Lords Sitting of 15 March 2001

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

Developing Countries: Labour Standards
Baroness Whitakerasked Her Majesty's Government:
How they are helping to support International Labour Organisation core labour standards in developing countries.
Baroness Amos: My Lords, the Government support core labour standards in developing countries in a number of ways: through bilateral partnerships, for example, addressing child labour and bonded labour; through the private sector by supporting ethical trade and socially responsible business initiatives; and by supporting and strengthening the work of civil society organisations in developing countries. The Department for International Development also works directly with the ILO, providing help to implement the declaration on fundamental principles and rights at work which define core labour standards.
Baroness Whitaker: My Lords, I thank the Minister for that positive Answer. Is the noble Baroness aware that, for the first time in its 81-year history, the ILO has urged its members to take action in respect of Burma's use of forced labour, including alleged rape, beatings and sending porters out to test minefields? Can she further tell us what is the response of Her Majesty's Government to the ILO decision?
Baroness Amos: My Lords, I am aware of the ILO's decision. The Government have consistently taken a strong line in the ILO for action against Burma. We supported the decision of the international labour conference to invoke Article 33 of the constitution which, as my noble friend knows, was unprecedented in the ILO's history. It is a serious indictment of the Burmese Government's appalling human rights record. That government actively discourage UK business, other governments and international bodies from having direct contact with the Burmese regime.
Baroness Rawlings: My Lords, the majority of funding for the ILO comes from the Department for Education and Employment, but increasingly it is coming from DfID. Can the Minister tell the House why DfID is now paying more of the Government's share? Furthermore, can the Government be confident
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that the ILO directly contributes to a reduction in poverty as required under the International Development Bill?
Baroness Amos: My Lords, the noble Baroness, Lady Rawlings, is quite right. The Department for Education and Employment takes the lead responsibility for liaison with the International Labour Organisation. However, the noble Baroness will be aware that the Government have been working actively to integrate activities across a range of areas. Since 1997 the Department for International Development has committed over £9 million to the ILO, mainly for the elimination of child labour. We are discussing a further four-year partnership. I can assure the noble Baroness that these activities are entirely in line with our priority of eliminating poverty across the world.
Lord Peston: My Lords, I am pleased to hear the Minister's remarks about support for the ILO. Is my noble friend aware that what lies at the heart of the problem are countries which have an antipathy to multi-party democracy and to the working of free markets? If that changed then many activities of the ILO would no longer be necessary.
Baroness Amos: My Lords, my noble friend will be aware that in the Globalisation White Paper published by the Government at the end of last year, we did a very careful analysis of globalisation and the impact that markets would have on assisting the development of countries in the developing world. We are well aware that it is important to have strong economic as well as development activity, which is funded through organisations such as the Department for International Development, if we are to meet our targets with respect to eliminating world poverty.
Baroness Gardner of Parkes: My Lords, when the Minister mentions our wish to do away with child labour, does she appreciate that in many countries families rely upon the income from those children? How can she reconcile that and what can be done to help? She mentions that this money is intended for that purpose. How can it be used to reduce, or improve, at least, the conditions under which children work, even if it does not do away totally with child labour?
Baroness Amos: My Lords, we are working in a number of areas which address the issue that the noble Baroness has raised. Yes, we are aware of the difficulty that exists in a number of families where the unpaid or paid labour of children is absolutely essential for the survival of those families. We are working to ensure that the very worst forms of forced labour are eliminated. We are working through our bilateral programmes in a number of countries to try to improve the economic conditions of families through programmes such as micro-credit schemes. In our education programmes in a number of countries we

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are trying to improve the access and quality of basic and primary education. So that that will be another route out of poverty.
The Earl of Sandwich: My Lords, UN conventions are all very well, but there are many poor countries which simply do not have the apparatus in place for implementing such conventions, and sometimes not even to implement legislation. I speak from my experience in Nepal. Can the Minister confirm that her department is supporting non-governmental organisations, which are the only bodies sufficiently equipped to implement the conventions?
Baroness Amos: My Lords, the noble Earl, Lord Sandwich, is quite right. In a number of countries the appropriate infrastructure does not exist. The noble Earl will be aware that we are working on this matter through a number of agencies in Nepal and that we have made recommendations to the government of that country. I agree with the noble Earl that the role of NGOs is extremely important.
Lord Avebury: My Lords, can the Minister tell the House whether she is satisfied with the links established between the ILO and the United Nations Commission on Human Rights? For example, last year the ILO World Conference passed certain strictures on slavery in Sudan. How are such decisions fed into the proceedings of the UN Commission on Human Rights which are about to begin?
Baroness Amos: My Lords, we have been working extremely hard to ensure that all the different parts of the international system are well co-ordinated. Certainly, in the preparatory meetings which take place before the main meetings commence, relevant decisions which have been taken by, for example, the International Labour Organisation conference, would then be fed into a meeting relevant to the UN Commission on Human Rights. I can assure the noble Lord, Lord Avebury, that in all our dealings with the international system, we try to ensure that that co-ordination takes place. We do not want to see a number of different agencies working independently rather than joining together and pooling their resources.

Teenage Pregnancies
3.14 p.m.
Lord Hyltonasked Her Majesty's Government:
Whether they will study the progress made in the state of Illinois in reducing the incidence of teenage pregnancies, including Project Reality.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, our teenage pregnancy programme is based on evidence of what is likely to be most effective. We are aware of abstinence programmes in the United States,
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including Project Reality. However, a recent expert review found no robust evidence that these programmes are effective.
Lord Hylton: My Lords, I thank the noble Lord for that Answer. Is he aware that, not only in the state of Illinois but throughout the United States, young people are receiving the message that it is in their own interests to abstain from sexual relations until marriage? Has this not had a marked effect on reducing teenage pregnancies and abortions? Is there not a strong case for putting in place similar programmes in this country?
Lord Hunt of Kings Heath: My Lords, I have studied a paper produced by the Resource Centre for Adolescent Pregnancy Prevention in the United States. It undertook a review of the published studies in this area. The centre found that only a limited number of studies were sufficiently robust to stand up to analysis. Indeed, the only study sufficiently robust to enable a comparison to be made between one approach and another found that the programme did not delay adolescent sexual activity. Like many noble Lords, we are concerned about the level of teenage pregnancy in this country. An important part of our own programme is a strategy to help young people to resist having sex before they are ready. However, the strategy also involves helping teenagers to understand and avoid the risks of unprotected and uninformed sex. I believe that a rounded programme in this area is likely to be more effective.
Earl Howe: My Lords, does the Minister agree that, when a teenage girl finds that she is expecting a baby, it is important that she is able to gain access to advice about the options open to her? Can the Minister say whether the forthcoming Adoption Bill will contain measures to ensure that girls receive advice not simply about abortion, but also about the opportunities for adoption?
Lord Hunt of Kings Heath: My Lords, the noble Earl has raised an important point. I agree with him that young girls in that situation should have access to a range of advice so that they can make informed choices. I would wish to see that all is done to ensure that that is the case.
Baroness Blatch: My Lords, does the noble Lord agree that to offer so freely to girls who have become sexually active at such an early age the morning-after pill, either through school or over the counter at a local pharmacy, is a policy of despair?
Lord Hunt of Kings Heath: No, my Lords. We have debated this matter thoroughly and at length in your Lordships' House. The fact is that in the event that a young woman wishes to seek emergency contraception, the rules that have been approved by this House allow for professional advice to be given. Ultimately, faced with the prospect of an unwanted

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pregnancy and the availability of emergency contraception, I believe that such contraception should be made available.
The Earl of Listowel: My Lords, does the Minister agree that, in the efforts being made to delay adolescent sexual activity, everything possible should be done to improve the sense of self-esteem of young people through education, meaningful youth activity and so forth?
Lord Hunt of Kings Heath: Yes, my Lords, I could not agree more with the noble Earl. Such efforts should move alongside a rounded approach to sexual health and education. That is why the Teenage Pregnancy Strategy, developed by this Government, is very much concerned with taking a holistic view of these matters.
Baroness Gardner of Parkes: My Lords, can the Minister expand on his address to the Pharmaceutical Service's Association committee dinner, at which he was the guest speaker? He said that he would like all pharmacies to contain an area for private consultation. Can he reconcile that comment with his statement of a moment ago that opportunities for confidential consultation were already available?
Lord Hunt of Kings Heath: My Lords, I am not aware that I said that confidential booths were available in every pharmacy. However, it is certainly my hope that, with the introduction of local pharmaceutical services, we can put in place an incentive programme that will encourage community pharmacies to install private consultation areas. Having seen some community pharmacies introduce them, I am sure that that is the best way forward. It will enable us to Look to community pharmacists to give even more advice to the public.
Lord Rea: My Lords, has the Department of Health paid due attention to the sex education programmes in the Scandinavian countries and in the Netherlands, which have the lowest teenage pregnancy rates in Europe?
Lord Hunt of Kings Heath: Yes, my Lords. Another contrast between this country and the Scandinavian countries—perhaps I may mention the Netherlands in particular—
A noble Lord: That is not a Scandinavian country.
Lord Hunt of Kings Heath: My Lords, I was not allowed to take O-level geography—your Lordships will understand why! One point to note about countries that are more successful in this area is that they have had very proactive sex education programmes. Also—this is why I was about to raise the issue of the Netherlands—young people in some of those countries seem much more willing to discuss sex and health education matters with their parents. I am keen to see parents in this country encouraged to do
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the same. It is a great disappointment that the research suggests that fewer than a quarter of the young people in the UK talk with their mother about sexual relationships, and only 10 per cent with their father. It would be a jolly good thing if we could do better than that.

Iraq: Aerial Bombardment
3.21 p.m.
Lord Jenkins of Putneyasked Her Majesty's Government:
Whether they will refrain from taking part in further aerial bombardment of Iraq unless authorised by the United Nations.
The Minister of State, Ministry of Defence (Baroness Symons of Vernham Dean): My Lords, our position is unchanged. The no-fly zones were established in 1991 for the north and in 1992 for the south in support of UN SCR 688. They are justified under international law in response to a situation of overwhelming humanitarian necessity. Coalition pilots take action only in self-defence. If Iraq stopped trying to kill our pilots, there would be no further confrontation.
Lord Jenkins of Putney: My Lords, is my noble friend aware that we all share her hopes that confrontation of this sort will cease to be general? Unfortunately, however, it is a fact that a large number of civilians have been killed by aerial bombardment since 1945. I am glad to hear from my noble friend, if I understand her correctly, that this country will not be taking any further part in such proceedings.
Baroness Symons of Vernham Dean: My Lords, I really must disabuse my noble friend of his conclusion. We know that some of the claims made by Iraq in relation to civilian casualties are grossly exaggerated. It was recently claimed that there had been 30 civilian casualties when we were not dropping any ordnance at all; on some of those occasions coalition planes were not even flying.
Baroness Williams of Crosby: My Lords, from these Benches we have consistently supported the Government on the Iraqi sanctions policy and the no-fly zones. However, does the Minister consider that the time may have come for a reconsideration at least of the sanctions policy, in view of the fact that we are now seeing the authority of the United Nations being steadily undermined and there is growing support among moderate Arab leaders for Saddam Hussein, which is deeply regrettable? Is there any prospect of an inspection regime being re-mounted, given that since the beginning of last year there has been no inspection and there are troubling indications that Iraq may again be building up weapons of mass destruction?
Baroness Symons of Vernham Dean: My Lords, the noble Baroness is right when she stresses the importance of our pursuing the issue of weapons of

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mass destruction. The incoming United States administration is looking at the position in a number of respects. What we are all aiming to do is to ensure that weapons of mass destruction are kept as far away as possible from the Iraqi regime. That is what our major effort has to be aimed at. The noble Baroness is right when she talks about sanctions: at the same time as trying to tighten the control in relation to weapons of mass destruction, we constantly look for ways to lighten the burden of sanctions on ordinary Iraqis with whom we have no quarrel whatever.
When the regime in Iraq is able to import 38,000 bottles of whisky and 300 million cigarettes every month, it makes one wonder just how credible the claims are about sanctions being the problem rather than the regime.
Baroness Turner of Camden: My Lords, does my noble friend have any reliable information about civilian casualties in Iraq? There must have been some, because it is not possible to have a bombing campaign without inflicting some civilian casualties. Will she also tell the House why our EU partners seem unwilling to continue to support the action?
Baroness Symons of Vernham Dean: My Lords, I have no definitive figures to give to my noble friend. However, if I may, I shall send her a list of occasions when there have been claims about civilian casualties when we know those claims to have been palpably untrue. Of course, any military action is never without risk, and we are always deeply sorry about any civilian casualties. But I must stress, as I have done on a number of occasions in this House, that the bombing that takes place is the result of trying to defend our own pilots.
So far as concerns the EU, I hope that my noble friend will be pleased to know that the policy is discussed both bilaterally and within the framework of the EU. Since we had the opportunity of explaining why we undertook the bombing last month—that is, because we had come under attack more times in January than we had in the whole of last year—I think the degree of understanding has been very much greater.
Lord Howell of Guildford: My Lords, does the Minister agree that, while the Iraqi regime is piling up huge oil revenues and continuing to develop weapons of mass destruction, that same regime is cutting the daily food ration for the people of Iraq and cutting medical supplies all the time? Far from easing the pressures on Saddam Hussein and this dreadful regime, do we not need to devise new and better targeted pressures to counter his evil efforts, and to work closely with the American authorities who are developing new ideas in this field? Are we so working?
Baroness Symons of Vernham Dean: My Lords, as I indicated to the noble Baroness, Lady Williams, we are aware that the new administration is not so much reviewing but assessing the position, as any incoming
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administration is bound to do. Of course we are in close touch with our closest allies on this issue, as the noble Lord would expect us to be. However, we must look carefully at making sure that any changes are targeted at the weapons of mass destruction in the way he indicated. Perhaps I may remind those who say that sanctions are the problem that the sanctions are the same throughout Iraq, but in those parts of Iraq which are not controlled by Baghdad—I am thinking particularly of the Kurds in the north of Iraq—for example, school rolls are rising, as opposed to in the rest of the country where they are falling; health indicators are improving; and infant mortality rates are lower than before sanctions were imposed. I think those examples indicate that it is not the sanctions that are the problem; it is the hideous regime.
Lord Phillips of Sudbury: My Lords—
Lord Jenkins of Putney: My Lords, will my noble friend place a copy of the information in the Library?
The Lord Privy Seal (Baroness Jay of Paddington): My Lords, the point is often made that we do not allow enough time for the fourth Question. I think it would be appropriate if we moved on now.

Alcohol-related Attacks aboard Aircraft
3.29 p.m.
Viscount Falklandasked Her Majesty's Government:
How they propose to protect airline staff and the travelling public from the dangers of violent attacks resulting from alcohol abuse.
The Minister of State, Department of the Environment, Transport and the Regions (Lord Macdonald of Tradeston): My Lords, we have worked closely with airlines and the police in recent years. Airlines have taken steps to prevent intoxicated passengers boarding, to provide more information on the effects of alcohol at altitude and to limit the amount of alcohol served. The Government are considering legislation to strengthen existing police powers in dealing with drunkennness on aircraft, and are currently consulting on whether passengers should be able to drink their own alcohol on board aircraft.
Viscount Falkland: My Lords, I thank the Minister for that Answer. I had prepared a slightly different supplementary question because I thought that another Minister would be answering. However, as I was deputy chairman for some 10 years of the alcohol misuse body in Parliament, I am used to rather "dickering about" at the edges of alcohol abuse in our society. On this particular issue, does the Minister agree that there must be some kind of technology available that the airlines could use to screen either those who have an identifiable alcohol problem, or that small minority who travel and are prepared to abuse the freedoms that they enjoy, regardless of

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anyone else? Apart from separating passengers from their alcohol during the flight, which he mentioned, surely there is some way of screening such people before they board an aircraft. Most of the other passengers who experience such situations can easily identify those who should never be put on the flight in the first place.
Lord Macdonald of Tradeston: My Lords, there has been no active consideration of the possibility of breathalysing, passengers before they board an aircraft. However, in our air transportation consultation document, The Future of Aviation, we asked the industry for its views on whether there should be limitations on passengers drinking their own alcohol on board. We hope to have those views collected and in hand by 12th April.
Lord Graham of Edmonton: My Lords, can I draw the attention of my noble friend the Minister to the excellent report of our Select Committee into the incidence of deep-vein thrombosis, and the evidence that emerged showing that the free availability of alcohol on airlines could be a contributory cause? My noble friend says that the industry is actively considering limiting the amount of alcohol available. Will he also bear in mind that the Select Committee recommended that an inter-departmental committee—indeed, the Minister has mentioned it—should look into the whole situation? It is not merely a question of abuse; it is a question of airlines trying to make themselves more attractive to passengers than other carriers by providing free alcohol. That practice ought to stop.
Lord Macdonald of Tradeston: My Lords, I am sure that the House and, indeed, passengers in general are most grateful to my noble friend for the information that he has provided about his experience of DVT, and for bringing this very real problem to our attention. As he said, we have initiated a departmental committee and various actions to try to ensure that the issue is more thoroughly researched. I am delighted to say that the industry has also shown its commitment towards trying to obtain further and better particulars on the problem.
As to drinking alcohol, one of the steps that the industry has very readily taken is to provide more information to passengers on the effects of alcohol at altitude. Indeed, it has also agreed to try, where appropriate, to limit the amount of alcohol consumed.
Lord Brabazon of Tara: My Lords, can the Minister tell the House what response the Government gave to the report on Powers and Penalties for Offences on Aircraft and Aerodromes, which was produced by the UK Airport Police Commander's Group in January of last year? In particular, can be say what response has been given regarding its recommendation that drunkenness on aircraft should become an arrestable offence?
Lord Macdonald of Tradeston: My Lords, the proposals put forward have been taken very seriously
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indeed. We have under active consideration the possibility of UK legislation being extended from the present maximum of two years' imprisonment for endangering the safety of an aircraft to five years, which would make such behaviour an arrestable offence. Some other forms of dangerous activity are also under consideration. Noble Lords may remember that we announced in the Queen's Speech that a draft safety Bill would be produced which would provide the opportunity of including the kind of legislative change suggested by the noble Lord.
Lord Newby: My Lords, can the Minister say whether his department has been in touch with British Airways about the incident on 28th December, when an aircraft on its way to Nairobi was nearly plunged into a fatal course by the actions of a deranged passenger, to ascertain whether there are any lessons to be learnt from that occurrence that might be taken on board right across the industry?
Lord Macdonald of Tradeston: My Lords, we have discussed such matters with British Airways. Indeed, BA has been in close liaison with the Civil Aviation Authority, which is reviewing the circumstances in which the passenger boarded the aircraft. That review has not yet been completed, but it will be reported to Ministers. The CAA is also looking at the security of access to the flight deck on aircraft to ascertain whether it can be made more difficult for disruptive passengers to interfere with the flight of the aircraft. We understand that the Kenyan authorities have decided not to pursue the offender; he is considered to be mentally deranged. However, should he return to the United Kingdom, BA has said that it will prosecute.
Lord Geddes: My Lords, the Minister said that the result of the inquiry—if I may use that word—will be reported to Ministers. Can he say whether it will also be available to Members of your Lordships' House?
Lord Macdonald of Tradeston: My Lords, I shall certainly make every effort to ensure that that is the case.
Lord Avebury: My Lords, is the Minister aware of another relatively recent case where a stewardess was stabbed in the back by a man who had been drinking vodka on board the aircraft and who subsequently broke the bottle and used it as an offensive weapon? Where it is known that a person has been drinking before boarding the aircraft, does not the noble Lord think that there is a strong case for the introduction of measures to allow the passenger to be searched and for any alcohol found on him to be removed before he boards?
Lord Macdonald of Tradeston: Indeed, my Lords. We are very aware of the Fiona Weir case, which happened in October 1998. From that deeply unpleasant event, we developed the Disruptive Passengers Working Group in April 1999. This group

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put together the unified reporting scheme for air rage incidents. In its meeting with representatives from the industry, the police, and with government departments, it has been considering voluntary and legislative measures. Those are the kind of measures that the airlines have under consideration, certainly as regards additional vigilance over who gets on to an aircraft. No doubt the ability to search passengers would form part of that process.

Foot and Mouth Disease: Update
3.37 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Hayman): My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Minister for Agriculture. The Statement is as follows:
"I want to update the House on the latest position with regard to the foot and mouth disease outbreak. I also want to set out how the Government are taking forward disease control measures given our increased knowledge about how the disease has spread.
"At 1 p.m. today there have been 240 confirmed cases in the United Kingdom: 205,000 animals have been condemned for destruction, of which more than three quarters have already been slaughtered. This is out of a total UK cattle, sheep and pig population of more than 55 million.
"Out of 160,000 livestock farms throughout the United Kingdom, 1,200 have been placed under restriction because of a confirmed or suspected case of the disease. We have been able to lift restrictions on over 660 of these farms, leaving less than 550 farms still restricted.
"This is a devastating disease for farming and for rural communities affected. I want to express my deepest sympathy for those farmers who have lost their herds and flocks, and to the wider farming communities who are going through a time of terrible uncertainty and distress.
"I was also sorry to learn of a confirmed case in France earlier in the week. As far as I understand it, there have been no further cases on the Continent. We have stayed in close contact with the European Commission and other European countries' veterinary authorities. They have all strongly supported the firm action taken in the UK to control the disease and prevent its spread.
"From the outset the Government have put firm disease control measures rapidly in place. Every action that has been taken is on the advice of the Chief Veterinary Officer.
"Each day we have learned more about the outbreak. Epidemiological investigations—and the incubation of disease in livestock—have revealed
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the mechanisms by which the disease has spread. As our understanding has increased, I have shared new information with the House through daily briefings.
"The disease has spread mainly through movements of sheep and subsequent mixing of animals at a small number of livestock markets. It is important to stress that the vast majority of disease spread around the country took place before 20th February when the outbreak was first discovered in Essex.
"With increased knowledge about how the disease has spread, the Government have been able to refine disease control measures. In the infected areas the Government have intensified controls. Where possible we have allowed movement, for example, to allow licensed movements to slaughter and short movements for welfare reasons.
"The Government are working to five key disease control aims: first, to keep free of disease those areas of the country that are disease free; secondly, to halt the deterioration of the disease situation in Devon; thirdly, to stop the spread of the disease in the north of England and south-west Scotland—we are increasingly seeing localised spread from sheep flock to sheep flock in Scotland and from cattle to cattle in Cumbria—fourthly, to minimise the spread of the disease from Longtown, Welshpool and Northampton markets, where it has been identified that infection has been present; and fifthly, to eliminate infection in flocks that have passed through dealers known to have handled infected flocks. And, of course, we shall keep this strategy under constant review.
"Taking each of these issues in turn, I shall set out the action the Government are taking. First, in areas that are currently disease free, we shall be establishing a new type of controlled area within which we hope eventually to allow a more normal level of activity both in agriculture and the rural community. But in the short term the priority will be to avoid the risk of importing the disease into these clean areas by movements of animals from areas where there is infection. In addition we shall be identifying any high risk movements of sheep which took place before 23rd February. These sheep will be destroyed to ensure that any possibility of infection is removed.
"Secondly, in Devon the disease has been spreading from farm to farm due to the nature of agriculture with lots of small farms, dense animal populations, movements of people and equipment. The strategy here will be to have an intensive patrol to all farms within three kilometres of the infected farm. Each farm will be visited and inspected by veterinary or trained lay staff to ensure that cases of foot and mouth disease are identified as soon as possible to prevent onward spread.
"Thirdly, the large focus on infection in the north of England and southern Scotland has been mostly concentrated in the sheep flock although there is now cattle to cattle spread in Cumbria. There are a considerable number of cases in this area with the

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potential for rapid spread to adjacent farms and even further afield. In this case we must still ensure that infected animals are removed as quickly as possible and in order to do this it will be necessary to destroy animals within the three kilometre zones on a precautionary basis.
"Fourthly, we now have clear evidence that sheep from the markets in the Welshpool, Northampton and Longtown areas were exposed to disease and there is reason to suspect that, with the passage of time, numbers of flocks into which these sheep were imported may become infected. These flocks will be removed as dangerous contacts. Fifthly, the same approach will be taken to sheep handled during the high risk period by two major dealers who have been associated with the movements of infected sheep.
"This is a policy of safety first. We are intensifying the slaughter of animals at risk in the areas of the country—thankfully still limited—where the disease has spread. And then, provided that the other areas remain disease free, we can, over the next week to 10 days, consider modifying restrictions in the areas that have remained clean.
"We are deeply conscious of the animal welfare problems that have been posed by the movement restrictions that we have had to put in place for disease control reasons. We made arrangements last week for a number of local licensed movements, which will, I hope, have alleviated a proportion of these problems. We were not, however, then able to provide for longer distance movements of animals caught in the wrong place, for example, sheep that are "on tack" on dairy farms in England. I shall be publishing later today the principles of a scheme for moving such animals, necessarily under very tight restrictions. The general principle will be that animals can be moved within a presently controlled area, or within the currently disease free areas, or into an area of higher disease risk, but not the other way around. It is my intention that farmers will be able to apply for licences for such movement over the weekend.
"These arrangements will not, of course, be able to deal with all the welfare problems which animals are facing. Some animals will be unable to move because of their condition; others will be unable to move because they are in infected areas. Where animal welfare problems cannot be alleviated by local action, by which I mean husbandry action, we shall be putting in place arrangements for their disposal at public expense. This scheme will apply across the United Kingdom. Payments will be made for such animals, broadly on the lines of those adopted by the Government in East Anglia last autumn for the pig welfare disposal scheme.
"I should emphasise that this is a voluntary scheme. It will be for individual farmers to decide whether to offer livestock to the scheme. Acceptances will depend upon certification by a vet that a welfare problem exists or is about to emerge.
"The licence to slaughter scheme introduced on 2nd March has allowed the meat trade to begin operating again, although on a necessarily limited
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basis. The latest estimate of the Meat and Livestock Commission is that the pig sector is back to 78 per cent of normal production, beef is at 68 per cent and lamb is at 30 per cent of normal production. Veterinary advice does not recommend the setting up a system of collection centres, although I have to tell the House that the option is being kept under review.
"The control of foot and mouth disease is a major logistical exercise. In this task we are drawing on the expertise of many public sector organisations, particularly those with field organisations or specialist knowledge and expertise including the Ministry of Defence, the Environment Agency, the Meat and Livestock Commission and my ministry's own agencies. The Ministry of Defence is deploying a logistic planning team, drawn from Land Command, to provide advice on the planning and management of my ministry's and other civil resources. We have also been offered support from a wider range of private organisations. In addition there has been international support, particularly in the provision of veterinary staff to help with the disease control programme. I am enormously grateful for all of this support.
"Disease control measures have had a major impact on non-farm businesses in rural areas, and in particular the tourism industry. Yesterday my right honourable friend the Secretary of State for Culture, Media and Sport explained to the House what the Government are doing to help those sectors.
"A new task force has met to take this work forward. My right honourable friend the Minister for the Environment will make further announcements next week. My ministry will continue to provide targeted advice and guidance from the Chief Veterinary Officer on the risks associated with a range of activities in the countryside.
"Movement control measures in place are keeping the spread of the disease to an absolute minimum. Slaughtering out of infected farms and dangerous contacts is bearing down on the disease where it exists. An intensified slaughter policy in respect of animals thought to be at risk of developing the disease will, of course, add to this effort. As further cases emerge we shall learn more about the way the outbreak has developed, and this will inform any further refinements of the control policy as necessary. And of course I shall continue to keep the House informed.
"Foot and mouth disease is a personal tragedy for those affected, and a body blow to the livestock industry as a whole. Again, I express the Government's deepest sympathy for those affected; I also want to express my support and appreciation of the State Veterinary Service, the farming organisations and all those others who are involved in combating the disease and dealing with its consequences. I continue to appeal to the public for their co-operation. It is important to remember that the key risk is contact with susceptible livestock, The

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precautionary measures should be focused on bearing down on that risk. There is no need to bring all aspects of rural activity to a standstill. So while the disease is still with us I renew my appeal to the public to avoid unnecessary visits to livestock farms, and where visits are unavoidable, to take the precautions advised.
"I am grateful for the support of the House for the Government's actions. It is important that we set aside party politics in dealing with this outbreak. If the whole country works together and works constructively then we shall get through this".
My Lords, that concludes the Statement.
3.50 p.m.
Baroness Byford: My Lords, I am grateful to the Minister for repeating the Statement. We should like to record our thanks for her work in the long debate on Tuesday when she listened to our many concerns and responded so well to questions that we posed. We express our gratitude to the vets, the officials, farming organisations, local authority workers and everyone who is busy working out there on the front line. We express our deepest sympathy to all farmers who are struggling and having the distressing experience of seeing their animals slaughtered. I acknowledge the difficulties being suffered by many people, other than farmers, who are living in rural areas and who have a variety of businesses facing very difficult financial circumstances at this time. We are all involved in this dreadful disaster. We support the Government in the efforts that they are making.
I have seven questions for the Minister. We are particularly pleased to hear that the Government are adopting a scheme similar to the pig welfare disposal scheme which I know will be across all species; it is not just for pigs. First, what percentage of market value is the Government estimating giving to farmers who voluntarily put their animals in for slaughter?
Secondly, on the question of burial of livestock there are conflicting views. In some areas it is possible to bury livestock, but there are some areas where the water course is at an undue high state and obviously those areas are unsuitable for burying. Is it anticipated that livestock will be buried on individual farms, or is the Ministry looking to have sites in the locality to which animals could be taken for burial in large numbers? The 1967 report recommended burial as one form of coping with the disposal of carcasses rather than burning. I would be grateful for greater clarification.
Thirdly, the Government have indicated that they are taking on extra help, particularly from the Army, in respect of slaughter and acceleration of disposal of carcasses. Is the Minister satisfied because, sadly, since the first Statement in this House the number of cases has doubled—we are up to 240? Has the Minister enough available help in whatever form, either through the Ministry or private means?
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Fourthly, I turn to the veterinary inspection. When a vet is reasonably suspicious of a foot and mouth case does it need a MAFF vet to confirm it or can the vet on site at that moment declare it as such, and therefore slaughtering can go ahead? One or two of the criticisms have been that there has been a delay. The Minister will understand that if the vet on duty is unable to clarify that, and they wait for another vet, it does take time. Is there to be greater use of trainee vets, and I refer also to the use of hunt servants about whom we spoke previously?
Fifthly, during the debate on Tuesday the Minister mentioned that the banks and the Government were to meet yesterday. Although it is not in the Statement today, can the Minister give an up-date on any information that would give help to those farmers who have a dreadful cash flow and cannot see where they are going? Would the Government consider giving help to them in the meantime?
Sixthly, I turn to the question of movement. There is great concern among the farming community and the wider community about the movement of slaughtered animals to rendering plants. I understand the advantages of using rendering plants. It is a real concern for people out there. They are concerned that those vehicles used should be completely sealed so that there is no risk of an infected vehicle going through a non-infected area and passing on infection.
Seventhly, I turn to infectivity. I understood that Nick Brown said that infectivity could be for a longer period than two weeks. Until now we understood that infectivity was anything from three days and up to two weeks. I should be grateful for clarification on that. There are other questions that Members will want to ask. I should like to give the Minister plenty of time to answer the questions that I have posed. I thank the Minister for her hard work and the way in which she has come back to the House and kept us informed.
3.56 p.m.
Baroness Miller of Chilthorne Domer: My Lords, from these Benches we add our sympathy to the great number of farmers who have been affected and the other rural businesses. Since our debate on Tuesday there has been the sad news of the first farming suicide directly linked to this situation. We join with the comments of appreciation for the hard work of MAFF officials, other workers and local authority staff, some of whom have been hardly sleeping. They have been working all the hours that they possibly can. We welcome the announcement by the Minister of a policy of eradicating any sheep from suspected markets. We agree thoroughly with the policy of trying to get ahead of the disease as best as it can be done. Can the Minister clarify that where there is an unconfirmed suspicion of disease on a farm there will be a decision taken to slaughter rather than to wait any longer for that negative result?
Devon is an area of very small farms. Small farmers will have less income or no income to cushion themselves from the results of this problem. Will the DSS send out guidelines to farmers to inform them of

