsland will speak in a few moments. My understanding of the matter is that the noble Lord, Lord Goodhart, is wrong. My noble friend's amendment would not remove the obligation to declare an interest orally. However, I am sure that he will return to that point when he winds up.
I turn to the date of implementation. It has been much discussed that the registrar's work between now and that date could be particularly onerous. I also understand—I may be mistaken about this—that the current registrar is due to retire at some date early next year. I therefore believe that it would be more appropriate to have a date that is later rather than earlier. The noble and learned Lord the Leader of the House agreed that with us and the Liberal Democrats. The date in the Motion is therefore the end of March 2002. My noble friend Lord Kingsland took the matter one stage further in his amendment and suggested that there should be a further resolution of the House before the date of implementation is known but that that date cannot be before the end of March 2002. That proposal allows him to deal with any details that come out of this debate and which may make it more difficult for the registrar to put into effect the resolution that is agreed to.
Many noble Lords know of my strong reservations about the proposals of the noble Lord, Lord Neill of Bladen. I made those reservations clear in the evidence that I gave to his committee. After all, the Griffiths committee in 1995, the Neill committee in 2000 and the committee chaired by the noble and learned Lord the Leader of the House agree that there were no breaches of the code and no evidence of any wrongdoing.
I, too, have moved. I am not sure whether I have done so because that chimes with the spirit of the times or is the result of the influence of the noble Lord, Lord Neill. However, I have come to accept, in light of the noble Lord's report, that changes should be made to develop the register further. I agree with what the noble Lord said about moving forward now. However, any such action should be taken in due time and it should be in due proportion. The amendment of my noble friend Lord Kingsland advanced an alternative code. Many may not like it and I myself may quibble with its details but his proposal keeps the vital sense of proportion that I feel the Motion lacks.
My noble friend's proposal is the middle way between the status quo, which the noble Lord, Lord Neill of Bladen, has probably rendered untenable, and the Motion of the Leader of the House. My noble friend wants to extend the ambit of registration but he strikes a more sensible balance between what is rightfully and legitimately public and what is fairly and legitimately private. He also allows due time for the registrar to consider operational details. My noble friend's amendment is not perfect. It is a compromise. I should like to think that the Leader of the House
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could agree to it but if he cannot I shall support my noble friend in the Lobby. I hope that many noble Lords on all sides who believe in a more balanced and proportionate response will do the same.
Finally, my noble friend Lord Renton called for unity. He is right. However, he also suggested that we should delay the process for another day. He is wrong about that because we have said just about all that there is to be said on this matter.
A vote for the noble and learned Lord's Motion would support an irreversible and draconian provision. A vote for my noble friend's amendment would lose us absolutely nothing. If it turned out that we were wrong, we could still in due course agree to the Motion's stricter policies. That is why, when noble Lords turn their mind to voting—they will do so soon—I urge them to support my noble friend's amendment.
Lord Selsdon: I want to correct my noble friend on one point. He said that we have heard everything that there is to say on this matter. However, some of us would have liked to make a contribution to this debate. I had intended to make a contribution lasting five seconds for each year that I have been in your Lordships' House. However, like all good people, I shall write to the noble and learned Lord.
Lord Williams of Mostyn: I remind noble Lords of where we have got to. For the past six or so years we have been bound by the Griffiths resolution. The noble Lord, Lord Goodhart, was right to say that that involves the declaration of a financial interest. The noble Baroness, Lady Boothroyd, who is not currently here, was equally right in her observation that when one is trying to skitter through a declaration, particularly at Question Time, it is virtually of no value to those noble Lords who might be interested. The noble Lord who is asking the supplementary question is not trying to deceive; he simply does not have the time.
It was said by the noble Lord, Lord Rees-Mogg, that all this came from the outside—I paraphrase. That simply is not correct. I, together with my noble friend Lady Jay, gave evidence to the Neill committee. I took the trouble to read not only the annex of those who had given evidence, but also the evidence given. Whether or not one agrees with the conclusions, one cannot say that it did not take into account a wide range of interests and views from Members of this Chamber. It is not correct therefore to say otherwise.
The present position also is that the Griffiths resolution says that—I quote for the last time today (happy moment)—
"They should also declare any non-financial interest of which their audience should be aware…Such interests may be indirect or non-pecuniary, for example the interest of a relation or friend".
It ought not to be forgotten that the Kingsland amendment also includes the obligation to register as a mandatory obligation in some circumstances the financial interests of the spouse.

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The real question therefore is not one of fine principle, but whether or not in this world the relationship of husband and wife may be of such close interest as to be equated reasonably to the interest, for instance, between a father and a well-loved child, or a doting grandfather or grandmother and a loved grandchild. Are they not capable in this world of having the same sort of intimate relationship that ought to require disclosure? It is not a question of endless investigation, as the noble Lord, Lord Strathclyde, was going to say.
I repeat, that was the situation which obtained. Indeed, the noble Lord, Lord Marsh, was a member of the Griffiths committee which produced that very resolution.
Lord Marsh: Perhaps I may comment. I am not relying on the fact that I did not have a friend at that time—I have got some now. I genuinely do not believe that any member of the public can reasonably assume that a Member of this Chamber will behave dishonestly purely on the basis that he has a friend who might benefit. That is one of the reasons I am relatively relaxed.
Lord Williams of Mostyn: It may well be that no member of the public could reasonably believe that any Member of your Lordship's Chamber would behave on the basis of self-interest or the interest of a spouse. But that is not the point. The question is: how do we deal with the circumstances that face us? Virtually everyone who has spoken agrees on the necessity—it may be a disagreeable one—for a code. Even the late repenter, the noble Lord, Lord Strathclyde, has now seen the light.
The recommendation of the Neill committee is worth looking at. We find it at page 58 of the report:
"The House of Lords should ensure that deposited agreements and details as to the remuneration derived from parliamentary services under category (1) be made available for public inspection".
That is exactly what we recommended. Category (1), of course, relates to consultancies or any similar arrangements whereby Members of the House accept payment or any other incentive or reward for providing parliamentary advice or services. We put that in our proposed code following the submissions, in part but significantly, because we reflected, first, on what was in Griffiths and, secondly, on what was in Neill.
We are living in a changed world. The noble Baroness, Lady Williams of Crosby, is quite right: this Chamber is enormously influential. Members of this place are influential not simply in voting or in debate, but also in conversation in a House which, by and large, is an amicable place; in public speeches on public platforms; and in writing letters to newspapers. Every one of us has the possible influence and advantage of membership of this place when we make public announcements.
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I dealt with the point in relation to privacy and shall touch on it only briefly. It was well made by a number of speakers. Either my noble friend Lord Shore or the noble Lord, Lord Marsh—forgive me for not remembering exactly—said that it was capable of poisoning relationships. That point was well made and I undertake to take it on board and deal with it.
Lord Elton: How will the Minister deal with it? We have the machinery before us to deal with it. My noble friend's amendment provides that machinery and the Minister's does not. How will the Minister remedy that when the car has rolled off the production line?
Lord Williams of Mostyn: The noble Lord, Lord Elton, knows quite well that the amendment of the noble Lord, Lord Kingsland, does not simply deal with privacy. Both the noble Lords, Lord Elton and Lord Kingsland, will remember that this was not an aspect of controversy when we produced our unanimously agreed report.
I am saying that the caveat of the noble Lord, Lord Kingsland, to which the noble Lord, Lord Strathclyde, referred, that this could not come into effect without further resolution, enables me to meet what I felt was the will of the Chamber by introducing that single amendment on that occasion of resolution. It would then be a matter for your Lordships to decide. I am trying to deal fairly with a point which has been fairly raised.
Viscount Bledisloe: Before the noble and learned Lord departs from that point, I did not understand his answer. Is he saying that he will accept an amendment that this code should not come into effect until there is a further resolution? If not, he cannot get the words, "in private" on to the face of the code unless he accepts part of the amendment of the noble Lord, Lord Kingsland. If he merely gives administrative directions that the registrar should keep it private, that will not prevent the complainant going public and doing the damage. How is this to become part of the code that binds us?
Lord Williams of Mostyn: It would not be proper for me to try to give administrative directions in those circumstances. But I repeat—I obviously did not make myself clear—that the noble Lord, Lord Strathclyde, pointed out, quite rightly, that the amendment of the noble lord, Lord Kingsland, indicates at the bottom that none of it should come into effect until at the earliest the 31st March. I am saying that there will be an opportunity, if the question of privacy exercises and agitates noble Lords, to put it in as a single amendment. I do not resile from my general proposition that the code as put forward by the majority of the committee is infinitely preferable.
The Earl of Onslow: I am obviously being very stupid here. Is the Minister saying that this version can be amended before it comes into force?
Lord Williams of Mostyn: If Members of this Chamber wish that to be done, it seems to me that it

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can be done. But I would not want the noble Earl then to produce a whole raft of other amendments; that would delay matters. I agree with the noble Lord, Lord Strathclyde, that we must come to a conclusion.
The question was raised in relation to the confidentiality of a friend's affairs. That applies to spouses as well; it always has. The noble Lord, Lord Williamson of Horton, raised the question of partnerships. Remunerated employment is specified and I would take that to include a partnership.
I turn now to the questions of the noble Lord, Lord Ezra. He referred to shareholdings not amounting to a controlling shareholding. That is simply the distinction to be found in paragraph 11, which states,
"the following financial interests are always relevant and therefore must be registered".
That is where we find shareholdings amounting to a controlling interest. The possibility of shareholdings not amounting to a controlling interest arises in paragraph 12:
"relevant financial interests may also include".
So it allows for the flexibility which the noble Lord, Lord Ezra, seeks.
The noble Lord asked a question in relation to "friend". I hope I dealt with that. One does not need, "gifts of a substantial nature" because it is found within the text itself. It depends on the significance of the gift and that is allowed for.
The question was raised as to whether there would be too much burden on the registrar. The noble and learned Lord, Lord Nolan, in approaching eagerly his prospective chairmanship of this sub-committee, said that the registrar might need to take advice from the chairman of the committee. I would commend that sort of scheme to your Lordships, with the single comment that if the registrar had approached the chairman, the chairman might then be disqualified from chairing the committee which heard the complaint. But those are matters of fine detail. This is a matter for the committee and its recommendation on resource, but it seems to me that legal advice should be available. However, one should avoid the presence of lawyers on these occasions if at all possible, other than in the Chair.
The noble Baroness, Lady Williams, asked, as did others, about publishing a running history of what has happened to complaints so far. Subject to the views of the committee, that would be an excellent idea because a body of practice, not case law, would be built up.
I have tried to deal reasonably briefly with all the points raised.
Baroness Carnegy of Lour: I am grateful to the noble and learned Lord for giving way. I did ask him what one does if one does not know at a given moment what shares one has. How can one register them?
Lord Wiilliams of Mostyn: The answer is that one cannot if one does not know. Nor is one required to look at PEPs or ISA statements every year, if one has those.
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I thought that there would be more division among Members of the Committee. It seems to be the generally, though not exclusively, held view that we need to have a code, or perhaps it is better to say that we should have a code. The arguments produced by the majority for the code are strong. It is said that this is a report which I have put before Members of the Committee. That is literally true but it is not my report; it is that of a distinguished committee which, by and large, agreed on everything.
I believe that the procedure is now for the noble Lord, Lord Kingsland, to take his view and for a vote to be taken on his amendment. Should be not succeed in seducing the Committee into error, my Motion will be put.
Lord Kingsland: While respecting the view of the noble Lord, Lord Rees-Mogg, who I wish had tabled an amendment in the sense of his speech, the noble and learned Lord the Lord Privy Seal and myself are in almost total agreement. On the principle of approach there is nothing to divide us. As regards two of the five issues that do divide us, the noble and learned Lord has, in effect, accepted the point of view that I expressed in my amendment on the question of privacy of reporting; and I accept, in turn, his interpretation of the obligation in respect of registration of private trusts.
There remain but three issues between us. The first is whether or not somebody in receipt of money for providing parliamentary advice should declare that amount in circumstances where they are obliged neither to take part in debate nor vote.
The second is the vexed issue of "friend" and "relative". The noble and learned Lord will be relieved to hear that I shall not rehearse the debate. However, in final submission I draw the attention of the noble and learned Lord to the remarks made by the noble and learned Lord, Lord Nolan, who pleaded, above all, simplicity in our code. I can think of no area more likely to achieve the opposite than declarations of interests held by either relatives or friends, for all the reasons that have been given by so many Members of the Committee tonight.
Finally, in my submission the arguments for categorising significant shareholdings in the discretionary rather than the mandatory category are overwhelming, especially when there are additional obligations to make a declaration where an interest should clearly be expressed in debate.
The noble and learned Lord looks characteristically adamant, so I should like to test the opinion of the Committee.
The Deputy Chairman of Committees (Lord Ampthill): The original question was, That this House adopts a Code of Conduct for Members of the House of Lords as proposed by the Lord Privy Seal, since when an amendment has been moved to insert an alternative code of conduct in the name of the noble Lord, Lord Kingsland. Therefore, the question that I now have to put is that this amendment be agreed to.
6.14 p.m.
On Question, Whether the said amendment (Lord Kingsland's amendment) shall be agreed to?
Their Lordships divided: Contents, 149; Not-Contents, 152.

Division No. 1

CONTENTS

Ackner, L.

Hodgson of Astley Abbotts, L.

Allenby of Megjddo, V.

Hogg, B.

Ampthill, L.

Home, E.

Anelay of St Johns, B.

Hooper, B.

Arran, E.

Howe, E.

Astor, V.

Howe of Aberavon, L.

Astor of Hever, L.

Howell of Guildford, L.

Attlee, E.

Hunt of Wirral, L.

Baker of Dorking, L.

Hurd of Westwell, L.

Beaumont of Whitley, L.

Jopling, L.

Bell, L.

Kimball, L.

Biffen, L.

Kingsland, L.

Blaker, L.

Kirkham, L.

Blatch, B.

Laing of Dunphail, L.

Bledisloe, V.

Lang of Monkton, L.

Boardman, L.

Lloyd-Webber, L.

Bowness, L.

Lucas, L.

Brabazon of Tara, L.

Luke, L.

Bridgeman, V.

Lyell, L.

Brookeborough, V.

McColl of Dulwich, L.

Brougham and Vaux, L.

MacLaurin of Knebworth, L.

Burnham, L. [Teller]

Mancroft, L.

Buscombe, B.

Mar, C.

Byford, B.

Marlesford, L.

Caithness, E.

Mayhew of Twysden, L.

Campbell of Alloway, L.

Methuen, L.

Campbell of Cray, L.

Miller of Hendon, B.

Carlisle of Bucklow, L.

Monson, L.

Carnegy of Lour, B.

Montagu of Beaulieu, L.

Carrington, L.

Montrose, D.

Cavendish of Fumess, L.

Mowbray and Stourton, L.

Chalfont, L.

Moynihan, L.

Coe, L.

Murton of Lindisfarne, L.

Colville of Culross, V.

Naseby, L.

Colwyn, L.

Noakes, B.

Cope of Berkeley. L.

Northbrook, L.

Crathorne, L.

Northesk, E.

Crickhowell, L.

Norton of Louth, L.

Cuckney, L.

O'Cathain, B.

Deedes, L.

Onslow, E.

Dixon-Smith, L.

Oxfuird, V

Eccles of Moulton, B.

Palmer, L.

Eden of Winton, L.

Park of Monmouth, B.

Elliott of Morpeth, L.

Pearson of Rannoch, L.

Elton, L.

Peel, E.

Falkland, V.

Perry of Southwark, B.

Feldman, L.

Piatt of Writtle, B.

Ferrers, E.

Plummer of St. Marylebone, L.

Flather, B.

Powell of Bayswater, L.

Fookes, B.

Prior, L.

Forsyth of Drumlean, L.

Pym,L.

Freeman, L.

Rawlings, B.

Gardner of Parkes, B.

Reay, L.

Geddes, L.

Rees, L.

Gilmour of Craigmillar, L.

Rees-Mogg, L.

Glentoran, L.

Renton, L.

Goschen, V.

Roberts of Conwy, L.

Gray of Contin, L.

Ryder of Wensum, L.

Griffiths of Fforestfach, L.

Saatchi, L.

Hambro, L.

Sainsbury of Preston Candover,

Hanham, B.

L.

Harris of Peckham, L.

St John of Fawsley, L.

Henley, L.[Teller]

Sandwich, E.

Higgins, L.

Seccombe, B.

686

Selborne, E.

Thatcher, B.

Selsdon, L.

Trefgarne, L.

Sharpies, B.

Trumpington, B.

Shaw of Northstead, L.

Vinson, L.

Simon, V.

Vivian, L.

Skelmersdale, L.

Waddington, L.

Soulsby of Swaffham Prior, L.

Wade of Chorlton, L.

Stewartby, L.

Walker of Worcester, L.

Strathclyde, L.

Wilberforce, L.

Swinfen, L.

Wilcox, B.

Taylor of Warwick, L.

Young, B.

NOT-CONTENTS

Ahmed, L.

Harris of Richmond, B.

Amos, B.

Harrison, L.

Andrews, B.

Haskel, L.

Archer of Sandwell, L.

Hayman, B.

Ashton of Upholland, B.

Hilton of Eggardon, B.

Bach, L.

Hollis of Heigham, B.

Barker, B.

Hooson, L.

Barnett, L.

Howells of St. Davids, B.

Bassam of Brighton, L.

Hoyle, L.

Berkeley, L.

Hughes of Woodside, L.

Bernstein of Craigweil, L.

Hunt of Kings Heath, L.

Billingham, B.

Hylton, L.

Blackstone, B.

Irvine of Lairg, L. (Lord

Boothroyd, B.

Chancellor)

Borrie, L.

Jay of Paddington, B.

Bradshaw, L.

Joffe, L.

Brennan, L.

Judd, L.

Brooke of Alverthorpe, L.

Lea of Crondall, L.

Brookman, L.

Lester of Herne Hill, L.

Burns, L.

Levy, L.

Carnarvon, E.

Lipsey, L.

Carter, L.[Teller]

Lockwood, B.

Chandos, V.

Lofthouse of Pontefract, L.

Christopher, L.

McCarthy, L.

Clark of Windermere, L.

McIntosh of Haringey, L.

Clarke of Hampstead, L.

McIntosh of Hudnall, B.

Clement-Jones, L.

MacKenzie of Culkein, L.

Cohen of Pimlico, B.

Mackenzie of Framwellgate, L.

Crawley, B.

McNally, L.

Dahrendorf, L.

Marsh, L.

Darcy de Knayth, B.

Mason of Barnsley, L.

David, B.

Massey of Darwen, B.

Davies of Coity, L.

Merlyn-Rees, L.

Davies of Oldham, L.

Miller of Chilthorne Domer, B.

Desai, L.

Milner of Leeds. L.

Dholakia, L.

Mishcon, L.

Dixon, L.

Morgan, L.

Dubs, L.

Morgan of Huyton, B.

Eatwell, L.

Morris of Manchester, L.

Elder, L.

Neill of Bladen, L.

Elis-Thomas, L.

Nicol, B.

Evans of Parkside, L.

Northover, B.

Evans of Temple Guiting, L.

Oakeshott of Seagrove Bay, L.

Ewing of Kirkford, L.

Orme, L.

Ezra, L.

Patel of Blackburn, L.

Falconer of Thoroton, L.

Plant of Highfield,L.

Farrington of Ribbleton, B.

Ponsonby of Shulbrede, L.

Faulkner of Worcester, L.

Prys-Davies, L.

Filkin, L.

Ramsay of Cartvale, B.

Freyberg, L.

Randall of St. Budeaux, L.

Gale, B.

Razzall, L.

Gladwin of Clee, L.

Rea, L.

Goldsmith, L.

Redesdale, L.

Goodhart, L.

Rennard, L.

Gordon of Strathblane, L.

Rooker, L.

Goudie, B.

Roper, L. [Teller]

Gould of Pottemewton, B.

Sawyer, L.

Graham of Edmonton, L.

Scotland of Asthal, B.

Greaves, L.

Scott of Needham Market, B.

Hamwee, B.

Serota, B.

Hannay of Chiswick, L.

Sewel, L.

Hardy of Wath, L.

Sharp of Guildford, B.

687

Shore of Stepney, L.

Wallace of Saltaire, L.

Stone of Blackheath, L.

Walmsley, B.

Symons of Vernham Dean, B.

Watson of Invergowrie, L.

Taverne, L.

Weatherill, L.

Taylor of Blackburn, L.

Whitaker, B.

Tenby, V.

Whitty, L.

Thomas of Walliswood, B.

Wilkins, B.

Thornton, B.

Williams of Crosby, B.

Tomlinson, L.

Williams of Mostyn, L. (Lord

Tope, L.

Privy Seal)

Turnberg, L.

Williamson of Horton, L.

Turner of Camden, B.

Winston, L.

Uddin, B.

Woolmer of Leeds, L.

Wakefield, Bp.

Wright of Richmond, L.

Walker of Doncaster, L.

Young of Daitington, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.26 p.m.
[Lord Ezra's Amendments Nos. 1 to 3 not moved.]
On Question, original Motion agreed to.
House resumed.
The Deputy Speaker: My Lords, the Committee of the Whole House which has considered a Code of Conduct for Members of the House of Lords has agreed a code of conduct in the name of the Lord Privy Seal and has directed me to report it to your Lordships.
Lord Williams of Mostyn: My Lords, I beg to move that the report be agreed to.
The Chairman of Committees: The Question is, That this report be agreed to and that the House adopts a Code of Conduct for Members of the House of Lords in the form agreed by the Committee of the Whole House.
On Question, Motion agreed to.

