Lords Sitting of 25 October 2001

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Lichfield.): The CHAIRMAN OF COMMITTEES on the Woolsack.

Manufacturing Industry
Baroness Miller of Hendon Baroness Miller of Hendon asked Her Majesty's Government:
Whether they accept the estimate that the Transport and General Workers' Union gave to the recent Trades Union Conference that 250,000 manufacturing jobs will be lost in the next two years.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, the Government recognise the difficulties of the manufacturing sector at the moment. However, the problems reflect the global economic situation. Comparing the latest available three months with the previous three months, manufacturing output fell by 4 per cent in Japan, 1.7 per cent in the USA, 1.2 per cent in the Eurozone and by 1 per cent in the UK.
The relationship between output and employment is very uncertain and varies from firm to firm. Therefore, the Government do not, in line with the convention adopted by previous administrations, produce forecasts of employment.
Baroness Miller of Hendon: My Lords, I thank the Minister for that comprehensive reply. Given that the figure mentioned at the TUC conference, which appears in my Question, was given before the tragic events of 11th September, I should like to go back a little if I may. The earlier figure relating to the number of jobs lost in manufacturing industry was 360,000 since 1997. Does that mean that the Government have presided over a boom or a bust?
Lord Sainsbury of Turville: My Lords, of course the Government, in terms of the general economy, have presided over a steady increase in both wealth and employment, which is due entirely to a very sound macro-economic policy. We have resisted the temptation of the previous government to go from a boom to a bust as their only strategy.
Lord Stoddart of Swindon: My Lords, does the Minister agree that the decline in manufacturing industry has been going on for a long period of time? Indeed, since 1973 its percentage of GDP has dropped from 32 per cent to 19 per cent at the present time. It is therefore a long-term business. Britain, instead of being the workshop of the world, has become the dumping ground of the world, which is most unfortunate.
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May I recommend to the noble Lord that he reads the Select Committee report of 1985 on overseas trade? I am sure that he will find many recommendations there which unfortunately were not taken up by the party opposite when it was in government.
Lord Sainsbury of Turville: My Lords, I remember answering a similar Question a few months ago. Perhaps I may remind the noble Lord that I pointed out then that in every industrialised country in the world, consistently over the past three decades, manufacturing as a percentage of GDP has declined. In 1999, the share of manufacturing in GDP in the UK was 19.2 per cent. That compares with 16.1 per cent in the US. If we are in difficulties because of manufacturing, we have to assume that the American economy is in even greater difficulties.
The reality is that there are two factors which mean that manufacturing as a percentage of GDP goes down; the first is increasing productivity in manufacturing and the second is the fact that as people become wealthier they buy as a percentage of their income fewer products. The result is that in every country manufacturing goes down as a percentage of GDP. The question to ask is whether that manufacturing is modernised manufacturing and whether it is adding real value to the economy. The percentage is largely irrelevant.
Lord Razzall: My Lords, will the Minister accept that two questions should be asked in addition to the question that he posed himself? First, does he accept that one of the major reasons for the loss of manufacturing jobs is that the pound is too high, in particular against the euro? Will he therefore accept that one practical action that the Government could take to lower that rate of exchange and therefore save manufacturing jobs would be to commit to a definite timetable for the pound sterling to join the euro?
Secondly, does the Minister also accept that a number of business regulations bear down particularly heavily on manufacturing industry? One obvious example is the climate change levy when what we should have is a proper system of taxation of carbon emissions. Does he further accept that in that respect the Government can do something to lift the burden from manufacturing industry?
Lord Sainsbury of Turville: My Lords, I believe that I answered that question, too, last time we discussed the issue. I hope it was clear from the figures I originally gave that this is not a UK problem uniquely. In fact, quite the contrary; the UK economy in this respect is doing rather better than other economies and for very good reasons. Therefore, arguments that this is due to regulations look simply as though people are not following what is happening out there in manufacturing industry, which is to do essentially with the slow-down in the economy.

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Of course we accept that the pound is higher against the euro than we would wish. I do not think that that is a reason for taking a sudden dash into the euro without looking at what the conditions are.
Lord Campbell of Alloway: My Lords, leaving aside boom and bust and what previous governments have or have not achieved, have this Government any estimate or projection of the loss of jobs in manufacturing industry over the next two years?
Lord Sainsbury of Turville: My Lords, as I said in my original Answer, following a convention which is now well established, we do not give forecasts of employment in the future, which is in any case extremely difficult to do.
Lord Taverne: My Lords, following on from the question asked by my noble friend Lord Razzall, would it not have a galvanising effect on manufacturing industry if we announced, first, that subject to a referendum we would be joining the euro; and, secondly, that we would seek to do so within a range of, say, 1.25 to 1.45 euros to the pound, enabling us then actively to intervene in the exchange markets to move towards that range?
Lord Sainsbury of Turville: My Lords, perhaps I may refer back to one of my previous answers. To rush into the euro without considering the conditions in which we do so would be a grave mistake. I am not certain that it would galvanise manufacturing industry in this context. It might be extremely worried about the basis on which it was being done.
Lord Lang of Monkton: My Lords, the Minister spoke about boom and bust under the previous Conservative administration. As unemployment fell consistently from the late 1980s and productivity, output and exports all rose by record amounts to record levels, when exactly did the bust occur?
Lord Sainsbury of Turville: My Lords, there was a very good bust in the early 1980s. There was another good bust in the later 1980s and there was one in the early 1990s. If the noble Lord was not aware of those, it reflects on his knowledge of manufacturing.

British Airlines: Cutbacks
3.8 p.m.
Lord Dubs Lord Dubs asked Her Majesty's Government:
What is their assessment of the social and economic consequences of the recently announced cuts and reductions in services by British airlines.
The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton): My Lords, it is too early to assess the consequences of the recently announced cuts and
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reductions in services by British airlines. British Airways' new timetable, for example, comes into force on 28th October. The Government would welcome representations on these changes. Operational changes must remain a matter for the commercial judgment of the operators. September 11th has had a significant impact on airlines, which need to be able to match their operations to demand.
Lord Dubs: My Lords, while accepting the difficulties of airlines and their need to make cutbacks to avoid losing money, does my noble and learned friend agree that it is particularly disappointing at the present time that British Airways has used the events of 11th September as a reason to cut back its services between Heathrow and Belfast, which represents a vote of no confidence in the Northern Ireland economy? Will the Minister consider making representations to British Airways that it should reverse its decision, given that it is difficult to believe that demand for services between London and Belfast has been affected by the events of 11th September?
Lord Falconer of Thoroton: My Lords, the Government very much recognise the importance of the air links between Belfast and London. It is not for the Government to get involved in the commercial decisions of airlines, and I cannot comment on the precise reasons for the withdrawal by British Airways of its flights between Belfast International and London Heathrow. Up until 28th October 2001 the number of flights between Belfast International and Belfast City to any London airport, including Stansted, Luton and City, is 34. When the new timetables come into force after that date the total will be 31, which is a net loss of three. The reason why the total loss is not the same number of flights that British Airways has removed is that British Midland has increased its flights from Belfast City to Gatwick.
Lord Clinton-Davis: My Lords, does my noble and learned friend agree, first, that the air passenger duty which is unique to British airlines should be deferred for the time being? Secondly, does the Minister agree that the Atlantic carriers should also be compensated and he should take up that matter with the transport directorate of the European Commission? Thirdly, does my noble and learned friend agree that the extra costs of security should be borne by the Government rather than the airlines?
Lord Falconer of Thoroton: My Lords, the question of aid to British airlines, including the deferment of any tax, is a matter for the EU Commission. The Commission has indicated the categories of aid: insurance, the direct consequences of airspace having been closed for four days and the direct cost of security as a result of the events of 11th September. At the moment the British Government are considering how to proceed in the light of that decision by the European

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Commission. I believe that the right course is for those discussions to continue and for the UK to operate in line with the rest of Europe.
Viscount Goschen: My Lords, what prospect does the noble and learned Lord hold out for progress on liberalisation of the air service agreement between the United Kingdom and the United States? Furthermore, what discussions have the Government had with the European Commission on this issue?
Lord Falconer of Thoroton: My Lords, as I pointed out on Monday, discussions continue between the US Government and the British Government on the air service agreement between them. That is a matter between Britain and the USA. The role of the European Commission and Europe generally in relation to that is the subject of a court case before the ECJ. I cannot tell the noble Viscount when that court case will be decided. I do not believe that it is appropriate for me to comment on how the discussions between the UK and US are proceeding.
Lord Rogan: My Lords, will the Minister ensure that the slots freed up at Heathrow as a result of British Airways giving up the Belfast-Heathrow route are offered to other potential carriers between Heathrow and Belfast and are not used for UK non-domestic routes?
Lord Falconer of Thoroton: My Lords, I am afraid that British Airways is free to put those slots to a different use and it is not a matter in which the Government can intervene. If BA does not use the slots normally they will be returned to the Heathrow pool for the following season. Although I have tried to find out, at the moment I do not know the intention of British Airways in relation to those slots.
Lord Razzall: My Lords, does the Minister accept that the prevailing view is that if the present economic circumstances continue, European airlines will be reduced to only three major carriers, of which British Airways is assumed to be one? If so, does the noble and learned Lord regard that as a desirable outcome, or will the British Government simply leave that to market forces?
Lord Falconer of Thoroton: My Lords, I do not want to comment on the economic prospects, which I leave to others. The Government have said over a period of time that they regard the restructuring of the EU airline industry as important. At a meeting of Transport Ministers on 16th October my right honourable friend the Secretary of State for Transport circulated a paper calling for member states and the Commission to try to prevent the ownership and control clauses in bilateral air service agreements becoming an obstacle to airline consolidation. Therefore, we are in favour of a process of consolidation.
Viscount Astor: My Lords, will the noble and learned Lord examine carefully the large subsidies that have been paid to American airlines by the US Government so as to ensure that British airlines that cross the Atlantic are not disadvantaged?
Lord Falconer of Thoroton: My Lords, my own examination of these subsidies may be altogether beside the point, but as to the issues involved they are matters in discussion between the two countries.
Lord Corbett of Castle Vale: My Lords, the Minister will be aware that every forecast about air traffic in the immediate future shows a very severe downturn which is due to a combination of the events of 11th September and the recession. Can my noble and learned friend give the House an assurance that the Government will not rush into an early announcement about the future of a possible fifth terminal at London Heathrow and will use the intervening time to do even more to build up the use of regional airports, especially those such as Birmingham International?
Lord Falconer of Thoroton: My Lords, I congratulate my noble friend on getting in his question at the fourth attempt. As far as concerns the decision about the fifth terminal, the Government will take the decision and announce it when the time is right. I agree with my noble friend that regional airports have a very important part to play and their future should be encouraged.

Specialist Schools
3.16 p.m.
Baroness Sharp of Guildford Baroness Sharp of Guildford asked Her Majesty's Government:
How they propose that specialist schools should share facilities and expertise with the community and neighbouring schools.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, specialist schools are required to work with a minimum of five non-specialist schools, including at least one secondary partner and target groups in their wider community. Their outreach work should be based on needs identified in consultation with their partners. This will be different for each specialist school but will typically include the sharing of equipment or facilities to teach the relevant specialist subjects, INSET provision for teachers in partner schools and courses in the local community.
Baroness Sharp of Guildford: My Lords, I thank the Minister for her Answer. Is the noble Baroness aware that in the recent Ofsted report on specialist schools, the sharing of facilities with the community was the one area where it found those schools to be defective? Given that each specialist school receives on average an extra £½ million over the course of the first five years

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or so, does the Minister agree that it is extremely important that they share that money and resources with the other schools? There is a good deal of evidence to show that they are linking up with partner primary schools because they help to feed in pupils. Does the Minister believe that they are doing enough to link up with other secondary schools in their neighbourhood?
Baroness Ashton of Upholland: My Lords, the DfES has commissioned research on the main part of the specialist schools programme. We were aware that work needed to be done on the community strand. When Ofsted told us that it wanted to do some survey work on specialist schools we encouraged it to look at the community side. As there has been a good deal of negative press reporting it is perhaps worth repeating the words of the chief inspector reported in The Times:
"We are not saying that schools are not sharing; we are simply saying this is not as strong an area of their work as it could be. There are good examples, but it needs to be developed further".
We are very conscious of this. It is only since 1999 that they have been required to share a third of their resources—an average of £40,000—with the community. We are keen that they link up with other secondary schools and primary schools, but we are equally keen that they work with the community. The notable exception to Ofsted's comments were schools specialising in sport which were commended on what they were doing.
Baroness Blatch: My Lords, does the Minister agree that specialist schools are funded on the condition that they fulfil their obligations under the regulations? If a school does not do so should it not have that money withdrawn? Has any specialist school lost its status simply because it has not fulfilled its obligation?
Baroness Ashton of Upholland: My Lords, I repeat again what the chief inspector said. He was not suggesting that schools were not sharing, but that it is a weaker aspect of their work. We are clear that in four years, when schools reapply for their status, that will be an element that we shall look for. We recognise that the Ofsted research was done within the first year of schools being required to do this. Therefore, we expect to see some serious ground being made between now and the next time that we look at the matter.
Lord Blackwell: My Lords, will the Minister accept that one of the reasons for the undoubted success of specialist schools is the freedom that they have in managing their own budgets and the lack of interference from local authorities and central government? If the Minister accepts that, will the Government consider that maybe one of the best ways of improving schools in the surrounding area would be to reverse their policy on abolishing grant-maintained schools and to give all schools that kind of freedom?
Baroness Ashton of Upholland: My Lords, I do not believe that we should reverse our policy, but I accept that allowing schools to manage a great proportion of their budgets is a good thing. That is indeed why we have increasingly moved in that direction. However, I recognise that LEAs have an important part to play, not least in looking after our children's special educational needs and dealing with other issues which are best coming from an LEA source. Therefore, there is a balance to be struck. I believe that we have moved in the right direction as regards that balance.

Privy Council Silver Collection
3.21 p.m.
Lord Freyberg Lord Freyberg asked Her Majesty's Government:
Why the Treasury is selling its Privy Council silver collection.
Lord McIntosh of Haringey: My Lords, the Government attach great importance to their programme of asset sales. We of course consider carefully the historical and heritage value of particular assets. In the case of silver owned by Her Majesty's Treasury, it has been decided not to sell items valued at over £1 million with the greatest historical and heritage significance. However, the items to which the Question refers have been offered for sale by auction at Bonham & Brooks next Tuesday.
The Government are open to representations on the particular items planned for sale next week. I can assure the House that any representations, particularly including views which noble Lords may want to express this afternoon, will be considered carefully, sympathetically and quickly.
Lord Freyberg: My Lords, I thank the Minister for his reply. I am disappointed that the Government are willing to see such items being lost to the nation. I urge the Government to reconsider and re-examine their policy with regard to works of art held in government departments.
The DCMS recently managed to get an exemption for items that are in its department. Could that be extended to other departments? Furthermore, can the Government re-examine the way that the Treasury looks at the matter?
Lord McIntosh of Haringey: My Lords, the offer that I made of the Treasury listening to representations applies specifically to the items which are in Bonham & Brooks' catalogue for sale next Tuesday. The noble Lord, Lord Freyberg, will find the Treasury less sympathetic to a general review of the policy on disposal of assets.
Lord Strabolgi: My Lords, the Treasury holds about 1,000 antique or national heritage items. How many of those will be earmarked for disposal under the present deplorable policy?
Lord McIntosh of Haringey: My Lords, in the 1990s the items which had been held as part of the civil estate by property holding were divided between departments. I do not know whether the figure of 1,000 quoted by my noble friend Lord Strabolgi is correct. It is certainly true that there are substantial assets which have been allocated to the Treasury and to other departments of state as a result of this policy.
Viscount Falkland: My Lords—
Baroness Hooper: My Lords, is the Minister aware that a few years ago when Liverpool City Council planned to sell some of that city's silver from its splendid collection, the National Museums and Galleries on Merseyside made a good case for acquiring it for the purposes of local heritage interest. It occurs to me that in this particular case the Government may consider creating, setting up or building a museum of parliamentary heritage, in which not only this Privy Council silver and the other hundreds of exhibits to which the noble Lord, Lord Strabolgi, referred could be exhibited, but also the public could be reminded of the significance and historic value of your Lordships' House before the recent reforms.
Lord McIntosh of Haringey: My Lords, I shall leave aside the last few words of the Question of the noble Baroness, Lady Hooper. The noble Baroness makes a valuable and helpful suggestion. Unfortunately, from the present point of view, it is something that would take a considerable time. The offer that I made—I make it in the hope that museums and galleries all around the country will look at these items—is that someone should make a proposition to the Treasury quickly before next Tuesday.
Viscount Falkland: My Lords—
Lord Best: My Lords—
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, the noble Viscount, Lord Falkland, first.
Viscount Falkland: My Lords, in the Minister's earlier reply one could be excused for thinking that the criteria for disposing of assets of this kind was purely on their predicted value in the sale room. The noble Lord will be as familiar as I am with them. I was at Bonhams this morning and looked closely at the catalogue. Unfortunately, the items are not available to see before next Tuesday's sale until tomorrow. The collection of silver is an interesting and charming one. Some of the items in the catalogue are at a relatively low level of cost, some even between £500 and £700. But they all have a historical resonance. Will the Minister agree that, when one has a number of items which were commissioned either by governments or by monarchs, some of them for the Privy Council and so on, there is an argument that—low value though some of those items may be—they represent an interesting part of Britain's history? One has a slight fear, from
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what the Minister says, that if the Government sell pictures it may be difficult to get a clear idea of the criteria that the Government have in mind.
Lord McIntosh of Haringey: My Lords, in my original Answer I referred to historical and heritage value; I did not refer to the price at all. So I do not think that the noble Viscount should get that idea. I have also looked at the catalogue. They appear to me to be not only charming items—as the noble Viscount says—but also, if one looks at the inscriptions on them and their provenance, of considerable historical and heritage significance.
Lord Ackner: My Lords, can the Minister tell us why this generous offer—so to speak—is made but four days before the sale? If the Treasury is taking the matter seriously, surely it should have been publicised weeks before this auction. My second point is a rather modest question. Those of us who have sat, or are sitting, in the Privy Council will be aware of the magnificent 18th century inkstands in the Privy Council room. Are they to be included in the sale?
Lord McIntosh of Haringey: My Lords, the items to which I referred in my first Answer that are not being sold include inkstands and candlesticks. Those are probably the ones to which the noble and learned Lord, Lord Ackner, refers. As a member of the Privy Council, the noble and learned Lord has standing in this matter and is entitled to make representations. The question arises today because the matter was put down by the noble Lord, Lord Freyberg, as a topical Question for the day.
Lord Renton: My Lords, if the Government are determined, as the noble Lord has said, to sell the Privy Council silver collection., should not the right of first refusal be given to members of the Privy Council"
Lord McIntosh of Haringey: My Lords, as I a:m not a member of the Privy Council, I am not consulted on such matters. Indeed, I do not think that I ought to be hearing what is being said by the noble Lord, Lord Renton. As I have said, I believe that members of the Privy Council have a standing—a locus, should I say?—in this matter.
Lord Acton: My Lords, is my noble friend aware that I agree fully with his view of this matter? Can he indicate the greatest antiquity of the silver to be offered for sale next week?
Lord McIntosh of Haringey: My Lords, the view I expressed was an aesthetic opinion. The political views I express are those of the Treasury. The most important items are as follows: James II silver snuffers and tray dating from 1685; William and Mary silver snuffers and tray from 1693; and a matched pair of silver snuffers from 1685.