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their entitlements so that they do not have the burden of making what can sometimes be very lengthy inquiries? Can the DSS produce a standard form in consultation with MAFF? Has the Minister had discussions with colleagues about the use of disinfectant regarding people coming from the infected area of France to Britain? Clearly, that is an issue.
I hesitate to ask the Minister whether she feels that the Government's message to the public about visiting the countryside is clear enough. I listened carefully to what the Minister for the Environment, Michael Meacher, said when interviewed. It did not seem to me that there was a very clear message and that some disease free areas and other areas could be visited. I was in the South West yesterday and people are desperate that the public are not encouraged to visit unnecessarily. It seems to me that that message is still somewhat confused by those who are concerned about tourist attractions losing their business—and I thoroughly sympathises with those people—but the name of the game, as the Minister indicated, is to eradicate the disease. There must be a clear message of no visiting and no movement that is unnecessary. If the result of that is consequential compensation for areas heavily tourist dependent then that is something that the Government need to consider.
Finally, I thank the Minister for her tremendous commitment in answering questions in this House and for her hard work outside the House.
4 p.m.
Baroness Hayman: My Lords, I am grateful for the support of both noble Baronesses, in particular for the staff who have been working tremendously long hours. For obvious reasons, they tend to be criticised if and when something goes wrong while they are doing in the main a tremendously good job under enormous pressure and changing circumstances.
I deal, first, with the questions raised by the noble Baroness, Lady Byford. We are working on the details of the welfare disposal scheme. We shall make them public. It is not a substitute market; it is a welfare disposal scheme. It will be broadly based on the pig welfare disposal scheme. If the noble Baroness will forgive me, I shall not cite exact numbers or proportions at this time. We shall make those available. For some people there will be commercial decisions about whether to go into the scheme.
Burial has always been an option on individual farms. It has not been taken up to the extent that it was in 1967 for two reasons. The first is the increased concern about environmental effects. Burial has to be checked with the Environment Agency in terms of the effect on water courses. The water table being so high this year has ruled out burial in some circumstances. Equally, we have been dealing with larger numbers of animals per farm than in 1967. There is a possibility of landfill sites being used rather than on-farm burial. We are investigating those urgently and hope to make an announcement about potential landfill sites for burial.
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The Statement gave the number of organisations, civil and military, which are providing support. The noble Baroness is right that it is an enormous logistical task. We have had a great deal of help already. More is coming in all the time. I hope that the logistical support team will identify in particular where additional resources are most necessary and will free up some veterinary resource which is the most difficult to access immediately because of the need for training. The noble Baroness also asked about trainee vets We are considering the possibility of using veterinary college students in their final or penultimate year to undertake some of the work, perhaps in Devon, involving regular visiting and patrolling of farms. Other lay people could also be trained for such tasks.
I do not believe that diagnosis is being held up in relation to laboratory results. In the vast majority of cases—the Chief Veterinary Officer told me today that it is about 80 per cent—diagnosis is made when the vet on the farm telephones headquarters. If they are satisfied from the description of the clinical signs that there is disease, it is confirmed there and then without waiting for laboratory results. Arrangements are then made for slaughter on-farm at the earliest possible opportunity. All noble Lords understand why it is important that the subsequent disposal is done quickly.
When I said recently that we were meeting the banks "tomorrow" there was a slight irony in my voice; I said it just after midnight so it was already Wednesday. The meeting should have started five minutes ago. We shall have further talks with the banks after their initial response to try to make some assistance available to their farming customers.
Perhaps I may give further reassurance on the movement to rendering plants. I know that there has been concern, particularly when there has been movement through areas of the country without infection. Despite the pressure to bring rendering plants on-stream early, such movement was not started before the CVO had reassured himself that the risks had been totally minimised. That is because one is dealing with corpses rather than live animals; they will have been sprayed with disinfectant; the lorries are adequately sealed; and there is a disinfectant regime after the rendering plants. Another rendering plant in the South West has now come on-stream. We hope to announce two more in due course.
On infectivity—I note that the noble Lord, Lord Soulsby, is in his place; he will tell me if I get this wrong—there are two issues. First, there is the period of time during which an animal may be infectious, some of which is before it shows clinical signs. The height of infectivity is in the early stages of clinical signs. There will be a tail-off of infectivity. That period may be about seven days. Secondly, the noble Baroness asked about the two-week period. The normal parameters for the incubation period are three to 14 days. But in the first case—the pigs were very close together and highly infected—we saw signs in 36 hours. Just as the period can be shorter, I believe that

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it can also be longer. I understand that three to 14 days would be the text-book description of the incubation period for symptoms.
The noble Baroness, Lady Miller of Chilthorne Domer, asked me about disease and identification and the wait for negative results. I understand what she says. Those are based not only on the clinical symptoms but also on the epidemiology. The noble Baroness will understand that the veterinary judgment about a suspect case in Devon in the centre of an infected area may be speedier than that for a new, suspect case in a totally clean area when people will want to assure themselves that they are dealing with a case of foot and mouth disease—in particular if we are dealing with sheep when it could be orf or something else. But I am sure that there is no undue delay.
The noble Baroness rightly points out the need for the Department of Social Security to offer guidelines on benefits. It has already taken action on that, as has the Inland Revenue, with its local offices, in terms of the working families' tax credit. I take on board her suggestion about giving information directly to farmers and those in allied industries who are also being laid off temporarily.
Controls were put on the movements from the area of France where the disease has been identified. I take on board her point about disinfectant.
As regards advice on visiting the countryside, I agree with the noble Baroness. I think that there have been different interpretations of the veterinary risk and the advice available. We are trying to clarify that advice. I understand what the noble Baroness says about those in the South West who are desperate not to see the slightest risk of spreading disease. Equally, people in the South West who are dependent on tourism, while desperate not to spread the disease, are concerned about unnecessarily compromising wider parts of the rural economy. We are not dealing only with the rural economy. There are reports of cancellations by visitors from overseas to London. We must have a proportionate response. We can do that best by promulgating clear advice about the veterinary risks. That is one of the first tasks of the working party. I hope that it will be completed at the end of this week.
4.10 p.m.
Lord Dean of Harptree: My Lords, I well remember that donkey's years ago, when I was a young boy, my father experienced an outbreak of foot and mouth in Cheshire. I warmly congratulate the Minister and her department on their rapid response to this disease. Unhappily, we now have a secondary outbreak that includes Somerset and other parts of the country. I have a more important and, I hope, helpful point for the Minister. I hope that she agrees that, disastrous though the loss of animals is for those concerned, the number involved is only a small proportion of our national stocks and herds. We hope that the outbreak
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will be over within a few weeks or months. We should then still have supreme confidence in the quality of our pedigree herds.
Baroness Hayman: My Lords, the noble Lord is right. We should in no way diminish the seriousness of the outbreak, but it has affected a tiny proportion of the livestock and livestock farmers in the country—less than 1 per cent of each. Even with the significant measures we have announced today, there will be a substantial high-quality industry to rebuild in the future.
The Lord Bishop of Hereford: My Lords, I associate myself with all the tributes that have been paid to the Minister for her work and to those who are trying to cope with this dreadful disease and all its effects. There undoubtedly have been delays and problems. We all understand that they are due mainly to the amazing geographical spread of the disease and the dreadful rapidity with which it developed. I have two points to make. First, I am grateful to His Royal Highness the Prince of Wales for his remarkable gift to the agricultural charities. I am sure that your Lordships want that to be recognised in this House and an expression of thanks to be conveyed to His Royal Highness. I appeal to those individuals and organisations who have it in their means to follow his example, even if not with equal generosity, by supporting the work of the charities that are doing such remarkable work at the moment helping to sustain the farming community.
The Minister has helpfully set out the Government's plans for allowing—or hoping to allow—some greater freedom of movement. I should like to press the point about farmers who have in-lamb ewes far from their farms. Many of them wish with desperate urgency to enable those ewes to come back to where the lambing needs to take place. In areas that are completely free of infection, such as west Wales or Sussex, is it not possible for movements of 20, 30 or 40 miles to be authorised with immediate effect, provided the transport is done with proper care and precaution? That very urgent need cannot wait even until next week.
Baroness Hayman: My Lords, I echo the comments of the right reverend Prelate on his first point and acknowledge the work that is being done by all the voluntary organisations, particularly those who are giving not only financial but emotional support and counselling to affected families. I take on board the urgency of some of the welfare movements, particularly for in-lamb ewes. The circumstances that the right reverend Prelate described would be covered by the welfare scheme that we are working out. I cannot offer him immediate implementation of part of that scheme only because we have to be certain all the time that we do not spread the disease. That means that when we implement a new scheme, particularly for long-distance movements, we have to have in place

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the regulations for licensing and assessment by a veterinary authority that these are the right things to do. I promise that we shall do it as speedily as we can.
Lord Hoyle: My Lords, I thank my noble friend for the work she has done inside and outside the House. All our sympathies go out to the wider farming community. Following on the point about pregnant ewes, is it not possible to help farmers who have to lamb in the open by providing finance for temporary buildings to reduce their losses?
Baroness Hayman: My Lords, we have given advice on how to minimise loss when ewes have to lamb away from home. I shall look into the issue of financial support that my noble friend has raised.
Viscount Bledisloe: My Lords, I declare an interest. My family has a dairy farm in west Gloucestershire with a number of outbreaks distressingly close to it. My question sounds very gloomy, particularly in view of the point that the Minister made that the percentage of the national herd so far infected is very small. However, I am frequently asked the question. I do not in any way want to call the Government's present policy of slaughter into question. But at what stage in a worst case scenario do they contemplate abandoning it? Presumably, they do not contemplate slaughtering the last but one herd in England to preserve the last herd. If the outbreaks continue to spread and we have a genuine worst case scenario, at what point does it become impossible or undesirable to maintain the slaughter policy?
Baroness Hayman: My Lords, I shall follow the advice of the Chief Veterinary Officer, which is not to make predictions and not to deal with hypothetical situations. I assure the noble Viscount that we are looking at contingencies and adapting policy as the situation progresses. We have not yet reached the stage that he describes and I hope that we shall not do so.
Lord Soulsby of Swaffham Prior: My Lords, does the Minister agree that one of the problems of deciding to move apparently healthy animals is that they can have the virus before it is clinically apparent? That is one of the great difficulties of contact between animals. If they are moved too quickly, they may move the infection before they are seen to have foot and mouth disease. Does the Minister have any new information on the origin of the present virus and how it got into this country? After this is all over—or maybe while it is still going on—can we have a method of alerting international travellers that we do not permit fresh meat and meat products to come into this country? We should make it an offence to import such products without permission, as is the case in the United States. Those of us who have visited the United States know that one has to make a declaration on the customs form. Could there be a similar declaration for visitors coming to this country?
Baroness Hayman: My Lords, I am grateful to the noble Lord. We have no further information on the
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cause of what we believe to be the initial outbreak, but there is no change in the view that the first case was at the pig farm at Heddon-on-the-Wall. No older incidence of the disease has been identified. The noble Lord is right to point out that we need to look closely not only at the regulatory framework, which is tightly drawn for commercial and personal imports from areas that have the disease, but at the enforcement of that framework. That work has already been commissioned and will be undertaken. We are fighting the disease.
Lord Graham of Edmonton: My Lords, I am sure that the Minister has taken heart from the understanding that has flowed towards her from around the House, especially from those who live in communities that are suffering dreadfully. I do not know of any man, woman or child in the whole country, including those of us who live in urban areas and do not have contact with the problem, who does not share the agony that has been suffered particularly by those who live in farming communities. Will she accept our enormous gratitude for the attitude that she and her ministerial colleagues in the Government have displayed? As far as I am concerned, taxpayers pay their taxes to deal with a national crisis. If the Minister wants reassurance that that is what is required to help to solve the problem, I am sure that the House and the whole country would be more generous in supporting her.
Baroness Hayman: My Lords, I am grateful for my noble friend's comments. The denial of access to the countryside has made people who do not live there even more aware of how much we are one nation in this response. In terms of resources, there has certainly been no constraint on the Chief Veterinary Officer with regard to what he needs to do or what he recommends in fighting the disease.
Lord Monro of Langholm: My Lords, in thanking the Minister for all her efforts in recent weeks, I take it that everything she has said today about the regulations applies to Scotland as well as to England. Although I cannot go to my home in Dumfries, I am assured by everyone there that the area is devastated. They have put forward three key issues. They have asked, first, when they may hear something about financial help to farmers over and above the £160 million of agrimoney that they are owed anyway; secondly, when financial help will be made available for tourism, which is at an absolute full stop; and, thirdly, subject to what has happened following the Lockerbie air disaster, whether the Government propose to provide financial help to the local authority for all the most effective extra work that it is presently doing to keep the disease away from the area.
Baroness Hayman: My Lords, we are well aware that local authorities are incurring extra costs as a result of the issuing of licences and the patrolling of movement restrictions. That will be borne in mind in the assessment of claims for compensation and for support and aid that are being made. As the noble

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Lord is aware, we have brought forward £156 million of agrimonetary compensation. Farmers are compensated in full for the value of destroyed herds. I know that, over and above that, there are still concerns about financial consequences, but I believe that the House recognises how wide they go and how difficult it is to assess where one can draw any particular line.
The Countess of Mar: My Lords, anyone visiting the MAFF website will be struck by the number of cases that have arisen from two dealers. I should like to ask the Minister, first, whether the delay in tracing some of those cases has been due to ill-kept records. Every animal keeper is required to keep an animal movements book, and I know that many dealers have difficulty keeping records. Will the Minister tell us to what extent the failure to keep proper records has caused the delay?
Secondly—I regret that I have not given the Minister notice of this—it has been reported in the press that private veterinary practices are refusing to help the MAFF vets because of the fees that MAFF is offering. I observe that everybody in the farming community and in the country is making sacrifices left, right and centre. It might be helpful if the vets could also make such sacrifices.
Baroness Hayman: My Lords, with regard to the latter point, I am sure that the veterinary associations will note what the noble Countess has said. We have had a very good response. The size of the State Veterinary Service has effectively doubled during the present outbreak as a result of temporary veterinary inspectors coming in to assist. I know that discussion is taking place about the level of fees.
With regard to the issue of recordkeeping, almost by definition, one cannot be aware of non-existent, or sometimes bad, recordkeeping. The main problem has occurred at markets where out-of-ring transactions have taken place. Clear records exist of transactions that take place under the auspices of auctioneers and valuers. In the case of out-of-ring transactions, although both the purchaser and the vendor may have kept their own appropriate movement records, no central list is available, which has undoubtedly created tracing difficulties.
Lord Williams of Elvel: My Lords, returning to the question of the right reverend Prelate the Bishop of Hereford, will my noble friend tell me a little more about the movement of pregnant ewes in infected areas? I understand what is to happen in areas that are not infected. I hate to return again to the problem in Radnor, but some farmers there cannot move their pregnant ewes one mile to a field in their own ownership, and that is causing a certain amount of stress. I should be grateful if my noble friend would assure me that there will be some flexibility in that regard.
Baroness Hayman: My Lords, I can assure my noble friend that we shall do everything possible to facilitate
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movements which do not increase disease risk. Until now, we have allowed very short movements in infected areas. Under the new scheme that we propose to put into effect, it may be possible to allow longer movements. The difficulty occurs in allowing any movement from an infected area into an area that is currently clean, which will be the case when some ewes need to return to west Wales, which is clean, from the South West, where there is infection. However, we should be able to solve the problems that exist in infected areas.
Lord Palmer: My Lords, may I ask the Minister whether she is completely convinced that her department is right in not telling the horse racing industry that horse racing should for the moment be completely banned?
Baroness Hayman: My Lords, I am convinced that my department's responsibility is to give veterinary risk-assessment advice. We have taken very firm action to ban the highest risk; namely, the movement of susceptible livestock. We have taken action to provide veterinary advice, whether to associations of walkers, to the horse racing board or to tourism, about the risk assessment. We cannot take decisions in respect of every activity or sporting event. On veterinary advice, we have to ensure that if there is no argument for banning an event, we allow the risk-minimisation and risk-management advice to be given, on which people will take their own decisions.
Lord Marlesford: My Lords, I have to declare an interest as a dairy farmer in Suffolk—a county which to my knowledge, thank God, has not yet been affected. Despite the good work being done by the Minster's department, there is, as she probably knows, increasing criticism of the length of time taken to dispose of corpses. Will the Minister consider handing over that responsibility to the Army, especially to the Royal Engineers, who have the equipment, the ability and the discipline to deal with it? This morning I talked to two Cumbrian farmers who are very worried that the disease may be spread by carrion, birds, foxes and rats from corpses that may take four or five days to dispose of.
Baroness Hayman: My Lords, I take the noble Lord's point about the importance of ensuring a speedy destruction of corpses. We shall take advice from the logistical unit of the Ministry of Defence as to the best mechanism for achieving that, whether it be by a private contractor or the Army. As I said on Tuesday, I quite understand the distress that is caused by the problem. In terms of disease control, however, the priority is the slaughter of the animals. Following slaughter, the animals cannot exhale the virus, they are sprayed with disinfectant and their decomposition changes the pH levels in the meat. The risk of transmission of the disease is therefore minimised to

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an insignificant level. However, we recognise that the disposal of corpses is still enormously distressing, and we want to deal with it as quickly as possible.
The Earl of Caithness: My Lords, I believe that there is confusion in some people's minds about the contradiction between allowing stock to remain on a farm once it is dead, which the Minister told us on Tuesday was acceptable because of the minimal risk, and transporting the same stock to a rendering plant with the significantly greater protection of disinfection and containment in a sealed lorry. If stock has to go through that amount of additional protection, why is it still safe to leave it on a farm for days after its death?
Baroness Hayman: My Lords, we need to understand the distances with which we are dealing and the amount of movement involved. We also need to understand that, in some cases, as has been pointed out, lorries are being taken through non-infected areas. Rightly, everyone wants to ensure that our approach in that respect is as precautionary as possible. That is why we are taking precautions in relation to lorries.
Equally, we need to ensure the rapid disposal of animals on farms, and we are doing everything that we can to speed that up. I was simply trying to explain to the House that the risks of animals remaining on farms after slaughter are much lower than those of having diseased live animals on farms. We do not want any risk at all and we are doing everything to speed up disposal.

Criminal Justice and Police Bill
Brought from the Commons; read a first time, and to be printed.

Private Security Industry Bill [H.L.]
4.31 p.m.
Read a third time.
Clause 3 [Conduct prohibited without a licence]:
Lord Thomas of Gresford Lord Thomas of Gresford moved Amendment No. 1:
Page 3, line 46, at end insert ("; or
("( ) he is required in the course of his employment to engage in licensable conduct falling within paragraph (b)").
The noble Lord said: My Lords, I must apologise for returning once again to the question of in-house employees and, in particular, to whether they should be licensed under the provisions of this Bill.
I do so for a number of reasons. First, I have been sent some correspondence between Mr Ian Goswell, who describes himself as "of the private security industry authority"—interestingly enough, because we have not set up that organisation—and the business law committee of accountants, I believe. In that e-mail, dated 23rd February last, he deals with the issue of students and those who are under secondment to accountancy firms. He says that the licensing
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requirement applies only to those whose main employment is concerned with the activities listed in Schedule 2 and as supplied under contract. Students or secondees employed by an accountancy firm would be in-house employees and would not, therefore, require a licence.
To my mind, that indicates a fundamental misunderstanding of the term "in-house employee". That expression would be correct only if, in the context in which it was being written, a student or secondee carried out private investigations for those who employed him; in other words, for the accountancy firm itself. Just as a doorkeeper is an in-house employee when he works for the firm that employs him, so a private investigator can be described as "in-house" only if he is engaged to investigate for the accountancy firm itself. However, as soon as clients enter into the equation—I imagine that that is the purpose of this correspondence—such people would cease to be in-house employees. I should like the Minister to consider whether the people within his department who are engaged with this Bill have dealt with the concept correctly.
I turn to the second reason why I raise this issue again. The Minister will recall that at Second Reading I indicated my opposition and the opposition of my party to the use of private security firms in carrying out police activities. Indeed, the noble Lord was kind enough to give assurances both to me and to the noble Lord, Lord Cope, that this was not a precursor to privatisation within the police service. He said:
"That is not our intention in bringing forward the Bill. We have no great desire to contract out core police tasks. We believe that the police service is properly in the public sector. As many of your Lordships will know, we have spent extra resources and put more money into the police service. We want to shore it up. We do not want to hack away at it for fundamentals".—[Offical Report, 18/ 12/00; col. 600.]
That was followed by the publication of the White Paper, Criminal Justice: The Way Ahead. In paragraph 3.158 of that paper it was indicated that experiments were to take place with the private security industry in carrying out core police functions. The White Paper states:
"The private security industry will be subject to regulation under the Private Security Bill now before Parliament".
Therefore, when the White Paper was written, the contents of this Bill were clearly before the authors' minds.
"But",
it says,
"no attempts have been made to link the overall contribution to public safety made by different bodies in a local area. The Government believes that there is scope for some evaluated schemes to determine the effect on public reassurance of the police accrediting and coordinating a range of independent bodies to work in conjunction with them in delivering community safety.
"This might best be organised as a crime and disorder partnership initiative. Staff working on such schemes would be deployed to meet particular requirements and would not be diverted to meet other organisational priorities. They would not generally have the power of the constable and would be accountable to their employers, but their recognition as contributors to public safety would depend on police approval of the scheme in question".
Therefore, the White Paper, Criminal Justice: The Way Ahead, envisages the use of private security firms to patrol the streets and to assist the police and community policing. If that is to be the case, I believe that it is essential that in-house employees are licensed under the Bill. Although I have broached this point on a number of occasions, I ask the Minister whether, in the light of the two matters that I have mentioned, he will rethink his position. I beg to move.
Lord Cope of Berkeley: My Lords, the position of accountants and their staff is a matter that I proposed to raise under Amendment No. 9. Of course, I have raised this issue previously in the course of discussing what happens with regard to professional accountants who carry out audit and other accountancy tasks.
Initially, I made the point that it seemed that an audit was, in effect, a contract to look into a firm's books and to produce an audit report on it, in the course of which part of the purpose was to investigate any possible fraud and, through the accounting system, to eliminate the possibility of fraud in the future. Therefore, it appeared that, as the Bill originally stood, every accountant undertaking ordinary audit work would require a licence, as would all his staff.
The Government were kind enough to agree that that was undesirable and, at an earlier stage, they moved an amendment which provided the accountancy exemption that now appears in the Bill. However, that does not provide for the exemption of any employees. I am aware that correspondence and contact has occurred between the Home Office and the accountancy institute. The noble Lord, Lord Thomas, referred to correspondence concerning the position of non-qualified staff employed by qualified accountants on work of that character.
The Government's position, as I understand it, is that because the staff are in-house, they will not require a licence, so there is no need to worry. However, from what I have seen, and according to the advice that has been given to the Institute of Chartered Accountants, to which I belong, when staff are employed on the premises of clients, as they often will be, they will require a licence if they are not members of the institute. If staff require a licence, their bosses will also require a licence under the earlier provisions. Every partner in every accountancy firm will therefore require a licence. That is why I am still concerned about the position of employees.
We need an amendment like Amendment No. 9—I am aware that I am informally grouping Amendment No. 9 with Amendment No.1, but that is for the convenience of discussing this point—if we are to avoid every accountancy firm engaged in audit requiring a licence. I understand that that is the agreed position of the Government and ourselves. It is easier if we raise that matter now.
With regard to the police core tasks, I sympathise with what the noble Lord, Lord Thomas, said and I look forward to hearing the Minister's reply. As the
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noble Lord, Lord Thomas, rightly said, we have been discussing this matter since the earlier stages of the Bill.
The Parliamentary Under-Secretary of State, Home Office (Lord Bassam of Brighton): My Lords, I apologise to the House if the correspondence received by the noble Lord, Lord Thomas, is confusing. Obviously, I shall look at the text of the letter again to satisfy myself that it is not. Our policy is clear, and is pretty much as the noble Lord, Lord Cope, has described it.
With regard to in-house staff, we believe that the balance is about right, and I am more than happy with the way in which we are proceeding. I shall, of course, review the correspondence again to check the point made by the noble Lord, Lord Thomas.
On the second point raised by the noble Lord, the White Paper is trying to describe how to provide for the situation, which probably currently exists, when some activities, which could be described as core policing work, carried out by private security companies are carried out in a more public domain. We need to knit that work into local crime and disorder partnerships. That is where the White Paper is coming from. It would deliver to the public a wider measure of accountability. The measure has been widely praised and broadly welcomed because of the way in which voluntary organisations, the police, local authorities and so on, will be brought together to improve the performance of law enforcement. People are being made more aware of local crime issues, which is what the White Paper is trying to achieve. With the greatest respect to the noble Lord, Lord Thomas, his amendment would not cover private security firms in the way in which he describes.
I hope that I have given a measure of reassurance. The White Paper is trying to improve and strengthen accountability, rather than diminish it. When private security companies are involved in a more public domain, perhaps working on behalf of a private company in a public place, they should be seen as very much part of the aim to tackle crime in our communities, towns and city centres.
We have covered this subject frequently in previous debates, and I see no great purpose in rehearsing the arguments that we have heard before. We feel that we have offered sufficient reassurance. We have debated the matter and, at this stage, we do not believe that it is right to require in-house staff to have licences, except for special cases, such as door supervisors and wheelclampers. The security industry authorities will be keeping these matters under careful review, and will make recommendations to the Secretary of State from time to time if there are gaps in the licensing regime.
In those circumstances, perhaps some of the concerns that have been raised in the past can be readdressed. We shall consult on how best to achieve our goals, and potential loopholes will be identified. I hope that the noble Lord, Lord Thomas, will feel sufficiently reassured to withdraw his amendment.
4.45 p.m.
Lord Cope of Berkeley: My Lords, before the Minister sits down, will he respond to the point made by the noble Lord, Lord Thomas, about the letter from Mr Goswell? It says that students who are employed by an accountancy firm would be in-house employees, and would therefore not require a licence. My understanding of the Bill is that they would be in-house employees only if they were working in the accountancy firm on its own matters. Is the Minister saying that "audit" is not regarded as doing work under contract for another firm? It seems clear to me that it is, albeit of a specialised character. If the Minister is saying that because such people are employed, they can work under contract without requiring a licence, presumably anyone could work under a contract for another firm of any character, other than wheelclamping or door supervision, without requiring a licence. That is surely not what the Bill means.
Is the Minister saying that "audit" is not regarded as doing work under contract to another firm; or is he saying that a licence is required if the auditor is working not on the accountancy firm's own accounts, but on a client's accounts in the client's premises? Inspiration may strike the Minister any minute.
Lord Bassam of Brighton: My Lords, I shall exercise the correspondence card on that one, as I do not want to spread confusion where there should be clarity. The interpretation of the noble Lord, Lord Cope, is probably right: when staff are working on matters internal to the accountancy firm, that would be considered to be in-house. Perhaps there could be circumstances when no licence is required. I refer, for example, to students or people on some sort of secondment carrying out audits. I want to clarify the matter in my own mind, so I shall happily correspond with the noble Lord, Lord Cope, on the matter.
Lord Cope of Berkeley: My Lords, the Minister is always willing to write to us, which we appreciate, but we are on Third Reading. Whatever happens today is the end of the debate in this House. In those circumstances, I should be grateful if the Minister would copy the correspondence to my right honourable friend Miss Widdecombe.
Lord Thomas of Gresford: My Lords, the letter from Mr Goswell seems to suggest that there is a misunderstanding. The easiest way of appreciating what is meant by "in-house" is to look at guarding. If a firm employs guards to look after its premises, they are clearly in-house employees. If, on the other hand, the firm sends those employees to guard someone else's premises, they are no longer in-house employees; and they clearly require a licence. If we translate that into the accountancy field, the only way in which we could say that the employees of an accountancy firm who are non-qualified are in-house is if they are working on their own firm's accounts. If they go off and work on somebody else's accounts under contract, they are no longer in-house. That is the fundamental problem.
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The other issue in relation to using security firm personnel on the street is this. Under the Bill, for a security firm to employ personnel to work on other people's premises they will have to be licensed; they will have to go through all the checks that are necessary; their backgrounds will have to be looked into and they will have to satisfy the authority that they are appropriate people. But if the security firm sends them out on the street, as at present, just because the security firm is employed by the Home Office to assist the police, they will not require a licence; they will not require those checks to be made upon their background.
Lord Bassam of Brighton: My Lords, in the circumstances that the noble Lord describes, they probably would require that licence.
Too much is being made of this point. I can see why the noble Lord, Lord Thomas, may consider that to be the case. But looking at practical examples—for instance where Group 4 may patrol regularly a shopping precinct which is in private ownership—one could describe the activity of the personnel as being not very different from that of a police officer, although they would not have the same powers, patrolling an area. However, the circumstances in which they patrol are different. They are doing important security work; they are employed by Group 4, and one would expect them to be properly regulated in those circumstances.
Lord Thomas of Gresford: My Lords, that makes my point. Within the shopping precinct they have to be licensed. But what happens if they go out into a public place and, as the White Paper envisages, are possibly given the powers of a police constable? The words used are that they will not "generally" require the powers of arrest. Surely, the checks that will have to be carried out on those personnel will be even greater. I have made my point.
Lord Cope of Berkeley: My Lords, I apologise for interrupting the noble Lord, Lord Thomas. My noble friend Lord Astor suggested a way out of the difficulty in relation to correspondence. Perhaps the Minister could accept Amendment No. 9 when we come to it. That way we shall have incorporated it into the Bill. Should the Government then decide that Amendment No. 9 is not required, they can take it out in the Commons. It will come back here in due course and we can respond to the correspondence. If the Minister does not accept Amendment No. 9, then we shall not have that opportunity should the Commons fail to raise this matter. I wonder if that course appeals to the Minister.
Lord Thomas of Gresford: My Lords, the noble Lord is suggesting standing down the troops. For the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 [Licensing criteria]:
Lord Thomas of Gresford Lord Thomas of Gresford moved Amendment No. 2:
Page 6, line 39, after ("licensed;") insert—
("( ) may include criteria for securing that persons who engage in licensable conduct have appropriate training in racial awareness and disability equality;").
The noble Lord said: My Lords, Amendment No. 2 was suggested to me by the Royal National Institute for the Blind. It seeks to add to the criteria which ensure that persons applying for a licence have the training and skills necessary to engage in the conduct for which they are licensed by specifying that they should have appropriate training in racial awareness and disability equality. It is in the public interest that those who exercise functions under this Bill should be made aware of the problems of racism and of the specific requirements of people who are suffering from a disability before they are given the licence to carry out their tasks. I beg to move.
Viscount Astor: My Lords, I shall be brief. We cannot support this amendment. Those who are covered by the licence are also covered by existing race relations and disability laws. The amendment would therefore seem to be unnecessary.
Perhaps I should also say to the noble Lord, Lord Thomas of Gresford, that doormen are there, by and large, not to turn people away but more often to encourage them to enter in an orderly manner and help them to leave in an orderly manner. That is their job. They are unlikely to keep their job if they spend their time preventing people entering.
Lord Davies of Oldham: My Lords, I am not sure which side I take in that definition of the primary role of doormen. With regard to this section of the Bill we are probably looking at the possibilities of a more pejorative perspective of the role of doormen, hence the anxiety expressed by the noble Lord, Lord Thomas of Gresford, which led him to table the amendment, as he indicated, being stimulated from an impeccable source elsewhere.
This is an important issue and I am entirely in sympathy with the principle behind the amendment. It would add a new criterion to the face of the Bill which the authority might use when judging an application for a licence to act as a security operative. The new criterion would allow the authority to include that applicants for licences should have "appropriate" training in race and disability issues.
The Government have said on several occasions that one of the reasons for regulating the private security industry is that its operatives are, in most circumstances, coming into contact with people who feel themselves to be in some way vulnerable or, at times, possibly subject to unfair discrimination and over whom the operatives have a certain degree of power and authority. It is therefore an entirely reasonable concern that they should be seen to have a sensitivity to and at the very least an awareness of the
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position of groups of people in our society who may not always have had a square deal and who are confronted by this element of authority.
Perhaps the noble Lord can anticipate my next remarks, particularly in the light of the contribution of the noble Viscount, Lord Astor; my comments are consistent with the line taken by my noble friend on earlier occasions when sympathy was expressed with the concerns raised. We do not believe we need to include such a permissive criterion on the face of the Bill. The noble Lord may argue that there is more likelihood of the authorities using such a criterion if it is explicitly available on the face of the Bill. Conversely, we would not see it as being any less likely to be used if it fell to be considered under the "other matters" provision of Clause 7(3)(c).
We are therefore willing to give an undertaking to ensure that the possibility of a criterion in relation to race and disability awareness is built into the planning processes leading up to the establishment of the authority. We recognise the motives behind the amendment and that there is a task to be fulfilled in those terms. But we do not consider it necessary for it to be on the face of the Bill. On that basis I hope I have persuaded the noble Lord to withdraw his amendment.
Lord Thomas of Gresford: My Lords, I am grateful for that reply, and for the undertaking that matters of this nature will be built into the planning process and included under subsection (3)(c).
The training and skills necessary to engage in the conduct for which people are licensed have emerged in one or two cases in the criminal courts in which I have been involved. That sort of training tends to be the ability to hold people in a lock-hold or to eject them forcibly without damaging or bruising them. Matters of racial awareness and disability equality are far more important. I am grateful to the Minister. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5 p.m.
Lord Thomas of Gresford Lord Thomas of Gresford moved Amendment No. 3:
Page 7. line 30, at end insert (", including formats accessible to visually impaired people,").
The noble Lord said: My Lords, this matter was suggested to me by the Royal National Institute for the Blind. I appreciate that in a recent letter dated 13th March the Minister stated in paragraph 5 that the Government were not yet thinking in detailed terms about the prescriptions for the format of licences and that that would need to be put into regulation. I have tabled the amendment so that it will be foremost in the minds of those who are charged with the duty of prescribing that format. I beg to move.
Viscount Astor: My Lords, as with the previous amendment, we are sympathetic to the concerns raised by the noble Lord, Lord Thomas of Gresford.