Political Developments in Northern Ireland
6.27 p.m.
The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton): My Lords, with the leave of the House I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Northern Ireland. The Statement is as follows:
"With permission, Mr Speaker, I shall make a Statement on recent developments in Northern Ireland.
"As the House will know, the right honourable Member for Upper Bann resigned as First Minister with effect from yesterday. I regret his resignation and the reasons which brought it about. The right honourable Member has played a courageous part in the process so far and will, I am sure, continue to do so.
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"Under the provisions of the Northern Ireland Act 1998, which implemented the devolution arrangements in the Good Friday agreement, the honourable Member for Newry and South Armagh automatically ceases to hold office as Deputy First Minister at the same time.
"Both have provided distinguished leadership to the devolved Executive over the past year or more; a year which has seen the four parties in the Executive working together to tackle real problems on behalf of all the people of Northern Ireland.
"Under the Act, the Assembly must hold an election to fill the vacant offices of First and Deputy First Minister within six weeks. In the meantime, the functions of both offices can be exercised. But if that period expires without a successful election, I am then obliged to propose a date for fresh Assembly elections.
"We face a serious and sombre situation. But I think it is right to recall the progress we have already made: a new Assembly; devolution of power to a cross-community Executive; new North/South and British/Irish institutions; new protection for human rights and equality of opportunity; and a new policing legislation and the first recruitment exercise for the new Northern Ireland police service on a 50:50 basis already under way.
"This process has already created the conditions of stability and confidence in which economic development is thriving. What we have achieved so far has been the result of efforts by all the parties in Northern Ireland.
"Of course we still face many challenges to ensure the stability and full operation of all the political institutions, the delivery of a police service which attracts and sustains support from the community as a whole and to take further steps towards the normalisation of security arrangements as the threat diminishes.
"But, crucially, the basis for progress in Northern Ireland is the implementation of the Good Friday Agreement in full, in all its aspects. That requires that every party be committed, and is seen to be committed, exclusively to democratic, non-violent means. It requires that every party rejects the use of force or the threat of force. It also means that as the institutional, social and legal changes set out in the Good Friday Agreement are implemented they must be accompanied by the putting of illegal weapons completely beyond use. In this of course we all have collective responsibility, but some parties have a particular position of influence with the paramilitaries and, under the Good Friday Agreement, are obliged to use it to achieve decommissioning.
"It is because there remain problems in implementing the Good Friday Agreement in full, as I have described, that I am here today to report further developments to the House. Over the weekend we and the Irish Government also received a further report from the Independent International Commission on Decommissioning chaired by

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General John de Chastelain. Both Governments have published the report today and a copy has been placed in the Library. The report notes that during the past year the UVF and UFF representatives gave the commission general agreement on methods of decommissioning and supporting issues. It also notes the opening of some IRA arms dumps to inspection by the international inspectors.
"Regrettably, however, the report also notes that, despite previous commitments and assurances being reaffirmed in good faith, and all the paramilitary representatives wanting to continue to engage with the commission, there has been no decommissioning by the IRA, UVF or UFF to date. The commission reports that the IRA representative assured it of the IRA's commitment to put its arms beyond use, completely and verifiably, on the basis that it set out last year. This is welcome. But I am disappointed that the commission has still to receive answers to the other two key questions: how and when arms will be put beyond use.
"The simple fact is that the Good Friday Agreement needs to be implemented in full. The people of Northern Ireland want to see a fair and equal society. But, as they and the Taoiseach have made clear, the people of Ireland, both North and South, insist that illegal arms must also be put completely beyond use as part of the process of transformation. We will succeed only if we all work together to move forward in all these areas.
"As my right honourable friend the Prime Minister and the Taoiseach said after their meetings in Northern Ireland on Thursday, there is now little time left to resolve the difficulties and obstacles that remain. We are determined to live up to our obligations in full under the Good Friday Agreement but others must do so as well. The agreement involves pain for all sides; it will not work if each side implements only those parts with which it is comfortable.
"The overwhelming desire of the people and parties in Northern Ireland is to see Northern Ireland's democratic institutions functioning as intended. They are valued greatly. They want to see them working, not suspended, on the basis of a total commitment by all to democracy and exclusively peaceful methods.
"I expect to be working with the parties, together with the Irish Foreign Minister, this week. My right honourable friend the Prime Minister and the Taoiseach have stated their clear determination to engage intensively to resolve these issues as soon as possible.
"I will not hide from the House the difficulties that we face. We have seen in recent weeks the dangers when politics appears to be stalling. There have been murderous sectarian attacks; people have been intimidated out of their homes; and young children have been used as pawns in sectarian disputes. And, as so often, the police have had to step in with the support of the Army to maintain the
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peace and uphold the rule of law. In the course of doing their duty, 57 police officers were injured on one day alone at the end of May in Portadown, and a further 39 were injured in North Belfast just on the evening of 21st June. The security forces have come under attack from a range of missiles, including petrol, acid and blast bombs, and shots have been discharged.
"Nevertheless, Saturday's Whiterock parade in Belfast passed off relatively peacefully. I commend the responsible attitude taken by the vast majority of those on both sides in a very tense situation, as we approach further parades and marches over the coming weeks. In the coming weeks all of us must show that it is politics, not violence, which works. After such a long period of division, death and deep pain it is not surprising that we face difficult challenges. But these hurts of the past impel all of us to find a way through to peace and stability for the future that ensures that the bomb and the bullet are put completely beyond use as a way of solving our problems. This is not a matter of victory or defeat for one side or the other; it can only be a victory for us all".
My Lords, that concludes the Statement.
6.35 p.m.
Lord Glentoran: My Lords, I am grateful to the Minister for repeating the Statement made by the Northern Ireland Secretary in another place earlier this afternoon. We on these Benches very much regret that Mr Trimble has been forced to resign. We believe that he did an excellent job as First Minister, and we hope that some day in the future he will be able to continue it.
Throughout the process Mr Trimble has displayed genuine political courage, integrity and statesmanship. At all times he has sought to promote the interests of all the people of Northern Ireland. While we regret Mr Trimble's departure, we fully understand the reasons behind it. Last year he was persuaded to reenter the Northern Ireland Executive on the basis of promises made by Sinn Fein/IRA to put its arms completely and verifiably beyond use. It was finally beginning to honour the commitments that it made over three years ago under the Belfast agreement. Yet, as General de Chastelain's statement this morning makes clear, that process has not yet begun, nor is there any realistic prospect of it happening. Far from putting arms beyond use, the General's statement makes clear that,
"We have been unable to ascertain how the IRA will put its arms beyond use, except for the assurance that it will be complete and verifiable. The IRA has taken note of our need for this information but until we know what method will be used, we cannot judge if it meets our remit".
What further evidence is needed to demonstrate the utter failure of the IRA to keep the promises that it made last year? There are those who argue that the mere fact of the IRA guns being silent, as they put it, is sufficient. It is not. The people of Ireland did not vote in the 1998 referendum for an armed peace: an overwhelming majority voted to take the gun out of

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Irish politics for good. What is required is a clear demonstration by the paramilitary organisations that they intend to pursue their objectives exclusively by democratic and peaceful means and not violence. That is why decommissioning is important.
We on these Benches have always argued, as did the Taioseach, Mr Ahern, last year, that, for anything but a limited period of time, it is fundamentally wrong that democrats should be expected to sit in government with representatives of terrorist organisations that continue to hold on to their weapons. To do otherwise is to undermine the very basis of democracy in the United Kingdom of which Northern Ireland legitimately, and by the consent of its people, forms a part. That is one reason why we support the action taken by Mr Trimble yesterday. Another reason is that Her Majesty's Government have fatally undermined the confidence of mainstream moderate unionism in the agreement itself, the consequence of which we saw in the recent elections. If noble Lords want proof of it I suggest that they talk to them. I have just spent several days there.
Put bluntly, the Government, and in particular the Prime Minister, have betrayed the pledges that they made to the people of Northern Ireland in the referendum three years ago. Then the Prime Minister pledged, in his own handwriting, that:
"Those who use or threaten violence [are to be] excluded from the Government of Northern Ireland".
and that,
"Prisoners [are to be] kept in unless violence is given up for good".
The Prime Minister said that cease-fires had to be "complete and unequivocal", and there had to be,
"an end to bombings, killings and beatings, claimed or unclaimed; an end to targeting and procurement of weapons; progressive abandonment and dismantling of paramilitary structures actively directing and promoting violence".
What has happened since those pledges were made? Some 430 terrorists have been released early; terrorist representatives have been allowed into the Government of Northern Ireland; and the morale of the Royal Ulster Constabulary has been shattered.
We, in this House, have passed four—I call them "odious"—Acts in favour of Sinn Fein: first, there was the Northern Ireland (Location of Victims' Remains) Act. I will not go into the detail of that; some noble Lords will remember the gruesomeness of it. What came of that? Nothing.
Secondly, there was the Political Parties and Referendums Act which allowed Sinn Fein to continue getting funds from the USA. The first thing it did with that Act was to defeat its own government in a European referendum. Thirdly, there was the Disqualifications Act which allowed Sinn Fein to sit both in Westminster and Dublin. Fourthly, there was the Police (Northern Ireland) Act which has destroyed the morale of the finest force in the country and pleased no one. Sinn Fein still wants more destruction of the RUC and the RUC is unable to do its job properly within the whole community.
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Yet still the terrorists—loyalist and republican—refuse to give up a single bullet or ounce of Semtex. Still the terrorists maintain their structures and carry out, as we heard the Minister admit when repeating the Statement, beatings, shootings and murders. What a mess.
There can be little doubt that we now face a most serious situation in Northern Ireland with the very future of the Belfast agreement at stake. A process that was supposed to bring people together, and which my party worked on for many years before the present Government, has ended up by polarising them like never before. The centre ground has almost been destroyed.
There will now be a period of negotiation. The institutions might have to be suspended again. Looking to the next few weeks and months, I ask the Minister four questions: first, in the event of continued failure of the terrorists to move on decommissioning, will the Government consider bringing a motion before the Assembly, or introduce legislation into this Parliament, to exclude Sinn Fein Ministers from the executive?
Secondly, will the Minister give an assurance that there will be no further reforms of the police or reductions in security as a trade off for decommissioning, or some further fudging of the issues?
Thirdly, can the Minister assure the House that if it is necessary to reintroduce direct rule, there can be no question of increasing the involvement of the Dublin Government in the internal affairs of the United Kingdom and Northern Ireland?
Finally, will the Minister ask his colleagues to make it very clear to republicans that they will gain no more, but will risk losing some of what they have already gained if this time they fail to deliver?
We hope that the Government can salvage something from the mess that they have created. We still want the agreement to succeed. But it will only succeed if it is implemented in full and by everyone. The time has come for the paramilitaries to deliver and for the Government to deliver on their promises.
6.43 p.m.
Lord McNally: My Lords, it is more than 30 years since, as a young researcher in the Labour Party's research department, I noted the decision of the then Prime Minister, who is now the noble Lord, Lord Callaghan, to send troops into Northern Ireland. In various capacities during those 30 years I have heard ministerial Statements of varying optimism about the situation in Northern Ireland. The two words about this Statement that ring true are "serious" and "sombre".
I also pay tribute to both David Trimble and Seamus Mallon. So far as concerns Northern Ireland, they have made great efforts for peace. We must call into question one part of the Statement when it talks about the "overwhelming desire of the people" of Northern Ireland. Sadly, as in 1974, now again at the recent general election, and often in the intervening

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period, when the people of Northern Ireland have the secrecy of the ballot box to make a choice they do not opt for moderation and conciliation; they opt for the relevant extremes. That is a matter that successive administrations in this country have had to deal with. The eternal British optimism that there is a silent majority for peace is frequently proved wrong by events.
We agree that the Good Friday agreement retains the best hope for peace. However, it must be examined with some sense of realism and with a sense of urgency and leadership by the Government.
The Statement says that the Northern Ireland Secretary and the Irish Foreign Minister plan to meet next week and that the two Prime Ministers—British and Irish—will meet as soon as possible. What kind of timetable of bilateral work between the two governments is planned? Is there a sense of urgency in this six-week period? Would it not be better during that period to set out another British/Irish understanding of the Good Friday agreement? There are, obviously, interpretations and counter-interpretations. We now need some clear objectives which can be kicked off if we are not going to be simply in a fool's paradise. But, first and foremost, do the British Government share Mr Trimble's interpretation of what the Good Friday agreement promised so far as concerns decommissioning? If they do, they need to put some very tough propositions to the IRA in order to make any progress.
With regard to the question of a new appointment or new elections, I do not think that new elections offer any real way forward. The Government probably now have the safest pair of hands in the present Secretary of State for Northern Ireland, John Reid. It may well be that a period of direct rule under Mr Reid's steady hand would be a better prospect for Northern Ireland than continuing to fool ourselves that the present process with new elections and a continuation of the Assembly takes us anywhere other than into a further political morass.
Will the Minister further tell us whether, either jointly or separately, the British and Irish Governments have talked to the American Government and have made any effort to explain the present situation in the United States? One can be as sure as anything that the IRA will be explaining the situation to the American public.
Surely the Minister must realise, as Mr Simon Hoggart, who often writes in the Guardian from his own experiences of serving in Northern Ireland, said:
"What both sides in Northern Ireland are seeking is not peace, but victory".
Until that quest for unquestioned total victory is removed from the equation we will be listening to such Statements as this which are made with all sincerity and good will by British Ministers.
It is not really the hurts of the past that we are dealing with, but the new hurts that these communities are inflicting on each other with a new generation
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learning all the old games and all the old bitternesses and hatreds. I am not sure that a pause with a further spell of direct rule, unhappy as that is for the British Government, is not a better way forward than going into a cul-de-sac where the necessary good will for resolution does not really exist.
6.50 p.m.
Lord Falconer of Thoroton: My Lords, we share with the noble Lord, Lord Glentoran, regret that the First Minister has resigned. Like the noble Lord, I pay tribute to Mr Trimble's courage, integrity and statesmanship. He has been a brave contributor to the peace process. As I think the noble Lord knows, Mr Trimble remains committed to trying to see the Good Friday agreement work, as do we on this side of the House and those on the other side of the House as well. We all want to see it work. Despite concessions, the noble Lord pointed out that the Statement referred to violence continuing. That is correct. The peace is imperfect. But we should not lose sight of what has been achieved by the peace process and we should all work together to try to make it work. I said that it is a sombre and serious occasion and the noble Lord, Lord McNally, echoed that. It plainly is. It is a very difficult time. It is plainly critical that we do not make it any worse by what we say here today. It is equally important that all parties commit themselves to trying to make the agreement work.
The noble Lord, Lord Glentoran, asked whether, in the event of failure of the talks, the Government would move to exclude Sinn Fein from the Executive. It would not be helpful for me to hypothesise on what might happen in the future. We are working to get the agreement implemented in full by everyone; not to see it either suspended or any of the parties excluded. The noble Lord asked for assurances on the policing legislation. In effect he asked for an assurance that we will not move any further in relation to the policing position. We believe that we are faithfully implementing the spirit of Mr Patten's recommendations so as to deliver the new beginning in policing supported by both parts of the community for which the Good Friday agreement called. However, if there are areas where parties feel that Mr Patten's recommendations are not being implemented and that risks undermining the new beginning in policing, we are ready to listen to their views and consider them. This is new and wide-ranging legislation. It would be surprising if we got it all right first time. It may well be sensible at some point to review how it is working in practice. But no one should lose sight of the enormous changes that have already been made in legislation, with the first members of the new police service already under recruitment.
The noble Lord in effect said that if direct rule is introduced there should be no increase in intervention in the affairs of Northern Ireland by the South. Again, I think it wholly unhelpful to talk about what may happen in the light of a number of hypotheses. The right course at this stage is to seek to make the

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agreement work. The noble Lord also asked for an assurance that the republicans will gain no more than they have already gained—
Lord Glentoran: My Lords, I asked the noble and learned Lord to make it clear to the republicans that they would gain no more.
Lord Falconer of Thoroton: My Lords, I apologise for misphrasing what I said. The right course is to make all the parties to the Good Friday agreement stand by its terms. That is the way forward for Northern Ireland and that is what we should all be seeking to do.
The noble Lord, Lord McNally, asked whether the United Kingdom Government share Mr Trimble's interpretation of what decommissioning means. We are as committed as he is to ensuring that decommissioning takes place because it is a vital part of the Good Friday agreement. The noble Lord said that he did not think that new elections would help in the present situation and asked for my comment in relation to that point. The legal position is that for six weeks a search goes on to try to find a new Executive. It is right that we embark on that course. Let us not speculate about what may happen at the end of it.
The noble Lord asked whether efforts are being made to ensure that in the United States of America our position is being properly put and that the US Government are kept informed. The Government are in close touch both with the US Administration and members of Congress. What is marked is that among many opinion formers in the US, particularly those involved with the Irish American community, there is a good understanding that progress has been made in implementing all parts of the agreement other than decommissioning. Therefore, a dialogue is going on. Both the government and the wider public in the United States are being kept informed and are being kept informed of what our position is.
I hope that I have answered all the questions adequately. It is a serious moment. The best thing to do is to try to see what can be achieved by the negotiations that are starting now.
6.56 p.m.
Baroness Park of Monmouth: My Lords, will we remind everyone that decommissioning actually means either handing over the arms or destroying them in the presence of witnesses? We are still allowing the IRA to talk in a general way about decommissioning when the conditions are right. First, the IRA undoubtedly does not mean that kind of decommissioning. Secondly, the IRA's conditions are the removal of the British Army from Northern Ireland and other demands of that kind.
What is happening about the police legislation? Martin McGuinness and Gerry Adams are both saying that we have ratted on them, that we have cheated them and that they have not been given what was promised. In fact, we gave everything that was promised. As far as I remember—I should like to be
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corrected if I am wrong—Sinn Fein and the SDLP refused to take up their places on the police authority when that was specially created to involve them. They have refused to tell their populations that it is now all right for Catholics to join as they will not suffer for it. I should like to know whether there is any truth in statements being made by some journalists that the IRA is demanding—it regards it as one of the areas we have failed in—the right for convicted terrorists to be recruited into the RUC. I should like the noble and learned Lord's observations on whether that is being said and, if so, what our position is.
I am made very uneasy by the noble and learned Lord's constant reference to the fact that we need to listen to the IRA's concerns and we need to worry about whether it is happy. It is time we started worrying about whether the IRA is keeping its side of the bargain. Someone said on the wireless the other day that the experienced journalists say that the IRA never reacts to deadlines, to which someone with great good sense said, "In that case, what about having a few deadlines which the IRA does not like?" Unfortunately, we could not do that over prisoners. We have given all that away. But surely there are things we can still refuse to be easy about. If the negotiations that are going on behind the scenes are with the sole object of finding something else to please the IRA, I suggest that the Government will lose the support of the majority in Northern Ireland. That matters far more.
Lord Falconer of Thoroton: My Lords, the people of Northern Ireland will remain wedded to the Good Friday agreement only if there is a sense that it is being implemented on all sides. That means implemented not just in relation to the institutions of devolution but also, just as importantly, in relation to decommissioning. Support will peel off from the Protestant community if there is not a sense that decommissioning is going on.
As far as concerns the method of decommissioning, under the Good Friday agreement, as the noble Baroness knows, there is an independent decommissioning body chaired by General de Chastelain. It is for him to decide the details of the methodology of decommissioning and whether progress is being made. It is right to leave it to him and his commission to determine what progress has been made and not to get into a debate about precisely what is meant by decommissioning.
Baroness Park of Monmouth: My Lords, I am grateful to the noble and learned Lord for giving way. If he looks at the original document setting up the commission he will find that those conditions were set down then.
Baroness Farrington of Ribbleton: My Lords, I have to remind the noble Baroness that brief questions and comments should be put. Other noble Lords wish to speak.
Lord Falconer of Thoroton: My Lords, with respect to the noble Baroness, there is no inconsistency

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between the two. The independent commission is looking at whether decommissioning is taking place in accordance with the terms of the Good Friday agreement.
As regards the policing issues raised by the noble Baroness, she asked specific questions about what progress is being made in this area. Her principal question concerned the police board. The position is that the new police board has not yet been formed. It is a matter on which my right honourable friend the Secretary of State continues to hold discussions with the parties concerned. Our aim is for all the relevant parties to take up their places on the police board. That is because policing to which all the parties in Northern Ireland can commit themselves is obviously a prize well worth fighting for.
Lord Dubs: My Lords, I am certain that, given this difficult situation, the approach adopted by the Government is right. My noble and learned friend said that he did not want to make too many comments. Again, I understand exactly why that should be the case. It might exacerbate an already difficult situation. On the other hand, in six weeks' time, when the period he referred to will have passed, this Parliament will be in Recess. For that reason, it is hard not to want to make a brief comment at this point.
Perhaps I may put the following to him. If, in September, the Government were to be compelled to call an election for the Northern Ireland Assembly, that would take place at a time which would be of maximum disadvantage both to the Ulster Unionist Party and the SDLP. I hope very much that, despite the limited options open to the Government, they will appreciate that calling an election at a time when the two political parties which most resolutely support the agreement would do badly would not help the peace process.
Finally, my noble and learned friend may have read a leader in this morning's Irish Times which states that:
"The peace process actually requires an Ulster Unionist leader of Mr Trimble's stature".
Lord Falconer of Thoroton: My Lords, I did not see the leader in the Irish Times referred to by my noble friend, but I agree entirely with the implication that Mr Trimble is a man of great stature. His courage in relation to the peace process has established that.
Again, with respect, I must refuse to be drawn into speculation as to what may take place. At this stage, the right course is to use the coming six weeks to negotiate to see what progress can be made. It would not be helpful to discuss what the end result might be.
Baroness Blatch: My Lords, the Minister will be aware that Mr Trimble's signature to the Good Friday agreement was secured by a personal manuscript message sent by the Prime Minister through Mr Trimble to the people of Northern Ireland on that night. Can the noble and learned Lord tell the House
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what is now the status of that personal pledge made by the Prime Minister and what progress has since been made in respect of it?
Lord Falconer of Thoroton: My Lords, the position is that the process engaged in by the Prime Minister and Mr Trimble led to the Good Friday agreement. Part of that involved the commitment to decommissioning, to which the note referred. All sides in the process should be seeking to ensure that decommissioning takes place. That is the view of my right honourable friend the Prime Minister; that is the view of Mr David Trimble. That remains the position: both wish to see decommissioning.
The Lord Bishop of Wakefield: My Lords, I have family and friends both in Northern Ireland and in the south. I know that the noble Lord, Lord McNally, was right to point out that not everyone wants peace. Some people in that tragic country are making a great deal of money out of perpetuating the strife. However, I believe that this Government have made genuine efforts to bring about peace and I hope that they will continue to do so by furthering the Good Friday agreement on all sides. Indeed, I have supported the Government in votes taken in this House on various aspects of the issue.
I understand from my links in Northern Ireland that there is indeed a good deal of backing and understanding for David Trimble's position. However, those in senior Church leadership, with whom I spoke a few hours ago, stress the urgency of still pressing on Sinn Fein the following plea: if you mean what you say, do please make a move now. At this stage, a simple gesture is all that is required. It is the view of those Church leaders that Sinn Fein may yet produce the hoped-for result. Pray God that that may indeed be so.
Lord Falconer of Thoroton: My Lords, I thank the right reverend Prelate for his remarks and say that I am grateful for the support that he has demonstrated over the months and years of this process. I thoroughly endorse the sentiments he has expressed, which say in effect: please let us make progress towards decommissioning because that is what the people of Northern Ireland want to see.
Lord Hylton: My Lords, I welcome the Statement. On the final page it refers to the hurts of the past, which I believe are still very real. First, are the Government considering at least the possibility of setting up a truth and reconciliation commission along the lines of the South African model? I suggest that this would be of great assistance to the many victims from the past. Furthermore, it would provide an opportunity for the perpetrators of atrocities to come forward in those many cases of unsolved crimes which remain outstanding.
Secondly, are the Government considering the introduction of methods and techniques of conflict analysis and resolution? I suggest that such aids cannot be provided directly by government because they

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require clearly neutral third parties. However, they could be helpful to all the parties concerned and eventually could lead to what is known in the jargon as a "win-win outcome"
Lord Falconer of Thoroton: My Lords, I know of the noble Lord's interest in these two matters. He has raised proposals for a truth and reconciliation commission or a conflict analysis process on previous occasions.
At the moment, the right course is to seek to secure the enforcement and implementation of the Good Friday agreement. Other proposals as regards conflict analysis, while interesting, are not at present at the forefront of the political agenda.
Lord Desai: My Lords, I understand that my noble and learned friend does not wish to discuss the details or to speculate about the situation. However, no doubt he is aware that the coming six weeks are going to be extremely difficult. They will coincide with the peak of the marching season; we are having a hot summer and, faced with the uncertainty of still trying to find a solution, the Government may find that their hands are tied. Would it not be better to move to direct rule far more quickly?
I should like to put forward only one further argument in favour of that proposal. At the local authority level, a great deal of practical co-operation takes place between all sides. People who say that they will not sit at the table with those who hold arms and so forth do say the same at the local level. What we need to do to allow more time for local co-operation to deepen and, in the meantime, the Government should choose direct rule. That is because until real movement fakes place on decommissioning, there is no reason why we should go on pretending that it is providing a solution.
Lord Falconer of Thoroton: My Lords, I agree with my noble friend that we have seen considerable cooperation at the local level. There has been considerable co-operation at the executive and Assembly levels as well. At this stage, we think that the right course is to go through with the provisions as set out in the Act and to start negotiations.
Once again, I shall not be drawn on where that might lead. The right course to pursue is to hold those negotiations.