International Development Bill [H.L.]
3.31 p.m.
Read a third time.
Clause 1 [Development assistance]:
Lord Elton Lord Elton moved Amendment No. 1:
Page 1, line 5, at beginning insert "Subject to section (Restriction on the provision of assistance),"
The noble Lord said: My Lords, the difference between this House and a harbour is that, in a harbour, anyone sailing a ship has to wait for the tide to come in before the ship can be brought over the bar. In this House, one has to wait for the tide to go out to the Bar before one can put any business before the House. I am moved to entertain noble Lords in a similar fashion for a moment or two longer in order that the substance of what I have to say should not be lost in the movement of those not concerned with its content.
In moving Amendment No. 1, I wish to speak also to Amendment No. 2, which is grouped with it. I am deeply obliged to the Chief Whip for his guidance in this matter, which should not have been necessary. Amendment No. 2 is the substantive amendment, the effects of which I shall remind your Lordships in a moment. Before I do so, I should tell the House that my noble friend Lady Cox, in whose name Amendment No. 2 is tabled, has to be away from Westminster at a time which may fall before the House decides what should be done with the amendment. Because only the mover of an amendment has a right to reply to the debate, my noble friend has asked me to move the amendment and it is my privilege so to do. I cannot pretend to speak with anything like the authority of my noble friend on this or any other humanitarian matter, but I shall attempt clearly to put the issues before noble Lords. Before my noble friend leaves the Chamber, she will tell noble Lords whether I have got them right.
The situation is this. The Bill before the House seeks to confer on the Secretary of State the power to give development assistance to institutions and governments outside this country. In the past that assistance has consisted, and will in the future consist, of very substantial amounts of money, as well as other forms of aid. Therefore it is a matter on which both Parliament as a whole and the taxpayers of this country have a legitimate interest. The effect of Amendment No. 2 would be to deprive the Secretary of State of the power to give aid to certain organisations; namely, those which use coercive methods to achieve policies of population limitation.
In the past and, under the Bill as drafted, in the future, money and aid could be given to a large number of bodies. Among those are the International Planned Parenthood Federation and the United Nations Population Fund. The amount which in recent years has been given fairly regularly to the Planned Parenthood Association is £5 million per year. In the calendar year 1999, that aid amounted to £5,883,000. When she joins the debate, the Minister, the noble Baroness, Lady Amos, will be able to confirm that in her reply.
Before I continue, I take it that the noble Baroness will be replying to our debates.
Lord Grocott: My Lords, I think that I can help the House at this point. In moving the Motion for Third Reading on behalf of my noble friend Lady Amos, I should tell the House that she is unable to attend the House today because she is presently in Zimbabwe, along with other Commonwealth representatives. I am sure that the House will approve of her visit to Zimbabwe, since noble Lords have always demonstrated their keen interest in matters associated with that country.
Lord Elton: My Lords, I thank the noble Lord for explaining that he is to reply to our debates. In this case, I think that the word "she" should embrace the word "he".
In his response the Minister will be able to confirm, first, whether that sum was the correct amount and, secondly, what restrictions were placed on a proportion of it. I should like to know what proportion of the funds was unrestricted and what proportion was restricted. That answer will be important because the association's published accounts show clearly that last year it, in its turn, provided funds to a body called the China Family Planning Association, an organisation run by officials of the Chinese state. The association placed no constraints whatever on how the money should be used. In a moment I shall tell noble Lords how that money was used.
The Minister can also tell the House on what terms we paid our rather larger subscription, if I may call it that, of about £15 million to the other organisation, the United Nations Population Fund, which confusingly uses an acronym which derives from an earlier title, UNFPA. On what proportion of that money did the Government place restrictions, and with what result? The UN Population Fund also publishes annual accounts. Those accounts show that it, in turn, provided funding to the State Family Planning Commission of China, which is a part of the Chinese Government. How did the commission use that money?
Both the China Family Planning Association and the State Family Planning Commission of China are agents for the implementation—or rather, I should say the enforcement—of a stated policy of the Chinese Government, which is to stabilise the population of China at its present level. The achievement of that goal, allowing for existing natural mortality rates, would require an average birth rate of 2.1 live births per couple. However, enforcement is not equally successful everywhere and the result is that where officials do have control they opt for far more stringent targets to make up for those areas where they do not have control. In large areas of China, and I believe also in Tibet, officials enforce what we have come to call a one-child policy, and pursue it with a savage ferocity.

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The UNFPA claims that it neither uses nor condones coercion. During the debate on Report last week, the noble Baroness, Lady Amos, appeared to have accepted the association's protestations. She stated that:
"The areas where UNFPA works have seen the abolition of birth quotas, evidence of a shift from administratively-oriented family planning services to client-oriented services, and … a decrease in induced abortion rates".—[Official Report, 18/10/01; col. 730.]
I find it rather hideous to have to welcome a decrease in the rate of compulsorily induced abortion, but there it is. That comment was made for our comfort.
We are not the only legislature to be deeply concerned about what is going on in China. In the United States, in spite of the disruption caused by anthrax attacks, a Congressional hearing has been receiving evidence which squarely rebuts the UNFPA's claims not to be complicit in coercion, and its claim of reforming China's population control programme.
An investigation conducted last month in areas where UNFPA is currently active in China found that:
"UNFPA's claims are false … Within counties where the UNFPA is active … contrary to UNFPA claims, the one-child policy, with its attendant targets and quotas, is still in place … there is no real distinction between the one-child policy as carried out in the 32 counties where the UNFPA is active and the one-child policy found throughout China as a whole. The UNFPA, contrary to its own statements, is participating in the management and support of a program of forced abortion and forced sterilization in China".
That confirms earlier US State Department findings. I wonder whether the Minister, on behalf of the Government, still feels able to dispute them. Zhang Weiging, the Minister of China's State Family Planning Commission, was reported in the IPPF News on 3rd November last as saying that China intends to continue to control the growth of population.
It is clear, is it not, that, despite 20 years of UNFPA involvement in China, nothing has changed. May one ask why? It is an immensely well-funded organisation. Last year alone, our Government, acting on behalf of us, gave it £47 million of our money. The UNFPA spends millions annually in China. So it is certainly not for lack of experience or money that it has not eliminated coercion from the Chinese policy. Whatever its words, its deeds are in support of China's coercive one-child policy.
Amnesty International reported as recently as 1999 that,
"women must sign personal birth limitation contracts…The contracts indicate that contraception is compulsory and that abortion is the only remedy in the case of unauthorised pregnancies".
The second body I mentioned, the International Planned Parenthood Federation, IPPF, has also been closely involved in the one-child policy for almost as long as the policy has existed. This has been through its member organisation, the Chinese Family Planning Association, China FPA. There is very little difference between IPPF and China FPA. IPPF is a federation of member organisations and China FPA has been an IPPF member for 18 years. Only a political
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philosopher could make a distinction between China FPA and the Chinese Government as regards policy. It has been run by Chinese Government officials since its creation in 1980.
When China FPA was created, the official communiqué announcing its creation. stated clearly:
"The association will implement government population control policies".
In a 1993 report, China FPA admitted that it had,
"participated and supervised that the awarding and punishing policies relating to family planning were properly executed".
IPPF itself has admitted that China FPA,
"volunteers sometimes collect the occasional fine when a couple break the birth plan rules".
An astonishing understatement.
What does enforcement involve? I quote Dr John Aird, the former senior research specialist on China of the United States Bureau of the Census, who calculates that between 1971 and 1985 alone there were roughly 100 million coercive birth control "operations", including forced sterilisation and forced abortions. Neither the UNFPA nor China FPA, supported as they were by British money, is moderating this policy.
On the contrary, on 25th September last, the BBC reported an editorial in the People's Daily, the Communist Party's official paper, which said:
"We cannot just be content with current success, we must make population control a permanent policy".
In March this year, Amnesty International reported that in China even children are not safe from state violence and that family planning officials get away with torturing parents who flout the policy. Yesterday, I read of one case where a mother, who had committed the dreadful crime of becoming pregnant for a second time, sought to escape compulsory abortion by running away from home and not telling a single soul where she had gone. Unfortunately, the officials in charge of the policy did not believe that she had not told a single soul where she had gone and they arrested her husband and tortured him. He was eventually released. Being under a cloud of terror, he went to the authorities again to swear his ignorance of her whereabouts. He was re-arrested and tortured, and as a result he died.
On 25th February 2000, another branch of the United States Government, the Department of Democracy, Human Rights and Labor, published a report on human rights practices in China which concluded, among other things:
"According to the latest figures…the number of children abandoned each year is approximately 1.7 million".
It referred to a particular orphanage, with well-paid staff and a brand-new facility, where it was reported that,
"the mortality for children under 2 approached 100%, even for those infants who entered in fair health".
These are horrifying facts.
Noble Lords who saw the television programme The Dying Room will know why I cannot bring before the House the true facts of how some of those orphanages are conducted. They are not fit for

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repetition in this Chamber. It is for your Lordships to decide whether this kind of practice—that we, through our Government, have been supporting—should be countenanced, let alone paid for.
I understand that it is possible for a Minister to put his hand on his heart and say, "This is something we shall never do again", but the fact is that these organisations have been supported by governments of both colours over a number of years. Therefore this is not a party issue. The Government have, after all, set their hand to the task of defending human rights throughout the world. It is difficult to say whether they were led or followed in the matter by the Liberal Democrat Party when they espoused that policy. My own party undertook in its latest manifesto that, while supporting education and access to family planning practices, we would in no way countenance compulsion to do so. I intended to have the manifesto in my hand, but I am certain that that is an accurate paraphrase. I have it here. It is an accurate paraphrase.
I should say in conclusion that the initiative for this substantive amendment sprang from my noble friend Lady Young before she fell ill. Noble Lords will know from a letter which she sent to many Members of the House that she is warmly in support of the substantive amendment. I hope that your Lordships will also support the amendment. I beg to move.
3.45 p.m.
Lord Carter: My Lords, before we proceed with the debate and in order to avoid confusion, the noble Lord said that he was moving Amendment No. 1 and speaking to Amendment No. 2. He then said that he would be moving Amendment No. 2. There is, of course, no need for that because the amendments are in a single group. The decision on Amendment No. 1, which is a paving amendment, will cover Amendment No. 2. So there is only one debate to be held.
Lord Elton: My Lords, that is a great relief. I thought it was understood. I am rather alarmed to discover that I have managed to put confusion in the noble Lord's mind on such a simple matter. The main matter is complex. I beg your Lordships, if you are in doubt, to ask questions. I do have a right to reply.
Baroness Cox: My Lords, I am deeply grateful to my noble friend Lord Elton for introducing these amendments so effectively, helpfully and comprehensively. In speaking to them, I shall not repeat the arguments made by my noble friend, nor those that I made at Report stage, which all demonstrate that these amendments are designed simply to prevent government funds and taxpayers' money from being used to finance coercive policies of forced abortion and sterilisation. My noble friend Lord Elton has given an indication of exactly what such policies mean in terms of human suffering.
I should like, first, to make a general point. Attention has focused on China and it may be a matter of some concern to noble Lords whether or not these
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amendments would affect trade or diplomatic relations with China. The categorical answer is that they would not; they are very specific amendments.
In replying for the Government last week, the arguments put forward by the noble Baroness, Lady Amos, were less than convincing. For example, the noble Baroness claimed that the organisations receiving British money were "forces for positive change". But there is much evidence to challenge that interpretation. For example, the United States Congress International Relations Committee is conducting hearings into,
"Coercive Population Control in China: New Evidence of Forced Abortion & Forced Sterilisation".
The evidence indicates that organisations receiving United Kingdom funding remain heavily implicated in coercive population control.
The divergence in approach between the United States and United Kingdom administrations is very notable. Whereas the United States conclusions are based upon testimony and evidence submitted to various committees of Congress over a number of years—and, indeed, very recently—neither House in this country, to my knowledge, has seen fit to investigate the extent of our Government's involvement in supporting persons or bodies engaged in coercive population control.
The question must therefore arise as to what evidence leads the Government to their conclusion that,
"United Kingdom assistance for sexual and reproductive health anywhere in the world is provided in support of the principles of free and informed choice",
and that they are,
"totally opposed to any kind of coercion in matters relating to childbearing".
Where is the evidence underpinning such assertions?
It is essential to highlight once again the issues that are at stake. My noble friend indicated them, but they bear repetition. Programmes of coercive population control, supported by HMG funding, are not only associated with forced abortions and sterilisations. They have other side-effects, including: the placing of thousands of children in the kinds of orphanages and institutions described by my noble friend leading to their premature death; infanticide of baby girls; a distorted demographic structure; and psychological ill-effects on over-protected single male children—well documented in research on what is termed "young emperor syndrome". These are the very serious results of the policy supported by the Government.
The second argument behind the Government's unwillingness to support the amendments appeared to arise from a concern that they would impede the Government's efforts to eradicate poverty. The noble Baroness, Lady Amos, said during the Report stage last Thursday:
"embedding current policies and priorities in legislation could restrict our ability to make the most effective contribution possible to the elimination of poverty and to the welfare of people".—[Official Report, 18/10/01; col. 730.]

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I hope that I am as deeply committed as the Government are to the elimination of poverty and to welfare, but that is a non sequitur in this debate. The argument is misleading. As the noble Baroness, Lady Amos, admitted last Thursday, the amendments are designed solely to prohibit assistance to those organisations or individuals that promote or practise "coercive" population control policies. The amendments in no way hinder those organisations or individuals involved in the fight against poverty. They would not prevent funding for abortion or family planning services; nor would they prevent the Government from giving funding to providers of those services so long as they are not complicit in coercion.
Sadly, it is demonstrably clear that organisations funded by Her Majesty's Government remain complicit in promoting and practising coercive population control policies. The amendments seek to end such funding—and only such funding. They enshrine respect for human rights and provide the Chinese Government with an opportunity to improve their family planning programme to meet internationally agreed standards. They also provide our own Government with an opportunity to demonstrate their self-avowed commitment to an ethical foreign policy.
Lord Alton of Liverpool: My Lords, it is a great pleasure to follow the noble Lord, Lord Elton, and the noble Baroness, Lady Cox, who have spoken to the amendment so eloquently and effectively.
As the noble Lord reminded us, the amendment has its genesis in an amendment tabled at Committee stage by the noble Baroness, Lady Young, and moved by the noble Baroness, Lady Rawlings. I supported the amendment then and am happy to do so again today. Perhaps I may associate myself with remarks by the noble Lord, Lord Elton, in connection with the health of the noble Baroness, Lady Young. Many Members from other parts of the House will join with friends of the noble Baroness in wishing her a swift recovery to full health. We want to see her back in her place taking part in our debates very soon.
In Committee I suggested a simple test for the amendment. Would we permit such policies or practices to take place here, and, if not, what on earth were we doing funding them in other parts of the world? Following that debate and my Unstarred Question on the issue in July, I was grateful to the BBC for transmitting a report from Beijing highlighting the way in which the "one child policy", as it was described by the noble Lord, Lord Elton, targets little girls. I am grateful to the corporation for the moving footage that it showed of the brave Chinese woman who had rescued five new-born baby girls who had been dumped on the local garbage heap because their parents were in breach of the "one child" quota. Sadly, that same woman said that she had to leave behind many others.
We understand the good reasons why the noble Baroness, Lady Amos, cannot be present today, and acknowledge that the noble Lord, Lord Grocott, will be most effective in dealing with the Government's
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arguments in her place. At earlier stages of the Bill, the noble Baroness set out five arguments in total as to why the amendment should be resisted. Perhaps I may summarise them.
The first concerned free choice. The noble Baroness said that the Government are totally opposed to any kind of coercion in matters relating to childbearing. I doubt whether anyone in this House would disagree. The second and third arguments suggested that, by working from within, we should somehow be changing policies with which we disagreed. The noble Baroness specifically said that the IPPF and UNFPA could act as forces for positive change. The fourth argument was that, because some good is being done, we could be relaxed about policies of which we disapprove, with particular regard to China. The final argument was that if we accepted the proposed amendments,
"embedding current policies and priorities in legislation [we] could restrict our ability to make the most effective contribution possible to the elimination of poverty and to the welfare of people.—[Official Report, 18/10/01; col. 730.]
It is proper to address those arguments, which have run through all stages of the Bill.
In the United States, the same arguments have been put. But our American allies have reached conclusions that are diametrically opposed to those of Her Majesty's Government. Their decision to end all funding of what they describe as brutal and inhumane policies of coercion is one that we have a chance to emulate today. It is my belief that we should redeploy the resources that are currently used for such policies into the humanitarian relief programmes that are so desperately needed in places such as Afghanistan. Although my remarks are made with regard to the continuing human rights abuses in China, the amendment applies more widely, wherever UK government funding is complicit in coercive population control.
As I said, the Government place great stock on bilateral human rights dialogue with China and on the role of the UNFPA and the IPPF as positive forces for change. During the debate on my Unstarred Question on 18th July, the noble Lord, Lord Moynihan, illustrated the problem. The noble Lord asked:
"Has China been persuaded to live up to the standards of the UN covenants it has signed, including the International Covenant on Civil and Political Rights'? Has China been persuaded to resume dialogue with the Dalai Lama? Has it given Tibet real control over its own affairs? Has China's persecution of Tibetans and the suppression of their traditional culture and religion ended? Has the boy designated as the Panchen Lama been produced? … The answer on all counts is a resounding 'No".—[Official Report, 18/7/01; col. 1559.]
The noble Baroness, Lady Amos, admitted on behalf of the Government that the human rights situation in China "remains bleak" and the process of dialogue,
"has achieved little in terms of promoting positive change in Tibet and on the freedom of religion and the treatment of Falun Gong practitioners".—[Official Report, 18/7/01; col. 1575.]
So, by the Government's own admission, the bilateral human rights dialogue with China is failing to curb widespread and appalling human rights abuses.