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However, we believe that the Minister has got it right. We are grateful for the explanation that he gave in paragraph 5 of his letter, and are happy to accept that.
Lord Swinfen: My Lords, I am glad that the noble Lord, Lord Thomas of Gresford, moved the amendment. It is essential that licences which may have to be on public display are of print which is large enough for most people to be able to read. I include in that people with visual impairments. It is also essential that the licence is designed in such a way that the colour contrast between the paper and the print does not make it extremely difficult to read. This is a sensible amendment, which I support.
Lord Davies of Oldham: My Lords, noble Lords who have spoken indicated that there is a principle behind the amendment similar to that in a previous amendment with regard to issues of racial awareness. Once again I express my obvious sympathy with the implications behind the amendment. Therefore, the issue comes down to the narrow point of the effectiveness of the amendment being carried on the face of the Bill.
It is important that the physical licences which the authority will issue will be carried at relevant times and produced when necessary. The authority has the power to impose appropriate conditions in relation to those requirements, including taking account of the point made by the noble Lord, Lord Swinfen, that they are readily legible by those of us who may have difficulty with our eyesight, and certainly by people with significant visual impairment. It is similarly important that the details of the licence are accessible to those with a significant visual impairment. The point made by the noble Lord, Lord Swinfen, is well taken.
Under the terms of the Disability Discrimination Act it is against the law to offer people with a disability a service which is not as good as the service being offered to other people, or to provide a service on terms which are different from the terms being given to other people. The provisions of the Act for a general right of access to goods and services are designed both to prevent discriminatory behaviour and to require reasonable adjustments to overcome physical and communication barriers to disabled people, such as the provision of literature in alternative formats for those with a visual impairment. Those rights apply to all services.
The security industry authority, in common with other public and private bodies, will be bound by the provisions of the Disability Discrimination Act 1995 and will therefore be required to take the reasonable steps that that Act requires. The authority will also take account of best practice in the area of licence format. It will discuss the issue with the appropriate bodies, adopt the best physical format available, and take into consideration other advice it may receive.
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On the basis of those assurances, I believe that our existing legislation with regard to disability covers the matters contained in the amendment. I hope, therefore, that I am able to persuade the noble Lord to withdraw the amendment.
Lord Thomas of Gresford: My Lords, I am grateful for that reply and for the support for the amendment. In the light of the assurances given, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 [Revocation and modification of licences]:
Lord Thomas of Gresford Lord Thomas of Gresford moved Amendment No. 4:
Page 8, line 37, at end insert (", and
("(b) consider any complaints made to the Authority by members of the public against the licensee.").
The noble Lord said: My Lords, Amendment No. 4 was drafted before I received the letter of 13th March, to which I have referred. It was an attempt to continue my campaign to put on the face of the Bill the necessity for a complaints procedure in a slightly different way from that which had not previously been accepted in Committee and on Report. I move the amendment simply so that the Government may put on record the assurances contained in that letter. I beg to move.
Lord Cope of Berkeley: My Lords, we, too, believe in the importance of a complaints procedure. I was similarly reassured by the letter to which the noble Lord, Lord Thomas, has referred.
Lord Bassam of Brighton: My Lords, I am grateful to both noble Lords. The amendment is a variation on Amendment No. 18 moved on Report, and an earlier amendment moved in Committee. As has been noted, it is a matter on which we have had correspondence. We have also had private discussion.
I said on Report and in correspondence that I do not believe that there is much between the noble Lord and myself on this issue. The noble Lord has advanced—as ever, effectively—points at various stages of the Bill on which we have debated the issue. However, I have not heard an argument which persuades me that we need to put squarely on the face of the Bill a requirement for the authority to take account of complaints made against individual licence holders. I have indicated that the effective discharge of the authority's duties to licence only fit and proper persons will inevitably mean that it will need to establish an effective complaints procedure. I have also indicated to the noble Lord that in the extremely unlikely event that an appropriate mechanism was not set up, the Secretary of State could direct the authority under the provisions in Clause 2 to establish one. That would—reverting to a couple of our debates at earlier stages of the Bill about Secretary of State directions—be an open direction.
The current amendment relates to a complaints procedure to the modification or revocation of a licence. That assumes that a licence is already in force. The authority will need to be able to listen to and, if necessary, investigate complaints which are made

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against anyone seeking a licence in the first place or seeking to renew a licence. It follows that they must also have that facility when considering whether or not to modify or revoke a licence. Indeed, one prime source of the authority's launching such revocation or modification procedures is likely to be complaints made by members of the public.
As I said earlier, there is no point of principle between us here. However, for reasons I have previously expressed, I do not believe that we need the words of the amendment on the face of the Bill. Having heard that, and sought the reassurances offered that this is a matter of record, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Thomas of Gresford: My Lords, I am grateful to the Minister for that reply. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Thomas of Gresford Lord Thomas of Gresford moved Amendment No. 5:
Page 8, line 40, at end insert—
("(4) The Authority may refuse to renew, revoke or suspend a license if it has reasonable grounds for being satisfied that the licensee—

(a) has supplied information in or in connection with the application for the license or its renewal that was knowingly false or misleading;

(b) has contravened any provision of this Act or regulations thereunder; or

(c) is no longer a fit and proper person to provide a security service.").

The noble Lord said: My Lords, it strikes me that in the Bill there is no way of disciplining those who supply information which is knowingly false or misleading in connection with an application for a licence or for its renewal. The applications are made under Clause 8(l),(2) or (3). Nor is there a specific provision to deal with a situation in which the authority discovers that a person who is the holder of a licence is no longer a fit and proper person to provide a security service as Clause 14(3) envisages. The amendment is, therefore, a suggestion to the Government to include a specific provision to deal with those points, and would give to the authority the power to take rather swifter action than might otherwise be the case. I beg to move.
Lord Cope of Berkeley: My Lords, I realise that lawyers like to have everything in writing, if possible. If an extra clause can be added it would be regarded as desirable on those grounds alone. For myself, I would have thought that the wording of Clause 10, as it stands, was adequate to cover the case suggested by the noble Lord, Lord Thomas.
Lord Davies of Oldham: My Lords, I am not going to get into a clash between the professions. Being neither a lawyer nor an accountant, I am able to take a detached Olympian view on this point. Of course I understand the nature of the amendment and the motive behind it. Certainly, the reasons as listed in the
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amendment are entirely valid ones for withdrawing or not renewing a licence. The first circumstance relates to the applicant having knowingly supplied false or misleading information. That is already an offence under the provisions of Clause 22 of the Bill.
The second relates to the applicant having contravened any provision of the Bill or any regulations made under it. The Bill creates a number of offences, and regulations will provide further detail governing many aspects of a licensed security operative's work. The third circumstance is that the applicant is no longer a fit and proper person to provide a security service. Clause 7 requires the published criteria for a licence application, to be successful, to include those which the authority considers show the applicants to be fit and proper persons.
I have no problems with the conditions which the noble Lord, Lord Thomas, seeks to place on the face of the Bill regarding the withdrawal or non-renewal of licences. But the Bill already requires the authority to have in mind the criteria that are applicable by virtue of Clause 7 when considering whether to modify, suspend or revoke a licence. I believe that this gives the equivalent effect to that sought by the noble Lord in his amendment.
Clause 7 requires applicants to be, in the authority's judgement, fit and proper persons. I cannot see the authority forming this judgement about an applicant whom it knows to have contravened his existing licensing conditions, to have falsified any part of his application papers, or otherwise to have misled or lied to the authority. The applicant would therefore have committed an offence under current legislation and that is pretty strong prima facie evidence that the applicant is indeed not a fit and proper person.
Therefore I do not believe that this amendment achieves any provisions that are not already available to the authority under the Bill as drafted. I recognise the virtues of clarity which the amendment brings to specific offences, but I would contend that the Bill clearly spells out the powers of the authority in respect of the judgement regarding the validity of any applicant for a licence. On the basis of what I have said, I hope the noble Lord may be persuaded to withdraw the amendment.
Lord Thomas of Gresford: My Lords, the creation of an offence punishable either on summary conviction or indictment is rather different from the revocation of a licence. Your Lordships will recall that at earlier stages I endeavoured to introduce on to the face of the Bill provisions for the reporting by the police and/or the magistrates' court and/or the Crown Court to the authority any convictions that may follow in relation to a licence holder, whether for a breach of this Bill or anything else. The proposals were not accepted. It was

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said that there would be arrangements in place, and so on. However, I have heard what the noble Lord said and of course I am not going to press the matter to a vote. I therefore beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.15 p.m.
Clause 15 [Arrangements for the grant of approvals]:
Lord Thomas of Gresford Lord Thomas of Gresford moved Amendment No. 6:
Page 11, line 34, at end insert—
("( ) are providing security industry services in England and Wales and are deemed to be acting as a public authority under the Human Rights Act 1998;").
The noble Lord said: My Lords, this relates to the approved contractor scheme, which, your Lordships will recall, is voluntary. At an earlier stage—I think in Committee—I suggested that the approved contractor scheme should be made compulsory. The purpose of this amendment is to make it mandatory for those who are engaged in public duties as public authorities. The definition of a public authority under the Human Rights Act is in wide terms. It includes executive agencies of central government, local government and so on. However, in this particular area, most importantly, it covers prisons. Of course it is a matter of contract between the Home Office and a particular contractor who offers to supply services for prisons within the scope of this Bill, but I submit that anybody who is to undertake tasks of that kind and of a public nature should be, as a matter of principle, a member of the approved contractor scheme. I beg to move.
Lord Cope of Berkeley: My Lords, I do not take the view taken by the noble Lord, Lord Thomas, that it is essential for any firm contracting to a public authority or acting as a public authority to be approved. I am concerned, as I have expressed on other occasions and in other contexts, that this new authority will have an awful lot to do and will have great responsibilities in its early stages. To make it essential on the face of the Bill that everyone acting as a public authority should have to be an approved contractor would add to the work of the authority in the early stages very considerably. It could make for inflexibility in the whole scheme. For that reason, I do not at the moment find myself in support of what is proposed. I am not necessarily against the idea that once all this is up and running and has been, going for a little while public authorities should require in their tendering mechanism that only approved contractors can tender for the appropriate contracts. I think that that might be a better way of doing it.
Lord Bassam of Brighton: My Lords, this amendment seeks to ensure that those contractors applying for approved contractor status would be deemed to be acting as a public authority under the Human Rights Act 1998. Clause 15 establishes a duty on the authority to make arrangements for granting approvals to the providers of security services who
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seek such approval. These arrangements must be made available to those who provide such services in England and Wales.
The noble Lord's amendment would mean that each provider of security services seeking approval would be deemed to be a public authority under the provisions of the Human Rights Act. Although the Act does not give a precise definition of a public authority, it does cover all central and local government bodies, the courts, the police, all government agencies, non-departmental public bodies, and the like. It may be helpful if I take this opportunity to confirm that the security industry authority itself, as an NDPB, would be covered by the provisions of the Act. It would be under a duty to act compatibly with rights provided for by the European Convention on Human Rights. If a person's rights were harmed, they could instigate legal proceedings against the security industry authority.
The provisions of the Act can also extend to a private body when it carries out a public function. If they regulate, direct or affect the public, or a group of the public, then they are likely to be covered by the Act. The Human Rights Act deliberately does not explain the meaning of a public authority or a public function in detail. Of course it is for the courts to interpret the Act and to decide what are "public authorities" and "public functions", and what are not. We consider it important that this discretion is left as it is, with the courts; and for that reason we cannot accept the noble Lord's amendment. I hope that, having heard this explanation, he will feel able to withdraw it.
Lord Thomas of Gresford: My Lords, I am grateful to the Minister for that explanation and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 [Powers of entry and inspection]:
Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 7:
Page 15, line 12, leave out from second ("person") to end of line 13 and insert ("and used by him for the purposes of his business").
The noble Lord said: My Lords, I beg to move this amendment, which goes to the question of powers of entry into domestic premises. I raised the possibility that there might be a house where the wife ran an unrelated business, and this might open up their home to the authority's private powers of entry. In his letter to me of 13th March the noble Lord, Lord Bassam, conceded that a narrow reading of Clause 19(1) might yield this interpretation. Nevertheless, he thought that the authority should not exercise its powers in such circumstances. I am paraphrasing what he said. He suggested that he might put the matter on record at Third Reading. It would be most helpful if he did.
Lord Bassam of Brighton: My Lords, I am grateful to the noble Lord for giving me the opportunity to put the matter on record. As the noble Lord said, the amendment follows a concern that was also raised at an earlier stage.

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It is a helpful amendment which perhaps seeks to clarify policy in the area. The noble Lord expressed his concern earlier about the position of premises occupied by a licence holder from which his partner or wife might operate a completely unrelated business. He was concerned that this set of circumstances might bring it within the scope of the Bill. The amendment seeks to clarify that the powers of entry and inspection would only apply to premises owned or occupied by a person appearing to be a regulated person and used by them for the purposes of business.
There are no differences between our views on the issue. I agree that premises which are used exclusively for residential purposes or used by a non-licence holder to run an unrelated business should not be subject to inspections. The amendment already approved by your Lordships on Report achieves that aim and objective.
Premises used exclusively for residential purposes are excluded. Inspectors would have no cause to enter premises used for the running of a completely and totally unrelated business. The authority's duties and powers are limited to private security activities. Consequently, inspectors operating on behalf of the authority would not be able to justify entering residential premises used for an entirely different business.
I am grateful to the noble Lord for tabling the amendment. I hope that the explanation now being in the public domain, as it were, and on the record, will enable him to withdraw his amendment.
Lord Cope of Berkeley: My Lords, I should have made clear that it is not only a wife or partner, it could be anyone who was running the unrelated business. In the light of the Minister's remarks, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Swinfen Lord Swinfen moved Amendment No. 8:
Page 15, line 36, leave out ("conduct") and insert ("actions").
The noble Lord said: My Lord, I referred to this matter on Report on 5th March when Amendment No. 28, in the name of the noble Lord, Lord Bassam of Brighton, was dealt with. I said:
"I believe that the Minister may be referring to the actions taken while the person exercising the power is on the premises".
In part of his reply to that the noble Lord stated:
"I believe that the noble Lord is right. Here, we seek to capture the details of what occurred, what transactions took place and what was found.
That is what we describe when we talk about 'conduct'—that is the business transacted".—[Official Report, 5/3/01; col. 48.]
Subject to that discussion in the Chamber, I had recourse to the 2nd Edition of The Oxford English Dictionary in your Lordships' Library. I looked up the word "conduct". It said:
"To lead, guide … To lead, command, direct, manage … To convey; to be a channel for".
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None of those definitions is appropriate. I could not find an appropriate description anywhere under that word that fits what I understand to be the requirement of the Bill.
However, when looking up the word "action", it said:
"The process or condition of acting or doing … A thing done, a deed … Mode of acting".
Therefore, I believe that "actions" is a better word than "conduct". I beg to move.
Lord Cope of Berkeley: My Lords, the amendment is a small but useful improvement to the drafting of the Bill.
Lord Davies of Oldham: My Lords, on Report, I listened to the noble Lord, Lord Swinfen, when he presented his argument. During the course of those proceedings some changes were made to the clause. Without the aid of a dictionary immediately to hand, I am loath to remotely challenge his definitions in the Oxford English Dictionary of the word "conduct". But I hope to be able to persuade him that the provisions in the Bill accurately cover the issues over which he has expressed concern.
Clause 19(4) places a number of requirements on a person carrying out an inspection on behalf of the security industry authority. On Report, after helpful debate in Committee, these requirements were added to Clause 19. They seek to balance the authority's ability to enforce its licensing regime with a proper respect for the civil liberties of persons regulated by the Bill.
The noble Lord is concerned about one particular aspect; namely, the requirement in the clause for persons undertaking inspections to make a record of their "conduct", as opposed to his preferred formulation—a record of their "actions". He is concerned that the current wording of the clause limits the subject matter of the inspection record to one relating to the way in which the inspector behaves himself. That is—the noble Lord referred to it again—whether he did so well and honourably. His fear is that a clever lawyer may seek to get a client off the hook by misconstruing that word. I am all for making sure that we have clear legislation to ensure that people do not evade their responsibilities through what might be regarded as an unfair legal process.
I am grateful for the amendment of the noble Lord. We have looked again at the word in question in the light of his representations on Report. I hope to reassure the House, however, by saying that I do not believe that his fears are justified. As my noble friend explained on Report, the intention of Clause 19(4) is to require the details of what occurred during an inspection visit to be placed on record—when the inspector arrived; for what purpose; how long he stayed; what he did while there; and other relevant facts. It should be a full record of the inspection and a copy should be made available to the regulated person.
I do not believe that a reasonable interpretation of the word "conduct" in the context in which it is used in this clause would lead to a conclusion that the

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actions of an inspector on regulated premises could legitimately go unrecorded on the inspection record. Although it would ultimately be for the courts to determine the matter in relation to any particular case, I am clear in my mind that any record which did not set out the important details of the inspection, such as I have just described, should be regarded as an inadequate record. I am also clear that the use of the word "conduct" is generally taken to embrace actions and includes also the concepts of omissions and statements. Thus, the word "conduct" appears to cover every aspect to which the noble Lord has referred. For that reason, I believe that the clause should remain unamended.
Perhaps I may also point to the requirement in Clause 20 for the authority to prepare and publish guidance on the manner in which the important powers of entry and inspection are to be used. I am quite sure that the guidance will go into further detail about the nature of the record of inspection that is to be made.
I hope, therefore, that the noble Lord will recognise that we have taken very seriously his representations on this point. We believe that the word "conduct" covers the whole aspect of actions during the course of such an inspection. On that basis, I hope that he will feel able to withdraw his amendment.
5.30 p.m.
Lord Swinfen: My Lords, the noble Lord has not wholly convinced me with his response. Can he tell me whether any other piece of legislation uses the word "conduct" when a report on the search of premises has to be made, rather than "actions" or, indeed, another more suitable word?
Lord Davies of Oldham: My Lords, I think that I have already confessed to the House that I am no lawyer and so I cannot give the noble Lord an immediate reply to his question. However, the Bill will become one of many Acts which permit public servants to carry out inspections. Legislation which relates to taxation and Customs and Excise contains such measures. There is no doubt that in the Bill we have followed a process whereby we have defined the manner in which inspection should be properly conducted. We have allowed a degree of freedom in the drafting to ensure that the authority itself will lay down what is to be expected as regards the conduct or, if the noble Lord prefers, the actions to be undertaken by an inspector when going into private premises.
I repeat: I hope that the noble Lord will recognise that we have taken seriously the points he raised on Report, but we have satisfied ourselves and, I hope, the House, that the word "conduct" is accurate and defines clearly what is expected of an inspector and how the process will be governed.
Lord Swinfen: My Lords, I am not a lawyer, but I know that court cases often arise over the exact construction and meaning of words. If it is not made clear, it is far more likely that court action will ensue. I hope that the Minister and his advisers will look at
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this again closely, because I am still not convinced by what he has said. It may well be that the word that I have proposed—"actions"—is not the best word, but I am sure that it is a great deal better than the word "conduct".
However, the House is thin and time is moving on. I shall not delay the House by dividing, as I had thought I might. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2 [Activities liable to control under the Act]:
Lord Cope of Berkeley Lord Cope of Berkeley moved Amendment No. 9:
Page 27,1ine 19, after ("such") insert (", or under his supervision and authority,").
The noble Lord said: My Lords, we discussed this matter earlier in our deliberations on Amendment No. 1. It concerns accountancy staff. I know that the Minister is going to write to me. However, if he accepts this amendment, it would keep the position in play. as it were, should he wish to reverse it. I hope that he finds that acceptable. I beg to move.
Lord Bassam of Brighton: My Lords, I would like to be able to accept this amendment, but I cannot do so. Perhaps I may explain carefully why that is the case. We held a debate on this matter earlier, as a result of a concern raised quite properly by the noble Lord on Report. It was then suggested that the government amendments to exclude qualified accountants should not extend to all staff in an accountancy practice.
As I indicated in our earlier debate, the Government wish to ensure that the provisions of the Bill are targeted at those specialist providers of security services whom we have stated we wish to regulate, and that they do not inadvertently catch groups which are not relevant to our policy aims and objectives. This latter group includes accountants.
The Government have accepted that the wording of paragraphs 4 and 5 in Schedule 2 did not make it abundantly clear that we were not seeking to take accountants into the regulatory framework. Your Lordships' House therefore approved amendments to provide a clear exemption for accountants from the definitions of private investigators and of security consultants. Those amendments were based on exemptions for members of relevant accountancy bodies, as the noble Lord had encouraged us t o do and, indeed, as we have been encouraged to do privately. That is now defined in Clause 25.
This amendment would extend the exemption to those employees of accountancy firms who work under the authority and supervision of an accountant, but who are not members of the accountancy bodies listed in the Bill. It is worth reminding ourselves that we are talking about those people hired out under a contract to supply clients with specialist services. Members of the relevant accountancy bodies and their staff who are working "in-house" fall outside the scope of the Bill.
Employees of accountancy firms who are not members of the relevant accountancy bodies as now defined may, of course, be hired out to provide

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accountancy services. In that case, they are not providing any of the designated activities which are the focus of the Bill and would not, therefore, fall to be licensed under it. However, as I said in my response on Report, it is not necessarily the case that only members of those relevant accountancy bodies may be hired out under contract to provide services that are relevant to the provisions in the Bill.
Many of the large and well-known accountancy firms now have extremely diversified business interests and provide a wide range of services. In some cases, those services will be "designated services" as defined in the Bill. It may be the case that accountants who are members of the accountancy bodies listed in Clause 25 will take part in some or all of these services. However, even if those services are "designated activities", the accountants undertaking them are now excluded from regulation under this Bill.
However, I am quite clear in my mind that in many cases these large, diversified accountancy businesses will also hire out members of their staff who are not members of the relevant accountancy bodies to undertake activities that are designated activities as defined in the Bill. This amendment would exempt anyone undertaking those activities from the need for a licence simply by virtue of their working under the authority or supervision of a suitably qualified accountant. As I indicated on Report, I do not believe that that would be right.
Those employees, if hired out under contract, would be undertaking the same type of work as people who legitimately offer their services as private investigators or security consultants, but not as accountants. They would be offering services such as the investigation of corruption, asset recovery and fraud risk management. In the Government's view, it would be wholly anomalous for non-accountants in accountancy firms to be exempt from licensing, when private investigators and security consultants offering exactly the same services would be caught.
Indeed, since we debated the Bill on Report, I have received representations from non-accountancy companies offering precisely these types of services who argue that if we were to exclude non-accountants who undertake services similar to theirs, it would create an uneven playing field. I find the arguments wholly persuasive. The counter-argument is to say, "Yes, we are undertaking designated activities as defined by the Private Security Industry Bill, but we are employed by accountants, so we should be exempt". I cannot accept that.
I also have great difficulty with the notion, advanced on Report, that such an exclusion was needed because in today's business world it is often difficult to define strictly what is "accountancy" and what is not. I accept that there may be certain difficulties surrounding definition here, but I am not convinced that the answer to those difficulties is to give such a broad and sweeping exemption to everyone employed by an accountancy firm.
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For those good reasons, I continue to resist the amendment. Having heard what I have to say on the matter, and given his great experience in the world of accountancy, I hope that the noble Lord will feel able to withdraw it.
Lord Cope of Berkeley: My Lords, the Minister is wrong to say that I have "great" experience in the world of accountancy, although I have some. He must not exaggerate my professional career.
I accept that definitional problems exist, as the Minister suggested. I hope that he is right in his interpretation of what the Bill now says. I admit that I do not think he is right, but I hope that he is. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
An amendment (privilege) made.
Lord Bassam of Brighton: My Lords, I beg to move that this Bill do now pass. In doing so, I thank all noble Lords who have taken part in the debates and who have helped in enabling the Bill to complete its passage.
On Question, Bill passed, and sent to the Commons.

Health and Social Care Bill
5.41 p.m.
Lord Hunt of Kings Heath: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Hunt of Kings Heath.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES (Baroness Serota) in the Chair.]
Lord Clement-Jones Lord Clement-Jones moved Amendment No. 1:
Before Clause 1, insert the following new clause—
"PURPOSES
The purposes of this Act are, inter alia, to—

(a) institute reforms relating to the National Health Service (including in health service funding, employment, public and patient involvement, scrutiny, consultation, independent advocacy, intervention powers and regulation, recruitment and discipline of general practitioners and dentists),

(b) provide authority for local pharmaceutical services' pilot schemes,

(c) extend prescribing rights,

(d) introduce provisions relating to Care Trusts and partnership arrangements,

(e) introduce free personal care (including nursing care) after an assessment of need for those in receipt of community care services, and

(f) introduce provisions relating to the control of patient information."

