Lords Sitting of 21 March 2001

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

Council of the Isles
Lord Wallace of Saltaireasked Her Majesty's Government:
Whether the development of the Council of the Isles is satisfactory.
The Minister of State, Cabinet Office (Lord Falconer of Thoroton): My Lords, the British-Irish Council—as the Council of the Isles is more properly known—has met three times, once at summit level and twice in sectoral format. The council has agreed an initial programme of work to include: the environment, social inclusion, the knowledge economy and drugs. Drugs will be the main substantive item for discussion at the next summit, to be held in Dublin. The date of this meeting has been postponed, most recently to allow continuing political discussions on the implementation of the Good Friday agreement. In the meantime, work continues at official level.
Lord Wallace of Saltaire: My Lords, I thank the Minister for that informative Answer. If it is simply to be the "British-Irish" Council, does that imply that the association with the council of the Isle of Man and the Channel Islands is an entirely subordinate, third-level matter? Has the idea of a Council of the Isles on which the Scottish and Welsh, as well as the Isle of Man and the Channel Islands, would be represented as part of a broader picture bringing together British and Irish interests in the wider constitutional context, now been left behind? Are we down simply to a British-Irish forum?
Lord Falconer of Thoroton: No, my Lords; it was intended that the Channel Islands and the Isle of Man should also be included. I am happy to be able to say that officials will meet on the issue within the next few weeks in Jersey, to indicate the continuing importance of places such as the Channel Islands.
Lady Saltoun of Abernethy: My Lords, of precisely what islands is the Council of the Isles the council? My understanding is that it was the council through which in the old days the Lord of the Isles governed his estate. If any of the Scottish islands are involved, is that not a devolved matter?
Lord Falconer of Thoroton: My Lords, the places involved are: Scotland, England, Northern Ireland, Ireland, the Channel Islands and the Isle of Man.
Lord Hylton: My Lords, do the Government consider that the council could be a helpful context in which to carry on further implementation of the Belfast agreement?
Lord Falconer of Thoroton: My Lords, the council is referred to in the Belfast agreement. It is intended to improve the totality of the relationships between all of these places.
Baroness Buscombe: My Lords, no one whom I have asked in the past week beyond the Palace of Westminster has known what the council is. Will the Minister undertake to make the workings and meetings of the British-Irish Council easily accessible to the public so that knowledge of it may increase?
Lord Falconer of Thoroton: My Lords, I do not know to whom the noble Baroness talks on a regular basis, but the council was referred to specifically in relation to the Good Friday agreement. It is an important part of the agreement and the work that it does is important.
Lord Wallace of Saltaire: My Lords, does the Minister consider that Scottish-English relations might usefully be discussed within the council? I have heard a number of leading Irish politicians talk about the utility of the Council of the Isles in future, particularly following any change of government at the English level, and about how they would be actively interested in mediating the peculiar triangle that is Scotland, England and Northern Ireland, which are quadrilateral with southern Ireland.
Lord Falconer of Thoroton: My Lords, I think that improvement in the totality of all the relationships, which is the purpose of the Council of the Isles, would be helpful for all of the places involved.

Crown Immunity
2.40 p.m.
Lord Hunt of Wirralasked Her Majesty's Government:
Whether they intend to remove Crown immunity under the Health and Safety at Work etc. Act 1974, including the present immunity which extends to the Palace of Westminster.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Lord Whitty): My Lords, the Government announced their intention to remove Crown immunity from the statutory enforcement of health and safety law in the Revitalising Health and Safety strategy statement which was published in June last year. In Parliament the situation is somewhat different. However, we have the agreement in principle of the House authorities to apply health and safety

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legislation to the Parliamentary Estate. Both of these measures are being considered for the safety Bill that the Government are currently drafting.
Lord Hunt of Wirral: My Lords, I thank the Minister for that Answer. However, will he accept that there is a degree of impatience about the issue because the same commitment was given by the previous government? So far as concerns the Palace of Westminster, the reason why it has not been possible to move as fast as some of us would have liked has been the lack of accommodation. The fact that the Minister's right honourable and honourable friends at Her Majesty's Treasury have authorised the expenditure of a substantial sum of public money on a property known as Portcullis House will mean the release of a substantial amount of accommodation within the Palace of Westminster. Will the Minister ensure a fair balance in terms of the use of accommodation between the House of Lords and the other place? Will he ensure not only that the changing and dining facilities for our staff are upgraded, but also that accommodation for Members of this House, for their staff and for others who work within the Palace of Westminster conforms to the necessary legislation?
Lord Whitty: My Lords, I fear that it would not be proper to reply to the bulk of that supplementary question, as it is a matter for the House authorities, in terms of budgets and their relationship to another place, rather than for any government Minister. The Government have a commitment to legislate—indeed, reference was made in the Queen's Speech to pre-legislative scrutiny in relation to a safety Bill. We are currently drafting a Bill that will include provisions to remove Crown immunity from all Crown properties. As I say, the Parliamentary Estate is slightly different; however, the Bill will cover that as well and will ensure the direct application of health and safety legislation to the Palace of Westminster and the enforcement of that legislation.
Lord Ashley of Stoke: My Lords, does my noble friend agree that it is ironic that successive governments have legislated for all of us, especially for any wrongdoing, but have used Crown immunity to protect themselves and to exonerate themselves from any wrongdoing? Does my noble friend recall that in the Commons some years ago some of us managed to get Crown immunity lifted in relation to dirty and dangerous kitchens, which previously could not be inspected? We also managed to get Crown immunity lifted for service personnel who wanted to make claims for negligence during training but could not do so. I welcome my noble friend's historic announcement. It will strip government of their historic defence, and it is a genuine indication of open government. When will it be done?
Lord Whitty: My Lords, I accept that this has been a problem in regard to health and safety legislation for many years and that it has become caught up with the legal and almost theological arguments about whether
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the Crown can sue itself at law. What is really important here is the protection of those who work on Crown properties and for Crown employers, as well as for those who pass through such premises. That is what our legislation will be designed to remedy. As I say, the safety Bill is currently being drafted. It was referred to in the Queen's Speech and will be enacted by this Government in this, or possibly the next, Session.
Lord Peyton of Yeovil: My Lords, can the Minister hold out any hope that, under this new regime, the temperature of this place will be kept at a reasonable level above freezing point?
Lord Whitty: My Lords, although I have deep sympathy with the noble Lord's predicament, again, it is hardly a matter for the Government; indeed, it is a matter for the House authorities. Should the noble Lord wish to address such a question to them, I have no doubt that he will receive a warm answer.
Lord Marsh: My Lords, will the Minister accept that many staff employed in this building work and live in conditions that would be totally unacceptable anywhere else in the country? Does the noble Lord further accept that there is no way that the Government, this House or Parliament itself can shelter behind anyone else's responsibility? If they wish to deal with the situation, nothing can stop them—or does the noble Lord believe that that is wrong?
Lord Whitty: My Lords, the question is what law applies. The House authorities have committed themselves to following health and safety regulations as far as concerns this House and, indeed, another place. There is a House of Lords Safety Policy that meets the best requirements of health and safety practice. There are problems associated with operating it within this building, but the House authorities have addressed that. Therefore, I do not want any implication to be taken of criticism of the House authorities. However, how they take it further in terms of the health and safety regime is a matter for them rather than us. Our responsibility is to ensure that the law applies equally to all work places.
Lord Barnett: My Lords, I should like clarification of my noble friend's reply to the first supplementary question posed by the noble Lord, Lord Hunt. When responding, my noble friend said that it is not for the Government to decide such matters. Can he confirm that neither is it a matter for the usual channels; it is matter for the House itself?
Lord Whitty: Yes, my Lords. My noble friend is absolutely right: it is a matter for the House itself.
Lord Geddes: My Lords, I declare an interest as a member of the Refreshment Committee of your Lordships' House. Has the Minister had the privilege, as I have—the shocking privilege—of visiting the

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kitchens of your Lordships' House? In support of the noble Lords, Lord Ashley and Lord Marsh, I should tell the noble Lord that, if he did so, he would be horrified by the conditions that he would find. Will the noble Lord prevail upon his noble and right honourable friends, especially those in the Treasury, to release money to improve these appalling conditions?
Lord Whitty: My Lords, as it happens, I have visited the kitchens on occasions, both many years ago when I was an officer of a union that used to represent staff within this building—indeed, I should perhaps have declared a past interest in that respect—and also more recently. I believe that things have improved, at least a bit. However, the purport of the noble Lord's question is probably to get me involved in matters that are primarily the duty of the House authorities. I shall, therefore, not fall into that trap.
Lord Janner of Braunstone: My Lords, if my noble friend the Minister will not fall into that trap, will he at least join with all of us on both sides of the House in paying tribute to the staff of the Palace of Westminster, not least for their perennial patience towards us and their efficiency? Will he also ensure that an investigation is carried out into the reasons why so many of them quietly tell us of the difficulties that they endure in serving the Members of both Houses of Parliament? If, as my noble friend said, there is an agreement in principle that the conditions are to be raised to the same standards as exist elsewhere—not in Royal palaces—why should they not be subject to the same laws as apply elsewhere? Indeed, why should not the staff be protected by the same laws as everyone else? That would reflect our appreciation of them.
Lord Whitty: My Lords, in terms of the first part of my noble friend's question, I wholeheartedly endorse his comments as regards the service and the dedication that we receive from staff in this building; and, indeed, that appreciation applies to our colleagues in another place. I recognise the often very difficult conditions under which they work. As to the middle part of my noble friend's intervention, I must again side step that question because that is primarily a matter for the House authorities. However, broadly speaking, I would agree with the last part of his intervention.
Lord Campbell of Croy: My Lords, on the question of safety and immunity, I am sure that some other noble Lords present today will remember the occasion in this Chamber when parts of the ceiling fell off and almost landed on the late Lord Shinwell; and, indeed, could have caused him, or any other Peer who happened to be sitting in the area below, quite considerable harm. Can the Minister tell us who is responsible if injury occurs to a Peer as a result of such a situation?
Lord Whitty: My Lords, one of my noble friends says "God". The legal situation is complex, but I am sure that the House authorities would observe their
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obligations in that respect had an injury—which thank goodness did not occur—been sustained by Lord Shinwell.
Lord Tanlaw: My Lords, how long will it take to change the light bulb on the right hand side of the Throne?
Lord Whitty: My Lords, I do not think that I need consult the Chancellor of the Exchequer on that; I think that the House authorities have sufficient funds.
Lord Hughes of Woodside: My Lords, do the mice in the Bishop's Bar and the Peers' Guestroom have Crown immunity, or can something be done about them?
Lord Whitty: My Lords, clearly that again is the responsibility of the House authorities. I may have a residual departmental responsibility in respect of biodiversity, but I think primarily it is someone else's responsibility. Clearly their appearance there is to he regretted, however much we might like them in other contexts.
The Countess of Mar: My Lords, as the noble Lord, Lord Ashley, reminded us. previous governments have removed Crown immunity from hospitals and from members of Her Majesty's Armed Forces. If Crown immunity has been removed from them, why is it proving so impossible to do it in the Palace of Westminster?
Lord Whitty: My Lords, I hope that we are reaching a situation where that is not impossible. Indeed, some movement in that direction was taken when we established the Food Standards Agency. The reason for the situation—I described it earlier as slightly theological—is that the Crown cannot sue itself, whereas since the establishment of trusts in the National Health Service there is a body to prosecute. Such a body does not exist as regards government departments, including MoD departments. However, the arrangements as regards the MoD differ according to the different locations of both civil and military personnel. We intend to clarify the whole situation so that the same laws can be enforced and applied to premises where people are employed by Crown bodies as apply to any other employer.

Bogus Marriages: Checks by Registrars
2.52 p.m.
Lord Williamson of Hortonasked Her Majesty's Government:
Whether, in view of the recent BBC exposure of the scale of bogus marriages for payment, they 'will take measures to reduce such practices; for example, by greater powers for registrars to check false

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addresses and better exchange of information about those who present themselves for unlawful or bogus marriages.
Lord McIntosh of Haringey: My Lords, following the implementation of the marriage aspects of the Immigration and Asylum Act 1999 on 1st January 2001, people are required to provide documentation as part of the procedures for dealing with the civil preliminaries to marriage. The Government are also undertaking a fundamental review of civil registration in England and Wales, the aims of which include an improvement in the quality of information that is collected, and better and wider use of technology.
Lord Williamson of Horton: My Lords, I thank the Minister for that helpful reply. However, does he not agree that it is in the public interest and, indeed, possible to take practical steps to reduce or eliminate the current "rent a bride" racket which is not only intended to circumvent the immigration and residence rules but is indeed making a mockery of marriage?
Lord McIntosh of Haringey: My Lords, it is important to remember that we have to maintain a balance. We have to have marriage laws which are not discriminatory as between any part of our population. We have to make sure that it is not unnecessarily difficult for people who legitimately want to get married to do so. At the same time we have to make sure that our laws are the same for everyone. That means that sometimes there will be bigamous marriages, marriages which involve perjury or marriages of people who have entered this country illegally.
Lord Waddington: My Lords, has the registrar the legal obligation to report suspicious circumstances when they occur?
Lord McIntosh of Haringey: My Lords, that formed part of the provisions of the Immigration and Asylum Act 1999. Not only is there a responsibility on registrars to make such reports, but there is now a specialist unit in the asylum and naturalisation division to which such a report can be made.
Lord Cope of Berkeley: My Lords, what has been the effect of the new measures which started in January? Is it too soon to say how effective they are?
Lord McIntosh of Haringey: My Lords, it is rather too soon. Since the London Marriage Abuse Team was set up in the asylum and naturalisation division, there have been over 200 arrests, over 100 people have been charged or cautioned, and more than 40 people have been removed or deported. But that occurred over a period of two years. The 10 or 11 weeks that have elapsed since 1st January comprise too short a period for statistical comparison.

Tourism and Foot and Mouth Disease
2.55 p.m.
Lord Monro of Langholmasked Her Majesty's Government:
In the light of the encouragement given by the Department for Culture, Media and Sport to tourists to continue to visit the British countryside, how this advice compares with the experience of the 1967 outbreak of foot and mouth disease.
Lord McIntosh of Haringey: My Lords, the Government's Chief Veterinary Officer has issued advice to the public on countryside activities and visits based on the most up-to-date expert advice and evidence. The committee of inquiry into the 1967 outbreak made no recommendations relating to controlling visitors during an outbreak. As long as they follow the Chief Veterinary Officer's advice, people may safely continue to visit and enjoy the countryside.
Lord Monro of Langholm: My Lords, I thank the noble Lord for his Answer, and indeed I thank the Government for the Statement yesterday on the crisis in the countryside. I should declare an interest as one who is likely to lose his breeding flock under the cull scheme to be carried out next week.
Does the noble Lord agree that Dumfries and Galloway Council has made heroic efforts to contain the disease in that county? Does he believe that the Scottish Office and MAFF have sufficient resources, in terms of physical resources and facilities, to carry out the cull speedily in the country? Does he agree that few who read the 1967 report believe that we have reached a peak in the crisis and that the recommendations in that report should be implemented as soon as possible, particularly those relating to the disposal of carcasses and communications with the public?
Lord McIntosh of Haringey: My Lords, the Question on the Order Paper concerns tourism, which is why I am replying to it. In view of the extensive debate we had on the foot and mouth outbreak in this country, including nine hours of debate last week and a Statement yesterday, it is not desirable for me to put into other words comments that my colleagues from MAFF and the Department of the Environment, Transport and the Regions have made in the House. I appreciate the tribute which the noble Lord paid to Dumfries and Galloway Council. He paid it last week and I am sure that it is well deserved. However, although I answer for the whole Government, I do not think that it would be appropriate for me to answer again on the other matters that he raises.
Lord Thomson of Monifieth: My Lords, does the Minister agree that there are throughout the countryside other interests as well as agriculture which we must of course treat as priorities? Does he agree that it is important to strike a balance between those other interests, including tourism—which in this

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country is a bigger foreign exchange earner than agriculture—and to make sure that there is a proper awareness throughout the country that much of the countryside is still available for enjoyment?
Lord McIntosh of Haringey: My Lords, I very much agree. I do not know whether the noble Lord saw a report in The Times this morning which described how the village of Porlock in Somerset is deserted despite being 60 miles from the nearest outbreak of foot and mouth disease. The fact that struck me is that in that area 90 per cent of the land is in agricultural use but 90 per cent of the employment derives from tourism. That is often the case. Of course, there is no restriction on people visiting shops, museums, galleries, restaurants, pubs, theme parks and other attractions; what they must not do is walk in fields where there is livestock. There is a huge number of attractive places to visit, including countryside, in this country. The Minister for Tourism is in New York at the moment to spread that message.
Lord Rotherwick: My Lords, is the Minister aware that the members of the Federation of Zoological Gardens of Great Britain—namely, the zoos and wildlife parks, which receive somewhere in the region of 13 million visits from tourists each year—will, according to that federation, be in a cash crisis by April of this year? Is the noble Lord also aware that 45 per cent of the members of that federation are charities and small businesses? How will the Government address those problems?
Lord McIntosh of Haringey: My Lords, the noble Lord refers to a problem which is more widespread than zoos. It applies to a large number of visitor attractions throughout the country. Clearly the measures in relation to tax, national insurance contributions, business rates and so on which my noble friend Lord Whitty announced yesterday on behalf of Michael Meacher go some way towards dealing with that. I have to repeat what my noble friend Lady Hayman said at the end of the debate last week. The Government cannot be the insurer of last resort for every financial consequence.
The Earl of Sandwich: My Lords, will the Minister consider a national appeal based on the premise that we are in a national emergency? Would not that help those involved in tourism and activities around farming? If we were to declare forthwith a national emergency and issue a national appeal for the support of the rural economy, would not that be a unifying factor for the nation?
Lord McIntosh of Haringey: My Lords, it might be a two-edged weapon. If we were to declare a national emergency we might make the situation worse by discouraging tourists from coming to this country. I think that probably the same consideration applies to the suggestion of a national appeal.
Lord Harrison: My Lords, does the Minister agree that the outbreak of foot and mouth disease has
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highlighted the economic importance to the United Kingdom of tourism? In the light of that, does he find it odd, as I do, that an entire Ministry is accorded to agriculture yet tourism does not feature even in the title of the Department of Culture, Media and Sport?
Lord McIntosh of Haringey: My Lords, tourism does not feature in the title of the DCMS but it features in its activities. We have a very effective tourism Minister in Janet Anderson, who has been visiting, as has the Secretary of State, the affected areas of this country. My noble friend is right about the importance of tourism. It is a £64 billion industry, of which £12 billion is in the countryside. That importance cannot be overestimated.
Lord Plumb: My Lords, my question relates to the 1967 review. If I remember aright, the criticism after the 1967 review was that the rules had been relaxed too quickly. Many will welcome the Statement yesterday. However, does the Minister accept that there is a good deal of confusion? It was expressed in many newspapers today. On the one hand, we had yet more outbreaks yesterday; at the same time there is the proposed relaxation of access to footpaths. Will not people be confused in particular when they are told not to go into livestock areas? Will the noble Lord please tell me where I find an area which is not a livestock area? There are foxes in London. There are animals, wild or commercial, throughout the country. In those circumstances, how does one define those areas where people can move freely?
Lord McIntosh of Haringey: My Lords, the noble Lord was a distinguished member of the Duke of Northumberland's inquiry into the 1967 outbreak. His knowledge of it will inevitably be much better than mine. I was not familiar with the finding that the restrictions were relaxed too quickly.
I do not think that it is true to say that the restrictions are being relaxed. They are being explained more clearly. The fact that large parts of the country are free from the disease is being made clear to those who have exaggerated fears. Although the outbreaks still continue, two-thirds of the outbreaks yesterday were either in Cumbria or in Dumfries and Galloway. That confirms that for the sake of the wider rural economy it is important that we continue to emphasise the extent to which this country and its countryside can still be a valuable and important tourist attraction.
Baroness Strange: My Lords, is the Minister aware that I have today cancelled the opening of my garden in early April in aid of the Scotland's garden scheme? Although we are not in an affected area, we are surrounded by livestock and animals and I am worried about the infection spreading further.
Lord McIntosh of Haringey: My Lords, I am sure that the noble Baroness acted on proper local veterinary advice.
Lord Greaves: My Lords, do the Government understand the problems experienced by outdoor centre instructors and guides? Many are self-employed. Often 100 per cent of their business is based on taking people into open countryside, which is now closed, and is concentrated in Wales, Cumbria and Dartmoor, areas which are affected by the disease. Is the Government's task force paying attention to the need of this vital sector—in particular with regard to education—which runs the risk of being wiped out?
Lord McIntosh of Haringey: My Lords, yes. The recommendations of the task force were reported yesterday. They apply to all businesses and charities and cover outdoor centres of the kind the noble Lord describes. It is worth emphasising that this is not the final report. Work is continuing. If further action is necessary, it will be taken.

Devolution: England
3.6 p.m.
The Lord Bishop of Durhamrose to call attention to the case for devolution to the English regions; and to move for Papers.
The right reverend Prelate said: My Lords, I must first declare an interest in devolution as I chair the North East Constitutional Convention. My intention in seeking this debate is not, however, to make a special case for one particular region but to give your Lordships the opportunity of expressing your views on political devolution in England and to seek a response from the Government about their future intentions in the programme of constitutional reform on which they are embarked.
The present Government have indeed been bold against the background of public disillusionment in the political processes. Low percentages of turn-out in elections indicate that voters have lost confidence in what they perceive to be an over-centralised and unresponsive political system. Within a year of the last general election the Prime Minister renewed his commitment to democratic renewal by emphasising the need for better education and the wider use of information technology so that citizens might be encouraged to participate in what he called,
"open, vibrant, democratic debate which is a laboratory for ideas about how we should meet social need".
I have become involved in this issue because I believe that it is only when people genuinely participate in the political process that real change in society will occur. We need to move from a dependency culture into one which enables all to influence the decisions which affect their lives and to take responsibility for them.
The past four years have seen significant steps towards fundamental changes in the way the constitution operates. The devolution in Scotland,
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Wales and London, the impact of the Human Rights Act, and the first stage of reform of your Lordships' House have, in the words of Professor David Marquand,
"heralded a reconstruction of the British State more fundamental than anything which had happened to it since the Act of Union of 1707".
Perhaps it is too much to expect more from one term of government but the programme of constitutional reform seems to have got stuck. Disillusionment is again beginning to show itself. Just four months ago one poll indicated that only 1 per cent of the populace thought the present system of government worked extremely well while 64 per cent thought that it could be improved. What, I wonder, will be the turn-out in the forthcoming local elections and a possible general election? Large numbers of absentees will indicate a serious state of affairs in our democracy. There is a strong argument that the devolution programme that has begun in Britain should continue to provide the stimulus for democratic participation and a recovery of confidence in the political process.
It is argued that devolution in England is inevitable after the start made in four parts of the union. Devolution to one part of the nation must affect all others. I am sure that your Lordships do not require me to spell that out. A situation could occur in which a government were dependent on the votes of Scottish MPs, for example, to press forward with their legislation, yet, because of devolution already enacted, the English could not equally influence similar policies in Scotland.
For some, the answer is an English parliament, but surely that has serious weaknesses, for it would effect the break-up of the United Kingdom into a number of federal states with England as the dominant partner and the reason for Scottish devolution would be undermined. Moreover, an English parliament would not address the over-centralisation of government and the disenchantment that many regions feel with the metropolitan outlook.
The recognition that the English regions need regionally rooted government to devise and deliver policy effectively began some time before devolution to Scotland and Wales. The previous government set up regional offices and a variety of quangos, but those structures did not address the overall need for cohesion in regional policies. There is already a tier of government at regional level with all its attendant bureaucracy, but it is still dominated by Whitehall departments. Regional assemblies with democratic accountability would create no extra bureaucracy and would provide a regional overview that the present fragmented organisation cannot handle.
While I applaud the work of the regional development agencies, not least in the North East, they work under considerable frustration because of fragmented funding streams from the Government and the fact that they have been tied to national programmes. All that has hampered the development of regional strategies. The Government have responded to those criticisms to some extent, but there are still many areas where overlap and confusion are

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the order of the day. The regional economic strategies are poorly integrated with the regional planning guidance. Furthermore, regional cultural strategies, the regional transport strategy and the sustainability frameworks all ought to be addressed in an integrated and joined-up manner. In other words, while regional government offices and RDAs have been a genuine step towards a regional approach, they do not provide the overall cohesion that is needed. Nor do they fill the democratic deficit and give the people of the region the responsibility for devising and fulfilling the overall strategy that affects them. The present arrangements also make sustainable development in the regions very difficult. In order to look long term at the future of a region it is necessary to bring together environmental, economic, social and cultural concerns.
That leads to immense frustration among local authorities. Even if democratic regional assemblies are introduced, local authorities will continue their important role in service delivery, but they need to work in partnership with each other rather than in competition, as often happens at the moment. The cooperation mechanisms between local authorities are wasteful of time and money and they are still unable to achieve the cohesive strategy that is desperately needed. They are a poor alternative to democratically elected regional government.
I am advocating a number of democratically elected regional assemblies in England, which would evolve according to government guidelines but not necessarily in precisely the same pattern or at the same time in every region. Their powers would focus on cohesive strategic planning, enabling them to be streamlined and non-bureaucratic. They would be largely serviced by the current provision made for Government Offices and non-departmental government bodies. They would not create another tier of bureaucracy, but would eliminate a good deal of the present confusion. They would provide a framework in which RDAs, learning and skills councils, regional planning guidance, Government Offices, the Countryside Agency, the Housing Corporation, regional sports and cultural bodies, tourist boards, environmental agencies and offices of the NHS Executive could work together in a complementary way to provide a long-term sustainable strategy that matched the particular needs of the region.
I do not pretend that this is an easy task. There are many factors that I do not have the time—and certainly not the knowledge—to address today. However, I believe that the question has become urgent. I am glad to hear that the Government are working on a Green Paper setting out plans for elected regional government. It is vital that they do not write it from an ivory tower. When a realistic document is published, there must be informed consultation on its contents, so that when the time comes for regional referendums on the subject people are well informed about the issues at stake. Those of us who are rooted in the regions can enable that process to take place. I very much hope that the Government will take the
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opportunity provided by this debate to begin that initiative and provide some hard promises about their policies for the regions.
I hope the Government agree that the existing tier of regional operation is fragmented and poorly coordinated, that too much public policy does not match local conditions, that there is insufficient democratic scrutiny and that English politics needs to recognise and accommodate the rich diversity and pluralism that our nation rejoices in.
I hope that your Lordships will forgive me if I conclude on a more personal note. I am often asked why a Church leader has become so involved in an intensely political issue. In the first place, I believe that the issue of regional government should be above party political divides. I am not ashamed if that sounds a little naive to many of your Lordships who have given distinguished service to the nation through party politics. I am deeply concerned that the vast majority of the population feel marginalised from the political processes that affect their lives. I long to see the people of the North East, which is the region that I know best, take a full part in the decisions that will shape their destiny. For generations they have been oppressed and have often lived desperate lives, dependent on others who seem have all the power. They have been subject to a dehumanising system that has left them feeling marooned and helpless. Closer association with the comprehensive strategies that will shape their region will free them to be even more responsible citizens and significantly help them to contribute to the common good. In this context, I am grateful that provision has been made for this debate and I look forward to listening to your Lordships' contributions and to the response of the Government. I beg to move for Papers.
3.19 p.m.
Lord Waddington: My Lords, I believe that we should all be grateful to the right reverend Prelate for having initiated this debate. However, I regret that I can find so little common ground with him. We are debating this matter at a time when the public are being rudely reminded that, as a result of the machinations of the Chancellor and the profligacy of local authorities, their local tax bills are increasing well beyond the rate of inflation. The one thing of which I am absolutely sure is that people in England, who are already suffering from a surfeit of politicians and bureaucrats, do not want yet another tier of local government. But that almost certainly is what we shall get.
There was a time when Labour said that elected regional authorities would come about only after the abolition of the county councils and the creation of unitary authorities. However, I remind the House that on 16th January this year Mr Prescott said:
"We remain committed to moving to directly elected regional government. In the meantime, there are no plans to reform the structure of local government".—[Official Report, Commons, 16/1/01: col. 184.]
On 17th January, his Under-Secretary of State was even more definite, saying that the creation of regional assemblies need not be preceded by another round of

