Lords Sitting of 11 December 2002

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

  School Playing Fields
  Lord Dormand of Easingtonasked Her Majesty's Government:
  How many school playing fields have been sold for other purposes in each of the five years 1997–2001.
  Lord Davies of Oldham: My Lords, no central records are available for figures before October 1998. Between October 1998 and December 1998, the Government approved seven applications to sell school playing fields larger than a sports pitch; 42 applications were approved in 1999, 32 in 2000 and 22 in 2001. All these approved applications met our strict criteria.
  Lord Dormand of Easington: My Lords, it takes a better brain than mine to take all that in at one go. Do not the figures generally show an increase in the number of school playing fields sold? Is my noble friend aware that, because of the immense value of a playing field to a school, the sale of one playing field is one too many? When the Government came to power in 1997, they placed a complete ban on the sale of all school playing fields. What reasons are now given for the approval of such sales?
  Lord Davies of Oldham: My Lords, the number of sales is decreasing year on year. There is a clear reason for that. The criteria employed by the panel are clear and explicit and applicants know that meeting these criteria will be a fairly rare event. As a consequence, as I indicated in my original Answer, the numbers of applications are declining year on year. The criteria meet my noble friend's point, which I share entirely, that to sell school playing fields must be against clear educational and sporting advantage. All the applications that have been approved are designed to improve sporting and educational opportunities, not to decrease them.
  Lord Monro of Langholm: My Lords, does the noble Lord accept that there are conflicting figures? The ones that I have from the National Playing Fields Association, which does so much for sports grounds in this country, show that, of the last 201 applications, 195 were granted and only six were refused. Further, the number of applications last year was up by 35 per
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  cent to 551. It does not seem to me that the Government's policy of reducing the sale of playing fields is working at all.
  Lord Davies of Oldham: My Lords, the National Playing Fields Association appoints one of the members of the panel. It is therefore Fully involved in the policy to fulfil the commitment we made in 1997 to end compulsory sales of our school playing fields. We all know that such sales went on apace in the years prior to 1997. They are now greatly reduced and are reducing year on year.
  Lord Strabolgi: My Lords, was the policy's effect on youth crime considered before it was adopted?
  Lord Davies of Oldham: My Lords, that is a very good point. We know that sport plays a very important part in bringing people into law-abiding activities within the community, and we recognise its value in those terms. That is why we have set out to ensure that our playing fields are enhanced and our educational opportunities are enhanced. Any fields that are sold at the present time are sold against the perspective that the school and the community will benefit from enhanced, not decreased, sporting opportunities.
  Lord Addington: My Lords, would it not be appropriate if we concentrated not only on sport but on recreation? The loss of these green open spaces means that the number of places where children can run around is rapidly being cut down. That kind of activity might well go some way towards reducing the amount of obesity found among young children.
  Lord Davies of Oldham: My Lords, the noble Lord seeks to broaden the discussion to include other open spaces. I share his point that such facilities are important, particularly in urban areas where green space is often at a premium. But the original Question to which I have addressed my replies related specifically to school playing fields, and any sales of those have to meet strict criteria.
  Lord Selsdon: My Lords, how much money was raised from these sales and what happened to it?
  Lord Davies of Oldham: My Lords, I cannot provide precise figures on the amount of money raised from these sales. However, part of the criteria against which a sale is projected is that the moneys are made available for sporting and educational opportunities in the school proposing the sale.
  Lord Tomlinson: My Lords, does my noble friend draw any conclusions from the figures involved in the sale of school playing fields, the reduction in the number of children who have the opportunity therefore of playing cricket, and our performance in Australia at the present time?
  Lord Davies of Oldham: My Lords, one has many uncomfortable moments at the Dispatch Box, and talking about our performance in Australia is probably the least comfortable. I do not believe that that performance is attributable to the Government's policy on school playing fields over the past three years. Some noble Lords may feed it back to the early 1980s when school playing fields were sold apace. Certainly we are aware of the importance of improving the quality of school sport. That is why there has been a substantial investment in it over the past three years. We regard it as a priority to enhance our sporting achievements because, as we all know, the nation enjoys the excellent performances of those of our teams which are marginally more successful than the one in Australia at the present time.
  Lord Cope of Berkeley: My Lords, to enable us to evaluate the enhancement of sporting facilities, will the Minister tell the House how many school playing fields have been bought over the same period?
  Lord Davies of Oldham: My Lords, the purchase of school playing fields relates more to the question of buying and developing all-weather facilities. As we are all too well aware, the problem in the past has been that many school playing fields have been out of action at certain times of year. Therefore, the emphasis is a great deal more on covered facilities—enhanced sporting facilities which are community facilities and which therefore justify the increased investment by the Government on behalf of both the community and schoolchildren.
  Baroness Billingham: My Lords, has not one result of selling off playing fields been the ability to lay artificial pitches to replace the dreadful school pitches that we have seen all round the country—which have been no inducement to anyone in a state school to learn to play cricket? These pitches will be in use for the whole of the year, rather than just for three or four months of the year, as was the case in the past.
  Lord Davies of Oldham: My Lords, my noble friend has expressed rather more accurately the point that I sought to emphasise. Cricket requires a reasonable quality of pitch. There is no doubt that in the past we have suffered disadvantages because of our poor-quality pitches. The new facilities coming on stream offer the prospect of all-year-round cricket and cricket that can be played on a reasonable surface.

  Ecstasy
  2.44 p.m.
  Lord Williamson of Hortonasked Her Majesty's Government:
  Whether, in view of recent research on the effect on the brain of the drug ecstasy, they will increase their efforts to warn young people of the potential damage from the use of this drug.
  The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, a three-year national communications campaign is being developed to inform young people, their parents and carers of the risks and dangers associated with heroin, cocaine and ecstasy.
  Lord Williamson of Horton: My Lords, I thank the Minister for that reply. Does he agree that although some users of ecstasy may be aware of the short-term risks, almost none is aware of the long-term risks? Recent research in Baltimore on non-human primates demonstrates that even small doses give rise to lasting damage to the dopamine neurones, thus signalling a risk to humans of Parkinsonism and mental problems in the future. I would not describe this as a time bomb, but it is a very serious issue.
  Lord Hunt of Kings Heath: My Lords, the noble Lord is right to draw attention to research in this area. Recent research on the effects of ecstasy on the brain has been reviewed by Professor Val Curren of University College London on behalf of the Department of Health. Her review noted limited evidence of direct harmful effects on the brain. Other literature in general and evidence from animal studies suggest possible brain changes. There is also some evidence in the literature of psychological problems in heavy users of ecstasy, although no clear causal link has been demonstrated. The Government will keep all research in this area under review. This will inform communication programmes and plans for the future.
  Lord Astor of Hever: My Lords, in the light of the worrying supplementary question of the noble Lord, Lord Williamson, of the Minister's response to it and of the survey on drug misuse, smoking and drinking among secondary school children commissioned by the Department of Health showing that pupils now find it more acceptable to take drugs and are more tolerant of other drug users, what plans have the Government to educate particularly the young on the real risks of taking ecstasy?
  Lord Hunt of Kings Heath: My Lords, the noble Lord is right to refer to the study, published in July, showing what appears to be a more tolerant attitude towards the use of drugs among a greater number of young people since the previous study was conducted. That is a matter for concern and it will inform the national communication campaign upon which we are about to embark. It will also inform the programme that takes place in schools, which is important in terms of getting the right messages across to young people.
  Lord Carlile of Berriew: My Lords, bearing in mind that most young people who take ecstasy do so when they are already entranced by loud music and possibly alcohol, does the Minister agree that to confront young people about this issue one needs to do it where they are when they take it? Is it not time for an organised campaign in which nurses, doctors and other drug experts would go into the clubs and

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  confront young people when they are liable to take the drug rather than having more committees, commissions and public information campaigns?
  Lord Hunt of Kings Heath: My Lords, I should certainly like to be there to watch such a confrontation. I am not sure that the noble Lord is right in saying that that is the best approach, although I shall ensure that it is considered. I recognise that the need is for action rather than for a large number of committee sittings. However, we need to take advice from those who are most concerned. Those who work with young people in the drugs areas are giving invaluable advice. My department is also in dialogue with young people themselves. I agree with the noble Lord's key message: patronising messages from adults to young people are no good. The best messages are informed by what young people think, and it is important that we take that forward.
  Baroness Masham of Ilton: My Lords, does the Minister agree that young people enjoy taking risks, and that the risk factor is one of the problems in drug taking? Does he further agree that one could put up hard-hitting messages such as, "Ecstasy can kill and damage the brain" in the clubs and places where young people go?
  Lord Hunt of Kings Heath: My Lords, I am all in favour of hard-hitting, accurate messages. Part of the programmes we shall be developing will seek to get across to young people as accurate a picture as possible of the harmful effects of drug taking. However, it is important that we are informed by young people themselves and by those who work with them as to the best way to get that message across.
  Lord Tomlinson: My Lords, further to my noble friend's robust response to the original Question, will he be equally robust about other forms of substance abuse by young people and the not-so-young, be it tobacco, alcohol or even cannabis?
  Lord Hunt of Kings Heath: My Lords, I do not disagree with my noble friend. The programmes that many schools have adopted seek to deal not just with illegal drugs but also the use of tobacco and alcohol. A holistic approach is appropriate, but the programmes must be accurate about the relative risks of each category.
  Lord Clement-Jones: My Lords—
  Baroness Strange: My Lords—
  The Lord Privy Seal (Lord Williams of Mostyn): My Lords, the noble Baroness, Lady Strange, has been trying to speak on a number of occasions.
  Baroness Strange: My Lords, does the Minister agree that we, in this House, are particularly fond of
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  young people, many of us being grandparents, great-aunts, great-uncles and godparents, and wish them all to grow to become healthy, intelligent old people like ourselves? If they take ecstasy, they will not.
  Lord Hunt of Kings Heath: My Lords, I am not sure that a message to young people that, if they stay active and healthy, they will grow to be as Members of your Lordships' House could be calculated to convince all young people that they should keep away from these substances. But the noble Baroness is right to suggest that one cannot simply adopt the approach, "Don't do this" and "Don't do that". It must be positive also. The comments made in the Answer to the first Question about the benefits of a healthy lifestyle, exercise and sport are relevant.
  Lord Clement-Jones: My Lords, without wishing to detract from the Question of the noble Lord, Lord Williamson. will the Minister confirm that the key killers are cocaine and heroin, and that it is towards those that much of our efforts should be directed?
  Lord Hunt of Kings Heath: My Lords, we should not underestimate the potential harm of ecstasy. But the noble Lord is right to draw attention to the serious consequences for users of heroin, morphine or cocaine. According to the latest statistics I have, in 2000, 926 deaths were recorded as a result of using heroin and morphine. There were 80 deaths from cocaine and 36 from ecstasy.