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Looking more specifically at population control in China, up-to-date evidence suggests that the UNFPA and the IPPF, which together receive about £20 million in unrestricted government grants each year, are not only failing to prevent coercive population control but are implicated in the coercive practices of the Chinese state family planning organisations.
Only last week, the United States Congress International Relations Committee held a hearing into,
"Coercive Population Control in China: New Evidence of Forced Abortion and Forced Sterilisation".
Perhaps I may say in parenthesis that I have been disappointed that the International Development Select Committee and the Foreign Affairs Select Committee in another place have never examined these policies in the detail with which they have been examined in Congress. Nor has any Select Committee in this place. If nothing else comes out of our debates during the course of the Bill, we fervently hope that one of those committees will do as the United States has done and call evidence on these questions.
The US committee heard last week that in January 1998 the UNFPA signed a four-year agreement with Beijing. Under it, the UNFPA would operate in 32 counties throughout China. In each of those counties the central local authorities agreed that there would be no coercion and no birth quotas and that abortion would not be promoted as a method of family planning. Indeed, when I spoke to the Secretary of State, Ms Clare Short, about this issue some three years ago, she pointed to that project and said that we must wait and see what happened there. She said that it might well denote a change in the attitude of the Chinese administration.
Yet after hearing last week first-hand testimony from one of those counties, Henry Hyde, the chairman of the House of Congress International Relations Committee, concluded,
"that, after three years, the new arrangement is not working".
That directly contradicts the Government's arguments that we must give the UNFPA and the IPPF more time and that somehow they might then be able to act as positive forces for change and that assistance given is based upon principles of free and informed choice. None of those arguments stands up to scrutiny; they simply are not true.
First-hand testimony of the persistence of coercive population control in areas in China where the UNFPA operates, and, indeed, the collusion of the UNFPA in such coercion, was provided to the committee on international relations by Josephine Guy, the director of governmental affairs of America 21. Her investigation in China began as recently as 27th September of this year. The evidence she uncovered cannot therefore be dismissed as out-of-date, rather it demonstrates the continuing horrors of coercive population control which we aid and abet
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through continued funding of the UNFPA and the IPPF. I shall provide your Lordships with some examples.
On 27th September, Guy's team interviewed women in a family planning clinic about a mile from the county office of the UNFPA. They interviewed a 19 year-old who told them that she was too young to be pregnant according to the unbending family planning policy. While she was receiving a non-voluntary abortion in an adjacent room, her friends pleaded that she be allowed to keep the baby. However, they were told that there was no choice as the law forbade that. At another location a woman testified to that same group—this evidence was also presented to the committee last week—that she became pregnant despite an earlier attempt by family planning officials forcibly to sterilise her. That attempt failed. She became pregnant again and was forcibly sterilised a second time. She told Guy's team that had she refused, family planning crews would have torn her house down. The House will recall that in Committee I provided evidence of that happening on a regular and systematic basis in many parts of China.
Josephine Guy was also told of the non-voluntary use of IUDs and mandatory examination so that family planning officials could ensure that women had not removed IUDs in violation of policy. Fines and imprisonment for contravening family planning policy are commonplace and, according to Harry Wu, the executive director of the Laogai Research Foundation, who also gave evidence to the committee, local officials acting upon government orders still strictly enforce quotas.
We should be absolutely clear that the Chinese Government remain firmly committed to the need for coercion in family planning. The Chinese Premier, Zhu Rongji, said on 13th October 1999 that,
"China will continue to enforce its effective family planning policy in the new century in order to create a favourable environment for further development".
In its White Paper on population, released on 19th December 2000, the People's Republic of China avowed to continue the one-child policy for another 50 years. The CFPA, which is run by government officials with the declared aim to "implement government population polices", is, of course, a full member of the IPPF whom we fund.
The UNFPA is highly implicated in the Chinese Government's coercive programme and yet continues to receive millions of pounds of UK taxpayers' money. Josephine Guy's team graphically illustrate the extent of collusion between the UNFPA and Chinese family planning officials. Following last month's investigations they concluded that,
"Through discrete contact made with local officials, we located the County Government Building. Within this building, we located the Office of Family Planning. And within the Office of Family Planning, we located the UNFPA office. Through local officials, we learned the UNFPA works in and through this Office of Family Planning. We photographed the UNFPA office desk, which faces—in fact touches—a desk of the Chinese Office of Family Planning".
The US based Population Research Institute (PRI) has stated:

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"UNFPA's claims are false … Within counties where the UNFPA is active … contrary to UNFPA claims, the one-child policy, with its attendant targets and quotas, is still in place … there is no real distinction between the one-child policy as carried out in the 32 counties where the UNFPA is active and the one-child policy found throughout China as a whole. The UNFPA, contrary to its own statements, is participating in the management and support of a program of forced abortion and forced sterilisation in China".
That PRI investigation took place in September of this year.
Furthermore, these claims are not unsubstantiated. The US State Department has reported that three years of UNFPA's programme has met only with what is called "mixed" success, with some counties having made "relatively little" progress while others have not begun to eliminate strict birth control quotas.
The amendments before the House today would not stop funding for abortion or family planning services. Many noble Lords will be aware of my personal views on some of these questions and they will have their own views. I should make it abundantly clear that those are not the issue before the House today. The amendment would stop government funding only where there is evidence of coercion. In addition, the amendments are not anti-China but would assist China as it strives to meet its international obligations. If UNFPA funding was stopped, the Chinese would be given a clear signal that if it is to resume coercion must cease.
I fail to see how the amendments would prejudice the Government's fight to eliminate or to eradicate poverty. There are plenty of organisations in the world involved in the fight against poverty that are not complicit in coercion and there is no reason why funding for those should cease. It is simply scaremongering to suggest otherwise. It is complacent to say, "We do not approve of coercion but there is nothing we can realistically do about it", or, "We are in sympathy with your views but this is not the way to do it". If it is not the way to do it, the House is entitled to be told what is the way to do it.
The noble Baroness, Lady Amos, conceded the purpose behind the amendments on Report last week when she said that they,
"would require the Secretary of State not to provide assistance to any organisations or individuals who were involved in promoting or practising coercive population policies".—[Official Report, 18/ 10/01; col. 729.]
She was right. That is all that these amendments seek to do. That is their straightforward intent. A coercive policy is in direct contradiction of the Government's stated aim that assistance should be provided based upon principles of free and informed choice. The Government's "softly, softly" approach to the Chinese is not working; rather it allows a conspiracy of silence to persist where, as Henry Hyde said in Congress last week,
"coercion is cloaked behind the rhetoric of voluntarism, shielded from criticism by yet another international seal of approval".
China is the only country in the world where it is illegal to have a brother or a sister. The draconian way in which this policy is enforced is an affront to civilised values. It is a disgrace that we continue to aid and abet
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those policies. I urge your Lordships to support these amendments and help to end the brutal violation of women's rights.
4 p.m.
Lord Renton: My Lords, I wish briefly to support these amendments. I do so in spite of the fact that for many years I regarded excessive population as one of the principal causes of poverty, as impeding human progress and sometimes even as being a cause of war. Indeed, in the 1970s I tabled a Motion in the other House, supported by Members of all parties and carried by more than half the Members of the other House, calling upon the Government to control the population of the United Kingdom.
So far as China is concerned, I have a grandson who up to last July had spent 10 months at Beijing University and thought that China was a wonderful place and the Chinese civilised and delightful people. He learned Mandarin Chinese. But their policy for controlling population seems to me not only inhuman and uncivilised, but also probably unnecessary. There are various ways in which people can be dissuaded from having excessive families. Some married couples fail to have any family at all, and that is tragic for them. It so happens, for reasons that I need not go into, that I was an only child and very happy, and my parents were very happy. But we really cannot persuade the people of the United Kingdom, our taxpayers, to support the coercive policy that is being carried out in such an inhuman way in China. Therefore I think that these amendments are important.
I wish to join with the noble Lord, Lord Alton of Liverpool, in the tribute that he paid to ray noble friend Lady Young. I join with him in expressing the hope that she will recover.
Lord Monson: My Lords, I am broadly sympathetic to the arguments advanced by the noble Lord, Lord Elton, the noble Baroness, Lady Cox, and my noble friend Lord Alton in particular in relation to China and, above all, in relation to Tibet. It seems to me that the Tibetans are in serious danger of seeing their culture and their race gradually exterminated over the years as a result of these policies. It is slow genocide.
However, I am worried by the inclusion of the word "financial" in paragraph (2) of Amendment N o. 2. If a country, for example India, promises substantial financial grants or tax rebates to couples who practise strict birth control but denies such financial assistance to impoverished peasants who refuse to limit the size of their families, could not that be construed as intimidation of a financial kind? It is the one matter which worries me about the amendment. I hope that the sponsors of the amendment will be able to answer it satisfactorily.
Lord Hayhoe: My Lords, having listened to the five speeches supportive of the amendment, I wish to add my small contribution.
Surely it is wholly repugnant to all noble Lords that British taxpayers' money should be used to support coercive population control policies of either forced

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abortion or forced sterilisation. It is a simple, straightforward, clear proposition. That is what the amendment is about. It seems to me that those who oppose the amendment for one reason or another will lay themselves open at least to the charge that they are implicitly supporting such repugnant policies. Therefore it is important that the House should express its view clearly on this matter. Politicians are criticised continually for weasel words, clever drafting and fudged activity. We are in a position to be quite clear and unfudged by supporting the amendments. I trust that the House will do so.
Lord Swinfen: My Lords, when the Minister replies, will he be kind enough to tell the House whether coercive population control would be legal in this country? If it would not be legal, why should our taxpayers' money be used to fund it elsewhere in the world?
4.15 p.m.
Lord Redesdale: My Lords, on these Benches we support the sentiments expressed in the amendments. It would be strange not to find coercive abortion an abhorrent practice. I speak as someone who is awaiting the birth of a second child in February.
However, I cannot support the suggestion of the noble Lord, Lord Hayhoe, that those who question the amendments support coercive abortion. I do not believe that it is DfID's policy to support coercive abortion. The UNFPA and the IPPF work in 150 countries. They do extremely worthwhile work. Their work is welcomed and is valuable for people in developing countries who wish to plan their own families. It is often forgotten that in developing countries—for example, Malawi and Mozambique—women have too many children far too quickly because they do not have the ability and understanding to limit their families.
I do not support paragraph (2) of Amendment No. 2. Although I understand why the amendments were drafted in that way, in particular in the context of China, the justifications could be used by those in many countries who oppose family planning—a large lobby does so on moral and conscientious grounds—to bring about a possible judicial review of DfID's action and support of family planning. This is the danger area that we on these Benches are considering. It is not that we support the policy within China. The most important way of bringing about population control is through education and especially through literacy among women.
Therefore, although we find shocking the stories raised by the noble Lord, Lord Alton, and support the sentiments underlying the amendment, we do not support the amendments. However, I support wholeheartedly the suggestion made by the noble Lord, Lord Alton, that this issue should be discussed by the Select Committee on International Development in another place. I very much hope that
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in giving his reply the Minister can reiterate most strongly that coercive abortion has no place within DfID's policy.
Baroness Rawlings: My Lords, I fully support the remarks of my noble friends Lord Renton, Lord Hayhoe and Lord Swinfen. I also add our good wishes to my noble friend Lady Young and regret that she is not with us today. We wish her a speedy recovery.
I should like to reiterate the last paragraph that I stated in Committee.
"We want women in developing countries to have the best possible access to birth control and family planning. We also believe that all people should be free to decide the size of their own family. However, we will not support any policies or agencies that practise coercive abortion".—[Official Report, 16/7/01: col. 1328.]
I support the amendment.
Lord Stallard: My Lords, I add my support for the amendment. The speeches have covered all the issues.
I am concerned, as are many ordinary folk, that the Government claim to have a policy opposing compulsory abortion and sterilisation; and yet the Government continue to make funds available to organisations which hand over a proportion of the funds to the Chinese Government to continue the policy that has been outlined today.
Lord Grocott: My Lords, noble Lords have referred to the contribution made to these debates in the past by the noble Baroness, Lady Young. I very much wish to be associated with wishing her a speedy recovery.
There is a surprising amount of agreement to be found among those who support the amendments and those who, like myself, will ask the House to resist the amendments. I shall try to explain some of those points. However, I need to explain the consequences of the amendments if passed.
The concerns expressed by noble Lords are well known. They are expressed with great sincerity and passion as indeed they were at earlier stages of the Bill. We have had a long, detailed analysis of the Bill. The various clauses have been rigorously tested. This issue has been dealt with at all stages—in Committee, on Report and now at Third Reading. I am slowly becoming used to the procedures of your Lordships' House and no one can say that the procedures are not rigorous. We have considered these issues on three occasions; it is right that we should because they are very important. However, the amendment would make it impossible for the Secretary of State to provide assistance to bodies that were working with countries to try to reform their coercive population policies.
China was mentioned by the noble Baroness, Lady Cox, the noble Lords, Lord Elton, Lord Alton and others. The net cast by the amendment would be so wide that the Department for International Development would be unable to provide support in any country in the world through a body that had anything to do with improving reproductive health care in China. We could not support the UNFPA or the IPPF in any way.

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That matter has been aired during the passage of this Bill. I need hardly repeat the words of my noble friend Lady Amos in Committee when she said:
"UK assistance for all family planning is provided in line with the principles of free and informed choice upheld at the International Conference on Population and Development held in Cairo in 1994. The Government are totally opposed to any kind of coercion in matters related to childbearing."
She went on to emphasise:
"The Government disagree with China's one child policy".
I am sure that all noble Lords expect me to say that, so I am doing so slowly and deliberately. Those who have contributed, to the debate have spelt out some of the dreadful practices. There is no disagreement about our concern about those policies. My noble friend said:
"The Government disagree with China's one child policy and do not support it. Coercion should have no place in family planning.".—[Official Report, 16/7/01; col. 1341.]
We stand firmly by our view that the work of UNFPA has had a clearly beneficial effect in China. In areas in which UNFPA works, birth quotas have been abolished and there has been evidence of a movement away from a preoccupation with meeting targets and towards improving the quality of information and services, and choice of family planning methods that are available to people. There has also been a decrease in induced abortion rates. We do not believe that these changes would have taken place without the engagement in China of the UNFPA.
Birth quotas and targets have been abolished in 47 counties in China as a result of UNFPA involvement.
Lord Elton: My Lords, I am sorry to interrupt the noble Lord, but may I ask when that happened? That fact has been denied by a number of organisations.
Lord Grocott: My Lords, I can only refer to the number of counties. I would list them if I could pronounce them, but the evidence is there.
I should say, too, that in June this year a review of the UNFPA's programme in China—this is important in view of the comments of the noble Lord, Lord Redesdale—by UNFPA's executive board, including those from the United Kingdom, other EU countries, the USA and developing countries, concluded that the UNFPA is playing an important role in fostering change in China.
The latest human rights report on China, which was issued by the United States State Department, notes progress in this area and shows higher public awareness of UNFPA's programme and the elimination of birth quotas in the counties in which UNFPA is working.
The Earl of Onslow: My Lords, with regard to the 47 counties, what percentage of China is that? Are we talking about, say, half the parish council of Scunthorpe or the whole of China?
Lord Grocott: My Lords, my pronunciation is not too good and neither is my maths, so I cannot give the noble Lord an immediate answer. It is clearly a substantial number. The crucial point is not so much
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the number but the fact that UNFPA's involvement produces significant improvements in all the areas that have been raised in the debate.
We stand by our support for those bodies. Indeed, we are convinced that it, is essential to maintain the ability of bodies such as UNFPA to engage in policy dialogue with countries where reform is so much needed, as in China. No one denies that coercion takes place in China. The point is that reform and change will take time. UNFPA's engagement in the process is an important force in promoting that change.
To undermine UNFPA's work would be to seriously damage the ability of the international community to protect the reproductive rights of women around the world. UNFPA's work means that many millions of women are able to choose when to have children and to deliver them more safely. The fund also supports a wide programme of activities to tackle maternal mortality through the training of midwives. It supports female education and equips health facilities with drugs and essential supplies.
Another aspect to which I should refer briefly is that the amendment would also damage the vital global effort against the spread of HIV and AIDS. UNFPA works at present on HIV and AIDS in about 140 countries world wide, and spends about a quarter of its budget on HIV prevention activities. The United Kingdom's support for all those activities would come to a halt if the amendment were accepted.
Lord Alton of Liverpool: My Lords, before the noble Lord sits down, as one of the proposers of the amendment, I ask him to look at Amendment No. 2, which refers to
"any form of coercion in relation to those said activities".
If the Government were to accept the principle of the amendment and perhaps add a codicil stating that it related only to abortion and the forced sterilisation of women, that would be a great advance. It would also address the point that he has just made about HIV, which is not covered by the amendment.
Lord Grocott: My Lords, the amendment needs to be dealt with as it stands. Its effect would be as I have described, which I have done as accurately as possible. In the light of my remarks, I hope that the noble Lord, Lord Elton will feel able to withdraw the amendment.
Lord Swinfen: My Lords., before the noble Lord sits down, will he be kind enough to answer my question? Is coercive population control legal in this country? If not, why should taxpayers' money be spent on that practice overseas?
Lord Grocott: My Lords, that is precisely my point. Of course it is illegal in this country. We are totally opposed to it wherever it occurs. The effect of the amendment would be to make it more difficult to assist in those countries where this form of coercion takes place.
4.30 p.m.
The Earl of Sandwich: My Lords, before the Minister sits down, does he accept that his advice to the House on this occasion has been based on rather general evidence? It contrasts quite strongly with the evidence given by the noble Lord, Lord Alton, who has made a powerful case based on experience in the United States. Is it possible for the department to present a detailed reply, whatever the outcome of the vote?
Lord Grocott: My Lords, the information provided by the noble Lord, Lord Alton, was powerful—but it was powerful in spelling out the consequences of a coercive policy, to which the Government, like everyone else, are totally opposed. The position of the United States is not that different in crucial respects. The United States still funds the UNFPA. This year it increased its funding from 25 million dollars to 39 million dollars. Again, I ask the noble Lord to withdraw the amendment.
Lord Elton: My Lords, before the Minister turns into a yo-yo, I congratulate him on my first encounter with him at the Dispatch Box and thank him for doing an honest job of trying to make a circle into a square.
The Minister has told us that 47 counties have done away with birth quotas, although neither he nor we know what small percentage of the surface of Chinese soil that represents. The continued failure of the UNFPA to moderate China's coercive policy was exposed only last month, when the US-based Population Research Institute sent a team to observe China's so-called voluntary programme and interview women and officials in the counties where the UNFPA is active. The institute found the statements to be misleading, because, although the quotas were said to be removed, the policy persisted.
In March this year, a report entitled Torture in China—a growing scourge in China: Time for action said:
"Numerous public reports from China indicate that local annual birth quotas still play a prominent part in the policy, upheld by stiff penalties as well as rewards. Whilst exceptions have recently been made in some municipalities,"—
I take it that that means counties—
"pregnancy without permission and so 'outside the plan' may still be punished by heavy fines and dismissal. Officials may also be demoted, fired or fined for failing to uphold the plan and quotas".
I must point out to the noble Lord, Lord Monson, that a fine is economic coercion, but a grant is an economic inducement. The amendment is aimed at coercion and fines. The policy ought to be aimed at grants and inducements. The report goes on:
"With pressure to perform, and popular opposition to enforcement, officials continue to resort to violence, torture and ill-treatment including physically coerced abortions and sterilisations. In recently publicised cases, some officials who have engaged in extreme violence have received only suspended sentences".
I must give your Lordships one more example to bring into the focus of actuality what we are talking about. We are not talking about mere statistics.
1122
Hearing of 1 million children being abandoned is so horrific that one cannot take it into cognisance. Let us look at a report about one child:
"Public outrage and reports to local newspapers disclosed the brutal battering and killing of a new born 'out of plan' baby by birth control officials in Caidian village, Hubei Province"—
how nice it would have been to know if it was in one of the counties referred to by the Minister—
"on 15th August 2000.
Liu Juyu, a former medical practitioner, reportedly rescued the baby boy from the cess pit of a men's public toilet behind the village government offices. Liu took the baby to the local clinic to remove his umbilical cord and administer vaccination. Liu was reportedly feeding the baby on her doorstep when 5 birth control officials approached, grabbed the baby and threw him on the ground. In front of several witnesses, they reportedly kicked the baby repeatedly as he convulsed on the ground, then took him away to a paddy field where they drowned him, witnessed by other villagers".
That is not fantasy; it is the Amnesty International report of March this year. It fills us with outrage and compassion. This is what the Government's money is being directed to support, whatever the Minister says.
Noble Lords: Nonsense.
Lord Elton: My Lords, it is no good saying "nonsense". The annual reports and accounts of these organisations show that the money goes to those two bodies, which are the effective arms for enforcement of that policy. It is there for Deloitte and Touche or anyone else to go and illuminate. Our simple request is that there should be in statute a disincentive for the Government to subscribe to that. The Minister has said that the amendment would prevent good bodies from doing good work elsewhere in the world. They can remove that disability themselves by ceasing to support the policy in China.
It is not a small thing that I am asking your Lordships to do. If there is any defect in the drafting of the amendment, your Lordships should remember that we are the first House to scrutinise the Bill. I am minded to divide the House and I hope that the Government will be forced to accept the amendment. When they bring the Bill to the other place in its new form, the representatives of the taxpayers who are paying the money that the Government are giving away will have their say and I very much hope that they support your Lordships.
4.36 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 67; Not-Contents, 149.