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local government reform. So let the public beware. Elected regional bodies will mean another layer of local government and even higher local tax bills. Of that there can be no doubt whatever.
On 26th May last year, a No. 10 spokesman was reported in the Guardian as saying:
"We need this"—
that is, regional government—
"like a hole in the head".
I agree entirely with what then appears to have been the Prime Minister's opinion.
For a start, the regions which were invented for the purposes of the Regional Development Agencies Act were, with the possible exception of the north-east region, exactly that—inventions. They were artificial creations, with one part often sharing no common problems with another and rarely reflecting any community of interest or regional loyalty. There is certainly no community of interest between the people of Nelson in north-east Lancashire, which I once represented, and the citizens of Birkenhead, let alone between those who live in Merseyside and the farmers on the banks of the Solway. And there is no conceivable community of interest between the people of Cornwall and the people of Bath.
Therefore, when power is devolved not to existing local authorities but to regional bodies, for the most part it will not mean giving power to local people; it will mean taking power from them. It will not mean government which is closer to the people but, in most of the country and certainly throughout most of Lancashire, which I know quite well, it will mean precisely the reverse.
We must be clear about another matter. If regional government comes about, it will not, as some with amazing self-deception have suggested, be a sort of English answer to Scottish devolution. The West Lothian question will not be solved by regional government. Regional government is no response to the under-representation of England in the Parliament at Westminster. Regional government alone will certainly not stop England receiving, under the Barnett formula, a far smaller share of public spending than Scotland. I assert again with absolute confidence that the best way to help the burghers of Gateshead and Bootle is not to give them more councillors but to give them more money.
No. 10 was right: we need more government like a hole in the head. The last thing that we want is more bodies trying to justify their own inflated allowances. And mark my words: elected regional assemblies will start as costly talking shops, monitoring the work of the RDAs and pontificating about planning and transport. However, in no time at all, they will demand, as indeed some chambers have done already, a wider role involving the whole economic, social and environmental well-being of the region. In short, they will be costly millstones round the necks of the people.
Lastly, I want to say a word about the important European dimension. Hearing Mr Blair rubbish our history and Mr Straw ridicule our patriotism, and
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seeing Mr Blair quite happily surrender more and more of Westminster's authority to Brussels, I sometimes wonder whether he would mind very much if we simply ended up as a series of provinces in a "Europe of the regions". Of course, elected regional bodies, with a corresponding decline in the importance of Westminster, will be a big step in that direction.
There is no mystery as to how we would fit into a Europe of the regions. The European Commission published a map to illustrate its thinking—a map on which every country in the European Union was depicted except England. It was not a printer's error; it was a reflection of the fact that, looked at from Brussels, Scotland is one region which can be called Scotland and Wales is another region which can be called Wales, but there is not much point in attributing a group name to a part of the United Kingdom which is made up not of one region but nine.
If we allow it to happen, regional government will bring about what can best be described as the balkanisation of England and the side-lining of our Parliament at Westminster as the regional bodies, already busy setting up separate offices in Brussels, look more and more to Brussels for direction and funding. I cannot believe that nine English regions, each competing against the others for the biggest share of grant money, will do much for harmony in our country. It certainly will not help to maintain our national identity, and that, I believe, is something which is worth preserving.
3.26 p.m.
Baroness Hamwee: My Lords, I very much welcome the debate but, even more, I welcome the role that the right reverend Prelate plays in his own region. He has a leading role in the North East, where I believe the cross-party, cross-sector support for regional development is most important. Regional government will be most successful in areas where there is a will for it. We need to follow that will.
In response to the comments of the noble Lord, Lord Waddington, I believe that we should raise our eyes to the aspiration; that we should will what we believe is good. We should not be held back by criticism of mere administration and extra bureaucracy.
I do not make light of the apparent dislike of the electorate for elections, nor of the low turnouts that we experienced in the London referendum. I declare an interest as a member of the London Assembly, although my Mancunian roots are by no means cut off. However, in London, one of our prime objectives—and certainly one of mine; it was central to my decision to stand—was the engagement of the public in the political process. That applies to all regions. I believe that regional government could offer that type of engagement, and it is very much in tune with the comments made by the right reverend Prelate.
We have talked about Scotland and Wales. I do not overlook the fact that they are nations and have a very particular identity. However, I am also aware of the jealousy—I believe that that is probably the correct

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term—of those who border those nations. We know of the concerns that exist in the North East. I experienced similar concerns when I went to Oswestry a little while ago. I asked one of my colleagues here what I should know about Oswestry. He said, "You should know that they are concerned about the additional funding to the Welsh Development Agency just a few miles away across the Border". That is unhealthy. However, I believe that it can be turned round if we have a regional pattern of government.
Of course, I am aware of the DETR's recent consultation paper, Strengthening Regional Accountability. I hope that this afternoon the Minister will take the opportunity to confirm to the House that the Government are looking to do more than simply strengthen the scrutiny role of the regional chambers.
People have said to me, "We want regional government like London". They should not want regional government quite like London. I do not commend the model of a single-person executive, but I do commend the sphere of government which deals with strategic matters and which can consider issues on a cohesive, integrated basis.
Good government is about accountability and accessibility. Up and down the country are quangos and government offices which I believe should be replaced by regional government. In place of an inaccessible series of organisations should be those which can be properly in the public eye.
I also believe—and this is an issue that we have previously encountered in London—that regional government should have the right directly to question government Ministers. I know that that is a sensitive issue. However, I believe that, if we are truly to appreciate regional issues, the relationship between central government and regional government could well be reflected by that direct and public debate. I must make it clear that we on these Benches do not regard that as taking power from local government, which we support and will continue to support, but of bringing it down from central government and its army of quangos.
I wish that I had more time than the few minutes available today to outline a number of topical examples that have occurred to me where regional government would have a role to play. I shall mention a few. First, arts funding; we have recently heard of Arts Council proposals for centralisation. Secondly, I cannot believe that regional government would not have a role to play in the present foot and mouth disease crisis. Thirdly, it would have a role to play in the scrutiny of health services, which your Lordships debated yesterday in the context of the Health and Social Care Bill. Fourthly, there is the longer running issue of house building and planning. The UK planning framework is probably one of the most centralised in Europe. We have heard—and I support this—that Europe is a Europe of the regions, and I hope that we in this country can play our regional part.
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I believe that those of us who are passionate about good government, good governance and public service must support both the concept of regionalism and the accountability of government and the involvement of our communities and individuals.
3.31 p.m.
Lord Harrison: My Lords, my noble colleague from the North West, the noble Lord, Lord Waddington, used to represent Nelson and I used to represent Birkenhead and the Wirral. The noble Lord said that there was no connection whatsoever, but perhaps he would like to know that Lady Hamilton was born on the Wirral! On a more serious note, I can tell him that it would have been very useful to have discussed at the time of the local government review the promotion of unitary authorities against a background of developing local government as well.
I thank the right reverend Prelate the Bishop of Durham for introducing this debate on the case for the English regions. It is a subject in which we have taken a renewed interest in the wake of the success of the Scottish, Wales and Northern Ireland executives. In the regions that are furthest from London, such as our North West, the North East of the right reverend Prelate the Bishop of Durham, or the South West, many of us feel like piggy-in-the-middle between London and the peripheral nations of the United Kingdom; and we often feel left out. Recent expenditure on museums in the English regions compared with those in London is a good example. If we compare the spending of the tourist boards of Wales, Scotland and Northern Ireland with that of England, we find that we are in a severe minority.
Nevertheless, the Government acknowledge that some problems and opportunities are regional, not national, to which end they have set up RDAs and regional chambers. I would like us to go forward and develop regional government. My experience on the North West Tourist Board and North West Arts— sufficiently large entities to contrast and promote best practice when delivering services to people—convinces me that we can develop a sense of region.
I want to concentrate today on my experience of Europe and the developing relationship of the English regions with the European Union. My experience as an MEP led me to think that we were unclear in talking to Brussels, compared to other European Union states, notably the German Länder and the Spanish authorities. When I was an MEP trying to represent Cheshire and Wirral, I well remember taking local authorities to see Bruce Millan, the then regional Commissioner, whose jaw would drop when he saw yet another of the 28 North West local authorities coming to see him. On the other hand, when he was speaking to the Germans or the Spaniards, he was able to get a clear message through about what the regional authorities required in terms of help and advice from the European Commission.
That impressed itself on me most clearly when I visited Barcelona and saw the investment that had been made and the work that had been done to

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improve the port facilities there. The people of Barcelona said, "We are developing very quickly. We are going to draw off some of the traffic from your region of Liverpool, Birkenhead and Merseyside because we are able to develop". But the key to their success was their ability to work with the regional authorities in Catalan, who in turn worked well with Madrid, who in turn worked well with Brussels. We have not developed that pattern in a way that would be most effective for us in the future, and I believe that the development of the English regional government will help to promote that in the future.
I have very little time and shall conclude by saying that this debate provides an opportunity for the new government, when elected, to give a voice to English regions, which will be effective not only in counselling our own government here in London but in talking to and working with Brussels.
3.36 p.m.
Lord Bowness: My Lords, I, too, am grateful to the right reverend Prelate the Bishop of Durham for enabling us today to examine what has happened to the notion of regionally elected assemblies, trailed in the Government's manifesto.
I say at the outset that I do not believe that regional bodies are intrinsically bad. During four years as a member of the Committee of the Regions of the European Union, I saw enough to appreciate that they can make very major contributions to their own areas. With great respect to my noble friend Lord Waddington, I do not believe that there is a diabolical plot on the part of Brussels to wipe out the United Kingdom by introducing regional government.
The truth of the matter is that the regions of the European Union vary enormously in their make-up. Some have legislative powers; some have taxing powers; they are of different sizes; they perform different functions. But they operate on the basis of what suits their particular communities and states. Spain has its autonomous regions, which have moved at a different pace. On the other hand, Scandinavia has structures that are much closer to ours.
It seems to me that we always face a difficulty in debating this matter. That is because we are never quite sure what we are seeking. Are we looking for some kind of local government body covering something that is described as a region, or are we looking for something with some kind of legislative function more akin to that which has been introduced in Scotland and Wales? I have no doubt that the latter is not realistic or desirable for the English regions, which we are considering today. I say nothing about Scotland or Wales, where different considerations apply.
I remind your Lordships that the Government's manifesto referred to a situation in which regional assemblies would exist in an area with a unitary system of local government. That would inevitably lead to larger unitary authorities—in this regard I agree with my noble friend Lord Waddington—taking local government further away from the people.
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One of the most obvious distinctions between Scotland and Wales and the regions of England is that there is no doubt about what comprises Scotland and what comprises Wales. I hope that I shall not be corrected about that, now that the question of Monmouthshire has been settled. But in England there are major difficulties in deciding which county goes into which region. Cornwall probably believes that it is a distinct region from the rest of the South West and should be considered in its own right. More controversially, is London a region on its own, or is it part of the South East?
There was great unhappiness at the time of the Regional Development Agencies Bill, when the Government insisted on working on the boundaries that had been set up to suit the administrative convenience of central government, rather than taking into account local views. The Government knew that that was the case because they resisted all attempts to write into the Bill a provision to review those boundaries.
We do not see any evidence of the demand for a further tier of government. Certainly, the new system of government in London did not bring people out in their droves. During the passage of that Bill, we asked time and time again whether the Government were trying to set up a regional authority or whether it was another tier of local government. We never got a straight answer. When local government structures are an addition, they tend to add cost, not value. I remember the very modest sums that the Greater London Authority was to cost council tax payers in London. That has now all been forgotten in the light of council tax increases which have caused consternation to political leaders of all political persuasions in boroughs across London.
The Greater London Authority has decided what it is for itself. I see in its advertisement for a head of media relations that:
"The GLA is unique. We're England's first regional government",
and, as such, it will have a head of media relations at £62,000 per annum, who will look after the mayor, and a deputy head of media relations at £45,000 a year to raise the profile of the assembly's individual members. All that money is spent despite the fact that outside the high profile areas of the capital, litter still abounds and so does the graffiti.
We are always in some difficulty in knowing whether we really support the devolution of functions, never mind power. Subsidiarity is a great battle cry between governments of the member states but it is never applied between national and local governments. Our legislation is full of guidelines and statutory guidance to control the local functions.
I recognise that local authorities need to think and act over areas wider than their own jurisdiction. But rather than constant reorganisation and adding tiers, we need to look at the mechanisms of co-operation which exist in other countries. As I have urged your Lordships' House on other occasions, if it would not be too bitter a pill for us to swallow, could we please

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examine the French structures of urban communities and districts which allow individual communes to own the structure and work together without creating a tier, and an additional tier, of cost?
3.42 p.m.
Lord Newby: My Lords, we have a hopelessly lopsided constitution. We now have devolution to Scotland, Wales and Northern Ireland and, as we have heard, we have a curious half-way house in London.
As for the rest of England, the country is politically highly centralised. Local government has had its powers and responsibilities reduced in recent decades. The regions have become an increasingly significant layer of government decision-making, something of which the noble Lord, Lord Waddington, seems completely unaware. The Government Offices for the Regions are responsible for billions of pounds of expenditure. But the problem is that nobody in the regions, other than the civil servants who work in those offices, is responsible for those decisions. They are completely unaccountable.
During the course of this Parliament, we have had the creation of the regional development agencies. The one that I know best, Yorkshire Forward, has made considerable progress. It is doing a good job in bringing focus to economic development issues. It is bringing new energy to those areas of policy-making; and it is helping to strengthen the identity of the region, which is of considerable importance, not least when bidding for funding externally or for external investment. But the powers of the RDAs are limited and they certainly provide very little in terms of additional accountability.
While all that has been happening, there has been a great bubbling up of interest in and activity on the question of regional government in the regions themselves. The Campaign for the English Regions now has representatives from most of the regions, and the Campaign for the North-Eastern Assembly and the North East Constitutional Convention, in which the right reverend Prelate the Bishop of Durham has played such a major part, have developed a very substantial and workable scheme for devolution to the North East.
Equally, in Yorkshire and the Humber, a constitutional convention has been formed. It is quite interesting that at the first meeting of that body, one of the most telling speeches was made by a civil servant frustrated that in the health service, although the targets that he was given seemed relevant, when it came to the ethnic minority communities in Bradford in which he was working, the targets were a complete nonsense, and he had no flexibility to amend them.
I believe very strongly that the discussion which took place in Scotland and which led to the Scottish Parliament now needs to take place across the whole of England. It has begun in some regions and I hope that the publication of a Green Paper will help to take that forward.
From these Benches, and certainly from my own point of view, I have a relatively clear view of the model that I would seek. In answer to the noble Lord,
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Lord Bowness, I am not looking for something that will be described as a new tier of local government. I am looking for something which is clearly fully-fledged regional government which is more akin to the Welsh Assembly than a glorified county council.
Unless regional government has significant powers covering the big issues—health and education—and tax-raising powers, it will not be able to fulfil its potential and will run the risk of being little more than a regional talking shop.
We believe—I revert to the noble Lord, Lord Waddington—that the Barnett formula should be amended and should be a formula for funding at regional level based fairly on need. That is a necessary but not sufficient condition for this process.
We believe also that the process should be permissive. Some parts of the country at present are not convinced that regional government is for them. Others are very keen on it. The model that was adopted in Spain allowed those regions that wanted it to press ahead and achieve full-scale regional government. The others could then see what they thought and be allowed to come along as they thought fit. In my view, that is the best model. My guess is that when those regions which have a less clear identity at the moment saw regional government working successfully in the North East, the North West, Yorkshire, the Humber and the Midlands, they too would go for it.
Regional government offers the prospect of more coherent public policy-making at regional level, more efficient use of public money and greater public participation in the way that that money is spent. For those reasons, I believe that a Bill to allow elected regional government to be introduced where there is popular support for it should be a high priority for the next Parliament.
3.47 p.m.
The Lord Bishop of Wakefield: My Lords, I add my gratitude to my noble friend the Bishop of Durham for securing this debate. In areas of West and South Yorkshire covered by the diocese of Wakefield, I have not detected a huge groundswell of public opinion urgently seeking political devolution. But as a Bishop in Yorkshire, I am left in no doubt about the strength of Yorkshire pride, even though, as a Lancastrian myself, I think it is sometimes overstated.
Yet it is that very strength of common identity which, as the noble Lord, Lord Newby, has shown, makes our Yorkshire and Humberside region a good example of how devolution can build on natural foundations, and not many other regions have such a genuine sense of shared identity. Some will want regional government and, as the noble Lord, Lo rd Waddington, made clear, others will not. I do not think that matters. My noble friend the Bishop of Durham and the noble Lord, Lord Bowness, have indicated already that variation is healthy and it may well be the right way forward.
The noble Lord, Lord Waddington, rightly pointed to the seeming nonsense of the make-up of some of the English regions. But he failed to include in his

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recognition of a region that does make sense that region to which I am referring of Yorkshire and Humberside.
In Yorkshire and Humberside, our regional assembly was formed with all-party support. Our regional chamber has brought together for the first time partners from the business and voluntary sectors, including the churches and faith communities. Our regional economic strategy has provided for the first time a coherent framework for the work of the whole public sector and we have seen decision-making being opened up and brought closer to ordinary people.
The £130 million from the last round of the Single Regeneration Budget was allocated by Yorkshire Forward through a process that involves the regional chamber and community groups in setting the criteria and sharing the decisions.
It is our experience, certainly in my part of the North, that the absence of appropriate regional strategies in the past has often undermined the ability of some of our communities to work together. It has undoubtedly exacerbated the tendency to have to look to London and the South East.
In terms of economic regeneration in the former mining areas of my diocese, I have seen how, often despite good intentions, the complexities of the problems and the specific and sometimes unique local issues have not always been understood here in London. I believe that we must press for the principles of subsidiarity if we go forward with regional government. However, it must be a real devolution of power from central government to the assemblies rather than a scooping up from local authorities which, as the noble Lord, Lord Newby, eloquently said, would leave us worse off with something like glorified county councils.
I particularly want to draw the attention of the Minister to the work of the churches and faith communities in some of the new regional institutions. I do not refer to Bishops chairing constitutional conventions, but, for example, to the work of the south-east and south-west regional faith forums, and to the fact that in Yorkshire and Humberside, the churches are full members of the chamber. We have seconded an officer to Yorkshire Forward to work on social inclusion. We have spearheaded the creation of benchmarks for community involvement in regeneration. That should not be surprising: churches or other faith communities are present in every part of every English region.
It is disappointing, therefore, that church and faith community involvement of that kind is not always welcomed. It is not only disappointing but perplexing that churches and faith communities are not part of the new Regional Cultural Consortia. That is odd, not least because of our obvious involvement in heritage, art and music. I should be grateful for a response from the Minister, either in this debate or afterwards, as to that strange occurrence.
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The Runneymede report acknowledges that faith has often been downplayed through ignorance or bias. It identifies faith as a key issue in social inclusion. Involving the churches and faith communities fully is not only sensible but essential if inclusion objectives are to be achieved. The Government's announcement of £5 million in support of regional chambers is welcome. However, I hope that some of it will be used to facilitate further church and faith community involvement.
Perhaps I may conclude by saying that discussion of elected assemblies is important, but not if it blinds us to what is already happening on the ground. We must realise that participation in regional government is about more than political parties and that devolution will be of value only if the process takes seriously the involvement of all major partners, not least among them the churches and the faith communities.
3.53 p.m.
Baroness Rendell of Babergh: My Lords, we are at an historical turning point in the economic development of the United Kingdom. Boom and bust have been replaced by stability, with unemployment and inflation at their lowest levels since the 1970s.
What better climate can there be for ultimately securing an assembly for Cornwall; provided, that is, that the county can satisfy Her Majesty's Government that its claims are valid. It has been suggested that a referendum, when it comes, should be conducted by both town and parish councils because much of Cornwall is rural. Perhaps I may quote from the declaration, compiled last year, to set up the Cornish constitutional convention. It states:
"Cornwall is a distinct region, defined by identity, geography, culture and history. It has a characteristic economic profile which sets it apart from the south-west. It enjoys unique opportunities to engage with other parts of the world, both through its cultural links with other Celtic regions and the Cornish diaspora".
The declaration adds—significantly to many Cornish people; to some a vital point:
"In all aspects it differs from the artificial construct known as the south-west".
I have never lived in the Royal Duchy but I have spent quite a lot of time there. Many members of my family come from Cornwall and many still live there. I know from them that, half seriously, half jokingly, the Cornish think of themselves as "not English". One of my cousins, at school in Truro, told me of the day when the headmaster announced to the assembled school that a certain member of staff would be leaving and taking a job on the other side of the Tamar, the river that divides Cornwall from Devon. "Mr So and So", he said, "will be leaving us, to our great regret, to take up a post in England".
That is a remark which might be made by a Scot, a citizen of Wales or someone from Northern Ireland but not, I think, by anyone living in any other region of the United Kingdom. It underlines Cornwall's peculiar and unique position. The Prince of Wales has referred to it not as a county but a country, for it has many distinct features which set it apart from the rest of Great Britain. It has, for example, its own language,

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a member of the Brythonic group of Celtic languages, most closely related to Breton. Although it has remained almost unspoken since the beginning of the 19th century, steps are being taken to revive it and works are being written in it.
Cornwall has the world's biggest shipping lane within three miles of the largest natural harbour in Europe, for the development of which Hayle has a multi-million pound plan. Its coastline is unrivalled for beauty and tourist attractions. Inland, it is distinguished for its fine gardens and now for Nicholas Grimshaw's Eden project, the largest geodesic domes housing tropical flora in the world.
A campaign to win home rule for Cornwall has so far gained the support of 20,000 people in an area whose population is under half a million. Campaigners particularly dislike the concept, if and when devolution comes, of their county being included in the area experimentally called the South West and extending from Scilly to Swindon. They feel a real need to resist being swallowed in a region encompassing such distant places as Bristol and Gloucester, with which, opinion is, they have little in common.
As regards the Cornish constitutional convention, a south-west regional assembly is acceptable—so long as it stops at the Tamar. One of the founders of the campaign, Councillor Bert Biscoe, stated:
"There are no ideas of breaking away from the United Kingdom. We are talking about Cornwall being a region, not necessarily English, but British. Emotionally, there is wide support for it in Cornwall".
Her Majesty's Government show great interest in Cornwall, designating it as a health action zone and sports action zone and, as such, along with the Scilly Isles, the only part of the South West eligible for Objective 1 funding, the aid that helps to improve the European Union's poorest regions. The county's plea for a degree of self-government is based partly on its distinctive culture and language but more than that on the county's economy. Much of its industry has declined over the past century and despite new jobs in tourism and manufacturing industries, it still suffers from unemployment and low wages.
Campaigners believe that an assembly would help to lift Cornwall's economy and change that, because so far no one has tried giving Cornwall a voice and an individual identity. If it wishes to change its status and achieve its aims of the establishment of an assembly on the lines of that which Wales now enjoys, it must convince government of its qualifications, its economic advance and its distinctive claims to semi-autonomy. Only a referendum would show how determined the Cornish are to stand alone or to submit to being part of a larger artificial and, in the opinion of some, unnaturally constructed region.
3.59 p.m.
Lord Elliott of Morpeth: My Lords, with the right reverend Prelate, I share knowledge of the north-east of England. I am a Northumbrian, and like everyone in the region which is called the North East, take great
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pride in the beautiful cathedral of Durham. Two of my children graduated at Durham University. So, one has an affection for that lovely place.
I should like to talk of the North East as a region. All the regions of this country have known problems in the past years, but few have known as many as the north-east of England. In the late 1950s I was elected to another place at a time when our three major industries, coal, shipbuilding and steel, were simultaneously in decline.
From then on, we experienced a remarkable problem with regard to employment. In attempting to deal with it, the region has always had some kind of development agency. I can go back to NEIDA— North East Industrial Development Association—a small body of leading industrialists, leading trade unionists and two MPs. I was one of them. That soon developed into a broader organisation called the North East Development Council which brought in local government. At present, we have One North East, a smaller but efficient body which is knowing great success.
Do we need another layer of government? I do not believe that we do. We tackled unemployment in a strong way and now, thanks to the work of One North East, there is an influx of new industry in the region. The region has experienced great environmental development. Since the late fifties, a period when both major parties subsequently were in office, the region has received considerable government support. Environmentally, the region is fantastically developed. We must have one of the best road systems in the country, built during the administrations of both major parties.
All our derelict sites have been cleared. The banks of our rivers are clean where they were once derelict. The quay side of Newcastle lives again and there are many examples of environmental improvements. Unemployment is still above the national average but not much. It is slightly higher than it was at the previous election. I believe that that is temporary because much is happening in the area which is good.
So do we need regional government? I do not believe that we do. Much of our new prosperity and improvement is due to having solid local government. I would greatly regret the abolition of Northumberland County Council in favour of a regional government. I never served on the council but my late father did for more than 40 years. I do not believe that we need anything other than the solid local government set-up that exists in the North East. The industrial situation is improving, as are educational facilities. Training opportunities are now available in the North East which did not exist when I became a Member of Parliament for Newcastle upon Tyne.
I believe that it is unnecessary to introduce regional government into England. It is a difficult proposition. I am against devolution; I have always contended that this is too small an island for federalism. I believe that it would be disastrous for people in England to have another layer of local government. The right reverend Prelate said that he deplored the fact that there was

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such apathy with regard to voting. There is, which is sad, but attempts have always been made to overcome it. Many years ago, I made my maiden speech on a Conservative local government Bill. I tried to support the idea of a block grant system in the hope that it would waken up individuals to the importance of valuing their local authorities. It did not do so and I doubt whether a regional government would do any better.
4.4 p.m.
Lord Smith of Clifton: My Lords, I feel a doctoral thesis topic coming on; namely, the role of the Anglican Church in pioneering devolution. It began with Canon Kenyon Wright who chaired the successful Scottish Constitutional Convention. I am pleased to see that his example is currently being followed by the right reverend Prelate the Bishop of Durham, who chairs the North East Constitutional Convention, and the right reverend Prelate the Bishop of Liverpool, who chairs the North West Constitutional Convention. As an Anglican, I am proud of that fact.
Before other parties lay claim to the concept of regionalism, perhaps I may point out that it is good intellectual Liberal policy. It was advocated at least 70 years ago by Professor Ramsay Muir.
I was slightly surprised to hear two noble Lords on the Conservative Benches speak of their enthusiasm for local government. They were MPs, one a Minister, of a Conservative administration under Mrs Thatcher which did more to denude local government of its powers and to accrete more power to the centre than at any time since the Tudors. Nevertheless, their conversion and devotion to local government are welcome.
It is fitting that the right reverend Prelate the Bishop of Durham should have initiated the debate, for which he is to be thanked, because the North East has a highly developed sense of its own regionalism. It has long had that strong regional identity, but that was recently strengthened by strong constitutional developments in Scotland which culminated in the restoration of the Scottish Parliament. As that Parliament increasingly asserts itself by formulating its own distinctive policies, so those English regions which border on Scotland become the first to appreciate the potentialities of regional devolution and democratically elected assemblies.
Although regional consciousness is most highly developed in the North East, the North West and in Yorkshire, there is a growing public opinion among the English that they are the most under-enfranchised nation of the four which comprise the UK. Northern Ireland and Wales now have their own elected Assemblies and Scotland has its own Parliament. Those three nations also have their own Secretary of State; there is no Cabinet Minister for England. The innovation of the London mayor apart, England and its regions are becoming increasingly aware of their democratic deficit relative to their Welsh, Northern Irish and Scots compatriots.
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An English Parliament, whether a separate institution or a sub-set of the House of Commons, is not the answer to the English question in general or to the West Lothian question in particular. It would be too large and would not effectively cater for the regions of England, many of which are larger in territory and population than the three nations benefiting from devolved democratic government. If it is accepted that Whitehall and Westminster do not always know best as far as concerns those powers that have been devolved to Scotland, Northern Ireland and Wales, why is that not true also for the English regions?
Despite their failure to complete the system of voting reform by kicking the Jenkins report into the long grass, it is heartening to observe that Labour Ministers have not totally lost their enthusiasm for further constitutional reform. Recently, both the Deputy Prime Minister and the Chancellor of the Exchequer reaffirmed their belief in progressing the idea of democratically elected regional assemblies, with full devolved powers, for those English regions which vote for it.
Following the example of Scotland, the three most northerly regions will vote for devolution, to be followed by the South West. Cornwall will be an important element of that. The principle of subsidiarity will have been fully implemented. The model of the Scottish Constitutional Convention is now being followed elsewhere in England. Others are being formed in the Midlands and all are co-ordinated through the good offices of the Campaign for the English Regions. Here I declare an interest as a director of the Rowntree Reform Trust Limited, which financed much of the Scottish Constitutional Convention and will always assist with devolutionary innovations.
Let us unleash and celebrate the diversity of the regions of England.
4.9 p.m.
Lord Morgan: My Lords, we must be grateful to the right reverend Prelate not only for introducing the topic but for persuading us to take it seriously. All too often, English regionalism is treated in a frivolous or facetious way, with references to the Anglo-Saxon heptarchy or to English nationalism, manifested by supporters of West Ham United. This is a serious topic whose time is coming, if it has not already come.
It was observed, for example, by Dr Tony Wright, a Member of the other place, that the English regions "are silent and uninvited guests at the devolutionary feast". Things cannot continue like this. There is a growing interest in business and among the political parties, including the Liberal Party, as the noble Lord, Lord Smith, observed. However, I point out that in the days of Mr Asquith the Liberal government did not do anything about it.
I believe that the Conservative Party is much more enthusiastic at local level than expressions by its leaders might indicate. To my knowledge, the centralism of the Conservative Party nationally is not,