International Development Bill [H.L.]
7.8 p.m.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Amos): My Lords, I beg to move that this Bill be now read a second time. In the debate on the gracious Speech last week, a number of noble Lords spoke about the importance of the development agenda. This Government have a proud record on development. Since 1997, spending has increased from just under
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£2.1 billion to £2.9 billion last year and is expected to rise to £3.6 billion in 2003–04. We are now the fourth largest aid donor and we have refocused the whole of our development effort on the reduction of extreme poverty and achievement of the international development targets.
My right honourable friend the Secretary of State for International Development has worked tirelessly with our international partners to move development up the global agenda and, with my right honourable friend the Chancellor of the Exchequer, has been at the forefront of the changes to the heavily indebted poor countries initiative, which has delivered fast and deeper debt relief. We have argued the case for changes to multilateral institutions such as the UN and the EU, and, most recently, my right honourable friend the Prime Minister has restated his personal commitment to development issues, particularly in Africa.
As we debate the Bill today, more than 1 billion people live in abject poverty, without adequate food, water, healthcare or education for their children. This Government believe that we have a moral duty and a direct interest in doing all that we can to reduce and eventually eliminate such poverty. That is why we are re-introducing the International Development Bill.
The 1997 White Paper on international development, Eliminating World Poverty—A Challenge for the 21st Century, set out the strategies and policies which the Government, alongside the international development community, needed to pursue to meet the challenge of world poverty. The 2000 White Paper, Eliminating World Poverty: Making Globalisation Work for the Poor, reaffirmed this focus and considered the challenges and opportunities presented by globalisation. The International Development Bill will establish this poverty elimination focus in law. The reduction of poverty will become the central aim of the United Kingdom's international development assistance.
The genesis of the Bill can be traced back to the 1997 White Paper. This committed the Government to consider the need for a new Act that would reflect the Government's intention to re-focus their international development assistance on the elimination of poverty. The issue was debated in the series of development policy forums which DfID ran between 1998 and 2000. The consensus among the country's development community was that we should have a new Act to better reflect and support the Government's commitment to poverty elimination and the international development targets.
This Bill was introduced into Parliament in the other place in the previous Session. All parties supported the principle behind the Bill, if not all the detail of it. It completed its passage there without amendment and was introduced into this House on 23rd April. My right honourable friend the Secretary of State for International Development and I met with interested Peers to discuss the content and implications of the Bill at that time. Unfortunately, the Bill fell on the prorogation of Parliament. The Bill introduced now is identical to the one which fell then.

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During the course of the Bill's first passage through Parliament, DfID officials met with representatives of the major UK development NGOs to brief them on the main issues in the Bill. I believe that there is strong support from NGOs for the Bill.
This is a short, straightforward but important Bill. Its purpose, as I say, is to establish the reduction of poverty as the central aim of the United Kingdom's international development effort. The Secretary of State will be able to provide assistance only if she or he is satisfied that such assistance is likely to contribute to the reduction of poverty through furthering sustainable development or improving the welfare of the people. This clear "poverty test" is set down in Clause 1 of the Bill.
There are two exceptions to this test. The first relates to assistance given to the Overseas Territories. The Government recognise the special relationship that the UK has with the Overseas Territories and our continuing obligations to them. These obligations go beyond our moral duty to tackle poverty in other countries. Even though none of the Overseas Territories is among the poorest countries in the world, the Bill will ensure that DfID is able to continue to work with them. It does this by allowing that assistance to the Overseas Territories is not subject to the poverty test set down in Clause 1. Assistance to the Overseas Territories need not be likely to contribute to a reduction in poverty. It must, however, be provided for the purposes of furthering sustainable development or improving the welfare of their populations. This formulation will allow the Secretary of State to continue to provide all kinds of support, including, for example, direct budgetary support and support for the construction of infrastructure to the Overseas Territories.
The second exception relates to assistance provided in response to man-made or natural disasters or emergencies. It is vital that the Secretary of State's ability to react flexibly and speedily in the first vital hours and days after disaster strikes is not constrained by any concern over whether the assistance which is needed is likely to contribute to a reduction of poverty, or to be "development assistance" as defined by the Bill. These requirements are therefore set aside. I know that all noble Lords recognise the importance of speed of response when there is a humanitarian crisis. It is something that we have discussed in this House.
I should like to draw your Lordships' attention to one important implication of the new aim and purposes for assistance set down in the Bill. By establishing the reduction of poverty as the central aim of British development assistance, the Bill will ensure that such assistance can no longer be used to further improper commercial or political ends—the so-called "tied aid". Under the Bill, there is none of the ambiguity which allowed a previous Secretary of State to support the Pergau Dam. There is no basis for the re-establishment of the aid and trade provision, or, indeed, for any improper links between aid and trade. Indeed, the Government announced that all aid would be untied from April this year. So any Government
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wishing to re-establish the link between aid and trade or aid and political influence would need to return to Parliament and argue their case.
The Bill will provide new powers to achieve this new central aim of poverty reduction. Under the Bill, the Secretary of State will be able to support civil society organisations undertaking development awareness and advocacy activities. The Secretary of State will also be able to engage more effectively with the private sector by taking shareholdings in companies and using convertible instruments, options and guarantees. This will ensure that we are able to take full advantage of the massive contribution that civil society and the private sector can make to the reduction of world poverty.
The basis for the provision of most United Kingdom development assistance is the Overseas Development and Co-operation Act 1980. This Act provides that a Secretary of State can furnish assistance for the purposes of,
"promoting the development or maintaining the economy of a country or territory outside the United Kingdom, or the welfare of its people".
These purposes are broadly cast and have not greatly constrained the Government's ability to re-focus this country's development effort on the reduction of poverty. But the Government believe that it is not enough for development legislation merely to allow the implementation of a development programme. We believe that it should reflect the Government's and the international community's shared commitment to reduce and eventually eliminate poverty, and ensure that the United Kingdom can make the most effective contribution possible to this work. The International Development Bill includes provision for the repeal in its entirety of the Overseas Development and Co-operation Act 1980.
I should at this point clarify the scope of the 1980 Act and of the new Bill, particularly in relation to European Community development programmes. The European Community is, of course, a major development partner, with some 25 per cent of DfID expenditure being channelled through its agencies and programmes. Our contributions to all bar one of the Community's programmes are determined by various European Community treaties. As treaty commitments, these contributions are covered by the European Communities Act 1972 and not by the Overseas Development and Co-operation Act 1980. So our contributions to, for example, European Community development programmes in central and eastern Europe, the Mediterranean, Asia and Latin America are, and will continue to be, covered by the European Communities Act 1972. Over the past five years, programmes covered by the 1972 Act have accounted for over 70 per cent of DfID's expenditure on the European Community. This expenditure will not be affected in any way by the Bill.
The one European Community development programme covered by the 1980 Act, and which will be covered by the Bill, is the European Development Fund. The EDF has the clearest poverty focus of all the Community's programmes. It provides

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development assistance for 77 African, Caribbean and Pacific countries, all but one of which are developing countries.
I should like to make one further point on the scope of the Bill. It is primarily concerned with the purposes for which assistance can be provided. It is not concerned with the detailed policies and priorities which should be implemented to achieve these purposes. It does not place any constraint on the types of activities or on the particular organisations or funds that a Secretary of State can support in order to achieve these purposes. The principle behind this approach is an important one. It is that our priorities and the nature and scale of our support should be determined in consultation with the people who are in need of our help. That is a principle that runs through our entire development effort, and one which I am sure your Lordships will endorse.
Nor does the Bill constrain the Secretary of State to support only activities and organisations that tackle poverty directly. Poverty is a complex phenomenon and the measures needed to reduce it will necessarily be varied. Some activities will impact on poverty indirectly and some will impact on poverty only over the medium or long term. The Bill will not constrain a Secretary of State's ability to support such activities. So it will, for example, allow us to continue to support security sector reform where such support is likely to prevent violent conflict and increase stability, thereby decreasing suffering and poverty. It will also allow us to continue to support reforms which increase revenue flow to a government where we are confident that a proper proportion of those additional funds will be used to reduce poverty in the country concerned. It will allow us to continue to commission research, even when we may not know at the outset exactly who will benefit from it.
I turn briefly to the clauses in the Bill. Clause 1 allows a Secretary of State to provide development assistance to countries and territories outside the United Kingdom if she or he is satisfied that such assistance is likely to contribute to a reduction in poverty. We anticipate that most assistance will be given under the powers conferred by the clause. This power can, therefore, be said to be the "core power" of the Bill.
Clause 2 sets out a modified form of the core power, to allow a Secretary of State to continue to support the economic and social progress of the United Kingdom Overseas Territories.
Clause 3 enables a Secretary of State to provide humanitarian assistance in response to disasters and other emergencies.
Clause 4 enables a Secretary of State to prepare for and facilitate the use of the powers set out in Clauses 1, 2 and 3. It also enables a Secretary of State to support organisations and funds whose mandates and constitutions may not be strictly or exclusively focused on the reduction of poverty but which nevertheless can, in particular areas or on particular issues, make a valuable contribution to the reduction of poverty. We shall, therefore, be able to continue to contribute to
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organisations such as UNESCO and funds such as the European Development Fund and the Global Environment Facility.
Clause 4 also enables a Secretary of State to support organisations undertaking development awareness and advocacy activities. Such activities are currently funded under the Appropriation Act.
Clause 6 lays down the financial instruments that would be available to the Secretary of State; namely, grants and loans, securities such as share holdings and convertible instruments, options and guarantees.
Clauses 9 and 10 relate to the interest of the devolved administrations in respect of international development matters. DfID has consulted closely with all the devolved administrations in the drafting of the Bill, and all have confirmed their support for it.
The Bill will confer some limited functions on Scottish Ministers, and under the Sewel convention these provisions require the consent of the Scottish Parliament. The Scottish Parliament has passed an appropriate Motion confirming that it is content for Westminster to legislate in this area.
In conclusion, the Bill demonstrates the Government's continuing commitment to reducing and eventually eliminating poverty. That was the objective set out in the 1997 and 2000 White Papers on international development. It is an objective which, I believe, commands support from all sides of the House and from the wider development community. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Baroness Amos.)
7.26 p.m.
Baroness Rawlings: My Lords, I thank the Minister for her clear and explicit description of the Bill. In opening, I wish to make it clear that we on this side of the House agree with the spirit of the Bill and welcome the fact that it comes before us so early in the Government's legislative programme rather than being rushed through at the end of last Session. It is now possible to have a serious debate on what should be considered a serious subject. I greatly look forward to hearing the maiden speech of the noble Lord, Lord Hannay, who has great knowledge of these matters.
As your Lordships have heard, the International Development Bill is intended to replace the 1980 Act and will provide the legal framework for development assistance. Britain has always had a strong record on aid and development. We on these Benches welcome this opportunity to discuss the framework of international development policy and will use it to outline some of our concerns.
We supported the Bill at every stage during its previous passage through the Commons and sought to improve it. We do not oppose the broad thrust of the Bill. However, there are several issues of concern which we were previously unable to raise and which we shall seek to highlight during the course of our debates.
We, too, seek a more stable world in which every person has access to basic living standards, a basic education and primary healthcare; a place where

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children are free from involvement in violent conflict. In every country in the developed world responsibility to the developing world is becoming more and more politically mainstream. That is in part a result of the impact of our globalised and interdependent world and in part because more and more people are taking an interest in this vital subject.
We share a common objective with the Government; namely, to seek to alleviate world poverty in any way possible. But we must not forget that charity deals with the symptoms instead of dealing with the causes. I agree with the Secretary of State that international development is becoming a centre-stage concern, and that the system may sometimes lag behind the new realities. It is good to see so many names on the list of speakers for this debate.
British aid and development enjoy a high reputation all over the world. British aid charities often lead the way and the newly branded Department for International Development has built on the impressive achievements of the previous administration. I should like to pay a genuine tribute to my noble friend Lady Chalker of Wallasey for all the work that she has done in this area over the years. Labour Members sometimes give the impression that history began on 1st May 1997 and that they invented overseas aid on that date. Britain has always had a strong record on aid and development—unlike the impression given in the words of Sydney Smith:
"Man is certainly a benevolent animal. A never sees B in distress without thinking C ought to relieve him directly".
For many years under the previous Conservative government, and under this Government, Britain has also led the world in debt relief. Part of our historic and strategic role in the world is to play our full part in relieving global poverty and working for global stability. Under Clause 1 of the International Development Bill, the Secretary of State can provide development assistance,
"if he [or she] is satisfied that the provision of the assistance is likely to contribute to a reduction in poverty".
However, the Bill contains no definition of "poverty". It seeks to limit the capacity of the Secretary of State to provide development assistance for economic or political reasons. The nature of assistance will not be altered by the Bill for UK Dependent Territories, now renamed "Overseas Territories".
For the first time, the Bill gives the Government powers to provide humanitarian relief, although a time-scale for humanitarian assistance is not given and there is no requirement for such assistance to contribute to poverty reduction. Provisions will be made for the Secretary of State to issue guarantees and to hold securities in overseas companies. The Bill says that it does not envisage these being widely used. It also gives the Secretary of State the ability to fund development education, currently carried out under the Appropriation Act.
Under the previous Parliament, however, as I mentioned earlier, Labour failed to make sufficient time for a Second Reading debate on the Bill in the
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House of Lords before dissolution. This meant that a number of Conservative amendments could not be debated. That it was not passed in no way affected the way that our aid is delivered. In no way were the poorest people in the world negatively affected by the failure to pass the legislation.
We were concerned by the way that the Bill was pushed through the House of Commons in less than two months, with inadequate time for debate. We shall call for charities and NGOs to be given a greater role in development. The Government have been severely criticised for ignoring charities in policy making and for being antagonistic towards them. We shall be pressing for the voice of NGOs to be heard under the new Bill. However, I welcome, again, the Government's reviewed policy regarding the financing of NGO activities that involved UK nationals in countries like Afghanistan.
We shall table amendments to make certain that encouraging "good governance" is at the very heart of UK aid programmes. Unfortunately, Labour has failed to do this. Instead it intends to increase aid to countries like China over the next five years, despite a deterioration of human rights and an increase in military spending. We do not want aid to be the sad story that I recently heard,
"of poor people in rich countries only giving to rich people in poor countries".
Labour promised to be tough on corruption. Despite saying on 10th April 2000 in another place that legislation would follow "as soon as possible", Labour has failed to pass legislation to enforce the Organisation for Economic Co-operation and Development Convention on bribery, which makes it a criminal offence for a UK national to bribe a foreign public official.
Labour is now introducing legislation, but has failed to explain why it would not do so during the previous Parliament. Government have sat on their hands while corruption has abounded. Transparency International, a well-known and much-respected body, has said:
"This Government can find time to ban foxhunting, but cannot make time to crack down on international corruption".
Where is the anti-bribery Bill? It is not good enough for the Secretary of State to say that she wished another department had introduced it. Where is the joined-up thinking? Ministers promised in April 2000 that it would be introduced as soon as possible, but the Queen's Speech came and went; and Bill came there none.
We support the steps that the Government have taken to reduce the debts of the poorest countries. However, Labour has failed, yet again, to deliver the faster and deeper debt relief that it promised. At the Gilbert Murray Memorial Lecture at Oxford on 11th January 2000, Gordon Brown said:
"By the end of 2000, our target is to have more than 25 countries receiving debt relief".
However, when it came to the end of the year 2000, only 22 countries had qualified. Chad has now qualified, thus bringing the total to 23. The heavily

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indebted poor countries initiative (HIPC) has fallen short of expectations. The Conservative Party believes that a radical and fundamental revision of the rules governing HIPC is needed with criteria that are foward looking, not prescriptive. We shall insist on a rigorous audit and that money saved from debt repayments should be spent on healthcare and education.
Labour promised that it would react quickly and effectively to international disasters. However, over the past three years there has, yet again, been a failure to deliver "joined-up" government in the British response to humanitarian emergencies. This has led to delays and infighting between government departments. The severe flooding in Mozambique in March 2000 highlighted flaws in the British response to natural disasters, as well as those of the international community. The Select Committee inquiry into the events in Mozambique severely criticised the co-ordination between the MoD and the DfID. The committee's report of 3rd May 2000 stated that,
"there needs to be joined up government".
Labour has failed to tackle the waste and mismanagement of the EU aid budget. With a third of all British aid money channelled through the European Union, there should be more accountability and less bureaucracy. We believe that member states should be able to deliver more aid bilaterally in a more effective way. On 10th January of this year, the European aid watchdog, the Court of Auditors, found the management of EU aid programmes to have serious "weakness" and "shortcomings". It also criticised the Commission for "cumbersome" procedures and "overly centralised" decision making. The backlog of outstanding commitments for certain programmes is equivalent to more than 8.5 years' payments.
I turn, finally, to Aid Direct. As suggested by Mr Gary Streeter in another place, Aid Direct will be dedicated to offering advice on how best the British people can help those in developing countries. It will help to match needs in the developing world with willing helpers in the United Kingdom. Aid Direct will be set up in partnership with the NGO community, with constant input from NGOs and embassies throughout the world. It will empower the British public and small aid charities to make a real difference to communities in the developing world.
Harnessing the enthusiasm of the British people will not only help developing countries, it will also raise the profile of development in the United Kingdom. We shall focus on good governance, do more to back the excellent work of British charities, and sort out European Union aid.
7.38 p.m.
Lord Redesdale: My Lords, I begin with an apology regarding a fundamental truth: toddlers, baby food and computers do not mix. Therefore, my well-prepared speech is locked in my computer and noble Lords will have to listen to my "scrawls" this evening. Perhaps I may, first, congratulate the noble Baroness,
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Lady Amos, on her recent promotion. This can be but to the good of the standing of the department that she represents.
It is rare for the House to have an opportunity to return to international development so quickly after the debate on the gracious Speech in which many noble Lords took part, including the noble Baroness, Lady Whitaker, and the noble Earl, Lord Sandwich. That debate took place just a few days ago and we were lucky to be included in that marathon nine-hour session, which covered so many topics. I should also like to welcome the maiden speaker in tonight's debate. I very much hope that he will join the small, but happy, band of Peers who regularly visit the subject of international development.
The history of the Bill is well known. I, for one, am extremely pleased that it should return to us as a priority and as one of the first Bills to be considered this Session. On the previous occasion the Bill fell because of the political machinations of the "wash-up" period in the last Session.
While it is tempting to score political points and to attach blame, the Bill will be all the better for having had due time for consideration in your Lordships' House. However, as the Bill has been reintroduced in the same form, will it still have to go through all its stages in the Commons once more? The Commons must be looking forward to that.
The Bill reflects the Government's priorities, as set out in the White Paper. On reading the Bill I was reminded of a meeting which took place a few years ago at the advisory council of the know-how fund. It was one of the first meetings of the know-how fund advisory board after an election. We were given a paper prepared by civil servants littered with phrases such as "poverty reduction" and "aimed at the poorest". It was so unlike many previous papers that I questioned the civil servant who had written the paper about the language. I was told that the language met the requirements of the Secretary of State. I commend that attitude of the Secretary of State. We now take such language for granted. We would question any Bill that was not focused on reducing the poverty of the poorest. Such language is now a feature of every Bill that is presented in Parliament.
The Minister said that Clause 1 is concerned with the poorest people. However, I am interested to note that it does not refer to the poorest states. Is there a distinction between the poorest countries and the poorest people? That is an important point as certain countries such as South Africa have a well developed, first world infrastructure but off the beaten track there are deprived areas without even basic amenities. In some countries certain groups have not benefited from the wealth of the country. I refer to women and minority groups. Therefore, although such countries may be in the middle income bracket, they should still be eligible for funding under the Bill. Is that possible under the terms of Clause 1?
The Bill sticks to the target of reducing poverty by 2015. During the election campaign our leader Charles Kennedy raised the issue of international

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development. It was also raised in a number of fora. I hope that the Government will promote that issue. As the Bill states, manmade and natural disasters are becoming more frequent. Global warming will also affect us although not, I hope, earthquakes. I hope that the Government will consider increasing funding for groups such as World Aware. I declare an interest as a vice-chairman of World Aware, as is the noble Lord, Lord Judd. I hope that the Government will not cut back funding for groups that promote development education.
An issue which is not included in the Bill and which constitutes a glaring omission is that of tied aid. Having read the relevant debate in another place I understand that the inclusion of tied aid on the face of the Bill might cause major problems as regards some of the smaller companies which seek to secure grants for small projects. However, I very much hope that the Minister will hold a meeting before the next stage of the Bill to consider tied aid. My noble friend Lady Williams is interested in that topic. Although we have a good record in this area and the Government are doing all they can to diminish tied aid, according to an OECD report in 1999 some 13 per cent of our aid was tied. However, our record in that regard is better than that of some of our European partners. I believe that Spain's aid is 100 per cent tied. However, Portugal's aid is not tied at all.
There is great anxiety that some of the consequences of the legislation might be missed if it is not thoroughly examined. I am particularly concerned about the Commonwealth Development Corporation. We had high hopes for its future and hoped that it would continue to invest in the poorest people. However, I was concerned to read in the 16th June edition of The Economist that,
"The CDC offices in Uganda, Malawi, Ghana and maybe Mozambique—some of the countries the department is most concerned about—are to be closed. Of the four regions that the CDC now invests in, Africa, the poorest, comes bottom of the list for any new investments".
That is not the future for the CDC that the Government intended. They wanted it to continue to invest in the poorest countries to help those who do not receive investment from other sources. The article in The Economist suggests that the CDC is becoming a venture capital organisation which seeks the highest rather than the most ethical returns.
It is traditional—this always used to happen in the past—for many speakers to concentrate on the sums devoted to overseas development. The figures are interesting. Although Britain is one of the highest contributors in cash terms, we are low in the league table as regards spending as a percentage of GDP. It would be wrong not to commend the reversal of the reduction in spending on development that the Government have undertaken which we on these Benches support. However, rather than thinking of spending 0.3 per cent of GDP on development—I believe that that is our current spending—we must consider the UN target of 0.7 per cent as the ultimate goal.
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The noble Baroness, Lady Rawlings, mentioned international debt. We should consider a fundamental reform of the Bretton Woods institutions. I realise that they have been considered untouchable. The very concept of the World Bank or the IMF writing off debt has always been considered unthinkable. However, it is now time to think the unthinkable given the fact that the developed nations are the directors of these institutions and given the aims and objectives of the institutions when they were established after the Second World War.
I have listed many other points. However, I shall not raise them at this hour of the night. Having focused my remarks on Africa, I end by referring to an interesting article that I read recently in an African newspaper, the title of which I cannot remember. The argument that the article proposed sticks in my mind. It suggested that the richer countries face the very real prospect of being labelled genocidal due to their almost indifference to the AIDS pandemic which is now increasingly out of control. Those countries have drugs which can halt the progression of the disease. That, linked with the effects of global warming and the fact that such a large proportion of the population will go hungry tonight, means that international development is an issue to which we shall return.
7.50 p.m.
The Earl of Sandwich: My Lords, we all look forward to the maiden speech of my noble friend Lord Hannay and I shall not detain the House for long. I welcome the noble Lord to these Benches. We look forward to his contribution to development debates as well as those on foreign affairs. I am sure he will use all his experience on that.
During the debate on the gracious Speech, I welcomed this eminently sensible Bill. I shall not repeat what I said. I am only sorry that the debate comes at the end of a rather long afternoon of what I call over-indulgent and unnecessary self-examination. For the first time we have a statutory basis for providing assistance and a clearly stated intention of reducing poverty through sustainable development. That is a cause for celebration.
My enthusiasm is a little tempered by a concern that the public is unlikely to learn about the debate or its implications. Does that matter to the Government? Knowing the Government's support for development education, I ask the Minister whether the department has made any effort to publicise what might otherwise be thought to be a parochial Westminster affair. It is important that the public are kept up to date with the UK's achievement in international development over the long term. This Bill is a landmark.
In the same context, I am delighted that development education and the promotion of global citizenship have become a priority in the Bill under Clause 4(2)(c) as well as within the DfID budget. It is a particular pleasure for me to say this as I have spoken for several years on the subject of development education. The subject is primarily concerned with awareness of development, but some noble Lords will