Division No. 1

CONTENTS

Ackner, L.

Biffen, L.

Allenby of Megiddo, V.

Blatch, B.

Alton of Liverpool, L.

Boardman, L.

Ampthill, L.

Bridgeman, V.

Astor of Hever, L.

Brougham and Vaux, L.

1123

Bruce of Donington, L.

Murton of Lindisfarne, L.

Buscombe, B.

Northesk, E.

Campbell of Alloway, L.

O'Cathain, B.

Colwyn, L.

Onslow, E.

Cox, B. [Teller]

Oxfuird, V.

Denham, L.

Park of Monmouth, B.

Eden of Winton, L.

Patten, L.

Elles, B.

Pearson of Rannoch, L.

Elliott of Morpeth, L.

Pilkington of Oxenford, L.

Elton, L.

Rawlings, B.

Feldman, L.

Renton, L.

Ferrers, E.

Roberts of Conwy, L.

Glenarthur, L.

Rogan, L.

Griffiths of Fforestfach, L.

Rotherwick, L.

Hanham, B.

St John of Fawsley, L.

Harris of High Cross, L.

Seccombe, B.

Hayhoe, L.

Simon of Glaisdale, L.

Hooper, B.

Skelmersdale, L.

Howell of Guildford, L.

Soulsby of Swaffham Prior, L.

Hylton, L. [Teller]

Stallard, L.

Stoddart of Swindon, L.

Laing of Dunphail, L.

Strathclyde, L.

Lawson of Blaby, L.

Swinfen, L.

Liverpool, E.

Thomas of Gwydir, L.

Macfarlane of Bearsden, L.

Trefgarne, L.

Masham of Ilton, B.

Waddington, L.

Molyneaux of Killead, L.

Weatherill, L.

Monson, L.

Wilberforce, L.

Mowbray and Stourton, L.

Wilcox, B.

NOT-CONTENTS

Acton, L.

Faulkner of Worcester, L.

Addington, L.

Filkin, L.

Ahmed, L.

Freyberg, L.

Andrews, B.

Fyfe of Fairfield, L.

Archer of Sandwell, L.

Gale, B.

Ashdown of Norton-sub-Hamdon, L.

Geraint, L.

Gilbert, L.

Ashton of Upholland, B.

Golding, B.

Barker, B.

Goldsmith, L.

Bassam of Brighton, L.

Goodhart, L.

Berkeley, L.

Goudie, B.

Bernstein of Craigweil, L.

Gould of Potternewton, B.

Blackstone, B.

Graham of Edmonton, L.

Borrie, L.

Greengross, B.

Bradshaw, L.

Grenfell, L.

Bragg, L.

Grocott, L.

Brett, L.

Harris of Richmond, B.

Brooke of Alverthorpe, L.

Harrison, L.

Brookman, L.

Haskel, L.

Burlison, L.

Hayman, B.

Campbell-Savours, L.

Hilton of Eggardon, B.

Carlile of Berriew, L.

Hogg of Cumbernauld, L.

Carter, L. [Teller]

Holme of Cheltenham, L.

Chandos, V.

Hooson, L.

Christopher, L.

Howells of St. Davids, B.

Clark of Windermere, L.

Howie of Troon, L.

Clement-Jones, L.

Hoyle, L.

Clinton-Davis, L.

Hughes of Woodside, L.

Cohen of Pimlico, B.

Hunt of Chesterton, L.

Corbett of Castle Vale, L.

Irvine of Lairg, L. (Lord Chancellor)

Craig of Radley, L.

Craigavon, V.

Jacobs, L.

Crawley, B.

Jay of Paddington, B.

David, B.

Jenkins of Putney, L.

Davies of Coity, L.

Joffe, L.

Davies of Oldham, L.

Jones, L.

Dean of Thornton-le-Fylde, B.

Judd, L.

Desai, L.

Kilclooney, L.

Dormand of Easington, L.

King of West Bromwich, L.

Dubs, L.

Lea of Crondall, L.

Elder, L.

Levy, L.

Enroll, E.

Lipsey, L.

Falconer of Thoroton, L.

Livsey of Talgarth, L.

Farrington of Ribbleton, B.

Macdonald of Tradeston, L.

1124

McIntosh of Haringey, L. [Teller]

Roper, L.

Russell, E.

MacKenzie of Culkein, L.

Sainsbury of Turville, L.

Mackenzie of Framwellgate, L.

Sandwich, E.

McNally, L.

Sawyer, L.

Maddock, B.

Scotland of Asthal, B.

Mallalieu, B.

Scott of Needham Market, B.

Massey of Darwen, B.

Serota, B.

Miller of Chilthorne Domer, B.

Sewel, L.

Milner of Leeds, L.

Sharp of Guildford, B.

Mishcon, L.

Shutt of Greetland, L.

Mitchell, L.

Simon, V.

Morgan, L.

Smith of Clifton, L.

Morris of Aberavon, L.

Smith of Gilmorehill, B.

Morris of Manchester, L.

Stone of Blackheath, L.

Murray of Epping Forest, L.

Strabolgi, L.

Naseby, L.

Taylor of Blackburn, L.

Nicol, B.

Temple-Morris, L.

Oakeshott of Seagrove Bay, L.

Thomas of Gresford, L.

Ouseley, L.

Thomson of Monifieth, L.

Tomlinson, L.

Pendry, L.

Turnberg, L.

Plant of Highfield, L.

Turner of Camden, B.

Ramsay of Cartvale, B.

Uddin, B.

Randall of St. Budeaux, L.

Walmsley, B.

Razzall, L.

Warwick of Undercliffe, B.

Rea, L.

Whitaker, B.

Redesdale, L.

Wilkins, B.

Rendell of Babergh, B.

Williams of Crosby, B.

Richardson of Calow, B.

Williams of Elvel, L.

Rodgers of Quarry Bank, L.

Williams of Mostyn, L. (Lord Privy Seal)

Rogers of Riverside, L.

Rooker, L.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.47 p.m.
[Amendment No. 2 not moved.]
Clause 20 [Short title, commencement and extent]:
Baroness Rawlings Baroness Rawlings moved Amendment No. 3:
Page 9, line 2, at end insert—
"( ) The Secretary of State may not appoint a date under subsection (2) until a bill to give effect to the Convention on Combating the Bribery of Foreign Public Officials in International Business Transactions is introduced into either House of Parliament."
The noble Baroness said: My Lords, I rise to speak to Amendment No. 3 tabled in my name. I welcome the noble Lord, Lord Grocott, to the Dispatch Box today for, I believe, the first time on a Bill. Your Lordships will be aware that we discussed this issue in Committee and then again on Report. Therefore, I do not intend to keep the House long on this matter. I thank the noble Lord, Lord Desai, for his kind words, if not support, during the Report stage. I also thank my noble friend the Duke of Montrose for his support.
This is an important and serious matter, and the Government have failed to act as swiftly as we and others would wish in implementing the agreement that they made on the OECD Convention on Combating the Bribery of Foreign Public Officials. The amendment tabled today varies from those which I tabled in Committee and on Report in a significant way which I hope will help the Minister to concede and agree to my amendment.
As I said previously, the OECD Convention on Combating the Bribery of Foreign Public Officials has been ratified by the UK Government but has yet to pass into UK law. The Minister said:
"We are committed to introducing legislation that will give effect to that convention".
However, she went on to say:
"I am unable at this stage to say when that legislation will be in trod uced".—[Official Report, 18/10/01; col. 740.]
I press this matter because in Committee the Minister was quite emphatic that a Bill would be introduced in this Session of Parliament. She said:
"I am therefore pleased that the Government have confirmed that a criminal justice Bill containing provisions that demonstrate our compliance with the OECD convention will be introduced into Parliament in the current Session".—[Official Report, 16/7/ 01: col. 1349.]
I have only one question for the Minister. Is he able to tell us now whether his Government will introduce a criminal justice Bill which will breathe life into the dead words of our commitment to the convention?
On page 198 of its report, Global Corruption Report 2001, Transparency International said:
"In the UK, the government will soon submit to parliament new legislation that will specifically apply to bribery of foreign public officials".
How much longer will it have to wait?
We support the Bill. We believe that the Government are moving in the right direction. Nevertheless, we believe that the war on corruption is equally important. Although our amendment seeks to delay the Bill, the means, in this case, justify the end. Our amendment would halt implementation of the Bill unless or until a Bill to give effect to the Convention on Combating the Bribery of Foreign Public Officials in International Business Transactions is introduced. My previous amendment referred to enactment of legislation. The amendment before us today will shorten any delay to implementation of the Bill, and I hope that that will gain the support of the Minister.
Corruption is hindering British business and the environment, and it is hurting those whom we seek to protect—the poor and the disadvantaged. In its conclusion, Transparency International's global report states:
"Overall, the results of the two years of monitoring are very encouraging. To ensure a level playing field for companies from all states that are party to the Convention, it is important that the remaining countries ratify and adopt implementing legislation as soon as possible".
Our amendment would enable that to happen with greater urgency. I beg to move.
Lord Thomson of Monifieth: My Lords, I declare an interest as a member of Transparency International. I have been pressing this matter on the Government for some years. I very much welcome the noble Baroness's approach to the Bill and the way in which she has presented her case and I wholly support the thrust of her remarks. I am not sure, I am bound to tell her, that I approve of the amendment's text. It is not a wise course to seek to delay this very important Bill
1126
over this matter. Nevertheless, this matter is of great importance. The delays from the government side have done the Government unnecessary discredit for quite a long time now. When the Minister responds, I hope that he will give a positive reply.
Lord Redesdale: My Lords, we support the amendment's aims. My one reservation was expressed by my noble friend. My problem with the amendment is that it uses the word "introduced", which implies not that the legislation should be enacted but that during this Session it should be introduced. I have been put in the enviable position of directing whether we support the amendment or the Government, depending on the Minister's response. I very much hope that the Minister, who is on his first outing on this Bill, will give a sufficiently strong reply to sway these Benches.
Lord Desai: My Lords, it is wrong to make such a big fuss about what I call "big corruption". Big corruption is a division of surplus among the élite—how much ministers get from multinational corporations. It is very bad and rightly should be abolished but, so far as the poor are concerned, it happens at the top, not at the bottom. To stop the Bill for that purpose is frivolous.
Lord Grocott: My Lords, I am very grateful to the noble Baroness, Lady Rawlings, for being generous to me on my debut at the Third Reading of a Bill in this House. The procedures are a lot simpler in the other place—a debate on general principles is much more straightforward than dealing with detailed amendments, as we are doing this afternoon.
As the noble Baroness said, this issue has been raised on previous occasions. I appreciate the fact that the revised wording softens the amendment and makes it rather more flexible. However, as was made clear by my noble friend Lady Amos on Report, our view very much remains that the ability of the Secretary of State to provide effective assistance under the Bill should not be dependent on the passage of other legislation.
We strongly support the views of the noble Baroness and the noble Lord, Lord Redesdale, on the importance of legislation to deal with corruption. I have been asked by the Liberal Democrat Benches to do something that I am sure they know in their hearts would be extraordinarily difficult for me to do. I have been around in politics long enough to know that the progress of government legislation is dependent on figures such as the Leader of the House and the Chief Whip both in this House and in the other place. I know my place, and it is not for me to spell out precisely the way in which the legislative programme will run.
In response to the points that were made by the noble Baroness, there was a crucial difference between our debate in Committee and on Report because, as we all recall, the debate in Committee occurred before the Summer Recess and what happened between the Committee stage and the Report stage were the horrendous events in the United States on 11th September. Pressure on the legislative programme has increased significantly as a

1127
result of the urgent need to introduce emergency antiterrorism legislation. The proposal to introduce such legislation—but not, of course, its detail—has been broadly supported in both Houses and by both Opposition parties in both Houses. The Bill will enable us to continue our efforts to fight corruption in all its forms in developing countries. On Report, my noble friend Lady Amos made clear the Government's commitment to fighting bribery and corruption in developing countries and she provided examples of the work that had been done by the Department for International Development.
In our White Paper, Making Globalisation Work for the Poor, we made clear our commitment to tackling corruption. Corruption hurts the poorest people most severely. It diverts public services from those who need them and it strangles private sector investment and growth. World Bank analysis shows that a corrupt country is likely to lose about half a percentage point of gross domestic product per year compared with a relatively uncorrupt country.
DfID supports those countries that are determined to tackle corruption seriously through a wide range of governance reform programmes, which often include specific anti-corruption measures. DfID's country strategy papers assess the extent of corruption in the country concerned, its government's commitment to tackling the problem and DfID's potential role in supporting anti-corruption programmes.
I want very briefly to mention two or three examples. We are supporting national anti-corruption strategies, which often include the establishment of anti-corruption agencies, in Ghana, Tanzania, Uganda and a number of other countries. We are strengthening public sector capacity for budget and financial management in countries such as Bangladesh, Ghana and Nepal. We are helping governments in Uganda, Jamaica, Malawi and South Africa, among other countries, to improve their procurement, accounting and audit functions and to reform their civil service management. We are also giving support to strengthen the legal sector, including the judiciary, in India, Malawi and Uganda. The total committed by DIM to bilateral projects that contribute towards governmental reform is running at about £350 million annually.
Now that this Bill is nearing its conclusion, I repeat that there has been tremendous, reassuring support from all sections of the House for the Bill. The Government greatly appreciate the support that they have received. It has been scrutinised properly and neither the noble Baroness, Lady Rawlings, nor the noble Lord, Lord Redesdale, have let us off the hook. In view of the widespread support within the House for the implementation of this Bill at the earliest opportunity, and reinforcing the point made by the noble Lord, Lord Thomson, that we need to have it on the statute book and to deal with the other problem as well, I hope that the noble Baroness will feel able to withdraw the amendment.
Baroness Rawlings: My Lords, I thank the Minister for his reply and the noble Lord, Lord Thomson, for
1128
his partial support. Perhaps I was not clear enough for the noble Lord, Lord Redesdale. This convention has been passed and ratified; but it has not been incorporated into UK legislation, and that is what worries us.
On these Benches, we have pressed for this point at all stages of the Bill. We feel that the UK should implement the OECD Convention on Combating the Bribery of Foreign Public Officials, which has been ratified. As the Government feel unable to accept the amendment, or to give us a date for the criminal justice Bill, I shall have to seek the opinion of the House.
5.2 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 55; Not-Contents, 107.

Division No. 2

CONTENTS

Alton of Liverpool, L.

Kingsland, L.

Anelay of St Johns, B.

Kirkham, L.

Astor of Hever, L.

Lamont of Lerwick, L.

Beaumont of Whitley, L.

Lawson of Blaby, L.

Biffen, L.

Mackay of Clashfern, L.

Blatch, B.

MacLaurin of Knebworth, L.

Bridgeman, V.

Marlesford, L.

Brougham and Vaux, L.

Masham of Ilton, B.

Buscombe, B.

Montrose, D.

Byford, B.

Murton of Lindisfarne, L.

Campbell of Alloway, L.

Naseby, L.

Colwyn, L.

Noakes, B.

Cope of Berkeley, L. [Teller]

Northesk, E.

Cox, B.

Norton of Louth, L.

Denham, L.

Onslow, E.

Eden of Winton, L.

Park of Monmouth, B.