  Reverend David Peachell: Army Pension
  2.52 p.m.
  Lord Morris of Manchester: My Lords, I beg leave to ask the Question in my name on the Order Paper. In doing so, I declare an interest, not a financial one, as honorary parliamentary adviser over many years to the Royal British Legion.
  The Question was as follows:
  To ask Her Majesty's Government, following the Church of England's decision to discharge the Rev David Peachell, a Gulf War veteran, on grounds of "Gulf War illness" and the release without question of his Army pension in consequence of that decision, what consideration they will be giving to the implications for other ex-servicemen and women.
  The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Bach): My Lords, it would be inappropriate to disclose details of particular cases, including the Reverend Peachell's, without permission of those concerned. With great respect, a decision of the Church of England cannot be a matter for the Ministry of Defence, nor would an Army pension, in these circumstances, be paid without question. The MoD shares the consensus of international scientific and medical opinion, which is that a unique medical

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  condition associated with the 1990–91 Gulf conflict has not been identified. Reverend Peachell's case has no implications for others.
  Lord Morris of Manchester: My Lords, why is it that, when highly reputable doctors—in this case, the Church of England's—readily use terms like "Gulf War illness" in diagnosing ill health among Gulf veterans, the MoD goes from pension tribunal defeat to defeat in contesting their use? Why are some illnesses treated as Gulf War-related in the United States but not here? Again, why, over 12 years on, when we could soon be involved in a second Gulf War, are we still unable to apply, since, without the Porton Down report, we shall not even have learned, all the lessons of the first? And is it not doubly distressing for Gulf veterans—more especially those who are terminally ill—to be made to seem impatient in asking for Porton Down to report before the end of next year?
  Lord Bach: My Lords, the fact is that, at present, there is no proper basis for recognising Gulf War syndrome as an appropriate diagnostic label. That does not prevent—I repeat, it does not prevent—a Gulf veteran getting a pension. A war pension can be paid for any disablement provided that a causal link to service is accepted. In terms of impact on moneys paid, war pension awards are for service-related disablement, not a list of specific diagnoses. To date, more than 4,800 Gulf veterans have received awards, around one-quarter of which are for disablement accepted as related to their service in the Gulf. Pieces of research must be published in the peer-reviewed scientific literature before they can be accepted. That is a generally true comment about medical research anyway.
  The Lord Bishop of Guildford: My Lords, is the Minister aware that, far from being discharged, Mr Peachell requested early retirement on grounds of ill health and that was fully accepted by the Church of England on the stated grounds of Gulf War illness? Given the measured and careful way in which the Church of England Pensions Board and its medical advisers approach these questions, what steps are the Government taking to ensure similar protection to other members of the military?
  Lord Bach: My Lords, I am grateful for that comment. The fact remains that the Army pension payment to the Reverend Peachell was made on the basis that, unfortunately, he had many illnesses over a period. That is why he was discharged. The Church of England doctors called it "Gulf War illness". We do not believe that such a syndrome exists; we accept of course that over the years the Reverend Peachell has suffered a variety of illnesses. We will be as
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  sympathetic to others as we believe we have been to him. We have enhanced his Army pension so that it will be paid immediately.
  Baroness Trumpington: My Lords—
  Lord Redesdale: My Lords—
  Baroness Trumpington: My Lords, I am standing my ground.
  Lord Williams of Mostyn: My Lords, I dare not, I dare not.
  Baroness Trumpington: My Lords, am I right in thinking that Porton Down was selected to look into this matter because it has the greatest expertise in that field? Why should it have taken 12 years? If it goes on any longer, will not those examining the matter be dead themselves?
  Lord Bach: My Lords, it has not gone on for 12 years. On 11th May, 1997, we announced that the interactions work—that being done at Porton Down—would be carried out. In September 1998, work on guinea-pig studies began. In December 1999, other work began. By August next year, the last group of marmosets to be vaccinated will complete their 18-month monitoring period. The study will be completed in December 2003. I agree with the noble Baroness that it is frustrating that it has taken so long. But there has been no 12-year delay. It is important that we get this right.
  Lord Redesdale: My Lords, I am tempted to follow the comments about marmosets. If the Minister is dismissing the Church of England's pensions appeal, will he comment on the fact that a Mr Rusling, at a pensions appeal tribunal in Leeds, was given a decision in his favour? The tribunal found that the injury, wound or disease on which the claim was based, namely Gulf War syndrome—that is published in the court papers—was attributable to the service. Does that ruling not have an effect on outstanding cases? How many outstanding cases remain?
  Lord Bach: My Lords, I cannot tell the noble Lord the number of outstanding cases. However, the Ministry of Defence considers that the appeal tribunal's decision in the particular case to which he referred was erroneous in law. That is why we are appealing against it.
  Lord Astor of Hever: My Lords, is the same combination of vaccines and NAPS tablets used in the Gulf War being used on present day servicemen and servicewomen?
  Lord Bach: My Lords, we now ensure that all troops are immunised routinely with the standard service immunisations. One improvement since the time of the Gulf War—and there are a number in this field—is that, since 1991, much more information has been

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  provided with anthrax immunisation to enable an informed decision on whether to have the immunisation. There have been improvements, and we have learned a lot of lessons since then.

  Buses and Coaches: Passenger Safety
  3 p.m.
  Lord Janner of Braunstoneasked Her Majesty's Government:
  Whether they will take urgent measures to increase safety for passengers in buses and coaches.
  Lord McIntosh of Haringey: My Lords, we debated the fitting and wearing of seat belts in buses and coaches two weeks ago, when I told the House about the existing measures we have taken and those in an EU directive under discussion aiming to improve safety for those travelling on buses and coaches. While implementing a European directive on bus and coach design, we are taking the opportunity to align and simplify all our national regulations and approval schemes for buses and coaches. Of course, all vehicle safety regulations are under constant review.
  Despite last week's unfortunate accidents—I convey our sympathy to the victims— buses and coaches remain a very safe form of transport, with an average of only 0.4 fatalities per billion— not million, but billion- passenger kilometres compared with a figure of 3.1 for cars and more than 100 for motorbikes.
  Lord Janner of Braunstone: My Lords, I thank my noble friend for that Answer. However, does he recognise that many coaches on the road today should not be on the road? Is not the best advice that coaches constructed before 1993 could be dangerous, and that, even when they are fitted with seat belts, it is often safer for passengers not to wear them? Will he, please, urgently take steps to ensure that drivers of coaches constructed and registered after April 1993 do not drive off until they themselves and their passengers are belted in'' Although there are not so many deaths or injuries involving coaches on our roads, many of the deaths that do occur could be avoided if those rules were followed.
  Lord McIntosh of Haringey: My Lords, I am very reluctant to take the advice of the noble Lord, Lord Janner, that passengers on vehicles fitted with seat belts should not use them. I do not know that there is any evidence for that, and, if I may say so, I think that it is very dangerous advice. Since 1998 rules have been in force stating that seat belts should be fitted on all coaches and minibuses which carry children. That clearly applies to a very large number of coaches and minibuses as very few of them could make a living unless they carried children for at least part of the time.
  The EU directive which we discussed a couple of weeks ago and to which I referred addresses the issue of wearing seat belts. The current position is that it is the driver's liability to ensure that all seat belts are
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  worn, but that is very difficult indeed to enforce. The EU directive will help to have alternative enforcement measures.
  Lord Bradshaw: My Lords, will the Minister, please, give careful consideration to the imposition of further regulations, as suggested by the noble Lord, Lord Janner? The Disability Discrimination Act, for example, requires all bus operators to have low-floor buses and access for wheelchairs. However, that is vitiated by the fact that sometimes buses cannot draw up alongside kerbs. People in wheelchairs and people with buggies cannot reach the buses because parked cars prevent the buses reaching the kerb. Will the Minister give attention to the secondary issue of clearing bus stops of parked vehicles so that the requirements of the Disability Discrimination Act can be complied with?
  Lord McIntosh of Haringey: My Lords, I very much agree with the noble Lord, Lord Bradshaw. These are important matters, and particularly important for people with disabilities, although they are not strictly related to the Question on the Order Paper, which is about safety. However, his words are taken very seriously.
  Lord Faulkner of Worcester: My Lords, does my noble friend agree that one measure that would improve safety standards on coaches and buses would be to dissuade their drivers from using mobile phones while at the wheel? Is he aware that the proposed ban, which we have read about and is coming, on the use of mobile phones by drivers cannot come too soon for road safety organisations? They believe that a ban will make a fundamental difference to road safety generally.
  Lord McIntosh of Haringey: My Lords, I think that the position of the Department for Transport has been made very clear. There has been a lot of debate about this in your Lordships' House, and I am sure that those who have taken part in those debates will be pleased to know that we are taking action along the lines suggested by the noble Lord, Lord Faulkner.
  Viscount Simon: My Lords, is my noble friend aware that holders of a driving licence in the state of New South Wales, in Australia, automatically lose their licence if they are not wearing a seat belt, regardless of whether they were driving? Does he agree that the introduction of similar legislation in this country would not only concentrate the minds of those who do not wear seat belts but reduce deaths on the road?
  Lord McIntosh of Haringey: No, my Lords. I was not aware of that; but, having driven in New South Wales myself, I shall examine my conscience very closely. It seems draconian, but if it works, then no doubt it is worth investigating, and we shall.

  Accidents: Bogus Claims
  3.6 p.m.
  Lord Bradshawasked Her Majesty's Government:
  What action they are taking to deal with bogus claimants and their lawyers who claim for damages in accidents in which they have not been involved.
  The Parliamentary Secretary, Lord Chancellor's Department (Baroness Scotland of Asthal): My Lords, the pursuit of those who make bogus claims is a matter in the first instance for the police. If an organisation feels that a bogus claim has been made, it should consider whether to report this to the police. While that applies equally to lawyers, they are additionally subject to strict rules of conduct, maintained by the self-regulating legal professional bodies, which preclude lawyers from acting dishonestly. It is for the legal professional body concerned to take action where it considers a breach of the rules has occurred.
  Lord Bradshaw: My Lords, I thank the noble Baroness for that reply. My question refers to a case in Manchester where an empty bus left a depot. Subsequently, 22 people claimed to have been injured although no one had been travelling on the bus. A firm of solicitors solicited the claims by telephone. Will the noble Baroness take action—and I mean strong action— both to discourage fraudulent claims and to ensure that firms of solicitors engaging in such practices are struck off? Does the case not convey a message about contingent-fee litigation?
  Baroness Scotland of Asthal: My Lords, I hear what the noble Lord says, and I join him in condemning such terrible behaviour. When such fraudulent behaviour is discovered, all those with knowledge of it should report it to the police—who are the proper agency to prosecute all those involved in such deception. I can but say that that works very effectively when and if it is done.
  Lord Carlile of Berriew: My Lords, does the noble Baroness agree that insurance companies are in the front line of the fight against bogus claims? Is she aware that many insurance companies now feel inhibited in making secret inquiries and surveillance of claimants whom they believe are making bogus claims as a result of the insurance companies' understanding of cases decided in the European Court of Human Rights and domestic cases with a human rights component? Will the Government do their best to ensure that insurance companies are not inhibited from proper investigation of what may well be bogus insurance claims?
  Baroness Scotland of Asthal: My Lords, again, I hear what the noble Lord says. I also hesitate before saying that the insurance companies should get some good lawyers. To the best of my knowledge and belief, there is no improper inhibition employed in relation to insurance companies doing that which they need to do
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  to ensure that fraud is not perpetrated. Fraud generally is taken very seriously by this Government. An intergovernmental working group including representatives from the Home Office, SFO, the police, LSLO, CPS, FSA, DTI and HMT are currently working to consider means of improving the response to fraud. They are doing very good work.
  Lord Phillips of Sudbury: My Lords, in answering the question of my noble friend Lord Bradshaw, the noble Baroness did not refer to the last point he made regarding contingency fees. Will she comment upon the propensity of contingency fees, or conditional fees, to lead to a greater degree of unscrupulousness on the part of the tiny minority of the legal profession who are so inclined?
  Baroness Scotland of Asthal: My Lords, we certainly have no evidence to suggest that conditional fees have increased the preponderance of fraudulent behaviour as the noble Lord suggests. They have indeed increased access to justice because individuals who could not afford to litigate privately despite having good cause now can. Public funds have been focused on other priorities where the market cannot yet provide. It is in a solicitor's interests to ensure that bad cases are not brought before the courts and are weeded out of the system. It is right to remind noble Lords that fraud within the legal profession, particularly in the branch of the profession in which the noble Lord, Lord Phillips, is involved, is perpetrated by a tiny minority. I believe that the figure is less than 0.22 per cent. Therefore, the majority of lawyers uphold the integrity of their profession with great aplomb.
  Lord Campbell of Alloway: My Lords, is not the Question, frankly, wholly misconceived? What on earth are Her Majesty's Government supposed to do about the fraudulent claim in Manchester? It has nothing to do with Her Majesty's Government. Good heavens, insurance companies make inquiries as a matter of course that indicate where there is a propensity for a bogus claim. I simply do not understand the purpose of the Question other than to have a "dig" at certain lawyers.
  Baroness Scotland of Asthal: My Lords, I share the perplexity of the noble Lord, Lord Campbell of Alloway. I am pleased to agree with him that the subject matter of the Question has nothing to do with Her Majesty's Government.
  Lord Ackner: My Lords, conditional fees have a lot to do with Her Majesty's Government. Is not the real problem with the conditional fee that you have a situation in which the lawyer has a direct interest in the outcome of cases? That is why in the past conditional fees were considered contrary to the public interest.
  Baroness Scotland of Asthal: My Lords, the comments of the noble and learned Lord in regard to conditional fees constitute an argument that has been advanced for some time. We have looked carefully to determine whether there is any evidence base to support that argument and whether the assertion of the noble and learned Lord is correct. However, we have no information to indicate that that is the position at the moment. If and when we do have such evidence, we shall take it extremely seriously and shall address the matter speedily.

  Business
  3.13 p.m.
  Lord Grocott: My Lords, with the leave of the House, two Statements will be repeated this afternoon. The first will be on Bali and the ISC report, to be repeated by my noble friend Lady Amos; and the second will be on new NHS resources, to be repeated by my noble friend Lord Hunt of Kings Heath. For the convenience of the House, it is planned that the Statements will be taken after the first debate.