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for example, echoed by its members on Buckinghamshire County Council. I am sure that there are other examples of that. The Conservatives opposed devolution which has given them new life in Wales and Scotland. If the right reverend Prelate allows me to say so, that is perhaps an example of life after death. 'That applies even more so to the Labour Party which now takes a much stronger line. In addition to John Prescott, the Chancellor of the Exchequer, Mr Gordon Brown, made a very strong speech in Manchester in favour of devolution. He said:
"We are moving away from the old Britain … where people had to look upwards to a Whitehall bureaucracy … to a Britain of citizens where … we are ourselves in charge and it is up to us".
Perhaps I may speak briefly as a Labour Peer. The Labour Party is often wrongly associated simply with centralisation and the view that "the gentleman of Whitehall knows best". The intellectual roots of the Labour Party are much more varied than that. For a great part of its history the Labour Party was the party of decentralisation. The Fabians supported municipal socialism, the ILP supported local government and local accountability, and Keir Hardie supported the idea that the Red Dragon should be united with the Red Flag.
The great change in the Labour Party came about with the unemployment of the 1930s and the planning mechanisms of the war. That was the high noon of the Labour Party's commitment to centralisation—to an extreme of collectivism—which was at variance with much of its earlier history. There has been a considerable change since then, particularly under the present Government of Tony Blair, with the creation of the regional development agencies and their many limitations, fragmentation and inadequate powers. Nevertheless, they exist and provide a quite different perspective on the whole problem of the implementation of government. I believe that in England there are now signs of the beginning of a vibrant regional government to supply the same kind of stimulus that has taken place, for example, in Germany and Spain.
Other noble Lords have referred to the wider factors which give momentum to regional government. One of them is devolution, of which we have heard a great deal. It is simply not possible to sweep England aside when the question of devolution is discussed because the matter impacts on all parts of the United Kingdom. Other noble Lords have referred to Europe and the way in which it is becoming increasingly regional in nature. I believe that the general process of constitutional reform implies regional government at all levels—perhaps even the reconstitution of this House in due course. It has been said in this debate that the best way to answer the West Lothian question is not to ask it. If one had regional government which operated properly, that question would be redundant.
I believe that regional government would have various advantages. It would build on an existing and increasingly vibrant, if fragmented, regional structure with the RDAs and the other bodies to which reference has been made. It would promote genuine pluralism not only in our constitutional arrangements but in
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society; and it would also make financial transfers more transparent. Clearly, it should be adopted gradually because it is not compatible with the present form of unitary local government. We have asymmetrical devolution; perhaps we should also have asymmetrical regionalism.
I hope that the Government are sympathetic and extend joined-up government to the localities as well as the centre and release local energies. Scotland, Wales and Northern Ireland have spoken in favour of more active, vibrant local government. To quote a famous poem, the people of England have not spoken yet, and perhaps they should be allowed to do so.
4.15 p.m.
Lord Hanningfield: My Lords, I, too, should like to congratulate the right reverend Prelate the Bishop of Durham for initiating the debate this afternoon. Several noble Lords have posed the question (which I do not believe anyone has answered), what is regional government? If one looks at the European Union, no single country has the same model. The Länder in Germany have almost the same powers as a good number of national governments, and yet the regions of France have very few at all. Perhaps when the Minister answers the debate this afternoon he will give his ideas on what regional government in England should look like.
As many noble Lords are aware, I am leader of Essex County Council. Several references have been made to glorified county councils. I should like to see them. The county of Essex comprises 1½ million people and is larger than most European regions. Essex is virtually surrounded by water, and one can almost canoe round it. Essex is also being put together with other areas in an Eastern region. As much as we like North Norfolk and the fens of Cambridgeshire, we have very little in common with them. We are larger than most European regions and have an historical base. When one looks at most European regions one sees that they are also historically based. Essex was a kingdom 1,000 years ago. For 200 years Essex had a king and London was a small village in Essex. Why should we not be a region on our own? I believe that it is pointless to try to put together artificial regions in England.
Obviously I am very much involved in local government. Whenever I hear people speak in favour of regionalism usually they come from the North East or North West. I do not hear many people in the South East, East or even the South West talking about regional government. Each of the great counties of Essex, Hampshire, Hertfordshire and Kent, comprise over 1 million people. Why can they not be the regions of the United Kingdom? Why can we not just develop our county councils in a way that gives them more power devolved from national government, as was historically the case in the United Kingdom? Why do we need to keep reinventing something that may not necessarily be satisfactory?
As to voting, even if we do not have a general election on the same day, the turn out for the county council elections in Essex will be just as great as for the

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London Assembly. There will not be many more people voting for regional government than vote at the moment.
I am vice-chairman of the Local Government Association. Last year a hearing chaired by the noble Lord, Lord Dearing, sat for many days to ascertain the desire for regional government in England. Evidence was given by people from all over the country and all political parties. That hearing resulted in a very good report, which I commend to noble Lords. The conclusion was that in England there was no national demand for local government. Demand varied considerably around the country. People did not want another tier of local government.
Clearly, if we have regional government we want to know what powers are to be devolved to it from national government. People have talked about regional offices taking a considerable number of decisions, but many of them are administrative in nature. I cannot see what decisions elected members will take from regional offices. Perhaps the Minister can also give an indication as to that. If we are to have any further developments in the North East and North West perhaps they should be based on the Spanish model. It may happen simply in that part of the world. Certainly, we have no desire for it in the East and South East. I do not believe that more than 10 per cent of people in Kent or Essex will vote for regional assemblies in the South East or East.
One of my particular roles as a member of the Committee of the Regions, of which my noble friend Lord Bowness and the noble Baroness, Lady Farrington, were members some years ago, is to consider those countries which have applied to join the European Union. Several of those countries are very small. I was in Slovakia last week. A country of 5½ million people is considering between eight and 10 units of regional or perhaps county government. Therefore, I ask the Minister why, if we are going to have regional government in this country, we need to have such enormous units as the East and the South East.
We should not keep reorganising our local government or our structures in this country. We are unique as a country in wanting to keep looking at this matter. We think we shall improve our voting performance by so doing. We have these great counties. We should make the most of them and devolve powers from national government to the counties and surrounding regions. I rest my case on that point.
4.20 p.m.
Lord Shutt of Greetland: My Lords, I, too, thank the right reverend Prelate the Bishop of Durham for introducing the debate. I should like to declare my interests. First, I am a trustee of the Joseph Rowntree Reform Trust. It has supported the Campaign for the English Regions and the campaign for Yorkshire. Secondly, I am still a serving municipal councillor in Calderdale, West Yorkshire. Thirdly, for the absence
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of any doubt, before I came here last May, my residence, life and being has always been in the county of Yorkshire.
The point has been made that the great northern regions are likely to be first in the queue in terms of being concerned and interested in devolution—the North East, the North West and Yorkshire. I am not surprised to hear from the previous speaker that there is less interest in Essex. Those of us with our lives and beings in the North believe that Essex is, perhaps, a few yards from London. I suspect that if there is regional devolution in England, even in Essex, its people will warm to the idea before too long.
First, what is this regionalism? We must make it very clear that we are talking, for a start, about the democratisation of existing regional structures. At the present time there is substantial administrative devolution. In our region, in Leeds, there is City House where the civil servants dispense that which central government has to offer. In the absence of such devolution, that has been the birthplace of the regional quango. The only reason that we have this multitude of regional quangos is because we do not have democratic regional devolution.
Secondly, we must consider what regionalism is not. It is not about hoovering up local government. That has been debilitated year after year for long enough. It must be made very clear—for example, to the noble Lord, Lord Waddington—that there is no question whatever of another tier of local government; it is entirely different. What vanishes are those many regional structures which could be, and should be, part of regional government.
Thirdly, in the past year or two we have seen the developments in Scotland, Wales, Northern Ireland and in London. It is important that there is equality of opportunity when looking at regional devolution in England. In other words, we cannot have a structure— certainly noble Lords on these Benches would not warm to it—whereby there is, for example, in one part of Britain, a one-party state, and in another the possibility of a multi-party activity with genuine electoral systems.
Fourthly, it is important that there is the opportunity either to increase or decrease taxation, so that people can take a view on whether members of their regional authorities are operating properly. In response to the noble Lord, Lord Bowness, if people do not want the regional authorities, and this applies to London, to spend money on media relations people, at least they can despatch them, or endeavour so to do, at the ballot box. At the present time, that cannot be done with the quangos. Therefore, it is important that we look at the taxation angle.
My fifth point is that, with regional devolution in England, there may be an opportunity for your Lordships' House to be involved in looking at the constitutional boundaries. That is very different from regional boundaries. I refer to the rights, duties, responsibilities and opportunities of constitutional boundaries with regional government. That could be looked at perhaps in the same way as your Lordships' House looks at European matters.
4.25 p.m.
The Lord Bishop of Hereford: My Lords, I thank my noble friend the Bishop of Durham for introducing the debate. He is an enthusiastic and eloquent proponent of regional devolution. I entirely share his desire that this subject should be widely and comprehensively discussed. I do not share his enthusiasm, at least not until some questions, many of them posed today, are better answered than has been the case so far.
The fundamental question is this: do we have too much government or too little? It could be argued that we have quite enough layers of government, too much bureaucracy, too much room for political manoeuvring and for political delaying, and not enough able people willing to take on the responsibilities, with the huge demands on time and energy, that active participation in local or regional government requires. On the other hand, as my noble friend the Bishop of Durham said, there are many areas of life and of public expenditure where unaccountable quangos function without the benefit of democratic discernment and decision making. "Let's make these bodies properly accountable", goes the argument. A number of noble Lords have said that today.
My own personal involvement has been with the West Midlands where a constitutional convention is in place to look at these matters, chaired by my noble friend the Bishop of Birmingham. The noble Lord, Lord Smith of Clifton, can add another bishop to his bag. There are questions being debated in the West Midlands which need to be discussed more widely but in different ways in different regions.
I return to the fundamental question already asked: is there in England a sense of regional coherence and identity? Without that sense of coherence and identity a regional assembly cannot be made to work. I do not share the confidence of the noble Lord, Lord Newby, that if it works in one place, other regions will want to follow. That sense exists in Northern Ireland, Scotland and Wales, but in the English regions it is patchy. In the North East and Yorkshire, yes, that sense exists; in the North West, perhaps it does, although the distance between Cumbria and Manchester makes it very difficult for it to be a coherent region.
The question needs to be asked whether these regions, which are those covered by the regional development agencies and by the Government Offices, are the right regions? I remember the noble Lord, Lord Bowness, referred to this matter during a heated debate in your Lordships' Chamber when the regional development agencies were being created. One noble Lord thought that the eastern region should consist simply of Norfolk and Suffolk and was appalled to discover that it would also include Essex. I apologise to the noble Lord, Lord Hanningfield. Even worse was to come because he discovered that the regional office was to be situated in—Bedford. He spoke the name with an extraordinary sense of distaste and incredulity.
The West Midlands is a much more geographically compact and coherent area than some, but it is still 100 miles from the Staffordshire moorlands to the Black
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Mountains. There is a very great difference between central Birmingham with its Convention Centre and Symphony Hall, or the colourful cosmopolitan culture of Handsworth, and a sheep farm on the hills in south Shropshire overlooking Welshpool. The question remains: have we the right regions? Is there or could there be created a sense of regional identity in every part of England? At present I doubt it.
The Churches in the West Midlands, working ecumenically through the West Midlands Churches' Forum, understand the complementarity between urban and rural. We celebrate and affirm cultural diversity. We have acknowledged the urgent need that has arisen in recent years to deal with the Rover crisis and to press on with the regeneration of the Black Country and the Potteries. But we have tried in particular, and against the background of these pressing urban concerns, to keep before the regional development agencies the need for proper attention to social inclusion, the rural dimension, which will be even more important post-foot and mouth, and environmental sustainability, which is so often left out of account when business-driven planning is taking place.
The question is whether all these matters would be better handled and more effectively dealt with if we had an elected assembly and whether popular support exists for such an assembly. I am not entirely convinced. I believe that these areas of life have been well dealt with by the quangos—though they are quangos—and I am not convinced that an elected assembly would have done better, or that it would have been more focused, more purposeful and more effective.
I want to make one last and very important point. I am absolutely convinced that we must not contemplate yet another tier of government. We shall have that unless we make one proviso. If there is to be regional government—devolution and regional assemblies—it must be against a background of unitary authorities alongside empowered parish councils, as recommended in the rural White Paper. If there is not unitary authority government, we will simply be creating another tier, whatever anyone may say about it. I hope that the Minister will be able to assure us that if we were to go down the route of regional assemblies, the Government would change their mind and insist that we had only unitary authorities.
4.31 p.m.
Lord Roberts of Conwy: My Lords, this debate comes at an opportune moment. The regional gross domestic product figures, published at the end of last month, highlighted yet again not so much the North-South divide, although the North East has the lowest GDP of all the UK regions, as a divide between London, the south-east and eastern regions and the remainder which are all below the English average.
It is reported that the Government are considering a massive transfusion of funds to those regions to raise living standards and improve public services. I do not

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know whether that is true, but the basic governmental argument for devolution to the regions is that there must be suitable vehicles like the regional development agencies through which to channel expenditure and elected regional assemblies rather than chambers to which they will be accountable. As I understand it, that is the Government's position.
I bring a Welsh perspective and experience to this debate in the hope that it will be helpful. We have had a Secretary of State for Wales since 1964 and non-stop administrative devolution ever since. Under this Government, a National Assembly has replaced the Welsh Office. The Assembly is now in its second year. That it is too early to pass judgment on its performance is the kindliest verdict, but it is already clear that even a well-funded regional government of this kind, operating against the background of a prosperous British economy, is not the answer to all our problems.
On the economic front, which I regard as all important because people's living standards are related to it, GDP per head in Wales has fallen over the past decade from 84 per cent of the national average to 80.5 per cent. With the impending loss of 3,000 jobs in the steel industry, along with 8,000 actual job losses in manufacturing since 1997, the current plight of the rural areas and the possibility of a recession, I foresee deterioration rather than improvement in the years immediately ahead, despite the obtention of Objective 1 status for the Valleys and West Wales.
I am bound to point out that the proudest claim of the present Secretary of State for Wales at the most recent Welsh affairs debate in another place was the benefit brought to Wales by the national minimum wage, but that was a boon—if such it proves to be in the longer term—brought by national rather than regional government. Scotland has not fared much better as far as concerns GDP over the past decade. Growth, at 0.9 per cent, has been minimal. On the health and social services front in Wales, hospital waiting lists have gone up alarmingly since 1997.
What I am saying is that devolution, even when it is backed by considerable resources, does not necessarily provide the economic regeneration and better services that we all desire. Speaking of resources, it is well known that Scotland has done well under the Barnett formula and expenditure per head there is much higher than in England. Wales, I hasten to add, has not done too badly either. Scottish expenditure has very understandably excited envy in the North East where the demand for devolution appears to be most advanced. The question is whether all the English regions can be as well endowed per head as Scotland— I doubt it—but their assemblies, if they come about, will press ceaselessly for more and the prosperous regions will become increasingly discontented. What we shall certainly have in that event is an additional and costly tier of government.
Is the huge transfer of resources that devolution implies from the prosperous to the less prosperous regions the best wealth-creative use of those resources,
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or are we missing some other important ingredients of prosperity in our concentration on this new vehicle of government?
I travel a great deal along the M1 and the M6 these days. I am appalled by the delays, especially around Chester, Birmingham and other conurbations. I keep wondering how much those delays are costing our regional businesses. It is certainly a great deal of money. I am sure that the delays are also frightening off would-be investors. We desperately need better roads, but that is now an unfashionable cri de Coeur. Should we not be looking again at the relocation of offices away from the South East and at the possibility of developing clusters of mutually related industries in suitable localities? Work, productivity and jobs—well-paid jobs—mean so much in these areas of need outside London and the South East. The national lines of development that I have mentioned do not need a multiplicity of new bureaucracies to achieve results.
4.38 p.m.
Lord Greaves: My Lords, I begin by declaring a small intermittent interest as an occasional member of the North West Constitutional Convention. I join the long queue of noble Lords who must be boring the right reverend Prelate the Bishop of Durham to death by thanking him for introducing the debate. Many of the speeches have certainly lifted my heart. I think in particular of the speeches from the Liberal Democrat Benches, the speech of the right reverend Prelate the Bishop of Wakefield—I grew up in Wakefield—and the speech of the noble Lord, Lord Morgan, who brings a welcome historical perspective to the House and points out that these things take time; indeed, they do take time.
My first interest in regional democracy in the North West came into existence as a result of reading a pamphlet entitled North West Regional Government, which was published in 1965 by a group of Liberal candidates in the North West. I mention that because one of the leading members of the group was my noble friend Lord Tordoff, who has continued to inspire me ever since. In those days we felt that we were a small and weak voice—a voice in the wilderness. There were times when I had hopes of the Conservative Party. During the early 1970s I did my best to interest my then Member of Parliament in these matters. He is now the noble Lord, Lord Waddington. I have to say that I failed miserably, as your Lordships will have realised from listening to the noble Lord today.
In the 1980s, it was a source of great pleasure to many of us that the Labour Party in the North West was coming around to our point of view. I pay tribute to the Labour leadership of Lancashire County Council, of which I was a member at the time—I was not a member of the Labour leadership; the noble Baroness, Lady Farrington, was a member of that leadership—for the lead they demonstrated to the Labour Party in the North West. I believe that we have all come to realise that these are battles which will not be won unless we are prepared to work together across

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political lines and with people outside politics. That is an important lesson to be learnt from Wales and, in particular, from Scotland.
To the right reverend Prelate the Bishop of Hereford, I simply say this: do we have too much government in this country? The answer to that is probably "yes". However, to the question, "Do we have too much democracy in this country?", I believe that it is the view of many that there is a severe democratic deficit. It is that democratic deficit which elected democratic regional government would seek to redress.
I have been impressed by the speeches of the Yorkshiremen on the Benches in front of me, some of them real and some by adoption. As a native Yorkshiremen, I offer a Lancastrian viewpoint. The North West Regional Convention has done a great deal of work on this. However, many of us feel that it is now some what beached on the sand and that a new initiative will be needed after the general election, whenever it is held. Last June, Liberal Democrats in the North West put forward a submission to the convention in which we made three important points:
"The central principle should be that an elected North West authority and regional government should essentially take their powers from central government (including existing regional arms of central government and quango type bodies) and not from local government … Liberal Democrats will not be able to support any proposal where regional powers are substantially gathered from local government".
That is extremely important. Secondly, we went on to say that,
"The new regional authority must be 100% elected".
Thirdly, we said that the,
"new elected regional authority must be representative of the full range of both geographical and political differences in the region".
We were concerned that the report entitled New Way Forward, No Way Back—that could be a new Labour title, although that should not necessarily damn it—advocates a very small body. I am not optimistic that we would be able to persuade people in Cumbria, for example, to support a body in which Cumbria might have only one or two representatives as against far more for the great conurbations of Manchester and Liverpool, let alone gain the support of sub-regions such as the area of north-east Lancashire in which I live. If we are to have an elected body, it will need to be big enough to be representative of the entire region. Furthermore, it will need to be elected using an electoral system which provides both political and geographical plurality within the region. Without that, the Liberal Democrats would find it very difficult to support any final proposal.
We desperately want to support the right proposal. This is something for which we have been campaigning for at least 35 years. I look forward to taking part in elections—not necessarily as a candidate but as a voter and a political activist—to a North West regional assembly. I believe that the North West does exist and that within the region there is a strong sense of identity. There are also strong affinities: economically, socially and culturally. The time has now come for an idea in which many of us have believed for a long time. We
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have reached the point where this ought to be put into effect. I hope that the time for it to happen will be during the next Parliament.
4.44 p.m.
Lord Renton: My Lords, I did not put my name down to speak in this debate, but having listened to the contributions, it may be helpful if I mention briefly the conclusions of the Royal Commission on the constitution which considered devolution between 1969 and 1973. I was appointed to the Commission in April 1971, when Mr Selwyn Lloyd became the Speaker. It was from then onwards that we considered thoroughly the possibility of devolution to the English regions.
Only three of the 11 members were in favour of it. However, eight members were in favour of regional coordinating and advisory councils, partly indirectly elected by local authorities and partly nominated by central government. I cannot go into any great detail, but I think that it would interest noble Lords to learn of some of the findings. I say that because circumstances have not changed greatly over the past 30 years. Indeed, having served in two Houses of Parliament for the past 55 years, I find that they have scarcely changed at all, even with regard to this matter.
When considering the expenses of such councils, the Commission suggested that they should be met by precepts on the local authorities in each region. Fair enough. The main responsibility of the councils is set out on page 356, in paragraph 1208 of the report. It states:
"The regional councils would meet the need. as represented to us by many witnesses, for machinery at the regional level for the co-ordination of local authority action and for the expression of regional views".
I think that we have heard many "expressions of regional views" during this interesting debate.
I must confess that, during the 30 years which have elapsed, I have kept an open mind on this matter. However, I think that the views expressed at the time of the vast majority of the members of the Commission—eight out of 11—are not far wrong today. I shall say no more.
4.47 p.m.
Lord Rodgers of Quarry Bank: My Lords, I am sure that the House will be grateful to the noble Lord, Lord Renton, for reminding us of the report of the Kilbrandon Commission in 1973. It is true that the majority of its members recommended the establishment of co-ordinating and advisory councils, but a strong minority were in favour of elective devolution. Indeed, the Redcliffe-Maud Royal Commission which, if I remember aright, reported in 1969, was also in favour of setting up eight English provinces with indirectly elected councils. However, if we are to consider the progenitors of what we are discussing today, I should like to pay tribute to the late John Mackintosh, who was then a Labour Member of Parliament. His book on the devolution of power, published in 1968, was not only a significant

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contribution to what later took place in Scotland in particular, as well as in Wales, but also set out a blueprint of a kind for the form of English regionalism that we are discussing today.
In view of the strictures voiced by my noble friend Lord Greaves, I am reluctant to add to the praise which has been heaped on the head of the right reverend Prelate the Bishop of Durham, but I hope that he feels, as I do, that he has given the House a great opportunity to discuss an important matter to which, on future occasions, we should return. I disagree with very little of what he said. History will record—I see no reason for not saying this today— that the present Government have been, in constitutional terms, a great reforming government. That is how they will be best remembered. However, they have stopped short of acting on the recommendations in the Jenkins report, which has already been mentioned from these Benches, and of making progress on regional devolution for England. I hope that this unfinished business will be a matter to which a new government will turn if they secure a second term.
We were not surprised when the right reverend Prelate the Bishop of Durham reflected his particular interest in devolution for the North East. I have to say that I have a personal interest. Although I was born and brought up in Liverpool and am therefore familiar with the north-west region of this country, I also represented the North East constituency of Stockton-on-Tees for over 20 years. During that period, I was fully aware of the local feeling which developed into a considerable passion for devolution of one kind or another, and of the organisations and institutions, to which the noble Lord, Lord Elliott, referred, which helped to underpin that movement.
I say to those who worry about differences of opinion and traditional hostilities within other regions, "Do not think that putting together Tyne, Wear and Tees was easy; do not underestimate the difficulty of putting together urban and rural communities". Time and circumstances have made the North East a leader in the demand for devolution, and a similar growth is likely to occur elsewhere even if the passion does not exist now.
The right reverend Prelate the Bishop of Durham was right to refer to the democratic deficit. This is the core of the difference between regionalism as proposed by the majority of the Kilbrandon Commission, for example, and regional government. Central government in the regions is not regional government. Decentralisation of administration—perhaps to quangos—by Westminster and Whitehall without democratic sanction is not devolution of power either. Regional government is distinct. Power lies within the region and accountability is to those who have been elected to serve in the government of that place.
There is a longish history of regionalism of one kind or another in England, but there has been none at all of regional government. Both the present Government, with some justification, and the previous Conservative government can point to
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modest progress in regionalism. The Conservative government—this was referred to by the right reverend Prelate the Bishop of Durham—established integrated government offices in 1974 to co-ordinate the delivery of policy. All credit to them. The present Government have set up the regional development agencies, which we discussed at great length—I remember the major contribution of my noble friend Lady Hamwee at that time—prior to the 1998 Act. They have also set up what are now generally called regional assemblies.
We have been here once before, and perhaps I may be forgiven a personal odyssey. Some 35 years ago, I was a junior Minister in the Department of Economic Affairs under George Brown. In that capacity I was responsible for setting up the economic planning councils and the economic planning boards which played an important part in development for some years beyond that. The councils were made up of local authority members, businessmen, trade union representatives, voluntary bodies and representatives of the arts and tourism, although I am not sure whether there were representatives of faith communities. They were councils which, although unelected, nevertheless did a very considerable job in their time.
Equally, representatives of government departments were brought together in the economic planning boards under a civil servant of what was then known as under-secretary level. We had some difficulties. The Board of Trade had been responsible for distribution of industry policy; it was very reluctant indeed to come in to the boards. The Department of Housing and Local Government, as it was then called, was responsible for land use. I well remember the then Minister, Mr Richard Crossman, accompanied by the formidable Dame Evelyn Sharp, marching into the office of the Secretary of State, George Brown, and making it absolutely clear that only over their dead bodies would the new councils and boards be called "planning councils" and "planning boards"; the word "economic" had to be inserted.
I say this only to demonstrate that those planning councils and boards performed a function not too far different from what is now assigned to the agencies and the assemblies. While the Government have every right to claim credit for what they have done, to some extent they have been going back to where we were 35 years ago, with that kind of regionalism being substantially eroded in the interval.
The history of regionalism goes back even further. I was glad to hear what the noble Lord, Lord Morgan, said about the Labour Party's involvement in it. One could say that it began with the special areas Acts of 1934, which dealt with areas of high and persistent unemployment. It is certainly true that proximity to Scotland has had an impact on sentiment in the North East in favour of change, particularly in the period 1977–78, the first attempted devolution.
There has been a long history of industrial decline, which has not yet finished. Although, as the noble Lord, Lord Elliott, rightly said, the position is

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somewhat improved, the latest figures show that unemployment is 5 per cent in England, 3.2 per cent in the South East and 8.1 per cent in the North East. So the problem is not yet solved; the job is not wholly done.
I accept that new developments of regional government are bound to be asymmetrical. It would not be right to create a single blueprint and require the different regions to fall into line on the same time-scale. The regions will exist because the people of the regions want them to, and for no other reason. I hope very much that the Government will prepare a programme for what I call "rolling regionalism"— bearing in mind, perhaps, as an example, the way that candidate members are prepared for the European Union: when they have satisfied certain criteria, they will he admitted.
I agree with my noble friend Lord Newby that Wales is the right working model to follow—or, at least, it is the starting point—for the evolution of something better for the regions. I hope very much that the regions which already have a sense of identity and wish to see a rolling programme of the kind I have indicated will prepare not only a campaign—I think it has gone beyond that, certainly in the North East—but a blueprint, even a draft Bill, for what might happen.
It will be very important to satisfy those who share the feelings of the right reverend Prelate the Bishop of Hereford, the noble Lord, Lord Hanningfield, and others. It would be right to show them that this will not take away from local government and add an unnecessary tier, but will lead genuinely to decisions in the regions being made by the regions in exercising powers which hitherto were the property of this Parliament and the Civil Service which serves it.
My noble friend Lord Smith of Clifton referred to "unleashing and celebrating regionalism in England". As I said, I hope that we shall make real progress in the next Parliament. This has been an excellent debate. Although we are not of a single mind, nevertheless this is a stage in the development of a significant constitutional change for this country.
4.58 p.m.
Lord Dixon-Smith: My Lords, my welcome and gratitude to the right reverend Prelate the Bishop of Durham can be expressed in a slightly different way: welcome to the cold bath of politics.
We have had an interesting debate and it gives me great pleasure to note that we have covered most of the regions within the country. We have covered London; we have covered the North East very thoroughly, where demand is very strong; the North West was covered by the noble Lord, Lord Greaves, who said that the idea seems to be getting more sticky there; and the noble Baroness, Lady Rendell, spoke for the West Country—for Cornwall, if I am correct—and illustrated in her remarks the problems of regionalism as we know it. My noble friend Lord Hanningfield spoke for Essex. I am an Essex nationalist at heart so I understood what he said. I even found some sympathy with the noble Lord, Lord Rodgers of Quarry Bank,
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because I was a member of what was in those days the South-East Economic Planning Council. So I recognise that body and I have some experience of regionalism at work in this country. It was a very good body. But it was an advisory body, without authority. In practical terms such bodies are not the most suitable form of government.
We should remind ourselves that we already have four layers of government—indeed we could say five, six or seven if we wanted to be sophisticated. We have national government, county government, district authorities and parish government. Added to hose, as a kind of sub-division, are the unitary authorities. We also have two other national types of government: the Welsh region—if the Principality will forgive that term—and the nascent nation state of Scotland. That might be deemed to be enough.
Lord Hogg of Cumbernauld: My Lords, I am sure that the noble Lord has forgotten that there is European government. He is supposed to be telling us that he is against it. It would be dreadful if he forgot to do so, particularly in the run-up to an election.
Lord Dixon-Smith: My Lords, I am grateful for that reminder. That takes the number of levels of government to eight. The noble Lord, Lord Greaves, remarked that we have too much government and not enough democracy. That may well be the problem, but adding another level of government in an attempt to solve the question of democracy would present a problem in itself.
I return to the issue of devolution. That, rather than structure, is what the debate initially needs to be about. Devolution is not a stream of statutory regulations from central government of which local authorities are obliged to take note and with which they are obliged to comply. Over the years we have seen an endless succession of such regulations. I spent a long time in local government under—to my distaste—an increasingly centralist national government. It is distressing to find that trend continuing. Devolution is not about government Bills going through this wonderful Palace of Westminster telling local authorities exactly how they should structure their business for administrative purposes, dictating exactly how they should establish their administrative organisations.
Returning to the present, we need to note that devolution is not about the kinds of measures announced by the Chancellor of the Exchequer in his Budget. The Chancellor promised increased flexibility for the regional development authorities. He said that this increased flexibility would be matched by increased accountability through objectives and targets that would shortly be announced by the Deputy Prime Minister. I can already feel the steel bands of Whitehall's control closing round the RDAs.
I am afraid that man is ever restless. He always feels that things would be better if he were somewhere else, and he strives to get there; and usually, when he gets there, he is disappointed. Then he will strive for