Elton, L.

Pearson of Rannoch, L.

Rawlings, B.

Ferrers, E.

Rotherwick, L

Gardner of Parkes, B.

St John of Fawsley, L.

Glentoran, L.

Seccombe, B. [Teller]

Griffiths of Fforestfach, L.

Skelmersdale, L.

Hanham, B.

Soulsby of Swaffham Prior, L.

Home, E.

Strathdyde, L.

Hooper, B.

Swinfen, L.

Howe of Aberavon, L.

Trefgarne, L.

Howell of Guildford, L.

Waddington, L.

Hylton, L.

Wilcox, B.

NOT-CONTENTS

Acton, L.

Christopher, L.

Ahmed, L.

Clark of Windermere, L.

Andrews, B.

Clinton-Davis, L.

Archer of Sandwell, L.

Cohen of Pimlico, B.

Ashton of Upholland, B.

Corbett of Castle Vale, L.

Bassam of Brighton, L.

Craigavon, V.

Berkeley, L.

Crawley, B.

Bernstein of Craigweil, L.

Davies of Coity, L.

Blackstone, B.

Davies of Oldham, L.

Borrie, L.

Dean of Thornton-le-Fylde, B.

Bragg, L.

Dealing, L.

Brett, L.

Desai, L.

Brooke of Alverthorpe, L.

Dormand of Easington, L.

Brookman, L.

Dubs, L.

Bruce of Donington, L.

Elder, L.

Campbell-Savours, L.

Falconer of Thoroton, L.

Carter, L. [Teller]

Farrington of Ribbleton, B.

Chandos, V.

Faulkner of Worcester, L.

1129

Filkin, L.

Milner of Leeds, L.

Finlay of Llandaff, B.

Mishcon, L.

Fyfe of Fairfield, L.

Mitchell, L.

Gale, B.

Monson, L.

Gilbert, L.

Morgan, L.

Golding, B.

Morris of Aberavon, L.

Goldsmith, L.

Morris of Manchester, L.

Goudie, B.

Murray of Epping Forest, L.

Graham of Edmonton, L.

Pendry, L.

Grenfell, L.

Plant of Highfield, L.

Grocott, L.

Ramsay of Cartvale, B.

Harrison, L.

Randall of St. Budeaux, L.

Haskel, L.

Rea, L.

Hayman, B.

Rendell of Babergh, B.

Hilton of Eggardon, B.

Richard, L.

Hogg of Cumbernauld, L.

Rogers of Riverside, L.

Howells of St. Davids, B.

Rooker, L.

Howie of Troon, L.

Sainsbury of Turville, L.

Hoyle, L.

Sawyer, L.

Hughes of Woodside, L.

Scotland of Asthal, B.

Hunt of Chesterton, L.

Serota, B.

Irvine of Lairg, L. (Lord Chancellor)

Sewel, L.

Simon, V.

Jeger, B.

Stone of Blackheath, L.

Jenkins of Putney, L.

Temple-Morris, L.

Joffe, L.

Tomlinson, L.

Jones, L.

Turnberg, L.

Judd, L.

Turner of Camden, B.

King of West Bromwich, L.

Uddin, B.

Lea of Crondall, L.

Warwick of Undercliffe, B.

Levy, L.

Whitaker, B.

Macdonald of Tradeston, L.

Whitty, L.

McIntosh of Haringey, L. [Teller]

Wilkins, B.

Williams of Elvel, L.

MacKenzie of Culkein, L.

Williams of Mostyn, L. (Lord Privy Seal)

Mackenzie of Framwellgate, L.

Massey of Darwen, B.

Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.11 p.m.
An amendment (privilege) made.
Lord Grocott: My Lords, I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.—(Lord Grocott)
Lord Howe of Aberavon: My Lords, I begin by saying, for the reassurance of the noble Lord, Lord Desai, as much as for the reassurance of the noble Lord, Lord Grocott, that my unaccustomed appearance at this unusual point in the proceedings is not intended to pose any serious threat to the Bill's passage.
I want to add my expressions of sympathy and encouragement to my noble friend Lady Young, whose birthday it was yesterday and to whom we all wish a swift recovery hereafter.
I intervene because this is an opportunity to re-express, and indeed to reaffirm, an anxiety that I share with others about what may be one of the unintended consequences of the shift in posture, implied in the Bill's passage, towards the priorities for the Department for International Development and the Foreign and Commonwealth Office. I say "reaffirm" because our anxieties have already been expressed in representations to Ministers, by myself in writing on
1130
more than one occasion, and by my noble friend Lord Campbell of Croy, who is unable to be here now, and the noble Lord, Lord Thomson of Monifieth.
If I may be allowed to do so, on behalf of all three of us, I declare a common interest because we are all trustees of the Thomson Foundation, which exists to promote instruction and understanding of the principles of journalism and the free press around the world. The noble Lord, Lord Thomson, is the acting chairman of that trust. I declare an additional interest as president of the Great Britain China Centre.
The point arises from the continuance or non-continuance of a programme of instruction in the principles of journalism which the Thomson Foundation has been running, in concert with some help from Her Majesty's Government, for a number of years. Indeed, it started during my time as Secretary of State in the Foreign Office. I was encouraged then to give it help by my noble friend Lord Campbell, who came with the noble Lord, Lord Thomson, to make representations to me. It is a programme whose very existence at one time would have seemed very remarkable—that, over the years, we should be giving help, in concert with Xinhua, the Chinese news agency, in instruction in the principles of objective journalism. The programme looked in danger of foundering, as colleagues will understand, at the time of Tiananmen square. None the less, it has continued.
The anxieties arose at the beginning of this year when, in a letter written on 26th January from DfID to the Thomson Foundation, it was said, by way of warning about the prospect of continuing the programme:
"It is not clear that further support to this programme will have the desired poverty focus".
My anxiety is that undue concentration on that particular focus could lead to the reduction or elimination of programmes that are otherwise extremely desirable. The very same letter said that DfID was expressing that view,
"although we are pleased with the project's outcomes to date".
Here we have a good project of long standing, which nevertheless has not yet secured assurance of continuing support after many years of pursuing it.
Since then, my noble friend Lord Campbell and, indeed, the noble Lord, Lord Thomson, who is here to speak for himself, have made representations about this point. I received a long letter from the Secretary of State for International Development, Clare Short, reaffirming the Department's negative posture. We have continued to pursue the point basically because it seems to us that although the relief of poverty must, of course, be an aspect of the policy of Her Majesty's Government towards a country such as China, as are the matters that we were discussing in relation to the previous amendment to the Bill, so also is what we can do to help to promote good governance. Colleagues will know that we have been running a number of programmes, in which the Prime Minister himself has taken part, promoting an understanding of the rule of law in China. Those are being financed by another part of the Government's programme.

1131
Our anxiety is that the unduly strict application by DfID of the poverty focus, which is understandable, is jeopardising programmes that have other justifications in the promotion of good governance, which is equally important for the promotion of sustainable development in these countries. That anxiety spills over into other areas, because there seems to be a lack of consistency in what is happening on this front. Some cases of exactly this kind have received help in a new form from the Foreign and Commonwealth Office human rights fund; for example, in Namibia and Belarus, Thomson Foundation programmes are still running, with money coming from a different pocket. In another case, programmes have been run in Georgia for some time, but diminuendo, largely because our ambassador in Georgia was himself in charge of the Know-How Fund, and knew how to have access to those funds to sustain the programmes.
Finally, the Department itself is financing programmes of that kind in some places. In Sierra Leone, for understandable reasons, the Thomson Foundation has its largest DfID contract. It is required to carry out the promotion of media integrity in that country, as part of what is known as the reconstruction of civil society. For another example of the links between press freedom and good governance, one has only to look at Zimbabwe, where it is so manifest that economic stability is linked to good governance and that one aspect of good, or bad, governance is the intolerance of press freedom.
There is no argument in principle between any of us. In principle, we all want those programmes to be maintained. My anxiety, and this is not a political point, is the division between the Overseas Development Administration, as it used to be, and the FCO. In my days in that office, the two were part of one all-embracing organisation, and joined-up government was quite easy. I had only to chat to my noble friend Lady Chalker, my last colleague in that post, to resolve a problem under one umbrella, as it were. The departments have since been divided and there may be a lack of integration between the two.
None of this angst is intended and I should like to refer to an observation made by the noble Baroness, Lady Amos, in the Second Reading debate in this House. She said:
"[The Bill] does not place any constraint on the types of activities or on the particular organisations or funds that a Secretary of State can support … Nor does the Bill constrain the Secretary of State to support only activities and organisations that tackle poverty directly".—[Official Report, 2/7/01; col. 703.]
Most recently when I raised the issue with the Foreign Secretary in a letter of 10th July, I secured the following response in a letter from him of 24th July:
"Encouraging the process of positive change in China, including better human rights, is a central element in the Government's overall strategy towards China. I regret, however, that I cannot yet give you a specific answer on the future funding of the Thompson Foundation programme. My officials are meeting with their DfID counterparts shortly to discuss this".
1132
That is the unresolved question about which we have anxieties not just in this case but because it may reveal an inadvertent shortcoming in the way in which things are being managed.
Perhaps I may sum up my concern in a couple of sentences. A programme for the funding of journalism training in China, which has been running for many years, may now be discontinued. I believe that such an outcome would send a profoundly wrong signal to the Chinese at a time when signs of increasing liberalisation, of course within relatively narrow limits, of their press and media are moving forward hopefully, albeit slowly.
The link between that kind of progress and other economic and social changes which are calculated not only to alleviate poverty but to promote an improvement in human rights is surely hard to dispute. And both those propositions are important aspects, of British foreign policy towards China. One would like to be reassured that discontinuity will not arise because of some interdepartmental glitch, or whatever. All the objectives are good and we want to see them being maintained.
Lord Judd: My Lords, I believe that all noble Lords will want to thank Ministers for the understanding way in which they responded to the points put to them during earlier deliberations on the Bill. It is particularly good today to see my noble friend Lord Grocott at the Dispatch Box. He and I have known each other for many years and I hope he will not be embarrassed if I say that it is another example of the right person in the right place. I know that his commitment to these issues has been strong throughout his political career.
I shall not surprise the Front Bench if I say that I remain a little agnostic about the Bill. I am riot altogether convinced about what it has added to the scope, power and effectiveness of a department which I greatly admire. In fact, because I admire the department so much and because I admire the political leadership of all the ministerial team at the department, I find the Bill a little disappointing in that it has missed an opportunity to include so many key commitments which I know the Ministers and the department take seriously.
It has been strong on legalistic pre-occupations and inhibitions but short on specifics. As we move forward to vote on the question that the Bill do now pass, there must still be an anxiety—the noble and learned Lord, Lord Howe, referred to it from another angle—about the definition of poverty. There must also be some anxiety about the absence of a clear definition of what humanitarian aid is and should be. The present situation surrounding Afghanistan is a good illustration of why it is so important to be clear on this matter.
I have listened to Ministers closely and conclude by saying that if I am reassured at all, it is by the unequivocal language used by my noble friend Lady Amos from the Dispatch Box. With all her commitment and understanding she said without

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hesitation that if people such as me are worried that the Bill mentions only the reduction of world poverty, whereas White Papers had mentioned elimination, the Government are determined that the reduction must always be a tangible and measurable move towards its elimination. The Government are totally committed to the elimination of poverty, which is some reassurance.
Secondly, if some of us were worried that it was a strangely permissive Bill in the sense that it gave the department the right to use funds where it was going to move towards a reduction in and elimination of world poverty but did not not do so if it was not, we had the words of the Minister not once but repeatedly, saying that it would be only where it was demonstrated that money going towards proposed action would be justifiable in terms of the elimination of world poverty that it would be approved.
Furthermore, we received specific reassurance on the Government's commitment to multilateralism and on the Government's determination to see everything they are doing on development related to their commitments on environmental policy. Less clear is the Government's reassurance on what happens when they are properly and understandably—and in many ways I would applaud their doing this—co-operating with the private sector or other institutions. The Government's statement did not make it absolutely clear that the overriding consideration would be that anything done in this respect must be towards the elimination of world poverty.
However, whatever disappointments, candidly, there may be on my part and perhaps on the part of others about missed opportunities, we nevertheless have nothing but admiration for the department and its work and for its Ministers. We find the reassurances that Ministers have given from the Front Bench a little encouraging in those respects and we wish them well.
Lord Thomson of Monifieth: My Lords, I want to follow the remarks of the noble and learned Lord, Lord Howe, about the work of the Thomson Foundation in China. However, I want briefly to put it in a wider context against the background of the Government's overall aid strategy, the path of which is expressed in the Bill. In doing that at this late stage on the question that the Bill do now pass. I am conscious that like the noble Lord, Lord Grocott, I appear in the discussions on the Bill for the first time. I apologise for that discourtesy. He is appearing for the first time with the best excuse of all; that he is a new Minister, whom we welcome to his responsibilities.
I congratulate the Government and the formidable Secretary of State of the DfID on the fresh drive and impetus that has been given to the Government's overall aid strategy over recent years. I do not dispute that the ultimate correct priority is to tackle world poverty. However, I agree with the words used by the noble Lord, Lord Tomlinson, during Second Reading of the Bill. He said:
"The poverty focus must be capable of wider interpretation than just direct aid to the poor".—[Official Report, 2/7/01; col. 715.]
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Here I declare a number of interests; the interest in the Thomson Foundation which was revealed by the noble and learned Lord, Lord Howe; as patron and founder of the Council for Education in the Commonwealth; trustee of the John Smith Trust; and trustee of various similar worthy bodies. All of those concentrate on the contribution which education and training can make to the development of good governance. We believe that good governance helps to lay the foundations on which developing countries can tackle their own problems of poverty more successfully as well as building decent and tolerant pluralist societies.
The Government promote good work in this field in various ways, as the noble and learned Lord, Lord Howe, mentioned. They do so through their Chevening scholarships, through the Know-How Fund, through the Westminster Foundation and through the grant to the Thomson Foundation, which is under so much, in our belief unjustified, threat. I hope that the grant which is now threatened can be reconsidered.
The attitude of the Government to this matter reflects far too narrow a test for an aid policy. There are other issues apart from the particular matter which concerns us about the grant to the Thomson Foundation. There are similar issues about educational aid. I believe that that is far too narrowly focused on primary education, important though that is. Developing countries need highly trained educational administrators if they are to tackle the poverty of their own school systems. I believe that that underlines the importance of the Commonwealth scholarships and fellowships scheme and similar aid policies in the field of higher education.
I recognise the reluctance of MID and its formidable Secretary of State to have their poverty policy as they see it diluted by all the various claims that inevitably emerge in any parliamentary system. But even the policy in this Bill has been compelled to make exceptions to the basic poverty test, for example in relation to Overseas Dependent Territories, the policy on humanitarian aid, which is now urgent and very much in our minds, and the multilateral aid that is provided through the European Union. I am glad that the EU, with which I had an involvement, has a rather wider vision of the overall purposes of aid policy than the very narrow focus which I believe to be the core of this Bill.
I wish the Government and Secretary of State well in their aim to eliminate poverty, but I plead for the widest possible vision of how it can be achieved. I make a particular plea for recognition of how education, training and good governance can make an essential contribution to a wise aid policy.
Lord Grocott: My Lords, in broad terms I certainly give the assurances that the noble and learned Lord, Lord Howe, and the noble Lord, Lord Thomson, seek. Good governance is a very important contributor to the reduction of poverty and is entirely consistent with the fundamental principle which underlies this Bill. I refer to a free press, an

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opposition, debate in the media and all the matters associated with it. Perhaps I should declare an interest as a long-standing member of the National Union of Journalists. I say to the noble Lord, Lord Thomson, that I have a long-standing interest in television. Those matters are quite consistent with the objectives of the Bill. At this stage of the Bill it would not be right to comment on decisions in respect of individual pieces of funding, but I hope that I can provide reassurance on that front.
Although it is customary to do so, I express my sincere thanks to all those who have taken part in the Bill. I thank them for their efforts over long debates. I refer to the noble Lord, Lord Redesdale, the noble Baroness, Lady Rawlings, and various contributors on this side of the House, not least my very good, honourable and noble friend Lord Judd. Throughout much of our two careers the positions have been reversed; I have sat where he is, criticising the person who stands here. I know that his support for the Bill is warm and strong and that he brings great expertise to it. My noble friend Lord Desai, with his cryptic interventions, and others have also contributed. The hour is late. I am pleased that the Bill has reached this stage.
On Question, Bill passed, and sent to the Commons.

Travel Concessions (Eligibility) Bill [H.L.]
5.33 p.m.
Read a third time; an amendment (privilege) made.
Lord Falconer of Thoroton: My Lords, I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.—(Lord Falconer of Thoroton.)
Baroness Scott of Needham Market: My Lords, we on these Benches wish this Bill well as it leaves your Lordships' House and wends its way to another place. It would be extraordinary if we did otherwise given that we pressed very hard during the passage of the Transport Act 2000 for the equalisation of age eligibility for men and women. We remain concerned and disappointed that the Government have not taken the opportunity to widen the scope of this Bill to another age-related group, namely young people between 16 and 19 years of age. To have done so would have opened up opportunities in terms of accident reduction, sustainability and, most of all, access to services for a group of people who should be given every encouragement to stay in full-time education.
We also remain concerned about the costs to local authorities given that any shortfall between government grant and local authority expenditure can be met only by cutting other services. We already hear stories emerging from local authorities. We are still concerned about the underlying state of the bus industry. We hope that the Government will take very seriously some of the concerns which are being
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expressed, because, however good the concessionary fare scheme may be, without a good underlying bus service there is very little point in having it.
Baroness Hanham: My Lords, I, too, wish the Bill well. Although the Bill is not very long it has been well scrutinised, as has the concessionary fare scheme in general. That may not have been quite what was intended when the Bill was brought forward. I reiterate the concern about compensating local authorities. Specifically, I refer to those authorities in London where the scheme is already widely operated and in some areas is mandatory, whereas in the country it is discretionary, and where it is probable that the implications of men travelling to work on concessionary bus passes has not been sufficiently taken into account. We have, however, addressed those matters during the course of the Bill. I hope that there will be discussion with the Association of London Government about the amount to be included in the standard spending assessment.
I note with some irony that equal opportunities have now worked in reverse. For once women are ahead of men, but, sadly, in this Bill it will be short-lived because in due course they will be married and hitched up to a lesser benefit.
Lord Falconer of Thoroton: My Lords, the Chief Whip deplores speeches being made on this occasion. However, I thank the noble Baronesses, Lady Scott and Lady Hanham, for their support for the Bill. I believe that the measure has been very well scrutinised, and I hope that it goes to the other place with their blessing.
On Question, Bill passed, and sent to the Commons.