  Business of the House: Standing Order 41
  Lord Williams of Mostyn: My Lords, I beg to move the Motion standing in my name on the Order Paper.
  Moved, That Standing Order 41 (Arrangement of the Order Paper) be dispensed with on 7th January next to allow the Motion standing in the name of the Baroness Scotland of Asthal to be taken before the Motion standing in the name of the Lord Grenfell.—(Lord Williams of Mostyn.)
  On Question, Motion agreed to.

  Administration and Works: Select Committee
  The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
  Moved, That the Lord Shaw of Northstead be appointed a member of the Select Committee.—(The Chairman of Committees.)
  On Question, Motion agreed to.

  Statutory Instruments: Joint Committee
  The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
  Moved, That the Lord Mancroft be appointed a member of the Joint Committee in the place of the Lord Vivian.—(The Chairman of Committees.)
  On Question, Motion agreed to.

  Government
  3.15 p.m.
  Lord Peyton of Yeovilrose to call attention to the growth of government and its attendant regulations and the case for action to reduce them; and to move for Papers.
  The noble Lord said: My Lords, I start by saying a few words more about Parliament than about the Motion. I believe that Parliament, like other of our institutions, needs to be seen, heard and respected. If little or nothing of what is said or done here is reported, Parliament unventilated will perish for lack of fresh air. People will not care for an institution of which they know nothing and Parliament will lose confidence in its ability to perform its main task of controlling the executive. It will also cease to attract people of merit.
  Governments will see no need to defer to such an enfeebled institution. They might then find it easy and convenient to tackle what they see as the nuisance of a free press. If the press should lose that freedom, it seems to me that it will have itself to blame in large measure for having allowed—if not actually pushed—an institution devoted to freedom to fall into obscurity where it can be neither seen nor heard. I make no apology for saying that because it seems to me that Parliament is in some jeopardy as so many of its procedures are totally ignored by those who think of nothing but football, money and sex.
  I turn now to the Motion. I should like to share with your Lordships some of my thoughts in moving it. Government is much too large, such that as a whole and as individual departments it has become virtually unmanageable. The number of Ministers in government today serve only to increase the frictions that are part and parcel of every government's experience. Government makes too many rules and is devoted to short-term considerations. Its principal skill is in presentation and promising, not performing. The new-speak language that it employs—I shall go into that later—is extremely confusing.
  I have made some sort of superficial study—it can hardly be anything else—of a volume entitled the Civil Service Year Book. It can be seen in the Library and it can be obtained from the Printed Paper Office. It is a chart of government as it exists today. A very brief editorial goes out of its way to call attention to the Office of the Deputy Prime Minister which, it says,
  "becomes one of the largest departments"
  of government.
  I shall return to that matter later. It is interesting to note that the year book is accompanied by a compact disc and a guide which mean very little to me. One can place it in one's pocket but it would be very difficult to get it into one's mind.
  We then read a foreword from no less a person than the Cabinet Secretary. I was rather surprised to find him lending himself to the newspeak arid saying that,

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  over the years of his appointment, his aim will be to give front-line delivery to education, health, law and order, transport and the many public services which we tend to take for granted. I thought that delivery was something done by midwives, messengers and bowlers on the cricket field. I have not yet got used to the idea of Ministers delivering these items as if they were packages. I believe they would do well to change their language.
  The size of government is a subject too large to be covered in a short debate such as this. We need time to dwell on it and on the huge volume of which it consists. I can refer briefly only to one or two departments. I turn immediately to the Office of the Deputy Prime Minister. I cannot think that anyone since Hercules has ever tackled such huge tasks. But, of course, Hercules had the benefit of being successful in his impossible labours. That has yet to be proved so far as concerns the Deputy Prime Minister.
  To call it an "office" when it is really a substantial empire is to do violence to language. I do not believe that any office can be large enough to hold the Deputy Prime Minister. His empire is covered by no fewer than 120 columns in the Civil Service Year Book. It has eight Ministers and 10 directorates. I have no time to go into what all those directorates do, but I cannot help feeling that there are rather too many of them and I wonder whether the people in them spend a great deal of their time fighting over boundaries.
  I have brought with me some quotations from the Year Book with which I want to weary your Lordships. At column 208 of this memorable book, it is stated that one of the purposes of the Office of the Deputy Prime Minister is to:
  "Improve delivery and value for money of local services by: introducing comprehensive performance assessments and action plans, and securing a progressive improvement in authorities' scores".
  It continues in like fashion. That really is a classic piece of gobbledegook and I cannot help feeling that the Deputy Prime Minister would be well advised to see that his purposes are better presented than that.
  I turn to another part of his empire. It is entitled the "Democracy and Local Leadership Division". It sponsors the institution of modern, democratic local government. From what I hear, it has caused a good deal of confusion in the ranks of local government. But this Democracy and Local Leadership Division has a subsidiary entitled the "Local Democratic Renewal Branch". Its task is to modernise,
  "local governance and democracy in England, including new council constitutions, elected mayors, the conduct of local authority business (not Councillors' Code of Conduct—see Branch D), the role of the councillor, and councillors' allowances",
  and so on.
  That is a huge function. I wonder why central government are taking it upon themselves to interfere so minutely in local government. Personally I recall that the government I used to support, at least in name, did a great deal of harm to local government in that they filleted it. At one time—it shows how wrong one
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  can be—I thought that the present administration would show more respect for local government than they do.
  I want to mention one more organisation—the Social Exclusion Unit—for which the Deputy Prime Minister is responsible. I shall weary your Lordships with one more quotation because it is something of a gem:
  "The Social Exclusion Unit remit is to help improve government action to reduce social exclusion by producing"—
  mark the words—
  "`joined-up solutions to joined-up problems".
  I have the greatest possible respect for the noble Lord who is to reply to the debate, but I believe that he will be puzzled as to how to give a lucid account of what that means.
  I have little time to dwell on individual Ministries but surely the DTI deserves a comment. It has 70 to 80 columns in the Year Book and seven Ministers. It claims to work closely with almost everyone in driving up innovation and productivity. How grateful industry must be! I have never heard any industrialist express either gratitude or admiration; nor have I ever heard it explained what the DTI has achieved, if anything, over the years.
  I turn briefly to the subject of health. I want to express my admiration for, and gratitude to, the noble Lord, Lord Hunt, who listens to what is said in your Lordships' Chamber. However, I still find it difficult to extract any information about what is happening. I refer to an institution called RAFT, which is the heir to the organisation established during the war by McIndoe at East Grinstead for burned fighter pilots. That institution has been in jeopardy for some years. It has been threatened. It is said to be moving from Mount Vernon to Northwick Park, but no one knows when it will go and no one seems to bother about the continued uncertainty. In my view, that is a scandal.
  I do not have time to deal with the question of transport, although I am glad to note that the pie-in-the-sky idea of a co-ordinated, integrated system of transport was recently put quietly on one side. However, I cannot resist the temptation to say that the situation in the capital city, where we live, is simply disgraceful. I know that the Mayor is doing his best to increase congestion, and he is being very successful in that. But the Government are standing back with folded arms and doing absolutely nothing to remedy a situation of increasing hardship and loss.
  I was going to talk about the Department for Culture, Media and Sport but I must refrain. I end by saying that all the people about whom I have spoken have power but they never have enough. They are always looking for more. Last year there were 4,642 new sets of rules. I have commented on the language used by those in government but, if I had the right to counsel a government, I would say, "Be a little more modest both in your aims and in what you say you have achieved". That might impress people more favourably.

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  I have a last piece of advice: I would so much like Ministers to spend time reading a book published in the 1970s written by Dr Schumacher, entitled, Small is Beautiful. They might pay attention not only to the title but to its contents. I shall give one brief quotation:
  "Man is far too clever to be able to survive without wisdom".
  In looking through the Civil Service Year Book with its chart of every limb of government, I saw no trace of wisdom My Lords, I beg to move for Papers.
  3.30 p.m.
  Lord Lang of Monkton: My Lords, it is a pleasure to rise in succession to my noble friend Lord Peyton of Yeovil, and to compliment him on the clarity with which he laid out the case for his Motion. It was a shrewd choice of subject, concerned with the growth of numbers in and burdens of government. It is illustrative not just of the Government's tendency to interfere, regulate and impose burdens; it also exposes the parallels that can be drawn with the major government areas of taxation, spending and borrowing that are now also growing and inflicting so much harm on our national well-being.
  The combined burden on enterprise is now beginning to become unbearable. A concise example of the growth of government might easily be given by looking across the Border to Scotland. What used to be done by five government Ministers is now done by 22. What used to be done by some 70 Members of Parliament is now done by around 200. In addition, there has been the concomitant increase in civil servants. It might be argued that part of that is the creation of a separate government and that in the view of some there is an overwhelming imperative to create that additional separate government. But it is illustrative of the broader problem that we face in looking at growing government and growing burdens.
  In the past year, 4,642 new sets of regulations were introduced; an increase of 50 per cent on five years ago. The British Chambers of Commerce, whose members have to struggle with those regulations, estimated that in 2000 the additional cost to business was some £10 billion. Now, just two years later, they estimate the cost at £15 billion.
  To all the regulations is added the burden of endless government task forces and Tsars for this and Tsars for that. As someone once said, the Government have more Tsars than the Romanovs. They have even set up a task force to try to achieve better regulation, forgetting that the creation of all the other task forces has caused part of the problem. The Government's response to criticism of the excessive burden of task forces is to offer a red tape day on which all new employment regulations would come in on one day instead of being scattered throughout the year. A better solution would be to introduce fewer regulations, to reduce the number of Bills they bring before both Houses and to insert in as many of them as possible sunset clauses to reduce the cumulative burden of legislation.
  A good example of the increased regulation and the burdens that that creates is something which happened immediately after this Government came to power in
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  1997. They threw away one of the great achievements of the previous government when the then Prime Minister, John Major, secured in the Maastricht Treaty negotiations an opt-out from the Social Chapter. The incoming government had a different set of priorities, and they were entitled to assert those. But I think that they should have weighed more carefully the downside to the changes they wanted to make, which would throw open the floodgates and cause the inflow of new regulation from the European Union to damage our more flexible and more competitive work forces with endless directives and red tape.
  I refer, for instance, to the Information and Consultation Directive; the part-time workers regulations, which in two years is estimated to have cost over £300 million; the contract workers regulations; and the temporary agencies workers directive. In the United Kingdom there are some 700,000 agency temps, something like 65 per cent of the whole of the European Union sector. That, therefore, impacts much more heavily on this country than elsewhere. There was then the Working Time Directive, which in four years is believed to have cost over £7.5 billion to industry.
  I am sure that some of those directives were worthwhile or had worthwhile components, and desirable ones at that. But collectively and cumulatively they are doing massive damage. With their surrender to the European Union on those issues, the Government have now thrown away the discretion to choose which to bring in; which to adapt to suit our circumstances and which to ignore. Elsewhere there seems to be an insensitivity to the economic consequences and a woeful lack of restraint in bringing in such regulation.
  The lack of restraint at a time of obvious economic uncertainty and a compulsion to over-govern, which I believe my noble friend illustrated, led government spending plans to increase from £418 billion this year to £511 billion by 2005–06. Now it is absorbing almost 42 per cent of our national income; a rise of 2 per cent in a year, despite tax revenues having risen by no less than 42 per cent. In addition, tax changes will have risen by £47 billion by 2005. Again, burden is piled upon burden.
  With borrowing we see the same rake's progress. We see borrowing in the public sector forecast last April at £11 billion for this year now forecast at £20 billion, and for next year at £24 billion. An overall budget surplus forecast of £3 billion is now to be a deficit of £6 billion, with a further £5 billion next year. I predict it will be much more; it always is. It is no wonder therefore that, overall, employment is now falling across the board. In the manufacturing sector alone, 400,000 jobs have been lost since 1997. The combination of the burdens of regulation, taxation and the other constraints imposed on enterprise have contributed to this result. GDP in the production industries is down by 5 per cent. Confidence is falling. Investment has been falling for two years. Inward investment is being frightened away.