The noble Lord said: Given the number of amendments that have been tabled, we are in for a number of fairly long sittings in Committee. However, I make no apology for placing the issue of personal care right at the forefront of our Committee stage deliberations.
The issue of personal care draws a clear line between the approach of these Benches and, as I understand it, that of both the Conservative Party and the Labour Party. Regrettably, the Bill promises to be a missed opportunity in that respect.
We on these Benches have strong support for our approach from a considerable number of sources—not least the Royal Commission on Long-Term Care of the Elderly, which originally highlighted the inequity in the current system whereby a patient receives free nursing care in hospital but is means-tested for that same nursing care in a residential home.
The Government's plans set up an artificial distinction between nursing and personal care. This will mean that many people in nursing homes, or at home, will still be means-tested for care such as being dressed, bathed or washed, which they would certainly not pay for in an NHS hospital. The classic example used by many correspondents is that of the dementia sufferer based in a residential home who requires a high level of care but who receives little medical intervention. In those circumstances such people will be paying for their personal care.
We on these Benches believe it right that all nursing and personal care should be paid for, whether in a care home or in people's own homes, according to an assessment of need. We believe, as did the Royal Commission, and as do a number of Members on the Government Back Benches who spoke in the debate initiated by the noble Lord, Lord Ashley, that this is the only long-term, principled and practical solution. We believe that the risk of needing long-term care should be spread across the whole population and over the life-time of that population as the most efficient way of addressing both the risk and the cost of ensuring against it. There should be a shared responsibility between the individual and society to meet the cost of old age. At the same time, the guiding principle of policy should be to make appropriate early interventions to support people in independent living.
My party found the key recommendations of majority view set out in the report of the Royal Commission that personal care should be free, subject to an assessment of need, persuasive and we regard this as a key priority for future expenditure.
Living and housing costs are legitimate items which people should expect to meet themselves. The straightforward living costs of staying in residential care should remain the responsibility of the individual, subject to means-testing. However, personal care costs fall heavily and unexpectedly, and are beyond the control of the individual. For this reason, we believe that personal care costs should be exempted from means-testing in all settings and that they should, instead, be based on an assessment of need. These are
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defined by the Royal Commission as the care needs that give rise to major additional costs of frailty or disability associated with old age.
The Royal Commission went on to say:
"Personal care is care that directly involves touching a person's body (and therefore incorporates issues of intimacy, personal dignity and confidentiality), and is distinct both front treatment/ therapy (a procedure deliberately intended to cure or ameliorate a pathological condition) and from indirect care such as home-help or the provision of meals".
Between 100,000 and 125,000 people in residential settings would benefit from excluding personal care costs from the means test, as compared to the 35,000 who would benefit from free nursing care alone.
Personal care costs at home should also be exempt from charging. The Government's recent consultation paper on charging policies for home care is a profoundly depressing document. Location should not matter when people need intimate care such as bathing, dressing or feeding. It is a disgrace that in this country debt collectors are chasing after dementia sufferers for money to pay for their care. If the Bill is passed in its present form, they will simply be chasing the sons and daughters of dementia sufferers instead.
As regards the arguments advanced by the Government regarding the fact that some of the better-off may benefit, the health service is not there to redistribute wealth from the rich to the poor, but rather to redistribute resources from the healthy to the sick. There is clear evidence from recent research carried out by the King's Fund that most people will struggle to pay for both long-term care—or long-term care insurance—and a second pension, as envisaged by the Government.
The proposed definition of "nursing care" which we shall debate later in Committee will leave care home residents unclear about what they will actually have to pay for. Indeed, it is our view that it is virtually impossible to devise a watertight definition of nursing care which will avoid disputes.
Over 15 voluntary organisations involved in the care and representation of older people have condemned the Government's plans as set out in the Bill, including Methodist Homes for the Aged, Age Concern and the Royal College of Nursing. The Scottish Executive is now moving down the path proposed by my party in the coalition. I very much hope that the Government will have the sense to do the same in England and Wales. I beg to move.
5.45 p.m.
Lord Morris of Manchester Lord Morris of Manchester moved, as an amendment to Amendment No. 1, Amendment No. 2:
In subsection (e), after "nursing care)" insert "and care by professionals supplementary to medicine"
The noble Lord said: In moving this amendment to the proposed new clause, I shall speak briefly also to my Amendments Nos. 265, 268 and 269 to Clause 56 of the Bill to which it relates.
All these amendments have the same goal; namely, to ensure that healthcare provided by any health professional— not just that provided by a nurse or a doctor—is made available to people in long-term care without charge.
Before setting out the case for the amendments, I have a non-pecuniary interest to declare. As some Members of the Committee will know, I have the honour to be president of the Society of Chiropodists and Podiatrists, and it is my work in that capacity which, for me, makes self-evident the need to make the Bill less restrictive in defining healthcare. As well as being a trade union, the society is the professional organisation of state registered chiropodists in this country. It works both assiduously and with success on their behalf as the providers of more than 8 million appointments for patients each year. Here I pay special tribute to Pam Sabine and Hilary De Lyon, the chairman and chief executive of the society, and to their fellow officers past and present.
Much of the debate about the Bill has so far, rightly, focused on whether only care by nurses and doctors should be free, or whether personal care more generally should be provided on the same basis for everyone in long-term care. The purpose of my amendments is to face the reality that essential healthcare in the UK is provided not only by doctors and nurses, but also by other health professionals.
The professions supplementary to medicine are 12 highly important and quite distinct professions. They include, as well as chiropodists and podiatrists, speech therapists and physiotherapists among other essential health professionals, all of whom have one thing in common: they provide real, measurable, tangible, clinical, healthcare benefits.
One striking example is that the clinical skills of chiropodists and podiatrists, when properly integrated into diabetic care, can now reduce—and demonstrably have reduced—amputations among patients with diabetes by 50 per cent, while their treatment of other disabling foot pathologies helps to increase the mobility and reduce the dependency of patients more generally. This explains the Health Minister's comment on the,
"excellent contribution of podiatric surgeons to foot health",
in a recent answer to a parliamentary Question in another place.
Yet currently, where chiropody and podiatry services are provided for people in long-term care, the cost to the patient depends—strangely and illogically—not on their medical needs, or even on their financial means, but on the employment status of the chiropodist or podiatrist. If she or he is employed by the NHS the service will be free. If the chiropodist or podiatrist is self-employed and has a private contract with the long-term care institution, then a charge has to be levied by the practitioner. This is clearly anomalous. I cannot believe that Ministers are content to leave the position as it now stands.
It may be argued that provision for people in long-term care is no different from that for other patients. Widely variable standards of NHS provision now mean that patients in some areas receive free NHS care, while elsewhere they have to pay. But that is plainly unsatisfactory and unjust, and the Society of Chiropodists and Podiatrists will go on campaigning to improve the general level of NHS provision to that of the existing best.
This is why the society now argues with such conviction for services to be provided free of charge and regardless of age. Keeping older people mobile can prevent many other ailments occurring. For example, older people who cannot walk are liable to become increasingly inactive, exposing them both to respiratory problems and depression, often resulting in complete dependency on care. Timely care from a chiropodist or podiatrist can prevent this happening and avoid unnecessary further costs to the NHS.
It was widely hoped that the Government's review of the Feet First report, which was concluded last year but has not so far been published, would by now have provided consistent and clear guidelines on the proper provision of NHS chiropody and podiatry by all health authorities and other commissioners within the service. There is still time for a rethink and, as the Minister is aware, the Society of Chiropodists and Podiatrists is seeking another meeting with him on this important issue.
Meanwhile, let us be clear about the here and now. Chiropody/podiatry is not personal care; but nor is it nursing care. It not only protects mobility and improves quality of life, but also specifically and undoubtedly treats medical conditions and alleviates clinical pain. Why then should healthcare be defined so narrowly as to deny patients the often vitally important help that chiropodists and podiatrists, like the other professions supplementary to medicine, can provide? What possible defence is there for treating their help as an optional extra—as the "a" in et cetera, as it were, of British healthcare?
The Health Minister also said in another place:
"Our definition [of nursing care] is not task based".
That is why I have framed my amendments—both here and again at Clause 56—as generically as possible; and I look forward to a positive response from my noble friend Lord Hunt when he replies to the debate. In particular, I hope for his assurance today that all chiropody/podiatry provided for a person who is in long-term care and clinical need will automatically be available without charge.
I ask for that assurance all the more urgently since, under the Care Standards Act 2000, care homes must now include foot care in their residents' needs assessment. They must also ensure that residents' NHS entitlements are upheld and promoted. Thus all that I am seeking is consistency in legislative provision. This means ensuring that state registered chiropodists, along with others in the professions supplementary to medicine, are recognised within the Health and Social Care Bill as providers of essential care without charging.
Although I have set out the case for the amendments mainly by reference to chiropody and podiatry, of course it can be argued just as strongly in terms of the essential role of other professions supplementary to medicine in providing healthcare. For a person stricken by a stroke, the work of a speech therapist is often critically important and, if provided in a longterm care setting, there should be no doubt but that it will be free. Likewise, when a frail elderly person falls and fractures a limb, the work of a physiotherapist can be hugely beneficial to her or his healthcare. So here again there should be no doubt but that it will be free in the case of long-term care.
Many other examples could be given of the case for inserting, after nursing care in the clause, care provided by the other professions supplementary to medicine. As I said earlier, they demonstrate that healthcare is not just about doctors and nurses. Ask any self-respecting doctor or trained nurse and they will tell you that to say otherwise is now barbarously old fashioned. Healthcare is also very much about chiropodists and podiatrists and all their fellow professionals in the professions supplementary to medicine. Ask any diabetic, any stroke victim, or any frail elderly person who has suffered a serious fall. That is the case for my amendments and I beg to move.
Baroness Carnegy of Lour: Perhaps I may suggest that noble Lords cut short the discussion on the amendment. It proposes a purpose clause. Such clauses have their uses, but they should at least amplify the Long Title of a Bill. I do not believe that this purpose clause does so, for starters. Subsection (c), which refers to extending prescribing rights, says less than the Long Title, as does subsection (f). Subsection (e), which the noble Lord, Lord Morris, seeks to amend, talks about something that does not even feature in the Bill.
The noble Lord, Lord Clement-Jones, has made all this in order by grouping it with Amendment No. 260, which proposes that there should be free nursing care. I suggest that it is quite wrong to discuss this in isolation from all the other amendments, many of which are most important and very much to the point; and. indeed, to which I believe the Government will listen. I do not know how recently he discussed the matter of free personal care with his Scottish colleagues in the Scots Parliament. However, I met a few of them last night and I gather that the whole matter is up in the air because no one knows who will pay for it. I do not honestly believe that we should spend much time on the matter. I personally could not support the amendment. I do not know what my noble friend, or the Government, will do in this respect. I think that we should move on.
Lord Lipsey: I am tempted to follow the noble Baroness because we have many more detailed amendments to the Government's proposals on which we could more profitably spend the bulk of our time. I shall not detain the Committee for long. The noble Lord, Lord Clement-Jones, made his case, and I believe that we should consider briefly one or two arguments on the other side.
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The noble Lord gave the game away to quite a considerable extent right at the beginning of his remarks. He began by saying that you get your bathing free in a hospital, but that if you are in a home you may have to pay for it if you are better off. That is quite true. It is also true that you get your food free in a hospital, while you do not get it free in a residential home: you have to pay for it, if you are well off enough to be able to afford to do so.
However, the noble Lord, is not proposing that food should be free in residential homes; just personal care. Whatever solution you come to, wherever you draw the line when you look at the difference between what is paid for and what is free, you will find that there are anomalies. There simply is not a clear-cut guillotine which makes clear what should be one side of it and what should be the other. We shall pursue a chimera if we try to find such a dividing line. We should judge these matters on their merits.
New Members of this Chamber may be astonished to discover that they often hear the same speeches four times: on Second Reading, in Committee, on Report and on Third Reading. One can hear the same speeches six times on this issue because we had a pre-run round the course on the debate initiated by the noble Lord, Lord Ashley, on 17th January. We shall have two "goes" at discussing issues surrounding the provision of free personal care.
I do not want to repeat my Second Reading Speech when I argued—I did not hear the noble Lord, Lord Clement-Jones, refute this—that the cost of free personal care (which is already very high at more than £1.2 billion even on the wholly inadequate calculation of the Royal Commission) will go up not by five times, as estimated by the majority of members of the Royal Commission, but by between 12 and 20 times by the middle of the next century. Free personal care would be the cuckoo in the nest and if we provided it, we would have to sacrifice services to older people—care assistants, care homes, clothes and the care provided to keep people in their own homes. Those items would be sacrificed to pay for services for the most well-off 25 per cent of the population. I do not want to go over that argument again.
I wish to address three points to those on the crowded Benches opposite who have clearly decided to adopt this issue as the kernel of their election appeal. My first point is a kind of constitutional point. Really big spending is a matter for the other place according to the rules of privilege. We are talking about a huge expenditure commitment. I would find it strange if this Chamber felt that it could override the judgment of elected Members. The other place was in favour of free nursing care but not in favour of free personal care.
Secondly, it is terribly important that we do not delay the Bill. There is a large number of amendments. We had a debate on Second Reading when points were made about the broad question we are discussing. However, there is much detail to be discussed on the issue of free nursing care. If the Bill is lost because we examine it for too long, the consequences will be serious as the provision of free nursing care is

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supposed to start on 1st October. In the case of most Bills, it does not much matter if they are passed this year or next year. We shall get them eventually and not much is lost by delay. However, this Bill concerns people who, on average, spend only 18 months or so in nursing homes. If their free nursing care is postponed for a year, during that year they will fail to get the benefits to which they are entitled and which the Government propose to give them. Therefore, we should be careful not to delay the Bill.
Thirdly, I hope that the noble Lord, Lord Clement-Jones, the noble Baroness, Lady Barker, and my many friends on the Liberal Democrat Benches who know that I am close to them on many issues will accept my next point. I spend much of my life campaigning for electoral reform. It is a great cause but not much loved by many on this side of the Chamber. Why is it that it is always so difficult to persuade the Prime Minister to go the full hog on that? He thinks that the Liberal Democrats are decent people. If they would have me, I sometimes think that I should like to join them; they are so decent.
However, at the end of the day, the Liberal Democrat Party is not serious as it will not face up to the kind of decisions that have to be taken in government regarding how scarce resources are best deployed for the maximum good. That is the fundamental issue here. If money grew on trees—as the majority of the members of the Royal Commission seemed to think that it did—of course it would be acceptable to provide free personal care. However, money does not grow on trees but has to be raised painfully from taxpayers. One has to take painful decisions as regards allocating it between competing priorities such as education, health, transport and the rest. To make a snap judgment to provide free personal care and let everything else go hang is to my mind not a serious approach to policy making and makes it difficult to achieve the truly plural politics that I should like to see.
6 p.m.
Lord Beaumont of Whitley: On behalf of my party, I support the amendment and the amendment to the amendment, which I imagine is accepted by the noble Lord, Lord Clement-Jones. They should both be supported. The arguments which have been deployed against them are not effective. We are told that we should not override the Commons. There is a perfectly good procedure between the two Houses whereby we try to reach agreement. We have not yet reached the stage of trying to override the Commons. However, we are entitled to ask the Commons to think again. We have a perfectly worthwhile reason for asking the Commons to think again.
The argument which the noble Lord deployed as regards delaying the Bill does not hold water either. I have never considered that a good argument. It is used time and time again at various points of the parliamentary year or the parliamentary Session. As the noble Lord has just said, in the end what is wanted and what is necessary and what is right usually can be
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accepted. I do not attempt to deny that people will suffer a sad loss if there is delay. I should be sorry if that occurred, but it is much better to put in place correct provisions that will last through to the next century than to worry oneself sick about people experiencing problems over the next 18 months. As I say, I do not think that that argument holds water.
Nor do I think the argument valid that the Liberal Democrat Party is not serious about these matters because it does not have to face up to allocating scarce resources. The Liberal Democrat Party, of which I used to be a member, has thought the matter through. It has established its priorities. I speak from experience of preparing for general elections on behalf of that party. If it is to include the measure in its election manifesto—as the other side of the Chamber seems to think that it will—no doubt it has already been costed extremely carefully. The party has faced up to priorities and has made a judgment. In my view, it is the right judgment and my party certainly will support it.
Lord Rix: My head having been chopped off by the guillotine of the noble Lord, Lord Lipsey, I hope that the Committee will forgive me if I take my head out of the basket, tuck it under my arm and support Amendments Nos. 1, 262 and 260.
I must confess that I have been outflanked. When I tabled my own amendment, I seemed likely to have the honour of firing the first shots over Clause 56. But the ingenuity of Amendments Nos. 1 and 260 let the noble Lord, Lord Clement-Jones, and the noble Baroness, Lady Barker, in first, followed closely by the noble Lord, Lord Morris of Manchester, with Amendment No. 2. But no doubt my time will come in due course!
The argument against a broad definition of personal care and exemption from charges, and matching that broad definition, is essentially one of cost and priorities. Less income from charges means greater cost for providing services, and costs incurred in one direction cannot, unless resources are increased accordingly, be incurred on other things. But we are not discussing whether the state rather than the individual should pay for very rich people, or even rich people, to have their flowers arranged or their nails manicured; we are talking about basic disability needs. I doubt whether anyone reading this draft clause (Amendment No. 260) would regard the services listed there as anything other than basic. As a civilised society, we ought to ensure that these basic services are free wherever they are provided and by whoever they are provided, including the care proposed by the noble Lord, Lord Morris of Manchester, in regard to supplementary medical practitioners.
I have no objection to people who are financially well off or reasonably well off being required to pay for board and lodging and the frills of care—all the grapes they wish to consume. But no one should be asked to pay for the disability care basics. On behalf of Mencap

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and numerous other disability and older people's charities, I support Amendments Nos. 1, 2 and 260 accordingly.
Lord Williamson of Horton: I heard the words of the noble Lord, Lord Lipsey, and I made the simple resolution that my own intervention would be shorter than his. The grouping of the proposed purpose clause, the amendment of the noble Lord, Lord Morris of Manchester, and the proposed new clause in Amendment No. 260 brings us to the difficult but important issue of the definition of nursing care and what we do about other forms of personal care. We greatly welcome the Government's commitment to fund free NHS nursing care for all who need it. If we were wholly satisfied with the definition in the Bill as it stands, we could say thank you. I advise the Minister that I sometimes do say thank you to the Government; it is not very common, but I sometimes do it.
Clause 56, to which we are coming, refers only to nursing care by a registered nurse covering the provision of care itself and the planning, supervision and delegation of the provision of care but excluding services which do not need to be provided by a registered nurse. This would exclude services provided by health care assistants who carry out a lot of essential tasks. On the other hand, Amendment No. 1 refers much more widely to free personal care which is evidently wider than services provided by a registered nurse. Amendment No. 260 is even more specific with a list of seven types of personal care services.
Experience in your Lordships' House has taught me that although many parliamentarians like purpose clauses, legal eagles do not and they are unlikely to be converted on the road to Damascus or Westminster. Therefore, in relation to personal care and assessment of need, we are dealing with a paving amendment. I do not think that we shall get anything more than that. I like to treat my intervention in the same way as a paving intervention, if there is such a thing. While there is a huge difficulty about definition and the risk of putting into legislation lists of services that may become outdated if there was a policy decision, it is none the less true that the current definition of nursing care in Clause 56 should be looked at again. That would be the consequence of the amendments; there would be a change. We need to recognise that we should include some other services which most people would consider to be an integral part of personal and nursing care. They would think it was one sole type of care and would not make a great distinction between them.
Baroness Masham of Ilton: It is very difficult to separate personal and nursing care. If a person is turned at night to prevent pressure sores, is that considered to be personal care or nursing care? If a person develops pressure sores, nursing care becomes necessary, and that can cost an immense amount. In the end, the patient can land up in hospital. The turning of a patient can be undertaken by an assistant or a nurse. This is vitally important because pressure sores are costing the country millions of pounds.
6.15 p.m.
Baroness Ashton of Upholland: I am conscious of the comments made about procedure so I am not sure whether I should be speaking. I remind the House that I am chair of a health authority. I want to make an administrative point, and a moral one from a personal view. The administrative point is that I have asked my health authority, if we were implementing this legislation today, how we might go about it. I recognise that we will receive fantastic guidance from the department—as always; and, as always, the department is glad to have views fed back to it in advance. I shall take the liberty of doing that via this statement.
From our point of view, it is simple. At present when persons are assessed to go into residential nursing care, we have an inspection registration unit responsible for ensuring that the appropriate standards of nursing and care are available for those patients. A typical percentage ratio would be 65 per cent of services provided by carers and 35 per cent provided by registered nurses. We do not investigate precisely what the registered nurses do; I do not believe that that is our job. They may decide to brush a patient's hair as a beneficial treatment for the scalp or because they are trying to develop a relationship with that patient. Were this Bill enacted now, we would pick up the bill for the 35 per cent that is currently paid by the residents of that nursing home. We have a clear administrative way of dealing with this that does not get us into the list of what is personal care. We should be cautious of doing anything other than leaving that in the hands of nurses who know perfectly well what they are doing and when they need to intervene with particular patients and not others.
We reassess patients every three months. We look carefully at patients who become more ill with regard to whether to move them. Currently, we have eight patients in my health authority who would have gone into NHS continuing care, but we feel that it is wrong to move them and we have paid for the additional nursing care.
On the ground this feels a lot easier from a health authority perspective than it feels in your Lordships' House. I would argue strongly that we should not include in this legislation lists which would tie the hands of nurses with regard to what they can do and which would create a division in the seamless care we wish to see in our nursing homes.
The second point I make relates to costs. I am conducting a review of elderly care in Hertfordshire. If I had the money that I believe is quoted in the documents and by the Royal Commission, I would not spend it in the way proposed in this amendment. That is because I have looked at all our care for the elderly. I would spend the money first on ensuring that elderly people at home who fall do not end up on trolleys in A & E departments. Currently, that is what happens because we do not have the capacity for teams of doctors and nurses to go out from intermediate or continuing care facilities to help them at home or to take them directly into a facility that would give them

1035
respite care. Secondly, I would look carefully at intermediate care where we have very little, if any, physiotherapy or occupational therapy—and I would invest in that. Thirdly, I would invest in ripping down some of the buildings we laughingly call NHS continuing care facilities and build purpose-built ones appropriate to the needs of our elderly population.
This does not mean that in an ideal world I would not want personal care; but I ask that we think carefully about the moneys we have available and could have available. This is not where I would put the money. There is a lot more to be done for elderly people. There are priorities that must come ahead of this.
Baroness Barker: Some months ago the noble Lord, Lord Lipsey, wrote an article in one of the broadsheet newspapers in which he gave six reasons why he was not a Liberal. I read that article and agreed with him on all six counts. I want to make it clear that, having listened to the arguments of the noble Lord on these matters over the past few months and watched him bravely go into the lion's den at pensioners' meetings, I am convinced that he is as passionate about the needs of older people as I am. We have different conclusions and priorities, but I do not doubt his sincerity.
The noble Lord referred to previous discussions on the subject in the House. I had hoped that he would rehearse some of the arguments which are germane to this issue. One of his most powerful arguments is that if something is free demand for it will inevitably increase. That argument was put forward by those who opposed the creation of the NHS in 1948. It was resisted at that time and the NHS was created. On the morning that the NHS came into being, healthcare workers in Birmingham went to work early, barricaded themselves in their offices and waited for the hordes to descend. At nine o'clock a short and orderly British queue formed.
It was right to resist such an argument in 1948; it is right to resist it today. From my experience, the idea that older people will ask for help to go to the toilet or to eat when they do not need it does not ring true. Older people value highly their personal independence.
The noble Baroness, Lady Carnegy of Lour, asked a valid question: why are we discussing this issue now? One reason is that the Government have put forward a number of different proposals emanating from the NHS Plan but without sufficient transparency to enable us to understand the future of healthcare. I refer in particular to the intermediate care guidance. The noble Lord, Lord Lipsey, states that £1.2 billion is too much to spend on personal care. We know—the Government have told us several times over—that £900 million will be made available for intermediate care. But we do not know how that will be made available. Because of the lack of transparency on the definition of nursing care we must now concentrate our minds on personal care.
1036
Opponents of the measure argue that 70 per cent of people already in residential care have all their personal care paid for and that the measure will subsidise those who are well off. Many people in nursing residential care already have to pay a considerable amount for their personal care. An individual with an income of approximately £185 per week may spend a third of his income on personal care.
The Government will say that things will change in the future because people will not have to sell their house. Those people may not have to sell their house immediately but the proceeds from the eventual sale will go towards the cost of their care. Although at a deferred stage, people with low incomes will still have to sell their house.
The noble Baroness, Lady Ashton of Upholland, argued for priorities. We shall discuss those in depth. Some of us cannot yet see the funding priorities in the detail of the Bill: we do not know from where the new money, as opposed to the recycled money, will come. We are told that there will be regulation and guidance. Until they are in place we must ensure that those who are in greatest need have those needs met.
The creation of the welfare state in 1948 was referred to as a settlement with the British people. At the heart of that settlement was an understanding that those most in need would have those needs provided for through taxation. The noble Lord, Lord Lipsey, may agree that the heart of the issue relates to taxation and priorities. On these Benches, we are not satisfied that the Government have made clear with sufficient transparency and clarity which needs of older people will be met. The measure appears to be a tax on age and vulnerability. That is not acceptable to Members on these Benches.
Lord Hunt of Kings Heath: In a sense we are having another Second Reading debate. I shall try to be brief in my response because in essence the Government's answer is the same as that given at Second Reading and in the debate initiated by my noble friend Lord Ashley a few weeks ago.
Of course, we are determined to ensure that we do everything we can to improve health and social care for older people. That is why the NHS Plan set out how we would invest £1 billion a year in new services for older people by 2003–04 and a further £360 million in easing the personal costs faced by people entering long-term residential care.
This is a substantial investment of public money. It is also a major step forward in terms of fairness, equity and better care. Clearly, the Government have had to face difficult decisions on where to spend that additional resource. In rejecting, as we have done, the Royal Commission's recommendation on personal care we have taken a deliberate decision to spend the resources available to us on improving the quality and range of services provided for older people and those with disabilities with particular emphasis on services which will help those older people regain as much independence as possible—services which will support them in their own homes, and services tailored to their individual needs.

1037
As noble Lords well know, personal care is currently provided on a means-tested basis. As the noble Baroness, Lady Barker, pointed out, that means that seven out of 10 people in residential accommodation receive free some or all of their personal care. I understand the point she made. Nevertheless, it is a fact that is often lost in debate on these issues.
It is also wrong to ignore the other changes we are making which I believe are substantial improvements: raising the capital limits at which people become eligible for the means test; and disregarding the value of a person's home for the first three months in residential accommodation which will mean that the moderately well off will have more of their care paid for from the public purse.
I agree with the noble Lord, Lord Rix, that it is a question of cost and priorities. Making personal care free, I believe, would in effect lock in place the inadequate services which older people currently receive. Not one extra person would be helped to stay in his or her own home, or to receive a piece of equipment which would transform their ability to cope at home. The services would not be extended so that more people could benefit from a greater range of better services.
It is a difficult choice but I believe that the Government are right to choose to invest those available resources in changing fundamentally the way that our care system supports older people. I believe that investment in personal care would very much inhibit that.
The noble Baroness, Lady Barker, frequently cast doubt on intermediate care. She asked for transparency. I believe that we have been transparent about our aim: to spend £900 million by the year 2003–04; and, as part of that programme, to enable us to have 5,000 extra intermediate care beds, and 1,700 supported care places enabling around 150,000 more people a year to regain their independence or avoid going into hospital—services which would be provided free. We have a target for the NHS of 1,500 more intermediate care beds in 2001–02 compared with 1999–2000, with an extra 60,000 then receiving intermediate care services.
Health authorities are also planning to provide intermediate care services for an additional 42,000 people in the coming year. We already have examples of imaginative schemes being put into place. They include short-term programmes of intensive therapy and rehabilitation in a residential setting such as a community hospital to enable people to regain the physical functioning and confidence to return safely to their own home. My noble friend Lord Morris may be interested to know that the schemes involve not just nurses, but physiotherapists, occupational therapists, speech and language therapists and members of other professions allied to medicine helping patients regain or maximise their ability for independent living. There are also hospital at home schemes, which provide intensive support in the patient's home and avoid the need for admission to hospital.
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I could quote many examples of schemes that are helping people regain their independence and maintain it for as long as possible. We will build on that, because we are committed to improving services for older people. The National Service Framework for Older People will include setting standards for care. All older people, including those with dementia, can expect improved services.
I listened with great interest to the noble Lord, Lord Clement-Jones. I do not remember him saying anything about money. Although the noble Lord, Lord Beaumont, postulated that the Liberal Democrats had carefully costed their proposals. I have my doubts. If we add up all the Liberal Democrat spending commitments that have been announced in the past few days, it is very difficult to square them with proposals to raise income tax by 1p. It would have been helpful if the noble Lord had come to the debate with some concept of how those extra resources could be raised.
In conclusion on the key debate, we believe that investing in the new, improved services is the right choice. It would be wrong to ignore the extraordinary advance that is being made by ending the anomaly that only people in nursing homes can be charged for the care that they receive from a registered nurse. That care would be free through the NHS in any other setting. That will help 35,000 people at any one time who currently have to pay for their nursing care. They could save up to £5,000 a year during a stay in a nursing home.
I suspect that we shall debate the definition of nursing care at some length in Committee. All that I would say at this stage is that through the definition that we have used in the Bill the Government are simply seeking to create a level playing field. That definition most closely resembles the extra care that a person would expect to receive in a nursing home as opposed to residential care. Of course we shall come back to that.
On the point raised by the noble Baroness, Lady Masham, there are always risks involved in listing the functions of nurses and care assistants or picking a particular illness or the issues that a person is suffering from and asking that question. The appropriate person to carry out that task will depend on the clinical assessment. In a sense, that is entirely consistent with the Bill's proposal on the role of registered nurses in nursing homes.
I was delighted that my noble friend Lord Morris referred to the role of professions supplementary or allied to medicine. I strongly agree that it is not simply an issue of doctors and nurses. The NHS Plan makes it abundantly clear that we see an important role for all the professions involved in wider health care. I have already mentioned the intermediate care role played by many therapists and professionals. I shall be happy to meet with the Society of Chiropodists and Podiatrists to discuss the issues further, particularly the point that he raised about Feet First.
The NHS has a duty to provide healthcare to any member of the public as reasonably required. If the NHS has assessed a health need, residents of care

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homes should already receive NHS services direct from the NHS in the same way as any of us would receive services from a GP, a physiotherapist or other members of the health professions under the responsibility of the National Health Service.
This is a straight issue of priorities. I think that the Government have taken the right decision. It has been a difficult decision, but I am convinced that the change in relation to nursing care provided by a registered nurse, other changes that we have made on the disregard and the massive spending on intermediate care are the best use of the additional resources that we have made available and will achieve much more for the people of this country than simply bowing to the altar of free personal care.
6.30 p.m.
Lord Rix: May I ask the Minister a question for clarification? Let us consider the case of someone who has invested £100,000 in a pension fund and is receiving that pension and their old age pension, but they live in rented accommodation and have £2,000 in their current account and no other liquid assets. How would the £18,500 disregard be calculated in that case?
Lord Hunt of Kings Heath: My assumption is that the calculation is based on the income that is received rather than a grossed up pension, which I think the noble Lord is referring to. I shall write to him if I have got that wrong.
Lord Clement-Jones: I thank the Minister for his reply. I greatly value the support of a number of noble Lords for Amendments Nos. 1 and 260, particularly those on the Cross Benches. I hope that the points made in the debate have helped to overcome the qualms of the noble Baroness, Lady Carnegy, on whether we should be debating the issue at this time of day. I hope that she will join us when we are engaged in happy debate at 2 a.m. on the definition of nursing care.
Baroness Carnegy of Lour: My objection is that any party could table such a clause at any time and include a later clause in the same grouping so that we discussed a clause out of order. If we did that all the time, we should make a tossed green salad of the Order Paper. That is my only point.
Lord Clement-Jones: I hear what the noble Baroness says, but paving amendments are well known and well established as a device for having debate at points convenient to the House.
I shall not run through the contrary arguments to the points put by some noble Lords. The noble Lord, Lord Lipsey, rehearsed a number of arguments that he has used before, including the doomsday scenario on cost and the constitutional case, which the noble Lord, Lord Beaumont, dealt with successfully. If we were never able to override the Commons on a matter of cost, there would be very few things that we could debate without being in fear and trepidation of the
1040
Treasury. The timetable for debate is largely controlled by the Government. The debate in the Commons was truncated by a new procedure in Committee. Only this House will be able to debate the issues in a proper fashion.
I do not normally accuse the noble Lord, Lord Lipsey, of polemic, but he almost suggested that the Royal Commission was not serious in its conclusions. I found the Royal Commission extremely serious in its conclusions. It determined the priorities and did an extremely effective job; but, of course, the noble Lord, Lord Lipsey, was a dissentient. I do not believe that it can be concluded from the report that Sir Stewart Sutherland thought that money grew on trees. That is a rather dismissive way of considering the report. As regards Sir Stewart's intentions in terms of his party allegiance, we shall no doubt have many happy discussions about that in the future.
The noble Baroness, Lady Ashton, made a much more serious intervention in terms of priorities, and a number of her points need to be answered. If "nursing care" is defined in the same way as the Government have defined it, there are major anomalies because healthcare assistants are not included in that definition. I believe that our proposals will help elderly people at home. They will allow them greater independence.
The Minister's point that our proposals provide no further assistance to older people is totally incorrect. I believe that the provision of free personal care, particularly in a domiciliary setting, will have a major impact on older people. The Minister said that not one extra person would be enabled to stay in his or her own home; that is not the case. We need to ground our case in the preventative value, which we believe is extremely substantial, of having free personal care available.
I accept the Minister's case on intermediate care. As my noble friend Lady Barker said, it is still insufficiently clear exactly what it constitutes or how it will be delivered. But the Government have chosen to use it as their flagship, on which they are spending £900 million. That is a priority that they have set themselves. We have decided to set ourselves an additional priority. We do not decry intermediate care and rehabilitation and everything that goes with it—it is very important—but personal care is also a high priority.
Finally, I cannot expect the Minister to conduct his research into our alternative budget, published only two weeks ago, or to read the very clear statement in it about how we would pay for personal care out of a 50 per cent tax rate on those earning over £100,000, or about the cost, which we estimate will be £750 million per year in the early stages. However, I do not believe that we should be accused of having failed to consider the cost and the tax-raising implications of personal care. We realise that it amounts to a massive commitment, not lightly undertaken. The importance of the issue is one of the reasons that we thought it right to hold this debate in prime time in this Chamber.
I do not believe that the Government's proposals create a level playing field. On the contrary, they create an extremely rutted pitch. The personal care which we

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envisage would level that playing field and deliver the outcome that the Minister believes his commitment to nursing care would deliver. This is a very important issue, especially for all the organisations that have contacted us over the months since the Royal Commission reported its conclusions. There is a huge sense of disappointment in the country about the Government's proposals.
Lord Morris of Manchester: My Lords, I am grateful to my noble friend Lord Hunt for his reply and for referring so warmly to the importance of the work of chiropodists and podiatrists and the other professions supplementary to medicine.
I am also grateful to my noble friend Lord Lipsey for condemning the practice of making the same speech in one debate after another. Well said. But not every participant in this debate is a serious offender. My speech today, like that of my good and longstanding friend, the noble Lord, Lord Williamson, was my first on this Bill and, like him, I have no intention of competing with the serial offenders in our midst. Naturally, I should like to discuss the Minister's response to my amendments with the Society of Chiropodists and Podiatrists, not least in fairness to my noble friend— before deciding whether to return to the fray—and thus I reserve my position with regard to the later stages of your Lordships' consideration of the Bill. Meanwhile, I beg leave to withdraw the amendment.
Amendment No. 2, as an amendment to Amendment No. 1, by leave, withdrawn.
Lord Clement-Jones: My Lords, I should like to test the opinion of the House on Amendment No. 1.
6.46 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 38; Not-Contents, 88.

Division No. 1

CONTENTS

Addington, L.

Oakeshott of Seagrove Bay, L.

Avebury, L.

Park of Monmouth, B.

Barker, B. [Teller]

Razzall, L.

Beaumont of Whitley, L. [Teller]

Redesdale, L.