Registered Designs Regulations 2001
5.38 p.m.
Lord Sainsbury of Turville Lord Sainsbury of Turville rose to move, That the draft regulations laid before the House on 10th July be approved [6th Report from the Joint Committee].
The noble Lord said: My Lords, the purpose of these regulations is to implement European Directive 98/71/EC on the legal protection of designs into United Kingdom law. This directive has had a long history. A Green Paper in June 1991 led to the first proposal for a directive in 1993, which was finally adopted in 1998. Throughout that time, and afterwards in preparing these regulations, the Department of Trade and Industry was in consultation with designers, manufacturers of consumer products and others who will be affected.
The appearance of a product can make the difference between success and failure of even the most functional of items. Good design is becoming ever more important in marketing a new range. The IJK has recognised the importance of protecting the investment of designers by protecting their designs from copying since the 18th century. The need to protect designs is recognised by several international treaties, most notably the Paris Convention of 1883

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and the TRIPS Agreement. However, the actual extent and effect of protection of designs is probably the least harmonised of intellectual property laws across the world.
Harmonisation of laws helps businesses plan their activities with more certainty. Designers cannot understand why their design might be protectable in some countries but not in others. Similarly, their competitors may be faced with determining whether rights which have been registered in different countries are actually all valid.
The individual assessment of the legal position which applies in different parts of Europe's internal market is unnecessarily time-consuming and expensive, particularly for small businesses which do not have their own legal departments. It can put designers off applying for protection, or put a manufacturer off launching a product in case it cannot be marketed across the whole Community.
The Commission and member states have sought to find the most appropriate protection for the benefit of Europe, recognising the investment made by designers and the need for fair competition for the benefit of consumers. Much of what the directive requires is similar to the protection already provided by the Registered Designs Act. There are, however, a few differences that are particularly significant: first, protection will be for the design itself, rather than a particular article bearing the design. This makes little difference when the design is the product itself but makes protection much simpler for designers of ornamentation—a floral pattern perhaps—which can be applied to many different types of product. Secondly, protection is extended to handicraft and one-off items. Up until now we have only protected designs applied to articles by an industrial process.
Thirdly, the protection offered by registration is improved. It gives the owner the sole right to use any design which gives the same overall impression as the design which he has registered. Until now, competitors have sometimes been able to sidestep the protection by making relatively minor changes to the design.
Fourthly, the quid pro quo for this is that the test to gain protection becomes conversely stiffer. Protection is only available if the design is both new and gives a "different overall impression" from earlier designs. Previously a design could be registered as long as it differed in a material detail.
Finally, in the past designs have had to be absolutely new to be registered. Almost any public disclosure before filing an application at the Patent Office meant that a registration would be invalid. The directive introduces a 12-month "grace period" where a designer can show and use his design in public to test the market and gain backing without prejudice to his right to apply for protection.
I must finally mention the significant area that this directive does not harmonise. That was one of the major reasons why it took so long to negotiate. Member states and the European Parliament could not agree on how to treat products which can be used
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as spare parts for complex products and have to match the original part to perform a satisfactory repair—car body panels and light clusters, for example.
The UK excluded such parts from registration in 1988 after it was found that some original manufacturers were using intellectual property rights to the detriment of consumers to maintain a monopoly on spare parts. Other member states allow full protection. It was finally agreed that it was important to bring the parts of the directive which could be agreed into force as soon as possible. The Commission would continue to review this area, to report in 2004 and make a further proposal in 2005. In the meantime, member states would keep their existing laws regarding the use of such parts for repair purposes. The UK's law presently excludes such designs from registration, meaning that they lack protection from others using them in original products as well as for repair purposes. The directive allows us the option of retaining this position. However, consultation with independent spare parts manufacturers concluded that that was not appropriate. The regulations allow registration of such designs, but the rights cannot be enforced against those producing, selling or using the products as spare parts. That is consistent with the interim solution which has been agreed for the forthcoming equivalent Community-wide right, the regulation for which should be adopted soon.
It is the practice for a Minister inviting Parliament to approve a draft statutory instrument to volunteer a view regarding its compatibility with the convention rights as defined in Section 1 of the Human Rights Act 1998. In my view, the provisions of the draft regulations are compatible with the convention rights. I commend these draft regulations to the House. I beg to move.
Moved, That the draft regulations laid before the House on 10th July be approved [6th Report from the Joint Committee].—(Lord Sainsbury of Turville.)
Lord Rotherwick: My Lords, this is an uncontroversial regulation which serves, in these days of global commerce, to make sure that throughout the EC registered designs are treated in the same way.
Registration of designs protects businesses from having their goods and logos copied by unscrupulous pirates who produce cheap and usually inferior copies of high value or well-known products.
The regulation is in compliance with an EC directive. I trust that when the directive becomes fully operational by the end of this month our European partners will be as assiduous as the UK will undoubtedly be in ensuring that it is fully complied with.
We support the Motion to approve the regulations.
Lord Razzall: My Lords, we also support the Government in bringing in these regulations. The noble Lord, Lord Rotherwick, indicated that the regulations are non-controversial. They may be non-controversial but they are clearly complex. The regulations are brought in under EU Directive 98/71,

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a 1998 directive. Perhaps the Minister will confirm that the Government have until Sunday to ensure that UK laws are consistent with that directive. Therefore, by any stretch of the imagination, the Government are leaving it fairly late.
I raise two points of detail for the Minister and make two general points. As the noble Lord indicated, the test for novelty will now change. The current position for registered designs is that one cannot register one's design in the UK if it is known anywhere else in the UK. Under these regulations that restriction will apply to it being known anywhere in the world. I should be interested to hear the Government's perspective on how that requirement will be enforced. It is obviously a particular concern of SMEs, which the Government are trying to encourage in this area, to discover how they can become aware of the fact that their design is known anywhere else in the world as opposed to solely in the UK.
The second point of detail is that the regulations introduce a test for individual character. In other words, while a design-seeking registration may differ from others, the question will have to be asked whether it differs enough. The test will be undertaken by an informed user or one who is familiar with the products in question. That is clearly a fairly subjective test. I should be interested to hear from the Minister how that will be enforced. That again will be of concern particularly to the SMEs which do not employ a myriad of advisers on these kinds of subjects.
I raise finally two general points. One is with regard to the European directive in general. It is not designed to ensure that people registering their designs will have automatic protection across EU states. There will in due course be a Community design directive that will give the owners of registered designs automatic protection across the EU. Can the Minister give any indication as to the timing of that directive and whether the Government have a negotiating position they would be interested in drawing to the attention of this House?
My final point is that these proposals are extremely important for the small and medium-sized enterprise areas. The Government clearly have a policy in the DTI of encouraging the SMEs in particular to develop their intellectual property rights and to stress the importance of those rights for small businesses. I know that some correspondence has taken place with Melanie Johnson, the Minister in another place, regarding what the DTI is doing to increase the knowledge of intellectual property rights, particularly among the SMEs. I should be grateful if the Minister can give me some comfort that that campaign is continuing.
Lord Sainsbury of Turville: My Lords, the noble Lord, Lord Razzall, is quite right to point out that the regulations should be brought into force on 28th October. They will be brought in on 9th December. The reason for the delay is that users of the system who are aware of the effects of the
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regulations have asked for notice before they are brought into force. They need a short delay to provide time for them to notify partners and clients.
It has taken an extremely long time to turn the directive into legislation, for the very reasons pointed out by the noble Lord. Some aspects of the regulations break new ground. It has proved quite difficult to find a form of wording which makes the position clear. Indeed, the problem was finally solved when a certain amount of copy was taken from the directive and put directly into the legislation.
We regard this legislation as important because it relates to SMEs and we shall continue to campaign to help such enterprises in a number of ways, in particular with regard to intellectual property rights. As regards the question of novelty worldwide, that is for the courts to decide. The restriction is similar to that which has been applied for many years in the field of patents. Occasions can arise when worldwide novelty may be extremely difficult to establish.
Agreement has been reached in the EU Council on Community design legislation, which will give Community-wide protection. Those regulations will be adopted shortly. On the question of individual character, again this is very similar to a well-known concept used in patent law; namely, the inventive step. We are sure that the courts will have little difficulty in assessing whether the same overall impression is made. Again, this is a new concept, but it should prove to be manageable.
Designers across the United Kingdom and the rest of Europe are looking forward to the simplification and new opportunities offered by this harmonisation directive. It represents the result of many years of consultation and negotiation. I commend the regulations implementing the directive to the House.
On Question, Motion agreed to.

Student Finance
5.52 p.m.
Earl Russell Earl Russell rose to ask Her Majesty's Government what principles will underlie their review of student finance.
The noble Earl said: My Lords, it is a matter of pleasure and, indeed, a matter of pride to speak from the Benches of a party of which an academic need never be ashamed. Nevertheless, what I offer today is a personal speech. It is based on individual experience as a university tutor and would be better compared with a constituency speech in another place. If the Minister should be eagle-eyed enough to spot some trivial difference between what I have to say and Liberal Democrat Party policy, he will note that my noble friend Lady Sharp of Guildford is to speak for the party. I shall speak from my experience.
I declare an interest as a serving professor of history at King's College, London; a member of one of the best departments of the one of the best colleges of one of the best universities in the United Kingdom. But when, at the end of the debate, the Minister

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reaches for his Roget's Thesaurus for some adjectives, I do not think that "rosy tinted" will be near the top of his list.
I welcome also the long and distinguished list of speakers who have been attracted to contribute to the Question. I mean no derogation of anyone else if I offer a special welcome to the noble Lord, Lord Morgan. My son was a pupil in the Department of International Politics at the University of Aberystwyth when the noble Lord was in charge. My son received what would have been a world-class education by the standards upheld before 1979. I should like to say that that is appreciated.
I welcome the fact that there is to be a review. I have asked a Question because one cannot get right a review unless one appreciates what was wrong in the first place. I am not sure whether that knowledge exists in the Government, and it is principally to probe that point that I have tabled the Question.
The rumour working its way along the grapevine suggests that we may be moving in something of a Cubie direction; away from the up-front payment of a tuition fee and towards a graduate tax. Should that be the case, there will be many reasons for welcoming it. Averages, like fig leaves, conceal more than they reveal. Many graduates, in particular those who go on to choose professions such as teaching—and we need more of them—earn a great deal less than those averages. The case for gearing more closely than before repayment to the graduate salary is strong.
During the last election I recall sharing a platform with one of our more promising parliamentary candidates. She was a solicitor and a graduate of Cambridge. She told me that one of her best friends and colleagues had a younger sister even more able than herself. The sister had to face the prospect of paying the tuition fee. The family had decided collectively that they simply could not raise the money. Now, that extremely able sister is working in a menial job, testing brakes for Ford. First, that is a waste; secondly, it means that when the Secretary of State criticises universities for the high percentage of middle-class intake, she is demonstrating what John Stuart Mill described as,
"the inability of the unanalytic mind to recognise its own handiwork".
But what is most wrong with this package is its size. If that is all that is to be put right, all we shall achieve is putting student finances back to the position they were left in by John Major. If, after two full terms, that is the best that this Government have to offer, they can do as much as they like to make voting easier, but I do not think that they will be able to persuade many of my pupils to do so.
The main reason for saying that this package is not enough is the number of people who have to take paid employment during term time in order to sustain themselves. Before 1990, that was almost unknown. Now it is almost universal. I do not think that noble Lords realise quite how serious it is. That is because we observe the practice in America, where it does not do
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desperate damage. But American students take on over four years the amount of work that English graduates are required to undertake in three. The three-year intensive English degree is compatible only with the full-time student. But the full-time student is now very nearly extinct.
The only full-time students to be found are those with rich parents who receive from them financial support, very often in the order of £2,000 a year, over and above the package of finance provided by the state. This is simply another way in which middle-class children enter university with a special advantage, and it is not the doing of the universities. We shall not take the blame for it. It is a point about which we have protested since the very beginning.
I wish also to ask the Government—I have given the Minister's office notice of this—whether they will look again at the application to students of the Housing Act 1988. That is the legislation which requires halls of residence to charge market rates. A number of cases are known to me where the rent charged by the hall of residence is greater than the whole of the student financial package put together. In those circumstances, I should have thought that it was quite easy to argue that the package is not large enough. As a trustee of the National Portrait Gallery, I shall declare an interest in the view that London students should not be entirely confined to areas such as Whitechapel. They should not be ghettoised; they should be able to live in the same range of areas as the rest of us. But until the 1988 Act is tackled, they will not be able to do so. Furthermore, until the Act is tackled, vice-chancellors will continue to get the blame for something over which they have absolutely no control. One can say, as I once said of Queen Elizabeth I: she left her officials to collect the unpopularity. Those who suffer that do not forget it in a hurry.
Everyone, at one stage or another, suffers some kind of special financial misfortune. That is why I think that everyone should have the right of access to the social security safety net. The absence of that net is causing gross and extreme hardship in some cases. The worst examples are those students who are estranged from their parents. I am responsible for two such cases at present. One student has recently failed to obtain a degree when he should have ended up with a First. That I regard as entirely a government responsibility. If you are working in the part-time labour market, at low wages, without housing benefit, you simply cannot earn enough money to house yourself. In my opinion, people in that position would be well advised not to attempt to come to university. I know that that is also the view of the student concerned, who has expressed it to me in words of one syllable or occasionally less.
The same problem arises with single parents. The cost of childcare is a familiar problem. I had a student in that position. We even managed to get the whole of her year to club together to provide an organisation for baby sitting for her—we could not have done much more—but it still was not enough and she withdrew. I regard that as a failure, but it is a failure that I do not have the power to put right.
Before the Minister starts to give a reply about providing university nurseries or crèches, he should consider the pressure put on university space by expansion. That is extreme. I do not know whether the remarks attributed to the Chancellor of the Exchequer on the Sunday before last in the Independent on Sunday that there was no new money for this package were official, speculative or entirely mistaken. That matters because the Prime Minister is committing himself to further expansion. That simply cannot be done without expenditure. If I say that in my lectures there is standing room only, I am being optimistic; I am not even sure that there is standing room. But before the Minister replies to that with a graceful compliment, it is also the case with all my colleagues to whom I have spoken. I do not take it as a personal tribute.
If there is not to be additional money, there must be a scaling back of expansion; otherwise we shall not be giving students higher education but a mockery that pretends to be higher education.
Clearly the Prime Minister and the Chancellor of the Exchequer have got to get their act together. I believe that they are on worse terms than any pair of senior Ministers since Russell and Palmerston. But Russell and Palmerston could talk to each other. Can they?
6.2 p.m.
The Lord Bishop of Lichfield: My Lords, I am honoured to speak early in the debate and I thank the noble Earl. Lord Russell, for introducing it. My particular concern is very close to that of the noble Earl, which is to draw government attention to some of the personal and pastoral needs of students at new universities—I am thinking of new universities in my own region of the West Midlands—needs arising in part from precisely that wider access to university education in which we rejoice.
In their review of student finance, therefore, perhaps I may ask the Government to remember someone like Malcolm. Malcolm is an intelligent mature student who wanted to do better for his own family and for his future. He gained entrance to his regional university and now travels 15 miles a day to study there. But his initial small amount of debt has escalated, and despite hardship funds and other sources, plus working for 20 hours per week in paid employment—a point underlined by the noble Earl—Malcolm is now unable to pay his rent regularly. In the middle of his second year, therefore, he is being counselled for stress. Just the other day, I heard of his decision to withdraw. For him, university will be an experience of failure which may last for the rest of his life. I hope that the Government review of student finance will consider the Malcolms.
And also the Cathys. Cathy is a younger student of 18. For her first two years she worked as a waitress, part time, to make ends meet. But her strength and concentration ran out, and university, again, has become a place from which she has withdrawn. Should this happen in a decent society which made wider access in the first place?
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In one way, I am rather proud to report that some students are receiving regular food pa reels from local churches, along with the covert collusion, I am glad to say, of college chaplains.
In conclusion, I remind the Government—they should need no reminding—of the three key players they should consider in the review. I have already mentioned the students but I shall say a further word about them. Many years back, in the 1960s, I was a university chaplain in Cambridge. As I look back to those years, one of my overwhelming remaining impressions is that of vulnerability. At that time, Cambridge had one of the highest suicide rates in the UK. Universities can provide some of the most creative times but also some of the most stressful and anxious.
But in the Midlands, the Malcolms and the Cathys do not even start from a level playing field. They did not grow up in families accustomed to mortgages and investments. Such students, if they graduate, do not walk into highly paid jobs. They do not expect to pay back their student loans within five years. They do not receive usually a golden handshake from an employer to pay off their student loan and bank overdraft on the first day of employment.
That is the students. But there are also the employers. What will be the role of the employers as the new government review goes forward? Many employers are beneficiaries of the new wider access to education; in what ways can they become contributors? I recall attending, several years ago, a memorable lunch meeting on a sunny day in the Birmingham boardroom of a highly successful manufacturing company. The lunch guest and speaker, whom I remember hearing with delight, was the noble Lord, Lord Dearing, who is in his place today. He held us in thrall by his vision for the renewal of school education.
Can the Government now take such firms into effective partnership in funding this crucial, exciting stage of regional university education itself? Is the contribution of such employers fairly distributed? Should those employers who can afford golden handshakes contribute more towards the whole?
Finally, what of society's contribution. I believe that some countries raise financial contributions from former students by collecting a graduate tax spread throughout their employment life. Others within higher education call for the reinstatement of government grants. These questions are too high for me; they are for others present today in your Lordships' House. I simply ask the Government in their review not to forget the Malcolms and the Cathys. They are there because of that very widening access which the Government have done so well to bring about in the first place.
6.9 p.m.
Lord Morgan: My Lords, I thank the noble Earl, Lord Russell, for introducing the debate. I also thank him for his extraordinarily warm tribute to the Department of International Politics at Aberystwyth.