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know that racism awareness is an important aspect of development education. I think that we shall return to that subject many times.
This is also the moment for me to congratulate Mr Hilary Ben n on his appointment which refers specifically to citizenship education and liaison with non-governmental organisations. The many organisations throughout the country in schools, colleges, churches and aid agencies which carry out development education will be delighted with the appointment. Does it also signify a joined-up initiative, a formal link with the DfES? Can the Minister say what Mr Benn's precise connection will be with the Department for Education and Skills?
I suspect that the Government would like the Bill to pass without too much delay. It is tempting at Second Reading to set out a wish list of improvements to the overseas programme. I am tempted by, first, the noble Baroness. Lady Rawlings, on debt relief and the noble Lord, Lord Redesdale, on the quantity of aid, a subject to which we shall certainly return. However, I limit myself to only one suggestion and a final comment.
The Minister has heard me previously on the subject. I suggest that the term "civil society" should be introduced somewhere in Clause 4 to spell out the partnership which donor and recipient governments now enjoy alongside non-governmental organisations, community-based organisations, trade unions and many other voluntary associations, as the noble Baroness emphasised.
I know that NGOs can he irritating to governments, but that is precisely the point. In many countries the NGOs, churches and agencies work very closely with government, even enabling government to carry out their function. Perhaps more than any other sphere of government they are now, in my view, actors in the drive towards good governance. Having listened to the noble Baroness, I know that good governance should be in the Bill. It is a phrase which is hard to interpret. The Minister used a different euphemism, reform; that is another way of talking about governance. Perhaps that is one reason why it has been decided to leave it out of the objectives of the Bill.
However, governments owe an enormous debt to the growing role of civil society, and their partnership with civil society is a distinct element of policy, especially in the poorest countries. There is no reference to that partnership in the Bill. I am sure the noble Baroness will have an answer, but I give notice that I intend to put down an amendment so that the issue can be examined more fully.
While I am all for change taking place in developing countries, I hope that I have no illusions about the potential of civil society to influence government. Representation will always be a problem. There is a huge disparity between the NGOs which can afford advocacy programmes and those which are simply carrying out development—and why not? In a number of countries—Malawi is a good example—groups which are attempting to monitor poverty reduction strategies, the PRSP process, are already finding the going uphill. A new DfID report is, thankfully,
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monitoring the extent of civil society participation. It is another indication of the Government's very close interest in the subject.
Few governments encourage the growth of civil society organisation. Uganda is one. In the coming years many more will see the advantages of a plural society. Like sustainable development, the development of good governance and civil society is a worthy objective which the UK in particular emphasises. I hope that that justifies the simple statement which I shall propose.
Finally, the issue of tied aid, mentioned by the noble Lord, Lord Redesdale, was debated in the House of Commons recently. I support the important comment made by Mr Bowen Wells, MP, who has made a major contribution as chair of the International Development Select Committee in another place. In his concluding speech Bowen Wells said that the abolition of tied aid must not deter UK companies, with their extensive experience, from tendering for and winning contracts. I think that the noble Baroness will confirm that that will not happen, but it would be helpful to hear from her. How many other OECD countries are genuinely following suit?
7.57 p.m.
Lord Hannay of Chiswick: My Lords, I make my maiden speech in this House perhaps a little on the early side—less than a week after my introduction. But I did not wish to lose the opportunity to speak on the Second Reading of the International Development Bill, a measure with whose broad thrust I am very much in sympathy and which covers ground with which I became familiar during my time at the United Nations.
Before mentioning development issues, perhaps I may say a word of thanks to all those Members and staff of the House who have made my arrival in this new world so trouble free and agreeable, and I also thank those who have made kind remarks, in particular the noble Baroness, Lady Rawlings, whose work in the European Parliament I used to admire from afar some years ago. If I commit any solecisms it will be my fault. To the extent that I avoid them, it will be to the credit of those who are helping me along this path.
The importance of delivery is as great in development policy as in more domestic areas, where it gets discussed a good deal at present. I touch briefly on three themes: trade, the United Nations family of agencies and the European Union's development effort, and on each focus on the need for more effective delivery.
One of the most important international decisions to be taken this year will be whether or not to begin a new trade round. The decision will be taken at the World Trade Organisation's ministerial meeting at Doha this autumn. I believe that it is strongly in the interests of this country and of the European Union

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that the decision be a positive one. But it will only be a positive one if we can convince the developing countries that this time, unlike on previous occasions, we shall actually ensure that they benefit in deed, not just warm words, from the negotiations. Too often in the past we have promised much but in the event have delivered too little. We have been particularly ungenerous in matters such as agriculture and textiles, which are of particular interest to developing countries.
If we are to win the support of developing countries for the new trade round, we shall have to avoid overly explicit linkages with labour and environmental issues, which caused the shipwreck at Seattle and which the developing countries, not entirely wrongly, regard as covert means of retaining protection against their exports.
Secondly, I shall say a little about the United Nations and its sprawling family of development agencies, including the United Nations Development Programme, the World Health Organisation, the World Food Programme and many others. They are at the heart of development policy, but their record for delivery is not always brilliant. The United Nations Secretary-General, Kofi Annan—whose re-election last week for a further term I salute—has done much to restore the UN's battered image during his first term. He has been a firm reformer, but his power to reform the UN agencies on his own is not great. The role of the member states in those intergovernmental organisations is crucial. I hope that our Government will give him their full backing in further efforts at reform of the UN agencies and that if reform is carried out effectively, we will reward it with increased financial commitments. Too often we have cut back our commitments with the laudable aim of achieving reform but then failed to reward reform when it is achieved. Such behaviour breeds cynicism and resistance to reform even when it is urgently needed.
Thirdly, the European Union's development effort, to which other noble Lords have referred, has had a poor reputation in the past. Some of the criticism has certainly been valid. However, that programme will not wither away and it is not in our interests that it should do so because it mobilises the resources of many of the smaller European countries that have no way of supporting a bilateral programme and of some among them who have not traditionally been aid donors. That will be even more the case when the European Union is enlarged. Here, too, the challenge is for the Government to support effective reform and delivery. We need to back the efforts being made by Commissioner Patten which have already begun to improve the quality and delivery of aid to the Balkan countries.
The theme of delivery has run through all my remarks. All the Bills in the world, worthy as they are and worthy as this one is, are to little avail if we cannot achieve the effective delivery of our development policies. On delivery, let us face it, an awful lot remains to be done.
8.3 p.m.
Lord Tomlinson: My Lords, I am sure that I reflect views in all parts of your Lordships' House when I say how privileged we have been to hear the excellent maiden speech of the noble Lord, Lord Hannay, who served his country with distinction over many years as a member of the diplomatic service. I remember first meeting him about a quarter of a century ago, when I was appointed a junior Minister in the Foreign and Commonwealth Office. At that time he had already held a number of important posts, including playing a crucial role from 1970 to 1972 in the negotiations over our membership of the European Community. Over the years, he proceeded onward and upward. The list of his appointments is so extensive that reading it out would probably stretch your Lordships' patience, but after serving as the head of a number of departments in the Foreign Office, he then had possibly the most difficult task that any member of the diplomatic service has to face as our ambassador and permanent representative to the European Union, after which he went on to be our permanent representative and ambassador to the United Nations.
The noble Lord retired a few years ago, but his has been an active retirement, with his appointments by the Prime Minister as a special envoy to Turkey and by the European Union presidency as a special envoy to Cyprus. He has also served with great distinction the cause in which he and I have a common interest—that of higher education in the city of Birmingham. He brings depth and breadth of experience to the House and I am sure that I speak on behalf of all Members of the House when I say that we look forward to hearing from him on many future occasions.
Before I deal with the Bill, I shall indulge myself by addressing a brief remark to the noble Baroness, Lady Rawlings, who claimed, in her interesting speech, that the Conservatives had always had a strong record on development when in government. The empirical example of percentage of gross domestic product devoted to development co-operation, as referred to by the noble Lord, Lord Redesdale, shows that from 1979 to 1997, this country's record went consistently in one direction. From that appalling base, we now have a figure that, although going in the right direction, is still regarded as substantially too low by most of us who are concerned about development co-operation. If we had continued the trend that the Conservative Government inherited in 1979, perhaps this country would have had a fighting chance by now of attaining the United Nations target of 0.7 per cent.
I shall deal briefly with the Bill. The core power is necessarily drawn much more tightly and concisely than the current legal basis in the Overseas Development and Co-operation Act 1980. We can look forward with confidence to the fact that never again will a Secretary of State be so unsure about the scope of their power that they allow themselves to be seduced into another Pergau dam project.
The Bill has a wider range of powers, but it also has a more focused aim. Like many of those who have already spoken in the debate, I believe that we are right

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to support a Bill with those extra dimensions such as support for organisations supporting civil society, the process of support for development awareness and education and a more effective engagement with the private sector. I was pleased to hear the Minister spell out the detail of that through shareholdings, convertible instruments, options and guarantees. It would be interesting to have it spelled out further in Committee.
The poverty focus must be capable of wider interpretation than just direct aid to the poor. An interesting editorial in the current edition of Choices, the journal of the United Nations Development Programme, looks in some detail at the role of information and communications technology in development. I shall quote two short paragraphs from that editorial. It said:
"Certainly ICT cannot by itself bring an end to world poverty. ICTs are simply tools. And no single set of tools can solve a global problem with such multiple and complex causes.
But while ICTs are not a magic bullet, they do provide powerful ammunition in the fight against poverty. As with all tools, the usefulness of ICTs depends upon how they are employed. And there is now a body of cost-effective, country-differentiated and empowerment-oriented solutions, which use digital opportunities to address basic development goals. New technologies offer potent support to efforts to address the divides in health care, human rights and education".
I hope that my noble friend will confirm that when we talk about poverty-focused aid programmes, we are not talking simply about basic programmes; we are talking about imaginative programmes that will use state-of-the-art technology to produce the very delivery that the noble Lord, Lord Hannay, so rightly emphasised.
I turn briefly to two other small points in the Bill. The noble Lord, Lord Redesdale, worried me slightly when he expressed concern that there was no reference to tied aid. I had always understood clearly that, when the Government said that they would not allow the use of aid funds for improper political or commercial ends, that was intended to be a direct reference to tied aid. Therefore, I ask my noble friend a specific question in that area. Will she confirm that tied aid is an improper use of development funds and that any government who wish to re-establish the link between aid and trade or aid and political influence will need to return to Parliament to argue their case and obtain parliamentary approval?
I turn briefly to the question of European Community development programmes. In this regard I believe that we see one of the weaknesses of the Bill, although I understand the reason for it. We are seeing a new Bill applying itself to the European development funds. However, it is applying itself to those which are not budgetised or subject to parliamentary scrutiny in the European Parliament through the normal budgetary processes but which exclude from the process 70 per cent of DfID's expenditure. There may be vast concern about increasing proportions of that 70 per cent being directed to strategies which are not poverty focused or poverty related.
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Therefore, although I understand and welcome the expressions of hope, perhaps I may say to my noble friend that, as we approach the Bill in Committee, it may be important to spell out further how we propose to translate our hopes to improve the effectiveness and poverty focus of EC development programmes into some kind of reality.
My final point in relation to the Bill concerns the question of good governance. I have a predisposition to want to see specific reference in the Bill to good governance. However, I recognise the differences of views and the cogency of some of the arguments behind the differences of views. But I want to make it clear to my noble friend that I shall listen with care to points raised on this issue during further stages of the Bill because I believe that a great deal of persuasion is still to take place if noble Lords are to believe that there should not be explicit reference to good governance in the Bill.
This is a useful Bill. It will not resolve all the problems, especially those concerning EU development aid. However, it takes clear steps forward. It places a better range of powers at the disposal of the Secretary of State, and it provides a basis for a more focused policy. I believe that the poverty focus is in; I hope that tied aid is out. On that basis, I welcome the Bill and look forward to our being able to discuss it in more detail at further stages.
8.14 p.m.
Lord Judd: My Lords, perhaps I may be permitted to add a word about the outstanding maiden speech of the noble Lord, Lord Hannay. During my own brief time as a Minister at the Foreign Office, I worked with the noble Lord and came to form a very high regard for his ability and talent. I am sure that those will be put to great use in this House.
I also want to say how good it is to see my noble friend Lady Amos in her dual role on the Front Bench. Perhaps I may be allowed to make one exhortation to her as she takes on her enlarged responsibilities. I hope that she will see her role as carrying the flag of DfID into the Foreign Office and not the other way around.
At the outset of my remarks, I declare an interest because I am deeply involved, voluntarily and professionally, in this sphere of work. Specifically, I mention my role as a member of the Oxfam Association and my trusteeship of Worldaware and the Overseas Development Institute. In my professional work, I deal with the think-tank, Saferworld.
It strikes me that this Bill is an international development assistance Bill. It deals with the authority to spend rather than with the wider policy of cohesion, which is essential to successful international development. That cohesion must be about trade, environment, migration, defence and foreign policy. It must be about multilateral institutions, the UN system, about which the noble Lord, Lord Hannay, spoke, about G7 and the OECD, as well as the World Bank, the International Finance Corporation and the

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IDA. And it should certainly be about the European Union, with its immense potential, whatever its still disturbing shortcomings at present.
The Bill endeavours to spell out purpose. But why is there talk of reduction of poverty? Why should there not be reference to the elimination of poverty? What, in the end, does reduction of poverty amount to? It may be difficult to eliminate world poverty, but if we have that as the objective, we have something against which to measure the progress that we are making in the reduction.
The Bill deliberately does not define "poverty". I believe that that is mistaken. Do the Government have in mind a money-metric measure, a multidimensional measure and empowerment, Professor Sen's ideas of capability and functioning, or the human development approach, as advocated by UNDP? Perhaps my noble friend the Minister will enlighten us in her reply. Similarly, there is a need for more clarification about what exactly is intended by the term "sustainable development".
However, I turn to specifics. There has been mention of untied aid. It is difficult to overstate the relief and gladness with which the Government's decision to untie aid was greeted by those of us who have repeatedly seen the folly, counterproductivity and damage caused by tied aid. It is therefore disappointing that the Government, for whatever internal Whitehall reasons of compromise, have failed to make clear in the Bill that tied aid is finished—banished, indeed. I believe that many of us fear a creeping, sinister rationalisation and the erosion of commitment away from the resolve to untie.
Then there is Clause 5(1). What is really envisaged as,
"assistance in any form or of any nature",
apart from the financial aid, technical assistance and supply of materials to which the clause refers? The clause raises potentially significant issues, but frankly it is rather vague.
In Clause 6(3) is a reference to buying shares. What exactly is all that about? Is it simply another obligatory genuflection to the market which seems to have become required of all legislation in our ideological age, or does it have a thought-through purpose? I look forward to the Minister telling us more. How does the clause relate to the Commonwealth Development Corporation and the International Finance Corporation?
In Clause 9(1) why is there no mention of poverty? I recognise the nature of the statutory bodies identified in the schedule, but should not their role explicitly be part of the general purpose, as spelt out in Clause 1(1)?
I turn now to the subject of humanitarian aid. We all know of the pressures that can be brought to bear to use the allocation of humanitarian aid to promote particular foreign policy objectives. But two questions arise. Is that ethical or, indeed, is it effective? In 1999, in the follow-up to what was called its Principles for a
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New Humanitarianism, DfID made an explicit link between humanitarian aid and conflict management objectives. Its policy statement said:
"It is essential that the humanitarian response takes into account the wider context. In some circumstances intervention may not help resolve the problem or may even prolong conflict. When considering its humanitarian response, DfID's policy is to look at the conditions that have brought about the conflict and assess what can be done to reduce violence and bring lasting peace".
That proved to be controversial. Some NGOs were unhappy about its implications. They even saw such a policy as potentially jeopardising their work. In contrast, in February last year, at the time of the reorganisation of the conflict and humanitarian aid department, the Secretary of State was unequivocal. She said:
"Whilst humanitarian aid must always take account of the political context in which it is given it should never be used as a lever in an attempt to achieve political aims or manage a conflict".
Nevertheless, not all of the anxieties of those concerned in the UK and abroad have been dispelled. In 1986, the International Court of Justice gave its judgment in a case involving military and paramilitary activities in Nicaragua. It argued that if humanitarian assistance is to escape condemnation as involving political—I stress that—intervention in the internal affairs of a country, its objective and methodology must conform to the standards that are laid down by the Red Cross. Two central imperatives have to be observed: impartiality and humanity. The principle of impartiality is defined by the ICRC as making,
"no discrimination as to nationality, race, religious beliefs, class or political opinions. It endeavours to relieve the suffering of individuals, being guided solely by their needs and to give priority to the most urgent cases of distress".
Whatever the misgivings within DfID or the pressures that were put on it by others within government, a more precise definition of humanitarian aid in the Bill would have clear advantages. It would underline in law DfID's determination to uphold international law and humanitarian principles. It would be central to the Government's commitment to a rights-based approach to development. The principles of impartiality and humanity are cornerstones of human rights law and international humanitarian law. It would complement what I hope is a continuing ethical dimension to our foreign policy. It would provide a statutory base for a robust policy by DfID and free it of charges of having soft or sentimental subjective preoccupations. It would meet the public's expectation of what humanitarian assistance should be. For all of those reasons and others, I trust that the Government will look at the matter again and put it right in Committee.
Like others, I am sorry that the Bill missed an opportunity to follow the example of the Netherlands, which legislated that aid will be 0.8 per cent of GNP. That would protect aid from any future opportunistic cuts. We hear a great deal about development targets, especially those for 2015, and about mid-term targets. We also hear a lot about partnerships and the obligations that must be fulfilled by developing countries if they are to receive more aid. But what about our obligations as a developed wealthy country,

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one of which must involve increased aid? On reflection, is it not unfortunate that the Bill fails to incorporate clear short-term, mid-term and long-term goals for the achievement of the 0.7 per cent figure?
I cannot conclude without commending the Bill on its commitment to the Commonwealth Scholarship Commission. I am a patron of the Council for Education in the Commonwealth. Education is indispensable to development, but it is a two-way benefit. If our own higher education is to meet the challenges of glohalisation, we would be insane not to ensure that it is pursued invariably in communities of scholars that are demonstrably representative of the wider world.
We love our Secretary of State. We admire all her gutsy but intellectually muscular drive. My noble friend the Minister is an invaluable asset to the team and to the cause. However, I must say that uncharacteristically the Bill is a little weary and middle aged. It does not challenge in the way in which it should do or set the pulse racing. We are, after all, fighting for humanity. Worthy the Bill may be, but it is hardly the inspiration for which we are looking if we really are to be a new Britain in a new millennium. Perhaps we can sharpen it up a little in Committee.
8.24 p.m.
Lord Freeman: My Lords, from the Conservative Back Benches, I welcome and congratulate the noble Lord, Lord Hannay. He will make many distinguished contributions to our debates. He demonstrated in his maiden speech an amazing command of brevity, which was obviously born in reaction to his long experience of United Nations debates.
I support the comments of my noble friend Lady Rawlings on the Bill. It should be supported in its principles, which deal with the alleviation of poverty. It is indeed time to end tied aid. The time for us to move on from that basis of distributing aid has long since passed.
The kind comments of the noble Earl, Lord Sandwich, on my long-time friend, Mr Bowen Wells, who has now left the other place, were much welcomed. He was a distinguished chairman of a Select Committee in the other place on international development.
The powerful speech of the noble Lord, Lord Judd, was based on his long experience of large NGOs such as Oxfam. I want to make a brief contribution on behalf of the smaller NGOs, which have played an important part in the alleviation of poverty, particularly in Africa. I want to talk briefly about Uganda, which was the recipient last year of the largest proportion of aid from DfID. Such aid was very welcome. I also want to discuss the development of new sources of water and the digging of wells to provide clean, convenient and regular supplies of water for some of the poorest parts of the Ugandan countryside. There are 200 NGOs, not all of which are British, active in that field. They have brought a welcome alleviation of poverty over many years.
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I declare an interest as the unpaid chairman of the trustees of the Busoga Trust, which is active in the Busoga and Luwero provinces north of Kampala. We have dug more than 800 wells over the past 20 years. We are a Christian charity and we were helped in a major way by DfID during the past five years. I pay tribute to the department and thank it for its assistance.
There has been a change of policy in this regard by Her Majesty's Government. I do not seek to criticise them for that, but the Government no longer directly fund many NGOs, particularly the smaller NGOs. Funding in Uganda, for example, goes directly to the Government. Debt relief—following the Cologne Summit in 1999, when the G7 agreed on its importance—and direct aid are no longer paid directly to NGOs; they are paid directly to the Government. The theory is that a government possess greater resources and can place direct contracts with NGOs to alleviate poverty through, for example, the digging of wells. I understand the reason for that change of policy—in the long run it is more sustainable for the relevant countries because governments in Africa must learn through their experience of administering those programmes directly.
The EU still funds NGOs directly and decisions are expected imminently about the next programme, which will commence in the autumn. Many NGOs in Britain have applied under the programme, which has an allocation over the next two or three years of about 1 million euros per application. However, it is heavily oversubscribed and many NGOs that were previously directly funded by DfID are now looking to the EU.
I have three brief points to make to the Minister. She is now no longer a "non-person" but a true Minister in her own right, and I congratulate her on that. Perhaps she would be kind enough, if she cannot cover these points this evening, to write to me. That would be much appreciated.
My three concerns follow on from the Government's change of policy. The first is about the fact that charities have to find working capital in order to undertake poverty alleviation programmes when they bid for contracts from the Government. No longer can a charity rely on using donations or grants that are made up-front. They have to perform the work under contract and get paid at the end. Larger contracts requiring funding of tens of thousands of pounds have to be financed from a charity's own resources, which has proved to be difficult this year. I forecast that it will also prove to be difficult during the next two or three years.
My first question, therefore, is: will the Government contemplate, under the clauses of this Bill, the granting of repayable loans to some of the charities active in fields supported by DfID, enabling them to continue their work as I outlined?
Secondly, whether or not we like it, we are now faced with the difficult problem of commissions. Because governments in Africa operate through local organisations, that problem inevitably presents itself, not only to my charity, but also to many others. It is a