Bradshaw, L.

Rennard, L

Clement-Jones, L.

Rix, L.

Dholakia, L.

Rodgers of Quarry Bank, L.

Ezra, L.

Roper, L.

Falkland, V.

Russell, E.

Goodhart, L.

Scott of Needham Market, B.

Hamwee, B.

Sharp of Guildford, B.

Harris of Greenwich, L.

Shutt of Greetland, L

Jacobs, L.

Thomas of Gresford, L.

Lester of Heme Hill, L.

Thomson of Monifieth, L.

Maddock, B.

Tope, L.

Mar and Kellie, E,

Wallace of Saltaire, L.

Methuen, L.

Walmsley, B.

Newby, L.

Watson of Richmond, L.

Northover, B.

Williams of Crosby, B.

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NOT-CONTENTS

Acton, L.

Hoyle, L.

Ahmed, L.

Hughes of Woodside, L.

Amos, B.

Hunt of Kings Heath, L.

Archer of Sandwell, L.

Irvine of Lairg, L. (Lord

Ashton of Upholland, B.

Chancellor)

Bach, L.

Jay of Paddington, B. (Lord

Bassam of Brighton, L.

Privy Seal)

Berkeley, L.

Jeger, B.

Brabazon of Tara, L.

Jenkins of Putney, L.

Bragg, L.

King of West Bromwich, L.

Brennan, L.

Lea of Crondall, L.

Brooke of Alverthorpe, L.

Lipsey, L.

Brookman, L.

Macdonald of Tradeston, L.

Burlison, L.

McIntosh of Haringey, L.

Burnham, L.

[Teller]

Carter, L.[Teller]

MacKenzie of Culkein, L

Chandos, V.

Mallalieu, B.

Clarke of Hampstead, L.

Merlyn-Rees, L.

Clinton-Davis, L.

Milner of Leeds, L.

Cocks of Hartcliffe, L.

Morris of Manchester, L.

Nicol, B.

Davies of Coity, L.

Plant of Highfield, L.

Davies of Oldham, L.

Ponsonby of Shulbrede, L.

Desai, L.

Ramsay of Cartvale, B.

Donoughue, L.

Rendell of Babergh, B.

Dubs, L.

Richard, L.

Eatwell, L.

Rogers of Riverside, L.

Elder, L.

Sainsbury of Turville, L.

Elis-Thomas, L.

Sawyer, L.

Evans of Parkside, L.

Serota, B.

Falconer of Thoroton, L.

Sewel, L.

Farrington of Ribbleton, B.

Simon, V.

Faulkner of Worcester, L.

Smith of Leigh, L.

Filkin, L.

Stewartby, L.

Gale, B.

Symons of Vernham Dean, B.

Gilbert, L.

Tomlinson, L.

Gladwin of Clee, L.

Thornton, B.

Goudie, B.

Turnberg, L.

Graham of Edmonton, L.

Walker of Doncaster, L

Grenfell, L.

Warner, L.

Harris of Haringey, L.

Whitaker, B.

Haskel, L.

Whitty, L.

Hilton of Eggardon, B.

Williams of Elvel, L.

Hollis of Heigham, B.

Williams of Mostyn, L.

Howells of St Davids, B.

Winston, L.

Howie of Troon, L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.56 p.m.
Lord Clement-Jones Lord Clement-Jones moved Amendment No. 3:
Before Clause 1, insert the following new clause—
"DUTY TO PREVENT DISCRIMINATION
(1) It shall be the duty of any person or body exercising functions or otherwise providing services under this Act to prevent discrimination against any class of persons receiving services under this Act, including discrimination by reason of age.
(2) It shall be the duty of any relevant authority and any other body exercising functions under this Act to publish an annual statement of the measures they have taken to prevent discrimination against any class of persons receiving services under this Act, including discrimination by reason of age."
The noble Lord said: In moving Amendment No. 3, I shall speak also to Amendment No. 4, which relates to age discrimination. Despite constant urging, this Government's failure to outlaw age discrimination during their term of office is a massive disappointment to all those involved in the care and representation of older people.
The Secretary of State was quoted in the not too dim and distant past as saying:
"I will not tolerate anything which smacks of age discrimination in the NHS".
Yet, the fact is that this Government have not done nearly enough to prevent it. They did not agree to an investigation into age discrimination in the NHS which, pre-election, they pledged to do. The national confidential inquiry into perioptic deaths in November 1999 referred to staff shortages and lack of experience leading directly to the deaths of older people. There have been restrictions on heart bypass operations, heart transplants and cardiac rehabilitation for older people. Kidney dialysis and transplants have been refused to patients over the age of 70. There are no public health fitness targets for those over the age of 65 in Our Healthier Nation. We all know of the stories of delays in older people being seen by doctors when admitted to hospital. However, the fact is that two out of three acute beds in the NHS are occupied by people over the age of 75. Therefore, this is a major issue.
We know of the scandals that have taken place. In one case, "Not for resuscitation" was written across a patient's toes. Diamorphine has been administered without medical justification and without consultation with relatives. We have heard of cases of denial of food and drink or food supplements to patients, and the denial of hip operations for older people.
Throughout, the principle seems to have been forgotten that we all have a right to treatment based on clinical need and not age. Age Concern's report on discrimination in the NHS, Turning Your Back on Us, was published in 1999. It put the case very cogently for a duty not to discriminate within the NHS. An Age Concern survey of 1,000 patients at the end of 1999 found that health was, of course, a key concern of older people. However, its survey of GPs found that 77 per cent said that rationing on the basis of age takes place in the NHS.
The most recent report by Age Concern, Speaking Out, which was published in November last year, showed that ill treatment and discrimination against the elderly is still rife. A report published last year by the Association of Community Health Councils on accident and emergency departments demonstrates horrendous discrimination against the elderly. Elderly patients are rushed to hospital but are then sometimes left to die on trolleys. One in five of us is aged 55 or over, and 42 per cent of NHS resources is devoted to the elderly. If we do not get the matter right in relation to the elderly, we are failing horribly.
I know that the National Service Framework for Older People is due to be published shortly. But that, by itself, is not enough. We need to create a positive legal duty and a positive culture of care. It is not only a matter of resources; above all, it is a matter of respect. That should be enshrined in legislation.
We on these Benches argued on previous occasions in relation to both the Care Standards Bill and the Health Bill that there should be such a duty in
1044
legislation. This Bill presents another opportunity for the Government to accept the need for a clear duty not to discriminate. We shall press hard for that throughout the passage of the Bill. I beg to move.
Earl Howe: We are fully in accord with the spirit of the amendment, as, I believe, are the Government. I cannot express the case any more cogently than the noble Lord, Lord Clement-Jones. I look forward to the Minister's reply.
7 p.m.
Lord Harris of Haringey: I wish to speak to Amendment No. 3, which the noble Lord, Lord Clement-Jones, has introduced. I am not sure what response my noble friend the Minister will give, but there are two possibilities. My noble friend may say that it is unnecessary because it is already enshrined in guidance, or he may say that unfortunately it brings within its ambit all sorts of other things that were not intended by the noble Lord, Lord Clement-Jones.
Discrimination by reason of age is not just about being old. For example, there are a number of thresholds at which point it is assumed that certain treatments will not be available. The standard protocols on breast cancer screening make assumptions about appropriate age ranges for screening to take place. Noble Lords want to adopt the principle that an assessment is done on the basis of an individual's needs and requirements, not on the basis of the standard application of protocols.
The amendment refers to "any class of persons", and I hope that that is not so widely defined as to make it impossible for there to be protocols on treatment. It is important to have clear guidelines on the provision of treatment by the medical profession which are capable of interpretation in the light of individual needs.
While I embrace the spirit of the amendment, I hope that a way can be found to achieve its objectives rather than bringing in all sorts of other factors, which would be unhelpful.
Lord Hunt of Kings Heath: I welcome the opportunity to debate this important subject, which has been debated frequently in your Lordships' Chamber in the past two years, for reasons that are entirely understandable.
My first response to the noble Lord, Lord Clement-Jones, as my noble friend Lord Harris foreshadowed, must be that the matter is enshrined in legislation. The whole ethos of the NHS must be to ensure fair and equal treatment to all. I refer the noble Lord to Section 1 of the NHS Act 1977, which places a duty on the NHS to provide a comprehensive health service for all. That is the starting point and the framework under which the health service must operate in providing a service to all citizens in this country.
I can go further and say that the Government have consistently stated that discrimination on grounds of gender, race, religion, sexual orientation, disability or age is wholly unacceptable. I very much reject the

1045
charge made by the noble Lord, Lord Clement-Jones, that the Government have not taken action to ensure that that is carried out in practice.
The NHS Plan sets out our vision for healthcare services in this country, which must be built around the needs and preferences of individual patients, their families and carers. The NHS of the 21st century must respond to the needs of different groups in society, whatever their age, gender, ethnicity, religion, disability or sexuality. We are committed to ensuring that the NHS will treat patients as individuals and with respect for their dignity.
I shall give some examples of the action we have taken. I firmly believe that unless we have the right approach to staffing in terms of equal opportunity, we shall not be providing services to the whole population in the way in which the noble Lord, Lord Clement-Jones wishes.
The NHS Plan introduces a standard to improve working lives and makes clear that every member of staff in the NHS is entitled to work in an organisation that can prove that it is investing in improving diversity and tackling discrimination and harassment. We are tackling harassment of staff, including racial harassment.
The "positively diverse" initiative brings together a service-wide consortium of healthcare and other partners to improve access and participation for all sections of local communities in the healthcare work force. We have set targets to increase minority ethnic representation in executive posts at board level to 7 per cent by the end of March 2004.
It is extremely important to set the foundation in which to eliminate discrimination in service delivery. We are facing up to inequalities in health, and launched the Acheson inquiry into health inequalities. We published the White Paper, Our Healthier Nation, and announced new health inequalities targets. Tackling inequalities is a key issue for health action zones.
The noble Lord, Lord Clement-Jones, referred to national service frameworks, and said that they were not sufficient. I believe that such frameworks are the ideal vehicle to ensure high quality and consistent provision of services throughout the country. We know that it has been a persistent sin of the NHS to have an inconsistent and patchy service. The national service framework for older people will be the ideal vehicle to raise standards in the way in which the noble Lord, Lord Clement-Jones, has rightly suggested. The Commission for Health Improvement is designed to allow us to examine the progress of the NHS and to address issues of access to healthcare.
I am not persuaded that defining legislation is the way forward. The fundamental duty of the NHS is laid down in the 1977 Act. The issue is not about adding to that legislation, but ensuring that we implement its provisions effectively in the National Health Service. I hope that the noble Lord, Lord Clement-Jones, will understand that the arrangements that we are putting in place, the targets in the NHS Plan and the national service framework for older people, which will be
1046
published shortly, will enable the NHS to tackle the issues, which the noble Lord has rightly raised, more effectively.
With regard to clinical treatments for older people, I can tell the noble Lord that I would deplore any such arbitrary age limit to which he referred. The treatment of older people must be based on clinical assessment alone.
Baroness Barker: I can tell from the Minister's face that he thinks that I am about to ask about the national service frameworks, but I am not. I want to ask him to pick up the point made by the noble Lord, Lord Harris, about protocols for treatment having to be based on factors other than age.
Lord Hunt of Kings Heath: Whether we are talking about protocol for treatment, or the clinical policies adopted in individual hospitals, the Government have said consistently that arbitrary age limits are not supported. The issue in the end is about an individual's clinical assessment made by a doctor.
Lord Clement-Jones: I entirely recognise the Minister's sincerity and genuine belief that new legislation is not the way forward. I am delighted to have elicited from him that he regards Section 1 of the 1977 Act as being as good as the amendment that I am proposing today, although I find that a little difficult to believe. As far as I know, no one has ever sued under Section 1 of the 1977 Act. I do not believe that medical negligence lawyers are lining up behind ambulances to use that Act, but I may be entirely mistaken.
I recognise that there is a litigation-averse feeling both in the NHS and more widely in the department itself. But that should not stop us considering the most effective way of preventing discrimination in the future. Time will tell. The Minister clearly believes that a national service framework is the ideal method of improving standards. I find that a little bit tall. They are relatively new instruments and we have the Commission for Health Improvement to help enforce them.
Lord Hunt of Kings Heath: Perhaps I can intervene and explain to the noble Lord, Lord Clement-Jones, why national service frameworks offer the best vehicle for taking forward these issues.
If we look back at the history of the NHS we can see, and my office contains, many reports which have been produced and designed to improve the provision of a specific service. The problem with that is that reports are produced without any connection to implementation, particularly in relation to resources.
The whole point of national service frameworks is to come forward with realistic plans for the implementation of changes in the health service which can reasonably be expected to be implemented because of the resources available and the robust performance management system that is adopted. That is why

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national service frameworks represent a much more effective way of ensuring changes in services than has been the case historically in the NHS.
Lord Clement-Jones: I thank the Minister for that intervention. I am a fairly rusty lawyer and am certainly not about to give a lecture on the law of tort. But lawyers are used to having a set of standards by which they judge whether or not somebody is guilty of malpractice, negligence or maladministration. Of course the national service frameworks are an extremely good method of testing the general level of standards that should be applicable. But it is rather like the Human Rights Act. That was an extremely valuable piece of legislation. It means that there are tests and that the whole system in government and the way we treat people has been tightened up. Why should it be any different in terms of adopting a clause of this nature within the NHS? Of course there will be cost implications and administrative tightening-up that will need to be carried out.
We are clearly going to return to this subject, no doubt on this Bill and in the future. There is a difference in relation to means; I do not believe there is any difference as to ends. Time will tell whether the Minister's optimism in national service frameworks is justified. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
7. 15 p.m.
Clause 1 [Determination of allotments to and resource limits for Health Authorities and Primary Care Trusts]:
Earl Howe Earl Howe moved Amendment No. 5:
Page 1, line 12, leave out "(in whatever way he thinks appropriate)"
The noble Earl said: My Lords, I do not suppose that I am alone in finding Clause 1 of the Bill quite a complicated piece of drafting. At the best of times NHS finance is an extremely difficult and specialist science and I do not pretend to be an expert in it. However, I feel that, as far as possible, what happens to taxpayers' money and who receives it should be clear and transparent.
The element lacking in Clause 1 is any acknowledgement of the importance of the transparency principle and the purpose of Amendments Nos. 5,7, 9, 10 and 13 is to try to rectify that omission.
The Minister will know that, for many years, allocations to health authorities have been based broadly on resource allocation principles. At the moment we have the Advisory Committee on Resource Allocation which advises Ministers on these issues. But inevitably, as each new version or refinement of these principles is adopted, some authorities find that they are above the target or below
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the target. The annual allocation process therefore has to try to make adjustments to shrink the gaps in both directions.
During the 1990s, under the last government, considerable progress was made in doing just that. In 1992 the gap—that is to say, the gap measured as the distance between the authority with the highest percentage above target and the authority with the lowest percentage below target—was around 34 per cent. By 1998–99 it had fallen to around 14 per cent. However, since then the trend has been reversed. I have not been able to lay my hands on precise figures, but my understanding is that very little of the total allocations during the past two or three years have been used to redistribute money between over and under- target authorities. That process of strategic shift in resources ought to be clearly in the public domain. At the moment it is not.
Ideally, the Government should publish the allocation target and the distance from target of each body. We should also ideally be able to see what amounts have been top-sliced from the budgets, such as the amounts in the NHS performance fund. However, it would be a welcome first step if a statement was laid before Parliament which set out the principles on which allocations are made and the amounts of money being parcelled out. That is what Amendment No. 9 seeks to do.
The Government indicated that the purpose of Clause 1 is to get fair shares for GP services. I do not suggest that there is anything wrong with that aim. However, it is patently obvious that another valuable by-product of that clause—that is, valuable to the Department of Health and the Treasury—is that it enables Ministers to obtain control of non cash-limited GP spending.
For example, if a southern health authority has had historically high levels of GP services and an average level of secondary care services, then its overall level of spending will have been above average. Clause 1 will empower the Secretary of State to cut allocations to the authority in order to level down the effect of apparently high GP spending. But it is worth saying that high spending is not in itself a good indicator of over-provision. Some costs associated with Part II services will inevitably be higher in areas where property prices and wages are higher than they are in other areas.
I understand about the new unified formula referred to in the Explanatory Notes. Paragraph 23 of the notes says that this formula should not lead to the cash limiting of Part II expenditure. That is an example of economy with the truth. It is clear that, as a result of the unified formula, some cash limits will bite on the allocations that are made by health authorities to PCTs; in other words, cash limiting by the back door.
The notes say that those authorities that are over target under the new rules will receive lower funding growth than those under target. Can the Minister confirm that there will at least be no reduction in allocation, certainly in cash terms, as a result of the new powers?
Let me revert briefly to where I started; that is, to the issue of transparency. The powers conferred by Clause 1 are incredibly widely drawn. It says that the Secretary of State may take into account a health authority's Part II expenditure,
"in whatever way he thinks appropriate".
That is a recipe for completely subjective decision making. If one takes the wording literally, the Secretary of State could abandon all pretence of following a laid-down resource allocation formula and do exactly as he likes without disclosing why he is doing it. To take that to an extreme, although the idea is admittedly fanciful, it would not do for the powers to be used to redistribute money into, for example, favoured marginal constituencies. What statutory safeguards are there to prevent that happening? What is to stop the Secretary of State taking into account one authority's general Part II expenditure in a certain way and yet take into account another authority's Part II expenditure in a completely different way or, indeed, not at all?
It does not seem to me to be right to depart from the principle which says that money should be allocated around the health service only by means of objective and fairly applied formulae. However, to the extent that formulae sometimes need to be refined and tweaked, I believe that it is of fundamental importance that there should be maximum transparency in the way that that is done. I beg to move.
Baroness Cumberlege: My Lords, I rise to support my noble friend. This is the first time I have taken part in debate on the Bill because I was not able to attend Second Reading. I have spoken to Members of your Lordships' House who have agreed that I should take part in debate in Committee.
As I have the generosity of the House and am able to do that, I start by declaring interests. I am a non-executive director of Huntsworth plc; executive director of MJM Healthcare Solutions and a council member of the ICRF. I chair St George's Medical School council. I am a vice-president of the Royal College of Nursing, a senior associate of the King's Fund, and it is time I got a life!
I support the amendment because I like the way that the clause is related to primary care. I have spent a lifetime working in primary care and feel strongly about it. The device which is being promoted here is to try to address the long-standing problem which was identified decades ago by Dr Tudor Hart and became known as "the inverse care law". However, like my noble friend, I have problems with the clause and much of the Bill because of its lack of transparency.
As my noble friend said, increasingly we have seen resource allocation shrouded in mystery. It is almost impossible now to see who is getting what because of the top-sliced money. Recently we have seen the introduction of the performance fund. That is a misnomer. It is not so much a fund as a convenient way of withholding money from general allocation. We shall see the fund grow and grow.
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It is impossible now to tell whether health authorities are receiving their fair shares or getting allocations of anorexic proportions. Added to that, the recent figures are not comprehensively on the public record. Even without the performance fund, if one takes into account health action zones, grants for inequalities, the New Opportunities Fund, and so on, it is hard to tell.
I shall be deeply boring and give a list of some of the top-sliced money: £7 billion for new capital investment; £31 million to improve hospital cleaning; £10 million for improvements to hospital food; £9 million for practical improvements in the working environment—I am not sure what that means—£250 million for information technology; £570 million for cancer; £230 million a year for chronic heart disease; £120 million of capital funding for the Treasury capital modernisation fund; £300 million in equipment for cancer, renal and heart disease; £300 million for the mental health national service framework; £140 million for professional staff to keep their skills up to date; £8 million for GPs and their staff (occupational health); £30 million for childcare arrangements; £50 million for special services to reward joint working with social services and £10 million for NHS-wide patient advocate and liaison service (PALS), a friend of ours, to which we shall come later.
I could go on. That is not even a comprehensive list. That illustrates how much money is being siphoned off and how little we are able to track it. I strongly support my noble friend's amendment in terms of transparency. He is right that ideally one would want to see the distance from target for each body made explicit. However, I recognise that that will be difficult. We should like to see the targets specified in legislation. Again, that is difficult. However, surely the least the Minister should give us tonight is transparency and agree to the amendments tabled by my noble friend.
I have given notice to the Minister that I should like to have a whole range of information about the Advisory Committee on Resource Allocation. I worked on this late at night. Looking at it in the morning, perhaps it is not so appropriate.
I should like to know who these people are; how they are appointed; the committee's terms of reference; whether it takes evidence; whether it meets in public; and how its decisions are disseminated. As regards this clause, will the committee take into account other community services such as nurse-led primary care centres? Does that come into the equation? Will it take a strategic view of the workforce, which in this case is GPs, or will it consider only financial issues?
I welcome any attempts to attract bright, young, newly-qualified doctors into general practice. I understand that, if enacted, the clause will strengthen primary care. However, can the Minister tell us whether it provides incentives for GPs to work in the wilderness areas? Will the measures in any way attract GPs, and will they address Tudor Hart's inverse care law? Will they bring in flexibility in terms of

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employment? I imagine that with the GP contracts that is not possible. However, will the measures enhance GPs' pay if they are part of a salaried service?
I do not believe that GPs take on general practice to seek money. I know that the Secretary of State has recently introduced incentives in terms of their pay. I believe that GPs are altruistic. They want to treat, heal and care for the sick. The ethic of most GPs is that they love their neighbour and feel that each should be done by according to his needs. That is a Christian ethic and one which many GPs carry out to the full.
However the way in which we employ such people is strange. We give them little opportunity to change their jobs. We expect a GP to arrive in a practice at the age of 28 and to spend the rest of his or her working life in that community. By the time GPs are 40, they are probably fed up. Their hopes have either been fulfilled or they recognise that such hopes are unrealistic. Are there incentives in the system being introduced to ensure that GPs are attracted to such areas, or will the system be mechanical?
The other question I want to ask the Minister reflects the comments of my noble friend. Let us suppose that a vacancy occurs in a health authority area and the health authority decide not to fill it but to use the savings to address, say, a recurring deficit in acute services. Are there safeguards in the clause to ensure that that will not happen? I want to ensure that there is such a safeguard and that transparency exists. I strongly support my noble friend.
Baroness Northover: I want to address the specific issue in Amendments Nos. 5, 7, 10 and 13 to a clause which allows the Secretary of State and, in one case, health authorities to act,
"in whatever way he thinks appropriate"
across a wide range of areas concerned with how the resources in the NHS are to be allocated.
There are many areas in the Bill where the Secretary of State apparently seeks wide powers. I gather from debates in the other place that the Government intend to introduce a formula for the use of such powers, when they have worked it out.
Like other provisions in the Bill, that formula has yet to be spelt out and we may come back to this in the next group of amendments. We should not leave this clause as it is, open to abuse. I am sure that this is very far from the Minister's mind. In the interests of transparency and accountability, Amendment No. 9 is the right approach.
7.30 p.m.
Lord Hunt of Kings Heath: My Lords, I am glad about the general welcome given to the intent behind this clause in relation to ensuring that there is a better distribution of GPs in the first instance throughout the country. I particularly welcome the penetrating questions of the noble Baroness, Lady Cumberlege, which I shall do my best to answer. She certainly showed that there is life after being a health Minister!
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Essentially, what we are attempting to do here is to use a formula for determining fair shares for health authority and primary care trust allocations, which brings both parts of the funding regime together. As the noble Baroness, Lady Cumberlege, suggested, this has been a big problem in the past. Even where you had the previous resource allocation funding assistance, there was a limit to what could be done, because it bore no reference to what could be spent under Part II.
Essentially, the clause allows the Secretary of State to take account of the distribution of spending on the non-cash delimited primary care services when he makes cash-limited allocations to health authorities, and then allows health authorities to take account of the distribution of spending on non-cash-limited primary care services when they make cash-limited allocations to a primary care trust.
The intention in the first instance is to develop a single-funding formula which will extend the existing unified budget formula which covers the old hospital health services budget, prescribing and general medical service infrastructure costs, to cover all GMS costs. The clause allows us to bring other Part II services, such as dentists and pharmacists, within the ambit of the formula in future.
We are starting with GMS because the relationship between population needs and the number of doctors is best understood in this area. However, as the dental strategy makes clear, we anticipate that health authorities will play a much more pro-active role in dentistry and indeed actually put their hands into their own pockets to ensure that it is given a boost. Initially we are focusing on personal dental service schemes to achieve this, but as preventative service becomes better understood on a population level we would, using this clause, have the opportunity to bring these services too into the fair shares allocation system, delivered through the single-funding formula.
Various speakers referred to the Advisory Committee on Resource Allocation, ACRA, regarding the development of the non-GMS non-cash-limited element of the new formula. It will be building on earlier work undertaken with the Medical Practices Committee, which developed a formula setting fair shares of unrestricted GP principals at health authority level. Essentially, we have asked ACRA to advise whether, and how, the formula needs modifying to operate in cash terms for the whole GMS non-cash-limited budget at both health authority and primary care trust levels.
Turning to the point made by both the noble Baroness, Lady Cumberlege, and the noble Earl, Lord Howe, the noble Earl referred to the 1997–98 range of distance from target, which was around 15 per cent. For 2001–02, the figure is 18.6 per cent but there is an explanation. While the range has increased as a result of one or two outlyers, I can confirm that more health authorities are nearer to their target. For instance, in 1997–98 93 per cent of health authorities were within plus or minus 5 per cent of their target, but by 2001–02 96 per cent will have reached that figure, being plus or minus 5 per cent. I would also say that the 2001–02

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figures of the unified allocations covering HCHS prescribing and GMS cash limited are not comparable with those for 1997–98, which cover HCHS only.
It is quite difficult, but my own conclusion is that progress is being made to try to reduce the gap between the health authorities in relation to the target. The intent, when we implement the new system, is that we will arrive at a single funding formula that will set a target, or fair share, for each health authority and primary care trust, covering GMS non-cash-limited expenditure as well as a unified allocation. I want to stress that when we allocate the extra resources for unified allocations in future our change-of-pace policy will apply to these new targets. I hope I can reassure the noble Earl, Lord Howe, that this works on extra resources being made available.
Essentially, those who are spending less than their fair share on GMS non-cash-limited services can be given a larger increase for their other services, and if they are spending more than their fair share they may get a smaller increase. The intent is to do that by a process of levelling up so that no area will have its existing level of resources reduced.
Of course, this clause does not stand on its own. It is clearly linked with the abolition of the Medical Practices Committee, as set out in Clause 21. We shall debate that later, but the important point is that in a sense we have anticipated the debate we had on Second Reading, in that it is really pushing responsibility down to the health authority level to try to tackle some of the very difficult problems in relation to GP distribution.
In answer to the noble Baroness, Lady Cumberlege, of course we want health authorities, and particularly primary care trusts, to use new flexibility to attract doctors to areas or localities where primary care services are poorly developed or over-stretched. We are looking particularly at GMS local development schemes or NHS walk-in centres. Those services are funded from cash-limited money and the new formula will mean that under-doctored areas will receive a proportionately greater share of increase in the unified budget, which they can use to fund these initiatives. Also, I am sure many of your Lordships will be pleased to recognise that some of them, like NHS walk-in centres, offer the possibility of using the skills of nurses to develop services to complement those of traditional general practice.
I would also say that in relation to issues such as the procedures that health authorities will need to go through they will have to work through a process of consultation at local level, particularly where they need to declare a GP vacancy, thereby taking over the role of the Medical Practices Committee. The essential point of all this is that we are giving much more leverage and responsibility to health authorities at local level.
Turning specifically to the amendments, in answer to the transparency point, only the provisions for funding health authorities under Section 97 of the 1977 Act, the formula process or mechanism by which the Secretary of State determines the allocation of each
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health authority, is left to his discretion. It has always been left to the Secretary of State to decide what each health authority should receive and how that is determined, subject to the usual accountability to Parliament. The funding process is monitored by the National Audit Office, and powers must be exercised in accordance with the principles of administrative law. It cannot be exercised in a way in which no reasonable Secretary of State would exercise the power. That allows for the allocation process to evolve over time in line with policy changes. We have simply adopted the same approach in the clause.
The alternative to a general power, which is in there to put beyond any doubt that the Secretary of State has the responsibility to decide these matters, would in fact take a very much narrower power to allow the Secretary of State to introduce a scheme for taking into account an authority's non-cash-limited expenditure when determining its cash limited allocation. I believe that such an approach might limit the ability to modify our approach over time; for example, as new information or research becomes available. The whole history of resource allocation formulae in the health service over what must now be 20 years suggests that new information becomes available and one needs a flexible approach to deal with it.
The words which Amendments Nos. 5, 7, 10 and 13 seek to remove simply make it clear that it is the Secretary of State who exercises this power and that he has a wide discretion to determine precisely how the health authority's non-cash-limited expenditure is to be taken into account.
I turn to Amendment No. 9. That takes us to the transparency issue in the allocations process. I accept the principle behind the amendment. However, I believe that the current allocations process is already transparent.
We already publish details of the current allocation formula. Every year we publish details of each health authority's target, the underlying calculations, and its distance from target and allocation. I can assure noble Lords that we will continue to do this for the new arrangements proposed in the clause.
The noble Baroness, Lady Cumberlege, has been assiduous in charting all the new initiatives that we have centrally funded and one way or another handed out to the NHS. All those initiatives have been publicly announced. The tables for central budgets are included in the allocation publication. Although the list of announcements was impressive—it was certainly an impressive sum—it was nevertheless relatively small compared to the total allocation.
The effect of the amendment would be to require us to publish details of the basis of the calculation of any variation in initial allocations. At the start of each year we divide the money available for the NHS between initial allocations to health authorities and budgets held centrally. As the noble Baroness has suggested, some of these central budgets are then allocated to health authorities for a number of different programmes. It would be bureaucratic to have to publish the details of these calculations. We shall