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It is deeply gratifying. It was the first such department in the world. It has produced many brilliant students, including, as it happens, my immediate neighbour, the noble Baroness, Lady Andrews. I am much gratified by what the noble Earl said.
Like the noble Earl, I am an academic. Academics have been accused this week in The Times Higher Education Supplement of being whingers, comparable only to farmers. So let me begin by not whinging but by stating that the Government have been very positive in many ways about higher education. They have tried to increase the participation rate and to link universities with a process of lifelong learning. They have introduced some new money. And they have provided stability in terms of the horizon for funding, which I never experienced as a vice-chancellor in six and half years.
The Government do not always help themselves. There was the Laura Spence affair of ill memory, which was dreadfully unfair to Oxford. Even Estelle Morris's speech a few days ago combined some sensible observations with references to "ivory towers" and "elitism"—a term which politicians have almost drained of meaning. However, the Government have done many good things. I am delighted that my noble friend Lord Davies, who is a former university teacher and chairman of a funding council, will be able to elaborate on them.
But one of the good policies has not been student finance, which is the nub of the Question. It is clear that, perhaps for the best reasons, the policy that the Government introduced has not worked. No one need be smug about this. University finance, like housing finance, is an extremely technical matter. There are no quick fixes, no easy options for the Government. I do not believe that they have found the right one. The Dearing proposals—I am honoured that the noble Lord is to speak next—were not adopted. The maintenance grant, which the noble Lord wanted to be preserved, has been abolished and the system has been described by a Minister as "an administrative nightmare".
We have a situation that was intended to assist the deserving poor while removing a subsidy for the apparently not-so-deserving middle class. What has in fact happened is that students over a wide range of social categories have been discouraged and are certainly accumulating debts. The Secretary of State referred the other day to the "perception of debt". "Perception" is a word that might be dropped, along with "elitism", in the dustbin of history. The difficulties are not a matter of "perception"; they are real. Students are penalised. The right reverend Prelate has given a moving example of the kind of problems that occur.
The additional money has not affected the universities in the way that was intended. Many of the most impoverished universities are those that are the most deserving. They have suffered from a fall in student recruitment, with the result that they have been penalised in failing to recruit in sufficient numbers. Yet these are commonly the universities that
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are doing most in an attempt to promote social inclusion, to bring in ethnic minorities, to work among those in inner cities, former mining valleys or whatever.
The effect has been to widen the differential between those universities which are successful and the majority which are not. In 1991, when I was vice-chancellor, it was thought that all institutions would have parity of esteem as the binary division was removed. In fact, levels of inequality are worse than they were in a variety of measurable ways.
Tuition fees may not be the main hardship. The sum of £1,000 must be paid up-front, but it is commonly paid by the student's parents. It was thought for some time that having to pay the fees had deterred students and harmed recruitment. It is good to see that the recruitment figure has risen this year—to 18,000—although it is the first time for some years that it has occurred. So that vital principle—although I regretted it at the time—has been surrendered.
The ending of the maintenance grant has been harmful. It has produced the effects indicated by the two previous speakers. It has diminished the whole point and quality of the university experience. The fact that students commonly have to engage in other activities during university vacations means that a three-year university course is cut back by half. Essential reading and preparation has to be done during term time, not in the vacations. So if one thinks of universities in terms of quality rather than simply the quantity of warm bodies which can be inserted on the campus, that seems to me less satisfactory. We have Walter Bagehot's famous doctrine of "mere numbers" in place in this context.
The noble Earl, Lord Russell, mentioned the Cubie report. England may increasingly be the odd man out. The Northern Ireland Education Committee has voted in favour of the Cubie principle. In Scotland, the means-testing of grants is already in operation; tuition fees are not paid by the students themselves; and finance is provided through student endowments. I have spoken to Mr Cubie and he appears to be perfectly content with the financial basis from which that position derives. There is certainly some support for this approach in Wales, notably from the Welsh teachers' union, Undeb Cenedlaethol Athrawon Cymru.
Scotland takes a different view on these matters. It seems to regard higher education as a public good, a basic component of social citizenship. There is no cheap talk about it being the "birthright of the middle class" or use of the kind of slogans that we have heard on this side of the Border. Higher education is seen as an essential feature of citizenship which will repay society many times over through a skilled and cultured population. I wish that the same view could be imported here. Among other things, it is an example of the liberated and refreshing effect of devolution bringing in different philosophies about education.
The Question refers to "principles". I shall briefly suggest four. Clearly, access must be widened. We are well short of achieving that: an extra 100,000 places

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and a 50 per cent participation range are far in the distance. Any payment by students through fees, loans or endowments should be geared to means and spread out over a long period. That is a problem, as indicated in the report on social justice chaired by my noble friend Lord Borne some years ago—the problem being that if students are charged initially, they are the least equipped to pay. Equally, if the payments are phased over a long period, the funds are slow coming in. Clearly, the present system is not geared to means, although the intention is that it should be.
Thirdly, the principles should be nationally comparable across England and Wales. The system should not depend on the vagaries of local circumstances, including the policies of local authorities, which can vary considerably—for example, with regard to the recruitment and support of mature students.
Finally, I say with feeling as someone who was in charge of a university for six and half years, if there is extra money—please—the university ought to get the benefit. The funds are so often clawed back by the Treasury and by funding councils. Universities experience precisely the kind of problems in relation to their facilities and infrastructure that were described by the two previous speakers. I hope that that will be so. I should) like to believe that universities are still free, autonomous institutions, able to spend their money as they themselves see fit, as professional agencies. They are not nationalised creators of wealth, as they were in the past—but as a historian, I tend to be in favour of the past.
6.18 p.m.
Lord Dearing: My Lords, I join in the thanks to the noble Earl for initiating the debate, so that our collective experience and wisdom may contribute to guide the moving finger in the department—which, once having writ, we may not change a word. I hope that we have got in first!
I am no philosopher, but I remember the saying of George Santayana:
"Those who cannot remember the past are condemned to repeat it".
The House may remember the circumstances that led the committee that I chaired to offer some recommendations regarding contributions from students. We commented that over the preceding 20 years there had been a 40 per cent reduction in the unit of funding for students in our institutions of higher education. On the then government's planned expenditure up to the year 1999–00 there would have been a fall of 50 per cent. In 1995, 41 institutions were in deficit. In 1996, the figure had risen to 66. Capital expenditure on buildings and equipment was being deferred, as was course maintenance. Research in our greatest research universities was imperilled by the decay of their infrastructure. Other universities from overseas said, "Unless you can remedy this we cannot see ourselves continuing to be research partners with you". There was, in short, a crisis in funding.
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Against that background there was an accumulating view that there needed to be a new source of funding. People looked to industry but, of course, also to students who, as research has shown, are the major beneficiaries of higher education. After consulting its members the National Union of Students came to the conclusion—I believe I am right in this—that, while a minority of the members of that union were opposed to any change in the then maintenance grants, a majority were prepared to recognise that they should make some contribution, possibly through a loan.
Many others were also of that view. My committee came down against the abolition of maintenance grants because the great problem in our society is the imbalance between representation in higher education according to social class. If you were born into a family of professional middle class parents, the odds were that you went to university. If you were not born into such a family, the strong odds were that you did not go to university. I say from memory that those in social class 5 provided about 2 per cent of the university population. Our view was that to remove the one special grant that favoured those people would make it that much more unlikely that we would solve that problem. Therefore, we chose instead the concept of a postgraduation income contingent contribution to the cost of tuition. We thought that that was equitable because the prime beneficiaries of that public expenditure were those who enjoyed the benefits of higher education in terms of greater security of employment and higher pay. There was a return on their investment, including forgone income, of 11 to 14 per cent in real terms. However, that benefit was not available to all members of society; it was available only to those who had the right DNA and the right parents to give them the best chance of qualifying for higher education while those who were not so gifted did not benefit from that opportunity.
The great issue today is to maintain quality and to increase participation. I say in parentheses that the first big battle that has to be fought in that context is to improve participation in continuing education at 17. Our participation rate is 72 per cent; in the OECD it is over 80 per cent. In France, Germany and Japan it is over 90 per cent. We must lift the perfonnance there and commit the resources to secure major improvement if we are to have any hope of obtaining the 50 per cent participation rate in higher education and involving more people from less well-off homes—that is the big battle that must be fought.
I turn to the particular matter of the Question of the noble Earl, Lord Russell; that is, the matter of principles. I have seen and welcome the four principles offered by the Government as the foundation for the review. I can identify with those of the noble Lord, Lord Morgan. I have written down five of my own—I have a little list—which I offer to the department through the House: first, recognition of the equity of a post-graduate contribution to the cost of tuition on an income contingent basis; secondly, recognition that the form of post-graduation contribution should reflect the need to minimise the risk of deterring students from the sections of society which have

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historically—and still do so today—participated least in higher education; thirdly, recognition of the principle that students should not be denied access to higher education through lack of access to funding; fourthly, recognition that higher education needs to be adequately funded to maintain quality while continuing to expand student numbers; and, fifthly—the noble Lord, Lord Morgan, made this point—recognition that the graduate contribution should supplement and not replace state funding, and, I add, should supplement the cost of tuition rather than research because under-graduates come to university essentially to receive tuition.
I do not claim that my committee got the matter completely right as we came late in the day to the idea of a differential rate of tax. I confess that we did not evaluate that option adequately and did not have time to address its difficulties. There may be a better way to meet the criteria I have mentioned. However, I believe that my committee got the principle right. Now we have to get right the practice. I offer three key rallying points in three words: access, equity and quality.
6.26 p.m.
Lord Borrie: My Lords, it is a quarter of a century since I last held a university post and nearer to half a century since I was an officer of the National Union of Students. Therefore, I have no interest to declare today. However, I have a general interest which is probably shared by all of your Lordships here this evening, and that is an interest in trying to ensure that all those who are capable of benefiting from higher education have a reasonable chance to obtain it.
This is an extremely timely debate and I am grateful to the noble Earl for initiating it as all the signs are that there is to be some kind of major shift in government policy. In recent years one of the biggest factors that has influenced government policy has been the fact that, by and large, graduates are more likely to earn more substantial salaries over their lifetime than their non-graduate contemporaries. If that is so, the argument goes, because the community has assisted them financially in enabling them to become graduates through the payment of tuition fees and the availability of grants, they should pay something back to the community. That argument has been used to justify a shift to loans from grants and a belief in the right of the community to obtain a repayment of those loans over the graduates' years of earnings.
It is also pointed out how unfair it has been in the past that taxpayers, who provided out of their taxes for the non-repayable fees and grants, should be left with the bill when so many taxpayers earn less than graduates are likely to do. Unfortunately, despite what I still consider the reasonableness of the idea of graduates paying more of the costs of their university education out of their higher and rising earnings as graduates, potential university students and their parents have viewed the prospect of substantial debt hanging around their necks as a major turn-off. In an adjournment debate in the other place in June, soon after the general election, my honourable friend the
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Minister responsible for lifelong learning, Margaret Hodge, admitted that the rate of participation in higher education among people from the lower socioeconomic groups had remained, as she put it, "stubbornly low" since 1993 at about 25 per cent. In contrast the proportion of people from professional backgrounds going into higher education has gone up from about 55 per cent in 1991 to 70 per cent in 2001.
It is evident that despite the various forms of increased funding for students from disadvantaged groups made available by this Government, the prospect of starting one's working life with debt is a major deterrent. Other noble Lords, including the right reverend Prelate the Bishop of Lichfield, have mentioned that during one's university life the fact of debt is a real hardship and has created a seriously wasteful drop-out rate.
It may well be that students from poorer backgrounds are risk averse to an unreasonable extent. It may be, as the Minister reminded us in the debate in another place in June, that, set against an average increase in earnings over a lifetime of £400,000 for a graduate, a debt of, say, £10,000 is surely manageable. However, it is the prospect of debt—I hesitate to use the word "perception" in view of what my noble friend Lord Morgan said—that matters to a 20 year-old and his or her parents. The prospect of what seems to them a great burden of debt is putting off too many potential students, especially from families with no history of higher education and who are unconvinced, or only partially convinced, of the value of higher education.
The way forward—it is a bigger question than I can manage in a minute or two so noble Lords must forgive my shortening what I should like to say—must be some way of eliminating any element of debt that is likely to be perceived as serious or substantial. Instead of loans and the burden of repayment, we should think in terms of an adequate means-tested grant and a graduate tax for graduates who receive such grants when, in due course, they are earning above a certain income. As a starting point, I suggest something like twice average earnings.
At the initiative of the noble Earl, we are talking today about the financing of students. However, it is important that improving student finances, enabling them to cope with life while they are students, is not carried forward at the expense of basic university funding bearing in mind the present backlog of building maintenance work, the need for replacement of equipment and the continuing low level of staff salaries. It is no good reaching the government target of 50 per cent of everyone under 30 in higher education by 2010 if that higher education is an impoverished, low quality, shadow of what it ought to be.
6.33 p.m.
Lord Griffiths of Fforestfach: My Lords, I add my thanks to the noble Earl, Lord Russell, for this Question. He said that he spoke from a personal perspective: that if he were in another place it would be at the time of an election. It was a speech from the hustings, from the strand. However, I felt at times that

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it was also a speech from the trenches. I was moved by the way in which he related the experience of individual students and their hardships. I wish to speak about principles but I do not want to do so from the point of view of triumphalism or suggesting that there is an easy answer. I do not think that there is an easy answer but we should know where we are going.
I mention three principles. I do so against the background of having been a university teacher for 20 years—I did not go back into university teaching after having been an adviser at No. 10 because I found the situation so demoralising—and having given lectures at a number of foreign universities.
One important principle is that the review should be conducted in the context of universities as a whole and not student finance as a stand-alone issue. The form of student finance has a profound implication for the character of the university system which emerges. I give two examples. When I was an undergraduate at the London School of Economics, we had a maintenance grant and no fees. That system relied heavily on government. When I became part of that system, I found that managing a university department and then running a business school was intolerable. One was squeezed by the Treasury. Whether it was payment of staff, the ratio of senior to junior staff, student numbers (even if one was running successful courses), one felt that one was part of a mini-soviet, a planned economy where creativity and initiative were totally penned in.
The alternative is a world where universities are free to set their own fees, where they attract a considerable number of students who are in some way or another raising the money themselves through loans, savings, scholarships and so on, and where the university sector as a result is freed up. I see those as two alternatives. I do not think that governments of either persuasion over the past 30 to 40 years have chosen between one or the other. Part of the desperate problem of our universities is that we are in between.
I empathise with the situation of the students the noble Earl mentioned. However, I felt that simply saying that we need a little more money was a quick fix to solve a short term problem. The real issue involves a longer term problem. In undertaking the review, we should be thinking along that horizon. The universities have become demoralised. They are not attracting the right quality of staff, and there seems to be an increasing divergence between us and the United States. That is one important principle.
On my second principle, I agree with the noble Lord, Lord Dearing, that students should pay a significant proportion of the cost of their education. I have never believed that the primary purpose of a university education was to enable an individual to earn more money. If it came, so be it. I believe that the purpose of a university education is to teach people how to think, opening them up to a different world and encouraging them to move outside their subject.
I specialised in teaching economics, money and banking. I had the greatest difficulty including in courses the fact that people should look at the history
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of monetary thought which is so important to understanding the present. However, it has also to be recognised that having a university degree tends to increase the income of that student. It seems only fair that those people should be asked to pay something for that. The present loan scheme has disadvantages. Those can be changed. I agree with the idea of the noble Lord, Lord Dearing, of an income-contingent loan over a much longer period of time. However, I should be nervous about the introduction of a graduate income tax. There is no complete correlation between the amount of higher education which someone receives and the extra income they earn. It would be a wonderful idea. But because there is no such correlation I prefer to stick with the present.
The third principle—it is one in which I very much believe—is that of encouraging access. It is important that students of parents who did not go to university are not discouraged because of a system of finance.
Having said that universities should be free to set fees, that should be done on condition that there is something in place to ensure that students will be looked after. We could return to the system of maintenance grants that we had, which was effectively free education. We could have a system of means-tested grants, which would be better.
I should like a system whereby every university has an endowment fund that is kicked off by central government but to which the business community and alumni can make contributions. That happens in America and is successful in helping marginal students and those who might be deterred from going to university.
As I said, I do not think that the review will solve all problems. But it would be a terrible misfortune if it reached a conclusion that sent us back in the direction from which we have emerged in which the state unfortunately cast such a shadow over university faculties that they became a depressing environment.
6.41 p.m.
Baroness Warwick of Undereliffe: My Lords, I join other noble Lords in complimenting the noble Earl, Lord Russell, on raising this timely issue.
I should declare an interest as chief executive of Universities UK. In this capacity, I can bring to the debate a view from university heads about an issue that has concerned them for some time. It led to their call for a rethink on student support at our annual conference last month.
Vice-chancellors have seen growing evidence of students facing hardship, particularly in the longer hours that students are having to work in paid jobs to support themselves. The noble Earl, Lord Russell, referred to that problem. Vice-chancellors are also concerned about the adverse prospect as well as perception of debt. For many potential students. debt is indeed a perception. They are the very people whom we want to encourage into higher education. Universities UK was therefore delighted to see the Government responding to the call for a review of student support.