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  Growth forecasts for the whole economy have belatedly had to be revised downwards by the Chancellor. Productivity growth has crashed in the past year. Again, that is a direct consequence of the mass of new regulations that so undermines our competitiveness. Corporate tax revenues, which were to rise by 15 per cent, have fallen by 14 per cent. We now have the worst trade deficit since records began.
  Cause and effect are interlinked here. It is the worst time to have burgeoning government; over-regulating government; and over-spending government burdening business with regulation and financial penalty. The cost of it all to business, the public services and the economy is in turn reducing their capacity to deliver and so undermining the credibility of the Government's whole approach and making the problems worse. It is no wonder that the savings ratio has fallen from 10 per cent when the present Government came to power to the all-time low of 3.75 per cent now projected. Only the paper-thin confidence of high consumer spending sustained by dangerous levels of personal borrowing is keeping the economy from collapse.
  Some of the statistics with which I have burdened your Lordships—I apologise for including so many in a relatively short speech— are in part the predictable consequence of the state of the world economy. But that should have led the Government to pause and adapt their behaviour. Many of the consequences that I have spelt out and many of the statistics that I have given, are the result of self-inflicted wounds. Against the background I have described, the extravagant growth of government, their numbers, aspirations, spending, taxing, borrowing, interference and the burden of their red tape and regulations are destroying both our prosperity and our prospects. I believe that it is time to call a halt.
  3.38 p.m.
  Lord Vinson: My Lords, it is a great privilege to follow the two previous speakers on this neglected but important subject. I recall reading when I was younger Gulliver's Travels. Your Lordships need no reminding that that was an allegory by Jonathan Swift on the regulations of the time, largely religious, but in the same vein as today. He said of Gulliver that:
  "No single silken thread held him down but 1,000 made him immobile".
  That is the problem with regulations. I shall try to illustrate it by briefly giving some practical examples of how the multitudinous nature of these silken threads—each one of them perhaps of little importance—taken overall, is immensely damaging. That is why I think that this subject is so important.
  My own background is that of an entrepreneur who started a small business and built it up, probably blissfully unaware of the problems that I should hit. In those days—40 or 50 years ago—the regulatory atmosphere was so much more benign and kind and, some would say, more unsafe, but at least it meant that entrepreneurs did not have to struggle with the huge burden of regulation that they have to struggle with
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  today. As a result, I am sure that we are inhibiting and handicapping the growth of many of the firms that would give this country prosperity tomorrow.
  Perhaps I can give two small examples as illustrations. The building trade is conditioned and governed by building regulations. These are, if one puts them all together, inches and feet—20 or 30 centimetres, if one likes—thick. I came across a typical example of this last week. My daughter is buying a house. I said to the builder: "Why is there no doorstep?" He said: "We are not allowed to put one in because wheeled invalid carriages of various kinds could not easily cross the threshold." I said: "Surely, a doorstep could be at least an inch high?" "No, it is not allowed." —he said—"But as a consequence, I cannot guarantee that when it rains heavily the water will not come under the door. What is even more important is that the frame of the door is now permanently sunk in a damp condition and will rot and will have to be replaced in 20 years". So in order to meet the relatively minor problem of enabling a disabled person to cross that threshold more easily, we cannot have a doorstep even an inch high. The unintended consequence of that ludicrous piece of legislative interference with builders' and architects' freedom to act will be one of enormous cost in the future as every one of those door frames will have to be replaced.
  The other day I received a cri de coeur from an architect about new windows that he was anxious to install into an Edwardian house and was prevented from so doing by a building regulation. The explanatory note—not even a regulation itself—states:
  "A new regulation 16A makes special provision for building work consisting of the installation of replacement windows, rooflights, roof windows and doors in existing buildings. It authorises a local authority to accept, as evidence that the work complies with regulations 4 and 7, a certificate to that effect by a person registered under the Fenestration Self-Assessment Scheme. Regulation 16A also provides for the notification of the completion of work where no certificate is to be given (regulation 2(4).
  "Regulation 3 contains a transitional provision".
  The long and short of that is that the cartel set up by the Fenestration group now has a total monopoly on the installation of windows. I am sure that that was an unintended consequence of the regulation.
  A very well known and respected architect wrote to me:
  "It is such a joy to get in touch with you. It is good to know that the fears of those of us who still labour at the sharp end are not totally ignored at the top. Thank you for that. But I have to say that the resentments of the ordinary Englishman are now starting to form a critical mass at this level. I do sincerely believe that politicians continue to despise us, or I would say ignore us, at their peril".
  We may be the eagles, but the moles down there at the bottom of the heap are getting restless because of the damage that overregulation is doing to them.
  Many of our regulatory bodies, I believe, pursue their own agenda, often regardless of the wider public considerations. It is time to ask the ancient Roman question: "who will judge the judges"?

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  I give the example of the work of the Food Standards Agency. It has just issued a recommendation to the EEC that sausage skins made from sheep should be banned. The background to that is that it is afraid that sausage skins might contain BSE. Even though we have all been eating sausage skins since the height of the BSE epidemic, it is now getting worried about it.
  Sheep were last fed with contaminated meat and bone meal in 1988. Not a single case of BSE has been found in sheep, although scientists are hunting hard to find it. There cannot be a sheep alive that has been fed with those contaminating substances. But the Food Standards Agency in its wisdom decided to hold a stakeholder meeting to endorse its officers' recommendation for a ban. That meeting was held in Belfast, which is very difficult for English people to get to in a hurry from the mainland. It comprised 88 people, a bit of a circus really; 49 of the 88—over half—were staff or directors of the FSA. The others were invited guests from various bodies.
  In practice, the Food Standards Agency has to take its decisions behind closed doors and then conducts, using its own officers, the stakeholder meetings in a manner to achieve the ends it needs. It argues that its decisions are based on the precautionary principle. In effect, that enables it to abandon the concept of risk assessment and balanced judgment based on proportionality.
  Proportion is so much harder to justify than precaution. The avoidance of risk means that no decision has to be justified and that the decision itself is hard to criticise, because who is brave enough to challenge publicly the concept of putting safety above all else?
  Thus, the precautionary principle stifles rational scientific debate regarding the nature of risk and is often nothing more than a cloak for intellectual cowardice.
  One has to consider seriously whether the Food Standards Agency's stakeholder meetings are a sensible forum for taking decisions. They certainly appear to be little more than a mechanism for giving the FSA a veneer of public approval to its decisions. They certainly give little confidence to those of us who believe that the FSA's decisions should be taken on hard-tested scientific analysis after in-depth discussions with those with knowledge of the industries concerned. That is a perfect example of a body that does not seem to take its decisions in the wider context but is blindly pursuing its own agenda.
  If time permitted, I could give umpteem other examples to the House of the problems of unintended consequences.
  Noble Lords will remember Lyme Regis and the deaths caused by canoes capsizing. As a consequence, regulation was introduced that covered both trips abroad and canoeing generally. A report in The Times of 4th July 2001 stated:
  "Commercial companies are now required to hold a licence under the Adventure Activities Licensing Scheme before they sell climbing, trekking, caving or watersports activities to schools or other groups of young people aged under 18.
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  "The Education Department insists that local authorities must obtain a licence for schools to take children on trips. The Adventure Activities Licensing Authority inspects the safety mechanisms of applicants and considers whether to grant or refuse a licence … Head teachers are expected to hold detailed briefings in school for parents who have to agree in writing to allow their children to join the trip".
  The unintended consequence of such safety fears is an end to playground games and sporting activities. I quote from our local newspaper:
  "There will be no adult or family swimming at Glendale this year. The requirement for a qualified lifeguard to be on duty at all times makes the provision of swimming at present impossibly".
  In other words, parents can take their children to the sea and prevent them from drowning, but not to the local pool.
  The outcome of all this overregulation and its unintended consequences is the headline,
  "Children becoming softies as red tape halts adventure".
  which appeared in the Daily Telegraph of 31st May 1999.
  Is this really the kind of world that we want to see and is this really the consequence of trying to make a supersafe society that we desire?
  My time is up. I could continue to illustrate this issue in umpteen ways, but I shall merely try to he constructive and ask: what can we do about it? We must bring back some proportionality into the application of regulation; we must bring back sunset clauses, as mentioned by the previous speaker; we must give more power to the better regulation unit or the task force, or whatever it is called today: and we need more pre-legislative scrutiny.
  Unless we do so, I am afraid that we shall wake up to find that the road to national decline is paved with well-intentioned regulations.
  3.49 p.m.
  Baroness Flather: My Lords, our society is complex and becoming more so. We all understand the need for regulation in such a society. Those of us who are reaching a certain age know that regulations have continued to grow to keep pace with the complexities. Currently, however, one feels that every day one comes up against something or other, small or big, that somehow impinges on one's everyday life. W hen everyday life begins to feel difficult in terms of what one can and cannot do, it is important for us to stop and ask whether things have gone too far.
  For example, I do not know whether any of your Lordships have tried to give away anything recently. One may have an electrical appliance, a television set, perhaps, that is working perfectly. If one wants to change that television for a bigger one, it is impossible to give away the old one. One cannot give away a fridge; one cannot give away anything to anybody. One is stuck. It is not allowed: everything has to have a certificate. If one wants to give a mattress to someone who does not have one, one cannot. One may not be certain it ever had that little fireproofing label. And one needs to know when and where one bought it.

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  I read somewhere recently that specialist doctors say that they used to spend eight minutes with each patient and that now they spend five minutes. What do they do with the rest of the time? I do not need to spell it out: they have more forms to fill, more records to keep and more things to do.
  My daughter-in-law decided that, as she has two young children, she would like to be a playgroup leader. She took a course, did extremely well and earned distinctions. She worked as a playgroup leader but lasted only one year. She was extremely good, but she could not find the extra day and a half, unpaid, to complete all the records. Children between the ages of three and five have to be assessed every week. Each child's record must be kept. Most playgroups run only from 9 o'clock until 12 o'clock. It is impossible for people who run playgroups to keep such records in the time available.
  It is becoming difficult for people in caring professions to do their job, which is to give care. They spend a huge amount of time filling in forms, keeping records and making sure that they have met every regulation. There is so much centralisation that we have to ask ourselves whether we have got the happy medium between a regulated society and a totally controlled society. As my noble friend Lord Vinson said, regulations are supposed to be for our own good. They are supposed to protect us. But has anyone done a proper evaluation of all those regulations to establish whether we are safer and better off? Or is it simply a cost implication for everyone involved? I do not believe that a proper evaluation has been done.
  We have a plethora of directives from Brussels, as noble Lords have said. Yes, we have to bring those directives into our legislation, but we do have some flexibility as to how that is done and to what extent. It feels as if we are already part of a federal Europe—a united states of Europe. Every time a directive comes up, we wholeheartedly take it in and push it through. Have we looked at our partners in Europe to see how much regulation they put into practice and how much they follow it? I shall not pursue that topic; it is for another occasion. The point is that we should spend more time considering our situation and seeing how directives could be modified to fit in with our needs.
  If we go down this road continuously, we shall have a nation of form-fillers and buck-passers, as my noble friend Lord Vinson said. We shall not have intelligent, thinking, flexible or imaginative people. We are trying to educate our nation into being much more responsive to situations and ideas. If all ideas and spheres of life are going to be regulated, we are not going to produce people of that sort.
  In the Government's first term of office, nearly all the legislation that passed through your Lordships' House was administrative in nature. There was little that changed anything. It is important for us to start thinking about what kind of country we are building. I am not making a political point here; I have made no political point. I have spoken very much from the
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  heart, as I always do. I hope that the Minister will take that into account and at least give an assessment of what is in place.
  Let us consider the situation in education, where there is such a burden on teachers, and in the health service. Those two matters are dear to the Government's heart. However, they are being drowned in all kinds of red tape and regulations. We need to see whether education and health have improved in any way since all the regulations were introduced. If the answer is a resounding "Yes", tell us, because we will accept that. It is not at the moment obvious to any of us.
  3.57 p.m.
  Lord Garel-Jones: My Lords, this is an important subject, and noble Lords are grateful to my noble friend Lord Peyton for introducing it. As with so many things in life, regulation is a question of balance, or "proportionality", as my noble friend Lord Vinson said. It is naïve to think that life would be better if all regulations were swept away. No one would seriously argue that the state does not have a duty to concern itself about food hygiene, the environment and so on. Equally, however, my noble friend Lord Hurd, speaking in the context of EU regulation, coined the felicitous phrase, "an invasion into the nooks and crannies of our daily lives".
  The figure given by my noble friend Lord Lang of, I believe, 4,642 new sets of regulations, represents a 50 per cent increase on the number introduced in 1997. That leads me, at any rate, to believe that the nooks and crannies are in danger of being swept completely clean. No one who listened to the opening speech of my noble friend Lord Peyton could fail to believe that the Government are in serious danger of losing all sense of balance and proportionality in this matter.
  I shall focus my remarks on the effect of excessive regulation in the City of London. The Wicks group identified four broad criteria that should govern our approach to regulation. First, practitioners, not legislators, create a functioning market. Not affording them the flexibility that they require to innovate will serve only to damage markets. Secondly, good regulation and good legislation can be ensured only through consultation with practitioners at all stages of the process. Thirdly, regulation must be risk-based, taking into account the different risks faced by different firms, customers, investors and counter-parties. Finally, enforcement of legislation and regulations is vital but requires constant monitoring at domestic and European levels.
  Within those four guidelines, to which I wholly subscribe, I shall make five quick points establishing that the danger of over-regulation can damage the City of London. First, at the level of the European Union, regulation of the financial services sector is clearly necessary, but only in so far as it contributes towards creating a healthy and unified trading environment. There is a culture in the United Kingdom—my noble friend Lady Flather referred to it—of blind compliance with legislation from Brussels. In my day,