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publish the Part I and Part II allocations and the targets. The pace of change policy will be in the public domain, as will ACRA's work on the formula.
We are committed to transparency. I believe that the arrangements I have set out show that that is so.
Baroness Carnegy of Lour: Before the Minister sits down, I presume a doctor might want to understand the clause. I am not as clever as a doctor. I have tried to understand it but I cannot. I was refreshed by the clear explanation of the amendments given by my noble friend Lord Howe. I could follow that. I know that the Minister is deep in the system and that he is in a government who are extremely good at inventing complicated systems. The trouble is that doctors will find either that they will have to move or be out of a job because of the amount of money that the Secretary of State allocates to their health authority. They will not know why that is.
My noble friend Lady Cumberlege asked what was being done to motivate doctors, to make them happier in their work. I do not think that finding out that these allocations have happened, as it were, completely over their heads by means of a clause which they cannot possibly understand will help most state doctors. As a simple soul who sometimes needs a doctor, I am extremely interested that there should be enough doctors in the area where I live. At the end of the day, that is what the allocation of doctors is about. Perhaps the Minister should consider whether something can be done to the clause to clarify, particularly for doctors and other people in the health service, how many doctors there are. It is a simple request, but one worth thinking about.
7.45 p.m.
Lord Hunt of Kings Heath: I accept that, when the new arrangements are put into practice, we shall have to explain them to the health service, and particularly to general practitioners. This is a sensible way to go forward. Essentially it is combining two separate funding mechanisms around one formula to enable us to have a much fairer system of financial allocation in the future.
We will continue to protect the non-cash-limited Part II budget for the general medical service. We will use the formulae to enable a shift of resources from the growth money. That will give more resources to those authorities which, under the formulae, are more distant from target. They will be able to use that to enhance primary care services. The existing system in relation to the distribution of GPs, despite the valiant efforts of the Medical Practices Committee, has not been very effective. By putting responsibility at the health authority level, we shall have a better chance of dealing with the matter.
I agree with the noble Baroness that one should provide the right incentives to GPs so that they will feel that they are being adequately supported.
Earl Howe: I am most grateful to the Minister for his full and considered response to the points made by
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noble Lords who spoke to the amendments. I am grateful to him for clarifying the situation with regard to the progress being made in reducing the gaps that local authorities experience against their funding targets.
I also thank him for explaining that, despite appearances, these provisions do not enable the Secretary of State to make judgments that might be considered purely subjective in exercising his discretion, and that there is a test of reasonableness which goes with that matter. The single funding formula sounds as if it will make life delightfully simpler and clearer. I may be an old cynic, but somehow I doubt it. Nothing the Minister said has dispelled my view that this amounts to cash limiting by the back door, at least that is one of the by-products of it.
The Minister did not specifically say that there would be no reductions in allocations—at least in cash terms—to any health authorities. I hope that that is the case. In theory, reading this provision (if I do so correctly), that could happen.
I was grateful for what the Minister said on the issue of transparency. I am sure that he shares the views that I expressed. But this is, by any standards, an arcane and abstruse area, certainly for the general public, also even for Parliament. I am sorry that the department cannot see a way around this matter. It should be possible to present something to Parliament in language that is clear and that we all understand. I know that the figures are available if one digs hard enough, and of course Written Questions can be tabled and so on. Nevertheless, many of us are operating in the dark and that is not as it should be.
I am still concerned about differential costs in different areas of the country and how those are to be allowed for in the allocations. How can the Secretary of State tell what is the real level of services provided for patients in a given area? What indicators and mechanisms are in place to enable him to do that? The concept of "fair shares" sounds delightfully easy, but clearly it is not. How is the Secretary of State to arrive at a judgment on fair shares when costs around the country differ as they do? For example, is there a linear correlation between the level of general Part II expenditure and, say, the number of GPs in practice? I would be interested to know the answer.
These are matters to which doubtless we shall be able to return during later stages in the Bill. I am grateful to the Minister for the light that he has been able to shed. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Burlison: I beg to move that the House do now resume. In moving this Motion, I suggest that the Committee stage begin again not before ten minutes to nine.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Student Poverty
7.50 p m.
Baroness Walmsley Baroness Walmsley rose to ask Her Majesty's Government what action they propose to take to alleviate student poverty, and to address the anomalies arising between support systems in Scotland, Wales, Northern Ireland and England.
The noble Baroness said: My Lords, when I left university, far more years ago than I care to reveal, the only things hanging around my neck were a string of beads and a guitar. Today, students graduating from university have an enormous burden of debt hanging around their necks. Some calculate an average total of £12,000 worth of debt for each graduate. For most graduates, this is a major concern. It affects their ability to establish themselves in the world of work and home ownership, and it deters their younger brothers and sisters from joining them in the ranks of those who benefit from higher education.
Moreover, for those that do take up university places, financial problems often cause them to leave before the end of their course and, in many cases, affect the quality of their studies. What a terrible waste. It is clear that the Government's failure adequately to address the issue of student funding affects both the quality of and the access to higher education—and what is most ironic, access by the groups the Government most want to encourage: the lower demographic groups, older students and certain racial groups. For example, in a survey of 2,000 working class pupils in Hull schools, more than half said that they were less likely to apply to university because of the introduction of fees and the replacement of student grants with loans.
Student debt is a ticking time bomb whose effects on individuals and on the economy have so far been only hinted at. The introduction of tuition fees, the abolition of the right to claim housing and other benefits, along with the removal of maintenance grants—all within a couple of years of each other—is a triple whammy. Already there is evidence of the damage that this has caused. Comparisons between applications in England and Scotland where, thanks to the Liberal Democrats, the funding system is now different, show what can happen when one government take a short-sighted view of student support and the other take a more visionary attitude.
Where is the evidence for all this damage? First, are students hard up? The answer is "yes", according to the NUS Student Hardship Survey conducted in December 1999. The survey showed a wide gap between the amount of money that students need to live on and the total package available through loans and, at that time, grants in some cases. It was demonstrated that students needed £5,641 to live on, but only £3,545 was available—a gap of £2,096. One-quarter of all students said that they were always short of cash and one-fifth of undergraduates said that they missed meals because of cash shortages. After accommodation costs had been taken care of, students were left with £23.10 per week to pay for bills, food,
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clothes, books, travel and so forth. In the same year, the jobseeker's allowance paid £39.85 per week, plus housing benefit where appropriate. It is not surprising, therefore, that around half of those surveyed said that money difficulties hampered their studies.
Many students take up employment in order to make up the shortage. This is not necessarily a bad thing in principle, as long as it does not interfere with their studies and as long as they are employed at fair wages and under decent conditions. It seems, however, that the studies of many students are affected by their jobs. The survey showed that nine out of 10 students work at some time during the year, with four out of 10 working during term time. The average time worked per week is 13 hours in term time, rising to 26 during vacations. Around half of the students who worked felt that it was detrimental to their studies. Three out of 10 said that they had missed lectures, while two out of 10 said that they had failed to submit work because of their paid jobs. These findings illustrate a picture of growing hardship where employment has become a substitute for proper student maintenance funding and where hardship is detracting from effective study.
The evidence does not come only from the NUS. The Student Income and Expenditure Survey 2000, known as the Callender report, although completed before the withdrawal of grants, points to a worrying degree of student debt. Almost nine out of 10 students in the survey reported financial difficulties. The costs of housing, travel and course expenses are rising and, when combined with the burden of paying tuition fees, it was found that student debt had trebled in the three years between 1995–96 and 1998–99. Goodness knows what it is now.
The Government may say that it is wrong to include tuition fees when calculating the cost of taking a degree because it is the parents who are supposed to pay them. However, it is often the student him or herself who bears the cost of tuition fees. The Callender report showed that 30 per cent of students paid the majority of it themselves.
It might be expected that some of those beset by financial problems might give up and go and get a job instead of ploughing on towards graduation. I think that all of us know someone who has done that. The survey backs up that theory. It found that over half of all students have thought about giving up their course at some time, with finance being the strongest factor for around one-third of students.
Clearly, students are reluctant to borrow as much as they need to live and even the maximum amount they are able to borrow from the Student Loans Company is not enough. Many students, in particular from poorer families, are reluctant to take on a large burden of debt. The impact of this is worst on those very same under-represented groups whom the Government are seeking to encourage. NUS research shows that between 1997 and 1999, male applicants from social groups 4 and 5 had fallen by 7.8 per cent; applications from black Afro-Caribbean males had fallen by 10 per cent; and from women over 25, they had fallen by 14.5 per cent. Applications from mature students

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taking degree courses have also fallen sharply since 1997, and that is almost certainly linked to the funding arrangements. The phasing out of grants that is now under way will sharply escalate the financial burden on the poorest students and Gordon Brown's small pot of money for non-repayable bursaries will not solve the problem.
So how are things different in Scotland, Wales and Northern Ireland? Scotland is the furthest ahead. The Labour and Liberal Democrat administration in Scotland had the benefit of the Cubie report into student funding and has implemented the vast majority of its recommendations. The principle is that students make a contribution to the cost of their education, but they do not do it up front, where it would prove to have the most deterrent effect. They do it after they graduate by paying £2,000 into a graduate endowment fund. They can pay this either as a lump sum or borrow from the Student Loans Company, just as they do with their student maintenance loan. This means that the universities have the benefit of getting the money much sooner and the graduate pays only when he or she is earning. Non-repayable student bursaries similar to the old grants have also been introduced in a student funding package containing over £50 million of new money. The sharpest funding differences in the UK are shown in the unit of funding resource of each full-time student. Next year the figures will be £5,360 for England and £6,744 for Scotland—more than a quarter higher. Next year, Scotland will be spending around 2 per cent above inflation on each student, with England spending only 0.4 per cent above inflation.
The effect of this has been dramatic. Figures released by UCAS in January indicated that the increase in university applications in Scotland, at 4.5 per cent, was three times higher than the increase across the UK. There has been a 7.8 per cent increase over the previous year in the number of Scottish students attending Scottish universities. The increase clearly shows that the abolition of tuition fees and the introduction of student bursaries have already made a major impact.
In Wales, where the joint Labour/Liberal Democrat administration in the Welsh Assembly has declared its intent to have its own Cubie-style report, there has been an increase of 6.5 per cent in the numbers of Welsh students going to institutions in Wales. In Northern Ireland, where the devolved Assembly supports a similar package, although the Minister does not intend to implement all of it, there was an increase of 8.6 per cent.
Before concluding my remarks, I should like to consider the proposals for tackling this issue that we have been hearing from Mr Hague's Conservative Party in these recent pre-election weeks. The Conservatives have promised to privatise the universities and privatise and commercialise student loans, thereby costing graduates a great deal more even than they pay now. In fact, their proposal would increase the total liability of the student body by a monumental 78 per cent. They propose to raise £700
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million a year by increasing the interest paid on student loans to the commercial rate. A student who takes out three loans would therefore pay an additional £2,815 under the Tory proposals than he or she does at present.
The Tories try to sell this idea to students by proposing to increase the threshold below which repayments need not be made to a salary of £20,000 a year. But what they do not tell you is that, while you are deferring paying off your loan, the interest is accruing at commercial rates and vastly inflating the amount that you will have to pay off in the end. What a con! I think that those who believe themselves capable of gaining a degree are by definition not stupid and they and their parents will see through this cynical ploy and will not vote for it.
What poor students need is not a Tory privatised loans system but the abolition of the tuition fees introduced by the Labour Government and the restoration of the maintenance grant, as the Liberal Democrats have done in Scotland and propose to do in Wales.
8.3 p.m.
Baroness McIntosh of Hudnall: My Lords, perhaps I may begin by thanking the noble Baroness, Lady Walmsley, for introducing the debate. It is one in which probably a significant number of noble Lords either had, or now have, a personal interest. My contribution will be brief.
First, I want to say that I have no quarrel with the Government's drive to increase access to higher education. I do not suppose that many Members of this House would quarrel with that. I also have no quarrel in principle with the possibility that those who can afford to might make a contribution to the cost of higher education. But the issue is: "those who can afford to pay".
I want to focus in particular on the difference between some groups of students and other groups. I shall refer briefly to the particular problems faced by students who undertake vocational training. My particular interest is in those undertaking training in the performing arts, because that is the world to which I belong; but my remarks may apply equally to others—for instance, architects or doctors, who have a particularly long training to undertake.
The point about vocational training, in whatever field, is that it is frequently long, it is often demanding, and it is usually heavily programmed. By way of example, perhaps I may draw your Lordships' attention to the experience of my son, who, I am afraid, trained as an actor. Before he did so, he went to university. While he was there the average number of hours that were programmed for him per week was around six. As a trainee actor, his programme was for up 12 hours a day, and there were often six days in a working week.
It is clear that, if students work programmed hours of that order, it is unlikely that they will be able to undertake paid work. If they were to do so, the likelihood is that it would be in hours that should

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properly be spent in sleep, or at the very least in study. Therefore, students who undertake vocational training often have to take up loans simply because they have no other way to acquire the money they need to support themselves. Alternatively, their parents have to help out to a greater extent than perhaps is the case with other students.
Those who are dependent on student loans for long training are therfore often at a significantly greater disadvantage than those who simply undertake an ordinary three-year undergraduate course. My daughter is currently training at music college on a four-year undergraduate programme and will almost certainly have to undertake at least one and possibly two years of postgraduate training in order to complete the work that she needs to do in order to take up her profession. At the end of that time, she and her colleagues will have acquired an even greater burden of debt than those who have taken a three-year undergraduate course of the conventional kind.
That might not be so bad if we were talking about students who were going out into the world and straight into highly paid occupations. In the main, though, students who undertake vocational training of that kind are not doing so. Certainly, those in the performing arts are going out into what is broadly a rather underpaid profession. Therefore, the extent to which they are able to begin paying off the loans that they have undertaken is significantly less than is the case with their more fortunate colleagues who are able to take well-paid jobs in the City—to join a law firm, for instance. They emerge into an uncertain and, as I say, often low-paid, occupation for which they have trained very hard and often for many years.
When my noble friend the Minister replies to the debate, will he comment on what the Government might be able to do in future to provide additional support for students whose commitment to a particular vocation puts them at a financial disadvantage? I suspect that there are many such students. It would be helpful if their plight could be taken into account in considering this issue in future.
8.7 p.m.
Earl Russell: My Lords, I declare an interest: first, as the parent of two recent graduates, one of whom is still living at home at the age of 30 while he pays off his loans and, secondly, as a university teacher. It is in the second capacity that I should like to speak.
We in this country, south of the Border, attempt to do in three years what the Americans do in four. They are used to students working their way through college. With a four-year course, that can be done; with a three-year course, it cannot be done without a grave sacrifice of academic standards.
The words "poverty" and "student" have been associated for a long time. But I speak for my party on social security matters and when I use the word "poverty" I endeavour, whether with success or not, to use it with precision. The sort of poverty I have seen among students in the past 10 years is totally unlike anything I had seen in my previous 30 years of academic experience.
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There have been two crucial points of calamity. One was the withdrawal of social security benefits in 1990; the other—especially for those in London—was the Housing Act 1988, which required university halls of residence to charge market rents. The effect of that in London is catastrophic. The tuition fees were only the arsenic on the cake. But arsenic, of course, has a cumulative effect as it works through the body.
My noble friend Lady Walmsley quoted a figure of four out of 10 students doing work during term time. That may be the figure that is known to the authorities, but in my experience it is a great deal too low. In fact, I believe that it should be just about doubled. As a college, we try to limit students to 12 hours' work a week, which does harm but does not necessarily do catastrophic harm. We are by no means always able to achieve that aim. Very often the choice is between doing a great deal more and withdrawing from college altogether.
In my experience since I returned from the United States in 1984, the amount of academic work carried out by students has halved. If I do not say that that amounts to a decline in the standard of the degree, it is because there has, at the same time, been a rise in the potential intellectual ability of those whom I teach. I believe that the one thing almost exactly cancels out the other.
To go through the immense cost of sending students to university in order that they should learn more about Burger King than about King John, strikes me as a rather wasteful process. It is also discriminatory by parental income. I know some pupils whose parents buy them houses for the period while they are undergraduates. They sell them after three years and make an immense profit: nice work if you can get it! However, it is a very different picture for other students.
I mentioned the fact that my son is living at home while paying off his loans. Other students cannot do so. There is also a severe distorting effect on the jobs that graduates take after they have completed their degrees. When we debated the student loans Bill in 1990, I can remember saying that the legislation would lead to the necessity of offering to repay loans in order to entice people into the teaching profession. I am sorry that that was a true prophecy.
There are also certain categories of people who suffer quite exceptional hardship. In my experience, the worst examples are the students who are estranged from their parents. The money that they receive simply does not cover the vacations; and they have nowhere to go where they can get a roof over their heads during that time. That is a torture of Tantalus. Two of my students are in that position at present. I had lunch with one of them earlier today. He has advised me very strongly never again to admit to the college anyone in his position. I cannot tell him that he is exaggerating; I wish I could.
The Minister will no doubt mention access funds. The college access fund has been extremely generous in the case that I just mentioned. However, there are many calls upon it. Each time it has brought that

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student just to the point where, when he jumped, he hit the top of the fence. Then we had to start all over again. When Ministers invoke access funds, I am reminded of when I tried to feed a hippopotamus at the Philadelphia zoo when I was five. I threw a peanut which, to my intense pride, landed on the middle of his tongue. But the hippopotamus simply kept his mouth open waiting to be fed. The access funds are nowhere near meeting the need.
I am extremely glad that the noble Baroness, Lady McIntosh, mentioned the case of those seeking vocational education. I have a student at the moment in that position who decided that he would like to go to the Bar. He would have been quite brilliant. However, both his parents were made redundant within a few weeks of his taking that decision. It is the Bar's loss; and it is justice's loss.
We are told about access, but if the Government complain of lack of access for applicants from underprivileged backgrounds, they are showing what John Stuart Mill described as,
"the inability of the unanalytic mind to recognise its own handiwork".
8.14 p.m
The Lord Bishop of Hereford: My Lords, I, too, thank the noble Baroness, Lady Walmsley, for introducing this debate. It is subject that causes a very great deal of anxiety to many people—above all, and in particular, to impoverished students, but also to their parents, even willing parents, who find themselves trying to meet burdensome or even impossible financial demands to help their student children. That is a factor that can often lead to tension and breakdown within families. The staff of universities and colleges know only too well about the privation suffered by their students, as the noble Earl, Lord Russell, so eloquently outlined. There are also the hard choices that many students face between concentrating on academic work and taking the available jobs in order to make ends meet.
The Church of England has chaplaincies in virtually every university and college. What I say derives mainly from information provided by those chaplains and known only too well to the staff of our Board of Education at Church House. Scottish students are indeed fortunate. I hope that their English counterparts may soon enjoy similar levels of financial support.
Perhaps I may briefly make some specific points. First, the experience of chaplains in higher education is that disparities in income between students are greater now than they have ever been in the past 50 years. Some are generously, lavishly supported by their parents and lead very comfortable lives. But others struggle desperately, even after taking the maximum available loan, which is swallowed up in accommodation and travel costs thus leaving pitifully little for food; and nothing at all for the legitimate, occasional pleasures of student life, let alone necessary books and the kind of cultural activities in which students should be able to take part.
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Secondly, I have this figure of 40 per cent in respect of students, although I accept that it may be more, undertaking 12 hours' work a week on average. But the kind of work that they do is either in bars or nightclubs, which obliges them to work far into the night and leaves them exhausted the next morning, or it is day-time work that prevents them attending lectures, seminars, and so on.
Thirdly, a large percentage of those who drop out of courses or fail exams come from among those who take such jobs. The real high-flyers can cope with that kind of stressful life, but the less able students find it very tough indeed. As has already been mentioned, this is a time of increasing access to higher education. It is those people who are, shall we say, on the border line of suitability as regards being able to benefit from higher education who become discouraged or defeated by such financial burdens and anxieties.
Fourthly, the expansion of student numbers has meant that fewer and fewer students can enjoy their first year at university or college on the campus. There is just not enough accommodation for the increasing numbers. We are talking about a supportive residential environment where they could find advice and help from fellow students. So many first-year students are now living out in lonely, isolated places with high travel costs. That isolation means more risk of emotional and academic breakdown.
Fifthly, there are some higher education institutions in which students are receiving food parcels through the agency of chaplains, local Church congregations, or branches of the Mother's Union. Such is the measure of destitution faced by the most hard-pressed students. Should we be content with, let alone proud of, a system that requires that kind of emergency charitable support? It might be necessary, and perhaps understandable, in an impoverished developing country. But food parcels for students in the United Kingdom in the 21st century? It is a disgrace.
Finally, one particular point about which I have some knowledge concerns candidates for ordination, of whom, I am glad to say, there are increasing numbers. They face some of the same problems encountered by students of the performing arts. There are increasing numbers, not least of academically distinguished young people, who will become the clergy and, in particular, the theological educators of the future. We need them badly. But the financial path to ordination is a very hard one. The Church will provide the full cost of training and adequate grants for accommodation during ordination training. However, the bright students will have undergone three years of undergraduate study and probably three years of postgraduate study. During that time they will have built up an intolerable burden of debt. Students are entering theological college burdened with this debt and are quite unable to face the prospect of repaying it out of the modest stipend which is all that they are likely to receive during their ministerial life.
Student poverty is a deeply serious problem. I beg the Government to find a sensible and generous solution to it. Students do not have the appetites of hippopotami; but they do need help.
8.19 p.m.
Lord Thomas of Gresford: My Lords, new Labour hit students in this country with a tripple whammy: the imposition of tuition fees; the abolition of maintenance grants; and the reduction of the repayment threshold on student loans from £16,000 to £10,000.
I shall begin with tuition fees. There are really two considerations that one must bear in mind. First, what effect do they have upon the level of participation in higher education? Secondly, what effect do they have on the social mix of the student population? My noble friend Lady Walmsley referred to the figures for 2001, which show how much the take-up of higher education places in Scotland has increased as compared with the rest of the United Kingdom. It is up 9 per cent, as compared with 1 per cent in England and 2.6 per cent in Wales.
If one looks at the applications for places in degree courses at higher education institutions in Wales over the past five years, one sees that there has been a dramatic fall due to the introduction of tuition fees. At the University College of Wales Aberystwyth there were 12,966 applications in 1994. In 1997, following the introduction of tuition fees, that figure dropped to 8,264—down 36 per cent. Last year the figure was 8,343. At the University College of Wales Bangor there was a drop of 23 per cent over the same period. At the University of Wales Cardiff there was a drop of 12 per cent and, worst of all, at the University of Wales Swansea—where one of my sons was a student—applications have dropped by 43 per cent as a result of the introduction of tuition fees.
I turn to mature students. Research carried out by the Liberal Democrats shows that in Scotland mature student applications have risen by some 5.5 per cent. In the rest of the United Kingdom they have dropped by 1.7 per cent in the same month in 1999. The rise in Scotland occurred exactly when tuition fees were abolished and maintenance grants or bursaries were reintroduced. Before that time applications from Scottish mature students were down by 14 per cent overall and by 11.3 per cent as a proportion of the population. Tuition fees have denied access to higher education, particularly in Wales.
As for the student mix, the noble Baroness, Lady Blackstone, acknowledged in the fourth report of the House of Commons Education Select Committee that currently around 80 per cent of children of professional and managerial groups enter higher education, compared with only about 17 per cent of the children of lower socio-economic groups. Scotland's Cubie inquiry concluded that,
"the perception of the up-front tuition fee represents an impediment to access … although the majority of students do not pay full tuition fees, their very existence was considered a deterrent".
The Cubie inquiry also pointed out,
"There is ample evidence that young adults from low income backgrounds are under-represented in higher education … Given the debt aversion of the families from which these students come, a support package which is made up exclusively of loans would not meet wider access objectives for participation by this grouping".
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In Wales the new partnership between the Liberal Democrats and Labour has tried to do something about the peanut on the hippo's tongue. The Partnership Agreement, Putting Wales First, commits the Welsh Assembly to,
"a further increase in funding to tackle student poverty in Wales. As a first step we will increase the amount of money available for access funds to at least £11.5 million in the coming year".
That increase of 15 per cent is immediately available as a result of the partnership that we entered into. In the next three years that will have a considerable impact on those who can gain access to higher education.
There have been some criticisms of access funds, not just by my noble friend Lord Russell. Access funds are available only once hardship has become evident. They do not pre-empt or prevent hardship. They do not seem to be used to promote access to education but to promote the retention of students who have got into financial difficulties. The NUS Wales stated with some firmness that access funds cannot be relied upon by students in planning their finances as they are not available at the start of courses; there is no way of predicting how much students will get from any fund and resources and procedures vary.
We have tried in Wales to do something about the way in which this Government have squeezed students and have created a degree of student poverty. We can only hope that the Liberal Democrats in England in this Chamber and outside will have a similar impact here.
8.25 p.m.
Broness Sharp of Guildford: My Lords, I join others in thanking my noble friend Lady Walmsley for introducing a timely debate on an important issue. The issue does not just concern tuition fees. It also concerns, perhaps mainly, the new loan-financed system of maintenance for students.
Under the new system, students outside London can obtain loans of £3,725 a year, or just over £70 a week. Those in London can obtain loans of £4,590 a year, or just over £88 a week. At the meeting of the parliamentary university group on Monday, Chris Llewellyn-Smith, the Provost of University College London protested to the noble Baroness, Lady Blackstone, about student poverty. He said that it is a very real issue and that students in London pay £80 a week in rent out of their loans of £88 a week. How can a student survive if nearly all of their income is devoted to rent?
Of course, some students work. Many noble Lords have mentioned that. At present the average student debt is £4,000 but in future that will rise to £12,000 to £16,000 and possibly more if students take further vocational courses. However, there are problems associated with students working, as my noble friend Lord Russell and the right reverend Prelate have mentioned. Some students live in sub-standard accommodation and do not eat properly. I speak from my experience at Sussex University where many students get by on one meal a day. People pay more for

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meals at Sussex University than I pay at the House of Commons cafeteria. Student meals are not necessarily a cheap option.
One may ask whether this matters. I have little doubt that the Minister will tell me that traditionally students live on low incomes and waste too much of their income on beer and other pleasures; that they will benefit from their studies and therefore they should pay something towards them and that loans are therefore an appropriate way to do so. Like the noble Baroness, Lady McIntosh of Hudnall, I agree that those who benefit from such studies should pay for that. However, the key issue is that of debt and debt aversion at a time when we are trying to encourage more students from lower income groups to enter higher education. There is much evidence on this matter in the Callender report that was mentioned by my noble friend Lady Walmsley, and in student surveys and in the Cubie report itself which examined in detail student debt and student poverty. Both the Cubie report and the earlier report of the noble Lord, Lord Dearing, came to the conclusion that maintenance grants were fairer than loans.
I have been struck by two groups who have been hit hard by the introduction of loans and their repayment. One group comprises student nurses about whom the Royal College of Nursing has produced a report. That is an example of vocational education. Nurses are required to spend time on the wards, undertaking shift work at weekends and during the summer vacations. They do not have time to take outside work.
The other group about which I am concerned are mature students. When I went on a course I picked up a useful pamphlet on financial matters for students. The example of a single parent with two children is mentioned who receives—f one includes the tuition fees paid—a total of £7,500 from the state towards her costs. It came through from the discussion we had with a highly competent lady in charge of students and student finance at a university that many lone parents find it difficult to juggle everything—child care and all the rest. They drop out of universities. From the survey on nurses, 67 per cent of the students said they had considered dropping out. Of those who dropped out 76 per cent blamed finance. The difficulty is in juggling everything. Many students said they wanted to go part time. All that a part time student gets is the £500 loan and nothing else. Do they continue to receive access to benefits if they are students? They did not used to. I am not clear whether this has been changed by the Government.
How far is the debt of £12,000 to £16,000 offputting to students? There is a good deal of evidence that students are debt averse. The Liberal Democrats, in looking at this issue, came to the conclusion that the answer was to use the Cubie solution in this country not only to abolish tuition fees but also to re-introduce means tested grants for part of the maintenance grant, topped up by loans, and to ask the student to pay an endowment which would bring it back. Two thousand pounds per student may not sound very much in relation to the total debt. If one considers that there are
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now 500,000 full time students, it is rapidly bringing in £1 billion a year. Therefore, it becomes to some extent self-financing.
The problem of student debt is not a trivial issue. It is a very real one. If we want to widen access to our universities it is a problem we have to address properly. The Government's bursary scheme introduced last year is not good enough. It was an ad hoc, knee-jerk reaction to the new post-Cubie arrangements being introduced in Scotland. From these benches we think the answer is clear—it is to return to the means tested maintenance grants for the poorest students. It has been done in Scotland and Wales. We have done it in Northern Ireland. As the Times Educational Supplement said last week, the proposals by the Liberal Democrats to restore means tested grants are the most coherent solution to student poverty and are a pre-requisite for expansion.
8.32 p.m.
Baroness Blatch: My Lords, I thank the noble Baroness, Lady Walmsley, for this debate. Much has been said by the Minister this evening about the funding of higher education and, in particular, of students. It is a matter of record that funding for a higher education student per full time equivalent fell between 1989 and 1997. It is true to say that the period coincided with a considerable expansion of the number of students admitted to higher education. That is why the Dearing report was commissioned with Labour Party support to consider funding and expansion.
The Government have lost no opportunity to make this point. They have been in office over the past four years and have presided over a declining unit of funding to date. From a written parlimentary Answer, the planned increase over the next three years is in year 1, 0.7 per cent; in year 2, zero per cent and in year 3, 0.4 per cent. It would be helpful to know from the Minister whether that increase will be more than absorbed by additional students planned for over the next three years and whether funding per student is planned to rise in line with the target of 50 per cent of the young cohort.
Average student debt has risen dramatically since 1997. In 1995–1996 it was £840; in 1999 £2,530; in 1999–2000 it was £3,210. It is estimated by the Department for Education and Employment that the average debt will rise to £13,000 by 2003. Ministers frequently say that graduates can expect to earn on average 20 per cent more than non-graduates. That is no longer true. Certainly, it is not true of those graduates and post-doctorates who remain in academe.
The number of applicants from varied social backgrounds to full-time undergraduate course through UCAS has fallen since 1997. The worrying trend for accepted applicants highlights the greatest decline for those from disadvantaged backgrounds, both those from a skilled manual background and those from an unskilled background. Educational commentators have highlighted the stark choices facing those from poorer backgrounds. They either do

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not apply for fear of debt or if they apply their choice of universities and colleges is restricted by fears about the costs of leaving home and commuting. They also feel they must rule out some subjects because they are worried about finding jobs at the end of their courses.
A recent report on student finance reported that three out of five students questioned knew a friend who had been deterred from applying to university because of changes to student funding. One in seven students said they had come near to deciding against university because of their concerns over the debt they would incur. As the debt burden rises I am sure it will impact on drop out rates. Peter Knight, Vice-Chancellor of the University of Central England, told a conference of university heads earlier this year that an increasing number of students were dropping out of their courses because of mounting debt. It is not just the application of tuition fees but, more importantly, the loss of maintenance grants which has exacerbated the problem. The Education Select Committee was also warned of this during a meeting at the beginning of February with the Professor of Social Policy at South Bank University, Claire Callender, who said:
"It is because of the move from grants to loans that students have built up that substantial debt. Thoughts about debt before going to university may deter some people"
I am on record as saying that the real issue for students was the loss of maintenance grants without even a taper. This Government came to office saying that they had no plans to introduce tuition fees and certainly said nothing about the abolition of maintenance grants. Within weeks of coming to office a Bill was introduced to do both. Students were betrayed.
There then came the Scottish anomaly. Devolution to Scotland and to Wales will mean different policies in different parts of the United Kingdom, and I understand that. The United Kingdom is a member of the European Union as one country. Therefore, students can be forgiven for believing that they are citizens of the United Kingdom and should expect parity of treatment within the European Union. We know that our English, Welsh and Northern Ireland students can be discriminated against but not southern Ireland, France, Germany, Italy and other EU countries and the Government remain unconcerned about that. That is the politics of the madhouse.
Time does not allow me to respond to the distorted description of the policies of the Conservative Party by the noble Baroness, Lady Walmsley. Suffice it to say that the present system of tuition fees and loans which results in students from the poorest families leaving university with the greatest burden of debt is causing much distress. The levels of debt and the pay-back threshold of only £10,000 is certainly acting as a deterrent for many young people. To say otherwise would display an indifference to what I believe is a very real issue.
8.39 p.m.
Lord Davies of Oldham: My Lords, I am grateful to the noble Lady, Baroness Walmsley, for introducing this debate on this important subject and for the
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participation of all noble Lords who have contributed to what has been a very lively debate. It is important that we keep a sense of proportion when discussing the subject of student finances. The recent Callender report on student income and expenditure, to which reference has been made, shows that the majority of students on degree courses are not in serious difficulties. They have systems of support which enable them to sustain themselves although not in a lavish lifestyle. No one ever thought students would be wealthy. For instance 59 per cent of students have a computer and 27 per cent have a car. A certain number of students still follow the old tradition of drinking above average levels of alcohol.
We should not be complacent about students. We know that if our widening participation strategy is to succeed we must attract into higher education more mature students and students from poorer backgrounds. We recognise that financial issues weigh more heavily on them. We need specific measures— I shall describe them briefly—to persuade them to take that step.
I turn to points raised in the debate. Are more students leaving their courses because of the new financial arrangements than in the past? It does not appear to be so. The present drop-out rate of just over 17 per cent has been the same over a decade. Over the past 10 years, the drop-out rate has been between 16 and 18 per cent. I understand that every drop-out is a casualty. Every teacher, like the noble Earl, who loses a student is bound to feel that keenly. Nevertheless, we must not over-dramatise the position.
Earl Russell: My Lords, has the Minister considered the figures for intermissions together with the figures for drop-outs?
Lord Davies of Oldham: My Lords, I quoted the drop-out figures. That was the cardinal figure described earlier. I stand by what I said.
The Government's vision of higher education is clear. We are committed to maintaining a world-class higher education system. We recognise that that takes money. We have to address that with the fairest funding arrangement for universities and students. We are investing £1.7 billion in higher education in the six years to 2003–04, a real-terms increase of 18 per cent. That includes significant new capital resources. There is extra on top for research.
For the first time in 15 years funding for students will rise in 2001–02 and the expansion of places will be fully funded thereafter. This is a considerable investment. It answers the important question raised by the noble Baroness about funding for higher education. It contrasts somewhat sharply with the record of the previous government.
A number of points were raised about student hardship. The noble Baroness, Lady McIntosh, will recognise that we addressed specifically the issue of dance and drama students. We knew that prior to our arrival in office in 1997 the country was in crisis in that

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area. The noble Baroness will recognise that our award scheme has produced guaranteed funding for up to 820 of our most talented students. We know that the rich seam of talent in our community goes far beyond that figure. The film "Billy Elliot" helped to illustrate that in a graphic way. It is important that we tap into that talent. But that scheme is real evidence that the Government are addressing themselves to the issue raised by my noble friend.
I turn to the differences in student support systems and the Scottish dimension. The Liberal Democrats have been fast learners with regard to the Scottish dimension. Five years ago the Liberal Democrats were emphasising their commitment to the maintenance grant. Three years ago their spokesman in another place commented favourably on the Government's proposals in the Teaching and Higher Education Act and supported our proposals on tuition fees and the loan system. The Liberal Democrat Party is now waxing strong on the advantages of the Scottish system.
We recognise that devolution will give other parts of the United Kingdom the opportunity to make their own decisions on funding. However, we recognise that there is a deficiency with regard to dedicated support for mature and, increasingly, part-time English students. It is important that we improve participation rates. Such resources, dedicated to those areas, would be difficult to raise if we followed the Scottish model. While it uses its resources for one particular area, it is without the resources that we intend to deploy for a specific range of support systems.
Since 1997 the hardship funds have quadrupled to £93 million a year. As the noble Earl indicated, students present needs. Every teacher in higher education is all too aware of the demands on hardship funds. But I maintain the obvious point: the funds represent a significant record of the Government. Those hardship funds are now available to higher education institutions at the beginning of the academic year. Therefore, they are able to plan more effectively to meet specific needs.
Earl Russell: My Lords, the increase mentioned by the Minister is genuine and welcome. The point I made was that the need applies to every single student. That was not recognised when the funds were set up.
Lord Davies of Oldham: My Lords, I am limited by time in dealing with these issues. I do not accept that every student attending higher education in England and Wales is suffering hardship. That is not the basis of the Callender report, much quoted today. It is not the basis of any serious analysis of student finance that I recall over the past two decades. Of course, students are poor; and some students suffer hardship and need. That is why we seek to target such students. That is why, for instance, mature student bursaries for childcare have been available this year; and from next September there will be increased help for student parents, in particular with the new childcare grant. Students facing real hardship are more prone to drop out of their courses.
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Opportunity bursaries of £2,000 are being introduced for bright students from less-well-off families. By 2002–03, 25,000 students will be able to benefit from those bursaries.
The concept of the Excellence Challenge requires real resources. The Excellence Challenge is providing £190 million over the next three years. This is dedicated to tackling the problem of attracting students from those backgrounds which are underrepresented in higher education to enable schools, further education colleges and higher education institutions to encourage those students to present themselves for their higher education opportunity.
So the Government are active in those pressing areas which have been identified today. I recognise that there will never been enough resources to meet the needs of every student. However, I assure the House that the Government's student support arrangements are working well. Drop-out rates are not rocketing in the way suggested. There will always be worries over finance, but such worries should not be a barrier to higher education. There is no evidence that that is so at present. More students are going into higher education than ever before. The Government are making sure that extra financial help is available for a vulnerable group of students. Students in hardship can obtain help from the hardship funds. We intend our high ambitions to be fair and progressive. I commend them to the House.