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something else. I cannot help but feel that if we arrive at the promised land as regards the regions, we shall find that there is great dissatisfaction.
Let us consider the problems in context. It is worth noting that it is as far from Gretna Green to John o'Groats as it is from London to Land's End, or indeed from London to Newcastle—and Scotland is supposed to be one region. There is a particular history, but that specifically illustrates the problem. Considered on an international scale, the United Kingdom is smaller than California and many other states within the United States of America.
There are other types of problem which will not be tackled by structure or, indeed, by democratic representation. Again, they are perhaps best illustrated by contrasting Scotland and the North East of England. I am sorry that this is the case. I spoke on this matter during the passage of the Scotland Bill. The average GDP per head in the United Kingdom is £12,455, based on the 1998 figures, which are the latest that I could obtain from the Library. In Scotland, it is £11,902, which is 96 per cent. In the North East it is £9,819, which is 79 per cent. Despite that real disparity in worth and value for the people of Scotland, they enjoy the enormous privilege of over £1.20 per head for every pound of public expenditure in England. The people of the North East enjoy the enormous privilege of contributing, through the Barnett formula, to that privileged position. It is a matter which could and should be tackled within the Palace of Westminster, and successive governments have signally failed to do so—for reasons that have to do with politics and, dare one say, with the democratic deficit.
What is required if we are to make progress in government in this country is real devolution of authority and decision-taking to the local communities. There is no doubt that not least among the frustrations that ordinary people feel with government and the reason why there is too often a lack of interest in elections, is the feeling—which is correct—that the powers of decision-taking on matters that affect local communities are removed from them. It is no good saying that, because there is a power of decision granted by national government to the local community, matters are all right, if there is not with that power control over the money, or if control over the money remains with Whitehall.
I return to what can be put into statute. We have 150 pages of regulations relating to highways expenditure. They are so detailed and require such conformity that they empower Whitehall to have intimate control over the details of local expenditure on highways matters. That is why we feel strongly that the proper way forward is to begin with correct and proper devolution through the structure that we already have. If we can begin to get that right, then if there are subsequent failures in the system there will be justification in going for something else. But to experiment with something novel, out with the traditions of this country, when we cannot make our present system work is to take a gamble which might be rather less than fortunate.
5.10 p.m.
Lord Whiny: My Lords, perhaps I may begin by thanking the right reverend Prelate the Bishop of Durham for raising the debate. Time was when Bishops of Durham were rather heavy representatives of top-down government, both from London and from Rome; and, indeed, on their own behalf. I am glad to see that the present incumbent is on the side of the people of the North East, and that we are here today discussing how we can bring greater democracy to that region, as well as to other British regions.
The title of the debate refers to "English regions", but obviously we have strayed somewhat wider into the settlement so far on the constitutional changes brought in by this Government—a great reforming government in relation to our constitution. Decentralisation and devolution have already been applied to Scotland, Wales, Northern Ireland and London. It is only right that we should now address the English regions. During the course of the debate we also addressed the role of Parliament, the role of Europe, and especially the role of local government.
The noble Lord, Lord Waddington, observed that it is important to retain English national identity. I do not disagree with that view. However, there is also a very important dimension of that identity; namely, regional and local identity. The North East does have an identity. Indeed, as the noble Lord, Lord Shutt, pointed out, Yorkshire has a pretty clear identity. Many of the other regions have an identity that may not be always as clear. There is a South West identity, even though it may be differentiated among the various counties and duchies of the South West. Even where that identity is not strongly felt, what is strongly felt is that decisions need to be taken closer to the people and that there is too much power centralised in London. That applies just as much in Essex and Cornwall as it does in the North East.
We have already achieved devolution to Scotland, Wales and Northern Ireland. We need to meet that sentiment in England. Indeed, as the noble Baroness, Lady Hamwee, and the noble Lord, Lord Smith of Clifton, said, the very fact that devolution to Scotland and Wales has taken place makes the regions closest to it think most acutely about it. It has a rolling effect across the rest of England. There is a problem of differential prosperity between the regions of England. We recognise that there is a North-South divide, although it is not necessarily quite as simple as that. Obviously, there are significant disparities within regions between prosperous and less-prosperous areas and, as the right reverend Prelate the Bishop of Hereford said, between rural and urban areas within regions. However, there is a regional dimension to much of this. We want all regions to share Britain's prosperity.
I should point out to noble Lords that unemployment has fallen in every British region, but it remains much higher in regions like the North East than in the South East. Within the United Kingdom as a whole, although the North East income per head has increased in recent years—a welcome increase—it has

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done so more slowly than in other regions. As regards the North East, there is still a disparity regarding the UK average of £13,000 per head and the £15,000 per head that applies to the south-east of England.
There is nothing inevitable about regional inequalities. Similarly, there is nothing sacrosanct about regional equality. But, clearly, the widening gap is not appropriate when we wish to share prosperity among all our citizens. We can achieve a better spread of prosperity both between and within regions and nations of the United Kingdom. As the noble Lord, Lord Rodgers, reminded us, many attempts were made to achieve that aim during his stint in the DEA. There were also earlier attempts, as well as subsequent attempts, to redress regional imbalances.
We have taken a very important step in the creation of the regional development agencies. In an otherwise not entirely favourable comment in relation to regional government, the noble Lord, Lord Elliott, mentioned the importance of one agency in the North East turning round the industrial infrastructure of that region. The development agencies were established in 1999, and subsequently thereafter in London, to drive forward measures to improve competitiveness, to decentralise decision making, and to bring the private sector and local government into development programmes for the regions.
As the right reverend Prelate the Bishop of Wakefield reminded us, those RDAs are working with local government and with the regional chambers; and, indeed, with the administrative devolution that we already have in Government Offices. The RDAs are only two years old. They have confounded the critics of their establishment and have succeeded. They receive enormous support from both business and the community in their regions. I regret that it seems to be the official policy of the Conservative Party to abolish both RDAs and Government Offices. That is an odd line to take for a party that I hope would wish, with us, to spread prosperity. We must have the instruments to do so.
Government Offices represent administrative devolution. There has been a substantial amount of administrative devolution over the past few years. It has been difficult, as was the case in an earlier era referred to by the noble Lord, Lord Rodgers, to ensure that all government departments participate in the Government Office structure. But an increasing number are doing so, including—most recently— MAFF, which is incorporating its regional activity into Government Offices. That is most valuable. However, we need to go further.
Our first step has been to create the regional chambers. They are voluntary organisations, which bring together local government and other bodies within the region. They provide the main link between the RDA and regional representatives. With the increased flexibility and resources that we are giving to the RDAs, the role of these chambers has become more crucial than ever. That was why the Chancellor of the Exchequer recently announced an additional £5 million for those chambers to provide for the
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expanding scrutiny role that the new flexibility of the RDAs requires. They also have an important role in planning, development and transport plans for the regional level.
The regional chambers are, perhaps, not dramatically different from what the noble Lord, Lord Renton, referred to as arising from the Kilbrandon report of 30 years ago, in terms of his own viewpoint. The noble Lord said that nothing much has changed, but I do not believe that to be the case. We are all grateful that the noble Lord has not changed. However, the whole constitutional framework within which local government and regional development is operating has changed, both in relation to Scotland and Wales and in relation to the role of local government. That applies also to the number of decisions that we are now taking administratively in conjunction with local government at the regional level. I give way.
Lord Renton: My Lords, I was trying to make clear that nothing much has changed, as yet, in the regions.
Lord Whitty: My Lords, I do not believe that that is true. With regional planning guidance, regional transport strategies and the creation of the RDAs, many economic, planning and strategic decisions are now dealt with at regional level. The point of going beyond the regional chambers is to democratise that process. The noble Lord would be right to say that nothing much has changed in terms of the democratic accountability of those decisions.
We want to go further than the regional chambers, but we only wish to do so when there is popular support for that move. We made a commitment in our manifesto to move towards directly-elected regional government where it was demonstrated—through referendums—that the people of the regions wanted it. I should make it clear today in this House that that commitment still holds. There is no blueprint for directly-elected regional assemblies, or a time-scale for their introduction. However, we are committed to that outcome.
The noble Lord, Lord Rodgers, called this a programme of "rolling regionalism"; indeed, to some extent, that is what would happen. There is a greater enthusiasm in the northern regions than there is in the southern regions. Therefore, it is likely that the northern regions would be the first to adopt the structure. I should not compare that exactly with the process of accession to the European Union, where a number of criteria are set by the existing members for potential members. The key criterion in this case will be the will of the people of the region concerned, as expressed through a referendum and a democratic vote.
In the process of moving towards directly-elected regions, we shall need to study the structure of regional government and its scope and purpose. We shall also

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want to consider what can be achieved and what added value it can provide. Each region must be able to decide on the way and time-scale—
Lord Hogg of Cumbernauld: My Lords, that is very interesting. How does the Minister view the impact of that process on central government and on the democratic structure of central government? Will we reform the House of Lords further? What will we do in relation to the House of Commons? How will it "gel" with that? If we are to have democratic regional government, how will it impact on central government?
Lord Whitty: My Lords, my noble friend takes me much further than this debate. Clearly, there is an impact on the role of Parliament if we devolve more decisions to the regional level. Like the right reverend Prelate, we are not in favour of an English parliament. We are, however, in favour of devolving some central government functions to the English regions. That, therefore, slightly alters the role of Parliament in overseeing the decentralisation of power within this country.
As to the structure of the House of Lords, I am not in a position to make pronouncements on such matters today. Your Lordships will know that there are proposals in the Wakeham committee's report for direct election to the House of Lords which would be based on a regional structure which, broadly speaking, as I understand it, would follow the structure of the devolved English regions.
Questions have been raised by the noble Lord, Lord Hanningfield, and others about why, if we need regions—
Lord Hogg of Cumbernauld: My Lords, I hope that I may press my noble friend a little further. How many elected members do we have to have in the United Kingdom before we have a properly elected democracy?
Lord Whitty: My Lords, I am not sure whether my noble friend's question relates to the number of elected Members in the House of Lords. I could not possibly make a pronouncement on that matter at this stage. However, if we are talking about elected persons throughout the United Kingdom, the numbers involved at regional level would reflect the powers at that regional level. The numbers would not be very different from the numbers who take part in the regional chambers at the moment.
I do not share the concern which the noble Lord, Lord Waddington, and others expressed that we have far too many elected politicians in this country, or the concern of the right reverend Prelate the Bishop of Hereford that we do not have the right quality of people coming forward. If there is a clear decision-making structure at regional level, appropriate people who are qualified and talented will come forward to fill democratically elected positions. At the moment the problem is that far too many decisions are taken which
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are not accountable to elected politicians at the right level. Therefore, we need to create a structure where such decisions can be taken.
The absolute number will depend on the propositions that arise region by region. It will also depend on the other issue which has been raised; that is, the reorganisation of local government. We have indicated that although in principle we are in favour of moving towards unitary local government structures, there is no presumption that all regions will have moved to unitary local government prior to the creation of elected regional government. It ill behoves the noble Lord, Lord Waddington, who was a member of a government who did not complete the reorganisation of English local government, to press us now to do that instantaneously. The reason we are not saying that it is a precondition for local government to have been reorganised before we introduce regional government concerns the central point about regional government, underlined by the noble Lord, Lord Shutt, namely, that the power will not be taken away from local government but from central government. It is a devolvement of power, not a dragging upwards of local government—
Lord Bowness: My Lords, I am grateful to the Minister for giving way. In view of what he says, can he share with your Lordships how he envisages the regional assembly working? Does he see it as the London model, strictly constrained by government guidelines with policy approved by the Secretary of State, or does he see it in terms of a Welsh model, perhaps exercising the functions of secondary legislation?
Lord Whitty: My Lords, the noble Lord has a tidy mind and he wishes to see structures which are precisely the same across the whole of the United Kingdom, or at least within England and Wales. That is not the view of the Government. London is unique as a world city which virtually constitutes a region. It is not a model for anywhere else but it is an important structure for a city region.
We are now talking about a different structure within England, which is a national identity. Therefore, one is breaking up a national identity as compared with the situation in Wales. It is, however, clear that the scope of regional government is not as wide as the scope of the Welsh Assembly. We are talking about having a role in strategic matters, economic development, planning, transport and environmental assessment, not taking over the whole of what are currently national government responsibilities within the regions, and certainly not— I was making that point when the noble Lord intervened—taking powers away from the counties and the unitary authorities within the regions.
Lord Bowness: My Lords, I am sorry to come back but the noble Lord will understand that the functions he has just set out are classically functions of local

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authorities which we have reorganised to make bigger and bigger so that they have the scope to deal with those matters.
Lord Whitty: My Lords, I was just about to explain. The noble Lord, Lord Hanningfield, asked why we needed bodies of this size. I mention the field that I know best. In the case of transport policy, it is not possible to deal with the M6 going through Staffordshire—a concern of the noble Lord, Lord Roberts—on a county basis. One needs to take a much wider approach. Similarly, as regards the development problems that he has encountered in the West Midlands—I assume, on his way home to North Wales—which cause additional pressures on the transport system, one cannot address those problems on a county by county, let alone district by district, basis. One can only tackle them on the basis of a larger, coherent economic region. That is what we are trying to establish and the powers I mentioned are the kind of powers we wish to devolve to regional level, subject to democratic accountability.
Lord Sheppard of Didgemere: My Lords, does the Minister agree that if devolution is to work central government must at some time let go? If we take as an example something which does not cross too many boundaries, what about the London Underground?
Lord Whitty: My Lords, that is precisely what I am saying. At the moment a substantial part of national government's regional responsibilities—operating to some extent through the Government Offices—is not subject to any degree of accountability at the regional level. We intend to pass those powers down to the regional level. Of course, standards and some regulations will be set at national level. However, the idea of democratising structures is not to give a new empty structure of local and regional government but to provide a real and effective devolution of power.
There has been some discussion on what the scope and the size of those regions should be. I believe that I have replied to that point in general terms. However, there will be queries about particular aspects concerning which county is within which region. Before the noble Lord, Lord Hanningfield, spoke, I had thought that Essex was already a glorified county council and—I hesitate to use the term—kingdom even, particularly in the light of his irredentist remarks about wishing to take back London. I recognise that there will be tensions within the regions. We believe that the Government Office boundaries that we have set are sensible and we have taken government decisions to consolidate those boundaries. However, in the course of the democratisation process, other options may arise.
My noble friend Lady Rendell referred to Cornwall. Cornwall is a special case. It is a special county and perhaps deserves special status and special respect. A degree of creativity is involved as regards the Cornish convention. almost as much as in the case of the North East. the Yorkshire. and the North West conventions. It is not, however, in the terms that I have described,
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a region which can on its own determine its economic, transport and planning infrastructure. Nevertheless some aspects of devolution will apply in relation to Cornwall.
I have no difficulty in defending the fact that there is an asymmetric development of devolution. It is asymmetric in two senses in that Scotland, Wales and Northern Ireland all have different kinds of powers. The English regions will have different powers from the Welsh Assembly and the Scottish Parliament. The development is also asymmetric in terms of time-scale. Some English regions will take powers before others. We would not devolve those powers to those areas which were not subject to directly elected assemblies. There are other European examples of asymmetric devolution. Spain has been cited. If the north-east of England had the same degree of success in its devolution as the north-east of Spain, in the context of the Catalonion government and the City of Barcelona government, I am sure that the right reverend Prelate and his flock would be well pleased.
I believe that we are on the right track. It is not as tidy a track as some noble Lords might wish. Progress may not be as rapid as some people, particularly in the northern regions of England, would like. None the less, as the Deputy Prime Minister made clear in Glasgow recently, we are committed to bringing forward the opportunity for English regions directly to elect their regional governments. At that point, the responsibility for various aspects of economic, strategic and planning policies would fall to those regions. We would hope that all the English regions would eventually take up that option. However, the decision will be theirs and it will be facilitated by this Government. We intend within the next few months to bring forward a Green Paper on these issues: the scope, structure and nature of devolution; and the nature of the electoral process for the English regions.
I welcome the debate. I thank the right reverend Prelate and all noble Lords who participated in it. We have touched on a number of issues which are of great importance to the English regions, many of which will no doubt be discussed during the coming months and years as we debate, region by region, how fast and in what manner we shall go down the road of further democratisation of our hitherto somewhat centralised constitution.
5.32 p.m.
The Lord Bishop of Durham: My Lords, first, perhaps I may thank the noble Lord, Lord Whitty, for so clearly restating the Government's position. Of course, I wish that he could have gone further today because I am impatient as regards this issue, as are many people in some of our regions. I shall look out for its appearance in the Green Paper, in the party manifestos at the general election and, it is to be hoped, within the legislative programme of the next Parliament.
Secondly, I thank those noble Lords who supported the arguments I sought to put forward. They have enriched and enlarged them because of their wide

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experience, deeply embedded as it is in political history and events. There has also been a geographic spread. It is good that we have heard the experience of many different regions. I am deeply appreciative of the time given and for the expertise demonstrated in those speeches.
Finally, perhaps I may express thanks to those who disagreed with me. I do not think that I have ever been so courteously criticised in all my life. Indeed, the noble Lord, Lord Dixon-Smith, spoke of the cold bath. He should see the ice cubes in the baths into which I sometimes have to climb in some of the circles in which I move. I thank those noble Lords for being so generous and for leaving unscathed my central argument; namely, that the existing government presence in the regions is unaccountable, costly, fragmented and deeply frustrating to those of us who operate in the regions. I stand by that argument. I am grateful to all who contributed. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Universities
5.34 p.m.
Lord Norton of Louthrose to call attention to the case for reducing the burden of bureaucracy on universities; and to move for Papers.
The noble Lord said: My Lords, I declare an interest as an academic and, indeed, as someone in a department shortly to undergo a subject review. I have thus been able to view the problem at first hand.
By the burden of bureaucracy on universities I refer to the administration now necessary to monitor, enforce and evaluate a raft of requirements imposed on universities. And it is a burden. Over the past seven years, about 10,000 people, mostly academics, have been engaged in inspecting universities and colleges. In 1999, the President of the Committee of Vice-Chancellors and Principals, as it then was, declared that we now have the most scrutinised education system in the world. The General Secretary of the Association of University Teachers said,
"To make good the claim that all degrees are of equal quality, all institutions equivalent, we have imposed on institutions the most leaden control apparatus possible".
In a Starred Question on 20th February, my noble friend Lady Perry of Southwark—I am delighted to see her here—drew attention to the number of rules, codes of conduct and subject benchmarks that have been imposed, with more to come. These rules have been introduced ostensibly for the purpose of improving the efficiency and quality of teaching and research and for ensuring accountability. No one questions those aims. They are eminently desirable. Universities do not seek to achieve some insular existence free of evaluation by others. Any complacency on the part of universities disappeared following the cuts of 1981. Universities know that they have to be accountable; they know that they have to deliver high quality education. What I
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wish to question is whether the means devised to achieve those desirable goals are the best ways of achieving them. In my view they are not. indeed, for reasons that I shall develop, I believe that they are counter-productive.
The burden of bureaucracy takes two forms. One is quantitative. I referred to the fact that universities are subject to a mass of rules. Academics face a substantial, growing and unrelenting burden of paperwork. Data have to be compiled. Information has to be supplied—often the same information but in different forms. The method of reporting one year differs from that of the next. The most recent "diary exercise" undertaken by the Association of University Teachers found that 33 per cent of academics' time is spent on administration and bureaucracy.
The other form of the problem is qualitative. The sheer burden of complying with all these requirements would not matter so much if it constituted what I shall call productive administration: that is, if it could be shown to contribute directly and clearly to maintaining or enhancing the quality of teaching and research. It might even be acceptable if it could be shown that there was an indirect contribution that was other than marginal. Unfortunately, much of what academics are now required to do is predominantly unproductive and, as I shall argue, any indirect marginal contribution is far outweighed by the costs of the exercise.
Let me identify those costs. There are financial costs. Last year the Higher Education Funding Council for England Commissioned a survey by PA Consulting of current accountability arrangements in universities. In its report entitled Better Accountability for Higher Education it looked at measured costs (that is, attributed administration and academic time), administration costs (such as management support and enhanced information systems), unmeasured costs (such as unattributed staff time) and what it termed behavioural costs (such as planning uncertainties and staff stress). It was unable to quantify the behavioural costs. The measured costs it assessed as £45 million to £50 million, the administration costs £100 million, and the unmeasured costs £100 million. In short, the total cost was in the region of £250 million. That is the equivalent of 5 per cent of the budget of the Higher Education Funding Council for England. This £250 million might be a justified cost if it delivered value for money. However, it does not. I quote from the report:
"The overall accountability regime for English higher education emerges as a patchwork of legacy requirements from different stakeholders responding to different concerns at different times, with little overarching design, co-ordination or rationale. In consequence, the current regime represents poor value for money both for stakeholders and for institutions".
The exercise is thus expensive and inefficient.
Various university departments have attempted their own assessment of the cost in terms of staff hours of subject reviews undertaken under the auspices of the Quality Assurance Agency. Those estimates have ranged from £20,000 to £200,000. The figures may be

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disputed, but they point to a substantial burden on what in many cases are overstretched departments. There is clearly a major financial cost.
There is another cost that has not been emphasised enough, but which has fundamental implications for the future of the education system in this country. PA Consulting defined it as the behavioural cost of the accountability arrangements. The consultants could not put a cash sum on it, yet it is probably the biggest cost of all. I refer to stress and, most importantly, morale. The cost in staff morale is horrendous. That cost has to be put in a wider context. The growing burden of bureaucracy is but one of many pressures to which academics are now subject. Universities have been forced to rationalise over the past 20 years. Initial promises of a steady state regime soon disappeared. The student body has expanded, sometimes abruptly, with resources not expanding to keep pace with the growth. Universities are being asked to do more with less. They are subject to different regulatory regimes with demands descending on them from the Government and from regulatory and funding bodies. That results in uncertainty and low morale.
Academics are now under tremendous pressure. They work hard, yet they are under-resourced, undervalued and under-paid. A post in academia ceased some years ago to be a cushy number, regarded by insurance companies as a healthy job for actuarial purposes. It is now demanding and, for many, notably stressful. That has been borne out by survey data, including that on the effects of the 1992 research assessment exercise.
The consequences are pernicious and long term. The implications for recruitment and retention in universities are obvious. We are not retaining the brightest and the best to teach our young people. In some cases they are not entering the profession; others are leaving it.
The situation is critical. Given that, any accountability regime has to deliver notable benefits to offset the costs. There is little evidence that it is delivering substantial benefits. The limited studies of subject reviews that have been undertaken do not show the exercise delivering well on its stated criteria. One study, published in the Journal of Education for Teaching, found that it did not deliver well on its financial and public information purposes. On its enhancement purpose, it helped to bring about some changes at a departmental level, but was less effective at a generic—that is institutional—level. Furthermore, as the Association of University Teachers has argued, the bureaucracy is out of proportion to the issues that it is designed to address. In the assessment exercise, few departments are found to be seriously wanting.
As long as there is a juxtaposition of greater regulation with limited resources, there is the danger that the exercise will undermine rather than enhance the quality of teaching. Only those with spare capacity have the time to cope with the burden of increased bureaucracy. Those who already have full teaching and research commitments can cope with the growing burden only at the expense of their teaching and
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research. One cannot impose a greater regulatory burden without providing the resources necessary to cope with it.
The conclusion to be drawn is that the costs of the present regulatory regime massively outweigh any presumed benefits. We cannot continue as we are. The Government recognise that. The noble Baroness, Lady Blackstone, has conceded the need for a lighter touch and a reduction in the burden imposed on universities. A new regime for subject reviews is to be introduced later this year. In response to questions on 20th February, the Minister said that we needed to wait and see how well the new system worked.
The move towards a less burdensome system of subject review is very welcome, but I fear that the Minister's position does not go far enough. It is flawed in two respects. First, it confuses a lighter touch with a light touch. There is a world of difference between the two. A lighter touch may denote a shift from an extraordinarily heavy burden to a heavy burden. It is also essentially—certainly in this case—reactive. The Government recognise that there is a heavy burden and they are making some move away from it. With a light touch there is by definition an absence of a heavy load. It is also something that can be worked towards. It can constitute a clear future goal.
It is clear from the Minister's comments on 20th February that she embraces a lighter touch, but not a light one. When asked about the reduction in the burden on universities, she said that the number of individual subjects to be reviewed was to be reduced by one third and that the number of days that people spent undertaking the reviews would be reduced by about one fifth. Those constitute reductions, but it is obvious from the figures that they are not major reductions. The coverage of the QAA under the new system has been extended. I understand that Roger Brown, the former head of the Higher Education Quality Council, has described the new system as,
"almost certainly the most complex anywhere in the world".
And for what? Trials of three subject areas in 1999 failed to establish that there had been any significant reduction in the overall burden of external scrutiny.
Secondly, the problem cannot be seen in discrete terms. It has to be put in the context of the other pressures on the education system. Those pressures are several and come from different sources. By concentrating on slimming down subject reviews, albeit modestly, there is a danger of missing the much wider and more critical picture. That wider picture needs to be addressed quickly. Instead of slimming down the existing regime, or at least slimming down one particular regime, we should be looking at alternative ways of achieving the goals that I adumbrated in my opening remarks. There is too much duplication in the quality control system. Too much of it is unproductive. We need to look for leaner, fitter and less obtrusive methods of ensuring accountability and good quality education and research. Given the competition that universities now engage in, not least in recruiting students, one has to ask whether heavy external regimes are necessary.

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I end by putting some questions to the noble Lord, Lord Davies of Oldham, who will reply to the debate. He has taught in higher education and chaired the Further Education Funding Council. I suspect that he will have empathised with many of my points. Does he accept the comment of Howard Newby in 1999 that we have,
"the most scrutinised education system in the world"?
Does he accept the argument of Universities UK that the £250 million spent on the accountability regime could be put to more effective use by being devoted to reversing deteriorating teaching facilities? Does he accept the need for a light touch in higher education? In each case, if not, why not? Finally and fundamentally, what are the Government doing, in conjunction with Universities UK and other bodies, to look holistically at the problems facing our universities and to find alternative ways of achieving the goals to which we all subscribe. I beg to move for Papers.
5.50 p.m.
Baroness Warwick of Undercliffe: My Lords, first, I congratulate the noble Lord, Lord Norton of Louth, on introducing this debate on accountability. I certainly welcome it. It is a vital issue. In my capacity as chief executive of Universities UK—I declare that interest—I know that our universities would be the first to agree that they should be accountable for the public funds that they receive. After all, public funds account for a large proportion—some 62 per cent—of their money.
However, the systems by which our universities account for that public money certainly need to be reformed. There are questions about cost-effectiveness and whether those systems are all necessary. I am sure that we all want to relieve universities of unnecessary burdens because they are time-consuming and costly and they limit innovation. Universities are finding that the burden of red tape is reducing their scope for flexibility. Flexibility is vital if universities are to develop their students to the full.
Our universities will be able to do that if they can tailor their programmes to the interests of students. That is a particular strength of UK universities. However, I fear that the burden of too much red tape might force our universities into constructing more limited programmes. I cannot emphasise enough how important flexibility is in allowing our universities to carry out the research which is so important to the economy.
The present system places a cost on universities which they can ill afford. After decades of cuts, the last thing that they need is for the much-needed extra resources, hard won from the Government, to be siphoned off into dealing with red tape.
It is worth asking how much the present systems cost. The noble Lord, Lord Norton, mentioned PA Consulting Group—the independent consultants retained by HEFCE, the Higher Education Funding Council for England, to look into the burden of accountability, as we have all come to call it. PA
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Consulting said that the direct and indirect costs of the present systems—the noble Lord, Lord Norton, enumerated them in detail—stand at approximately £250 million each year. Not only is that equivalent to 5 per cent of the total budget of HEFCE but, according to my calculations, it is equivalent to the funding of about two universities.
The main areas of accountability which cause those costs are, as has already been mentioned, the work of the Quality Assurance Agency; the research assessment exercise; to my mind, the cost of bidding for the ever-increasing small pots of money for special initiative funding; and the inexorable increase and sheer cost of extracting more and more information about students, finances and staffing.
Therefore, I was very pleased today to read the announcement from the Department for Education and Employment about the reduction in the burden of higher education quality assessment—one area where we know that there is a substantial burden. I certainly welcome it as a significant step towards reducing that burden. I believe that it is a step towards fulfilment of the Minister's intention that the burden should be reduced, as she said in a response to the noble Baroness, Lady Perry, just a month ago.
I also welcome the further dialogue with the funding council and the Quality Assurance Agency that is intended to continue that process and to identify further measures to reduce the burden on universities. Of course—I believe that everyone will acknowledge this—at the same time, that must be consistent with the need to provide reliable public information for students and other stakeholders.
I also want to stress that the auditors and assessors of the Quality Assurance Agency do a good job. The problem rests with the system of accountability rather than with the people who carry it out. However, I agree that reform must be much more ambitious. The new "light touch" of the QAA may well save the sector money. However, the £250 million bill needs to be reduced drastically. To achieve that, a fundamental reform of the whole series of audit systems is needed. Wholesale reform might mirror more accurately, for example, the good practice, tried and tested, which is employed at present in industry and commerce. I believe that we have much to learn in that regard.
I said that PA Consulting estimates that red tape costs £250 million each year. It is important to put that figure into context. Many noble Lords will know that Universities UK's Funding Options Review Group, under the guidance of Sir William Taylor, issued its final report on university funding, New Directions for Higher Education Funding, only a few weeks ago.
That report identified a funding requirement in the university sector of at least £900 million each year which must be found by 2004–05. Universities need that extra money, among other things, to improve their deteriorating teaching facilities. Those are, of course, enormously important if universities are to provide the skills and knowledge which the economy needs. The extra money is also important in enabling universities fully to motivate their students. Without