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  we used to call it gold plating the legislation. The result is that directives are often implemented in the United Kingdom in an excessively legalistic fashion without accounting for the differences between markets and—again, my noble friend Lady Flather referred to this—the way in which other member states choose to implement such measures. That frequently leads to a relatively higher compliance burden in the United Kingdom than in other EU countries.
  Secondly, there is a prevailing attitude among regulatory authorities that all forms of commercial risk should be covered. An overcautious approach ignores the requirement on firms to employ risk as a tool for innovation and competition. Stifling those elements damages the competitiveness of the entire sector.
  Thirdly, regulatory cost is a huge issue, particularly under current market conditions. Declining volumes of business increase the potential for default. However, increasing the regulatory cost is the wrong approach to mitigate that. Although the FSA is required to undertake a cost/benefit analysis before adopting new rules, the analysis is generally cursory and always concludes that the benefit of new rules outweighs the cost.
  Fourthly, firms and regulators are in clear agreement that the trend towards regulatory harmonisation is beneficial. Regulators often fail to see the need, even within this climate of harmonisation, for differentiated treatment of product lines and firms, such as SMEs. There is insufficient differentiation between types of market user and investor and differing levels of protection, which each may need. That is a particular feature of the European approach.
  Finally, regulators may be at risk of overburdening themselves. Already, momentum exists to widen the scope of the financial services legislation to encompass a number of wholesale markets, for example, that of power. The inclusion of non-financial institutions and product ranges, under the umbrella of the FSA, will create the risk of their becoming overstretched and losing focus on the retail investor.
  Initially, the concept of prudential regulation was designed to prevent retail customers losing money to unscrupulous investment firms. However, that initial "public good" objective has somehow been replaced by a massive compliance burden, which has not served and is not serving to fulfil the initial and wholly laudable objectives. What is required now is that authorities refocus their attention on the core principles of consumer protection rather than seek to broaden their scope.
  4.4 p.m.
  Lord Plumb: My Lords, I hope that noble Lords will forgive me for intervening; if the noble Lord, Lord McNally, agrees, I shall say a few words during the gap, having missed getting my name on the Speakers' List yesterday.
  It is always a great pleasure to follow a Motion moved by my noble friend Lord Peyton. It is appropriate to debate this Motion because every
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  person in the land is concerned with the effect of regulations on their individuality and in relation to various sectors, not least in relation to agriculture, to which I shall refer.
  The Curry report says,
  "regulation has to be proportionate and efficiently implemented and the likely benefit should be identified and if possible quantified".
  No single farmer could disagree with that statement but, given the way in which present regulations have become almost "set in concrete", is that easier said than done? There is one measure that could have a significant effect; that is, that the basis of all regulation should be subjected not only to examination but also to scientific peer review. One example will serve. The current proposal to extend nitrate sensitive area regulation across the bulk of the country is based on a perception that nitrogen is potentially dangerous to both human health and the environment. It will cause very great problems, all to little or no purpose. A full scientific examination would have avoided the problem.
  Society will always have a keen interest in the operations of farmers and the food industry. Food safety will naturally be a high priority. But concerns about environmental impacts and animal welfare lag not far behind. Moreover, farmers and growers are subject to the same regulatory framework as the rest of the UK industry in their role as businesspeople and employers. Given the resultant substantial and cumulative impact of regulations on farmers, it is essential that the impact of each is kept to the minimum.
  I ask the Minister to acknowledge that regulations must be kept under regular review. It appears that regulations are often applied to regulations, which causes conflict. I had six farmers—good people and good businessmen—around a table fairly recently and I asked them for their opinion on how four sets of regulations should be applied. I received six different answers from people who understand the issues; their interpretations were very different.
  If a regulation has been introduced on the basis of a precautionary principle, the necessary work has to be commissioned to improve the decision-makers' knowledge base and we should review the regulation as soon as new information is available. Often, the cost of regulations that are imposed on other sectors is transmitted by economic force to farmers, growers and the whole agricultural industry. A clear example of that is the meat hygiene directive, which is complex to say the least. In that, farmers have to be involved in discussions about how to reduce the impact of the regulations, together with the directly affected sectors.
  These are important matters—there are many others—and they show how regulations affect people, particularly those who are hard at work, who farm as individuals and who have no labour support. They have to deal with these bureaucratic regulations when they have finished their day's work.
  4.9 p.m.
  Lord McNally: My Lords, we all welcome the fact that the noble Lords, Lord Garel-Jones and Lord Plumb, who have expertise in this area, have taken the opportunity to point out the problems and dangers of over-regulation.
  I have with me an excellent paper by the Liberal Democrat shadow spokesman, Dr Vincent Cable, entitled Unnecessary Regulation. I recommend it to all members of the Government. However, my one fear was that the debate would be just a catalogue of complaints and horror stories about bureaucracy and government interference. The debate has not taken that line, thanks to the way in which the noble Lord, Lord Peyton, introduced it. He brought a philosophical approach to the debate. That is something that I must confess that I have not always associated with him; I had rather thought of him as a kind of Dickensian character—a man who went home at the weekend to shoot pheasants, or peasants, as the mood took him.
  Lord Peyton of Yeovil: My Lords, I am most grateful to the noble Lord for giving way. I merely point out that I do not shoot pheasants at the weekend. In so far as I have any wish to shoot at all, it is directed against some people.
  Lord McNally: Well, my Lords, I was half right when I mentioned peasants.
  The philosophical question—the tug between over-government and a desire to cut back on Government—has been present for at least the past 50 years since the Conservatives campaigned so successfully by promising to make a bonfire of controls. Successive governments have brought in whizz-kids from the private sector to consider the matter. That hides another even deeper trait of Conservative Members: they really want lower taxation and less government, but they do not have the courage to argue the full logic of their case. Hence the hiding of Mr Oliver Letwin during the most recent general election campaign, when he blurted out that they actually wanted to cut £20 billion of public expenditure, but they did not know how they were going to do so.
  That is the problem: this debate should really be conducted in parallel with yesterday's debate on government expenditure, when the Government again came under fire from Conservative Members for not cutting expenditure, but few examples were given of how those cuts should be achieved—which parts of public expenditure should be cut to achieve the savings sought. The noble Lord, Lord McIntosh, gave the reply that my party has been giving for some years, to which the Government are a recent, welcome convert: that increased public expenditure may not be the whole answer to better public services, but it is certainly part of the answer. That is why we have supported the Government in devoting more expenditure to public services.
  Whether they speak it loudly or whisper it darkly, we reject the Conservative approach, which is really just a resuscitation of old Reaganomics: low taxes, a minimal
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  role for government, safety-net public services and a trickle-down distribution of wealth from the rich to the poor. That is their real agenda; they just do not have the guts to expound it. Instead, they choose a superficially easy target: meddling bureaucracy, red tape, inefficiencies in the public service—of which there are clearly examples—burdens on business or gold-plating from Brussels.
  It is worth having that philosophical debate, because I am glad to meet the Conservatives on that ground. We on the Liberal Democrat Benches believe that the real answer is a coherent and radical programme of reform. We believe in individualism and civil liberties, as is often heard from these Benches. We want neither the nanny state nor the concept that the man in Whitehall knows best. But we also know, as the noble Lord, Lord Garel-Jones, acknowledged, that when we go to people's doorsteps, they usually ask: "What are the Government going to do about health, education and transport?" They know that the market's hidden hand will not deliver the health, education, transport or even public broadcasting that they want. The people want a political process responsive to their views and quality, value, effectiveness and accountability in their public service.
  So where the Motion misses the point is in not accepting that the answer lies in political reform and, to use that horrid European word, subsidiarity—basically, moving power and decision-making to its most effective level. We have one of the most over-centralised states among advanced democracies. We need to get power out of Whitehall and to the appropriate level: whether local, regional, national or, indeed, European. Considering the work now being done in Europe and the century that stretches ahead of us, I should like much more emphasis on Europe being able to promote an effective foreign and security policy.
  Lord Vinson: My Lords, I am anxious that the noble Lord should get to the point in this short debate dealing with regulation rather than with foreign affairs.
  Lord McNally: My Lords, I will make my speech in my way, as I listened to the noble Lord make his in his way. There is a philosophical point to this, and I am making it. If he does not understand it, that is almost as much his problem as it is mine.
  I am talking about moving power and decision-making to the right level. Get decision-making to the right level, and we shall deal with regulation. Is that clear enough? Right! Get power up to Europe on the important, global issues: foreign policy and security. Get power to the regions because, far too often, our regions are overburdened by Whitehall decision-making; and get power back into local government. That redistribution of power and moving power out of Whitehall would be one answer to the problem of over-regulation.
  The problem is that having started off as genuine reformers, the Government have become machine-minders. They have lost their enthusiasm for reform.

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  For example, we do not know what progress has been made on the Freedom of Information Act 2000. In fact, it has been handed over to the noble and learned Lord the Lord Chancellor as a damage-limitation exercise. Again, if the noble Lord, Lord Vinson, does not know what that has to do with regulation, I point out that unless we open up government, we give power to the bureaucracy.
  Likewise, what has happened to the Civil Service Bill? One worry of recent years has been the centralisation of power in No. 10. Indeed, when the Deputy Prime Minister, to whom reference has been made, was told on 18th October by Annette Brooke, MP, that she was not sure that she understood the structure of power in No. 10, he replied: "Join the club". We now have a Policy and Government Division, a Communications and Strategy Division and a Government and Political Relations Division, all headed by political appointments. A central problem of Government is what has happened to reform of the Civil Service. In a lecture given recently by Mr Peter Hennessy, he said that at a Cabinet meeting of 7th March 2002, there was a review of the Civil Service, when it was said that everyone present was,
  "deeply shocked by the sheer incompetence of the civil service to deliver in the modern world".
  As one Minister put it, the Cabinet Secretary's publicly expressed belief in the need for a Civil Service Act to clarify the proper roles and functions of a politically impartial Civil Service was,
  "a … stunt to entrench the incompetence of the civil service".
  Is that an accurate review of the Government's attitude to the Civil Service and to a Civil Service Act? If it is, there is serious problem at the heart of government that must be addressed.
  If we are to talk about the power of the bureaucracy and about over-regulation, we must address the reform of the machine and the system of delivery. lithe Government have some idea that they can take credit for anything that goes right in the economy or in government but can quickly blame everything that goes wrong on the incompetence of the Civil Service, that would be a sorry state of affairs.
  As long ago as 1997, in an earlier lecture, Peter Hennessy warned against "politicised over-mightiness" in government. He said:
  "The notion of a single profession with shared procedures and the bonding of a common ethic is no longer sustainable in an age of executive-type agencies, substantial contracting-out of work if not outright privatisation, separate recruitment and remuneration systems and a determined search for outsiders from beyond the public service to come in and improve performance and the delivery of the service to the public".
  That was written in 1997, at the end of the period of Conservative government, but it could have been written today. We are a long way from what Peter Hennessy determined as the ideal:
  "The public service impulse—the desire to join a disciplined profession with its own ethic for the purpose, under democratically legitimated political guidance, of shaping or implementing public policy for the wider public good".
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  He also said that that remained,
  "one of the most powerful motivators for those who seek a career in the public service".
  If some of the things that I have suggested are true and there is, inside Number 10, a policy unit that believes in micro-management, rather than a Civil Service that believes in professional management, professional people and professional tools, we might be getting close to the core of poor delivery. In 1996–97, I had the honour of serving on the study of the public service carried out by one of your Lordships' committees, under the chairmanship of the noble and learned Lord, Lord Slynn of Hadley. I challenge the Government to call that committee back to the colours to examine our public services again, five years into the life of the Labour Government, as we did after 18 years of Conservative government. I know that the noble and learned Lord, Lord Slynn of Hadley, would be enthusiastic to do that, and I would certainly sit on the committee again.
  It is not just the machinery of government that needs action, as the noble Lord, Lord Peyton of Yeovil said. We need reform of Parliament. There is too much sluggishness and too many rumours that things are being kicked into the long grass. There is no real feeling that the Government share the belief, which the noble Baroness, Lady Boothroyd, expressed in a recent lecture, that Parliament must reassert itself against what the noble Baroness described as the "insider trading" style of British politics.
  By all means, we should have the war on red tape and over-regulation and keep up the drive for quality, efficiency and delivery in our public services, but we should not lose sight of the benefits of having a public service that is selected on merit, politically neutral and imbued with an ethos of public service. Accompanying the reform of public service, there should be more open government, devolved government, a healthier and more responsive democracy, a fairer voting system, a reinvigorated Parliament. That is the holistic picture of over-regulation or over-government; it is part of the reform. The impression—not least from a rather grey Queen's Speech—is that we have grey machine-minders, instead of a Government committed to radical reform who could deal with many of the problems associated with the Motion.
  4.24 p.m.
  Baroness Wilcox: My Lords, I thank my noble friend Lord Peyton of Yeovil for introducing this important debate. He described with wit and chilling clarity the proliferation of regulations, the sheer size of government today and the dramatically increasing tax burden being imposed on each of us and on the beleaguered business community. However, my noble friend must be disappointed that no one on the Labour Benches thought the subject worthy of attention. We are, therefore, grateful to the noble Lord, Lord McNally, for giving us the Liberal Democrat view on this important subject, although we do not agree with all that he said.
  I shall start with the Government's public expenditure. The Chancellor is raising government consumption by approximately 10 per cent a year in