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difficult ethical issue. One can understand why the distributors of government money seek some sort of participation fee. It is understandable in the circumstances of the poverty that exists in many parts of those countries. But it is an issue on which I hope DfID will provide guidance and encouragement to local governments in Africa and throughout the world, advising very strongly that such payments should not be solicited and that those active in this field should not make them.
Thirdly, and finally, other sources of aid are not referred to directly in the Bill but are referred to in publications of DfID; for example, the Civil Society Challenge Fund, to which the noble Lord, Lord Redesdale, and the noble Earl, Lord Sandwich, referred. I look forward to policy decisions about the distribution of what I believe to be the £4 million available this year and ongoing. My specific question in that regard is whether some of that money can be used to help empower local communities in Africa. For example, it is important to educate local communities as to how they can use the newly constructed water sources to ensure that the health of their families and communities is improved.
The lottery, under its community fund, may be able to provide some funds for charitable acts abroad and any comments the noble Baroness can make on that point will be appreciated. Speaking on behalf of some of the small NGOs, we hope that the Government will keep under review the way in which they are supported and the role that they can play in an extremely important mission. I congratulate the Government and the Minister on the production of this Bill.
8.32 p.m.
Baroness Whitaker: My Lords, we do not often get an International Development Bill so I feel privileged to welcome it and to add my congratulations on my noble friend's well-deserved appointment.
As my noble friend said, this is a simple Bill with one big idea; that is, that the purpose of aid is to reduce poverty. Your Lordships may think that reducing poverty is the obvious purpose of development aid and that it does not need saying. But as my noble friend Lord Tomlinson said, that did not prevent the Pergau Dam misuse of aid, nor will it prevent a different government retying British aid to goods in kind, thus distorting best aid practice as well as fair competition.
I disagree with my noble friend Lord Judd and the noble Lord, Lord Redesdale—which hardly ever happens—that it is necessary to specify in the Bill that aid must not be tied. Indeed, it is preferable to rely on the big idea of poverty reduction as the measure of admissible aid since, to define too closely what kinds of aid are illegal, is implicitly to recognise others which may still not be primarily aimed at reducing poverty.
Similarly, to specify how aid should be handled by receiving governments—the good governance stipulation—singles out that criterion as more worthy than others, quite apart from any difficulties of definition. Of course, good governance is essential for
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the relief of poverty, but as long as the big idea is maintained, good enough governance will be part of the context of development aid.
However, if it would suffer from over-specification of means, the big idea of reducing poverty needs some underpinning. Poverty reduction is achieved most strikingly from a base of national investment in health and education, particularly for girls, a proven stimulus for economic growth. In turn, economic growth assists investment in health and education and is itself a necessary, though not sufficient, condition for general stability and prosperity.
Private sector investment accellerating economic growth is essential for developing countries to make a success of poverty reduction, and so it is important, as noble Lords said, for the Bill to enable the Government to take part in and influence efforts by companies to invest through shares, options, convertible loans, guarantees and so forth. For instance, one of the more successful ways of giving people the wherewithal to improve their earning capacity is micro-credit. But micro-credit organisations cannot easily obtain capital from the capital markets and banks. Commercial banks are often averse to helping organisations which give such small returns. Under the Bill, DfID could guarantee a bank loan to a micro-credit organisation, or take a shareholding, or enable financing in other ways. That is the modern way to enable the private sector to act as a partner in creating economic growth without compromising its modus operandi.
The Bill also clarifies government support for organisations which undertake development awareness and advocacy, which currently needs recourse to the Appropriation Act. In that way, people's understanding of and support for British development aid can be improved, which makes government policy more transparent and easier to access. The Bill, in its simplicity, sends a clear signal to all the partners in development—developing countries themselves, other governments and donors—that the UK is committed to sustainable poverty reduction and that that is the purpose of aid. But we are entitled to ask exactly how the Secretary of State will be able to continue to support activities whose impact on poverty may be long term. My noble friend mentioned conflict prevention. There is also police training and strengthening honest and effective tax-gathering capacity. I should be grateful if my noble friend could clarify that.
Finally, aid is only a start, though it is a lifeline, in eliminating poverty. Poor economies need access to markets without the unfair imposition of tariffs and the unfair competition of subsidised western produce, as touched on by the noble Lord, Lord Hannay, in his notable maiden speech. To reach economic take-off, countries need direct investment beyond that which the Bill can facilitate. But direct investors will not come when efficiency and effective administration are betrayed by corruption. To make this Bill inaugurate the end of absolute poverty, we also need to put our missing bit of the jigsaw in the OECD anti-corruption regime in place, as promised in the Queen's Speech,

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through a speedy, separate anti-corruption law. I hope that my noble friend can persuade her colleagues of the importance of that. I warmly support the Bill.
8.39 p.m.
Lord Hughes of Woodside: My Lords, at the risk of being labelled a nameless crony, I offer my sincere congratulations to my noble friend Lady Amos on her promotion from the Whips' Office to being a full Minister at the Foreign Office with special responsibility for Africa. We are all delighted, not simply because of her own personal qualities. We know that her intelligence and thinking will be an asset to the Foreign Office.
I welcome the Bill, particularly as it emphasises priority on reduction in poverty. I remind noble Lords that that should apply to both the urban and rural poor. There is not just one poor. People can be poor in all sorts of different ways.
The Labour Party manifesto, which for once I did not have to stand and defend during the election, states:
"Labour will continue to focus Britain's development effort on the achievement by 2015 of the International Development Targets—including halving the proportion of the world's population living in extreme poverty, reducing child and infant mortality by two-thirds; primary education for all children and sustainable development plans in every country".
That is a fairly ambitious programme and certainly one which should inspire people to support it. The manifesto continues:
"With Labour, the aid budget will rise to 0.33 per cent of GNP by 2003–04, reaching £3.6 billion—a 45 per cent increase in real terms since 1997 level. We remain committed to the UN target of 0.7 per cent of national income devoted to development and will make further substantial increases over the next Parliament. We remain committed to [that figure]".
If my memory is correct, it is salutary to remind ourselves that a target of 0.7 per cent was set in 1970, well over 30 years ago. It might be another 20 years before that target is reached. We should certainly try to increase that target as much as possible. However, one must add that when it was set in 1970 there was no mention of the huge programme for the reduction and abolition of debt. The picture must be looked at in the round.
I especially welcome the stated intention of Clare Short that DfID should engage more fully in ensuring that DfID is the voice for development and poverty eradication across all areas of the UK Government, not just in terms of aid. The key issues are debt—where Britain's role in pressing for relief is welcome—and trade. However, it is critical that DfID develops a coherent and proactive strategy within government to ensure that poverty is at the heart of HMG's overall policy in areas such as trade rather than being an afterthought after the "real" trade interests are considered.
I agree with DfID's arguments that a full strategy in HIV/AIDS and other communicable diseases must be multi-faceted. This is not just about drugs. Britain should have been much stronger and more vocal in support of the South African Government's medicines
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control Act, which was a model of World Trade Organisation compliant but poverty-focused legislation to increase access to medicines for the poorest, providing a balance to purely commercial-driven policy. South African won the case, but I am sorry that we were not as strong in our criticism of the drug companies as our colleagues in the German and Danish governments.
If we are to be certain that globalisation helps the poor and does not increase inequalities, Britain's development policies, especially for Africa, will have to take precedence, sometimes over vested interests. We must ensure that that is the case.
I also welcome and encourage stronger support by Britain and the rest of the G8 developed countries for the Millennium African Plan (MAP), the idea being taken forward by President Mbeki of South Africa and a number of other African leaders for a kind of compact between Africa and the West for reform, good governance and so forth by Africa, with the West giving concessions in areas such as trade. It is critical that the MAP gets strong support; Clare Short and the Prime Minister have both voiced theirs.
We must ensure that we get action and that words do not get in the way, as with so many other plans and initiatives for Africa which have been meaningless because they have simply drifted along. Meaningful action on issues such as trade will be key, especially in agricultural and related processed products where EU policy and the CAP still cause great damage. Despite the recent EU rhetoric there will be strong resistance to change. This will be a key measure in knowing whether these countries are serious in tackling poverty. The late Archbishop Trevor Huddleston used to say words to the effect of: "Words, words, I am tired of words. What we need is action".
I turn to Angola where, frankly, I am unhappy with DfID's policy of giving only emergency aid apart from one NGO product in Luanda. There are tentative signs of hope in some areas, where displaced people have been able to settle. It is critical that donors are prepared to support those efforts with seeds, tools, resettlement grants and so forth, otherwise the painful faltering steps towards a lasting peace will not be given reality at grass roots level. That is important in building popular hope in the possibility of peace. Britain and NGOs have excellent expertise and experience in such areas. I hope that DfID will review its policy on reconstruction and development aid to Angola as a matter of urgency.
There is a tendency in our debates on international development to concentrate on matters upon which we agree almost entirely. I turn to one area which is not strictly a development Bill area but nevertheless is affected in terms of poverty reduction. Where do we stand in relation to the provision of dams? I notice in yesterday's Observer that the Ilisu dam in Turkey has again come to the fore. The headline stated. "Turkish dam to lose UK support. Report raises human rights concerns". I love the way in which newspapers print that sort of declamatory headline when nothing has been decided.

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I am ambivalent about the provision of dams. I have read the report from the world commission on dams from cover to cover. It is a substantial document and makes gloomy and dismal reading. So many of the dams provided over the past 50 or 60 years have not lived up to the promise made when they were built. The detailed cold economic analysis conducted by that commission leads one to conclude that there would not have been any dams built in the past 50 to 60 years. It may well be that the great project of building dams in America might not have happened if we had applied to them those rigid tests.
The objection to the Ilisu dam appears to be not so much economic as social. Here, the figures keep changing. Initially it was estimated that there would be 12,000 to 15,000 Kurds displaced. According to recent reports, that figure has now risen to between 70,000 and 75,000. Friends of the Earth state that that would be terrible for the Kurdish people and the environment. Where does one draw the balance? How do countries which are deficient in energy make up the shortfall? We say quite vehemently and adamantly, "You are not getting nuclear power; you cannot have that". Then we say, "You cannot burn fossil fuels either because that is bad for the environment". How are they to make up the deficiency? It is easy for us sitting at home with a microwave, washing machine, dishwasher, television and video recorder. I have no doubt we have all sorts of other such things in our home, including light bulbs. However, we say, "You really cannot have that". I take a hard line—which sometimes gets me into trouble; I have no doubt it will do so tonight—on how we deal with people who have had a cultural history for many hundreds of years.
I am in favour of cultural history. However, when I go abroad as a tourist I am offended when I see people handing over tiny sums of money to bare-breasted black women, who are shuffling about and dancing, and being careful not to give them too much money in case that upsets the local economy. I have never had a vision of the noble savage kept in his place for the rest of time. How do we grapple with such issues? Sometimes we must face up to them and, on balance, I would now say—it is not a final view—that the Government should stick by the view they took two years ago; that they were minded to give export guarantee credit to have the dam built.
We shall never reach a position in which such matters are dealt with without controversy. We shall never reach a position in which every decision taken in terms of development has no knock-on effect one way or another. However, I hope that when we can examine these issues we can accept that the denial of modernisation to people because of our prejudices is just as bad as forcibly changing people's way of life. We must try to balance that equation and I hope that we can do so. Otherwise, much of what we do may be peripheral.
I believe that the Bill is worth having and that it requires rapid progress and implementation. I believe that at the Foreign and Commonwealth Office and the
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Department for International Development we have the Ministers and civil servants to do just that. I commend the Bill to the House.
8.51 p.m.
Lord Joffe: My Lords, perhaps I may first declare an interest as chair of Oxfam. It is a privilege to have listened to the maiden speech of the noble Lord, Lord Hannay, who during his term at the United Nations was a good friend to Oxfam and the development agencies. I, too, congratulate the noble Baroness, Lady Amos, on her new appointment.
I welcome the Bill and congratulate the Secretary of State on introducing it and on the powerful and inspirational leadership she has shown in the battle to eradicate poverty. The untying of aid and trade is an issue on which the development agencies have been campaigning for a number of years. I am delighted that the Bill implicitly entrenches the principle of untying. It is also reassuring that the Opposition, in their policy paper First Things First, take an equally firm line on this vital issue.
I do not agree with two points which the noble Baroness, Lady Rawlings, made in her thoughtful speech. I do not believe that any Chancellor of the Exchequer could have done more to push for debt relief than Gordon Brown. He has taken a remarkable lead in this regard not only in the United Kingdom but internationally. Indeed, much of the progress internationally has been due largely to his efforts and commitment to this important cause. As regards the speed of delivery of humanitarian assistance, there have been delays but more recently the department has moved with exceptional speed, having made a number of decisions literally within hours of dispatching relief to areas of natural disaster.
I support the views of the noble Lord, Lord Redesdale, about the amount of international aid. I also support the proposal put forward by the noble Lord, Lord Judd, that clear targets should be set by government to increase our aid to the agreed levels. Without such targets, it will be a long time before we reach the levels to which we are committed. Finally on this aspect, I share the concern of the noble Lord, Lord Freeman, about NGOs being bypassed, with funds going directly to government.
The Bill deals also with the Commonwealth Scholarship Commission. These scholarships have the potential to make a significant contribution to developing countries, provided—and I emphasise this proviso—that the students to whom they are awarded return to their homelands after they graduate. If, however, they remain in the United Kingdom or move on to another developed country, it is the developed world which benefits rather than the developing world, for which the scholarships are intended.
This important issue stretches well beyond the Commonwealth scholarships. Current government policy appears to be to seek to attract nurses, teachers, IT experts and other skilled professionals from outside the United Kingdom, including from the developing

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world, in order to fill skills shortages in this country caused by our failure to invest sufficiently in the training of such professionals.
To the extent that such professionals are attracted from the developing world, it does great harm to those countries which have invested considerable sums out of their limited budgets in their education. All who work in the field of development know that education is the key factor in enabling developing countries to create wealth and to eliminate poverty.
To deprive such countries of the very people they desperately need in order to develop their economies is unacceptable. It makes no sense, on the one hand, to grant scholarships to people from developing countries and to provide development assistance to them aimed at improving standards of education and, on the other hand, to deprive the countries in question of the benefits which derive from such scholarships and development assistance by luring away the very people they need.
I sincerely hope that the Government will consider this issue and take appropriate action to ensure that it is addressed.
8.57 p.m.
Lord Haskel: My Lords, I, too, welcome my noble friend Lady Amos to her new job at the Dispatch Box. I congratulate earlier speakers on their practical contribution to international development. I know of the work of my noble friend Lord Judd, of the noble Earl, Lord Sandwich, and of the noble Lord, Lord Joffe, but I am sure that there are others.
I welcome the Bill. welcome it as a further step by the Government in the reduction of world poverty. I, too, thought that the noble Baroness, Lady Rawlings, was a little grudging about the role of the Chancellor. As the noble Lord, Lord Joffe, told us, the Treasury has been particularly active in debt reduction and I have little doubt where that inspiration came from. Those of us who had the privilege of knowing the Chancellor's father, a Scots clergyman, knew that he often spoke of the moral duty that we all have to reduce world poverty among our fellow men and women. I have little doubt that the Chancellor absorbed that at his father's knee.
I also congratulate my right honourable friend Clare Short. I agree with other noble Lords that she has been a gutsy and powerful warrior for poverty reduction.
In our modern world, what is it that reduces poverty most? It is trade and the equal sharing of its benefits. This is why fair trade schemes which help develop products and their markets on an equitable basis are an effective form of aid. I am glad that my noble friend the Minister told us that the Bill will enable the Government to guarantee loans and other financial instruments to help support these schemes.
The "Everything But Arms" scheme, giving the world's poorest countries access to the rich European Community market, is another way of helping trade on a fair basis.
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But fair trade requires rules and their enforcement. Without that corruption creeps in. I hope that the Minister will be able to reassure noble Lords that this Bill will also help to defeat corruption. Why is that important? It is important because it is the poor who suffer most from corruption, and they are the very people whom we try to help. It is easy to say that if the culture of a country demands it the payment of money to accelerate business is not corrupt. The noble Lord, Lord Freeman, mentioned commissions. I am not sure that this Bill will deal with those matters. I agree with the noble Baroness, Lady Rawlings, that the Government should seek to incorporate into UK law the OECD convention on bribery. I realise that to give UK courts jurisdiction over offences committed abroad creates problems, but I believe that the convention deals with that.
The noble Lord, Lord Hannay, in his perceptive maiden speech, mentioned textiles. When I was a very young engineer I was sent to a developing country to install a textile process. In order to complete the necessary bureaucratic process in that transaction I had to visit a government official. I was rather nervous and wondered how I would communicate. When I arrived at the official's office I was delighted to see that his bookshelves contained the complete works of Shakespeare, large volumes of the works of Dickens and Chambers Twentieth Century Dictionary. I complimented the official on his love of the English language. He looked a little surprised. He handed to me his copy of Chambers Twentieth Century Dictionary and invited me to open it. When I did so I found inside a cut-out which fitted exactly the size of US dollar treasury bills. When I discussed this matter with my advisers back home I was told not to worry because bribing foreign officials was tax-deductible and that made it all very respectable.
Corruption, visible and invisible, takes many form. It can take the form of overlarge armed forces in developing countries, unnecessary extravagance, or enriching the elite. Aid can enrich UK companies if it is used to back commercially unsound projects. These forms of corruption are easy to see, but there are less visible forms. Sometimes tax incentives are offered to encourage foreign investors into a developing country. Those tax breaks may be legitimate, but it is not legitimate for a developing country to become a tax haven for prosperous companies in the hope that the tax forgone will be made up by overseas aid. There is plenty of advice on tax efficient schemes involving developing countries available from the tax avoidance industry here in Britain and I hope that the Government have taken note of it in preparing this Bill.
I agree that the Government should encourage business and industry to accept the standards proposed by Transparency International on these matters as a code of practice. The old idea of linking aid to trade facilitated corruption. By breaking the link the Government have gone some way to reduce the possibility of corruption. To help countries help themselves to reduce poverty through trade and humanitarian aid is a fine ideal and deserves every

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support. At the same time, I hope that the Government will not allow it to become corrupted by short-term commercial, political and private interests.
9.4 p.m.
Lord Desai: My Lords, I welcome this Bill. I said nice things about my right honourable friend the Secretary of State on Thursday. Therefore, I have to say nice things only about my noble friend Lady Amos, about whom we are always saying nice things. I am glad to repeat what many others have said. Welcome, at last you have escaped the Whips' Office, which is a good liberation to celebrate.
I should like to praise one matter in the Bill. The Bill contains a definition of sustainable development which is better than anything I have read in a long time. The whole notion of sustainable development became trapped after the Brundtland report way back in 1987 by references to the environment and handing future generations a world as good as that we inherited. That is a noble notion, but operationally it is very difficult to define. I am very glad that this Bill contains a more direct definition of sustainable development—not that the Secretary of State can define it—namely,
"the likelihood of it generating lasting benefits for the population of the country or countries in relation to which it is provided".
I believe that the notion of "lasting benefits for the population" rather than making a distinction in the population is very good; otherwise, we may fall foul of all kinds of environmental issues in giving development aid.
I do not agree with my noble friends who have talked about the target of 0.7 per cent. I do not disagree because I like governments to be mean, but when the target was set in 1970 the world in which we lived was very different. Today, official government-to-government aid totals about 50 billion dollars, give or take a couple of billion, and the private flow of capital, which was non-existent in 1970, is 250 billion. For countries that can get it, it is the private flow of capital which is a much better and swifter motor of development than development aid that goes from government to government. Therefore, the role of official government-to-government aid is very different from what it used to be in the 1970s and 1980s. Aid provides leverage for private flows. A number of countries in sub-Saharan Africa which have not been receiving any private capital flow need official aid to lever themselves into position so that, with good governance, education and health, they can become attractive havens for indirect investment.
That is a very different world from the one in which the original target was set. In that world there was no hope that private capital would flow from rich to poor countries. From that point of view I am not all that distressed that we have not reached a target; but of course more money is always preferable. What we really should be emphasising is that countries should prepare themselves in a way that they can become recipients of foreign direct investment.
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I welcome what the noble Lord, Lord Hannay, said in his brilliant maiden speech about the negotiations for the WTO. That is another example of how poverty alleviation may have nothing to do with official aid but may very much have to do with rules which are set in the global economy about how trade takes place.
The Bill mentions development awareness. One awareness that I should like to see in this country is how much we need to have free trade so that poor countries will benefit. We have a reluctance to admit that some jobs will disappear because they will go off to poorer countries. We should not be protecting our declining industries but starting to invest in new ones. When one talks about globalisation and benefits of trade there are costs, but we are better equipped to bear the costs of structural change than poor countries. We want to educate the people that globalisation is beneficial. However, it will benefit the poor only if the rich countries do not stand in their way by following protectionist policies.
I very much welcomed what the noble Lord, Lord Hannay, said about the labour and green clauses. They are very well meaning issues and many people like them, but, from a developing country's point of view, they are very suspicious.
I do not, however, agree with the noble Lord, Lord Joffe. I am a prime example of brain drain, although I did not come with a Commonwealth scholarship. I believe that the noble Lord has a very antiquated view of development. Development happens when people go wherever they want to go and where they will be better off. Just because they come from a poor country they should not be nailed down. One would not put such a condition on someone with a Rhodes scholarship. Why penalise people? They may go somewhere else. They may stay in America. They may stay here. They may go back and benefit. All may benefit by being abroad. Think of Kofi Annan. He went from Ghana to America for a degree. He stayed in America. How terrible. Should he have gone back? Of course not. People should do whatever they can do to the best of their ability whenever they can do it.
Development and poverty alleviation take place by individual poor people becoming not poor. Forget about countries and statistics. Basically, poverty is alleviated when poor people get not poor. One reason why poor people get not poor is by migration. One-third of the European population migrated in the 19th century to North America. That was the biggest ever poverty alleviation divide.
We, today, are obstructing movements of labour. We are all for free capital movements, but when it comes to labour movements we suddenly become very territorial. I believe that if there are talented people and they want to move, let them move. There will be more talented people. If one looks at the history of Ireland, it gained in both ways. The many people who left the Irish shores to go to America were better off. The people who remained behind were better off because there were fewer people for the remaining jobs. Therefore, from that point of view we should not think that just because someone comes from a poor