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it, it becomes increasingly difficult to ensure that the UK's rate of student retention, which is almost the highest in the world, remains that way.
To my mind, if some of the resources which are now being used up in meeting the accountability burden were spent instead on improving the teaching infrastructure and other forms of student support, that would go some way to meeting the funding requirement set out in New Directions for Higher Education Funding.
Having said all that, I very much support the call by the noble Lord, Lord Norton of Louth, for attention to be given to this issue. I certainly also welcome the Government's intention of ensuring that that happens.
5.57 p.m.
Earl Russell: My Lords, I, too, thank the noble Lord, Lord Norton of Louth, for introducing this debate, and for doing so with great elegance and great perception and in such a style that, like Clive, he is entitled to stand astonished at his own moderation.
I must, of course, declare an interest. I am a serving university teacher and although I am proud to belong to a party for which I do not have to apologise when I talk to colleagues, I speak for myself and for those with whom I was sitting in a departmental meeting five hours ago.
This is not a party matter and I hope that the Minister will not reply with any party points. We are facing a programme which is strictly, in the good old 18th century sense, that of the Court and Treasury Party. So far as I can see, the change of government has made absolutely no difference whatever. The last time I expressed that view in the Chamber, the noble Baroness, Lady Blackstone, expressed some dismay at it. I decided to check it with my head of department. I asked him whether he had seen any difference in what came from Whitehall since the change of government. He looked at me as though I were half-witted and said, "Of course not". I do not make a party point, but that illustrates that all this has been going on for some time. We are now beginning to hear the ever louder sound of turning worms—it is like the mud flats when the tide goes out.
Recently, I talked to a young colleague, who is not in my department. He is the recent author of an extremely promising first book. He said to me, "I came into this job because I hoped to exercise academic judgment and because I hoped to be able to follow standards which I believe to be right. But if I am to be turned into a sort of lance-corporal, applying standards laid down from somewhere else, then I don't see why I shouldn't go into the City and make some money instead". That remark frightened me, and it is very far from an isolated case. If that mood becomes general, I believe that our survival, on a very wide scale, will be in doubt.
The noble Lord, Lord Norton of Louth, used the word "burden"; that is a literal word. In my experience, departmental secretaries are some of the most dedicated people with whom it has been my privilege to work. One expects departmental
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secretaries to go home at half-past five. The day before we had to submit our papers for the teaching quality assessment, the departmental secretary was still at her desk at 4 o'clock in the morning. She was already in her 60s and was not in good health. That is not the sort of burden that one should place on departmental secretaries. If we do, we do not get good service.
We receive the most extraordinary things. I have here a letter, dated 23rd February, which I received from an organisation called Teaching Personnel, the UK's largest teaching agency organising supply teachers for schools throughout every area of England and Wales. The DfEE has recently recognised that FE and HE teachers provide a credible additional resource for supply positions where qualified mainstream teachers are not available. The circular asks:
"Would you be interested in taking temporary supply teaching assignments on your available day?"
I have heard many comments on that circular. This is a polite House; I shall not repeat them.
I should like to ask the Minister—I do not expect an immediate answer but I shall put it down for a Written Answer—what was the cost of this consultation exercise? How many university teachers have come forward to take up supply teaching positions? What was the cost to public funds per university teacher who did so? I shall be interested to see the answer.
A great many of the questions are completely irrelevant to what one does, incomprehensible in relation to one's own work, and therefore unanswerable. A couple of weeks ago I had to fill in an appraisal form. The first question that it asked about my teaching was what I had done to develop teaching material. I ask people to read books—I do not supply them with teaching material—and that is getting more difficult than it used to be. I could multiply those cases over and over again.
When I once served on the research assessment exercise, I was given a large amount of paper from the number-crunchers in Whitehall. I was only able to proceed once I had been solemnly assured by my chairman that I could ignore every word because none of it told me anything that I wanted to know about the quality of the people whom I was assessing.
Accountability is obviously a key issue. The change that became effective in 1988 was the disappearance of the University Grants Committee. In retrospect, it looks even more important than it did at the time. That is because we are now seeing an attempt to make the quality judgments, on which attempts to assess accountability are based, not in the old University Grants Committee, which was competent to do it, but inside Sanctuary Buildings themselves. That attempt is literally ultra vires; it is beyond their power; they are not competent to do it. That is especially so since one observes from all these questionnaires an immense inability to recognise the differences between subjects, as in the case of the length of a PhD. A PhD in history and a PhD in chemistry are not identical operations. Any attempt to control them by a uniform set of rules

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must risk mangling one of them. I have not taken on a PhD candidate since these rules came into force. I regret that.
There must, of course, be accountability. Whitehall is entitled to know that we spend money on the items for which we are granted it. But the body to which universities are properly accountable for judgment of quality, a body that is able to assess it, is the global higher education market. That is something real. Judging by the number of people coming in from places such as France, Germany and the Netherlands, we are not doing that badly. However, it does not really seem to impinge on Whitehall because of the obsession with irrelevant quantitative indicators.
The other point to be mentioned in this respect is that we have moved away from the semi-autonomy of the University Grants Committee towards a relationship very similar to that which exists between Whitehall and the boards of the private utilities, in which a technical private ownership is combined with a very detailed contract, enabling Whitehall to demand changes in practically everything from what Railtrack does with its rails to what sort of books we use for teaching. In neither case is Whitehall competent to take those decisions. So what we have is detailed control without responsibility. We know what sort of a prerogative power without responsibility is: and it is what this system provides us with. It is not doing us any good.
It causes the more anxiety because of the fact that all these measures came into force together with a passionate attempt from inside Whitehall to reduce unit costs. There is a suspicion, by no means unknown among my colleagues, that the whole atmosphere of quality control is a back-door attempt to reduce unit costs—a deliberate Whitehall attempt to reduce quality and then to blame the universities for the result. "Never" is a short time in politics. But in the case of Oxford's reaction to the case of Laura Spence and the Chancellor of the Exchequer, "never" will be not quite as short a time as usual. It causes a very deep measure of anger, and that should not be ignored.
In terms of unit costs, matters have been getting worse ever since 1976. The mere mention of 1976 compels me to a recognition that some change in that direction had to happen. But a pendulum that goes on swinging in one direction for 24 years should be due to swing back again. I do not see much sign of it. That is from where we get the sense of turning worms among my colleagues; the sense of their being deliberately set up to fail and blamed when they do so. It is not confined to my own profession. Dr Bogle of the BMA has recently expressed very much the same sense. Any lawyers listening to the Home Secretary's criticisms a couple of weeks ago may well have made similar comments that I have not been privileged to hear. I guess that they have not been put into printable form! So there is a very strong feeling that unless this downward pressure on unit costs can be brought to a halt, and the whole attempt to make academic judgments inside Whitehall brought to a halt with it, if
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it were to end in there being no more universities in this country, it would not cause me nearly as much grief as I would wish.
6.08 p.m.
Lord Parekh: My Lords, I begin by thanking the noble Lord, Lord Norton of Louth, for introducing this extremely important debate.
Since the noble Lord, Lord Norton, the noble Baroness, Lady Warwick, and the noble Earl, Lord Russell, have spoken about the larger issues raised by the current bureaucratic regime that impinges on the universities, I should like to concentrate on one particular aspect—the Quality Assurance Agency and its operations. Universities are publicly funded and must obviously be accountable to the wider society. However, it is worth remembering that, since these days they are less dependent on public resources, they cannot have the degree and depth of accountability they used to.
Since universities compete for students at home and abroad, and since the country has a vital stake in their professional reputation, it is crucial that their quality of teaching and standard of degrees should enjoy public confidence here and abroad. Although academics are men of honour and commitment, they are fallible human beings, and some are inevitably tempted from time to time to cut corners. For those and other related reasons, there can be and should be no objection to some form of national quality assurance.
The current system, however, leaves much to be desired. That becomes strikingly evident when we consider three recent findings. First, we were told that the politics departments of Salford and De Montfort Universities are superior to that at the LSE in the quality of teaching and standard of exams. Salford and De Montfort are obviously good universities and I respect them, but I do not think that one would want to argue that they are in the same international league as the LSE, as the differences in their RAE results and international reputation clearly show. An exercise that finds those departments superior to that at the LSE is prima facie suspect.
Secondly, several departments have secured 24 out of the maximum of 24 points. That is odd as it implies that those departments are perfect and need no further improvement whatever. It is even odder that hardly any department seems to have secured less than 22 out of 24 points and that a score of 22 out of 24 is widely regarded as a sign of failure. There is certainly something worrying about a system which encourages such grade inflation and clusters almost all university departments around an extremely narrow band.
Thirdly, almost all university departments that have gone through the quality assurance exercise have been highly critical of it, including those which have obtained the highest number of points, such as the Department of Economics at the University of Warwick whose senior professors wrote a scathing piece in the Guardian only a few weeks ago.

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What then is wrong with the current system? First, it is crude. It judges university subjects and departments on the basis of six criteria which are not all of equal importance. The quality of teaching is at the heart of the pedagogical exercise and cannot be treated on a par with the supply of teaching materials, library resources, student support or even curriculum design.
Secondly, the Quality Assurance Agency largely concentrates on what I might call the externalities of teaching and cannot even remotely be said to assess the quality of teaching which it claims to assess. It looks at a department's paperwork and minutes of various committees. It talks to past and present students from the department, whom the department itself has chosen for the purpose. That is obviously an inadequate basis on which to pronounce judgment on the commitment, inspirational qualities, extra-curricula contacts with students and the scholarship of the teachers involved.
Thirdly, since so much importance is given to paperwork, departments are forced to spend huge amounts of time getting it right. In my own department, for example, two colleagues spent nearly four months of their precious time getting together the nearly 150 ring-binders required for the exercise. Other colleagues devoted only slightly less time to it. All that detracts from the time needed for research and teaching and brings the whole department to a virtual standstill for weeks on end.
Fourthly, the whole exercise, costing hundreds of thousands of pounds, seems to produce little benefit. The departments may learn to be a bit more efficient in their paperwork or in ensuring that recommended books are available in their libraries, but there is very little improvement in the substance and quality of teaching. An outsider sitting in on odd lecture or tutorial is hardly in a position to proffer sensible advice to the teacher concerned or to the students involved.
Fifthly, thanks to the way that the Quality Assurance Agency has operated, academic morale has suffered enormously. Academics feel that they are not trusted to do their jobs and that they are judged by matters which are external and incidental to the exercise of teaching for which they entered the academic profession in the first instance. Indeed, every student now appears to them not as a mind to be trained but as a symbol of so much paperwork—a burden to be avoided to the extent that one could and one would do so if only the student did not bring some money.
As several friends in the Academy of the Learned Societies of Social Sciences have pointed out to me, they would prefer to resign and be re-employed on a part-time basis to avoid the mindless paperwork and bureaucratic inspection to which they are subject.
I have argued so far that some external quality assurance is necessary. But I have argued also that the existing regime is deeply flawed. What then is the alternative? In the short time available to me, I shall end by making four suggestions.
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First, universities, by and large, consist of committed people who have enough professional integrity to take their pedagogical responsibilities seriously. Our universities also have, unlike their European and American counterparts, a fairly effective system of external examiners who not only ensure high standards of marking but also high standards of curriculum design and so on.
Since universities depend on students, they all have a vested interest in ensuring that they enjoy an excellent reputation. Therefore, I suggest that we should approach universities in a spirit of trust rather than suspicion and appeal to and modernise their professional integrity rather than their fears and vulnerabilities. We should rely on encouraging them to do yet better, rather than shaming and hounding them.
Secondly, we should urge, or perhaps even require, universities to devise their own mechanisms for inspecting and improving their quality of teaching and standard of degrees. Young lecturers benefit far more if their senior colleagues attend lectures, advise them on curriculum design and so on rather than having outsiders making negative comments on the basis of a two or three day visit to the university.
Thirdly, external quality assurance should be a device of last resort rather than a regular regime of inspection. Only when students complain or when the Quality Assurance Agency has reason to believe that the university department is failing in its duty should it send in an inspection team. Such inspections should not be routine but activated only when universities fail to be self-regulatory. And its concern should be to help to improve the quality of teaching, rather than to concentrate merely on what I have called the externalities of the pedagogical exercise.
Such inspection is likely to be beneficial only if it is led by senior scholars in the field whose judgment and impartiality are widely respected, rather than by those with no research record, no strong reputation as teachers or who have become disillusioned with academic life themselves.
Finally, we need to remember that different disciplines and subjects cannot all be judged in the same way. English literature is not statistics and both again are very different from history and economics. We need to appreciate those differences and evolve appropriate criteria of assessment.
I have one final thought. I am fairly confident that some of the greatest past teachers of our country— Isaiah Berlin, Karl Popper or Michael Oakeshott— would most certainly have failed to pass many of the bureaucratic tests set by the QAA. A system with such results most certainly needs a radical second look.
6.18 p.m.
The Earl of Longford: My Lords, I hope that the expert speakers and the great contemporary experts who have spoken already will forgive a Rip Van Winkle offering a few memories and reflections.
I had the honour to open the first ever debate held on universities in this House 45 or 46 years ago. I opened the first debate on polytechnics some years

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later. So my mind goes back a long way and I ask myself what has been the result of the initiatives taken on those occasions, not only by me, of course, because I was just a minor figure.
There was a nationwide demand among well-informed people that there should be a great expansion of university places; and that has duly taken place. There was an almost equal demand that polytechnics should receive university status; and that also has been achieved.
What has been the result? We have the debate today. Those complaints were never made in the old days because there were not the same difficulties. But now, with this vast number of students, the tendency to introduce bureaucracy is obviously overwhelming and so we have this debate.
I defer to the academic credentials of many Members of this House. When I last counted, some little while ago, there were some 15 professors. Now, I think there are a good many more, including four who are speaking today. The Minister, who will reply, is versed in higher education, as are other speakers. The noble Lord, Lord Windlesham, is head of a college. Other noble Lords have been heads of colleges. We have here every kind of expertise. There are two Fellows of All Souls, neither of whom is in his place: the noble and learned Lord, Lord Hailsham—we do not hear from him often enough these days—and the noble Lord, Lord Waldegrave, who we warmly welcome.
I speak merely as a college tutor at Oxford in the 1930s and for a short while in the 1950s. My first pupil later became owner of the Telegraph group of newspapers. My last pupil later became Chancellor of the Exchequer. So, I have had experience of academic life. All my seven surviving children graduated. Sixteen of my grandchildren have graduated, with others to come. I have, therefore, had contact with universities. I taught for the Workers' Educational Association and at the London School of Economics. I have my own credentials, even if they do not compare with some of those here.
My message can be delivered briefly. Everybody has, in their own mind, those special features of university life which mean most to them. Some think of the social life; which is not by any means to be despised. Some think of the wonderful, unforgettable lectures they have heard, and some think of the opportunities for research, which are much more pronounced than in my day. I think of the tutorial system. I shall ask the Minister whether the tutorial ideal is still preserved. It was carried much further in the old universities. The circumstances were much more favourable than throughout the polytechnics, for example. Nevertheless, is the tutorial system, carried out on a one-to-one-basis—occasionally two people have a tutorial at the same time—to be preserved as an ideal, or, under the new developments is it completely overlooked?
Much is said today about pressure. Does that interfere with the tutorial system and make it less likely that a tutor will have time to give to a pupil what tutors
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gave me in my time; namely, an hour a week throughout his time at university? Is that still possible or has that been rejected?
The tutorial system had its disadvantages. Some tutors frightened their pupils. Even the great and mighty Dick Crossman, later to become a famous Cabinet Minister, was somewhat intimidated by the philosopher HWB Joseph who kept asking his pupils, "What do you mean by that word?" The only man to defeat him was Professor Lindemann, later Lord Cherwell. He retaliated on one occasion in a seminar by asking, "What do you mean by the word 'mean'?" That left Joseph temporarily speechless.
Pupils did not always get on well with their tutors. I know of a gifted young woman who asked to be given a different tutor. A tutor had to be fetched from London to Cambridge to look after her. I owe everything to a tutor, an economic Scotsman, who was a rather awkward type. I said to him on one occasion, "I suppose I shall get a first?" He said, "I've no reason to think so". That made me settle down to work for the first time in my life. One can owe a lot to a tutor. Perhaps I may simply press the point to the Minister: is the tutorial system still any kind of ideal or will the new developments destroy it?
6.24 p.m.
Lord Morgan: My Lords, I hope that it is in order to speak. I spoke in the previous debate and hope that I am not taxing the tolerance of the House too much. The debates on English regional government and this debate on universities raise exactly the same themes. They both concern the impact of centralisation on the regions and, in this case, on free and supposedly autonomous institutions.
I listened with enormous interest to the observations of the noble Lord, Lord Norton, a fellow member of the professoriate, and, indeed, a member of perhaps a smaller sub-group; namely, a former vice-chancellor. His speech and those of other speakers brought back many memories, many rather miserable. To hear some of those observations was rather like having a lunch appointment with Banquo's ghost.
We have heard much about the mechanics of the present situation. As an historian I am interested in origins. These matters did not originate with the government of Mr Blair but with the policies of the Conservative Party in the 1980s. I do not mean to be narrowly partisan, or at all, but as a matter of historical accuracy, the present situation began with a process of trying to change the direction of institutions and of using governments so to do.
In many ways, that process was necessary; I do not dispute that. Universities needed reform at that period. In some ways I found, as a vice-chancellor, that the impact could be liberating and by no means depressing. However, it was part of a process in which trying to roll back the force of state control led to more control. The noble Lord, Lord Norton, is a distinguished professor of politics. He will be familiar with the philosophy of Jean Jacques Rousseau, and the outstanding example of forcing men to be free, as

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Rousseau said. So it was with universities; with local government forced to be free of the "loony Left", and with hospitals and many other institutions at that time.
The process built on an even earlier tradition. In my opinion, the universities began to lose their esteem and their right to freedom, as popularly perceived, in the student troubles of the late 1960s, immediately after the Robbins report. The student rebellions of the 1960s had many positive features. They improved the governance of universities, and the way in which young people were dealt with in matters of discipline, and so forth.
However, the rebellions left a disastrous impression on the public mind: the view that universities were incapable of running themselves. Without intention, the student rebellions led to a feeling that universities were incompetent and had to be taken over. That chimed in with a later feeling, the so-called "taxpayers' revolts"; the feeling that students who behave in that way should not in any way be supported or funded by the taxpayer. That led to the interventionist reforms under the noble Baroness, Lady Thatcher, which were taken up by John Major and, I am sorry to say, have been continued without any great fundamental change by the present administration.
Many of the features of which we have heard chime in exactly with my own recollection as a vice-chancellor between 1989 and 1995. In some ways I believe that the procedures have got worse. We have heard a great deal about the funding document concerning administrative matters and regulation, which was Commissioned by HEFCE, the funding council for England. As the noble Lord, Lord Norton, explained, it went through the whole range of impacts, both direct and indirect, institutional and personal, and the enormous costs involved. All that was alarming. It related to England, but my information is that the process in Wales is by no means an improvement. Although I believe in devolution, I felt that the devolution procedures in higher education were not a great advertisement for that principle.
The worst of the problems has been alluded to. I refer to the quality assessment subject reviews which are enormously time consuming. A number of figures were quoted. Those in the hefty document related to the University of Leeds, which I know at first hand. That medium-sized university reckons that it costs £70,000 a year, much of it unnecessary in terms of duplication and excess of details. As has rightly been said, there is considerable pressure on university staff. We see in the public service the kind of demoralisation that we see among teachers and people in the NHS. That is part of a diminution of the esteem of the public service, despite the Government's best efforts. The situation is not improving and is perhaps worsening.
Perhaps less overwhelmingly expensive and complicated are the institutional audits of which I have had great experience. They are enormously detailed. It seems to me that the same unnecessary degree of pedantic detail is sought in all aspects of a university's operation and there is no "lightness of touch" in that direction.
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The research assessment exercise has in some ways shown an improvement in terms of its impact on universities but in some ways it has become worse. One twist that has been imposed is that the documentation which cannot be discovered by assessors in their own institutions, libraries and so forth must be found by the university under review. In other words, it is forced to carry the administrative costs which should properly be borne by those administering the system and by the funding council. Time and again we hear that this is a listening administration. We often hear of governments listening but sometimes I have my doubts because the listening process is not too evident.
Bids for new academic developments are needlessly complicated and heavy in their detail. In my experience as a vice-chancellor, it is easier to obtain resources and funding for new developments from Europe. For example, in Wales there was a simple procedure for obtaining funding for a new lecturer from the committee dealing with minority languages.
Finally, I turn to audits. Like all public institutions, universities need to be audited. In my experience, they were audited several times a year. It was perhaps a peculiarly Welsh experience because we had the disastrous case of the university in Cardiff, which my noble friend Lord Morris will know better than I. I in Aberystwyth felt that we were all tarred with the same brush and therefore audited to death because we could not be trusted with public money—could we?
I felt that all the audits were not so much auditing us as auditing each other. If one audit suggested 92 technical improvements, the next, as a matter of honour and pride, suggested 110. And so it would go on. The famous phrase, "Quis custodiet ipsos custodes?" comes to mind—who guards the guardians? Who, I wondered, audited the auditors? It was not transparent to me.
As the hefty document makes clear, the right balance is not being struck between public assurance about universities and their private governance. This is harmful to their resources and to their role as precious centres of intellectual life. I say that with some sorrow because I believe that the Government have done many splendid things for education, including higher education. We have a new level of funding of more than £1 billion over the next three years. The unit of resource is going up rather than down. We have new money to improve staff retention and recruitment, although I agree with those who have said that staff stipends are at an extremely poor level.
The sheer pressure of costs and time seem to be working against those objectives and getting in the way of the universities' immediate role of research and teaching, and contributing more widely to the moral and knowledge economy of this country. That is seen most obviously in the operations, narrowly educational; but a new level has been alluded to; namely, the intervention of the Treasury. There is a new phenomenon which is interesting to historians and perhaps even more so to political scientists: the Treasury is concerned not only with controlling and vetting the expenditure of departments for their

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policies but also with laying down what those policies should be. That seemed an indicative feature of the melancholy story of Laura Spence with, it appeared, an attempt to dictate on, sadly, wrong information, what the admissions policy of an Oxford faculty should be.
I agree with my noble friend Lord Parekh that trust should be placed in universities. They have a high international reputation and a high and proven level of efficiency on all the indicative tests which are applied to a business. The costs imposed on universities are too frequently artificial regulatory burdens which could well be diminished. We have heard the kind of savings that could be made.
Labour governments have an honourable tradition in education. The Wilson and Callaghan governments took forward the great expansion following the Robbins report. The present Government are committed to the noble ideal of raising participation massively to more than 50 per cent in higher education and to the strategies of lifelong learning. Universities can, and should, be trusted to carry that policy through.
Finally, to misquote Rousseau again, universities were conceived as free but too often they are in chains. Even if the chains are paper chains, they ought to be removed.
6.37 p.m.
Baroness Sharp of Guildford: My Lords, I, too, thank the noble Lord, Lord Norton of Louth, for introducing an extremely important debate. We have touched on the subject in this House from time to time but never concentrated on the issue of bureaucracy in universities. I must declare an interest. For much of my life I have been an academic and remain attached to the University of Sussex on a part-time basis.
One must put the development of bureaucracy in universities within the context of the growth of mass higher education in this country. When I went to university in 1957, I was one of 7 per cent of the age cohort then going through to university. In the 1960s, under the Robbins expansion that 7 per cent increased to about 10 per cent. By the end of the 1970s we were taking in 14 per cent of the 18-year olds. The figure remained static at 14 per cent until about 1987. Then there was a big expansion. By 1993 the number had risen to 28 per cent and we are now touching 35 per cent. The aim is to have 50 per cent of the 18 year- olds going on to higher education.
When I went to Sussex in 1980, I took tutorial groups usually of four. It was the Sussex tradition to have tutorials rather than classes. It was not quite the Oxbridge tradition of two but it was a semi-Oxbridge tradition. It was good because although I had a relatively small room I could fit four students in it and take them for a tutorial. When I left in 1998 the tutorial group was typically 17 or 18 students.
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That illustrates the fact that it is necessary to have different teaching techniques. One gets to know four students personally very quickly. One knows their foibles and can cope very easily with four written pieces of work each week. One sets the written work and it comes back. If one has 18 students it is much more difficult. One does not like to go round a class and check the names, or pass round a piece of paper, but one must keep a note of the students who come in. However, to teach 18 students is a different matter.
When 7 to 10 per cent of the age cohort went into higher education, a student could be handed an essay and literally a few books that might be relevant. The student had to search out the information for himself or herself and learnt enormously as a result. One can use those methods only with the top decile, or perhaps a little more, of the intelligence quotient. When one has many more students one cannot rely on those methods.
The Earl of Longford: My Lords, perhaps I may ask the noble Baroness a question. Does the noble Baroness agree that in the case she mentioned the tutorial system has been abandoned?
Baroness Sharp of Guildford: My Lords, it has not been completely abandoned. From time to time, as an academic, one gives tutorials to students who come to one's room and say they cannot understand. In Oxbridge the tutorial system continues, and that is one of the advantages of that sector. However, it also costs a lot more.
It was natural to look much more closely at teaching methods. Those changes took place simultaneously with other changes in the 1980s. It was a time when public expenditure was being squeezed enormously and the public and government demanded value for money. As the noble Lord, Lord Norton, and others explained, from that climate derived the two big exercises in accountability: teaching quality assessment and research assessment.
Other bureaucratic exercises have now crept in, many of which have come from this Government rather than the previous one. There is an increasing tendency to ring-fence money and ask for separate bids. That means that somebody must put together the bid. That can take a great deal of administrative and academic time. That is all extra time taken out. The question is whether all of these exercises are really necessary. Have they become unnecessarily bureaucratic?
Because I work in a research unit at the University of Sussex my experience has related largely to RAE which is slightly less bureaucratic than the teaching quality assessment exercises. At the end of the day, probably the unit puts in slightly more than a year's worth of top time to hone the RAE application. It is a five-year exercise. At the start, one has 30 researchers who publish research. One looks at what research is going on, tries to identify the researchers who are likely to produce good work and get them to submit articles to the premier journals to ensure that they publish their work early, and so on. One talks to them about

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the timetable. To some extent, one plots it and gradually builds it up. It is probable that half a dozen of the top people in the unit are involved in putting it together. Over the five years we spend a year's time putting the RAE together. That also has knock-on effects.
The other side of the bureaucracy, to which the noble Lord, Lord Norton, also referred, is the spillover: the effects on morale and so on. My impression is that TQA has a much worse record. I have not been involved in the detail. Based on the single lecture course in which I was involved—10 lectures and 10 classes which went with it—I was surprised by the amount of paper. I ended up producing about 200 pages of paper to justify what I did and everything that went with it. It took me about a week to put together. If one assumes that one department has about 120 courses like that, one begins to understand how the Warwick economists came to the conclusion that it would cost £120,000 for one subject review. I have checked with the University of Sussex and discovered that in the past year it has undertaken five reviews. Therefore, the expenditure on these subject reviews by a university is between £½ to £¾ million each year. PA Consulting found that it amounted to a great deal of money.
As the Warwick economists pointed out in their splendid article in the education section of the Guardian, one is batting against a flexible objective which changes all the time. One of the bad factors is the degree to which the rules change all the way along so one never quite knows at what one is looking. It does not give an objective standard of teaching quality or a good measure of changing quality over time. Therefore, it is not necessarily a good diagnostic tool to the department. There are always knock-on effects as one sits down to appraise oneself. Good things come out of it. One realises that there are shortcomings and that it is possible to do some things better, but overall the cost is great and the benefits, which could probably be secured by other much less costly means, relatively marginal.
The reason why these have become such demons within the university sector is that they come on top of what was already a very stressed situation. As various noble Lords have pointed out, during the 1980s the real increase in the resources of universities was not very great, and resources have not kept pace with the demands in terms of student numbers. We know that in 1988 the unit of resource was £7,000 plus; it is now £4,500 plus.
In most departments the average contact time for a teaching fellow is probably between 10 and 14 hours a week. On top of that, one has preparation and marking time. Because classes have become so much larger, marking takes more time. My daughter is currently downstairs with the University of Bradford group showing off what is being done in the environmental sciences department of that university. Just before I came into the Chamber for the debate, I gave tea to my daughter and some of her fellow lecturers. They were very interested in the debate and were sorry that they could not listen to it. I spoke to
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them about teaching loads. They said that, typically, the load was about 14 hours a week but it took three times as long to mark the work. On top of every essay was an assessment sheet. One of them said that it took almost half an hour to fill out the sheet.
I was a detailed marker of essays and I estimated that it took me half an hour to mark one. If I had 16 to do it took eight hours to mark them decently. The time taken to mark nowadays is very great. One has 14 hours of teaching and probably at least the same amount of time for preparation and marking, with five hours spent in committees. That takes up one's 35 hours a week and all one's research. Promotion conies from research. In view of the impact of the RAE the pressures on research are enormous. All of this must be done in the evenings and at weekends. The average working week of academics is now between 50 and 60 hours, and for the more senior staff it is often between 60 to 70 hours. Often 70 per cent of a department suffers stress.
This system of bureaucracy has been labelled by one of my academic colleagues at Leeds, Hugo Radice. as equivalent to the soviet system. I should like to quote briefly his words:
"The institutions we work in resemble more and more closely the Soviet form of enterprise. Our activities take place within a rigid hierarchy that runs up through the head of department to the school, faculty, the university as a whole, and thence to the Higher Education Funding Council for England, the functional equivalent of Gosplan, the high command of the Soviet planning system.
Our task is not to generate high quality of learning and teaching but to satisfy the current demands of the quality inspection system, which means producing a Potemkin village, paint scarcely dry on the walls, for the week of inspection by the Quality Assurance Agency".
The system resembles closely the system of Soviet bureaucracy. Many noble Lords have drawn attention to the effect that this regime has upon recruitment and retention of staff and the difficulty of continuing to attract the best and brightest brains into the profession. What they have not pointed out are the insidious effects that this command economy has created within the collegiate system of our universities. Instead of professionalism, there is increasing cynicism and emphasis on how best to get around the rules; in effect, to cheat against the rules and to be economical with the truth.
We all know how the Soviet system collapsed under the weight of its own inefficiencies. British universities have a long and very distinguished record of scholarship and invention, borne from a liberal regime of independence and autonomy. Noble Lords have not quarrelled with the need for accountability, but it is dangerous that we may let our universities fall under the weight of their own bureaucracy.
Earl Russell: My Lords, before my noble friend sits down, perhaps I may assist her argument by pointing out to the noble Earl, Lord Longford, that I last practised the tutorial system as recently as yesterday afternoon. If it is dead, I am a ghost and I have not noticed.
6.52 p.m.
Baroness Blatch: My Lords, I thank my noble friend Lord Norton for the opportunity to have the debate and for his excellent speech. The noble Lord's theme was that universities are under-resourced, undervalued and underpaid.
The Government, on coming into office, set about, in their own words, "a modernising agenda". Indeed, in that respect, hardly any of our institutions has escaped the Whitehall tentacles. They set about this work with gusto. In just four years their most significant achievement has been to turn professional staff in our schools, further and higher education in colleges and universities into ciphers, paper pushers and collators of endless information demanded by the Government, the Quality Assurance Agency for Higher Education and the research assessment exercise.
The staff are enslaved by overburdensome bureaucracy and no value has been added to the quality of higher education by this additional work. One can add to that concerns about levels of central government interference through the various and unco-ordinated funding initiatives and of course concerns about the much discussed, but as yet unresolved, levels of pay for university lecturers which are affecting recruitment and retention. The level of bureaucracy is having a considerably adverse effect on the work of universities.
Accountability is important. However, the system of quality assurance has invalidated the aims of accountability by debilitating the energies of teachers and lecturers and by absorbing excessive costs.
The original "mission"—to use another government buzzword—for the QAA was,
"to promote public confidence that quality of provision of standards of awards in higher education are being safeguarded and enhanced".
I am afraid that rings very hollow. An industry of bureaucracy and time-consuming unnecessary work is having an impact on standards.
My noble friend Lord Renfrew of Kaimsthorn, who cannot be with us today, commented on,
"the bureaucracy which now strangles the unfortunate teachers in the University sector … There are mountains of paperwork … The Government are creating a new profession—bureaucratic administration … The dead hand of bureaucracy is falling upon British Universities".—[Official Report, 14/6/00; cols. 1676–77.]
What is depressing is that the Government now accept that there is a problem. They have spent four years creating the burden of bureaucracy, only to focus now on reversing that problem. Earlier this year the noble Baroness, Lady Blackstone, said:
"But I accept also that the burden, particularly for teaching quality assessment, has become rather bureaucratic. It is for those reasons that a new system is being introduced in the autumn. We need to wait and see how well that works".—[Official Report, 20/2/01; col. 595.]
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That is a tardy response to a problem identified back in 1998 and which has been the subject of regular comment by noble Lords from all Benches in this House. The late Lord Annan was right when he said:
"The more the bureaucrats in the department are fed, the hungrier they become".—[Official Report. 8/12/99; col. 1334.]
The PA report Commissioned by HEFCE was damning. The authors of the report found that higher education institutions incurred significant costs, both direct and indirect, which are generally not measured nor planned. The table on page 6 of the report calculated costs of £250 million, which does not include the cost to the quality of teaching in universities arising from—I quote—
"bidding 'game-playing",
and the planning uncertainties and staff stress. Those are points made by the noble Baroness, Lady Warwick.
On page 7 of the report they also found that the overall accountability regime for English higher education emerges as a patchwork of legacy requirements from different stakeholders responding to different concerns at different times, with little overarching design, co-ordination or rationale. In consequence, the current regime represents poor value for money for both stakeholders and institutions.
The report goes on to say that there is a lack of defined relationships between stakeholders and higher education institutions and different agencies; there are inconsistencies between the key agencies and the accountability requirements; and information requirements are uncoordinated, duplicated and, in many cases, redundant. To wait until the autumn of this year before these issues are properly addressed suggests an indifference over the past four years to the concerns of our universities, all of which were predicted when the QAA system was put in place.
The issue of university lecturers' pay cannot be divorced from this issue. I shall not pretend today— nor did I in our debate last week on student poverty— that concerns about pay and conditions in universities and their funding started in May 1997. We are all culpable. But I must emphasise again that the Dearing report was established by the Conservative Government precisely to deal with these issues, including increased access for students. That report was Commissioned with the support of the Labour Party.
Recommendation 50 of the Dearing report advocated that an independent committee should be appointed by the employers to consider a framework for determining pay and conditions of service. As we all know, an independent report by the Bett committee published in June 1999 acknowledged the need to raise the salaries of university lecturers. The Bett report called for an extra £350 million from the Government. However, the Government have consistently avoided a direct response to the Bett report, arguing that it was Commissioned for the sole benefit of the university employers. The Guardian on 13th July 1999 reported