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  money terms. We can now see how much that costs us—the taxpayers—following the publication of figures by the Office for National Statistics. In 2001, 8 per cent more money was spent on public services. It is alarming that that has resulted in only 3 per cent more or better services. The implication of the figures is that, as we on these Benches argued, the extra tax revenue has been less productive than if it had been left to us to decide how and when to spend our money. I fear that that demonstrates that the Government's interventionist instincts have created a situation in which not just businesses but our public services suffer under a sea of new taxes and a sea of red tape.
  The competitiveness of British businesses is being undermined, as is their ability to win orders and create jobs. As failure to reform public services translates into failure to achieve improvements in standards on the necessary scale, the indications are that the Government's only answer will be to spend still more. That will lead to escalating problems and an ever-widening vicious circle and, eventually, to further tax increases and/or additional borrowing.
  As resources are drained away from the business sector, the Government's failed approach to public services could, in time, undermine the foundations of our economic strength. On these Benches, we are keenly in favour of reducing the burdens on business, introducing sunset clauses, making special efforts to protect small firms and, once again, fighting our corner more vigorously in Europe. Given the opportunity, we will reform public services to ensure better delivery for people and businesses alike, while reducing the burden imposed by our failing services.
  Our party is so concerned that we have set up a new commission to examine both specific regulations and the general burden of regulation to provide a new, systemic approach, incorporating the costs, benefits and outcomes of present and future regulation. No doubt, the Wicks group, referred to by my noble friend Lord Garel-Jones, will be listened to intently for City regulation. In outline, we would like to see the regulatory burden imposed by each government department fall year by year. As my noble friends Lord Lang of Monkton and Lord Vinson said, we want to see sunset clauses for new regulations, and we want to ensure that small firms are protected from onerous regulation by raising the employee threshold at which they apply. Increased business taxes inhibit business investment, holding back the future productivity and competitiveness of the UK economy. In November, ONS figures recorded business investment at its lowest level for 37 years.
  The Government are committed to huge increases in public sector spending over the next few years. That spending assumes a buoyant economy and a thriving business sector. However, their approach to business—piling on costs and undermining competitiveness—threatens to undermine the revenue sources on which their plans depend. The CBI claims that the Government have increased taxes on business by £47 billion over the period 1997–2005.
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  In the latest Budget the Chancellor announced major increases in both taxation and public expenditure. Much of the extra taxation burden is on business with an increase from April 2003 in employers' national insurance contributions raising £4 billion a year and an increase in self-employed NICs raising £450 million a year. It is a tax increase which we on these Benches strongly oppose. The climate change levy represents another significant increase to business costs despite government claims that it is "fiscally neutral".
  The Government have presided over a period of great prosperity, much of it due to difficult decisions taken by previous governments. Annual productivity growth has halved. In the first five years of Labour government, average annual productivity growth was 1.3 per cent. In the previous five and a quarter years, it was 2.7 per cent. And, after Labour's £5 billion a year tax on pension funds, the Red Book projects that the savings ratio this year will be 3.75 per cent—the lowest annual savings ratio since records began in 1963.
  We have overwhelming evidence that the UK economy is starting to suffer and that the Government's favoured strategy of throwing money at the problem is to be exposed finally as unsuccessful, inefficient and seriously wasteful. What we on these Benches propose is fundamental reform so that the root of the problem is tackled. Whatever happened to the Government's Better Regulation Task Force'? Maybe the Minister will tell us.
  I was a businesswoman for many years. After that I was privileged to be chairman of the National Consumer Council and represented people who bought both goods manufactured by businesses and services provided by the public and private sectors. In both roles I learnt one thing in particular: governments cannot and should not run things. This Government cannot keep their hands off anything. Government departments are growing and growing. If they are allowed to continue, the sheer size and meddling will stifle every bit of freedom and initiative in our beloved country.
  4.33 p.m.
  The Minister for the Cabinet Office and Chancellor of the Duchy of Lancaster (Lord Macdonald of Tradeston): My Lords, I, too, am grateful to the noble Lord, Lord Peyton, for the opportunity to address these questions today. In facing the noble Lord in the past, I have usually disappeared quite quickly down some hole that he has set in the road ahead for me. I thought that I might avoid it today but I notice that at the end of his speech he came up with a strong swipe at transport. However, I welcome the professional contributions made today from obviously a depth of personal expertise. I welcome, too, the recognition of the complexity of modern-day society and its widespread aversion to risk, which is often driven by concerns reported strongly in the media.
  This Government put regulation very close to the top of their priorities. The Prime Minister himself drives it with a particular passion. When we look at

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  regulation—and I shall explain later to noble Lords why—we see that in some areas we come near the top of the international league, according to many objective experts. However, perhaps I may begin with an area that was not too much touched on, but was raised by the noble Lord, Lord Peyton.
  Since 1997, there has been a growth in the number of people working in the public sector. That growth has been around 200,000 extra public servants. But that is inside a growth in employment of approximately 1.5 million more people in work, which has given us the lowest unemployment for decades. The interesting point here is that the proportion of public sector workers in relation to the overall workforce has fallen from 19.7 per cent in 1997 to 19.3 per cent in 2001. I make no apologies for the fact that there are 20,000 more teachers or 80,000 more classroom assistants and helpers or that there are 40,000 more nurses, and I doubt whether many noble Lords would complain.
  In central government, again there are interesting statistics. In 1976 there were about 750,000 civil servants. That reduced to 494,000 in 1996, the year before the election. Today, the number is 4,000 down on that—490,000 civil servants. The trend has been up since 1999 but, interestingly, the pay bill costs in 2002–03 will drop by 1.7 per cent. Even in Scotland where, clearly, there has been a significant change in its governance, the number of civil servants there has increased by only 500 to just under 11,500. In Wales, the increase has been greater—up by 1,160 to 3.370. Interestingly, the number of quangos has gone down. In 1997, there were 1,128. That has dropped by 103 to 1,025, according to the latest figures that I have.
  Therefore, I cannot accept that there is this rapidly growing government that has been described to me. The swings that were taken at the Deputy Prime Minister were a little unfair. His department is dealing with local government with 400 councils, including important areas such as planning, housing and the regions. As far as I recall, the number of Ministers is not the eight mentioned by the noble Lord, Lord Peyton, but six. However, I am happy to be corrected on that.
  I should prefer to look at regulation in three areas. Perhaps, first, we may look at it in one of its most important forms: economic regulation. Looking internationally, the Wall Street Journal put Britain in the top 10 for its business-friendly environment, second only to the United States among major economies. The Economist intelligence unit, indeed, put us third on similar measures. Perhaps most tellingly, in October, the OECD report stated that Britain was at the forefront of regulatory reform. Therefore, if we look at the activities of this Government, we can see that they have been trying to keep Britain at the competitive edge of international business.
  We have a regulatory impact unit; we have a Better Regulation Task Force, to which reference has been made. The Better Regulation Task Force is made up largely of business interests. It is chaired by
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  David Arculus, a notable businessman. It has put 350 recommendations to government since it was formed in 1997 under the noble Lord, Lord Haskins, and all but nine have been accepted.
  Therefore, when we take that in conjunction with the DTI initiatives to create the small business service—at present it is trying to streamline the plethora of some 500 grants—and when we think of the depth of consultation that has taken place with business and stakeholders across society, it helps to explain why our record on economic regulation internationally has been so widely applauded.
  The second area is, admittedly, contentious: that of social and environmental legislations. Again, noble Lords would not expect me to make any apologies for bringing in a minimum national wage; for extending paid holidays to poorer workers; or for bringing in parental rights or rights for the disabled. However, I accept that there are difficulties as regards the Working Time Directive and the Employment Act. But in those areas we consulted thoroughly with the business sector.
  Much of this regulation comes from Europe. Approximately 50 per cent of our regulation emanates from Brussels, and in the area of the environment it is probably around 80 per cent. We try to counter anything which seems overly damaging by scrutinising it in great detail through a Cabinet Committee. the Regulatory Accountability Committee, which I chair. Involved in the work of the committee are the chairman of the Small Business Service and the chairman of the Better Regulation Task Force.
  We work very hard in Europe. Noble Lords may have heard of the Mandlekern report which seeks to bring some British disciplines into the activities of Brussels—for instance, regulatory impact assessments. I am delighted to say that the Mandlekern report was backed by the Heads of Government. The Commission now has an action plan for better regulation, and I was recently in Brussels lobbying to make it as effective as possible.
  The third category relates to bureaucratic red tape, which has been the bane of British life for many decades. I remember from when I was in business the efforts made by Michael Heseltine to make a bonfire of red tape. He would admit himself that he had only limited success.
  We have introduced a regulatory impact unit to build on what was there before. We have a public sector team inside that which has produced some 300 recommendations from across the public sector to strip out unnecessary regulation. We place great emphasis on our regulatory impact assessments and we have brought in the National Audit Office to monitor them much more strongly.
  We have produced a regulatory action plan containing 268 measures. That was published earlier this year and its proposals will be delivered inside four years. We have built on the Regulatory Reform Act 2001 and we have introduced a new channel for regulatory reform orders, of which there are 63 in our action plan, to be enacted over the next three or four years.