Health and Social Care Bill
8.50 p.m.
House again in Committee on Clause 1.
Earl Howe Earl Howe moved Amendment No. 6:
Page 2, line 2, at end insert—
"(3AB) The Secretary of State shall exercise his powers under subsection (3AA) solely with a view to securing the appropriate number of medical practitioners providing general medical services (under arrangements made under section 10) or providing personal medical services (under section 28C) in the area of each Health Authority, and in so doing the Secretary of State shall have regard to (inter alia)—

(a) the existing and anticipated need for such services in the relevant area,

(b) the existing and anticipated numbers of such medical practitioners in the relevant area,

(c) the cost in the relevant area of providing such services.

(d) the impact on other health services in the relevant area,

(e) the need for equity as between Health Authorities in the amounts allotted under subsection (3) (or varied under subsection (5)).

(3AC) Prior to exercising his powers under subsection (3AA), the Secretary of State shall publish details of the number of medical practitioners he considers appropriate for each Health Authority area for the purposes of subsection (3AB), and other matters taken into account in accordance with subsection (3) or (5). ""
The noble Earl said: I shall speak also to Amendments Nos. 8, 11, 12, 14, 15 and 225. The amendments deal with how the Secretary of State will use the powers granted to him by Clause 1 to ensure

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that there is an adequate distribution of medical practitioners throughout England and Wales. Clause 21 abolishes the Medical Practices Committee, which, since the inception of the NHS, has undertaken the task of facilitating a fair and even spread of GPs throughout England and Wales relative to local populations. In 1946, the need for such workforce management was plain. There were areas of the country where the number of doctors per head of population was dangerously low, while more affluent areas could boast abundant doctor numbers with comparatively modest list sizes. The way in which the MPC has redressed those imbalances and maintained a continuing steady hand on the tiller has been very creditable. By the mid-1980s, the old restrictive classifications of areas as open or closed to doctors wishing to set up in practice were becoming redundant. By 1986, they had disappeared. Since the mid-1980s, the average list size per GP has continued to fall at a time when the number of whole-time equivalent GPs has remained constant. That illustrates the continuing effectiveness of the MPC's approach to its remit.
Against that background, many people are baffled as to why the Government wish to see the back of the MPC. It has had only limited powers to direct doctors to an area. It has no power to force a doctor to move to a particular post or region. However, the absence of regulatory power has not stood in the way of success. The MPC uses some sophisticated analytical models to evaluate GP workload in an area or even in a specific GP practice. The expertise necessary for those evaluations does not grow on trees. A priori, it seems self-evident that such expertise could not be replicated or distributed over 100 health authorities in the absence of a central body.
It may be a turn-up for the books for the Minister to hear me arguing for some centralised co-ordination, but I am fearful that without the MPC we shall be worse off. The ground that has been gained over the past 50 years could well be lost and it would not be easy to recapture it in a hurry. At a time when there are not enough GPs, I doubt that an approach based on simple resource allocation formulae will guarantee that under-doctored areas of the country are able to attract an adequate supply of practitioners.
I would have no problem with the idea of health authorities offering enhanced financial packages to GPs if GPs were in abundant supply. However, that is far from being the reality. Who will sort out the battles that are almost certain to arise between health authorities that are jockeying to compete for the same individuals? Some areas are bound to lose out.
It is ironic that the present Government should be creating such a market mechanism, having condemned and abolished the market mechanisms introduced by the Conservatives. The previous administration did not seriously contemplate the abolition of the MPC—and for sound reasons. That is why I am proposing a new independent medical practices advisory body that would advise the Secretary of State on any action that he needed to take to ensure a fair and adequate
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distribution of GPs. That advice would be published to enable groups representing patients to monitor national and regional trends.
If such a body is not set up, what safeguards will there be against a failure of the resource allocation formula? How will the Secretary of State avoid an area with an adequate supply of GPs suddenly finding itself starved of doctors as they are siphoned off elsewhere? I beg to move.
Baroness Northover: We share the Government's aim of an equitable distribution of GPs to ensure that patients have equal access to doctors. However, we are also very concerned about the abolition of the Medical Practices Committee without the continuation of its functions of national oversight, data collection and control. I shall put on record some of the views of the noble Lord, Lord Rea, who would have liked to contribute to the debate, but has unfortunately had to go home because of illness. He has passed me a note of what he intended to say.
The noble Lord would have spoken in support of the amendments, which are aimed at averting the danger of a less than even spread of GPs. He points out that if individual health authorities are allowed to fill or create new GP vacancies without national coordination, we are likely to get ourselves into a worse situation than we have been in up to now. He argues that the MPC has not had sufficient incentive at its disposal to attract adequate numbers of GPs to deprived areas. I agree with much of what he has said.
How will the Government's new system work in practice? What powers might the Secretary of State have to ensure an equitable distribution of GPs? In the absence of such safeguards, I commend the amendments.
9 p.m.
Lord Hunt of Kings Heath: I rise as the champion of devolving responsibility, in contrast to the noble Earl, Lord Howe, who is the champion of ever-tighter regulation.
We shall debate the Medical Practices Committee later. Our proposals detract not a jot from the hard work that the MPC has undertaken over the years. I have worked for many years with the current chair of the committee and I have enormous respect for her. As the noble Earl, Lord Howe, said, the MPC's role is to determine, on referral from a health authority, whether a vacancy for a GP should be declared. He rightly pointed out that it cannot direct a GP to practise in an under-doctored area, although it can prevent more vacancies being declared in over-doctored areas.
After many years the MPC has had some success, but it has not been as successful as one would want in ensuring a much fairer distribution of GPs throughout the National Health Service. I am convinced that the mechanism that we have adopted will allow local health authorities to take the lead role through the leverage that they will be given. The local medical services and the other techniques that can be used will

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allow them to be much more pro-active in developing primary medical care services, underpinned by the change in the funding formula.
I assure noble Lords that health authorities are not going to be left floating on their own to engage in a brutal market force approach to ensuring a better distribution of GPs. In the first place, as part of the process that they have to undertake, they will have to agree with regional offices of the NHS Executive the need for the number of GPs in their area and to agree with the regional office target increases. There will be what are described as "regional envelopes" for the number of GPs, so that we can match—I very much take the point raised by the noble Earl, Lord Howe in this respect—the distribution of numbers of GPs to both the increase in GPs who come through as a result of the NHS Plan and the overall increase in medical training and the need for a better distribution of GPs. That will be linked into national workforce planning arrangements, which I shall shortly describe more generally.
The substantive point that I want to make is that health authorities will be given much greater freedom to be proactive in this area, but that will be within a sensible performance management framework through regional offices, allowing for targets to be agreed between the health authority and the regional office and allowing the Department of Health to have some workforce planning arrangements at national level. I believe that that will give us the best of both worlds: a framework for the NHS and greater freedom for the health authorities.
I oppose the specific amendments that have been tabled because I believe that they would limit the Secretary of State's power. He could only take into account Part II expenditure with a view to ensuring that each health authority has an appropriate number of medical practitioners. These amendments ignore the need to look at the whole primary care workforce when considering GP distribution. I suggest that they also continue to separate GP services from the rest of the NHS although workforce planning is moving in the direction of integration.
The amendments would also require the Secretary of State to say how many GPs he thinks there should be in each health authority. I believe that that amounts to over-centralisation. It seems to me that the determination of the need for GPs should form part of the local strategic planning role of the health authority, which is very much underpinned by the changes in the funding formula.
The other point that I make in relation to the amendments is that a further effect of them would be that the only non-cash-limited expenditure which could be taken into account would be that on general medical services. I said earlier that, although our present focus is on general medical services, we want to ensure that in future we shall be able to cover other contractor professions, including, for example, dentistry.
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I turn to Amendments Nos. 12 and 15. I have said that we want to devolve responsibility for GP distribution to health authorities, but not in isolation. We believe that health authorities must consider GP numbers as part of their whole NHS workforce planning strategy. But we do not believe that a framework is needed to oversee national GP distribution, which I suspect would almost recreate the Medical Practices Committee.
We are setting up a new national workforce development board, which will start its work in April. It will oversee the workforce development of all NHS clinical staff, including GPs and their staff at national level. Alongside that, the Medical Education Standards Board will also keep under review the impact of training requirements on the distribution of GP trainees and principals. Through the national workforce development board, we shall establish an integrated structure of national workforce planning.
I turn to Amendment No. 225. I believe that a medical practice advisory body would amount to over-centralisation and would, as I have already said, tend to recreate the Medical Practices Committee in another guise. I believe that the overall framework that we have set—a funding formula with the right financial incentives, a leadership role for health authorities within a performance management framework, and a national workforce mechanism at national level—will give us the right balance between a central framework and local determination.
Earl Howe: We shall see. I hope that the noble Lord is right in his predictions. I am grateful to him for explaining very clearly the full set of mechanisms that will be in place to deliver what I am sure he wants to see; namely, a more equitable distribution of GPs. However, I still have worries that the significant expertise built up in the MPC will be dissipated.
Lord Hunt of Kings Heath: Perhaps I may respond to that. I am the first to admit that the expertise of the MPC has been valuable, but it is worth pointing out that all the data on which it relies come from individual health authorities, which have to make cases to the MPC. The health authorities have a great deal of expertise in putting together information and making cases to the MPC, and I am sure that that is a good foundation on which health authorities can take forward this work.
Earl Howe: That is true. Nevertheless, the skill lies in the interpretation of the data. I do not believe that the tools of analysis developed by the MPC over the years are readily available and to hand in most health authorities, as they will need to be to enable the health authorities to approach the kind of fine tuning required. In the mean time, this has been a useful debate and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 7 to 15 not moved.]
On Question, Whether Clause 1 shall stand part of the Bill?
Lord Clement-Jones: I do not want to extend the debate unduly. We have had a fair canter around the course and the Minister has tried to explain a thicket of very difficult language in the existing Act and in the proposed Clause 1. Certainly, as a lawyer who is used to reading legislation, I find the 1977 Part IV provisions very difficult to understand. I am also ashamed to say that the Government Resources and Accounts Act 2000 had passed me by. I did not realise what it was all about until very recently, when the provisions of the Explanatory Notes made clear why it was so relevant.
This is not only a debate about transparency or the future of the MPC; it is also about the merits of Clause 1. I listened very carefully to what the noble Baroness, Lady Cumberlege, said. I believe that she could give tutorials in resource allocation, although she said that they are "shrouded in mystery". They continue to have a shroud around them.
I believe that the essence of the clause is that it is directed at under-doctoring. The way in which it tries to do so is to allow a different method of dealing with total resources by permitting non-cash-limited expenditure to be offset against cash-limited expenditure. However, I am baffled. If we are trying to get more GPs into deprived areas, why are we adopting this extraordinarily complicated method of doing so? Is it not simply a rather sophisticated way of introducing overall cash limiting? The noble Earl, Lord Howe, used the expression "back-door" cash limiting. I wonder what the ultimate agenda is in that sense.
I understand what the Minister said. The clause is designed to achieve a fairer system. But why is the BMA so opposed to the proposal? One would have thought that a new system, both of resource allocation and of assessing the needs of deprived areas, could have been concocted and used in conjunction with the medical profession. Why have we chosen this rather unilateral way of doing it?
The Minister said that it cannot be subjective, but, frankly, the Wednesbury unreasonableness test, which relates to judicial review, is hardly the most fine instrument of control on government policy, as some of the former Ministers in this House will be only too well aware. Therefore, I do not believe that an adequate level of objectivity is in place, and the result could be overall reductions. We heard what the Minister had to say. Reference was made to overall reductions in the budgets in total. If one added together the GMS budgets and unified budgets, that would be the power available.
Therefore, in a sense, does not this proposal represent a move towards overall cash-limited expenditure? Could it not be used for all sorts of other purposes, quite apart from those stated by the Minister? In addition, as a number of Members of the Committee asked, will it involve a transfer of funding?
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My final point is that a great deal hangs on the formula in Clause 1. I find it somewhat inexplicable that the MPC could not have been reformed rather than abolished. Perhaps it needs to be less powerful or perhaps it could have been advisory. However, so much now hangs on that formula. I heard what the Minister said about the national workforce planning framework. Nevertheless, without the MPC, that formula will be very important. It is extremely opaque and, if I were a health authority manager, I would find it somewhat baffling. I would need a great deal more explanation than I believe we have heard today.
Earl Howe: Before the Minister replies, perhaps I may follow up the comments of the noble Lord, Lord Clement-Jones, because I identify myself very much with what he said. However, I want to add one or two other comments. I begin by saying that, by any standards—certainly by comparison with existing health legislation—Clause 1 gives the Government powers that are extraordinarily wide. They are wide enough to cash-limit the NHS as a whole, including general Part II expenditure, and to do so by squeezing the remaining expenditure. Essentially that is what we are looking at.
The Government may say that that is not what is intended. However, some people will suspect that that is precisely what is in their mind. If the aim is to enable the Government to increase resources in under-doctored areas, I still do not understand why a power for that purpose, and that purpose only, could not be taken under Clause 1.
In exercising their powers under this clause, the Government must also act fairly and transparently. The Minister's comments in earlier exchanges were most helpful in that regard. I believe that that is a very important principle because the objective of a more equitable spread of doctors can only be achieved indirectly. Therefore, it is all the more important that the Government make apparent precisely how they intend to use their powers for that purpose. If the Minister can shed further light on that, I shall he extremely grateful.
What the Government are doing begs a host of questions, such as the extra costs of providing GPs in terms of premises and the impact on other services of diverting resources to under-doctored areas. Health authorities must be treated fairly vis-à-vis each other, and there may be other relevant matters. The rules of fairness and transparency demand that the Government make clear at the outset what are their aims for GP numbers and what else will be taken into account in allocating funds and resources. Those matters need to be enshrined in the legislation. They are too important to be left to whatever modus operandi the Government choose to introduce because that can be changed at the drop of a hat.
Baroness Carnegy of Lour: I have a small footnote to add. The Minister says that this is a decentralising way in which to do things. I expressed my anxiety at Second Reading about the centralising nature of the Government's approach. They must realise that it may

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look as if giving certain powers to local authorities is decentralising, but it does not look like that to GPs, anyone else working in the health service, or patients. The manipulation of jobs, spread of GPs, and so on will seem enormously threatening to individuals.
I do not want to sound too much like a great aunt— I may have already done so this evening—but we must remember that the NHS is made up of individuals, all of whom have to find a certain satisfaction from it, whether that is job or customer satisfaction. The Government's approach is dangerous from the point of view of demotivating and alienating people. Everything must be done to clarify precisely what is happening. The system must be abundantly plain so that everyone knows exactly what the Secretary of State and the authorities are doing. The doctors must have as much say as possible in their fate, otherwise there will be trouble.
9.15 p.m.
Lord Hunt of Kings Heath: I shall do my best to respond and perhaps try to show how the system will work. I shall be happy to follow up with more detailed information if members of the Committee would like me to write to them. I understand that matters relating to NHS finance are not easily understood, even by those of us who have struggled to understand them for a number of years.
We are making a genuine effort to devolve authority down to the level of the health authority. The record of the Medical Practices Committee, however hard it tries, shows that a central, bureaucratic approach does not work. My experience is that efforts made to determine numbers of doctors have always failed in the past because they have never fully connected with the needs of the health service. Our approach in decentralising decisions down to the health authority level, combined with the work force framework at national level that I have outlined, is the best way to proceed.
Secondly, I accept the challenge in relation to fairness and transparency. That is why we referred the issue of the formula to ACRA. The recommendations that it makes in due course will be made available to Ministers. The formulas that are decided will be in the public domain, especially the targets that are set and the distance from targets for each health authority.
My third substantive point is that these changes are occurring in the context of both more resources and more general practitioners. That is the only way in which changes to the formulas will work effectively. We can look back at RAWP—the Resource Allocation Working Party—son of RAWP and grandson of RAWP and we know that if we try to introduce formula changes at a time when resources are squeezed, it becomes difficult to get any substantial movement. The conditions in which we are introducing the changes are absolutely right.
There will be a single funding formula that will set a target or fair share for each health authority and primary care trust, covering GMS non-cash-limited
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expenditure, as well as a unified allocation. When the Government allocate extra resources for unified allocations in the future, our pace of change policy will apply to those new targets.
So those who are spending less than their fair share on GMS non-cash-limited services will be given a larger increase for their other services. If they are spending more than their fair share, they may get a smaller increase. But that will be done—this is important—by a process of levelling up so that no area will have its existing level of resources reduced. I want to stress this: GMS non-cash-limited spend will remain non-cash-limited. GPs will continue to enjoy the right to remuneration that they currently hold.
Perhaps I may give one example. For the purpose of illustration, suppose a health authority is 3 per cent under target on its unified allocation and 10 per cent under its new GMS non-cash-limited target, if we combine those it might show the health authority to be 4 per cent below its combined target. In line with the pace of change policy, it will probably receive higher growth in its unified allocation than it would under the current system. It is then very much a matter for each health authority to decide what strategy to take forward. But in the end that is the best way of dealing with two different problems; first, the distribution of GPs; and, secondly, the way the allocation of funds works at the moment. We could have a situation where Part II funding is out of kilter with the unified funding which is based on a fair shares approach.
Baroness Cumberlege: Before the Minister sits down perhaps I may ask for clarification. I clearly understand the issue where we have a strong economy and we are able to invest more in public services. But there is a feeling, when we look across the Atlantic to what is happening in America, at the stock market and at all the other signs, that we are at the beginning of another recession. If the situation arises when the Government can no longer continue to increase their funding to the National Health Service, what happens to those allocations? Do they stand still? If there is a reduction in funding, do we then take away from some authorities? Where does the squeeze come?
Lord Hunt of Kings Heath: Given the Government's sound handling of the economy, I regard that as an extremely hypothetical question. But if a decision were made, for whatever reason, that resources to the NHS, at some undefined time in the future, were to be reduced from current levels, that would clearly have an impact on the pace of change. As has happened in the past, when less resource money is available we simply slow down the pace with which we move people nearer to target.
Lord Clement-Jones: I thank the Minister for that reply. But I do not believe that the situation the noble Baroness, Lady Cumberlege, introduced into the discussion is so hypothetical. The situations when levelling up might not occur would be exactly those that she indicated.

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I take some comfort from what the Minister said and the care with which he outlined the meaning and intent behind Clause 1. It may be we will have a truncated process on this Bill. But we shall need all the time we can get in order to understand what is a complicated area. I regret that the drafting of the Bill had to be so complicated. It cannot be beyond the wit of those concerned to have had more simple drafting and, frankly, drafting that did not take the opportunity to draw the net so widely. I know it is always a great temptation, but the Bill draws the net very widely, which raises suspicions about what could occur in the future if the resources were not there. However, I accept the Minister's assurances.
Clause 1 agreed to.
Clause 2 [Payments relating to past performance]:
Lord Clement-Jones Lord Clement-Jones moved Amendment No. 16:
Page 3, line 4, after "they- insert "reasonably"
The noble Lord said: Here we move into the thickets of performance management and resources following performance and so forth, which I believe will give us much excited discussion between now and 11 o'clock. The amendments I suggest are not as comprehensive as those which follow in later groupings. However, they are significant. They try to introduce safeguards which, in the circumstances, will be valuable.
In moving Amendment No. 16 I shall speak also to Amendment No. 20. Amendment No. 19 is a slightly stray amendment, which may have been introduced in a haphazard fashion. Amendments Nos. 16 and 20 are the nub of the argument. The wording in Clause 2(2) contains the term "satisfied". That seems to be an absolute statement and leaves matters very much in the hands of the Secretary of State.
On my reading, each and every objective would have to be met to receive any additional amounts. Many of us believe that health authorities should have access to additional funding if they reasonably satisfy the objectives; for instance, if they achieve the majority of the objectives. They should not be deprived if they miss achieving one or two of the number of set objectives. There should be a degree of flexibility in the process.
Amendment No. 20 tries to introduce further flexibility. At present, as I read Clause 2, it is all carrot if health authorities have performed well in the past. Rather, there is a lack of incentive for health authorities which are not performing satisfactorily. If a health authority has performed satisfactorily and well against criteria, they can be rewarded. But what about those health authorities to which the Secretary of State wishes to give an incentive to perform better than they have to date? That may be covered elsewhere in the provisions, but it does not seem to me to be included elsewhere on the face of the Bill. Therefore, we have introduced the concept of payments being made to improve unsatisfactory performance looking towards the future. The Minister may say that there are other ways of dealing with that; I hope that he does.
Those two amendments are designed to give extra flexibility to the clause. We have no objection in principle to a performance management system. It
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seems to us to be sensible to introduce something along those lines. However, it should be right and should give the rewarders a degree of power to be flexible in the circumstances. I beg to move.
9.30 p.m.
Lord Hunt of Kings Heath: I am grateful to the noble Lord for his welcome for the general principle of a performance fund. This falls neatly into the Government's proposals to develop what we describe as earned autonomy. Essentially it endeavours to reward through greater autonomy those parts of the NHS that are doing well and to intervene less in their activities while having a much more proactive role in relation to intervention than those organisations which are not doing so well. These clauses enable us to go down that route.
As regards 2001–02, the new performance fund will be issued to health authorities on a fair share basis. Health authorities will then be directed to pass the fund on to NHS trusts and primary care trusts. Performance in the next financial year will not determine the amount of money those NHS bodies receive. It will determine how much direct control they have over how it is spent. The powers in the clause will not be used to operate the performance fund next year.
The essential purpose of this clause is to allow at some future stage the Secretary of State to make additional payments to health authorities, based on how well they are performing in a given year, if he should wish to do so. There will be additional flexibility which will allow the Secretary of State to provide an additional performance incentive for the health service.
For that reason, I have concerns about this group of amendments. First of all, the clause envisages incentives for good performance. The Secretary of State will be able to make payments to health authorities that either satisfy objectives notified to them or perform well against criteria notified to them in advance. I do not believe that is the place to deal with poor or average performance. By extending our powers to make payments to authorities that perform well against criteria, I believe that we have already provided much of the flexibility suggested by the concept introduced by Amendment No. 16 of reasonably satisfying objectives. However, we would not accept that any such payments could be made in any circumstances, as suggested by Amendment No. 19.
I understand the concern behind Amendment No. 20 that money should be made available to tackle poor performance. That is why the performance fund that we are starting with and which will operate next year is based on fair shares for all health bodies, with more strings attached to the money for poor performers. I do not believe that it is appropriate to take a power to make additional performance payments on the basis of poor performance. I accept that there is a balance here, but there is also a danger of that being a perverse incentive.

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I think there are other ways in which we can make payments to health authorities to improve unsatisfactory performance levels. For instance, one way in which at the moment we deal with funding issues for authorities or trusts which are having problems is to use brokerage, where money is made available but has to be paid back over a certain period. The condition of the brokerage deals is that there is greater intervention and supervision, perhaps by the regional office, as to how that organisation can get itself out of the trouble it has fallen into. Of course it would be open to the Secretary of State to make an adjustment to the allocation process in order to deal with those issues as well.
I believe, overall, that we have set out a reasonable way to go forward. We are starting on the basis of fair shares, but the clause as it stands allows us, if we wish, to move to differential additional performance payments in future. It would always be our intention to notify health authorities in advance of the objectives they need to satisfy and of the criteria against which they need to perform well.
Lord Clement-Jones: May I thank the Minister for that reply. I appreciate what he said, but still feel that the clause as it stands is still somewhat unbalanced. It seems to be all "sticks" so far as the under-performer is concerned, and there are inadequate "carrots". I suspect it is a somewhat lopsided situation and it may he that the Minister may be able to make a case, himself, for giving cash and resources to under-performers, rather than going through brokerage, and so on. That would of course inevitably add to the costs of the local authority concerned. It needs further consideration. I will read carefully what he has said and in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Viscount Simon): In calling Amendment No. 17, I must advise Members of the Committee that if it is agreed to I cannot call Amendment No. 18 due to pre-emption.
Earl Howe Earl Howe moved Amendment No. 17:
Page 3, line 4. leave out from first "objectives" to end of line 9 and insert "set by the Authority as objectives to be met in performing their functions and approved by the Secretary of State, or

(b) they met the performance criteria set by the Authority and approved by the Secretary of State as criteria relevant to the satisfactory performance of their functions (judged by the method of measuring their performance against those criteria set by the Authority and approved by the Secretary of State),

and the Secretary of State shall publish details of such objectives, performance criteria and method of measuring performance within 28 days of approving the same."