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that David Blunkett, the Secretary of State for Education, had been credited with dismissing the Bett proposals as,
"all in cloud cuckoo land".
Certainly, the noble Baroness, Lady Blackstone, has consistently argued that this is a matter for the employers and not for government.
In July 1999, in a debate on that report, the noble Baroness, Lady Blackstone, said that,
"the Dearing Committee recommended that there should be an independent review [of lecturers' pay]. That independent review has now taken place. It was clear that the Dearing Committee intended that it should be a review set up by and reporting to the employers. That is exactly what has happened. There is no case for the Government to interfere in and to respond to the Bett Committee at this point in time".—[Official Report, 12/7/99; co1.10.]
However, Recommendation 50 of the Dearing committee does not actually specify that the review committee should answer to the employers alone. Although the report recommends that higher education employers appoint the committee, it makes no mention of the intended recipients. The fact that the Government are allotted the task of choosing the chairman indicates that the Dearing committee envisaged government participation in the review. It implies that the Government would be expected to respond upon publication of the review committee's findings.
If Recommendation 50 is considered in context, it appears even more likely that a government response to the prospective review committee was anticipated. Paragraph 72, which precedes Recommendation 50, states:
"Whatever view may be taken of the various options, the issue of remuneration [of higher education employees]should not be looked at in isolation. Significant changes will be needed as higher education responds to changing needs and opportunities. To the extent that higher levels of remuneration may be justified, there is the question of how institutions can meet the cost".
This "question" is one that can be answered only by the Government, so the reply in the debate of the noble Baroness, Lady Blackstone, would appear not to be absolutely accurate.
However, the noble Baroness has since slightly modified the Government's position, as the following exchange on 31st January 2000 demonstrates. I said:
"My Lords, in the past the Minister has been careful to say that the Bett report is not a matter for Government, but for higher education. Do the Government not realise that the key to the universities' ability to consider freely their response to the Bett report has a great deal to do with the way in which the Government fund higher education?".
The Minister replied:
"My Lords, I readily accept what the noble Baroness has just said; that university pay—not only of academics but of all staff in universities—is a large part of universities' expenditure and, of course, the overall level of university funding will have some impact on what is paid to staff. However, as I have already said, the Government have substantially increased the funding available to higher education institutions. They will be looking in the next spending review' at public expenditure in that area, as in many others. The Bett committee will be a factor in that spending review, but of course I cannot anticipate the outcome".—[Official Report, 31/1/00: cols. 3–4.]
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The spending review has come and gone and pay remains unresolved in the higher education sector.
Furthermore, the noble Baroness's assertion that,
"the Government have substantially increased the funding available to higher education institutions",
is not factually accurate if the Government's own preferred measure of spending as a proportion of GDP is used. The DfEE figures show that the Government would need to spend an extra £5.9 billion during the current Parliament simply to maintain the level of funding, as a percentage of GDP, set by the previous government.
The Government claim to have increased real terms funding to higher education by 11 per cent over the four years up to 2001–02. I take issue with that. Indeed, I believe that in another place the Liberal Democrats have done so too. Using the Government's preferred measurement of spending on higher education, including the science budget, as a proportion of GDP, and referring in particular to a parliamentary Written Answer, spending as a proportion of GDP between 1992 and 1997 was up 1.27 per cent. whereas between 1997 and 2000 it was up only 1.14 per cent. Furthermore, what modest increases there have been have been more than absorbed by the widening of access. So there is not much scope left for addressing the problems of university pay and conditions.
In a debate on 14th June 2000, my noble friend Lord Baker of Dorking quoted Robert Stevens, then the Master of Pembroke College, Oxford. My noble friend went on to say that,
"the Government have received three reports. The latest is the one Commissioned earlier this year by the Committee of Vice-Chancellors and Principals, the Higher Education Funding Council and the SCP. They all say the same thing; that the quality of education in our universities is declining because of their inability to recruit and retain staff. They say that the infrastructure of our research base is deteriorating. They say that more than one-third of academics in this country are over the age of 50. Young graduates are not being attracted into the profession in the numbers that are required".—[Official Report, 14/6/00; col. 1641.]
Low morale, poor recruitment and retention policies, excessive bureaucracy and too much interference by Ministers need to be addressed. I was impressed, as I always am, by the noble Lord, Lord Morgan. He was right to say that there are lessons to be learnt from history. In a confessional mode I would agree that members of the previous government as well as of the present Government need to learn those lessons. There is a way forward that would enhance academic freedom. Whatever criticisms are made of Conservative policies for universities, the truth is that the universities would welcome being set free— from control and interference, free from bureaucracy and free to manage their own affairs.
Endowment is a way forward and our plans for student finance together with the way in which tax relief will work mean that many students will pay less over time and they will not be obliged to start repayments until earnings are at £20,000 at current prices.
My noble friend Lord Norton should be congratulated. He is of the higher education sector and brings great experience and expertise to bear on our

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debates about higher education. I want to thank him most warmly for the opportunity to debate this important subject today.
I end with this comment. Academically free institutions will restore professionalism and morale. That is a very real challenge, but one worth the pursuit.
7.6 p.m.
Lord Davies of Oldham: My Lords, I join other noble Lords in expressing thanks to the noble Lord, Lord Norton, for initiating this important debate. He identified the issues in a characteristically precise way and stayed very much within the framework of the subject, concentrating on the issue of the burden of bureaucracy on universities.
The noble Lord also asked some quite specific questions. I am not sure that I am entirely equipped to answer them, except to say, first, that I recognise the quote from the chairman of the Committee of Vice-Chancellors and Principals, who said that our system is the most scrutinised in the advanced world. I would not worry about that epithet if scrutiny was reflected in terms of us also having a higher education system that produced best value for our people and was of a high standard as a whole.
I maintain that, despite some aspects of jeremiad identified in the debate, we have much to be proud of in our universities. We are still attracting students in very large numbers—from abroad, with their clear element of choice, and students from this country— and our position with regard to research is second only to the United States, with its vastly greater resources. Therefore, in a debate such as this, we must be careful not to produce a false perspective of just what is achieved in universities.
The noble Lord asked—it became slightly metaphysical as far as I was concerned—about when light would become lighter in terms of the touch of bureaucracy. During the course of my speech I hope to be able to identify to the noble Lord developments in the process whereby control over quality in higher education is to be exercised from now on. That will certainly be lighter—perhaps to the extent of 40 per cent in relation to the bureaucratic burdens in the assessment of teaching quality. I shall seek to identify the reforms that are being proposed to reach that objective. Whether that will be light enough for the noble Lord, I very much doubt as I recognise the position that he adopts. Nevertheless, I hope to indicate substantial progress and a recognition that one of the concerns of higher education has certainly been about the over-bureaucratic nature of the accountability exercise.
There has not been a speaker in the debate who has not recognised the importance of our higher education system being fully accountable to our people. But how do we achieve that in the best and most economic way? The noble Baroness, Lady Warwick, welcomed aspects of the lighter touch that have been announced by my right honourable friend the Secretary of State. He has today identified how that lighter touch is to be
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employed. I shall go into that in some detail in a moment. However, I want to reassure her that it is certainly the case that we do not expect the hard-won additional resources advanced for higher education to be lost in red tape. Perhaps I may say, first, that those hard-won resources are real, despite the rather disparaging comments made by the noble Baroness, Lady Blatch, about the resources presently available. I hope that she will recognise and not contend the fact that sufficient resources have been identified. Indeed, for the first time in over a decade, the real unit of resource will be increased in higher education, irrespective of the number of students on roll. That reverses a process which previous administrations had set in train—indeed, had almost set in stone—over a substantial period of time. Indeed, for year after year, that was the case. For the first time, we shall see that position reversed.
Baroness Blatch: My Lords, I am grateful to the noble Lord for giving way. Does he agree that I was referring to this Parliament? Resources will not be increased during the lifetime of this Parliament.
Lord Davies of Oldham: My Lords, the first tranche will come into effect in the autumn of this year. I do not know whether that will take place in this Parliament or the next. I merely testify to the fact that all resources are hard won from the Treasury—my noble friend attested to that—but, nevertheless, they are now in place.
The noble Earl, Lord Russell, raised a number of points, not least the fact that remuneration levels for teachers in higher education are such that it is possible that schools might raid higher education institutions for their qualified staff. I do not think that the noble Earl quoted from a government agency with regard to recruitment, but rather from a private agency. Of course we would not condone a situation in which schools raided universities if they were short of qualified staff. Nevertheless, we all recognise that a free market obtains. If a private organisation thinks that it can entice people away from the delights of higher education into the different delights of the school classroom, then that is for individuals to judge.
Baroness Sharp of Guildford: My Lords, does the noble Lord accept that the starting pay of a teacher in a primary school, after studying for a three-year degree and gaining postgraduate experience, is now higher than that of someone starting as a young, temporary lecturer in a university? Starting pay at the age of 26 or 27 is around £18,000 a year.
Lord Davies of Oldham: My Lords, I do not think that I should enter a debate on relative levels of pay when we are debating the question of bureaucracy as it affects higher education. However, perhaps I may say that I would not in any way condemn the enhanced position of primary school teachers. I believe that that development is long overdue. As the noble Earl, Lord Russell, mentioned, if we are going to discuss this matter in terms of the philosophy of Jean-Jacques

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Rousseau and his emphasis on education, then we should recall how my right honourable friend the Prime Minister stressed: "Education, education, education". I take that to mean that education is to be emphasised at the primary level, at secondary level and in further and higher education.
Of course we recognise that there is a problem in higher education pay. That is why specific resources have been identified to address the matter. However, that does not meet the contention put forward by the noble Baroness, Lady Blatch; namely, that the Government should in some way suspend the negotiating position of employers in higher education and implement £380 million in one year, a demand which I believe many would regard as, if not unrealistic, at least far beyond the bounds of the imagination of the previous administration. Our steps towards enhancing pay in higher education are admittedly limited, but they have identified specific sums of money—hard won from the Treasury, as I have said—in the public spending round, to be directed towards tackling this important issue.
However, that is not the issue primarily addressed in our debate. We are discussing the burden of bureaucracy in higher education. The Government are alive to the concerns over unnecessary bureaucracy being imposed on our universities. Following the publication of a report on the accountability burden in higher education by the English Funding Council in August 2000, a forum has been established to see how we can achieve a reduction in that bureaucracy. The forum's membership includes representatives of the relevant government departments, HE institutions, the Quality Assurance Agency, the funding councils and the research councils.
A number of practical methods and tools have been identified, such as enhanced arrangements for collecting and sharing student information, leading to an integrated student information system for the whole sector. The English Funding Council has already altered and streamlined its own bidding processes, using conditional grants. I believe that the noble Baroness, Lady Sharp, identified the issue of wasteful bidding. That point has been taken. The method of using conditional grants means that HE institutions will know where they stand as regards their funding and thus avoid bureaucratic and wasteful bidding arrangements. Those have been wasteful of both time and resources, as well as introducing a measure of unpredictability. Good practice guidance for all parties is being sponsored by the funding council with encouragement from the Treasury and from the National Audit Office, along with the support of the Better Regulation Unit in the Cabinet Office.
But the greatest concerns expressed in our debate have turned on the burden on universities and colleges of the reviews to be carried out by the Quality Assurance Agency on the standards of teaching. I understand the comments made by my noble friend Lord Longford as regards the value of the tutorial system. We know of its glories in the older universities. However, perhaps I may say to my noble friend that,
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while I would not begin to try to calculate when he attended one of the older universities, let me hazard the proposition that it is quite possible that we are now educating some 10 times the number of students at the higher education level in comparison with the time when he was a student.
In the course of her remarks, the noble Baroness, Lady Sharp, identified another matter in this regard, one that has occasioned significant change in the nature of the process of higher education. It is a fact that it would be extraordinarily short-sighted of us not to see the potential advantages of new technology in enhancing university education. Technology is already employed in a whole range of subjects because it offers opportunities to achieve more effective teaching. By that I do not intend to imply that I am concerned solely with the economics of teaching, but rather that resources saved in certain areas of teaching can then be made available to reinforce those areas which are perhaps more deserving of staff time.
I shall return to the matter of the Quality Assurance Agency. There is no doubt that the system in place during most of the 1990s was excessively bureaucratic. I believe the noble Baroness, Lady Blatch, was generous enough to indicate that the system was not created in May 1997, but that it was inherited by the present administration. On taking office, we said that systems should be put in place to ensure a good standard of education for students, but with the minimum of bureaucracy. Over the past few years, the Quality Assurance Agency has consulted widely on a new, streamlined, single system of academic review. The system would rely heavily on self-evaluations by institutions and would draw on the documentation already in use by institutions for their own internal quality assurance processes. It would take account of the previous track record to determine the intensity of review activity, thus ensuring that intervention will be in inverse proportion to success. That is a principle to which I believe we should all subscribe.
The Quality Assurance Agency is determined to schedule reviews to coincide with the needs and preferences of institutions and of all the professional bodies which will be accrediting courses in universities. This has involved a substantial degree of consultation across the sector, a point to which my noble friend Lady Warwick referred.
The new method of assessment is in place; it began in Scotland last autumn. My noble friend the Minister of State made clear on a number of occasions that we would be watching closely how the new system developed in Scotland to ensure that the twin objectives that I mentioned earlier—robust assessment along with streamlined processes—come about.
There are already encouraging signs that the changes will reap the desired benefits. Much less information is required for the QAA reviewers to pore over. The use of e-mail and electronic documents is being encouraged and, because the time spent in institutions by reviewers is much less, the much parodied "base room", which has come in for so much

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criticism, is no longer needed. Perhaps that reflects the concept of the lighter touch to which the noble Lord referred.
We were aware, however, that there continued to be a major debate in the sector as to whether the burden, albeit lighter, was still too much. In the responses that we have had it has been quite clear that university departments—particularly those institutions which did not always have the highest status in the sector— may want the opportunity to demonstrate their excellence. Therefore, although the lighter touch enables departments which have reached the required standard not to be subject to the process, we are still leaving open the possibility that a new head—who perhaps wants to establish the worth of his department—may, if he or she so wishes, submit to the process.
Otherwise, we are reducing significantly the weight of work on individual departments. In other words, the Government have concluded that the arguments for a reduction in bureaucracy are compelling. That is why the Secretary of State invited the English Funding Council to discuss with the Quality Assurance Agency and the representative bodies of the universities ways of reducing the load still further. He has paid tribute to the work that has been done by the Quality Assurance Agency and he has ensured that change will take place.
The Government are setting out to make sure that in the future we can look forward to the average length of reviews being reduced by both the funding council and the QAA. The aim is to secure a reduction of 40 per cent or even more in the volume of review activity compared with existing arrangements. This was part of the announcement made today.
We believe that the new arrangements will ensure that high quality provision continues to be identified and that improvements are made while, at the same time, freeing departments of established high quality from the burden of assessment. This is not an elitist approach or one that will work only in the interests of certain universities. High quality departments exist throughout our diverse higher education system. They will all have the opportunity to benefit from the lighter touch where quality is already clearly identified and can be guaranteed.
We are confident that the invitation to the funding council, Universities UK and SCOP to pursue their discussions, coupled with the changes already in the pipeline, will result in significantly reducing the bureaucratic burden.
Lord Morgan: My Lords, I am grateful to the Minister for his explanation. He has described very clearly the reduction in bureaucracy within individual reviews. Surely a greater reduction would come from fewer reviews. Another problem is that not only are there lots and lots of reviews but that the system is rather like ripping up a road for water, electricity and gas repairs at different times. Could the reviews not be synchronised.
Lord Davies of Oldham: My Lords, that is the purpose of the extended consultation between the bodies. There would be many merits in obtaining greater co-ordination in that respect. I take on board the point made by my noble friend.
My noble friend Lord Parekh asked whether departments which scored 24 out of 24 were displaying angelic qualities not likely to be found in higher education. I merely point out that the top mark is a product of six different elements of calculation. What we are really seeing is more the component concepts which lead up to an evaluation. It is similar to the situation of a student obtaining a degree. No one suggests that every "first" is of exactly the same quality, but it is a clear mark of excellence at a high level. In that sense, 24 out of 24 is not an indication of absolute perfection; it is more an indication of the excellence of the department concerned.
Comment has also been made today about the burden of the research assessment exercise. We are hoping to reduce the burden on institutions through a range of measures, including the enhanced use of IT for the making of returns, greater use of peer review panels, and greater consistency in the approach to assessment.
In conclusion, the Government believe strongly in ensuring that the quality of higher education, both in teaching and in research, is universally high. Of course we must always strive to get better; of course we all recognise the pressures upon the system from the wider population. The number of students coming forward into our universities is increasing and therefore we should expect increased pressure from outside. After all, universities play an increasingly significant role in relation to our economy and to the social life of our nation, and none of us should shy away from demands for proper accountability.
We want to see poor quality identified and addressed. We owe that to the students we seek to educate. That requires a robust system which focuses the greatest attention where there is the greatest need and the greatest failing. It also means removing unnecessary bureaucracy and burden which would distract hard-working academics and administrative staff from their main jobs.
However, I say to the noble Earl, Lord Russell, that we should not pray in aid those particular demands upon both academic and administrative staff at the point when the scrutiny is taking place. There is not a sector of our education system which cannot bear testimony to the inevitable strains placed upon already hard-working staff at the point when the inspection team is about to arrive. That is natural in the circumstances.
We have encouraged streamlined approaches which rely on sound internal quality assurance processes and a light touch wherever possible. The plans that we have announced this week will reduce further the burden of bureaucracy on universities while maintaining a robust and firm control over poor quality teaching and research. I may not have entirely convinced the noble

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Lord of the degree of the light touch. I am sure that he will recognise, however, that it is a substantial step forward.
Lord Norton of Louth: My Lords, I am extremely grateful to those who have taken part in the debate. I am conscious that, technically, it could go on for another half hour but I shall confine my comments to a few brief points. A very clear message has come across in the debate. There has been agreement among speakers on all sides of the House and I am grateful for their contributions.
I am grateful to the Minister for responding to the debate. I heard what he said. He has outlined the way in which the burden will be reduced and has stressed the lighter touch. I welcome that. However, I would make two brief points in response. Saying that a burden will be smaller does not stop it being a burden. That is especially a problem when the burden itself derives from a system which may be inherently flawed. One should be looking at alternative systems rather than simply seeking to slim down an existing one. My second point relates to that. The Minister did not quite answer my final, fundamental question of what are the Government doing to look holistically at the problems facing our universities and at alternative ways of achieving the goals to which we subscribe.
Throughout the debate it was clear that there was agreement as to the nature of the problem. The existing regime is burdensome; it is not cost effective; it is counter-productive. The noble Lord, Lord Davies, is right. We have a great deal to be proud of in higher education in this country. My fear is that we are jeopardising that by imposing too much on our universities.
As I said in my opening comments, the busier one is with teaching and research, the greater the burden that is imposed by the present regime. I speak with feeling as someone who teaches several courses. I have taught for 25 years in higher education, and I like to think that during that time my teaching has improved. I am still looking at ways to improve it, including through e-technology, which was referred to by the noble Lord, Lord Davies. But if it has got better, it is despite, not because of, the present accountability regime. The regime is burdensome. Most importantly, it is dispiriting; and it is taking a serious toll in the university world. We need to look at the regime in a different way, not simply slim it down.
The best judges of teaching quality are those who are being taught. The best judges of research are those who choose to read the books and the articles, not those who are told that they must do so. There are far more efficient ways of ensuring quality. We need to bring a fresh and novel approach to the subject. The present situation is not sustainable.
My Motion—of necessity—calls for Papers. It will be clear from what I have said that the last thing I want is more papers. This is not the first debate I have initiated in which I have said that. I was conscious when I tabled the Motion that I was calling for papers when the whole thrust of my intention was to get rid of
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a whole raft of them. I was also hoping that the Minister might throw away his papers and say what he actually thinks. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

House of Lords Financial Powers Bill [H.L.]
7.32 p.m.
Lord Saatchi: My Lords, I beg to move that this Bill be now read a second time.
First, I should like to say what a privilege it is to have the opportunity to introduce this Bill into your Lordships' House. I express my gratitude to noble Lords for attending the debate. I should also like to thank the usual channels for giving time for this Second Reading debate.
I thank also many noble Lords on all sides of the House who have given my noble friend Lord Kingsland and I the benefit of their experience and wise counsel during our deliberations on the Bill. Although it is presented from the Opposition Front Bench, my noble friend and I have sought above all a cross-party approach, not a party political one.
The Bill's objective is simple. It seeks to improve the quality of financial legislation by applying greater parliamentary scrutiny to it, so that tax is simpler and more transparent. It seeks to do this by bringing about a redefinition of a money Bill for the purposes of the 1911 Parliament Act so that the present blanket disqualification on House of Lords involvement in public finance is partly lifted.
It may be helpful if I begin by explaining the need for the Bill and then describe the cure that it might provide. The Treasury Select Committee in another place explains in its latest report, published in January, that the passage of Finance Bills through Parliament affords insufficient opportunities for scrutiny of complex measures. The noble Lord, Lord Barnett, a former Chief Secretary to the Treasury, told the Commons committee:
"The Finance Bill and the way it is examined by Parliament is totally inadequate, so you get very bad legislation on the statute book and there is no opportunity for the House of Lords or any Select Committee to look at it from a purely technical point of view".
The Select Committee concluded:
"We are dissatisfied with procedure on the Finance Bill, which lets badly drafted and insufficiently tested tax legislation onto the statute book every year".
The difficulty of giving a detailed Finance Bill proper scrutiny in Parliament is reflected in widespread concern about the complexity of the resulting tax system. The Institute of Chartered Accountants states:
"The Finance Act 2000 ran to a staggering 624 pages. Much of this legislation was barely debated in its progress through Parliament. Many of the provisions became law without either a thorough review or the time for second thoughts or worthwhile amendments".

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The ICA summed up with the statement:
"The tax system has spun out of democratic control".
No citizen, however intelligent, can match the massed ranks of No. 10, No. 11 and the Treasury: one man against the legions of Rome.
That is the need, but what is the cure? Someone needs to carry the torch for transparency, simplicity and openness in the tax system—but who? It should, of course, be Parliament, but one part of Parliament is disabled in this area; namely, your Lordships' House. As a result, the Bill that should receive the greatest parliamentary scrutiny actually receives the least. Let us consider the Finance Bill 2000, which has the official status of being the longest-ever Finance Bill. The length of debate in the House of Commons was 101 hours and 39 minutes over 93 days. Now let us consider the Finance Bill 2000 in this House. The length of debate was two hours and 29 minutes, on a Friday morning in July on the last day of the parliamentary Session.
Why is that the case? It stems from a decision by this House from which much of our political history takes its origin. If noble Lords will forgive me, perhaps I may briefly revisit the events of November 1909 when this House rejected Lloyd George's "People's Budget". The Government then secured the passage of the Parliament Act, the terms of which enabled the House of Commons to enact a money Bill within a month of its passage, notwithstanding any objections raised in this House.
Notable aspects of this history were recently addressed in this House in a splendid duet of speeches by two of the country's most distinguished Law Lords, the former Solicitor-General, the noble and learned Lord, Lord Simon of Glaisdale—whom I am delighted to see in his place—and the former Master of the Rolls, the noble and learned Lord, Lord Donaldson. They reminded us, first, that examination of the recitals to the 1911 Act show that it was intended only as an interim step. The Preamble states:
"Whereas it is intended to substitute for the House of Lords, as it at present exists, a second chamber constituted on a popular instead of a hereditary basis, but such substitution cannot be immediately brought into operation … It is expedient to make such provision as in this Act appears for restricting the existing powers of the House of Lords".
The noble and learned Lord, Lord Donaldson, said that these recitals showed that the Parliament Act was,
"an interim measure … pending a constitutional change".
The 1911 Act, he says, contained,
"the agreed terms of an armistice".
The second relevant aspect of the history of the Parliament Act 1911 was the motivation behind it. The record seems to show that its raison d'être was the hereditary nature of the upper House. Commending the Parliament Bill to the House of Commons on its Second Reading, the then Liberal Prime Minister, Mr Asquith, said of the hereditary principle,
"Let it not be our master. So say we. It is because it has been our master … because it enslaves and fetters the free action of this House, that we have put these proposals before the House and we mean to carry them into law".
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Winston Churchill, campaigning for the Parliament Bill around the country, asked:
"Why should their children govern our children? Why should the sons and the grandsons and the great grandsons have legislative functions?".
He hoped that the Bill would be,
"fatal to the hereditary House of Lords".
But let us consider how much has changed since then. The House of Lords Act 1999 removed the hereditary Peers. The noble Baroness, Lady Jay, the Leader of the House, said that this reformed House is now,
"more democratic, more legitimate. more authoritative".
Speaking during the passage of the House of Lords Bill, the noble and learned Lord, Lord Williams of Mostyn, the Attorney-General, said that the reformed House of Lords would be,
"more democratic, more legitimate…and better equipped to do its proper job of scrutinising legislation and holding the executive to account".—[Official Report, 20/4/99; col. 1078.]
Membership of your Lordships' House now includes seven former Chancellors of the Exchequer, seven former Paymasters General and nine former Chief Secretaries to the Treasury, as well as many professors of economics, academics and men of business. Soon they may be joined by a number of elected Peers under the Royal Commission's recent proposals.
In its report Strengthening Parliament the Norton Commission, headed by my noble friend Lord Norton of Louth, said:
"We see no reason why the House of Lords, given the expertise of some of its Members, should not monitor the impact of Bills falling in the economic sector".
The Bill before the House this evening provides a simple mechanism to enable that to happen. It does so by making a distinction between the principles of taxation—properly the preserve of the House of Commons alone—and the mechanics of administration, on which the House of Lords would be allowed to express a view, subject always to the veto of the House of Commons. That is described in a memorandum on proposed parliamentary procedure, which I hope all speakers in tonight's debate have received from both my noble friend Lord Kingsland and myself.
It is important to say that the distinction described in the clauses of this short Bill is one that has been recommended by the Institute of Chartered Accountants, by two Select Committees of the House of Commons, and by my noble and learned friend Lord Howe of Aberavon. Therefore, nothing in the Bill challenges the supremacy of the House of Commons. Nothing in it denies, as the noble and learned Lord, Lord Simon of Glaisdale, says,
"that the vouchsafing of fiscal authority to the other place is a necessary conclusion".
Nothing in the Bill will delay by one day the process of revenue raising by the government of the day. However, it would allow Parliament—all of