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country he is sold in slavery to the country and does not have to go back. Let the person do whatever he can do, wherever he can. He will remit more money back by staying here, than he would ever earn there.
Lastly, I was a little worried about what the noble Lord, Lord Freeman, said. The noble Lord mentioned that official aid is increasingly not going to NGOs but to governments. I remember when the noble Baroness, Lady Chalker of Wallasey, was Minister for Overseas Development, I was arguing very strongly that governments should give their money to poor countries via NGOs because that is a better way of reaching the poorest people than going government to government. One of the oldest known problems in development aid is that if it becomes government to government aid it takes a long time to trickle down. One has to have good governance and all those things. If at all possible, we should devise ways of giving such money as we have to NGOs which work closer to the grass roots and know what the people need. They can therefore get good value for the money we give them.
One thing we should have learnt in the last 30 years is that governments of poor and rich countries do not always look after the well-being of their citizens. Sometimes they can be completely antagonistic. The history of post 1960s Africa is full of those examples. What we really want to say is that we want to alleviate poverty of the people not poverty of countries. We should de vise ways of getting aid to them as directly as possible. I should like to hear what my noble friend has to say about the observations of the noble Lord, Lord Freeman, on the difficulty of getting aid directly to NGOs.
This is an excellent Bill. However, Clause 6 worries me a little. It is about financial assistance. While it is laudable, it may give rise to problems. In the modern world it is often the case that one buys equity in a company only to discover later on that the company is either part of a larger conglomerate or has been taken over by a larger conglomerate. One then ends up aiding people other than those one thought one was aiding. In exercising their rights under Clause 6, I hope that the Government are careful to find out whose equity they are buying.
9.15 p.m.
Lord Swinfen: My Lords, I shall begin with one or two comments on the speech of the noble Lord, Lord Desai. I agree with some of the noble Lord's points and disagree with others. I agree with him that it is useful when workers in the West from the developing world send money home. But I disagree with him when he suggests that workers who come here and acquire skills should stay in the West and not necessarily go home. I know he did not suggest that all should stay in the West. Not all of those who acquire great skills in the West will necessarily go back to their developing countries.
Although I am not a medic, my experience is in the medical world. In the developing countries I have visited the need for skilled doctors and nurses is very great indeed. There are not enough people in those
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countries to treat all those who need that help. Those who acquire medical skills need to go back not only to use those skills themselves but to teach others. In some of the hospitals I have visited I have seen people, particularly those with some form of paralysis, become very much worse because their families are feeding them and looking after them but do not know how to nurse them. I have seen pressure sores the size of dinner plates and meat dishes. I do not know how they manage to survive, but some of them do when they eventually receive proper medical assistance.
I declare an interest. I run a small charity that provides telemedical links to remote hospitals in the developing world and keeps them in touch with medical consultants in this country and in other parts of the developed world.
I welcome the principle behind the Bill but I would like to see less of our aid being available through the EU. I agree with the noble Lord, Lord Hannay, that, by making some available through the EU, countries that have not given overseas aid in the past are brought in and we therefore increase the pool of overseas aid generally. I think that we as a nation manage our overseas aid well and probably better than most other countries. I may be biased but that is my view.
I know that following the inter-community strife the Solomon Islands are in extreme difficulty. It is the only nation in the world I know of that has to pay in advance for fuel supplies as its economy is in such a bad state. The telephone system has virtually broken down and until recently it was unable to get medical supplies because the companies supplying them would give no further credit. I understand that a trickle is getting through. I know that a number of the hospitals had to lay off all but very essential—not just essential—staff and could admit only patients who were genuine emergencies. The hospitals were not receiving the money to pay the staff or to do any work. I understand that the aid to the Solomon Islands is provided by a committee of people from various countries. We have our own High Commission in the capital, Honiara, where there are DfID representatives.
I feel certain that, if we supplied aid directly rather than through the channel of the EU, it would get to the right places much sooner than has been the case and would be dealt with far more efficiently. We know that there have been scandals regarding corruption in connection with EU aid. That is our money that is being used corruptly. It is our duty to make certain that our funding is used properly and honestly; that it reaches the right people at the right time and in the right places.
However, we are not perfect. One of the hospitals with which I work applied for a grant from DfID. The department sent out from the United Kingdom three individuals—I am told that they were experts—to undertake a gender audit on the hospital, which was run by an NGO. The hospital was told that it would not receive its grant because only 25 per cent of its beds were reserved for women. The other 75 per cent were reserved for men. That was not what the hospital

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wanted. I know that it looks after some women for the rest of their lives because their families will not take them back.
The job of the gender audit could have been handled by DfID representatives on the spot, without sending people out from the UK at a cost of many thousands of pounds. The local representatives would have been able to advise DfID in the United Kingdom that, because of the culture of the country, women who are seriously injured or have become dangerously ill are simply not taken to hospital. The situation is unfortunate. In this country we take our female relatives to hospital, but in that part of the world they do not. Women are just not important enough. We cannot, simply by wishing to do so, change the mores of another culture.
We need to be sensible about how our aid is handled. We must take advice, not only from DfID representatives on the ground, but also from local NGOs and charities. Very often, their representatives have been in place for many more years than the DfID representatives. They have managed to build up considerable funds of knowledge and expertise which ought to be used.
The noble Lord, Lord Haskel, and other noble Lords mentioned the problems surrounding bribery and corruption. I think that we should introduce measures in this Bill to reduce the incidence. In some parts of the world, great difficulties are caused to NGOs as well as to commercial organisations, when essential goods are held up in customs for weeks or even months. The duty has been paid and the correct import permits have been completed. Often those goods deteriorate so that sometimes, when they are released from customs, they are no longer fit for use. That applies in particular in regard to medical supplies which have a short shelf life. This occurs because charities are not prepared to pass something under the table.
We can deal with the problem by making it a part of the contract that, when DfID gives a grant for aid to an NGO or a charity, their accounts for how the money has been spent must be extremely detailed. It must be made clear that if bribes are paid those organisations will not receive any further funding, or that their funding will be cut off at that point. I know that this is a difficult problem. In some cultures, the salaries of individuals are extremely low because it is expected that they should make a little on the side. But that is not our way. We should not encourage it. If we can do something in the Bill about this issue, I should like to see it done.
As has been mentioned, the Bill separates aid from trade. I am in favour of that. A direct exchange of aid in return for trade is a mistake and is wrong. But will that mean that DfID cannot help small organisations in the developing world to start businesses that will give people employment and allow them to feed their families? In some developing countries, one individual in a family will be working and supporting 30 or more people. The more people we can get working, the greater the reduction in poverty and the greater the
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chance of feeding everyone. If we can feed people properly—particularly the children—we will be building a healthier generation for the future.
I hope that we will be able to improve the Bill slightly as it passes through the House, but generally I welcome it.
9.26 p.m.
Lord Brennan: My Lords, poverty in all its forms is the greatest challenge facing the international community. So said the world's leaders at the spring meeting here in London which was designed to combat world poverty. One of the successes of the first term of this Government was trying to meet that challenge. This Bill is a further opportunity to improve on what has already been done. I commend the appointment of my noble friend Lady Amos as a Minister well equipped to help in that task.
One may say that this Bill marks a coming of age for international aid from this country. We started with charity, mostly from church organisations; we developed to tied aid in the 1960s, 1970s and 1980s; and now we have come of an age where we can confidently give aid without it being charity or without it being tied solely to our commercial advantage. The Bill seeks to put that picture of the past firmly out of the way.
I agree with my noble friend Lord Desai that one should look at Clause 1. The Short Title—International Development Bill—has to be defined, as it is in Clause 1, in an expansive way. "Development assistance" is that which is likely to help reduce poverty. But what is development assistance? It is that which furthers sustainable development; that which improves the welfare of people. It is not only about the alleviation of poverty; it is about its elimination, albeit down the avenue of reduction. As my noble friend Lord Desai pointed out, it is significant that in Clause 1 there is special mention of that kind of assistance which will generate lasting benefits.
When my noble friend, in opening the debate, said that poverty is a complex phenomenon and that the ways of solving it must be varied, she was right. I regret to say that I disagree with my noble friend Lord Judd when he complains about the lack of precision in the Bill. As a lawyer, I welcome that. I treat Clause 1 of the Bill as being in the widest terms; and rightly so. It has maximum flexibility to meet every circumstance. I will be very dismayed indeed if any Minister in future tells us that Clause 1 has some limited meaning. It has nothing of the sort. The only limitation is practicality and expense.
The Bill is wide in its intent. Perhaps I may address three features of it that merit development, if not in committee, then later by ministerial statement. The first is the role of multinational companies in the reduction of global poverty.
As Peter Hain said in a pamphlet published a month or two ago, globalisation of opportunity demands globalisation of responsibility. He was right. Profit

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involves people. When we look at international development, the analysis is not merely donor governments, donee governments, NGOs and the people of the donee countries. It includes the commercial enterprises that make development work.
The 100 largest multinational companies account for one-third of the world's direct investment. That is mighty power. It deserves to be harnessed in part for the common good. Therefore, the provisions of Clause 4 enabling the Government to subscribe to, contribute to or promote organisations that will work to reduce world poverty and to make us more aware of the problem must include multinational companies—with two particular objectives. The first is innovation—they preach it; let us use it. At the Okinawa G8 summit a special programme was set up to produce cleaner forms of energy. It is marvellous that Shell is involved in a programme in South Africa to produce local energy by solar power. It is doing what it can do best technically. That could be used as a source of development aid in a critical area of development problems; namely, shared water resources. Also, companies which are innovative in international affairs should surely agree to work with our Government and others on regionally based programmes to avoid national sentiment frustrating initiatives that could be of regional benefit.
I turn, secondly, to the conduct of multinational companies in development work. Out of the 30 or so codes that presently exist, I want to give a few powerful examples. Such companies should raise corporate awareness of global poverty. They should identify broad-based common values, especially in the field of anti-corruption. They should provide special assistance for the social and environmental effects of their development programme. Where they fail, they should be accountable—but in order to ensure that such a problem does not arise, business schools should include in their programme regular tuition on the values of corporate efforts.
Why is all this so important? It is the antithesis of tied aid. II expects sympathetic free aid as a peripheral cost of major profit-making activity. Let us see, from the values that the companies preach and the codes that they produce, co-operation with the Government pursuant to Clause 4.
I turn briefly to the subject of children and their place in global poverty. My noble friend the Minister mentioned a figure of 1 billion people living in extreme poverty, many of whom are children. They would regard it a s intellectually patronising in the extreme to be required to define their condition. It is obvious. If it is that great a problem, each country involved has a special obligation to help its children.
Therefore, under the parts of the Bill that deal with "financial assistance", I invite the Government to consider requiring any government who benefit from debt relief or from a development programme to ensure that in some way children, in particular, benefit from savings made or extra moneys invested. It is a little more than that requested by the noble Baroness,
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Lady Rawlings, as regards health and education: it must be targeted at children. At that February meeting, Gordon Brown put it well when he said:
"There is a virtuous circle of debt relief, poverty reduction and sustainable development";
at the heart of that circle are the children of the developing world.
The Commonwealth countries still show toward us a tremendous sense of affinity and, I emphasise, expectation. Gone are the days when people trained here, went back to their countries and there was a permanent tie. These days we should bring them here. In the clauses that deal with Commonwealth scholarships, I hope that the emphasis that appears to be solely on the educational is a misreading on my part. The 1980 Act properly provided for exchanges of health workers, police and teachers. I hope that this legislation will continue in the same way when it becomes law.
However, as well as Commonwealth scholarships at Oxbridge, red-brick, or wherever, why should there not be short-term visits to this country of, say, three weeks or a month? That could apply to nurses, teachers, environmental workers, civil servants, poor lawyers and accountants—people who are running the future of those countries with which we are concerned. Those people could come to this country for a month or so and, I hope, be dignified with the title of "Commonwealth scholars".
I close my remarks by reminding the House of that challenge which was said to be so great. We have the good fortune to have a Minister for international development who says what she thinks and who tries to do what she promises—a happy coincidence in a Minister for international development. We have a Government who, by the re-introduction of this Bill so early in the Session, show commitment to the cause. But, above all, we have a country that expects a moral obligation to be fulfilled to the people who need help. Everything that I have suggested tonight—multinationals, children, as well as educational and other exchanges—involves the people of those countries, or of our own country. When it becomes law, this Bill should improve the poverty problem of this world.
9.38 p.m.
Lord Hunt of Chesterton: My Lords, it is always a pleasure to follow my noble friend Lord Brennan. I hope that my contribution will be seen as complementary to his remarks. I welcome this Bill on international development following the excellent White Paper, and the inspiring work of the present Secretary of State. Perhaps I may add my congratulations to those already expressed to my noble friend Lady Amos, with whom I share an education at the University of Warwick. I also congratulate the noble Lord, Lord Hannay, on his maiden speech. I look forward to discussing with him the prospect of increasing the understanding in this House of the importance of the United Nations.

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My career has touched on aspects of this subject from the time when I was an engineering student and visited both modern and ancient irrigation schemes in Pakistan. At the Met Office I worked with developing countries on forecasting natural disasters. At present, I work with academic, charitable and consulting groups; and, accordingly, I declare my interests.
Bills on international development are rare but important events in the work of this House. Therefore, we need to examine the Bill closely to see whether it meets all the Government's objectives. We recall that this Bill relates to the work of an excellent department which over the years has transformed itself from a department of technical co-operation with such famous Ministers as the noble Baroness, Lady Castle, and the noble Lord, Lord Carr. I hope that the current focus of the department on the reduction of poverty will not lead to a lesser appreciation of the contribution of science and engineering to that task. I shall return to that issue later.
In considering the legislation which deals with an overarching theme, the House should be on its guard against passing a purely departmental Bill. Regrettably, departments find it easier to propose legislation which deals only with their department, or even one part of a department, rather than dealing with the more complex task of involving the whole government and the wider community as well. We saw that par excellence with the Transport Act in the previous Parliament which needed some crucial amendments on the environmental aspects of transport. I hope that this House will have the courage to do that again with this Bill. Although I support the Bill, at present in my opinion it is framed too narrowly.
Clauses 1 and 3 are excellent in that they include the three objectives of a reduction in poverty, sustainable development and alleviation of the effect of natural and manmade disasters. My point is that international development is a task which should be led and stimulated by the Secretary of State, but it is far too broad an objective to be her sole responsibility. Other government departments and agencies, including European intergovernmental agencies, need to be involved. My suggestion is that those organisations should be explicitly instructed in the Bill to have as one of their measured objectives contributions to international development paid for out of their budget to some extent. Those departments and agencies know better than the Secretary of State how best to meet those three objectives in a number of situations.
A strict reading of the Bill would imply that such work in government is to be done only if it is the express wish of the Secretary of State. Let me explain. The present Secretary of State has quite rightly emphasised that poverty reduction is effective only where conflict is eliminated and there is law and order. Sadly, the events in Sierra Leone and South America suggest that one of the causes of conflict is trading in legal and illegal commodities. I heard from a US official recently that oil trading is affecting the Indonesian situation. At the same time, of course, the UK and other countries sell arms for internal security.
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Those matters are handled by the Department of Trade and Industry and the Foreign and Commonwealth Office. One should read in the annual reports of those departments how their policies contribute to international development.
My own expertise is concerned with science and technology and how that can contribute to international development. Although it is not an explicit objective of many departments and agencies, nor of European intergovernmental agencies, the responsible civil servants in those bodies not only include that work as part of their regular tasks but also report on it in their annual reports. The list of such organisations goes far beyond those listed in Schedule 1. The list is bizarre in my view. As usual in the British public service, demanding and unusual tasks are taken on by civil servants without asking permission from higher levels and therefore without thanks or recognition and with the distinct possibility of being shot on the quarter-deck or a public accounts inquiry if things go wrong.
The Meteorological Office regularly reported on its work to improve hurricane warnings to some of the poorest and most vulnerable communities in the world, such as fishermen in Mauritius and in Andhra Pradesh on the coast of India. Farmers in north east Brazil and Africa utilise the three month seasonal forecast to decide which crops to plant. European intergovernmental agencies provide out of their regular budgets help with satellite forecasts and movement of pollution over the Indian Ocean.
More could be done. Why, one might ask, is it quite possible to use advanced technology to warn a Grand Prix driver in Sao Paulo to change his tyres because of an impending thunder storm when it is not possible to find funding to improve the expensive and erratic aviation services in central America? That point has been made by international banks. The legal, administrative point I am making is that current practice is ad hoc and may not necessarily continue unless such contributions are properly budgeted and agreed to in government as part of the overall responsibility of departments and agencies.
When that point was put to her, the Secretary of State commented that in emergencies she could call up fire officers from local brigades or helicopters from MoD. That is essential but it is only one part of interdepartmental collaboration. I am talking about the long-term programmes which are necessary for the long-term goal of sustainable development.
Another powerful example was made by James Wolfensohn of the World Bank who explained how the Internet now enables cocoa farmers in West Africa to arrange their sowing and trading. But the telecoms' arrangements in the developing world are very unsatisfactory and far too expensive. Are the DTI, the telecommunications agencies and the UN agencies for telecoms facing the problem? I am not sure. Is the City of London being used to help those farmers do their commodity trading?
The scientific community could also contribute much more to this goal. I have been on the Natural Environment Research Council and a holder of

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numerous research grants. At present, research proposals even regarding a quite fundamental topic in the UK have to explain how they could contribute to "wealth creation" and "the quality of life". Surely if the Government could communicate their serious commitment to poverty reduction and sustainable developments to the science agencies and research councils, they could urge them to include those objectives in their equally important if more parochial goals and to devote a proportion of their research budget to that end.
I hope that the Minister for Science, the noble Lord, Lord Sainsbury, will support such a measure. Recently at the European Energy Laboratory at Petten in the Netherlands I saw research on photo-voltaic plastic sheets which in five years or so may provide cheap and practicable forms of electricity for the humblest dwellings all over the world, thereby obviating the ruinous deforestation which one sees everywhere. This research began in the laboratory of Professor Friend at Cambridge. It was originally applied to high-tech Piccadilly Circus type of lighting schemes. Noble Lords can see the implication.
To summarise, I believe that Clause 8 should be extended to require government departments and agencies to devote a certain small percentage of their budget to poverty reduction and sustainable development, to report on it and for the Secretary of State to ensure its wider effectiveness. One need hardly add that such a report from H M Treasury would have an up-to-date account of the outstanding initiative of the Treasury to reduce the debt of developing countries.
Finally, in line with the remarks of many noble Lords, I believe that Clauses 7 and 8 which empower the Secretary of State to fund activities for poverty reduction and sustainable development need amending to ensure that those arrangements are reasonably transparent. It is important that the public have a clear understanding of the relative effectiveness of those funding arrangements, whether with UN or EU agencies, the private sector, other governments or non-governmental organisations. Such comparisons need to be sensitive and sensible, but they are needed. I warmly welcome the Bill.
9.48 p.m.
The Lord Bishop of Southwark: My Lords, from these Benches we add our congratulations to the noble Baroness, Lady Amos, on her new responsibilities. We are also delighted that the International Development Bill has been reintroduced so early in the life of the new Parliament. We see this as a sign that the Government intend to continue to work for a more effective global effort to reduce poverty. We would wish to give it our full support.
Like many others, we continue to be involved in the campaign to reduce the debt of the poorest countries. I agree with noble Lords who have indicated that one of the most heartening aspects of this campaign has been the personal commitment of a son of the manse, the Chancellor of the Exchequer. If the international
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fruits of this campaign have been modest, as they have, we support the Chancellor in putting pressure on his counterparts in Japan and other prosperous countries so that the poorest of people on earth are no longer shackled in this modern form of slavery. We feel that there is genuine support at the financial and political heart of our own Government. We in our turn would wish to give general support to the Government's objective on development aid expressed in the Bill.
Within this general support, however, we express some more critical comments. I suppose that the Biblical word most appropriate to our deliberations is "tZED A KAH". That is sometimes translated "charity". However, a better translation would be "righteous benevolence". That contains the strong element of justice. Charity awaits the cry of distress and then acts. Justice anticipates the cry of distress. We view the provisions of the Bill through the spectacles of justice, not of charity. Seen through those spectacles, it falls short.
Any Bill that makes poverty reduction and sustainable development pivotal issues deserves support, but there must be concern that the Bill will make little impact without additional financial provision. I welcome the fact that the Government's commitment to overseas aid is increasing, but it still remains inadequate when compared with the challenges set out in their two international development White Papers. At current rates, it will be 50 years before the UK reaches the UN target.
As it happens, the General Synod of the Church of England will be debating international development concerns at the end of this week. Among other things, the General Synod will be asked to endorse a set of policy commitments prepared by Global View 2001, which is an alliance of 25 human rights and development organisations, including Christian Aid and our own Board for Social Responsibility.
We, too, have our wish list of specific policies. We will encourage the Government to take action in five areas on overseas development assistance. First, we would like an annual increase in the aid budget, with the aim of reaching the UN target of 0.7 per cent of gross national product within 10 years. Secondly, we want the proportion of aid that is spent on basic social services such as health and education to be increased to 20 per cent of the total budget. Thirdly, we would like the Government to improve the quality of European Union development assistance and increase its poverty focus by ensuring that 70 per cent is spent in the poorest countries. Fourthly, we ask them to use aid procurement and contracting to build southern capacity and to untie all aid, including technical co-operation. Fifthly, we want the Government to ensure the swift and effective delivery of humanitarian assistance to all civilians affected by conflict and natural disasters.
However, we want to play our own proper part in bringing aid to those most in need. Clause 4 makes provision for the Secretary of State to support activities or organisations likely to promote awareness and understanding of world poverty. I have no doubt

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that faith communities fall within that provision. On that point I disagree slightly with the noble Lord, Lord Brennan. The Church has not just been involved with the eradication of poverty in the past; it is still very much involved in the present—and not just the Church.
I chair a national organisation called the Interfaith Network. As it happens, it has had its annual meeting today in Birmingham. Sadly, I had to leave it early to be in your Lordships' House this evening. However, before I left I heard from a young Sikh who, together with some of his friends, has formed an organisation to take emergency aid to regions in crisis. It all started from the Kosovo atrocities. In 10 days, that young man raised £25,000 from the Sikh community in Slough and took a lorryload of food and medicine across Albania to the war zone. There are not many Sikhs in Kosovo, but there are people in human need. The young man was responding to that need, as he and his friends have since done for those suffering as a result of the earthquakes in Turkey and Gujarat, where they helped to cremate bodies.
That is just one young man and a few friends—a drop in the ocean. But from such drops the wave of human concern can transform lives. All the great world faiths are rooted in local community developments. For example, the Church of England, which is part of the global Anglican communion, with nearly 70 million members, is well placed to encourage a deeper awareness and understanding of world poverty through our global action.
I saw a typical example of that on a Sunday morning in a Tanzanian village a few years ago. I was accompanying the local bishop to one of his visits to a far-flung village. There was no church building, so we worshipped in the open air. When the prayers had been prayed and the songs had been sung, the holy table was cleared of its sacred vessels and it immediately became a development table where basic medicines, nutritious milk biscuits for children and fish from the diocesan fish farm were all made available, together with illustrative leaflets on how to combat malaria or AIDS. Such is the stuff of grass-root development, and it is repeated hundreds of thousands of times through faith networks around the globe.
I hope that the Secretary of State will bear in mind such faith communities as she seeks to build the broad coalition of which she spoke when she addressed the General Synod in November 1998. We certainly want to play our part in this great enterprise and we shall listen with interest to what the Minister says when she responds to the debate. In particular, we would be interested to hear anything that the Minister might have to say on the role of faith communities.
9.56 p.m.
Baroness Wilkins: My Lords, I join other noble Lords in congratulating the Government on bringing forward this important Bill. I also congratulate my noble friend Lady Amos on her new ministerial post. The Government's commitment to the reduction of world poverty is one in which we can take a deep pride.
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The World Bank has estimated that around one-fifth of the world's poorest people are disabled. And disabled people are the poorest of the poor. Their literacy rates are considerably lower than those of the rest of the population, with recent UNESCO studies suggesting that only 1 to 2 per cent of disabled children in developing countries receive an education.
There are known to be 300 million disabled people in developing countries, but the enormity of their situation is rarely obvious because they are so often hidden away. That led Howard White, the author of the 1999 Africa Poverty Status Report, to conclude that disability was,
"the hidden face of African poverty".
Disability is a cause of poverty and poverty can cause disability. This vicious cycle, clearly described in DfID's March 2000 issues paper, Disability, Poverty and Development, shows how the social and cultural exclusion and stigma of disability lead to denial of opportunities for economic, social and human development. In turn, that leads to a lack of economic, social and cultural rights, and on the cycle goes to reduced participation in decision-making and the denial of civil and political rights.
It is on the matter of the promotion and protection of human rights that the International Development Bill is disappointing. The 1997 government White Paper, Eliminating World Poverty: A Challenge for the 21st Century, has a clear rights-based approach. It states that poverty reduction can take place only in a climate of rights and non-discrimination. Moreover, it takes a rights-based approach in relation to market economies.
DfID has been working on a rights perspective to all its aid and development policies. But this Bill gives no support to ensuring that that approach will continue into the future. All the rights which this Government and disability development organisations, such as Disability Awareness in Action and Action on Disability and Development, have fought so hard to achieve could be jeopardised by a future, less-understanding government.
There needs to be a clear commitment on the face of the Bill to protect and promote human rights. That is all the more important as the Bill gives considerable powers to the Secretary of State. An explicit commitment would prohibit any other government or Secretary of State from making suggestions that would contravene rights and, by implication, discriminate. And, most importantly, it would ensure that all the groups which traditionally have been left out of development assistance could be included.
I am not arguing that specific groups, such as disabled people or women, should be mentioned in the Bill. They should not. However, the Bill must tacitly recognise that those groups exist and that they should be included in programmes, projects and policies that are committed to poverty reduction. That is why an explicit commitment to a rights-based agenda is essential to disabled people.