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From what we have read in the newspapers—I can think of the Guardian today—there is clearly detailed debate behind the doors of government on the best way of proceeding. I hope that the Minister will agree to share some of these ideas with universities, through Universities UK and, of course, the House, to ensure that they are workable. I hope that the Government will address the needs of the worst-off students.
What is needed? First, it is vital that the review focuses on the needs of students from poorer backgrounds. They are the students who need to be attracted to university if we are to meet the target of 50 per cent participation. At the moment, 74 per cent of students from the more affluent backgrounds enter higher education, yet only 15 per cent of young people from working class backgrounds do so. One has to reflect that despite the current situation, we used to have one of the most generous support systems for students in developed countries, but we have still not been successful in attracting those very students whom we want to attract now.
These are the students who are likely to struggle financially and they are also most likely to drop out. The UK has a good record on student retention but any student lost to the system because of financial hardship is a bitter loss. It is therefore important that the review considers how to retain students, as well as how to encourage them to enter higher education. It is inevitable that there will need to be a return to some form of mandatory maintenance support scheme for students.
My second principle is simplicity. Students need to be able to understand what they are entitled to. The current plethora of schemes—a staggering 21 at the last count—is ridiculously complex, difficult to navigate and expensive for universities to administer. The higher education Minister said to our members in September that the current system was a nightmare. The Secretary of State said on Monday that one needed a degree to understand how to access the support that is available.
Any new scheme of student support must be easily understood, well publicised and easy to access. We also need to be clear about what we mean by student support. There has been much confusion about tuition fees and we need to separate the issues of tuition fees and student support. Using tuition fees as a shorthand for the whole debate is unhelpful if we want to set up a new system that encourages wider participation in higher education.
Too many people from lower socio-economic groups believe that they have to pay fees when they do not. The Government have ensured that 50 per cent of all students will be exempt from paying fees. For those students, it is not tuition fees that lead to hardship, but the cost of supporting themselves.
Universities UK is opposed to scrapping means-tested tuition fee contributions. We believe that those students and families who can afford to make an upfront contribution to the costs of their higher education should do so. They receive a real tangible
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benefit in return. Universities rely on that substantial income stream. We should not forget that this now raises £350 million a year. Without that money, the funding that universities receive per student would have continued its historic decline. Any radical change in the system would jeopardise universities' financial stability, unless the Government are prepared to fill that gap in income.
It is important when considering the issue of student funding not to forget funding for institutions. If we are to widen participation in higher education, further investment in institutions is essential. All noble Lords who have spoken have reinforced that point. It is vital that once we have attracted students into higher education we do not short-change them when they get there. It is for that reason that Owain James of the National Union of Students backed Universities UK's view about investment in universities at the recent party conferences.
It is for that reason, too, that we shall be making the case for extra investment in high education institutions in the forthcoming spending review. Earlier this year, Universities UK report, New Directions for Higher Education Funding, showed that higher education needs at least an extra £900 million each year.
The findings that are emerging from the research that we are conducting for the spending review submissions show that the final figure may be a great deal more. I mention the figures to set in context the £350 million that is generated by the current tuition fee contribution scheme.
It is crucial that the much-needed shake-up in student support funding is not achieved at the expense of the student experience. Universities UK will be making it very clear in our submission to the forthcoming spending review that we need significant additional investment in our universities to ensure that the students whom we want to attract are well served; otherwise the world-class provision of which this country can be so proud will be in jeopardy.
In urging the Government to make access and simplicity the two guiding principles of their review, perhaps I may add a third, which is the quality of the student experience.
6.49 p.m.
Baroness Sharp of Guildford: My Lords, I join others in thanking my noble friend Lord Russell for initiating this debate on this important subject. I must also declare an interest as a fairly recently retired university teacher with a continuing interest in the university sector.
From these Benches, we welcome the Government's change of mind about student finance. Perhaps I should say that there is a certain amount of schadenfreude. For at least two years we have been saying to the Government that there was inconsistency in their stance. While pursuing a policy of widening access to university, they imposed tuition fees simultaneously. Above all, as the noble Baroness, Lady Warwick, said, maintenance grants were replaced by loans. That impacted particularly on the

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poorer students. The net effect has been that, whereas under the old regime of grants topped up by loans the average student emerged from university with debts of £5,000 to £7,000, they now emerge with debts of £12,000 and a probable burden of £.16,000 or even £20,000 in the future, unless daddy is wealthy enough to pay for it all.
The Liberal Democrats have pointed out time after time that the people who were hit hardest by the change were precisely those whom the Government were trying to entice into higher education. I do not understand why the Secretary of State was so surprised to find that some of those in the lower income brackets were risk-averse. Your Lordships have probably all heard of the law of diminishing returns, which is a fundamental principle for economists. There is also a law of diminishing utility. The more money that someone has, the less utility. For those who have very little money, it has very great utility. I am astonished by the figures for savings and assets held in this country, because a remarkable number of people have remarkably little in the way of savings. For many people in the lower income brackets, even finding £300 to mend the car when it breaks down is very difficult. For such people, the concept of an unsecured loan of £12,000 or £15,000 was a very difficult prospect.
As a consequence, many students are now in debt and working very long hours, to the detriment of their studies, trying to find a way out of their debt. This debate is about the principles that should underlie the new student finance system. The principles that I have jotted down accord very well with those of the noble Lords, Lord Dearing and Lord Griffiths.
The Liberal Democrats are committed to widening access to our universities. The noble Baroness, Lady Warwick, quoted the figures. Some 74 per cent of those from professional families now go to university, but from families of manual workers in the lowest income bracket the figure is only 13 per cent. That is an unacceptable differential. It is very important to find ways of widening access, particularly for those in the lower income brackets.
However, we find it difficult to accept the 50 per cent target unless there is more money in the system. My noble friend Lord Russell pointed out that he and his colleagues now face overcrowded lecture rooms with standing room only. That situation is repeated in university after university, and not just in lecture rooms, but seminar rooms and everything else. Everywhere is overcrowded and the facilities are rundown and crummy. We cannot take on the proposed extra 250,000 students because there is no room for them at the moment. We will have to spend more money. By all means let us have the 50 per cent target—although we cannot see any particular rhyme or reason for the figure—but not without more funding.
We also echo the words of the noble Lord, Lord Dearing, that the highest priority at the moment is the shortages in vocational education. We need to look at the education framework for 16 to 19 year-olds and do something about vocational education. In summary, we want increased access, but not at any cost.
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Our second principle is equity. I pose to your Lordships two concepts of equity. The first is called vertical equity—to those according to need, from those according to ability. By all means let us pay according to ability. It makes more sense for there to be some income contingency in whatever loan repayment method is adopted, whether it is in the form of the Cubie endowment, or a graduate tax. However, we have to ask whose income it is anyhow. Do we look to the parents' income or to the student's income?
That brings us to the other concept of equity, which is also very important. Many of those who have taught in universities know that many parents do not pay up according to their assessment under the maintenance grant. It is very important that we have some mechanism whereby those students whose parents do not pay up are able to take out loans and pay them back afterwards.
From a Liberal Democrat point of view, it is also important to distinguish between tuition and maintenance. Our view is similar to that of the Scottish Executive, which was enunciated by the noble Lord, Lord Morgan: there is a public good element to higher education, tuition should be free, those who benefit should pay and there should be some repayment after the event either through the endowment, as in Scotland, or through some form of graduate tax. At the moment, we favour the Cubie type of endowment. From the point of view of access, it is vital that we tackle the maintenance element of student finance properly.
My final plea to the Government is that, in looking at the issue, they should take account of the current inequity between part-time and full-time students. Many students these days work 16 or 20 hours a week. They are, in effect, part-time students, but because they do not check in as part-time students, they get most of their tuition fees paid. Those who are registered as part-time students pay full tuition fees. Mothers who are part-time students do not get the benefit of all the childcare allowances that are available. There is great inequity here. Increasingly we shall have to look to a world in which students fund themselves through college. We need horizontal equity between the part-timers and the full-timers.
I welcome this timely debate and I hope that the Government will listen to some of the advice that they are given.
6.58 p.m.
Baroness Blatch: My Lords, I, too, thank the noble Earl, Lord Russell, for this timely debate. These short debates are always very valuable. As the noble Lord, Lord Dearing, said, I hope that the Government will inwardly digest before the onset of the review.
Before the 1997 election, I attended a meeting with sixth-formers, together with candidates from other parties who were contesting that election. Among the questions asked of each candidate was whether they had any plans to introduce tuition fees. It was not a surprising question, because there were rumours around at the time to that effect. The Dearing

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committee had been set up with all-party support and was also considering the financing of the higher education sector, and student finance in particular.
However, the then Labour Party candidate gave an assurance that his party had no plans to introduce tuition fees. His views were endorsed by the Prime Minister—then Leader of the Opposition—in an article under his name in the Evening Standard on 14th April 1997. He said:
"Labour has no plans to introduce tuition fees for higher education".
That was further supported by the right honourable Robin Cook MP, who also agreed that his party was clear that tuition fees must be met by the state.
In July 1997, the Dearing report was published. Among its many recommendations was that students should pay a flat tuition fee and that the maintenance grant should be retained for students from low-income families. Within a matter of days, and without any consultation, the Government ignored the advice of the Dearing report. They reneged on those promises by announcing the introduction of tuition fees and, I believe more significantly, the wholesale abolition of maintenance grants. I said then, and subsequently during the passage of the Bill giving effect to those measures, that students could be forgiven for feeling that they had been double-crossed by the Government and by the Prime Minister in particular.
I also said then—I stand by it today—that the greatest impact on students from low-income families was the abolition of maintenance grants. That now accounts for £12,000-plus of accumulated debt after three years. Not only that, but the implementation date announced by the noble Baroness, Lady Blackstone—the Minister at that time—and its impact on students who were taking a gap year had to be retracted and modified to take the gap year into account.
All that was further complicated by the unfortunate effect that followed concerning what came to be known as the "Scottish anomaly". The tuition fees for Scottish students were waived and the concession was awarded to students from all other European countries but not to students from England, Wales or Northern Ireland. Again, students from England, Wales and Northern Ireland can be forgiven for believing that, as British citizens and as citizens of the European Union, they would be treated equally with, for example, southern Irish, French and Italian students.
A number of concessionary arrangements were also put in place which created even more unfairness; for example, four-year Bachelor of Education student teachers received no help whatever, but teachers doing a PGCE course had their fees waived.
The 1997 proposals have now been in place for three years and many of the predictions have come to pass. Poorer students are leaving university with a higher level of debt than their more affluent colleagues. Many students are inhibited from entering higher education, particularly the poorest and many from ethnic
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communities, by the fear of mounting debt. Contrary to government predictions, the result has not been massive additional funding for universities.
Alongside that unsatisfactory state of affairs, the Government have set a target for 50 per cent of young people under the age of 30 to enter higher education. The limit on time in this debate does not allow for any expansion on this policy. Suffice it to say that the appropriateness of degree courses, the quality of the experience for the student in higher education, the quality of degree courses themselves, academic freedom, academic standards and the resources needed to deliver the 50 per cent target are all very real issues which, I believe, require further discussion on another occasion.
With regard to the issue of access, my noble friend Lord Norton, who, sadly, has had to leave, particularly wanted a point to be made about access to PhD courses, which he considers to be critical at this time. However, what are we now to believe? A review has been proposed, and perhaps tonight all will be revealed. It is clear that very late in the day the Government, or, at least if we are to believe what we read and hear in the media, 10 Downing Street, have accepted that concern among young people and their families, especially those on low incomes, is considerable.
First, we heard that all options were to be considered. Then we heard that only two systems were under discussion. Therefore, my first question tonight is: which of those is correct? On the one hand, we hear that grants are to be reintroduced, tuition fees are to be scrapped and a graduate tax is to be introduced. However, now we also understand that the dead hand of the Treasury has intervened. This morning, the Guardian published an interesting article setting out Treasury-led proposals.
On first reading, I must say that one bad set of proposals is in danger of being replaced by another, hastily thought-out, bad set of proposals. As I said, we understand that there is to be a review. Like the noble Earl, Lord Russell, I want to ask the Government what principles they will put in place to underpin the review. Who will carry it out? I hope that it will not merely be an exchange between officials within the education department and behind closed doors. What evidence has been collected and analysed to inform the review, and can that evidence be made public?
What outside influence will be brought to bear on the review? In particular, will students, higher education and parental interests be taken into account and, if so, how? What is the time-scale for the outcome of the review, and when is it envisaged that the changes in the present system can be brought into effect? In the mean time, what will be the position of students under the present system who have already left and are still leaving higher education with debt?
As the present target is for a percentage of young people to enter higher education, a point that may need to be revisited by the review—it has been repeated today by the noble Lord, Lord Dearing—is the argument that a graduate has greater security of

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employment and higher pay. Increasingly, that is not the case. As the mother of a graduate doctor, I can tell the House that academic salaries do not put him in the category of earning a great deal extra and, certainly, security of employment does not feature at all for him.
Finally, just as the Dearing report was set up with the support of all parties, why do we not take an all-party approach to the issue of student finance? More particularly, why do we not take that approach to the funding of higher education? As the noble Lord, Lord Morgan, said, it is a challenge for all of us and for all parties, and it is a subject that would benefit from a much wider discussion. I, too, thank the noble Earl for providing the opportunity to discuss this issue.
7.6 p.m.
Lord Davies of Oldham: My Lords, it is customary, as many noble Lords who have contributed to this debate have done, to congratulate the originator of the debate on its timeliness. On this occasion, I do not believe that we are merely going through the form and courtesy of doing so but I consider that we are reflecting the fact that this debate is, indeed, timely.
The review to which reference has been made will continue over the next few months. The deliberations of this House will, of course, be taken into consideration. I very much doubt whether this will be the last occasion on which this House will discuss these important topics, not least because it is recognised that many noble Lords have a great interest in higher education and because debates such as these help to enlighten all of us about the way in which we may proceed.
The question addressed by the noble Earl, Lord Russell, concerns the principles that will underlie the review. Therefore, I shall do him the courtesy of seeking to respond immediately to the forthrightness and straightforwardness of that question. The aim of the review, and the principles on which it will be based, is to tackle concerns about student debt, especially among students from lower-income backgrounds. It will aim to reflect the general view expressed by many contributors to the debate that a perception exists that debt may deter students, particularly those from poorer backgrounds.
Against that perspective, it should be recognised that student applications have not reduced in number since the introduction of the present financial arrangements. Indeed, the position this year gives the lie to the concept that debt is a major deterrent to students. Nevertheless, in so far as it raises serious questions and discussion, it is important that we get this factor right. It is certainly important in relation to the second principle that will underline the review; namely, that the Government are committed to a target of 50 per cent participation in higher education by the year 2010. Therefore, so far as possible, any barriers which may obstruct application to higher education should be removed.
Against that background, I detected in the speech of the noble Baroness, Lady Blatch, some anxiety about whether that target could be reached without having
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deleterious effects on higher education. That is not the Government's view. We do not see why we should present to young people and mature students a lesser prospect of enjoying higher education than is common among their counterparts in other countries. However, we recognise that that makes a substantial charge on resources because, as my noble friend Lady Warwick and the noble Lord, Lord Dearing, emphasised, the quality of the experience must receive due attention. That means that we have to consider what resources are available.
The third principle must be that we provide sufficient resources to continue the standard of excellence in our universities. The right reverend Prelate discussed the difficulties experienced by students on courses. We must ensure that adequate resources are available during the years of study so that students can fulfil their course requirements. We should maintain that which we have delighted in for many decades; namely, a relatively low drop-out rate, which has shown no sign of increasing, among students in higher education. I am seeking to identify and to make clear the four principles that underpin the review. They represent a response to all the contributions that have been made in this debate.
I have a slight reservation—the noble Lord, Lord Griffiths, may have identified the strategy about which the Government are unconvinced. I refer to what is vulgarly called top-up fees, although the noble Lord used much more delicate terms, and to freeing certain universities so that they can obtain resources—the market—rather more readily than they can at present. The Government are not persuaded by that argument although we have heard what the noble Lord said. Others have articulated that case, which will no doubt be taken into consideration in the review.
I hasten to add, lest it be thought otherwise, that the review will not be conducted solely behind closed doors; full consultation will take place. It may be suggested that the Government appear to be engaging in such an important issue without the adequate participation of the wider community, not least of higher education institutions. However, I have only to look around the Chamber to recognise that there is small chance of the Government being able to evade their responsibility, which is to ensure that the review is open and that the issues are widely discussed. That will allow us to reach a due consensus and a proper solution to what we all recognise is an immensely thorny problem.
The only other jarring note to which, I confess, I have to respond was the suggestion—I believe that it was made by the noble Baroness, Lady Sharp—that different arrangements in different parts of the United Kingdom had been arrived at, and that that was a disadvantage to students in general. The consequences of devolution are bound to work their way through in that regard. We all recognise that difficulties are attendant upon that. We hope that there is a solution that commands assent across the different parts of the UK. However, it has not been so thus far. The objective

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relating to the situation in England and with regard to the review lies within the proper provenance of the Department for Education and Skills.
The review is taking place because the Government have no intention of letting obstacles get in the way of the goal of successful expansion. The noble Baroness, Lady Blatch, expressed reservations about certain matters relating to employment. Despite that, all noble Lords who contributed to this debate recognised that there is a gain to be had from higher education—a utilitarian gain. Earnings for graduates are still significantly above earnings for people who have not graduated, and unemployment levels are also lower among graduates than among others. Real utilitarian advantages, if I may use the phrase, can be gained from graduate status. The noble Earl, Lord Russell, may think that it is typical that I, a product of University College, London, should stress that which is utilitarian. That is the nature of our debate. I hasten to add that I recognise that the advantages of higher education involve much more than the way in which one earns one's living.
The fact that those advantages obtain encourages us in our view of the expansion of higher education. The background to that is the fact that we cannot possibly accept the situation in which, although a reasonable percentage of people from homes of relatively high incomes expect almost automatically to achieve the A-levels and entry requirements that are needed to get into higher education, the level of participation among our lower socio-economic groups is well below international comparisons. That is intolerable. That is why the issue needs to be addressed.
Earl Russell: My Lords, does the Minister accept that that undesirable situation will persist until the total package of student support is big enough for people not to need to depend on their parents for support while they are students?
Lord Davies of Oldham: My Lords, we have to recognise that this situation will be long running in terms of participation in higher education. As the noble Lord, Lord Dearing, identified, the problem goes back to the time when a maintenance grant system was in place and when there were no tuition fees. We should not exaggerate the extent to which the issue of student maintenance plays a part in this crucial aspect of how we advance educational opportunities.
Increased resources are needed and that is why some of the resources should come in the form of contributions from those who are the beneficiaries;
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namely, the students. We must ensure that more students are able to position themselves for entry into higher education. A major emphasis of the Government is to ensure that hard-won and important resources are directed towards schools and further education colleges to ensure that an increasing percentage of our young people are able to present themselves for entry into higher education because at present the figures are too low.
That is why the foundation degree, which creates a bridge, has been introduced. I believe that the noble Baroness, Lady Sharp, referred to the issue of vocational education, which is of significant importance. The foundation degree is meant to act as a bridge to encourage those who are committed to advancing their vocational skills, but at present do not do so, to take the opportunity of raising their skill level to graduate level.
We should also recognise that the Government have been concerned to increase investment in higher education. The investment in universities and HE colleges has been an extra £1.7 billion of publicly planned expenditure, 18 per cent in real terms, over the six years to 2003–04. There is not a noble Lord who does not recognise that that money could be spent usefully and intelligently. That is always the case with as good a cause as higher education, but there is no doubt that the Government are concerned to ensure that additional resources are placed in the system.
As a prudent Government, we have been monitoring the effects of the changes brought about by our policies. Demand for places is buoyant. UCAS showed an increase in allocated places of 5.5 per cent this year compared with last year. None the less, the Government have announced that they are undertaking a student review. I have set out the aims of the review and I have given a clear undertaking that consultation will take place. This debate has given us a good start in identifying some of the key issues that need to be addressed in the review.
Baroness Blatch: My Lords, can the Minister say who is to carry out the review?
Lord Davies of Oldham: My Lords, the review is to be conducted by the Department for Education and Skills, the department responsible for higher education policy. That does not alter the fact that the department will be open to consultation and will ensure that consultation takes place.
House adjourned at twenty-two minutes past seven o'clock.