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Parliament—to provide a much needed disincentive to tax complexity. and act as a spur to a simpler and more transparent tax system.
Your Lordships' House has often shown that it is a good, technical revising Chamber, sometimes asking the Government to think again and often getting better legislation as a result. Your Lordships' House has the expertise and the authority to help the House of Commons in the awesome task of holding governments to account on the public finances. What it lacks is the power—the power to help—which is what this Bill would provide.
Times have changed. So it is time to say, as the noble and learned Lord, Lord Simon of Glaisdale, said in the 1950s, "Change is our ally". I hope that the Minister will follow tonight the injunction expressed last week by the noble and learned Lord the Attorney-General:
"You are put in this life to question aren't you? You have to wonder why things should remain the same. Often there's no reason why they should".
I commend the Bill to the House.
Moved, That the Bill be now read a second time. —(Lord Saatchi.)
7.43 p.m.
Baroness Noakes: My Lords, I rise to support the Bill introduced by my noble friend Lord Saatchi. I should say, first, that I am no expert on the constitution and can offer no insights there. I speak as a chartered accountant and, indeed, declare an interest as a member of the council of the Institute of Chartered Accountants.
Chartered accountants have had major concerns about the quality of tax legislation for some time. As we heard from my noble friend Lord Saatchi, the Institute of Chartered Accountants issued a Tax Manifesto last year which claimed that our tax system had spun out of democratic control. That may seem fanciful language, but it reflected a genuine belief that the existing parliamentary scrutiny processes are simply not effective enough in the face of the increasing volume and complexity of tax legislation.
Chartered accountants fully support the involvement of the House of Lords in tax legislation because they see this as a way of getting better tax law. Some cynics may claim that accountants have an interest in complex tax legislation in order to increase their usefulness, and hence their fees. However, I can assure noble Lords that chartered accountants have no interest whatever in badly drafted legislation, ineffective legislation, or legislation that has perverse consequences. Good, workable and effective legislation is at the heart of what this Bill is seeking to achieve. If we can also achieve a simpler tax system, that would be an added bonus. I believe that the involvement of your Lordships' House would help to turn the tide of complexity that successive Finance Bills have introduced.
In the year that I qualified as a chartered accountant, 1973, the Finance Act ran to 59 sections, 22 schedules, and took up 116 pages. I thought then that that was pretty onerous, so I opted for the easy life
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and chose not to specialise in taxation. Subsequent volumes of tax legislation vindicated that decision; for example, 10 years ago, the relatively modest Finance Act 1990 had 133 sections, 19 schedules and ran to 191 pages. As we heard, last year's monster effort ran to 624 pages, encompassing 157 sections and 40 schedules.
I do not believe that the time available for scrutiny in another place has kept pace with that volume, if it has increased at all. Indeed, I understand that the poor quality of draft tax legislation has contributed to the problem of scrutiny, with an increasing volume of technical amendments needed to make sense of the Bill taking up the time of the Committee stage in another place.
Bodies such as the Institute of Chartered Accountants spend a lot of time commenting on tax proposals, including the provisions of Finance Bills. The vast majority of those comments are designed to improve the effectiveness of the legislation and to reflect the practical concerns of taxpayers. Other professional bodies, and many trade associations, do the same. It is a source of increasing frustration to those bodies that their voices are not heard. The Government can, and do, ignore representations. They do not even need to reply to them. With little available time in the other place, these carefully thought out contributions often seem to vanish into the ether.
Perhaps I may illustrate the frustrations of the current process and the benefits that would follow from this Bill. Schedule 12 to the Finance Act 2000 contains eight pages entitled, "Provision of Services Through an Intermediary". Noble Lords may be more familiar with this as the infamous IR35 proposals—the attack on self-employed contractors sneaked in at the bottom of a huge pile of Inland Revenue press releases issued with the 1999 Budget. It was clear to many from the language of the press release that this was not a subject on which a lot of listening would happen. 'The Inland Revenue issued a Summary of Issues paper after the Budget. Although this was not billed as a consultation document, it did, nevertheless, result in a large volume of submissions from the Institute of Chartered Accountants and many other professional bodies, including the lead trade body on the issue, the Professional Contractors Group. There were indeed some changes made when revised proposals were issued later in 1999, reflecting some, but far from all, of those submissions. Further representations were then made.
Then the Finance Bill was published last year, containing what is now Schedule 12. There were still many problems perceived by those commenting on the provisions, but very little change was made during the Bill's passage. Some of those concerns related to the consistency of the proposed provisions with European legislation, but those points were not taken into consideration. As noble Lords may be aware, the Professional Contractors Group has been forced to take the very extreme step of seeking a judicial review

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of this legislation in order to get its views heard. As I understand it, that case is before the High Court this week.
If this Bill becomes law, your Lordships' House will have a great opportunity to make a positive contribution; for example, a Select Committee of this House could take evidence from many sources, including the Government. At the very least, that would give a proper forum for the views of professional bodies and trade bodies—the taxpayers' concerns would be heard. I have every confidence that such a committee could handle the complex tax issues, as well as those relating to European law. Such a committee could have helped to ensure that the intent behind IR35 resulted in effective legislation.
IR35 is a relatively simple example of how controversial tax legislation is pushed through. There are many much more complex examples, such as the ongoing saga of the Government's attempts to change the way in which double tax relief is applied, but I shall not weary noble Lords this evening with a detailed explanation of that. Suffice to say that the skills of dispassionate scrutiny in your Lordships' House that are much admired could be deployed to great effect in such cases in the interests of simple and effective tax legislation.
I am sure that all who deal with tax legislation outside the Government will heartily support the Bill. I hope that the Government may also reflect that it is in their interests also to harness the undoubted skills of this House in the cause of better and simpler tax legislation.
7.51 p.m.
Lord Simon of Glaisdale: My Lords, it is a privilege to follow the noble Baroness. I have only intermittently been concerned with the complexities and difficulties of our fiscal code and, intensively, only over a short time, whereas the noble Baroness has had to deal with it day in and day out.
I am glad to support the Bill which has been explained so clearly by the noble Lord, Lord Saatchi. Your Lordships will remember a famous inscription on the tomb of Sir Christopher Wren in St Paul's Cathedral. It is written in Latin but I know that your Lordships despise the way that lawyers pronounce Latin. Therefore, I shall translate it freely. It states, "If you seek my monument, look at what surrounds you".
Therefore, if we seek a reason for the Bill, we need not look far. Recently there have been two measures which throw great light on that. The first is the Capital Allowances Bill. That was the first measure of the rewrite of the fiscal code. It is massive and concerns only a small part of the income tax code. Indeed, the Explanatory Notes are barely susceptible of being lifted by someone of my age. We would not need the fiscal rewrite, which we owe primarily to the noble and learned Lord, Lord Howe of Aberavon, if there had been proper scrutiny of the measures that are now rewritten.
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The second monument, which is almost as massive—in fact, it is more massive—is the most recent Finance Act, the Finance Act 2000. It has 613 pages and 157 sections. One might note that capital allowances occupy only 11 of those 157 sections. It has 40 schedules. If your Lordships think that that is a bit meagre, I hasten to add that many of the schedules contain a number of parts. Schedule 6, for example, contains no fewer than 14 parts. Schedule 14 contains no fewer than nine parts. I say in passing, as I shall come back to it, that that was a money Bill, as most of the recent Finance Acts have been.
As I say, we would not need a rewrite if the measures had been properly scrutinised in the first place. That is not only the job of the House of Commons, which in fact performs it quite indifferently, but also of your Lordships' House which has no fewer than five former Chancellors—if I have counted correctly, but I rather think that the noble Lord calculated that there were more so I probably have not thought of them all— three former Chief Secretaries to the Treasury and a former Permanent Secretary. Above all, your Lordships' House, as is generally agreed, has at least this primary duty; namely, to scrutinise legislation. If ever there was a case for scrutiny, it concerns the fiscal code. The noble Lord's Bill has done that skilfully. He has distinguished between, on the one hand, the type and incidence of the taxation, which is entirely a matter for the other place, and, on the other hand, what may be loosely called tax management and the minutiae of the fiscal code.
The fact that those were amalgamated goes back to the "People's Budget" of 1909 which contained so much more than purely fiscal measures. In particular, it was designed to pave the way for the taxation of land values and, ultimately, the nationalisation of land. I am afraid that I am old enough to remember the Liberal land song, "God gave the land to the people". It was that that prompted the skilful manoeuvring and tactical adroitness of Lloyd George who carried out what was more than a fiscal measure and dared the House of Lords to reject it, which, very stupidly, it did.
So much for tax management. But even there the Bill ultimately surrenders the last word to the other place—I think quite rightly. Nowhere does the Bill do more than entitle your Lordships to scrutinise. Any amendment is subject to the discretion of the other place. We must ask why there is that distinction between the incidence of tax and the type of tax which is a matter for the House of elected representatives and not primarily—not except by way of scrutiny and suggestion—a matter for the House of elite representatives. The reason is that through their representatives the people can influence the way that the Government's proposals for taxation shall be implemented; in other words, how much of their own money shall be taken in providing services to themselves. The elected representatives being closer to the electorate, although not very close in the latter part of a Parliament, they are the people to be influenced. One should not exaggerate that because of the

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executive dominance in another place and the many restrictions on the fiscal initiatives of private Members of another place.
I said that I would return to the Finance Act 2000. I wish to draw attention to Schedule 39. That schedule amends the Taxes Management Act 1970. That Act was not a money Bill. It was given a Second Reading in your Lordships' House and then went to the Joint Select Committee on Consolidation Bills. But the amendment was to the Finance Act 2000; it was a money Bill. I ask the Minister who will reply to the debate this question: why should not amendment of the 1970 Act be scrutinised in the way that the 1970 Act was itself scrutinised by your Lordships' House and the Joint Select Committee? That provision is now hidden away towards the end of a money Bill.
I hope that the Minister will respond to the debate and will not show himself to be one of the forces of conservatism.
8.3 p.m.
Lord Blackwell: My Lords, it gives me great pleasure to support my noble friend Lord Saatchi on this Second Reading, as on so many issues. I go further than my noble friend. The House would still have restricted powers with respect to some aspects of money Bills, rates and incidence of taxation on individuals. I see no reason to have any distinction or limitation.
My arguments come under two headings: practicalities; and constitutional issues. On the practicalities, the arguments have been expressed well by my noble friend Lord Saatchi and the noble and learned Lord, Lord Simon. This House contains a wealth of talent. I shall not compete with them in counting the number of former Chancellors and Permanent Secretaries in this House. My noble friend mentioned academics; and there are many noble Lords, such as my noble friend Lady Noakes, with experience in accountancy and financial services. Many noble Lords have practical experience in business. I shall return to that point. So much of the tax legislation falls on the business community rather than on individuals. It is where the complexities and the need for scrutiny are most intense.
The point has also been made that another place has insufficient time to undertake adequate scrutiny. If this House were to be so engaged the time available for such scrutiny would be increased. It would also add to the quality of the scrutiny not only because of the experience of noble Lords but also because it would be possible for this House to do what it does so well: to bring in points of view from experts; and to consider amendments in a less party political atmosphere than in another place. Therefore there is opportunity for considered views from the accounting professions, the business community and others to be debated in a rational way in this Chamber in a manner that might not occur in another place.
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I have had the privilege of serving recently on the Joint Committee on tax simplification. The Joint Committee of both Houses worked well, albeit in a limited way. It provides one option for further involvement of this House although it is clearly not the only way. This House has opportunities for debates and has its own Committee stages of Bills.
One of the practical issues is the need to avoid delay. On other occasions, my noble friend Lord Saatchi has argued that there are many ways to avoid delay: for example, by having Sessions in parallel. Given the need to ensure that legislation is passed quickly, if this House has in all other respects full powers over financial legislation, I see no reason why we should not be prepared to concede that legislation in this area should not ping-pong backwards and forwards or be delayed from one Session to another. It would be reasonable to concede that amendments passed by this House might be overturned by another place without recourse to this House. The benefit of having such amendments tabled and considered would make it a worthwhile process even if we had no power, for obvious reasons, to delay Budget matters. The practical arguments come down clearly in favour of the benefits of engaging the expertise and the time of this House in that process.
I turn to the constitutional arguments. Many of those arguments—they relate to the 1911 Act—go back to the popular cry around the time of the American revolution of, "No tax without representation": that it was solely the people, through their representatives, who should levy taxes on themselves. But matters have moved on since those days. In recent years, the House of Lords has demonstrated that it can be the Chamber which defends minorities and minority interests against what some may say at times has become an elective dictatorship in another place. It is true that a government in another place has a mandate and its business must get through. However, one of the dangers of a large majority in another place is that the interests of minorities do not always receive proper attention. If they so choose, an autocratic government can use their majority to act in an autocratic fashion.
The notion of popular scrutiny by the representatives of the people which underlies the notion of no taxation without representation can no longer be applied to the way in which legislation often passes through the other place. The House of Lords can make the Government think again. In that sense, it can be a defender of minority interests, in particular with regard to financial matters—for example, when a government seek to impose taxes which appear to have no victims but which damage many individuals who are unaware of the impact of the laws and taxation. The legislation that imposed taxation on pensions is a good example of that and it has been cited many times in the House. Taxes have been imposed on many other occasions on groups that have not necessarily had a voice. As in so many other areas, this Chamber could act as a guardian to ensure that those minority interests were heard.

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I come back to the business community. Where is the representation for the business community, on which so much taxation falls? This House has more active representatives of the business community than the other place. They are aware of the implications of certain tax changes and can draw them to the attention of the House, the Government and the people at large. It is a valuable aspect of this House that, because it has more representatives of the business community, it can more properly hold the Government to account for the implications of some of the taxation levied on that community.
At the time that the slogan, "No taxation without representation" was coined, the idea of public companies or joint stock companies was still fairly vague and dim. Two hundred years ago, taxation on companies effectively meant taxation on individuals, because they were the holders of the shares. Now that the ownership of companies is dispersed, taxation on business does not fall so much on individuals, except indirectly on those who ultimately benefit through pensions. It is difficult to argue that the representatives of the people are the best qualified to understand the implications for wealth creation and employment of taxation on business. Even though the elected representatives must have the final say on tax policy, there is an increasing argument for allowing people who can bring to bear expertise from other areas to play a role in scrutiny and proposing amendments.
The House of Lords does not need to wait for a change in status before carrying out that role. Some may say that the proposals are all very well, but we should wait until we have a reconstituted House of Lords. As I have made clear in the past, I do not believe that the democratic legitimacy of a second Chamber depends on it being elected. Many of the benefits that this House brings stem from having the kind of representatives that we have now. The mix of skills brought in through the current system can be of most value on issues such as tax policy.
Finally, I do not understand why tax and money Bills should be distinguished from any other legislation on which this House plays a valuable role in scrutinising and proposing amendments. Why should a Bill to impose taxes be any more vital to the rights of individuals than legislation on many other issues: human rights, on which this House has an important role; criminal law; the large amount of legislation on benefits, which affects the pecuniary interests of individuals just as much as tax; or education, which is rightly a priority and a key element of the rights of individuals to access opportunities in society? Why is it right for this House to opine on those issues, but not on tax law, on which in many ways it has particular expertise? I do not see any practical or constitutional reasons why this House should have different powers or rights on tax or money legislation than on other legislation, except on the specific issue of ensuring that the timetable for the consideration of amendments is kept to a minimum so that legislation can be passed through both Houses in an appropriately short period.
8.15 p.m.
Lord Norton of Louth: My Lords, it is a pleasure to follow my noble friend Lord Blackwell. Picking up on what he said, the underlying principle of the debate should be, "No taxation without proper scrutiny".
I welcome the Bill. In my brief comments I intend to focus on the intended consequences, as outlined by my noble friend Lord Saatchi. I have argued before that your Lordships' House should complement the first Chamber rather than compete with it. A complementary role ensures that the accountability of our present system, with the party in government being answerable to the electors, remains intact.
By virtue of its membership and its activity, this House fulfils a particularly valuable role in scrutinising legislation, policy proposals and the actions of the Government. The juxtaposition of membership and activity is important. This House enjoys legitimacy as a scrutinising Chamber, complementary to the first Chamber, but that legitimacy has to be earned. We cannot take it for granted. We have to work to prove our worth.
I believe that we have done so. Indeed, I believe that we presently do so more effectively than the other place. However, that fact constitutes no basis for complacency. As well as working hard to prove our worth, we have to find ways of reinforcing and extending the good work that we do. We need to build on what we have and what we do.
As my noble friend Lord Saatchi said, I had the honour to chair the Commission to Strengthen Parliament, set up by my party leader in 1999. The Commission reported in July last year. In our report, entitled Strengthening Parliament, we emphasised the valuable work done by this House and argued that it should play to its strengths. My noble friend has already touched on that. We stressed the committee work of your Lordships' House. We wanted more sessional committees. We noted that the House was especially well placed to address cross-cutting issues such as macro-economic policy. We also made the case for Bills to be referred for Select Committee scrutiny before their Committee stage on the Floor of the House.
I very much welcome the creation of the Joint Committee on Human Rights, the Economic Affairs Committee and the Constitution Committee, which I chair. I welcome the appointment of ad hoc committees on stem cell research and scientific experimentation on animals. I would like the House to build on those developments. The Bill is a means of achieving that. It moves in the direction signalled in Strengthening Parliament. It plays to the strengths of this House without challenging the supremacy of the first Chamber. Far from challenging the first Chamber, my noble friend's proposals should be of considerable benefit to the other place.
The Bill creates the conditions for subjecting a Bill—in this case the Finance Bill—to Select Committee scrutiny. I would like that to be a precedent for how we deal with other Bills. In this case, the scrutiny by Select Committee would be advisory and confined to the

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technical issues of tax administration. Any amendment made to the Finance Bill could be struck out by the Commons.
As various noble Lords have said, your Lordships' House has the expertise to make a Select Committee on the Finance Bill highly authoritative. Like the other place, your Lordships' House has some former Chancellors and Treasury Ministers among its members, as well as a number of economists. Unlike the other place, this House also has former governors and directors of the Bank of England, former Treasury mandarins and those who have served in positions in the International Monetary Fund and World Bank. The noble Lord, Lord Roll of Ipsden, has combined virtually all those positions.
This House has a wealth of talent—detached talent that is independent of party and talent that can be deployed to effect. One has only to look at the membership of the Economic Affairs Committee to see the expertise that is available. That committee by no means exhausts the expertise and experience available in this House.
The appointment of the Economic Affairs Committee and, earlier, that on the monetary policy of the Bank of England, also confirms that this House is qualified to undertake reviews of such matters. The principle underpinning committee scrutiny by this House in this sector has, in effect, been conceded. Therefore, we are discussing not so much a matter of principle but rather how to give effect to it.
My noble friend outlined how the provisions of the Bill would enable such scrutiny to be undertaken. I have no quarrels with how he described it. I believe that the measure before us is excellent. As I said, it plays to the strengths of this House, and I see no reason why it cannot be considered on its merits—that is, as a free-standing measure, independent of any wider debate about your Lordships' House.
At this stage was intending to anticipate, as I have done on previous occasions, what the response of the Minister might be. However, on this occasion I shall leave him to develop his speech and shall see whether he makes the point that I had in mind. If he does, I shall intervene then.
I conclude by saying that I consider this to be a constructive and highly desirable measure. It fits squarely with the proposals advanced by the Commission to Strengthen Parliament. During the debate at Second Reading of the Finance Bill last July, the Commission report not only attracted praise from my noble friend Lord Saatchi and the noble Lord, Lord Barnett; it was also described as excellent by the noble Lord, Lord McIntosh of Haringey. I hope that he will see this Bill in the same light.
8.21 p.m.
Lord Newby: My Lords, together with all other noble Lords who have spoken, we are extremely grateful to the noble Lord, Lord Saatchi, for bringing forward the Bill at this stage and also for the cross-party approach that he has adopted. We agree with him that transparency, simplicity and openness should
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be hallmarks of the tax system and of the way in which it is amended. We agree that those are not hallmarks either of the current tax system or the current system for changing it.
However, I disagree with a number of noble Lords in relation to the degree of democracy and legitimacy of this House. I do not believe that we on these Benches are proposing to move away from the principle of no taxation without representation. We are not even suggesting that when, in the fullness of time, the House of Lords is a wholly elected body, it should necessarily have parity with the House of Commons in terms of taxation measures. I say that not least for the purely practical reason that, were anyone to make such a suggestion, it would guarantee that such a reform would never take place. No House of Commons would ever agree to it. If we are to make any change in this respect, I believe that we must accept that as a raw reality of politics.
However, as the Bill proposes, it should be possible to separate from the type and levels of taxation discussion on the detailed rules relating to its implementation. I am sure that the Treasury would argue that, finally, everything contained in a Finance Bill relates to the level and burden of taxation.. However, frankly, I do not consider that argument to be sustainable. I believe that in what currently forms the Finance Bill it is possible to separate the clauses which deal essentially with levels of taxation from the detailed clauses which deal with its implementation.
If there are problems at the margin in that respect, one should remember that the House of Commons can vote against any amendments passed in your Lordships' House and, thus, they retain the last word. Therefore, I hope that we shall not be invited to accept an argument that such a proposal is too intellectually complicated to achieve.
Obviously, we agree that expertise in this House could and should be brought to bear on taxation matters. I also believe that there is a willingness among at least some of those who have that expertise to spend time and effort examining the tax system. The two remaining questions are: how best can we do it and how can we move from the current situation to one in which Parliament has agreed that we can do it.
Two basic approaches can be adopted in relation to how we might carry out such a change. One option is to have a Finance Bill in which some parts but not others are debated by your Lordships' House. The other approach is to introduce separate taxes management Bills. I believe that, of the two, marginally I prefer the second, not least because it would allow the core of the Finance Bill to go through its Commons stages more quickly than it does at present.
I believe that it should be possible to introduce a Finance Bill in the Commons more quickly because one would not be worried about its drafting. Indeed, much of the drafting cycle could continue almost without reference to the Budget date. The point at which a taxes management Bill is introduced may vary somewhat from year to year. Therefore. on balance, I would prefer to see us follow that route.

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I believe that the key question which concerns the noble Lord, Lord Saatchi, and those of us who are keen to see change is how we persuade Parliament that such a change should take place. Even if this Bill were to pass all its stages in this House before an election were called, I find it difficult to believe that our colleagues in another place would agree to it. Therefore, I suggest that the only realistic way in which we shall succeed in getting the change implemented is in the context of a broader discussion of the powers of the House of Lords. We were promised such a discussion early in the next Parliament under the remit of the Joint Committee of both Houses. It has been promised that that committee will consider the powers of your Lordships' House.
I believe that that would give us a legitimate basis and a legitimate forum in which to raise these issues and in which to obtain agreement. If we were successful, it would be much more difficult for the Government or our colleagues in another place, if they were so minded, to push this matter to one side.
Lord Norton of Louth: My Lords, perhaps the noble Lord will give way. I want to put forward an idea that has been prompted by what he said. I believe that there is a way of meeting the problem without necessarily going fully down that route. The other place is used to separating out Finance Bills. They send the more technical details to a Standing Committee while the broader political issues are dealt with in the Chamber. One solution may be for this House to accept that it would look only at matters sent to the Standing Committee in the other place. That would leave the other place, in effect, to decide what would be considered here. Therefore, that might be acceptable and we may not necessarily have to go down the route suggested by the noble Lord.
Lord Newby: My Lords, that is an extremely interesting option. However, as this debate is taking place, we are having new ideas. That demonstrates the fact that the ideas are not completely formed and that there is no consensus. We must build a consensus within Parliament if the proposal is to take place.
As other noble Lords are aware, we on these Benches do not object to the overall level of taxation. That is not our problem. However, we despair about the complexity of tax legislation. In our view, letting the House of Lords loose on the detail of tax legislation offers an opportunity to simplify and clarify the tax system. It should be a high priority in the next Parliament.
8.28 p.m.
Lord Kingsland: My Lords, I am sure that my noble friend Lord Saatchi, the noble Lord, Lord Newby, and, indeed, the noble Lord, Lord McIntosh of Haringey, will agree that, although we have had few speeches from the Back Benches, they have been of the highest quality.
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I refer, of course, to my noble friend Lady Noakes, who has had such a distinguished career in her own profession in the City and whose observations on tax matters carry great weight in your Lordships' House; to the noble and learned Lord, Lord Simon of Glaisdale, whose characteristically invigorating and apposite remarks reminded us once again that he is simply the finest constitutional lawyer in your Lordships' House; to my noble friend Lord Blackwell, whose time in government brought him closer to the centre of power than many Cabinet Ministers; and, last but certainly not least, to the noble Lord, Lord Norton of Louth, whose speeches so frequently remind us of his masterly grasp of our political institutions. We have benefited enormously from hearing the views of all four today.
I echo the words of the noble and learned Lord, Lord Simon of Glaisdale. It is not the intention of this Bill to usurp the rightful powers of another place. If your Lordships would care to glance once more at the two clauses of the Bill, your Lordships will see that it is made perfectly plain that the type, rate and incidence of tax on a person's transactions or properties remain exclusively a matter for another place. It is only in those other areas of taxation that my noble friend Lord Saatchi seeks to enhance the powers of your Lordships' House.
That is not to say that your Lordships' improved ability to deal with tax management issues will not in the long term influence the way in which future governments shape the taxes that they bring forward. I would like to think that the work of simplifying and rationalising tax management matters will happily infect the way in which governments plan their political approach to taxation, so that its incidence will be easier for us all to understand.
Perhaps I should, briefly, refer to the second clause of the Bill. The first clause will be extremely familiar to your Lordships, because most debates on constitutional matters dealing with finance tend to be cast in terms of money Bills. But, as many of your Lordships will be aware, in recent years Finance Bills, more often than not, have not been certified as money Bills by the Speaker of another place. That is because they contain measures that do not fall exclusively within the definition of money Bills.
Finance Bills that are not money Bills are dealt with in the context of another place's privileges to aids and supply. Those privileges have always prevented your Lordships amending such Bills. However, ever since the privileges were first enunciated as constitutional conventions, your Lordships have retained the right to vote against tax Bills. That happened on more than one occasion at the end of the 19th century. Indeed, under those same aids and privileges, your Lordships today still retain the right to reject tax Bills, but not to amend them. In the early 20th century the Government got round this embarrassment by creating the Finance Bill, which accumulated a large number of tax Bills under its umbrella, thereby making it practically impossible for your Lordships to assert your Lordships' constitutional rights. Under Clause 2,