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  We have established an office for public service reform which is working with departments. We have said strongly to departments that they must try to stop the flow of regulation. We have tried to place gateways in departments—successfully in areas such as health and education—to ensure that any proposed legislation is scrutinised thoroughly and discussed with those in the front line before it is introduced. This system is in a rudimentary form in some areas and we want to make sure that it is refined.
  As to the stock of existing regulations, the regulatory reform orders are available and can be taken up by trade associations, lobby groups and MPs. When adopted by a Minister, they can run through Parliament on a faster track than other legislation.
  A number of noble Lords raised the question of statutory instruments. Given the high standards of debate in the House, this is a rather unfortunate area in which to find distortion. Of the 4,642 statutory instruments, about 97 per cent of them, by our estimate, have no impact on business. The introduction of around 700 last year was the result of emergency measures related to foot and mouth disease. We hope that most of those will fall out from this year's total, which will be significantly lower. Many relate to road consent regimes. We hope that the Local Government Bill will help to make the process much easier and much less likely to lead to bureaucracy.
  The Conservative Party spokesperson asserted that it would take 65 years to introduce all the measures in our regulatory reform plan. Again I do not recognise the figures involved. I worry, too, about some of the costs that the Opposition attach to regulation, which at times seem to be plucked from the air. The noble Lord, Lord Lang, mentioned the British Chambers of Commerce—a body with which I worked closely in the past and for which I have great respect. I noticed that one of its officials recently said that the red tape index was something that they had developed on the back of an envelope. That does not give me much confidence in the figures of billions that were attached to it.
  Perhaps I may now refer to some of the individual points that have been made. I have tried to explain to the noble Lord, Lord Peyton, that the size of government is perhaps not the problem that he fears it will be. I agree with him that in the Government's approach to these issues it is always better to use the business maxim and try to "under promise and over deliver". I shall adhere to that approach where I can.
  As a former Secretary of State for Scotland, the noble Lord, Lord Lang, was able to govern Scotland—he did so with great aplomb during my time—with five Ministers. Unfortunately, the Scottish Office which followed—in which I was a Minister—put the total up to seven. I sometimes felt in coming from business into government that I was doing three times the work I had done before, and so it came as no surprise that the figure went up from seven to 22 under the Scottish Executive. But that decision was taken by elected
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  Scottish representatives following the decisive view of the Scottish people in the referendum that led to the 1999 elections.
  As to the points made about the DTI, I would argue that it has listened to business in regard to unemployment law and that it has listened to suggestions made by the Better Regulation Task Force on the issue of the red tape day. These are predominantly business groups. As to the issue of sunset clauses, we agree that it was in our manifesto. We shall work on it and try to ensure that it is brought in as appropriate. Of course it is not appropriate for all legislation. Certainly we will fight any unnecessary regulation, not only at local level but in the EU. If the noble Lord will allow, I shall not go into his rather sombre analysis of the PBR, with which he would not expect me to agree.
  The noble Lord, Lord Vinson, referred to the Better Regulation Task Force. We have given it a great deal of power. We have also introduced a business regulation team, consisting of secondees from big companies in the private sector, which has been working with trade associations, particularly in the area of fashioning the regulatory reform orders, to strip out any unnecessary regulation. Work is being carried out at present on fire regulations in an attempt to rationalise 100 years of accretions in that area.
  I agree with the noble Lord, Lord Vinson—as I do with many of the points made by other noble Lords—that we have to have a more sensible policy towards risk. I recommend to him the document produced by the Cabinet Office in the last month which takes us through some of the complexities and contradictions of a more robust approach. I cannot agree with the noble Lord's doom-laden conclusions, but I accept that there can be unintended consequences. Who can ever forget the Dangerous Dogs Act when a politician is being badly mauled by the press pack? So I take all the points made in that respect.
  I think the noble Lord, Lord Vinson, was a little unfair when he said that the FSA is not open; that it makes its decisions in private. It holds all its board meetings in public and publishes its minutes on all decisions. I believe that that procedure has built a degree of public confidence in the FSA.
  Lord Vinson: My Lords, the point I was trying to make was not that the FSA does not hold its meetings in public but that it holds them like a circus in public—88 people and a huge gathering, with no one allowed to speak for more than two minutes. It is such a farcical way to take decisions. That is the point I was trying to make.
  Lord Macdonald of Tradeston: My Lords, I thank the noble Lord for that clarification.
  The noble Baroness, Lady Flather, referred to complexity and risk aversion and asked whether matters have gone too far. Again, I recommend the reading of a recent document. It is an area that we take very seriously. The noble Baroness talks about red tape surrounding doctors; but when a case arises such

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  as that of Harold Shipman, inevitably more regulation is demanded. However, we have put our public sector team into the doctors' surgeries and they have come out with dozens of recommendations to try to remove that red tape. I take the point that there is far too much paperwork for doctors, just as there is for teachers and for the police. We are working in all of those areas.
  Baroness Flather: My Lords, I accept that there are exceptional cases which need exceptional treatment, but the mistake is to think that by providing for one exceptional case we can control everything. Exceptional cases will continue to arise, and overregulation as the result of an exceptional case catches everyone. This happened even under the Tories in regard to local government. I recommend that we should treat exceptional cases as just that.
  Lord Macdonald of Tradeston: My Lords, sometimes exceptional cases throw up areas where regulation is required, but I was attempting to agree with the general thrust of the noble Baroness's remarks. Society is more risk averse now. It is also safer in many areas. Our roads are much safer. The situation is much safer for workers on the railway; but I have no doubt that the costs of rail construction have risen because of safety demands. These matters have to be balanced, as I am sure the noble Baroness will understand. We do not want to "gold-plate". That is one oft he messages that we have sent in to our debates in Europe about better ways of doing things there. Yes, of course, our Civil Service has a great deal of integrity in the way in which it carries through legislation. I do not think that we should necessarily want that to be compromised, but I am quite prepared to do battle if there is any over-compliance there. I hope that we shall be able to answer the noble Baroness's question about whether we have improved health and education with a resounding "yes" before this term of government ends.
  I turn to the well-informed points made by the noble Lord, Lord Garel-Jones, about governance, particularly in the City. As to consultation, there was a recent Cabinet code of' practice on consultation. The evaluation indicated a very low level of complaints about individual consultations. The range of matters used to supplement written consultation was quite wide: we have web debate forums and so on. So we have been working in many of the areas about which the noble Lord is concerned. I have mentioned gold-plating, and there is the covering of all forms of commercial risk—I return to the Cabinet Office document. The over-burdening of the regulators is presently being addressed by the Better Regulation Task Force. I strongly agree with the thrust of the noble Lord's remarks, but I should disagree with any implication that the regulatory impact assessments were not effective. They can he made better, and we are working on that.
  I see that the time allowed to me is almost up. I recommend to the noble Lord, Lord Plumb, a reply given by my noble friend Lord Whitty earlier this year to the noble Baroness, Lady Byford, in regard to some aspects of regulation relating to the agricultural industry.
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  The noble Lord, Lord McNally, offered a measured analysis. I agree with much of what he said. He knows that the Government are committed to a Civil Service Bill, but the role of the Cabinet Office is one of nurturing a whole range of units, most of them led by civil servants. Sir Andrew Turnbull has taken that over and is driving it with great vigour. We await the suggestions of the PASC sub-committee and of the Wicks committee.
  The noble Baroness, Lady Wilcox, has had a distinguished business career and I listened to her remarks with great interest. I shall not follow her into Treasury territory. Fundamental reform is what we are about. I believe that the great range of measures in which we are engaged in terms of regulation should help.
  4.55 p.m.
  Lord Peyton of Yeovil: My Lords, I thank all of my noble friends who have taken part in the debate, and particularly my noble friend—I do not always say this—who is such an ornament on the Front Bench. I appreciate what she was kind enough to say.
  The noble Lord, Lord McNally, is quite wrong in thinking that I spend my weekends shooting pheasants. It is more than 40 years since I even tried to shoot one.
  Lord McNally: My Lords, perhaps the noble Lord might think of me as a different kind of ornament then.
  Lord Peyton of Yeovil: My Lords, l did say that if it came to shooting, there are one or two people whom I should like to shoot straight at.
  In the few minutes allowed to me, I am hound to concentrate mostly on the noble Lord, Lord Macdonald. I always welcome him on the Bench opposite because I have the odd feeling that, unusually, he has ears, That does not make him remarkable. But what does make him remarkable is the fact that he is a Minister who knows what ears are for. He actually listens. Even more remarkably, from time to time he actually does something, and that is very welcome.
  I was, however, slightly disappointed by the noble Lord's opening remarks. He opened with a tremendous burst of small-arms fire in the form of statistics. I felt very sorry that I had not brought my umbrella with me, because I needed to protect myself from the shower.
  I have two or three brief points to make. First, I have come to suspect that there is no one in the Government who knows how to add up. They specify the great benefits that they have conferred on the needy and then say, "Of course, no one would grudge that sort of money". Perhaps no one would. But we are worried about the cumulative burden of all the benefits that the Government so nobly and generously confer at other people's expense. That is the worry, and I hope that the Minister will take the point.
  The Minister mentioned the magic word "consultation". Only recently I have been told of cases of consultation where the person consulted was 'very much against the proposals and was told. "Well, it

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  doesn't really matter what you think. We're going to do it anyhow". I refer to a small business in Trafalgar Square which is such a source of contentment and satisfaction to everyone who tries to use it.
  If the Minister would be kind enough to give me a copy of the Cabinet Office paper he mentioned, the title of which I did not hear, I should be very grateful. One never knows, I might learn from it. I previously invited him to, "Read, mark, learn and inwardly digest" the book Small is Beautiful. I repeat the invitation. I couple with that a suggestion that, when the Minister is feeling strong in stomach and head, he might even cast an eye over the Civil Service Yearbook. He will find there traces of smugness. He will also find that tendency which characterises almost every action of this Government: to confuse promise with performance. It is a mistake that goes on all the time. I do hope that he will read it, and I hope that he will not feel too ill after doing so.
  The time has come when I must withdraw the Motion. I certainly have absolutely no desire for any papers, so I shall do so. But I very much hope that something of what I and my noble friends have said will have sunk in—I know that the noble Lord is receptive. I hope that he might persuade his colleagues every now and again to look before they leap. I beg leave to withdraw the Motion for Papers.
  Motion for Papers, by leave, withdrawn.

  Bali: ISC Report
  5 p.m.
  The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Amos): My Lords, I wish to repeat a Statement made in another place by my right honourable friend the Foreign Secretary.
  "With permission, Mr Speaker, I should like to make a Statement about the report published today by the Intelligence and Security Committee in respect of the terrorist bombings in Bali on 12th October.
  "This inquiry was established at my request as I announced on 21st October. I said then that I would be making available all relevant intelligence to the ISC so that it could make its own independent assessment of the facts.
  "The committee has since reviewed all intelligence relevant to Bali and taken evidence from the heads of the agencies, other officials, my right honourable friend the Home Secretary and myself. The House will be aware that my right honourable friend the Home Secretary is currently indisposed, recovering from an operation.
  "The Government welcome the report and I am very grateful to my right honourable friend the Member for Dewsbury, the chairman of the committee, and her colleagues for all their work. We
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  will consider their recommendations carefully and let the committee and the House know of our final conclusions as soon as possible.
  "I know that the entire House will join me again in extending our deepest condolences to the relatives and friends of the victims of this terrible act. Special arrangements have been made today to contact the next of kin to tell them of this report.
  "As the report has only just been published, it may be helpful if I briefly summarise it and then tell the House of the Government's initial response.
  "The committee's report broadly covers four questions. Let me deal with them in turn. First, was intelligence collection in Indonesia of a sufficiently high priority? The report says that sufficient priority was given to intelligence collection in respect of Indonesia. That was in spite of the fact that, since 11th September last year, the volume of intelligence available to the agencies has increased,
  'by a factor of at least ten',
  and that during the period in question the agencies received at least 150 separate reports a day.
  "The second question is: was any intelligence overlooked? This question, it will be recalled, was one understandably raised by the relatives and friends who lost a loved one in the atrocity on 12th October. The committee concludes that it has:
  … not seen any intelligence that described or directly related to any form of terrorist attack on Bali on or around 12th October 2002',
  and that on the basis of the available intelligence,
  'there was no action that the United Kingdom or its allies could have taken to prevent the attacks'.
  "The third question is: did the Security Service make the correct assessment of threat levels on the available intelligence? The committee's report covers three areas. It says that the Security Service's current six levels of threat assessment do,
  'not provide a sufficiently clear definition of the threat to be of use to customer departments'.
  It questions why, in the wake of a failed grenade attack against a US diplomatic property in Jakarta on 23rd September, it took the Security Service over two weeks to issue a report on Indonesia; and it says that because there was intelligence of a terrorist threat in Indonesia, because there was a possibility of displacement of targets, and taking into account,
  'the reluctance of the Indonesian authorities to deal with terrorism',
  the Security Service made what the committee says was a 'serious misjudgment' in failing to upgrade its assessment of the threat to British interests from 'significant' to 'high'.
  "The staff of the Security Service have to make fine judgments based on fragmentary intelligence and other information. In the absence of any specific material in the period preceding the Bali bombing, the service had assessed the threat to general British interests in Indonesia to be significant. As a result, the security climate was judged to be such that UK general interests were likely to be a priority target.