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Although there has been a major shift in recent years from the traditional approach to development and aid, traditional habits die hard so far as disability is concerned. Disability projects are still predominantly medically based, exclusive and controlled by non-disabled people. Less than a year ago, the chair of a major aid agency articulated his belief that disability should not be part of his organisation's policy because disability was a,
"special issue and had to he dealt with by specialists".
An explicit commitment to rights in the Bill is all the more important because the UK has yet to support the call for a UN convention on the rights of disabled people. In 1993 the UN General Assembly adopted the standard rules on the equalisation of opportunities for disabled persons, but those rules have no teeth. The standard rules put no compulsion on member states, they are not tied to the human rights monitoring mechanism of the UN and they do not have any regular UN funding.
Eighteen months ago, Disability Awareness in Action set up a database to document violations of disabled people's human rights since 1990. It has already recorded cases against 2 million disabled people worldwide. It collected appalling evidence, such as the family in Spain who kept a disabled woman in a stinking six-foot hole for 40 years and the six disabled children who starved to death at a hospital in the Ukraine because staff stole their food.
Alongside those atrocities exists the unremarked acceptance that most public buildings and transportation systems throughout the world are inaccessible. Solutions to the violations of rights and discrimination can happen only through enforceable, comprehensive legislation that results in concrete social change. There are more than half a billion disabled people in the world today, 80 per cent of whom live in developing countries. While a UN convention would not make an immediate improvement to their lives, it would provide an important lever with which to push the rights of disabled people up the national and international political agendas. That in itself can result in important changes, not least in the writing and scrutinising of government reports and legislation and in changing the focus of legislative bodies and NGOs.
At a recent conference organised by International Service, Macline Twimukye was the speaker from Uganda, where disabled people have achieved a greater level of political representation than in any other country. The new Ugandan constitution provides for the representation of the disability movement at all levels of the political administration. Five seats are reserved for disabled people in Parliament, representing the four regions of Uganda and the interests of disabled women. In each local election at all levels of government there must be at least one representative who has a disability. However, Macline Twimukye, who heads the National Union of Disabled Persons of Uganda, made the telling point that all of that progress could be lost with a change of government. For that reason she advocated strongly for a United Nations convention on disability to
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provide her organisation with a powerful tool to continue to lobby governments for the rights of disabled people to be recognised.
I urge the Government to support the call for a UN convention on the rights of disabled people. Equally, I hope that my noble friend the Minister will accept that an explicit commitment to protect and promote rights needs to be part of the Bill in order that this Government's outstanding achievements will not be jeopardised in future.
10.5 p.m.
Baroness Amos: My Lords, I begin by thanking all noble Lords for the constructive and insightful debate we have had this evening. I thank noble Lords also for the broad welcome given to the Bill across the Chamber. In particular, I thank noble Lords for their positive comments about the work of the Department for International Development, and about the energy and enthusiasm of my right honourable friend the Secretary of State who has made such a difference in this area of work.
I pay particular tribute to the noble Lord, Lord Hannay. His was a notable maiden speech, and the noble Lord's experience and knowledge will be greatly appreciated in this House.
I thank noble Lords too for their kind remarks on my promotion. It is a privilege to cover both the Foreign and Commonwealth Office and the Department for International Development. I hope that this is an example of real joined-up government—I look to my noble friend Lord Judd. In a characteristically robust speech my noble friend asked: why poverty reduction rather than poverty elimination? I can reassure him that we are committed to poverty elimination and to the international development target of halving the proportion of people living in abject poverty by 2015.
I do not want to indulge in political point-scoring, but I must remind the noble Baroness, Lady Rawlings, as did my noble friend Lord Tomlinson, that the ODA GNP ratio fell from 0.5 per cent in 1979 to 0.2 per cent in 1997. I need say no more on that point. But I say to the right reverend Prelate the Bishop of Southwark that we are reversing that trend. By 2003–04 our ODA GNP ratio will be 0.33 per cent. That shows this Government's strong commitment. I am also pleased to say that we are making good progress in all the areas mentioned by the right reverend Prelate and I shall touch on them later.
My noble friends Lady Whitaker and Lord Tomlinson recognised the balance in the Bill; that it tightens the purposes for which development assistance can be provided but allows the Secretary of State to use a wider range of instruments and powers to achieve those purposes. That clear focus will have the effect of making the use of development assistance for further improper political and commercial ends unlawful. I welcome my noble friends' support for the Government's position on that issue.

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The term "poverty" is not defined in the Bill, for good reason. As I said in opening, we are dealing with an extremely complex area. But, as my noble friend Lord Desai made clear, Clause 1(3) defines "sustainable development".
The noble Lord, Lord Redesdale, asked specifically about the difference between "poorest state" and "poorest people". The Government recognise that serious pockets of poverty exist in middle income and transition countries. The Bill is premised around providing development assistance to tackle poverty, not around providing development assistance to poor countries. It will therefore allow the Government's efforts to contribute to the elimination of poverty in middle income countries and in countries in transition.
I wish to make two further general points. My noble friend Lord Hunt of Chesterton made a plea for government departments to report on activities which contribute to the international development agenda. We are taking a more proactive and integrated approach across government; for example, the Conflict Prevention Fund. There are other areas of work but I agree that more remains to be done.
My noble friend Lady Wilkins raised the important issue of poverty and disability. The Government realise that that is an area which is not often recognised; that is why we published a paper. Social justice and equality are at the heart of our development effort and I can assure my noble friend that we take a rights-based approach extremely seriously.
I turn to some core themes which emerged during the debate. The noble Baroness, Lady Rawlings, my noble friend Lord Tomlinson, the noble Lord, Lord Hannay, the noble Lord, Lord Swinfen, and the right reverend Prelate the Bishop of Southwark, among others, raised the question of UN and European Union reform.
It is important to say from the outset that we get additional leverage from our work through the multilateral institutions. The UN and EU both have the potential to make a huge impact on world poverty. Both are making genuine and significant efforts to become more efficient and more effective, in particular under the guidance of Secretary-General Annan and under Commissioners Patten and Kinnock.
DfID will continue to work with the UN and the EU to support and reward reform. The noble Lord, Lord Hannay, will be interested to note that last year we established an international policy and performance fund to reward improvements in the performance of multilateral organisations and to provide support for their reform efforts. Major recipients in 2000 and 2001 were the UN Fund for Children and the United Nations Development Programme (UNDP).
I turn to debt relief, which was mentioned by a number of noble Lords, including the right reverend Prelate the Bishop of Southwark. Other noble Lords referred to the tone of the remarks made by the noble
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Baroness, Lady Rawlings, in that respect. Twenty-three countries have qualified for debt relief under the enhanced HIPIC initiative with more than 50 billion dollars of relief being agreed.
Debt relief is agreed on the basis of poverty reduction strategy papers which are drawn up and owned by national governments. They set out how governments will tackle poverty and specify how the debt relief savings and other development resources will be used. They are public documents drawn up with the participation of civil society groups and international donors. Perhaps I may also say to the noble Lord, Lord Redesdale, that we have worked hard to ensure that the World Bank and the IMF appreciate and understand the need for a poverty elimination focus.
The noble Baroness, Lady Rawlings, chided us for reaching only 22 countries by the end of last year rather than 25. Perhaps I may remind her that conflict is a fundamental obstacle to many countries qualifying for HIPIC debt relief. We are working with our partners, including in G8 and the UN, to strengthen international and regional efforts to prevent and resolve conflict. For example, we are seeking to curb the use of diamonds to fuel conflict. We are working closely with the UN to improve its handling of crisis and conflict management following the Brahimi report on UN peace operations.
My noble friend Lord Brennan suggested that countries should be required to use debt relief savings to lift children out of poverty. Child poverty is a particular priority. However, it cannot be eliminated in isolation from the poverty of the community in which the child lives. Therefore, we must take an holistic approach.
The noble Baroness, lady Rawlings, and my noble friend Lord Tomlinson, among others, talked about the importance of good governance. There has been some debate over whether the Bill should contain reference, either as an aim or purpose, or even a precondition of development assistance, to good governance.
The quality of governance is critical for the eradication of poverty. Where governments are unrepresented, unrepresentative and ineffective or where corruption is endemic, economic growth and sound development suffer. For those reasons, we are clear that under the Bill the Secretary of State will be able to continue to support good governance activities. To add good governance as an additional aim or purpose of development assistance is therefore unnecessary. The quality of governance is important, but so are health, education, water, the environment, human rights and the empowerment of women. The list could continue. All those aspects of development are inter-dependent.
This is a good point to move on to corruption. It was raised by my noble friends Lord Haskel and Lady Whitaker, the noble Baroness, Lady Rawlings, and the noble Lord, Lord Swinfen. My noble friend Lord Haskel spoke of the enormous cost of corruption. He

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was right to highlight the problem. Corruption affects all areas of development and the poorest suffer the most.
However, I am pleased to say that the prospects for progress have never been better. Corruption is no longer a taboo subject. Governments everywhere are exposed to pressure to bear down on corrupt practices and increasingly appreciate the benefits of doing so. DfID's strategy is to support countries which are genuinely determined to crack down on corruption and we are currently spending £350 million each year on programmes in this area. We are also collaborating with other development agencies and contributing to multilateral efforts, in particular through supporting the strengthening of financial intelligence units and regional and anti-money laundering mechanisms.
The noble Baroness, Lady Rawlings, accused the Government of sitting on their hands with respect to corruption. Where governments are not committed to tackling corruption we have taken strong action in partnership with other donors, including, for example, the withdrawal of government-to-government aid in Kenya, Malawi and Zambia. But given what has been said tonight about the nature of poverty, that is clearly not a long-term solution and such actions can hit the poorest hardest. We need to engage with such governments in order to influence them.
The Bill will allow us to continue to support activities which help the fight against corruption in all its forms and I hope that this addresses the serious concerns outlined by the noble Lord, Lord Freeman, when he was talking about the particular case in Uganda.
My noble friends Lord Haskel and Lady Whitaker and the noble Baroness, Lady Rawlings, were interested to know when the Government would demonstrate their compliance with the OECD convention on the bribery of foreign officials. I am pleased to say that the Government plan to introduce a criminal justice Bill into Parliament in the current Session.
My noble friends Lord Brennan and Lord Judd and the noble Lord, Lord Joffe, raised the Commonwealth scholarships scheme. The scheme should be seen in the context of DfID's wider work in education. Our efforts are focused on the attainment of two international development targets for education: to achieve universal primary education by 2015; and gender equality in primary and secondary education by 2005. Within that framework, we are investing heavily in skills development. A key challenge is to address the education skills and development demands of the poorest, especially those who are completely excluded from educational opportunity. Skills to improve livelihoods are particularly important, and literacy is the major issue.
My noble friend Lord Brennan raised the question of engagement with multinational companies. The Government support and encourage socially responsible business practice by multinational companies in their activities in developing countries,
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believing that this is one way in which the private sector's every-day activities can also work to decrease poverty further than is already the case.
I turn to tied aid. The noble Earl, Lord Sandwich, the noble Lords, Lord Redesdale, Lord Freeman and Lord Joffe, my noble friends Lord Judd and Lord Tomlinson and the right reverend Prelate the Bishop of Southwark all mentioned tied aid. The Government intend that the new Bill will make the use of aid funds for improper political or commercial ends—so-called "tied aid"—unlawful.
We have been persuaded by legal arguments that the most effective way to ensure that aid cannot be used for improper political and commercial purposes is to rely on the clear statement in the Bill of the principles and purposes of development assistance which are set down in Clause 1. Under that clause the Secretary of State may provide development assistance only if he or she is satisfied that it is likely to contribute to a reduction in poverty through furthering sustainable development or promoting the welfare of people.
It is entirely reasonable to ask why we have not chosen to make an explicit reference in the Bill to tied aid or improper commercial and political purposes with a view to making them unlawful. The straightforward answer is that, despite a good deal of effort, we have been unable to develop a convincing and useful definition of these terms. We concluded that tied aid could not be defined by the mechanism or form of assistance but only the motivation behind it. The question of motivation is dealt with in Clause 1 of the Bill which is the core power.
We also welcome the agreement at OECD that all financial aid to least developed countries will be untied with effect from 1st January 2002. Not only will that help to reduce the proportion of tied aid globally but it also sends an important political message on which we intend to build. Other bilateral donors are considering whether to follow our example of unilateral untying. We are working with developing countries to push for further untying at next year's Financing for Development Conference.
I turn to humanitarian assistance. I am surprised by the comments of the noble Baroness, Lady Rawlings. We are often the first on the ground with our emergency response teams and through our support for NGOs. We should be proud of that. I thank the noble Lord, Lord Joffe, for his positive remarks. The noble Baroness also spoke about the need for the voice of NGOs to be heard. The Government are committed to a partnership approach. We consult extensively and engage in robust discussions with NGOs about our priorities.
The noble Earl, Lord Sandwich, referred to NGOs being an irritant—quite rightly so given that we live in a democracy. I agree with the noble Earl and the right reverend Prelate the Bishop of Southwark that civil society, including faith communities, both in the United Kingdom and in partner countries have an important role to play in supporting the elimination of poverty in a globalising world. The Government channel a substantial proportion of their resources through them. I do not have time to go into the details.

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I say to the noble Lord, Lord Freeman, that there has been no change in our policy which prevents DfID providing financial support directly to UK NGOs, but we take a sector-wide approach in our bilateral programmes and work with reforming governments to bring fundamental long-term sustainable change to specific sectors like health or education. I also confirm that projects which seek to empower local communities are in principle eligible for Challenge Fund support.
As to the funding of development education, we believe that if we are to succeed in meeting international development targets we need to build greater awareness and understanding of development issues across the United Kingdom and internationally, and we are working with NGOs on that matter.
The noble Lord, Lord Hannay, and my noble friend Lord Desai spoke of the importance of trade, investment and development. Trade has a vital role to play in helping developing countries to boost their economic growth and generate the resources necessary to reduce poverty. We are working to strengthen the WTO and particularly the voice of developing countries within it. We are also working for the launch of a broad-based trade round at the WTO ministerial conference in November, although noble Lords will be aware that that remains a challenge.
My noble friend Lord Hughes of Woodside referred to Africa, a continent where we are in danger of not meeting the targets. I agree that we need to support the millennium plan for Africa which is about African leaders taking a leadership role in resolving that continent's problems.
I shall write to noble Lords on other questions which I have been unable to cover. For example, the noble Lord, Lord Redesdale, asked me specifically about the CDC; my noble friend Lady Whitaker asked me about long-term impact and security sector reform; and my noble friend Lord Hunt of Chesterton raised the important point about science. I shall of course write on other points which I have omitted to answer.
Parliament's approval of the International Development Bill would send a clear signal to our partners in developing countries in the donor community and within Britain that we are serious about developments and intend to continue to play a major part in tackling the challenge of world poverty.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Arts Council of England
10.26 p.m.
Viscount Falklandrose to ask Her Majesty's Government whether they intend to implement the changes in the structure of the Arts Council of England; and, if so, what is their timetable.
The noble Viscount said: My Lords, perhaps I may take this opportunity to welcome the noble Baroness, Lady Blackstone, to the first of our debates when we
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look to her to answer on behalf of the Department for Culture, Media and Sport. It is a small cast of players—if I may describe them as such—that we have today, but I hope nonetheless that a valuable discussion will be had.
It would be churlish of me not to say that we enjoyed an interesting and productive time with the predecessor of the noble Baroness, the noble Lord, Lord McIntosh of Haringey. Some of our debates were carried out with rigorous toughness but all with unfailing good humour. I am sure that we shall see a continuation of that approach while the noble Baroness holds the office.
Tonight we are here to talk about changes proposed by the Arts Council of England. On 14th March the chairs and chief executives of the regional arts boards were informed by the chairman and chief executive of the Arts Council of England of a plan to initiate a significant reorganisation of the arts funding system. The arts funding system is never perfect but the search for perfection goes on. The RABs were told that these proposals had "political endorsement", whatever that may mean precisely; that they were "non-negotiable"; and would be pushed through regardless of the views of the regional arts boards. A deadline of 30th April was originally set for the RABs to transfer their staff, their assets and their liabilities to the Arts Council of England.
The following day the Arts Council of England produced their proposals—A Prospectus for Change. At the heart of the prospectus was the proposal to amalgamate the existing Arts Council of England and the ten regional arts boards to create a single, new national arts funding and development organisation. The new arts council, we were told, would have nine regional offices, based on the Government planning regions. The arts council would be the national governing body. There would be no independent boards at regional level, but a system of regional advisory groups would replace them. A new arts council executive team would be established to include the executive directors of the nine regionnal offices.
That was a very surprising announcement. It surprised everyone. It surprised almost everyone in the arts world. It surprised Members of Parliament. It surprised the media. I dare say that, in the way it was delivered, it surprised the Department for Culture, Media and Sport.
The manner of the introduction, prior to the publication of A Prospectus for Change, shocked and dismayed the regional arts boards to an extent which I have not experienced since I have been in the House—and with the correspondence that I received—couched as it was in terms such as "non-negotiable" and "politically endorsed". No consultation beforehand and no argument afterwards seems to be the order of the day so far as concerns the Arts Council of England. Those methods would have been surprising in Vichy France in 1940 let alone within democratic England in the year 2001.
The way in which the Arts Council launched its prospectus surely contravened the Cabinet Office paper on staff transfers in the public sector and its

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published code of practice on written consultation. The regional arts boards immediately jumped into action. They consulted widely on the proposals and persuaded the Arts Council in very short order to consider those events and to agree to an independent evaluation based on many written responses. The evaluation will be available this month. More than 1,000 responses were received, the majority expressing grave concerns at the proposals, with the loss of regional autonomy and accountability. Artists, regional development agencies, local authorities and arts organisations have expressed dismay and concern about what they fear is a proposal to centralise the arts under one national organisation.
Perhaps I may refer to a letter in the Independent written by my right honourable friend Mr Robert Maclennan, who is soon to be my noble friend. In the letter he said that we are returning the position to 1956,
"when the Arts Council last had regional offices explaining to the provinces how London wished them to behave … Such a centralised b urea ucracy"—
as is proposed by the chairman of the Arts Council—
"so far from being able to speak for all the arts, would quickly be driven to defending its own policies and strategies for distributing taxpayers' money to its clients. Concentrating decision-making at the centre would not reduce the personnel required"—
as forecast by those who have drawn up the changes—
"and would increase the time spent shuttling between the regions and the Arts Council".
One may be forgiven for having as a first impression that this RS a cost-driven exercise. Indeed, it was presented as such on radio. There did not seem to be much argument about it but there have been denials since. If one takes these proposals and examines them, the drift seems to be a desire to go towards populism and commercial success at the expense of what has been a satisfactory happening in many of the regions. Not all the work has been perfect but experimentation and demanding work, as the noble Baroness, Lady Blackstone, with her long experience in the arts, knows full well, are important. There must also be a degree of failure. Artists have to fail. Those who thought up the plans do not like that aspect at all.
There is a good deal of talk about people called change management professionals. I do not know what change management professionals are and I am not sure I want to know. But I am quite sure that they cannot satisfactorily do arts work. The cost of those people will no doubt be very high indeed and it will be at the expense of arts funding. The trust that exists in the best of the regional arts boards between the arts boards and the practitioners has been vital. The practitioners may be individuals or bodies. Individuals in the arts world are often difficult people. My mother was a painter. I did not think that she was a particularly difficult person, but she was fairly solitary and was not terribly interested in money. From time to time she was easily upset. She was also very talented. I suggest again that those who drive forward these commercial ideas—I interpret them as being commercial—do not like such people, and those feelings are reciprocated.
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Communication with artists is a tricky business. In the best of the regional boards, it has been done quite successfully. Furthermore, to ape a piece of contemporary jargon, the secret of maintaining good communication between artists and those who fund them is location, location, location. The new proposals will make that communication extremely difficult. The southern region is to be based in Exeter. Will artists be prepared to travel to Exeter where now they have to travel perhaps only a quarter of that distance? Channels of communication must remain open.
We are not concerned only with dishing out money here. Long-term relationships with the people involved must be nurtured. We are not selling T-shirts or video games, we are selling human activity, activity which has to be encouraged and nurtured. That is what the arts are all about. I do not like the bureaucratic attitude of the proposals. I do not understand half of them. The proposals refer to,
"the ability to speak with one voice on behalf of all the arts".
What the hell does that mean? Another proposal suggests,
"greater capacity to address needs and act on bold ideas for the arts throughout England".
That is gobbledegook.
Perhaps I may turn to one or two more technical matters as I reach the end of my contribution. These were brought to my attention by my noble friend Lord Phillips of Sudbury, who is not in his place tonight—he would have liked to speak in the debate—because he is advising a regional arts board on their legal and constitutional position in the light of these changes. He has stated that, leaving aside the policy aspect here, there is a serious issue as regards charity law which the Government must take into account, something which I had not realised. My noble friend tells me that each of the 10 regional arts boards is a separately constituted charity in the form of a company limited by guarantee. The overriding obligation of the trustees of any charity—here I point out that the majority of the RAB trustees are not appointed by the Arts Council—is exclusively to serve the best interests of the charity concerned. Even if all the trustees of the arts boards were appointed by the Arts Council, that would still be the case. They would be acting improperly simply to do the council's bidding.
Another point which makes me think that this move is extremely arrogant and pompous is the fact that the arts boards secure funding from all kinds of sources. Funding comes in from local authorities, private charitable foundations and commercial sponsorship; often they have their own independent assets. We have heard the news that—perhaps the noble Baroness will be able to confirm this—some arts boards are minded to do the opposite of what they are being asked to do: they will not disband. So far as I can tell, there is no legal force to make them do so. The boards feel that they have a duty to continue until all these matters have been sorted out.
I should like to end by asking the Minister two questions. First, will she ensure that when further consultation takes place—we hope that that will