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the noble Lord, Lord Saatchi, seeks to reintroduce flexibility for your Lordships in those areas that are not politically sensitive or controversial.
A number of your Lordships have addressed the question of the appropriate procedures to be introduced once the Bill finds its way on to the statute book. The Opposition's proposal is that the Finance Bill should proceed through another place as usual; and that when it is published for consideration by another place, a new Select Committee of your Lordships' House, building on the successful Monetary Policy Committee, should be established to review the Bill.
That Select Committee would be a cross-party committee, empowered to take evidence. It would not consider the type, incidence or rate of tax, but would consider the technical issues of tax administration and whether the legislation could be clarified or simplified. It would publish a report on its findings and recommendations in time for the Second Reading of the Finance Bill in your Lordships' House.
Your Lordships' House would have power to amend the Finance Bill in order to incorporate any, or all, the recommendations of the Select Committee. After amendment, the Bill would return to another place, where your Lordships' amendments would be considered in the usual way. Should the other place disagree, we envisage that your Lordships would not insist on your amendments, and the Bill would progress to become law as another place had determined.
However, in the event of any disagreement over particular amendments, your Lordships' Select Committee would reconvene after the passage of the Finance Bill. Your Lordships' Select Committee would then prepare a supplementary report, again taking evidence as your Lordships saw fit, on matters that were unresolved by agreement and on which your Lordships believed that the Government should, none the less, think again. That supplementary report would be submitted to the right honourable gentleman the Chancellor of the Exchequer and be published, simultaneously, before the beginning of the next Budget cycle. The supplementary report would be the subject of debate in your Lordships' House. It would be expected that the right honourable gentleman the Chancellor of the Exchequer would publish a formal response to any supplementary report of the Select Committee.
That seems to us to be an appropriate response to the new powers of amendment that we seek. I see no reason at all why what is contained in this Bill should perturb, or, worse, frighten the Government. On the contrary, with their declared vision about the greater legitimacy of your Lordships' House, this Bill would represent an appropriate reflection of that admirable political philosophy.
8.37 p.m.
Lord McIntosh of Haringey: My Lords, with his customary command of publicity, the noble Lord, Lord Saatchi, has been preparing for this moment for
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two years, ever since he took over the Treasury portfolio on the Opposition Front Bench. On a number of occasions he has warned us— sometimes in more anguished terms than others—that something is terribly wrong with the way in which we enact our taxes, and that the House of Lords has an answer to this problem. Now we have the answer to the problem.
It has been fascinating to hear the way in which the noble Lord, Lord Saatchi, has orchestrated the debate in your Lordships' House. Perhaps he has not. Perhaps it has all been entirely spontaneous, in the same way as a fascinating article previewing the provisions of the Bill appeared in The Times.
All those matters pay tribute to the noble Lord, Lord Saatchi's, command of his profession. I, too, join in paying tribute. Of course, it reached a peak most recently in the consideration of the Capital Allowances Bill on 26th February when many of the arguments that we have heard today were set out at some length. We therefore come to this matter not entirely unprepared.
I should make it clear, as is always my duty from this Dispatch Box, that the Government do not oppose Private Member's Bills in this House. We shall do nothing to impede the progress of the Bill through the House. However, I should also make it clear that if the Bill reaches the House of Commons, the Government will take such steps as are necessary to oppose it in the House of Commons. But is that needed? I really must ask the Opposition Front Bench whether this is official Opposition policy. I have been looking for evidence of support from the Conservative Front Bench in the House of Commons and all I find is silence. I may have missed the evidence of support but I have not seen it yet.
On the contrary, a number of ex-Conservative Front Benchers in the House of Commons have expressed themselves very firmly on the issue. I quoted some of them on the Capital Allowances Bill. Perhaps your Lordships will allow me to do so again. Mr Eric Forth said:
"When I see the words 'tax' and 'Lords' mentioned together in one motion, I become suspicious and wonder why we have all suffered from collective amnesia on the history of this place and the relative roles of the Commons and the Lords, especially in respect of tax matters".
He went on to quote Erskine May in order to,
"illustrate the constancy and consistency of the attitude of the House of Commons over the centuries—that it is to this House alone that the raising of money and revenues, and the disposing of tax matters should rest".—[Official Report, Commons, 15/1/01; col. 54.]
Mr John Redwood, discussing the Joint Committee which examined the Capital Allowances Bill, said that increasing the numbers of Members in the House of Commons required for the Joint Committee to he quorate would,
"reinforce the message, which I am sure the Paymaster General wants to send, that the House of Commons is in charge of taxation matters".—[Official Report, Commons, 15/1/01; col. 72.]
Lord Rees-Mogg: My Lords, is the noble Lord putting to this House that Mr Eric Forth and Mr John Redwood are now the best representatives of government policy?
Lord McIntosh of Haringey: My Lords, indeed I am not. I am pointing to the fact that the silence from the present Conservative Front Bench in the other place is deafening on this subject. I should be fascinated to see—and in some ways, of course, selfishly politically delighted to see—Mr Portillo coming out in favour of this measure. That is the point that I want to make. It is clear that there would be formidable opponents from the Opposition Benches in the House of Commons if this Bill were to reach the House of Commons.
I appreciate the position of the noble Lord, Lord Norton of Louth, who was the chairman of his party's Commission on the constitution and who has given his support to the Bill this evening. But his report does not say anything which gives support to the Bill. What his report says—and he fairly quoted it—is that the House of Lords should have more say on macro-economic policy. Indeed, perhaps as a result of his report, I do not know, the House of Lords is setting up committees which have more say on macro-economic policy. But his report did not suggest amendments to the 1911 Parliament Act. Therefore, to that extent, I cannot be convinced that this Bill is official Conservative Opposition policy for the next election.
I turn now to the content of the Bill itself. It seems to me that there are three major fallacies which are inevitable in the Bill. The first is that the constitutional issues involved can be concentrated on the Parliament Act 1911. The second is the fallacy that in fiscal legislation it is possible to separate tax administration from the type and rate of tax and its incidence on persons, transactions or properties. The third is the fallacy that it is possible, using the procedures set down in this Bill, to have a reasonable and useful scrutiny within the inevitably restricted time period of the passage of a Finance Bill.
I start by dealing with the constitutional issues. I acknowledge, of course, that the Bill does not overturn the principal content of the Parliament Act 1911. It still leaves the one-month rule intact. But, of course, the Parliament Act 1911 is not the beginning of the story. The beginning of the story—and it may be even further back—certainly goes back to 1671 and 1678. In 1678, on 3rd July, the Commons resolved:
"That all aids and supplies, and aids to His Majesty in Parliament, are the sole gift of the Commons; and all bills for the granting of any such aids and supplies ought to begin with the Commons: and that it is the undoubted and sole right of the Commons to direct. limit and appoint in such bills the ends, purposes, considerations, conditions, limitations and qualifications of such grants which ought not to be changed or altered by the House of Lords".
We are going a good deal further back even than 90 years. It is not as though that were the only part of the story. The noble Lord, Lord Kingsland, rightly said that the right to reject Bills still exists. But the right to reject Bills was only effectively used until 1860 when
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Finance Bills became the norm and when, I think it was, the Paper Duties Repeal Bill led the Commons—and I quote Erskine May from page 805,
"to adopt the practice of including all the fiscal changes of each year in a general or composite Bill … Since that time, although the Commons still acknowledge the right of the Lords to reject such a Bill, its composite nature renders the exercise of that right a practical impossibility".
Lord Kingsland: My Lords, I am grateful to the noble Lord for giving way. I think I have said all that.
Lord McIntosh of Haringey: My Lords, the noble Lord was claiming that there was still a right. I am saying that although there is still a right, it is a practical impossibility.
Lord Kingsland: My Lords, I am most grateful to the noble Lord for giving way again. I also accept that. Once the decision was made by another place to accumulate all the individual tax Bills into a compendium Finance Bill, it became practically impossible for your Lordships' House to reject it. I do not seek for that decision to be overturned.
Lord McIntosh of Haringey: My Lords, the Bill is seeking to provide for amendments to Finance Bills. That is what the Bill does. I will come onto the practicalities of the matter in a moment but the noble Lord, Lord Kingsland, has set out in detail the Select Committee procedure which he proposes would be adopted. I am grateful for having had an advance copy of that. But, of course, in the way he sets it out, it is a hybrid between the Select Committee procedure in this House and legislative consideration in this House. Some very serious issues are involved.
However, the point that I make is that what is at stake here is not simply Section 1(1) of the Parliament Act 1911 but over three centuries of relationships between this House and the House of Commons on financial matters. Those are not changed by the recent changes in the composition of the House, any more than they were by the much more significant introduction of life Peers in 1958 or, indeed, than they would be under the second phase of House of Lords reform.
I turn now to the second fallacy—the fallacy that there is such a thing as tax administration which can be distinguished from the type and rate of tax and its incidence on persons, transactions or properties. One only has to look at the Finance Act 2000 to realise that such a distinction cannot be made. I have looked at only a tiny part of it.
Lord Simon of Glaisdale: My Lords, surely it has already been made in 1970 by the Taxes Management Act which the most recent Finance Act itself amended.
Lord McIntosh of Haringey: My Lords, I shall come onto the Taxes Management Act 1970 and the point made by the noble and learned Lord, Lord Simon. But perhaps he will allow me to make the point about the bulk of the Bill rather than Schedule 39 at the moment.

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Sections 68 and 69 and Schedules 19, 20 and 21 are all concerned with research and development tax credits. If one looks at those sections, which take up 14 pages in all, there is not a single point which could be described as tax administration which does not involve those matters which the Bill acknowledges would have to remain the sole responsibility of the House of Commons.
I acknowledge that Schedule 39, which amends the Taxes Management Act 1970, did so without Lords scrutiny when the 1970 Act was subject to the scrutiny. But that is precisely why the Finance Act 2000 was not a money Bill; that is, because matters were introduced which did not merit the Speaker's certificate. It would not be appropriate for specific individual clauses alone to be scrutinised by the House of Lords. If the Commons object to the inclusion of a measure in a Finance Bill that prevents its certification as a money Bill—which is the answer to the point raised by the noble and learned Lord, Lord Simon—it can bring an amendment and attempt to have that measure removed. We do not do so because of the holistic nature of Finance Bills and the view which the Commons takes of such matters.
I listened to the suggestion made by the noble Lord, Lord Newby, of a separate taxes management Act. That was raised by a Commons Select Committee as recently as 1993. However, I have to say that that would not work. We simply cannot separate the headline parts of taxation, the rate, type and incidence as the Bill attempts to do, from the detail. If we tried to do that, what would we do with anti-avoidance measures, for example, which take up a large part of Finance Bills? They affect who pays tax; therefore, they would be excluded from the noble Lord's Bill. That cannot be done.
Lord Kingsland: My Lords, I am grateful to the Minister for giving way. If he thinks all these highly politically sensitive matters would be excluded from my noble friend's Bill, why is so concerned about them?
Lord McIntosh of Haringey: My Lords, I am concerned that we should not act. I not concerned about it; the House can do what it likes with it. That is not my personal concern. However, it would be absurd for the House to pass legislation under a misapprehension. That does not mean that there is not a sound point which has been made by a number of speakers tonight about tax simplification in particular and about consultation and scrutiny outside the Standing Committee in the House of Commons. Those are valid points. That is why we were considering the Capital Allowances Bill in February. As we all agreed, that is a valuable extension of improvement of tax legislation.
I am a great supporter of the tax manifesto of the Institute of Chartered Accountants. I have said so in this House, and have agreed with virtually all its points. Despite the comments of the noble Baroness,
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Lady Noakes, I do not think the institute states 'in its manifesto that there should be increased scrutiny by the House of Lords on taxation matters.
Baroness Noakes: My Lords, I thank the Minister for giving way. I believe that it states that tax matters should be considered by a Joint Committee of both Houses. It fully recognises that there is a role for the House of Lords in scrutiny.
Lord McIntosh of Haringey: My Lords, I believe that is a matter which could be put forward, but which is not put forward in the Bill. In addition to what is being done about tax simplification, perhaps I may suggest to the House that in the introduction of a Pre-Budget Report we have taken an enormous step forward in the possibility and, indeed, practice of scrutiny. The Pre-Budget Report is produced in the autumn. There is then a period of up to six months before the Budget. In that period, a huge amount of consultation takes place on those matters which are identified for consultation. Such consultation takes place with the Institute of Chartered Accountants; the Chartered Institute of Taxation, the CBI, the Institute of Directors and many others, who I do not think would be pleased to see themselves, pace the noble Lord, Lord Blackwell, as being replaced by business persons or ex-Treasury Ministers in this House. That is what they do. There is no reason why—it is not for me to say; it is for the House to say—the House of Lords should not set up a Select Committee to consider those matters which are out for consultation in the Pre-Budget Report and to report before the Budget. There is no reason why the House of Lords should not be involved in that way. To do that would not require legislation, and would not require the Bill.
Despite the comments of the noble and learned Lord, Lord Simon, I am certainly not part of the forces of conservatism. My mind is open to all sorts of ways in which we could make changes. However, the Bill does not do that because of the third fallacy, which I shall refer to briefly; the fallacy of process and timing.
The Finance Bill is published in the Commons after the Budget. The noble Lord, Lord Kingsland, set out the procedures he proposes. I refer to the proposed cross-party Select Committee. Presumably that would have to include all seven ex-Chancellors, seven ex-Chief Secretaries and six ex-Paymaster Generals, otherwise there is no point in making that argument. The committee would have to report to the House of Lords by July. But what would it report on? The Finance Bill is in Committee during that period. Amendments are being proposed by the Opposition; considered by the Government; and being made. By the time the committee came to report to this House it would be reporting on a different Bill from that which comes to this House. The differences between the Bill which is first introduced and the Bill that comes to this House are always great. That would be like shooting at a moving target and does not make sense.
Noble Lords have been good at keeping their remarks to a minimum; I have not. Frankly, the Bill does not work in any sense. It does not work because

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it does not respect the constitution of this country; it does not understand the nature of the legislative process on taxation, and does not understand the timescale and process in which tax legislation has to be considered. I wish it a happy process through this House and no further.
8.57 p.m.
Lord Saatchi: My Lords, I am extremely grateful to all noble Lords who have taken part in the debate at this inconvenient hour, and to the Minister for his winding-up remarks. This debate follows a series of excellent debates in your Lordships' House about the changed nature of our constitutional arrangements, which were led by the noble and learned Lords, Lord Donaldson and Lord Simon of Glaisdale, and my noble friend Lord Norton of Louth, all of which I valued enormously and drew on greatly when working with my noble friend Lord Kingsland on the Bill.
Perhaps I may say how grateful I am to my noble friends Lady Noakes, Lord Norton and Lord Blackwell, for bringing their experience to bear on the Bill. I cannot think of three Members of your Lordships' House who know more about the theory and practice of government, the formulation of government policy, or finance and accounting.
I also give special thanks to the noble and learned Lord, Lord Simon of Glaisdale, for his support. As stated by the Leader of the Opposition, my noble friend Lord Strathclyde, he is a unique constitutional voice. I am grateful to him for his support. I also thank, in particular, the noble Lord, Lord Newby, for putting forward the Liberal Democrat support for the principles of the Bill and for the ideas he put forward this evening on how those principles could be achieved through Parliament.
Before sitting down, perhaps I may say that the only reason my name appears on the Bill and not that of my noble friend Lord Kingsland is because if he had a personal logo it would be, "A light under a bushel". I am grateful to him for creating this short Bill.
We have heard two views this evening. We have had the views of those I have just named, whose opinion can be summed up as "Something has changed; therefore it is time for a change". On the other hand, we had one different view which came from the Government. They take the view that we must deal with financial matters the way we always have because we have been doing it that way for centuries. The Minister went back to 1678 and was proud of the fact that the traditions of all those centuries were being upheld by his Government.
Is it not one of the ultimate ironies that this Government, who have so despised what the noble and learned Lord called the "forces of conservatism" should here tonight be enthralled to events of 100 years ago—or 300 years ago—to uphold history and tradition as the basis of their future policy?
I hope only that the debate has given the Government fresh food for thought. I also hope that I shall have the opportunity to respond to the views of
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your Lordships' House in Committee both on the definitions contained in the Bill and the procedure by which it might be put into practice. I am grateful for the time given and I commend the Bill to your Lordships' House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Consolidated Fund (No. 2) Bill
Lord McIntosh of Haringey: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time.—(Lord McIntosh of Haringey.)
On Question, Bill read a second time; Committee negatived.
Then, Standing Order 46 having been dispensed with (pursuant to Resolution of 20th March), Bill read a third time, and passed.

Postal Services Act 2000 (Determination of Turnover for Penalties) Order 2001
9.2 p.m.
The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville)rose to move, That the draft order laid before the House on 28th February be approved [10th Report from the Joint Committee].
The noble Lord said: My Lords, this and the following order put in place the final planks of the new postal services legislation and complete our programme of Post Office reform. The Postal Services Act will change the nature of the Post Office by transforming it from a statutory authority into a plc owned by the Government. This will underline the greater commercial freedom we have given it to enable it to compete more effectively in a changing communications market, fulfilling the promise we made on coming into office four years ago.
The new Post Office company will be better able to provide the efficient postal services that we need to support the business and social life of the nation. At the same time, the current postal monopoly will be replaced with a licensed area, to be regulated by a new independent body. These changes fundamentally alter the postal services market in Britain and pave the way for greater competition and higher standards of service to consumers throughout the whole country.
The Post Office company will no longer receive its authority for the delivery of post from a statutory right but from a licence negotiated with an independent regulator. That regulator—the Postal Services Commission, or "Postcomm", as it calls itself—has a primary duty to ensure that the universal service obligation, the delivery of post to every address in the UK at a uniform tariff, is maintained.

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Postcomm also has the option to license other companies to operate in the licensed area. It could even designate other postal operators as providers of the universal service, or parts of the universal service, where currently the Post Office is the only designated universal service provider.
The Postal Services Act 2000 (Consequential Modifications No. 1) Order, though extensive and in parts highly technical, is based on a simple premise: updating old legislation to take account of the new regime established by the Postal Services Act 2000. The Post Office, its functions and services are referred to in many Acts and statutory instruments. This order makes changes in such legislation to the references to the Post Office and its services in order to reflect the change in the market and the creation of the new company.
In many cases, there is no longer any justification for limiting the provision of services, such as the delivery of documents, to the Post Office. Therefore, we propose that in those cases references to "the Post Office" are amended to become references to "a postal operator", which is defined in Section 125(1) of the Postal Services Act and includes all postal operators.
That introduces an element of choice in terms of the service provider. The Post Office is given special rights and privileges by legislation because of its provision of the universal postal service; for example, rights and privileges granted to statutory undertakings in relation to planning or the compulsory acquisition of land.
Under the new regime, it will be possible for Postcomm to designate other operators besides the Post Office to provide all or part of the universal service. Therefore, we propose to replace references to "the Post Office" where they relate to rights and privileges which affect the universal service obligation with references to "universal service providers" in connection with the provision of the universal postal service.
It would be only fair that any operator who is given the same social obligations as the new Post Office company will be given the same rights and privileges which would allow it to deliver a universal service. References to "the Post Office" which are no longer relevant to a plc or the services it provides have been repealed.
In a very few cases we propose that the term "Post Office company" be used to replace references to "the Post Office'. This type of amendment is used when the legislative provision in question relates to a specific service that only the new Post Office company will provide, such as postal orders. Some references to "the Post Office" have been retained. These are mainly historical references which confer rights that it is desirable to keep. For example, being a tenant of a public sector landlord can allow an individual to acquire certain rights. We would not wish to remove the time served as a tenant of the Post Office from counting towards the acquisition of such rights. Therefore, such references have not been amended in the order.
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The order also makes provision for references to "second-class post", which is a term specific to the Post Office, to be interpreted to generic references which could apply to the services of other operators. Existing and future references to "second-class post" in legislation will be deemed to be references to a postal service which seeks to deliver documents and other things no later than three working days after posting.
Similar deeming provisions in Schedule 9 paragraph 8 to the Postal Services Act amended other Post Office specific terms, such as "by post", "first-class post", "recorded delivery" and "registered post".
The order also makes the transitional, saving and supplementary provisions which are required to ensure that there is a smooth transition from the previous regime to the new one.
This order is a practical and necessary step towards the greater commercial freedom for the Post Office and the greater choice and service for the consumer that we all desire. It is essential to ensure that the existing body of legislation that refers to postal terms operates effectively under the new regime. I commend the order to the House.
I turn to the second order. It is important to remember that the creation of an independent regulator was one of the main features of the Postal Services Act 2000. The regulator (the Postal Services Commission, or Postcomm) is responsible for granting licences to operate in the licensed area and is able to include certain conditions in a licence. Where the Commission is satisfied that a licence-holder has contravened, or is contravening, any condition of his licence, the Commission may impose on the licence-holder a penalty of up to 10 per cent of its turnover. The order before us today specifies the way to determine the turnover of a licence-holder for the purposes of ascertaining the maximum penalty. It is an important step towards giving the Postal Services Commission teeth to police the new regime successfully.
I should stress that this order determines turnover for the purposes of calculating the maximum penalty. The actual penalty imposed would be determined by the Commission in the light of the circumstances of the contravention. The purpose of the Act was to create a strong and independent regulatory regime. That is why the Act was not prescriptive in relation to fines. However, the limitation was introduced in view of the support expressed strongly in this House last summer during the passage of the Postal Services Bill and the Utilities Bill for a stated limit on penalties.
The policy behind the order has been developed with the aim of fairness and not imposing an undue burden on licence-holders. A consultation document on the proposed approach was published and put on the DTI website on 19th December, and interested parties were notified simultaneously. The department is grateful for the three responses received.
The key matters covered in the order are the period to which the penalty should relate and the business to be covered. The period chosen is the financial year preceding the date on which the Commission gives

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notice of a proposed penalty. When there is no preceding financial year, the turnover of the current financial year, up to the date on which the Commission gives notice of a proposed penalty, will be annualised. The order also provides for multi-year penalties. If a contravention continues for more than one year, but less than two years, the relevant turnover will be the annual turnover multiplied by two. If the contravention continues for more than two years, the relevant turnover will be the annual turnover multiplied by three.
The business from which annual turnover is derived is the services which the licence authorises the holder to provide. A number of alternative definitions were considered but ruled out on the basis that they would introduce the possibility of unfair treatment or encourage artificial organisational structures. This is especially the case in the postal services market which is only partly regulated. For example, it was considered that it would not be appropriate to impose a penalty for breaches of a licence condition that is in proportion to the whole of a company's business as the company may have substantial postal business for which no licence is required, or indeed substantial non-postal business. We do not believe that it would be just if two licensees doing similar amounts of business faced vastly different penalties because one of them had substantial other business.
During the debate on Monday in Committee in the other place a question was raised in connection with article 2 of the order. The Liberal Democrat spokesman asked what would happen in the case of a breach of the licence which the Commission considered had lasted for exactly two years. He thought that that fell within neither paragraph (2), which deals with breaches lasting more than one year but less than two, nor paragraph (3), which deals with breaches lasting more than two years.
In reviewing the draft order in the light of those comments, we have concluded that there is a minor glitch in the text. As a result, a breach lasting exactly two years would fall to be dealt with under paragraph (1). That is not what is intended, and I apologise to the House for the error. But the situation that it deals with cannot occur until at least two years after the start of the licence regime, and we propose to introduce an amendment as soon as convenient to remedy this. Apart from that, I assure the House that we are satisfied that the order will operate perfectly effectively, so we propose to proceed with the draft order which enables the Postal Services Commission to make use of the powers to impose financial penalties, should the need arise, from the outset.
In conclusion, noble Lords have before them today an order which specifies the way to determine the turnover of a licence-holder for the purpose of ascertaining the maximum penalty in a fair and pragmatic way. I commend to the House both that order and the Postal Services Act 2000 (Consequential Modifications No. 1) Order 2001.
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Moved, That the draft order laid before the House on 28th February be approved [10th Report from the Joint Committee].—(Lord Sainsbury of Turville.)
Baroness Miller of Hendon: My Lords, I thank the Minister for his clear explanation of the two orders. Last Wednesday the consequential modifications order was presented to me with the suggestion that it should be debated last Friday. The order is some 54 pages long. It amends an 111-page Act which contains 131 clauses and nine long schedules as well as diverse other Acts and regulations which I have not managed to count.
Therefore, I was most grateful to the Government Whips' Office staff for immediately agreeing to postpone our consideration of the provisions until today. Even so, I must confess that I have not had sufficient time to do a thorough job of examining and doing justice to the provisions. Perhaps the Minister is more than happy that I have not gone into the detail and crossed every "t" and dotted every "i".
The Government will recall from their long time in opposition that the Opposition do not have the same resources as the Government to cope with a torrent of legislation. I do not complain about that, except very mildly, because that is the way that it is. I trust that on future occasions the Government will do Parliament the courtesy of ensuring that far longer notice is given.
These orders amend an Act passed only nine months ago after extensive debates in both Houses. The Act contained powers for the Secretary of State to amend it and any other primary legislation by order. We warned Parliament that by legislating in this way enactments would not receive the full scrutiny that they would get if they were primary instead of secondary legislation. This instance where these orders have come before Parliament at very short notice is clear proof that happens. It is happening far more than it should if we are to do justice to these Acts.
The principles of the Act were supported by the Opposition. During the passage of the Act though Parliament, we sought only to make constructive amendments. I understand that the Minister in the other place told honourable Members that the amendments were drafting or consequential amendments. On first sight, that appears to be the case—for example, substituting "postal provider" or "universal postal provider" for the words "post office" in various Acts and regulations, as described by the Minister, when he presented the order just a few moments ago. We accept the good faith of the Government's description of the contents of these orders. We agree also that they are simply highly technical. In those circumstances, we shall not oppose the making of these orders.
I turn to the second order, which deals with the determination of turnover for penalties. Among the provisions that we supported during the welcome passage of the Act was the very important appointing of a regulator. To be able to perform his duties, the regulator needs strong powers. That in turn necessitates his having strong powers of enforcement.

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These orders provide power to impose fines. Those fines can be very severe. They are based on up to 10 per cent of the offending company's turnover, not its profits.
My honourable friend the Member for Hertfordshire South West, while discussing these same orders in the other place, described the penalty of 10 per cent of turnover as draconian. The Minister simply dismissed the matter by saying, "Well, it is in the Act". That is a little rich coming from the Government, given that the Bill, as presented, did not say "10 per cent" but "unlimited" penalties. The Minister will remember that I tried to curtail the "unlimited" element by proposing an amendment that followed the words in the Government's own Competition Act 1998, which would have capped the penalties at 10 per cent of turnover. As the Minister will recall, that was not accepted by this House, but I see that it now appears in Section 30(2) of the Postal Services Act. So draconian it may still be, but not as draconian as it might have been if the Government had not decided at a later stage to take my suggestion on board.
Considering the potential size of the business, the fines will possibly run into millions of pounds. If the offending company's profit is just a minimal percentage of turnover, such draconian fines could easily, to the extreme prejudice of not just itself but also its customers and suppliers, wipe it out.
I find the definition difficult to follow in two respects. I apologise to the Minister for that, because I know that he tried to explain the matter a few minutes ago. I am still not very clear. Therefore, I shall ask him to answer a couple of questions. The maximum fine is up to 10 per cent of turnover for a simple breach of the terms of the operator's licence. If the offence continues for two years it will be 10 per cent of two years' turnover. What is not clear is whether the 10 per cent includes the whole of the second year's turnover.
I have a second question. If the offence lasts for 364 days and the fine is 10 per cent, what would happen if a second year lasted for only a year and a day? Would the offender still be subject to a fine based on two years' turnover for an overrun of an extra two days? That would be double the penalty, possibly running into millions or tens of millions of pounds, for just two extra days. I should be grateful for an answer to that question. My honourable friend the Member for Hertfordshire South West asked a similar question in the other place. Unfortunately, he did not receive a clear answer. Therefore, can the Minister give me some clarification?
It also seems that the offender will have the right of appeal. However, will the Appeal Court interfere with the regulator's exercise of its discretion about the level of a line, or will it insist that it will deal only with issues of fact? I hope that the Minister will be able to clarify that point as I find it quite complicated.
I wish to raise one other matter. I had not intended to raise it but I shall do so now. The Minister referred to a glitch. Has an amendment been brought forward to put the matter right? I note that the Minister is
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shaking his head, which I imagine indicates a "no" rather than a "yes". Perhaps when he comes to reply he can say what the position is so that I can have it in Hansard.
Apart from those queries, we are not unhappy with the Act or with the provisions to enforce it. Therefore, we shall not oppose the making of the order.
Lord Sainsbury of Turville: My Lords, I think that the noble Baroness should actually have thanked me for not giving her the time to read all the consequential amendments, because exciting reading they are not! However, I take her point that even when amendments are rather technical and consequential, it is important that every noble Lord should have enough time to peruse them. It is perhaps unfortunate that the mistake occurred not in the 54 pages but in the two pages of the determination of turnover penalties.
The 10 per cent ceiling was suggested by the noble Baroness. While we did not immediately accept it, I accepted it at a later stage of the Bill's passage through the House. I shall explain how it works. For the first year, it applies to the turnover of one year. Between one year and up to two years—it was framed as "up to two years"—it is on the one year multiplied by two. That is done in order to make this as simple as possible and not have accounts for shorter periods. For up to two years it is double the first year, but for just the precise moment of two years, that is not included. We shall introduce an amendment—we have not yet done so—so that up to two and including two is doubled. Only if it goes over two years and above is there a possibility of it going to three times. I am afraid that it is quite complicated in that sense, but the way that we will be expressing it is the right way. In the very unlikely circumstance that it did fall on two, it operates to the advantage of the company, because it then reverts just to the turnover for one year.
The penalty is set by the Commission and the order provides a ceiling to it. The penalty set must be reasonable. Therefore, in the Appeal Court the reasonableness of the decision can be queried. So it is not simply a question of judicial review. No amendment has been put forward, but we shall do that to cover what is a very remote possibility, which, of course, could not happen for two years.
The two orders complete the new legislative and regulatory framework that we need for the modern Post Office company and the changing postal services market.
On Question, Motion agreed to.

Postal Services Act 2000 (Consequential Modifications No. 1) Order 2001
Lord Sainsbury of Turville: My Lords, I beg to move.
Moved, That the draft order laid before the House on 1st March be approved [10th Report from the Joint Committee].—(Lord Sainsbury of Turville.)
On Question, Motion agreed to.

Jobseeker's Allowance (Amendment) Regulations 2001
9.25 p.m.
Lord Davies of Oldhamrose to move, That the draft regulations laid before the House on 28th February be approved [10th Report from the Joint Committee].
The noble Lord said: My Lords, the regulations are purely technical and present amendments to two existing regulations only: Jobseeker's Allowance Regulations 1 and 11. Both amendments are consequential to the Learning and Skills Act 2000.
The core of the Act is the establishment of a new non-departmental public body, the Learning and Skills Council in England, which will be responsible for post-16 learning, other than higher education. Noble Lords will be aware that the Learning and Skills Council will assume responsibility from April 2001, and will take over functions performed by the Further Education Funding Council in England and the functions currently contracted by the Secretary of State for Education and Employment to Training and Enterprise Councils. The Learning and Skills Council will operate through a network of 47 local councils.
Noble Lords will know that the Act also brings about changes in Wales. It creates a new National Council for Education and Training in Wales with broadly similar functions to the Learning and Skills Council in England, but with some variations to reflect Welsh circumstances. Responsibility for the delivery of training for unemployed people in England will transfer to the Employment Service.
The Act also enables the Secretary of State for Education and Employment to establish a new youth support service in England, to be known as the Connexions Service. The aim of the new service will be to work with young people of all abilities to give them advice, guidance and support to participate effectively in learning. In Wales, the Act empowers the National Assembly for Wales to enhance local youth support services for all 11 to 25 year-olds through local authorities, voluntary organisations or others.
The arrangements in both Scotland and Northern Ireland relating to the provision of post-16 education, training and support services for young people are devolved. In Northern Ireland, social security matters are also devolved. The Learning and Skills Act therefore does not affect either Scotland or Northern Ireland.
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Amendments are required to two of the jobseeker's allowance regulations. The first is Regulation 1 as it defines "full-time course of advanced education" and "full-time student". In both definitions, reference is made to courses funded or part-funded by the Further Education Funding Council as being subject to the 16-hour study rule. We propose to amend Regulation 1 to refer to the Learning and Skills Council, which will assume the functions of the Further Education Funding Council in England. Reference has also been made to the National Council for Education and Training, which will perform a parallel function in Wales. The amendment is technical and does not reflect any change in policy.
The second amendment is required to Regulation 11, where it defines "training" as that provided directly or indirectly by a Training and Enterprise Council pursuant to its arrangements with the Secretary of State. We propose to amend Regulation 11 to reflect the fact that the Learning and Skills Council in England and the National Council for Education and Training in Wales will assume the functions of Training and Enterprise Councils when the TEC contracts end on 25th March 2001. Once again, this amendment is purely technical and does not alter the policy intent of Regulation 11, which is concerned with the treatment of people studying part-time whilst on JSA.
There are other technical amendments to be made to the jobseeker's allowance and other income-related benefit regulations resulting from the Learning and Skills Act; however, those are subject to negative resolution and have been laid before the House as a separate set of regulations. But these two amendments are being presented to the House today because they are subject to affirmative resolution, as determined by Section 37 of the Jobseeker's Act 1995.
In conclusion, I repeat that these are purely technical amendments which are necessary to reflect the assumption of responsibility by the Learning and Skills Council. I commend the regulations to the House.
Moved, That the draft regulations laid before the House on 28th February be approved [10th Report from the Joint Committee].—(Lord Davies of Oldham.)
Baroness Miller of Hendon: My Lords, I thank the noble Lord for his clear exposition of the meaning of these regulations. We certainly agree that they are both technical and necessary. We accept the regulations.
On Question, Motion agreed to.
House adjourned at half past nine o'clock.