The noble Earl said: I would like, if I may, when we come to Clause stand part, to talk a little bit about the so-called "traffic light" scheme, so I do not intend to dwell on that now. Whatever one thinks of the "traffic
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light" scheme as currently proposed by Ministers, I hope it is common to all of us to want to see it working fairly in practice. One of the ways of ensuring that fairness is achieved, and is seen to be achieved, is for all the parties on the receiving end to know exactly where they stand and what they are expected to do with the scheme. That is why it is strange—indeed, quite disappointing—that Clause 2 of the Bill suggests the exact opposite of that. It says that the Secretary of State may increase the amount of money allocated to a health authority if it appears to him that it performed well against any of the criteria notified to it,
"whether or not the method of measuring their performance against those criteria was also notified to them".
That is an extraordinary provision. It suggests a kind of measure first and manage second approach. If one takes the wording at face value, the Secretary of State could set, for example, patient satisfaction outcomes as a criteria, but then not set the way in which it is to be measured. That would leave the managers flying blind. It would be rather like saying to Members of the Committee that the Peers will be rewarded for their contribution to the work of the House, without saying how that contribution is to be measured. Noble Lords' contribution might be measured according to the number, the length or even the brevity of their speeches. The point is meant to be serious. There is a maxim of management theory which says that you cannot manage what you cannot measure. This is an example.
The Explanatory Notes say that the Secretary of State may need to see how well bodies have done the previous year before setting performance measures for the coming year. All right, but why not notify the method of measurement as soon as it is known? The wording in the clause smacks very much of thinking of the answer first and then setting the question. I do not believe that is acceptable.
There is another way to approach the whole issue. That is the way that is set out in my Amendment No. 17. I should have said at the outset that I am speaking to Amendments Nos. 17, 18 and 21. What concerns me about the whole concept of supplementary payments, as presented by the Government, is the ability of the Secretary of State to micro-manage the NHS. We have already had a graphic illustration with the operation of the waiting list initiative of how disastrous that can be in practice. Waiting list targets have been set by Ministers, so the only option for managers is to try to meet those targets if they are to access certain funds available to them, but, in doing so, they find that they have no alternative but to distort clinical priorities.
It is a way of proceeding that is the very opposite to being assessed on the quality of outcomes. In a real sense Clause 2 sets that dangerous syndrome in concrete.
Although in Clause 2 we are not dealing with trusts but with health authorities, the point still holds good. I suggest to the Minister that we can retain the worthy idea of rewarding good performance from the centre, but should do it with a light touch. The amendment would leave it to health authorities to set their own

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objectives so that local knowledge and clinical needs are properly catered for. However, it would also provide for Ministers to approve and make sure that the objectives were soundly based. There would doubtless be scope for Ministers to urge local health authorities to adopt targets which were slightly more ambitious than the ones they had first thought of. But one distinct advantage would be that, because it would have set the assessment criteria, there would be no possibility o f a health authority being ignorant of the way in which its performance was to be assessed.
I look forward to hearing what the Minister has to say on these issues. I beg to move.
Lord Clement-Jones: I rise briefly to support these amendments. I have worked as a professional manager for something like 30 years—I had to pause to recall how long it has been. I must say that if you are going to move the goalposts after setting the original performance criteria and not notify someone about how it is proposed to measure whether they have ultimately succeeded, you are in a pretty arbitrary employment situation. It seems to me that the same principle would apply in this clause.
The amendment has been drafted extremely well. It would make the clause a far less arbitrary instrument in terms of resource allocation. I commend that to the Minister.
Baroness Carnegy of Lour: I should like to make a small point. I am not a professional manager, but I have been involved in management for a long time. One of the main tasks of the management process is to set objectives. Furthermore, having been on the receiving end—while serving on a university governing body—of something rather like this system—in my case, concerning the allocation of money for research—it does not take long for intelligent managers to begin to play the system. That means that the system then quite often has to be changed, or the managers get the better of those setting the objectives. I believe that there may be an enormous trap here.
I may be over-simplifying the case a little, but this is a basic principle which I am rather surprised that the Government think will operate successfully.
9.45 p.m.
Lord Hunt of Kings Heath: I suspect that we shall debate the question of central/local relationships in the National Health Service in a number of clauses. The debate generated in relation to this clause very much reflects the need to get right the balance between national direction—which is appropriate in view of the Secretary of State's accountability to Parliament for the running of the NHS—and the need for local managers to be given sufficient room to lead and to make any necessary changes.
I do not believe that anyone, when looking back over 52 years of the NHS, would ever say that this balance has been entirely right. Indeed, I give due notice that I can cite plenty of examples of undue centralisation conducted by the last government which
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I intend to bring to the attention of noble Lords at various stages of our debate. However, if we are serious about this matter, we must acknowledge that it is never easy to get the balance exactly right in a service like the NHS. That is why I am optimistic that, through earned autonomy and the traffic light system, we have found a way to achieve it. We shall reward the good performers by intervening less, but we shall intervene more on those who are not up to the task. The clause is designed precisely to achieve that. It is not concerned with micro-management, nor is it concerned with moving goalposts during the financial year.
Perhaps I may turn first to Amendment No. 17 which, essentially, would allow health authorities to set their own objectives to secure the release of the performance fund. I suggest that it would also allow health authorities separately to define the performance criteria and how they are to be measured prior to the release of the fund. Much as I admire health authorities and uphold their honesty and decency, I have to say that I believe that there is a real danger that the amendment would create a perverse incentive. It could encourage health authorities to define objectives that would release the performance fund which they knew that they could achieve. That might not be consistent with the priorities set out in the NHS Plan.
It is wholly consistent with the purpose of the performance fund, tied into the NHS Plan, for national targets to be set. However, that does not mean that we should set unrealistic objectives. The whole process of NHS planning involves Department of Health regional offices negotiating individual objectives and targets with health communities that define their contribution to nationally set objectives. I should also make it clear that it does not mean that an overly prescriptive approach will be adopted as to how the performance fund is spent.
The system of earned autonomy outlined in the NHS Plan gives complete freedom to better-performing green light NHS bodies over how they will spend their share of the fund, while yellow light bodies will negotiate and agree their spending with regional offices. It is only in the case of the minority—I very much hope that it will be a small minority— of poor-performing red light bodies that the new modernisation agency will determine how the share of the fund will be spent.
We sent out a consultation document on 18th January with ideas about how the performance fund might be developed. We have received from the health service a large number of very helpful comments. We shall issue guidance shortly to the NHS on how the performance fund will work. At the end of the day it is right that the essential framework should be set by the Secretary of State.
I now turn to Amendment No. 18 and the suggestion that the goal-posts can be moved during the financial year. Let me make it clear that in all cases the criteria against which a health authority's performance will be measured must be notified in advance. There is no suggestion, and this power would

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not make it possible, that we should make additional payments to health authorities based on their performance when the criteria against which they would be measured had not been notified to them in advance. For example, we could not inform health authorities of additional criteria halfway through the year and then make payments based on their performance against those criteria during the year.
This is not a question of moving the goal-posts. It is simply a question of practicalities. The annual assessment of traffic light status will not be available until some time into the new year, because it reflects performance over the whole of the previous financial year. So it would not be sensible for us to set the precise method of measuring performance against the notified criteria for the coming year without seeing the results for the previous year, and in particular how individual performance indicators have worked.
I can assure the Committee that we intend to consult the NHS each year on the introduction of new performance indicators or the amendment of existing ones. We should want to avoid, for example, introducing indicators which might produce perverse incentives. It would not always be possible to conduct a consultation process and assess the results before the start of the assessment period.
Amendment No. 21 reflects a point that the noble Earl has made previously in relation to transparency. As I said in response to earlier amendments, I believe that sufficient arrangements exist for demonstrating overall accountability to Parliament for NHS allocations and expenditure. The process begins with a parliamentary vote on the estimated expenditure for the NHS prior to the start of the financial year. The actual expenditure of the department funded through allocations to the NHS is provided at the end of the financial year in the published appropriation accounts of the department. The financial accounts of NHS bodies are published after the financial year ends. These include details of income and expenditure. As I have indicated, central budgets allocated to the health service are announced. These arrangements have been in place for many years. They were used by the previous government as well as by this Government and they clearly demonstrate an acceptable level of accountability to Parliament.
Overall, I believe that this is a very sensible approach. It gives the right incentive to enable health authorities and the whole of the NHS to wish to improve their performance. I believe that as a result of the consultation process on the new performance system we shall produce a system which will be seen to be fair and which will operate well, and one which the health service will feel ownership of.
Lord Clement-Jones: As quite a strong supporter of the new earned autonomy system, I feel rather less satisfied now than I did at the beginning of the Minister's response. There is a real cultural problem here. Quite honestly, if I applied what the Minister said to any organisation of which I had any experience I should find myself with a revolution on my hands. The
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setting of objectives is a mutual process. The noble Lord says, "We don't leave it to health authorities to come back to us with some suggested objectives; effectively, we set them. However, there are some safeguards". It is like me saying to my employees, "I'm not going to carry out an appraisal this year, I'll jolly well tell you what your objectives are".
The Minister says that the clause is not overly prescriptive, but this provision is bolted into its structure. I became more and more uneasy as I listened to his response. It is rather like looking at the objectives of one of my people and saying, "What we're after is X per cent growth this year", and then, six months later, saying, "Aha! It wasn't based on turnover, it was profit", which is a different system of measurement. It is extraordinary. We seem to have a system where the Secretary of State has all the cards and, culturally, the health authority is totally at the mercy of the centre.
The Minister has assured us that there are safeguards involved, but the culture of the clause is deeply unsatisfactory. We are not talking about a mutual discussion, or a mutual agreement; the system seems to me to be very centralist. Indeed, it is far more centralist than I thought it was when we started the discussion.
Lord Hunt of Kings Heath: At the risk of disappointing the noble Lord, I should like to speak further on the matter. In a national service, which is accountable to Parliament, it is surely right for the Secretary of State to take a leadership role in relation to encouraging the improvement of performance. That is what the performance fund is about. Surely it is right for the Secretary of State to set the criteria under which those performance arrangements will take place. It is a national service.
We are having a debate with the health service at present about the criteria, the targets, the "must dos", and the other targets that will need to be reached, to enable those bodies to become green light bodies. That is only right. As the years go by, we expect to have a close dialogue with the NHS. However, at the end of the day, it must be for the Secretary of State to set those criteria.
Lord Clement-Jones: At this stage of the proceedings, I am glad that I can respond to the Minister. As I said, I am all in favour of strong leadership, but objectives must be set in a mutual fashion. That does not appear to be the case under this clause.
Lord Hunt of Kings Heath: We have just consulted on a detailed paper, which asked for the views of the health service on how the whole programme should work. We shall continue to do that on a regular basis. Unless the NHS feels confident that we have the right system, clearly it will not work. I agree with the

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philosophy that the noble Lord is espousing; namely, that. at the end of the day, those concerned must feel that it is a fair system.
Earl Howe: I listened with great attention to the exchange between the noble Lord and the Minister. I am right with the noble Lord, Lord Clement-Jones, on this point. I have to say that I do not believe that the Minister has dispelled the doubts that I raised. I extend the point made by the noble Lord in the following sense. After spending hours and weeks of their time ensuring that they achieve certain targets, it is demotivating in the extreme for managers, who believe that they are doing everything that is required of them, to find that their way of evaluating the performance of their authority is not quite the same as the method employed by the Secretary of State. I am worried that the Bill explicitly leaves the way open for such a situation to arise.
I understand what the Minister said about the difference between setting criteria and what one might describe as the "weighting" attached to the performance. However, it still seems to me that the clause allows the Secretary of State to notify performance criteria to an authority without telling it what weight will be attached to those particular targets in the context of overall performance. Once that happens, you create a situation where the managers on the ground are in the dark about the resources that they need to allocate to address the particular issue. They may well allocate some money to the problem that the Minister thinks is appropriate, but they may allocate more money than he believes to be appropriate. But how are they to know?
I am disappointed that the Minister does not see more merit in my bottom-up approach to the setting of targets. It does not seem to be so difficult to do. There is no question in my mind of carte blanche being given to health authorities to set their own targets. I made it clear that Ministers would decide whether or not the targets were reasonable—the kind of mutual process to which the noble Lord, Lord Clement-Jones, referred. However, more important is the psychological point that a bottom-up approach would enable managers to feel a real sense of ownership of the targets they attempt to meet. They would know that these targets were 100 per cent relevant to the needs of their area. That will not always be the case under the scheme proposed by the Government. That is to be regretted.
However, having said that, I think that we have probably exhausted the topic for the time being. Like the noble Lord, I shall read carefully what the Minister has said as it may contain more words of comfort than I realised when the Minister was speaking. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 18 to 21 not moved.]
On Question, Whether Clause 2 shall stand part of the Bill?
Earl Howe: The Explanatory Notes tell us that Clause 2 is directly linked to the concept of earned autonomy in the so-called "traffic light" system of ranking health authorities.
It is easy to see how the best authorities, rated as green light authorities, come within the clause as it is drafted. The clause refers to satisfying objectives and performing well against criteria. That is indeed what green light authorities will do in order to earn extra funding. What is less easy to see is how, as the clause is worded, the yellow and red light authorities can be allocated extra money, albeit with strings attached, if I can put it that way.
By definition, yellow and red light authorities have failed in some measure to satisfy the objectives that they have been set. How does a clause which provides only for success cater for those health authorities that are not successful? Anyone reading the clause might be forgiven for thinking that the idea is to reward green light authorities with extra money but not to reward yellow and red light authorities. Yet we are told that even the less good or failing authorities will receive extra money. I simply do not understand how the clause achieves what the Explanatory Notes say that it does.
My other question relates to the way in which the traffic light system will work. My noble friend Lady Noakes said quite correctly during the debate on the gracious Speech last December that the NHS Plan anticipated a 25/75/25 per cent split between green, yellow and red light authorities respectively. yet she received a letter subsequently from the Minister which stated:
"Work to develop a fully operational traffic light system is still ongoing and no decision has yet been taken as to exactly how or how many NHS bodies will be classified green, yellow or red. Therefore it is incorrect to assert that 25 per cent of health bodies will automatically have red status, as was suggested in the King's Fund article in the HSJ on 7th December".
So much of the detail of the NHS Plan seems to be changing and evolving that it often looks as if the department is making things up as it goes along. Of course, I am sure that it is not. We need to be told with a little more clarity how in the first instance it is envisaged that health authorities and, indeed, other health bodies within the scheme will be classified as to their colour and what sort of split between green, yellow and red Ministers have in mind. How many green light authorities are there likely to be? Will there be any kind of quota or limit set on those numbers and, if so, will the quota be large or small? What of red light status? At the moment we do not know whether the red light is to be an exceptional measure for a seriously failing authority or trust or whether it is likely to be accorded to a significant number of organisations. Without that information we simply cannot tell how the scheme is likely to operate or what its impact will be on the NHS. If there are arbitrary limits placed on the number of authorities eligible to receive red light

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status, be it 10 per cent, 25 per cent or even 50 per cent, there is bound to be considerable damage done to NHS morale.
Good managers in the NHS have a choice. They can go and work for an authority that has earned its autonomy and can spend money as it chooses or they can apply to work for an authority whose extra money may only be spent in ways laid down by the NHS Executive. For which working environment would you opt? Would you not want to be paid more to go to a failing authority than to go to a successful one? As far as I can see, there is no provision here for incentives of that kind.
The over-arching problem with the traffic lights scheme is the one to which I have already referred. How do those organisations at the bottom of the pile succeed in recruiting and retaining staff in the face of their red light status, and what is certain to be a terrible dent to staff morale? How do they present themselves to the public as places in which patients would want to be treated? One can imagine a doctor telling a patient that he needs an operation and the good news is that the waiting list at the local acute hospital is quite short, but the bad news is that it is classified by the Government as red and failing. What the patient cannot say is "send me to another hospital". If he says that the doctor will be obliged to tell him that as a patient, effectively, he has no choice as to where he is treated because of the limitations placed on freedom of referral.
The flaw in the system as currently proposed is that hospitals will be encouraged to compete with each other for the valued green light status. They will be competing to meet targets set by the Secretary of State. Those targets will not necessarily be those directly in the clinical interests of patients, the waiting list initiative being an example and the cancer pledge being another. They will be in a double bind. To meet politically driven targets such as the waiting list initiative they may have to compromise on clinical priorities. Even when they have done that successfully they may still not achieve green light status because they will find that the quota of green light organisations is full up. Without each and every hospital having the realistic prospect of achieving green light status because of the limit imposed on how many can get it, there will always be yellow and red light hospitals struggling to present themselves as attractive to both staff and the public. It will be a very difficult trick to pull. We all agree with the need to drive up quality in the NHS, but I have grave doubts whether an openly divisive scheme like this is the way to do it.
10 p.m.
Lord Clement-Jones: My Lords, I hold a slightly different position with respect to the traffic lights system. I believe that properly applied it could be a very effective way of ensuring that quality standards are improved in the NHS and that we see a
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considerable increase in quality. It is an edifice on which a great deal of the success of the NHS Plan is predicated.
Since it was announced my party has always had doubts about the fixed allocation or the possibility of fixed allocation. There have been mixed messages coming from the department and the Minister about there being a fixed allocation of red, green and yellow status. Initially, it appeared that there would be such an arbitrary allocation. Later, messages have suggested that that is not the case. Certainly, at Second Reading the Minister denied that there was going to be a fixed allocation. The more detail the Minister can give about that the better. If there is a situation where a red light status trust or health authority cannot move into the next category—although by any reasonable standards it has met the criteria—that is grossly unfair. It means that one is "disincentivising" managers, lowering morale and effectively driving them into trusts which are already in a different category. That is an extremely negative way to proceed. A proper performance management system should not operate in that way. It should give every chance for the failing hospitals to achieve a higher status.
The noble Earl, Lord Howe, raised many extremely good points. Since the consultation on the performance management system is so important, can the Minister undertake to make public the framework of performance management which the health authorities have agreed as the sensible way forward? If that is a possibility, perhaps the noble Lord can give the dates that we are talking about. It is an important new instrument. If we are to make the best use of new resources, we have to ensure that the system works and is not an arbitrary, centralising process. I have argued that it is not; but I do not want to be proved wrong in a couple of years' time.
Baroness Cumberlege: I support both noble Lords who have spoken. I thank the Minister for sending me the NHS Plan implementing the performance improvement agenda, the consultation document to which reference has been made. I have read it and I found it of great interest. It explained to me clearly how the system will work. The figure of 25 per cent is mentioned as regards "green" organisations—those which are perceived to have succeeded. What measurements were taken on that? I assume that there is consultation on the "must dos" and the performance indicators. But what is so magic about 25 per cent—a quarter? What evidence was taken in order to choose that figure; or was it plucked out of the air?
I assume that there has been much consultation with selected people in order to draw up the consultation document. But for health authorities alone there are 10 "must dos", 38 major priority areas, with 39 associated performance indicators. That is something like 87 suggested targets. I think that that is demoralising. It is a straitjacket. With those figures and targets, there is no room for local autonomy and local decision making or for local priorities to be set on local needs. Surely health authorities are meant to look at local needs and reflect them in local priorities.

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I understand the view that there are too many performance indicators, "must dos", targets and so on. I hope that the Minister will be able to tell us what they will be cut down to. In my experience, if one wants to achieve something one needs a slimmed down version that people will want.
I echo what my noble friend Lady Carnegy said. I believe that if progress is to be made, if services are to be improved, then local people have to be allowed to be creative, to use their imagination, to take risks and, above all, to be forgiven when things go wrong. Forgiveness is lacking in the health service. That is why some of us have strong reservations about this traffic light system. I accept what the Minister said about the Secretary of State, his ministerial team, officials within the department and the NHS executive providing leadership. But if everyone has to achieve this rigid grid, it is demoralising and will not work. People will not have ownership of it. There will not be enough room for manoeuvre. When it goes wrong, they will be beaten over the head again.
Beaten over the head is the right phrase, because they will be in the hands of the Modernisation Agency. I have not met the Modernisation Agency, but it does not sound like a friendly, cuddly helper. It sounds like a remote quango that comes in to take over the management of a local trust and health authority. Why does the Modernisation Agency always succeed when local people fail? Where do these people come from? How did they come to be supermen and superwomen who know how to manage brilliantly something that may be hundreds of miles away? How does the system work? It looks pretty frightening to me.
Where does the agency's accountability lie? Why does it have an amazing capacity to micromanage when local people cannot do so? This is a big brother approach to something that could be sorted out in another way.
Lastly, I should like to know how this brilliant agency is going to manage all these wonderful things so cleverly. It will have to keep an eye on around three quarters of the NHS body. That is an enormous task. How does the Minister think that it will all work?
Lord Hunt of Kings Heath: We come again to this fascinating; issue, which is crucial to the future success of the running of the huge organisation called the National Health Service in a way that discharges proper accountability to Parliament. I have been a Minister answering questions in your Lordships' House for nearly two years. Very rarely am I asked to give away control or decentralise. The emphasis of the parliamentary debate and focus is on Ministers taking more control, regulating more and having more information. That is one pressure that is always on health Ministers. I agree with everything that has been said about the need to allow for local determination, flexibility, growth and leadership. It is difficult to get the balance right.
We already use the traffic light system in a number of areas. Winter planning is a good example. We have developed a process of identifying those parts of the
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country that look as though they are not going to succeed. That results in greater intervention and help for those places. The system has proved outstandingly successful. The health and social care services have coped magnificently this winter with the pressures put on them. As with earned autonomy, those health communities that are doing well and are seen to have things sorted out are left alone, but intervention is necessary for places that look as though they are in trouble.
The second part of our approach is based on our experience in the past three years. When authorities or trusts seem to have specific problems, often the best form of intervention is to send a team of people who are experienced in working at the front line to help the poorly performing organisation sort the problems out. That answers the point made by the noble Baroness, Lady Cumberlege. That is how we should approach poorly performing organisations. We need rapid identification of the fact that they are in trouble and then help to allow them to get out of trouble. That help comes not from academics or people sitting in an office in Richmond House, but from people who have done the job successfully at local level. In other words, we have a learning organisation.
I again stress that the proposals for the working of the traffic lights system have been the subject of consultation. No final decisions have been made. There are three band definitions for the traffic lights system. First, the green organisations will meet what could be described as the "must do" core national targets that will be set, which we think will initially involve about 20 per cent of all organisations, but that has to be a fluid figure. As we gain experience in developing the system, it will be reconsidered and changed if we think it appropriate.
For a health authority, the examples in the consultation paper of core (or "must do") national targets may be waiting targets, emergencies, reduced levels of delayed discharges, financial balance or clinical quality measures. In addition, there may be other performance indicators on a second list, which for a health authority may involve programmes aimed at reducing smoking, preventing the illicit use of drugs and teenage pregnancy. The consultation paper explores those options in some detail.
I accept the point made by the noble Baroness, Lady Cumberlege, that it would be very difficult for the health service to respond to a huge number of different targets. I agree that the challenge for us is to try to keep those targets to as limited a number as possible. The noble Baroness will understand that that is not always easy because of the natural pressure on government to ensure that every area of concern or every client group is included in those targets. We shall have to balance those two conflicts, which I believe will be quite difficult.
The yellow organisations will meet their core national targets, but they will not be in the top 25 per cent of performers overall. They will succeed in the "must dos" but may be weaker in some of the other performance targets that are set. I can tell the noble

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Earl, Lord Howe, that the intention is to encourage more and more organisations to become green light organisations. I agree with him that it would be demotivating if over the years we had very arbitrary percentage figures for one category and another category; but that is not the intention.
I can also tell the noble Earl that I very much hope that the number of red organisations will be limited. I do not agree with him that it necessarily becomes a wholly demoralising situation for an organisation to be classified as red. I believe that there are examples in the NHS of organisations having patently been seen to fail, which has acted as a spur to people to improve their performance and get their act together. That surely must be the aim of these arrangements.
The Modernisation Agency is not a draconian arm of central government coming down to hammer local NHS organisations. It is very much a helping agency—helping people to make change and design new services—and a centre of excellence using people with practical skills who have succeeded at local level. Linked to the Modernisation Agency is our Leadership Centre, which is designed to give much greater support to people in leadership positions, whether clinicians or lay managers. It will play a much more proactive role in ensuring that we have the kind of people, mentioned by the noble Earl, Lord Howe, whom we will need to lead change and particularly deal with red performing organisations.
From the explanation that I have given, I hope that Members of the Committee will see that we are going to adopt a sensible, sensitive approach. There is a clear need for ownership by the NHS in these arrangements in order to ensure that they work effectively. The whole purpose of consultation is to ensure that that ownership is put in place. Of course, we shall learn by experience and shall make changes as necessary.
Earl Howe: I wonder whether I may ask the Minister to comment on the point that I made at the outset. I could not see how the clause, as drafted, caters for yellow and red light organisations because it is expressed in terms of satisfying objectives and performing well against criteria. By definition, yellow and red light authorities do not satisfy objectives and do not perform well against criteria, yet they will still receive extra funds. I do not understand how the clause works.
Lord Hunt of Kings Heath: I said earlier that we do not need the clause to make the current performance payments that we are making because they are made on a fair-share basis. At present, every NHS organisation will receive its fair share of the performance fund. Organisations which do well will have much greater freedom to use the funds in the way that they wish. This clause would allow us to move on from that situation. At some stage in the future, we
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may well wish to make additional payments to green light organisations as an extra incentive. That is what the clause allows us to do.
Earl Howe: I am most grateful to the noble Lord for that clarification. I take the point that he made about red light status. Of course, it could act as a spur to those who work for the health body to institute measures to improve the performance of the body. However, I believe that if red light status lasts for more than a short time, there is a distinct risk that it will become, as it were, a self-fulfilling prophecy because it will lead to the migration of staff. I believe that the challenge will be to ensure that red light status does not hang over an organisation for more than a certain time.
This has been a useful short debate. I thank the Minister again for what he said.
Clause 2 agreed to.
Clause 3 [Supplementary payments to NHS trusts and Primary Care Trusts]:
Earl Howe Earl Howe moved Amendment No. 22:
Page 3, line 17, at end insert ", at the request of any Health Authority or any trust with the approval of a Health Authority,".
The noble Earl said: In speaking to Amendment No. 22, I shall speak also to Amendments Nos. 23 and 25. These amendments have an obvious purpose: to introduce greater transparency into the way in which additional payments are determined. We cannot expect the Bill to go into minute detail. However, it is remarkably silent as to the basis on which supplementary payments to trusts and PCTs are to be made. Unlike Clause 2, which refers to good performance, there is not even a mention in Clause 3 of any type of criterion or benchmark.
Effectively, what is being proposed is a bypassing of the normal purchaser/provider relationship whereby health authorities pay trusts and PCTs for the services provided. That has a distinct look of central micro-management about it, which makes me uncomfortable. I am prepared to be persuaded that there may be infrequent occasions when an accelerated process of that kind is justified by the prevailing circumstances. When it occurs, it is important for everyone to know what has happened and why. There needs to be a clear public statement of how the payment powers have been used, and health authorities need to know exactly how and why the normal contractual systems have been overridden.
It would be helpful if the Minister could tell us how often he expects those powers to be used, and in what circumstances. The Explanatory Notes speak of rewarding staff performance and improving facilities. Why should those not be dealt with through the normal service level agreements? If they are exceptional, one-off payments, what will determine them?
I fear that the normal system will be undermined either by special pleading from a trust, a PCT or, heaven forbid, even by ministerial favouritism. It is easy to imagine Ministers being lobbied as they go around the country so energetically.
There is nothing in the clause that would prevent that happening. That is why I suggested in my amendments that it should be the health authority itself that requests the supplementary payment, or at least approves it, so as to retain the semblance of accountability through the normal commissioning chain. In itself, that device would not alter the mechanism for payment, but it would promote transparency and a slight check would be built into the system to prevent money being paid across to trusts in inappropriate circumstances, such as those to which I referred.
Baroness Cumberlege: I rise to support my noble friend Lord Howe. I am concerned that the Secretary of State is seeking powers directly to reward staff working within a particular trust, or to improve facilities. This is very detailed stuff, according to the Explanatory Notes.
The Secretary of State will bypass the allocation formula, the health authority and the management of the trust. In my view, that is micro-management writ large. In the helpful meeting that the Minister held in the Moses Room, he explained that it was a way of cutting red tape and bureaucracy. I have some sympathy with that because I know how frustrating it can be. However, systems bring safeguards, which are extremely important in a public service. Service level agreements are drawn up with enormous care; there is a great deal of consultation and many people are involved. They take account of local need, and the input from a large number of people, including the public, is immense. They also implement the health improvement programme, which is the strategy that is adopted locally.
It is possible that under this clause the Secretary of State could act quite arbitrarily and perhaps make some perverse decisions, which have no place in the public service. In the private sector, where there is much more freedom to move, the boards of companies still have to comply with the Greenbury and Cadbury codes—those ethical tenets that have been laid down. It is even more important that a Secretary of State, who is in charge of a huge publicly owned body which affects all our lives, should work in an open and transparent system.
If the system is wrong, or the Minister feels that the bureaucracy has a stranglehold on the NHS, it is time to streamline the bureaucracy. Perhaps the Minister should be humble enough to recognise that local decisions should be taken locally, especially on these detailed matters of rewarding staff and improving facilities.
10.30 p.m.
Lord Hunt of Kings Heath: Those who launched the NHS trust movement would be disappointed to hear the words of the noble Earl, Lord Howe, and the noble Baroness, Lady Cumberlege. In a sense we are trying to provide a mechanism by which, on occasion, we can make direct payments to NHS trusts with the normal commissioning arrangements.
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This is not an undermining of the commissioning arrangements; it is designed to enable us, on occasion, not to have to go through the normal bureaucratic system under which commissioning operates. The underlying principle of supplementary payments is to make timely direct payments outside the scope of service agreements. The kind of things for which the power would be used is, as has been described, the direct improvement of infrastructure to enable the provision of better services. A good example of that was the injection of £32 million for ward cleaning. The Government took a view some months ago, quite rightly, that the cleanliness of the NHS was a matter of great concern—indeed, your Lordships' House debated it on a number of occasions. To kick start a new approach extra money was injected into the service mid-year. Our ability to do that quickly is important and this clause will allow us to make those payments directly to NHS trusts.
Another example of where this system could be used is money given to ward sisters to improve facilities and the appearance of their wards. That was an outstanding success. It was very much welcomed and was a great boost to morale at ward level. Again, there is a case for allowing the department to make those allocations direct to NHS trusts without going through the normal commissioning arrangements.
I heard the concerns expressed and want to assure Members of the Committee that this is not meant to undermine the normal role of commissioning. It is not meant to take the place of commissioning; indeed, to do so would undermine the whole approach to the development of NHS services. It is simply a more effective and efficient method to make the occasional direct payment to NHS trusts.
In relation to the notification to Parliament, raised in the second amendment spoken to by the noble Earl, I covered those matters in previous debates. The reporting arrangements to Parliament, which are the same as those under the last government, are sufficiently rigorous. When extra direct payments are made such as those for cleaning or for ward sisters to spend on their wards, they are always made as public announcements. I hope, on that basis, that the noble Earl will consider withdrawing his amendment.
Earl Howe: The Minister was a little hard on me and my noble friend Lady Cumberlege in drawing the conclusions he did from what we said. I made clear that I was prepared to be persuaded that infrequently there could be compelling and good reasons to make supplementary payments to trusts and PCTs and to do so in a speedy fashion.
I am glad to hear from the Minister that this is a mechanism that is likely to be used relatively rarely and that it will not undermine the normal commissioning process. I am a little disappointed that the Minister could not be more sympathetic to my arguments in favour of somewhat greater transparency and I wonder whether the normal NHS accounting requirements will provide the kind of immediate and accessible information that is so valuable.

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Members of this Committee and no doubt Members of another place can table Written Questions to prise out details of supplementary payments when they are made. But it should not be necessary to do that. They should be on the record almost as soon as they have taken place. The announcements to which the Minister referred may or may not apply to every single instance. If they do, that may be satisfactory. We shall have to see.
Lord Hunt of Kings Heath: I confirm that in the year 2000–01, the current financial year, the three direct payments made were all publicly announced.
Baroness Carnegy of Lour: I apologise to the Committee for intervening. Those announcements were general and about the whole health service. There was no question of fairness between different parts. If people hear that their trust has received extra money to make their hospital cleaner and the one next door has not, a lot of trouble will be caused. I do not think that we can compare that. I am concerned about the matter. It is a peculiar way to manage fairly.
Lord Hunt of Kings Heath: Perhaps I may respond to the noble Baroness. I refer to the hospital cleaning programme, which I had the pleasure of launching at the Whittington Hospital in August. The public announcement gave details of how much money every NHS organisation received. That was based on a fair formula.
Baroness Cumberlege: Does the Minister not appreciate that there is a lot of frustration in the health service because allocations are pre-empted by top slicing? Many of the managers who spoke to me said, "We would have sparkling clean wards if we had the amount of money to spend that we want". However, as I explained earlier in Committee, so much has been top sliced. There is no room to manoeuvre and the frustration is enormous.
Lord Hunt of Kings Heath: Even with top slicing the health service is receiving huge amounts of additional resources—record amounts. There will always be a balance between the allocation made to the NHS locally and the retention of money at central government level to give particular impetus to core national priorities. I accept that there is a debate as to how that balance should fall. However, I do not think that we will ever get away from retention of some moneys at national level.
Earl Howe: As the Minister indicated, this will be a running theme, not only throughout the Bill but, I suspect, for as long as the Session lasts. It is a fascinating topic. I am grateful to all noble Lords who contributed to this short debate. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 23 not moved.]
Lord Hunt of Kings Heath Lord Hunt of Kings Heath moved Amendment No. 24:
Page 3, line 29, at end insert—
"( ) In section 97D of the 1977 Act (financial duties of Primary Care Trusts), in subsection (1)(b), after "section" there shall be inserted ", apart from subsection (5A)"."
The noble Lord said: This is the first of a number of government amendments which have been tabled. I regret that we have to do this. However, I believe we have done rather better than with the NHS Bill we took through the House last Session.
This is a technical amendment, purely consequential to the 1997 Act. Although the new subsection (5A) of Section 97C of the 1997 Act enables the Secretary of State to make supplementary payments direct to a primary care trust, Section 97D of that Act did not allow for such payments to be taken into account when determining the primary care trust limit on expenditure for the financial year in question. In other words, the primary care trust could receive the extra payments but could not increase its expenditure for that year by an equivalent amount.
Section 97D of the 1977 Act sets a limit on the annual expenditure of a primary care trust. It provides that in any financial year a primary care trust may not spend more than the aggregate of the various types of income it receives in that year. Paragraph (a) refers to sums allocated to the trust by the health authority. Paragraph (b) refers to sums received under the 1977 Act other than the sums received under Section 97. Those words exclude the income from health authority allocations, but unfortunately they would also exclude supplementary payments from the Secretary of State which would be paid under the new paragraph 5A of Section 97.
This amendment resolves the problem by excluding supplementary payments under Section 97C(5A) from the ambit of the words
"other than sums received by it under that section."
Supplementary payments will therefore be added to the aggregate amount which the PCT is permitted to spend in the financial year in which the payment is made. I beg to move.
On Question, amendment agreed to.
[Amendment No. 25 not moved.]
Clause 3, as amended, agreed to.
Lord Carter: I beg to move that the House do now resume.
Moved accordingly and, on Question, Motion agreed to.
House resumed.
House adjourned at nineteen minutes before eleven o'clock.