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happen—the Arts Council is compelled fully to observe the Cabinet Office guidelines on written consultation? That is something which the council significantly has failed to do so far. Secondly, is the Minister aware that what the Arts Council is proposing is increased delegation to regional offices rather than any real devolution of power? Is that not a flat contradiction of the Government's policy aim to increase devolution of powers to the regions of England?
10.40 p.m.
Lord Bernstein of Craigweil: My Lords, I congratulate the noble Viscount on initiating this debate on the arts. They are an important part of our society and it is right that we should debate the changes that the Arts Council plans to make. I also congratulate my noble friend Lady Blackstone on becoming Minister for the arts.
As to the noble Viscount comparing the Arts Council of England to an organisation of Vichy France, it is worth saying that the Arts Council has served the arts extremely well over the past few years. It has achieved the confidence of the Government, who have given it a greatly increased grant. Funding for the arts in this country is higher than it has ever been, which has done a lot to overcome the serious funding problems of the past two decades.
The Arts Council has done a great deal to put its own house in order over the past three or four years. It has reduced costs and staff at its London office and it has simplified its procedures. However, more remains to be done, and it is entirely sensible that the Arts Council should be looking at the complex organisation of the regional arts boards and their relationship with the national body.
Arts organisations have long complained about the complexity of dealing with the regional arts boards and with the Arts Council and about delays in implementing policies. I was once chairman of the Royal Exchange Theatre in Manchester and I have bitter memories of endless discussions with the Arts Council, which were pursued for months, sometimes years, on end without any real decisions being made. It is much better that the arts organisations should spend their time and money on supplying high quality arts to their region rather than dealing with endless committees and endless paperwork.
The regional arts boards were established a long time ago with the best of motives—that is, to give due regard to the views of people who live in the regions—but the cost in time and money has been heavy. It cannot be right that the Arts Council spends £36 million on administering grants in this country; it cannot be right that it needs 660 people to fulfil this work. I do not think there is anything to be ashamed of in trying to save money in administering the arts, because that money can then be put to more productive use in the form of grants to the performing arts, the visual arts and all the arts in the regions and in London.
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It is sensible of the Arts Council to create a single structure. It must be right to replace 11 organisations with one. Having 11 organisations may have been right a long time ago but it simply cannot be right now. These changes should lead to less delay, to better and quicker decision-making and, finally and importantly, to money being taken from administration and put into grants.
It is not surprising that these proposals have met with resistance from the regional arts boards. It would be easy to use the old cliché about turkeys not voting for Christmas, but I do not want to say that; it is not fair. It is legitimate for the regional arts boards to fear that they will be losing authority and decision-making in their regions, and it is legitimate for them to fear that decisions taken in London without proper consultation will do harm to their regions. After all, the arts are a vital part of our society, and the regions are quite right to feel that this is an important issue which should be raised.
Over the past 100 years, our great regional cities have lost both power and influence. There was a time when they were home to major banks and major businesses and to their founding families, who felt a strong loyalty towards their region. Globalisation has changed all that. Local companies—if they have survived at all—have become subsidiaries of companies in London, Frankfurt, New York or Tokyo, and major decisions which affect the regions are often taken hundreds or thousands of miles away. That happens less with our European partners. In places such as Düsseldorf, Lyons or Munich, large banks and large companies still have their head office and their commitments within the city. They take pride in local affairs. It is no surprise that arts funding on the Continent has been higher than it has in this country because of that identification.
I understand the concern of local people and why they are worried about any change to their status. However, that in itself is not a reason for not making any change. The present system is wasteful and inefficient. The Arts Council, however, should recognise those fears and put in place certain safeguards. Perhaps I may mention four.
First, if the regional arts boards are to be abolished, they should, as recommended, be replaced by strong advisory councils which have the respect of local people. Secondly, the regions should be able to have representatives who have access to the governing body of the Arts Council. In that way, any concerns in the regions can be fed to the top level of the Arts Council. Thirdly, officials in the regions should have at least as much power as they do now to approve small and medium-sized schemes on their own. Fourthly, the Arts Council should actively encourage a new regional system of consultation involving the Arts Council, local authorities and local enterprise.
I have not discovered from anything that the Arts Council has said that the decision to reorganise is led by commercial or populist ambitions, or even that the intention is to employ many more management professionals. I do not know what it means either.

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After all, this Arts Council has been instrumental in producing up to £25 million for regional theatre. That indicates its concern as regards regional activity.
The Arts Council should not be discouraged from re-organising but it should be encouraged to consult with the regional arts boards while it does so.
10.47 p.m.
Lord Greaves: My Lords, I, too, congratulate the Minister on her new appointment. Also, I thank my noble friend for initiating this debate. Perhaps I can offer a perspective from the North of England, particularly that of the North West. I should add that my noble friend Lord Shutt of Greetland would have liked to have been present. Unfortunately, he has been "put down" for a day or two by some Yorkshire debilitation. He has probably been eating too much rhubarb! My noble friend would have brought a Yorkshire perspective to the debate, so I shall attempt to do so on his behalf.
The first thing that people—probably throughout the country but certainly in the North of England— would say is: if this is how the Arts Council brings forward its proposals, is it not a demonstration of how it would run matters in practice if it took them over? Whatever the rights and wrongs of the proposals that we are discussing, the way in which they came to light and the way in which they were put forward have been an absolute disaster. It will take a long time for those responsible to regain the confidence of others that they will act any differently if the structure is changed to one that is far more centralised, as the Arts Council wishes. Obviously, much consultation and debate have taken place since that time. It is interesting—is it not?—that almost all the responses that have been put forward, especially from our part of the world, have been negative as far as concerns these proposals.
Many of the concerns that have been advanced by organisations in the North West—we are talking about arts organisations, local authorities and many others—are as follows. First, there is a real suspicion that decisions in a region like the North West should be made in that area and that the intention is that such decisions will no longer be made by people there; that is to say, those who understand the diversity and the needs of the region, as well as its relevance. The latter may be quite different from that which applies to other regions and, indeed, to London.
Secondly, there is considerable concern among local authorities that this is yet another attempt to cut them out of the loop as regards public services, the disbursement of public money, and the support of arts organisations. There seems to be an attempt beneath the Arts Council proposals to underplay the importance of local authority support and activity across the whole range of the arts, together with a feeling that a national organisation would be less responsive. That seems to fly in the face of what is happening in almost all other areas of life in this country; namely, a belief that running things in a centralised way from London is not, in practice, the best and most efficient way to proceed.
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The noble Lord, Lord Bernstein, said that it was about greater efficiency. I thought that the idea that centralisation meant greater efficiency went out a long time ago, and that people now understood that, in order to provide efficiency combined with flexibility for local circumstances and accountability to people in a particular area, you had to devolve service provision, accountability and decision making. In the North West we are some way on the road towards what we hope will be an elected regional authority, which will take over a great deal of responsibility for decision making across a whole range of areas in our region. Indeed, the same is true in the North East and in Yorkshire.
At the same time that this proposed change is taking place in one area of the arts with the apparent support of the Government, it seems extraordinary that the reverse is happening whereby people are looking to a much greater degree of centralisation. In so far as there will be decentralisation in the new structure, it really will be decentralisation of service provision: it will not be decentralisation of accountability and decision making. Many people in the region ask themselves the following question: if this is what is happening in our region, are the Government genuinely serious about regional devolution in general?
As regards costs, and the alleged, proposed savings, two arguments are being put forward. The first is that they are not really demonstrated at this stage; and, secondly, that, if there are savings to be made—everyone wishes to make savings in administration, if that money can then be used to support the arts or the service in question—that can take place by modification of the present structure without throwing it all up into the air and starting again.
At present, local authorities have considerable involvement in the regional arts board in the North West. There is some doubt as to whether the degree of support provided would be forthcoming under a new structure that cuts them out of the loop. There is talk of the regional office having a local partnership fund to which local authorities would be asked to transfer their funding. However, there can be no guarantee that that will happen if local authorities are treated in a way that they believe does not reflect their importance.
I do not believe that anyone is opposed to improvements, or even to structural change. However, people are opposed to the way in which this has been done. There was no prior consultation on the matter; consultation took place after the event with what still seems to be the core commitment by the Government that you can talk about the details but not the underlying issues of the proposal. We shall all be interested to hear what the Minister has to say about that.
However, there are other fears. There are fears that while the arts are essentially about diversity and creativity, that inevitably means that different decisions will be made in different regions of the country. Those will partly reflect the needs, opportunities and cultural heritage of those regions. My noble friend Lord Shutt asked me to mention the

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fact that he would expect brass bands to be considered more important in Yorkshire than in the South East. That matter has to be taken into account.
To whom are the decision makers in each of the new regions responsible? Who sets the priorities and to whom are they accountable? Diversity within regions is important. A region such as the North West has a varied and creative culture. It is rich, varied and cosmopolitan. It is a progressive region which, like many other regions, embraces people from all five continents. When I was a lad in Bradford we used to have an event in Peel Park known as the Peel Park gala. Last weekend there was an extremely successful multicultural event called the Peel Park mela. The latter is very much the same kind of event but is much richer in terms of its cultural diversity. I refer to the higher arts, the experimental and avant-garde arts and the arts rooted in the cultures of the people who live in the regions. Surely it is those people who should take the decisions and have the responsibility.
Finally, I hope that the Minister will give an absolute commitment that my next point will not arise; namely, that if decisions are to be centralised much of the money will also be centralised. Will the Minister assure us that whatever the new structure may be, the proportion of funding which is allocated to regions outside London and the South East will at the very least not be reduced?
10.57 p.m.
Baroness Anelay of St Johns: My Lords, I too welcome the Minister to her new post. Like other noble Lords I thank the noble Viscount for introducing our short debate tonight. It gives us a valuable opportunity to be given an indication of the way in which the Government's thinking on arts policy is developing after the cull of all four DCMS Ministers last month. The only survivor of the team is someone we are pleased to see survive—the noble Viscount, Lord Falkland, mentioned this point—namely, the noble Lord, Lord McIntosh. He was a spokesman, not a Minister. The noble Baroness will be aware of the high regard in which he is held in the House. We are rather surprised that he was never appointed to a ministerial post, but perhaps that may yet happen.
The debate is held at a time when it is clear that the Arts Council has had second thoughts about pushing ahead immediately with the plans it announced in March. I am grateful for its briefing. I welcome the fact that it has held wide-ranging discussions since March with the regional arts boards, the arts sector, local authorities and other partners. However, it is a pity that that did not occur before publication of the first prospectus. That would have saved much angst in the arts world.
The Arts Council now says that it will publish its second prospectus in July to answer many of the important questions and issues which people have raised and that there will then be a further period of consultation. It could be tempting for a Minister to interpret that as giving the Government a let out clause
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enabling him to say, "I cannot comment now because the Arts Council has not put any concrete proposals before us". I hope that the Minister will not take that route tonight.
It is right that we should have this debate now. The Government have announced that the House will rise early this year on 24th July and will not return until 15th October. Therefore, we are unlikely to have any chance to discuss the Arts Council's second prospectus in this House or indeed make any comment upon it presumably until after the Government have given the Arts Council their seal of approval for its plans, or have rejected them. I hope that the Minister will take the opportunity offered by the noble Viscount tonight to flesh out the rather tantalising glimpse of government thinking which we saw in the Daily Telegraph report of an interview with her that was published last Wednesday. The article stated that,
"The only action so far has been an order to the Arts Council of England to freeze its presumptuous abolition of regional arts boards, a decision that outraged local councils; and was sprung on Smith at short notice".
Is that true? Did the Government tell the Arts Council to freeze its plans? Is that why the Arts Council has delayed publication of its second prospectus from the original date of June to July and added in more consultation? Can the Minister inform the House how long that period of consultation will be? What meetings have DCMS Ministers or officials had with the Arts Council, regional arts boards or local government, the clients of the Arts Council since 7th June, or do they have any plans for the near future?
The Daily Telegraph article stated that,
"while she"
—I think that it refers to the Minister—
"approves of cuts in arts bureaucracy, she dislikes the ACE's grab for power".
Is that an accurate report of the views that the noble Baroness expressed? Daily Telegraph reader though I am, it was rather cheeky of the paper to say that the Minister is still reading her way into the brief. With her experience of the arts, I rather think that she wrote it.
The Minister is directly quoted as saying that,
"The aim must be that more money ends up in the hands of people who are putting on artistic endeavours".
Yes, of course, I am sure we would all agree with that objective. As ever, it is the route to achieving it that we must analyse.
When the Arts Council of England made that announcement in March—it was not received with a welcome in many quarters—we on these Benches made it clear that although we were happy that it was prepared to take on reform—at last, after talking about it for so long—its proposals would need careful scrutiny. Rationalisation, which would mean that more money could be spent on the arts and artists and less wasted on administration, would be welcomed. But we were surprised and alarmed that the Arts Council gave so little time for consultation and appeared to undermine its own consultation process by making its decision a take it or leave it affair.

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We were also puzzled by the plan it proposed. It wants to merge the Arts Council with the 10 regional arts boards to create a new and restructured single body which would be more responsive to local and regional democracy. I am grateful to the noble Viscount, Lord Falkland, for giving such a clear explanation of the proposal.
The Arts Council says that this is to achieve a more regional input and cut costs. Yet it seems to create a centralised bureaucracy in the hands of an organisation in London which has not met its own early promises of cuts in personnel and expenditure on its own patch—a point forcefully made in the first briefing to noble Lords by Southern Arts. I thank Southern Arts for its care in collating the views of so many artists, arts organisations and local authority partners in its area and publishing so many of those responses in The Artists Voices—responses to the Arts Council of England's Prospectus for Change. The responses make clear the level of anxiety in the arts world about the changes proposed by the Arts Council.
I am prepared to accept that this may be more a problem of perception than actuality. I shall continue to listen to all sides of the argument. I look forward to reading the Arts Council's second prospectus. I try to have an open mind on all this. I am very much aware that the chief executive of the Arts Council of England, Peter Hewitt, has first-class experience of the regional arts from his time with the Northern Arts Board.
We on these Benches are not opposed to reform of the arts funding system—just the reverse. We would welcome a fundamental review of the Arts Council of England, its structure and function. Are the Government planning to undertake such a review? We believe that it is important that the Government should develop in consultation with the arts sector a system of funding in which artists themselves can have confidence, and a system that is at arm's length from the Government.
We should ensure that the voice of the voluntary arts sector is heard where decisions are taken. We strongly recognise the particular need to ensure that the interests of the arts and arts audiences outside London are properly addressed. It is of great concern that so much of the present budget for regional arts is consumed by administration costs. Collectively, the regional arts boards in England spend well over £16 million on administration. The spending levels vary significantly between boards. South East Arts spends 34 per cent of its budget on administration, whereas the London and Northern boards spend respectively 15 per cent and 14 per cent.
Southern Arts also refers to the difficult question of what could and should be the most effective regional boundaries for arts development. That issue was referred to by many of the respondents and I hope that the Government will address it, given the proliferation of interlinking and overlapping regional agencies and quangos over the past four years.
Above all else, I hope that the Government's response tonight will demonstrate a willingness to move away from their interventionist policies that
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have developed over the past four years. A nation's artistic life should never be an instrument of government policy.
11.6 p.m.
Baroness Blackstone: My Lords, I am grateful to the noble Viscount, Lord Falkland, for introducing the debate and to those who have taken part. I am grateful for an opportunity to respond on behalf of the Government in my first debate as Minister for the Arts. I thank the noble Viscount, the noble Baroness, Lady Anelay, and the noble Lord, Lord Greaves, for their kind welcomes to me in my new position. I very much hope that the good humour that has always accompanied debates on the arts in this House will continue to prevail. I shall certainly do my best to make sure that it does.
While we are waiting for the Arts Council to produce its revised proposals, I can say very little about what might be in them. However, the opportunity to debate the issues is still very welcome.
Before I deal with current proposals, it is worth reminding ourselves that the arts funding system is not set in stone. It has been remarkably receptive to change since the original structures were put in place after the war. The past few years have seen the provision of bigger budgets, including lottery money, and the delegation of large areas of responsibility to the regions in an attempt to devolve as much decision-making as possible to the grass roots. I welcome that. However, if new ideas for further improvements are identified, we owe it to the arts community and to the taxpayer—whom we must not forget—to consider the options and at least give them a fair hearing.
As well as favouring devolution of decision-making and power to the regions wherever possible and appropriate, the Government are also keen to reduce spending on administration and bureaucracy so that more of the resources available can be committed to services and individuals and to the organisations in the arts that really need them. No one in this debate would dispute that objective.
For its part, the department is keen for the arts community to do its bit. We have been actively encouraging the Arts Council to consider how it could improve the way in which things are done. To its credit, the Arts Council responded. It is only sensible that any response that the council comes up with should consider the arts funding system as a whole rather than restricting itself to one single aspect.
It is no secret that, following years of under-funding before 1997–98, administration costs as a percentage of overall spending on the arts have increased That is regrettable. They have increased at the centre and in the regions. We cannot simply assume that costs have gone up only in the centre.
All that money could be better used by arts organisations. The Government have already taken a number of steps over the past few years to remedy the shortfall in funding that we inherited. Therefore, the increase in grant-in-aid funding of 80 per cent—that is, £150 million more—between 1997–98 and 2003–04 is, I

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believe, to be welcomed. More funding, for example, has been made available for national touring so that people around the country can see the performing arts in a number of locations.
My noble friend Lord Bernstein commented on the £25 million extra that was allocated to support regional theatre between 2002–03 and 2003–04. I believe that that is a most important development. As my noble friend Lord Bernstein said, I am sure that it is important that that extra money is well spent. It is not only a matter of cost-cutting; it is a matter of spending the existing money in a sensible way. I am sure that the noble Viscount, Lord Falkland, agrees that we should all share that aim.
I now return to the Arts Council's original proposals. As I am sure noble Lords are aware, they consisted of four themes aimed at reinforcing the regional agenda while, at the same time, saving money by reducing administrative costs and using that money for the arts. The proposals were, first, for the Arts Council to merge with the regional arts boards, creating regional offices of the Arts Council, and, secondly, at the same time, to align the regional offices with government offices and the RDAs. I believe that that certainly makes sense. The third proposal was to devote more money down to the new regional offices and give them a greater link with management at the centre. And, fourthly, the aim was to reduce that centre, saving money on administration overall. I want to stress that the aim of the Arts Council was to reduce substantially the number of staff working in the centre.
The Arts Council submitted its plans to my department in March. Keen to minimise any period of uncertainty that the proposals would be thought inevitably to involve, the Arts Council then announced that it intended to push through the changes by the end of April.
I am of course aware of the largely adverse reaction, especially from the RABs. I also recognise that a number of genuinely legitimate concerns have been raised in response to the announcement. Those focus mainly on how the proposals were drawn up and announced. Some questions have also been raised about the substance of what the Arts Council was proposing, in particular whether the proposals would mean greater decentralisation. I believe that the noble Viscount and the noble Lord, Lord Greaves, picked up that point.
Perhaps I may deal with each issue in turn. Concern has been expressed that the department did not play an active role in working with the Arts Council to formulate the proposals. I want to make clear at this point that there is nothing untoward about the Arts Council working out plans and then approaching my department. That is what we would have expected. It does not change the fact that whatever the Arts Council proposes will still require the eventual approval of the Secretary of State.
Concern was also expressed that the Arts Council could have consulted rather more widely before making an announcement. That has been very much
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reflected in this debate. With hindsight, I believe that the Arts Council now sees that it might have handled matters a little differently. However, by undertaking a more thorough consultation exercise on its revised proposals, it has demonstrated that it has learned important lessons from that first exercise. Therefore, I believe that I can say in response to one question from the noble Viscount, Lord Falkland, that the Arts Council is now committed to full consultation on its new proposals, and we shall ensure that it does so.
I move on to the question of extended consultation. For the sake of its employees and others who will be affected, neither the Arts Council nor the Government want to prolong the reorganisation process any longer than necessary. That would be unfortunate in that more time would be wasted and the savings in administrative costs which we have discussed would be delayed. It has taken away those proposals and entered into a longer and, in the case of the RABs, more formal period of consultation and negotiation. Incidentally, I am aware of the point raised about charity law. We are clear about the fact that RABs are both charities and companies limited by guarantee. That means that they will have to decide to hand over their assets to a new organisation.
The Arts Council spent the last few weeks engaging with RABs and the regional assemblies, RDAs and regional cultural consortia and it is due to issue its new prospectus quite soon.
I say to the noble Baroness, Lady Anelay, who raised this matter, that my right honourable friend the Secretary of State and I have seen representatives of the Arts Council and the RABs. We asked them to reconsider their positions and to see whether they could reach an agreement together. That is the right approach and it does not involve the Government laying down the law. The noble Baroness asked the Government not to be too interventionist in general. This is an example of the fact that it is far better if the arts organisations work together to resolve their differences.
The new prospectus is expected in the next couple of weeks and my right honourable friend the Secretary of State and I will discuss it with the Arts Council. I am sure that noble Lords appreciate that it would therefore not be appropriate for me to go into any more detail about what might or might not be included until we and the RABs have had a chance to see and consider the final report. However, the fact that I cannot comment on exactly what the new structure may be like does not mean that I cannot comment on what my right honourable friend Tessa Jowell and I will insist on in relation to the revised plans. Our approval of what the Arts Council comes up with is very much conditional on its being able to satisfy both of us that the plans will deliver the outcomes. I hope that I can rise to the noble Baroness's challenge and put some flesh on what she has so far read of my views.

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The central premise in relation to the Arts Council, which we continue broadly to support, has always been that what it proposes will deliver the administrative savings that would prove impossible to secure under the current structure and that it will at the same time succeed in delivering increased power and responsibility to the regions. Our approval of the revised proposals will also be conditional on the Arts Council being able to demonstrate several other points, including the fact that regional organisations within the new revised structure will have real power to spend money in light of regional priorities. I hope that that gives the reassurance that was sought by noble Lords on the Liberal Democrat Benches.
I emphasise that we do not envisage the Arts Council using the reorganisation as a means of reversing the general trend towards greater delegation of power and funding to the regions. If, when we see the proposals, we conclude that that is what the revised proposals amount to, we will simply not be able to give it our backing.
We will look at the levels of spending to be devolved to the regions, the ways in which decisions are taken and the influence of local people in that process. We accept the importance of local government in that regard and in relation to the way in which local representatives can influence the centre. We want to ensure that local distinctiveness will be preserved, with the involvement of local government, RDAs and the regional cultural consortia. It is important that all of those should be safeguarded.
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Again, perhaps I can say to the noble Lord, Lord Greaves, that the centre will grow smaller as real decisions are given to the regions if we have our way, which we intend to. The Arts Council will be expected to provide details of exactly how that will happen in practice. We also want to see the end of duplication in the system, to which my noble friend Lord Bernstein referred. So it will be clear that when artists or artistic organisations have contact with their regional offices or with the centre, they are able to connect with those responsible for making decisions. There must be an end to the confusion that most people accept exists in the current system.
We are absolutely determined that efficiencies that are being claimed for the changes will be realised to ensure that the money goes to the arts and not to administration. Finally, the new organisation will offer best value for money. We will not sanction anything until we have been reassured on all those points. Approval is dependent on their being Able to do that—I cannot emphasise that enough.
In conclusion, I recognise that there are still questions to be answered and assurances to be met. Once the revised proposals have been submitted, we will consider them carefully. We will not sign up to anything until the case for greater devolvement of power to the regions and administrative savings have been made. But, in the end, it is in all our interests for us to continue to work towards a structure that is acceptable and beneficial to the arts in England.
House adjourned at twenty-three minutes past eleven o'clock.