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  "As I know the Intelligence and Security Committee itself fully recognises, the staff of the Security Service are dedicated people who work to the highest professional standards. They are never able publicly to justify or to defend themselves. But they—and we—must also be properly accountable for what we do and we will of course take the committee's recommendations on board.
  "Against the background of the increased global threat of terrorism, the Security Service began earlier this year to review the system of threat assessment. That work will now be informed by the committee's Findings and will be brought to an early conclusion. My right honourable friend the Home Secretary leads on this. I know that he will ensure that the ISC and the House are kept fully informed.
  "Let me now turn to the fourth set of conclusions of the committee—those concerning the FCO's travel advice. The committee says that the travel advice at the time of the Bali bombing did not accurately reflect either the threat or recent developments in Indonesia. However, it says that the advice issued was 'proportional' to the assessment of the threat made by the Security Service, to which I have just referred. It also says that, generally, travel advice is not communicated to the public and travel industry effectively, and that the whole purpose of FCO travel advice should be reviewed.
  "Our travel advice is widely used by individual travellers and the travel industry, with some 670,000 visitors to our website this month. In the wake of the Bali bombing, I have put in hand a comprehensive review of the way in which our travel advice is both prepared and presented. We have already made some improvements and will be making further changes, drawing on the committee's helpful recommendations.
  "The purpose of travel advice is to provide reliable information to British travellers and residents overseas. It is vital that our advice is based on the assessments made by the Security Service. The intelligence agencies are based placed to evaluate the terrorist threat to British nationals both at home and overseas. That often involves difficult judgments, where we have to ensure that travellers are warned of threats that we assess to be credible, while not causing panic by overreacting to unsubstantiated pieces of information.
  "It is worth underlining that this often requires a really difficult judgment. The safety and well-being of our nationals abroad is our prime concern. But, as my right honourable friend the Prime Minister said last month, we must aim,
  'to take preventive measures without destroying normal life'.
  If, rather than properly seeking to separate truth from fiction, the Government treated every terrorist threat as accurate, on many occasions in recent months we would have had to shut down roads, shopping centres, airports, factories and military installations. That would serve only to cause panic—precisely the circumstances that the terrorists are striving to create.
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  "We are always looking for ways to do this job better, to work more closely with our allies to ensure that collectively we do all we can to protect our citizens from the threat of terrorism, while allowing people to live, as far as possible, normal and free lives, uninhibited by unnecessary or exaggerated fears. But I should also remind the House of a sobering point about intelligence. By its very nature, when it works, which is usually the case, the public rarely get to hear about it, but there will always be exceptions—instances where, despite our best efforts, the terrorists slip through the intelligence net.
  "The tragic lesson from Bali is that British nationals are targets of terrorism in many parts of the world. The message for the Government is that we must all exercise constant vigilance if we are to avert future such tragedies.
  "I know that I speak for the whole House when I say that we will never how to the evils of terrorism. Its purpose is to undermine the very foundations of our free and democratic life, and our campaign against it will continue to be unrelenting both here at home and overseas".
  My Lords, that concludes the Statement.
  5.10 p.m.
  Baroness Rawlings: My Lords, I thank the Minister for repeating the Statement made in the other place by her right honourable friend the Foreign Secretary. We on these Benches should like, first of all, to extend our sympathy to the families of those so brutally murdered. We welcome the report and its contents. It is a very serious report with very serious implications for the security of British citizens abroad. We owe great gratitude to the members and the chairman of the committee for producing it so quickly. I also join the Minister in paying tribute to the dedication of our security services, who work very largely unthanked and behind the scenes.
  At the time, we called for the ISC to investigate what information had been available prior to the Bali bomb. We also asked that there should be a full debate on the report. I hope that, notwithstanding this Statement, the Government will make time for one. We referred to John Howard's belief that we have an "obligation" to have the procedure "thoroughly examined". Today's report supports that view, and its recommendations largely endorse the actions that we called for at the time of the Bali bombing. As the report indicates, there are serious lessons to be learned from Bali. There are a number of urgent recommendations relating to the security services and the FCO. These must be responded to swiftly, comprehensively and sufficiently openly to restore public confidence in the advice that flows from their activities.
  One of the major deficiencies highlighted in today's report concerns the level of threat grading. The committee calls for the gap between the level "significant" and the level "high" to be addressed. Can the Minister tell us whether the Australians and/or the Americans grade their threat assessments in the same way? Can we learn from them?

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  Were early lessons, even preceding this report, learned from Bali? The Australian Government do seem to have learned lessons from Bali. Ahead of the attack in Mombasa, on 28th November, they warned their citizens:
  "to defer from non-essential travel to Kenya".
  All the Foreign Office warned was that,
  "there may be an increased terrorist threat".
  There is a very substantial difference.
  Further, in mid-November, the Australian Government warned that,
  "threats against Westerners and Western interests in Mombasa are high".
  What was the FCO warning? Why was Mombasa not mentioned? Why was travel advice not changed until my right honourable friend Mr Michael Ancram wrote to the Foreign Secretary, on 29th November, raising the disturbing similarities to the much criticised action taken by the Foreign Office in the run-up to the Bali bombing?
  Does the Minister agree that it is important that the public can have confidence in the travel advice issued by the department, and that this report must be acted on to restore lost confidence? The inconsistency between the United Kingdom and Australia may have dented that confidence yet further. What steps are being taken to improve consistency? Was our intelligence in relation to Bali and Mombasa the same as that available to the Australian Government? Were the threat assessments the same? If so, why, on the first occasion, did we give the same travel advice, but, on the second, different travel advice? Has the Minister considered a more joined-up approach to the issuing of travel advice? Should not countries such as the US, Canada, Australia and the United Kingdom consider a joined-up approach?
  Has the noble Baroness also considered the effect of Foreign Office travel advice on the validity of travel insurance claims for holidays cancelled as a result of the advice given?
  This report refers to insufficiency of information to prevent specific terrorist incidents. However, does the Minister not agree that there may frequently be insufficient information to prevent an attack, while sufficient to establish a threat to British interests, which should be reflected in travel advice? Was this not the case in relation to Bali, and even more to Mombasa? I urge the Minister to heed the words of the committee when it concludes that,
  "the whole issue of travel advice, its purpose, target audience and presentation needs to be examined … as a matter of urgency".
  Will the Minister assure the House that the Government will waste no time in implementing all the recommendations of this report? I agree with the Minister—I am sure that we would all agree—that we will never bow to the evils of threats or terrorism.
  5.16 p.m.
  Lord Wallace of Saltaire: My Lords, we on these Benches also thank the Government for repeating the
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  Statement. I recall that the Minister was involved in the aftermath of the Bali events and had herself to deal with many of the consequences affecting British citizens. My family and I were on holiday in Bali only a short while ago and I was very conscious of the sensitivities while we were there.
  One of the long-term lessons we all have to learn is that there is no absolute security for holidaymakers either at home or abroad, and the Government are going to have to educate British citizens to live with a slightly higher level of risk. Those of us who have lived in London for the past few years have indeed grown used to that, as we remind our American friends when they say that they are suddenly threatened by terrorism. It is part of the way in which governments must learn to re-educate their citizens.
  We all recognise that we are dealing with a long-term problem and that this is not the last incident in which the Government's advice will be challenged. Part of our response to the report must therefore be to ask what we can learn from the incident and how we can prepare for future occasions when the appropriate level of advice will again be in question.
  I did not see in the Statement—perhaps I missed it—an answer to the question about an additional level of threat assessment. That was one of the strongest points made in the report. I should therefore like the Minister, please, to deal with it. The Statement does not fully address the issue of the link between ISC assessment and FCO travel advice and how the two fit together.
  Timing is one of the most difficult issues. Holidaymakers tend to book their holidays three to six months in advance. The question is whether the Foreign Office travel advice should have been changed over one to two weeks. That gives rise to various questions about the extent to which the Government should work with the travel industry—through which many of those people booked their package holidays—and whether they should tell people, just before they travel, that there may be a heightened risk level. We are also conscious that there has to be a careful balancing of advice. We do not want to frighten British citizens from travelling abroad. We also recognise the enormous importance of tourism to developing countries.
  I have a few brief questions. We have talked about co-operation with Australia, the United States and Canada. Many British citizens go on holiday to Morocco, Tunisia, and now even Libya. Co-operation with other European intelligence services seems to be rather more important for such travel. How far are the Government expanding co-operation on travel advice to cover a number of other countries, particularly in the Mediterranean and the Middle East, where security levels are, sadly, open to question?
  We believe that one of the lessons to be learnt is that the ISC itself needs to have a strengthened and more public role in maintaining public confidence. We on these Benches have argued for a long time that the ISC should become a formal parliamentary committee answerable to Parliament and could perhaps have rather more Members from this Chamber. I hope that

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  the Minister will tell us whether strengthening the role of the [SC is being considered. But, having said all that, we must recognise that there is no absolute security for British citizens and that the intelligence services have to make very fine judgments about short and long-term risks.
  5.20 p.m.
  Baroness Amos: My Lords, I shall do my best to answer the questions that have been raised. I shall start by responding to the wider questions raised by the noble Lord, Lord Wallace of Saltaire.
  I entirely agree with the noble Lord that we shall have to do a much better job of educating our citizens in this regard. We have already begun discussions within the Foreign Office on how we might undertake such a task. The noble Lord is right to say that we cannot guarantee absolute security. However, we need to ensure that we give information in as clear a form as possible and in a form that our citizens are able to use. The noble Lord asked about an additional level of threat assessment. That matter was addressed briefly in the Statement. It is the responsibility of the Home Office. My right honourable friend the Home Secretary has begun a review of threat assessments and will take that recommendation on board in that review.
  We work closely with the travel industry. We have a campaign, "Know Before You Go", targeted at the travel industry and at different kinds of travellers. That campaign is increasingly reaching members of the public. When travel agents receive information about a change in our travel advice through the "Know Before You Go" campaign, they undertake to inform travellers about it just before they depart. Clearly, we can do that more effectively. Some people are able to receive regular updates of our travel advice by e-mail. We need to encourage more people to do that. On this matter we work with our allies, including the European Union. I am sure that a strengthened and public role for the ISC is being considered although that does not fall within my remit.
  The noble Baroness, Lady Rawlings, asked me a number of questions. As regards the possibility of a debate on this matter, the noble Baroness will know that I cannot possibly give commitments about the scheduling of issues in this House without incurring the wrath of my noble friend the Chief Whip and the usual channels, but I am sure that the noble Baroness's point will have been heard by the usual channels. I assure the noble Baroness that we share information with our allies. However, there will be differences in advice. We share information, but we each make a judgment with respect to that information.
  As regards the noble Baroness's point about Kenya and differences in advice, I assure her that the Australian Foreign Minister has confirmed that the Australians received no specific intelligence to enable them to predict what happened in Mombasa. We received the same advice as the United States. Clearly, we arrived at different judgments. We aim to ensure that we work more closely with our allies with respect
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  to that matter. However, I say to the noble Baroness that despite working more closely with our allies, we may still reach slightly different judgments. However, I take the point that liaising more closely is important.
  I agree with the noble Baroness that our citizens need to have confidence in our travel advice. However, as I said to the noble Lord, Lord Wallace of Saltaire, we also need to ensure that our citizens are aware that while in giving that advice we try to be as clear and accurate as possible, it is not possible in the world in which we now live to ensure in security terms that possibilities do not arise for which we have not been able to plan.
  The noble Baroness suggested that we should be more joined-up. We recognise that. We are already working more closely with our allies. I confirm that we shall consider the report's recommendations. A wholesale review of travel advice is already taking place within the Foreign Office. That 'was asked for by my right honourable friend the Foreign Secretary. Some of the outcomes of that review are already feeding through into our processes.
  On the noble Baroness's final point about travel insurance, travel companies use the Foreign Office travel advice in making decisions about travel insurance. But that is not a direct link that we have established; it is something that the industry has decided to do on the basis of the advice that we give.
  5.26 p.m.
  Lord King of Bridgwater: My Lords, I welcome the Statement repeated by the Minister. I welcome particularly the work done by the Intelligence and Security Committee on this particular inquiry. As the noble Baroness may know, I had the privilege of chairing that committee for its first seven years.
  The noble and learned Lord the Leader of the House and I remember the Mitrokhin inquiry with which we were involved in different incarnations. The noble Lord, Lord Wallace of Saltaire, referred to the role of the committee. I have some sympathy—not simply because my role has changed—with the notion that this House could be better represented on the committee than has been the case in the past. I believe that Members of this House have a contribution to make to it. In no sense do I seek a transfer or a place on the committee as I have served on it for long enough.
  One fact of which I was not aware in all my time as chairman of the committee, but which struck me when I heard the Statement, was the number of visits paid to the Foreign Office website last month alone. The noble Baroness mentioned a figure of 670,000. That is a staggering figure and shows how critically important is the quality of that information. Of course we share intelligence closely with Australia and other friendly countries but we make our own assessments. It is sometimes embarrassing when both assessments are made public. Alexander Downer is a most respected Foreign Minister. His statement was carefully worded; that is, that the Australians had no specific information about Mombasa. However, they referred to Mombasa by name, whereas the Foreign Office did not consider it necessary to do so.

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  I understand that these are in many ways political decisions. A major conference and exhibition, World Travel Market, has just taken place. I declare an interest as I am involved in the ExCel exhibition centre in London Docklands where it took place. I refer to the economic importance of tourism to a whole raft of different countries for which it is virtually their only source of real foreign exchange. Consequently, an over-cautious and unfair assessment of a particular country can absolutely devastate its economy.
  I do not underestimate the challenge that is involved here but I stress the importance of considering the matter—I apologise for speaking at length—of Foreign Office advice and taking an independent look at it. It has perhaps been a less regarded area up to now, but it needs to be considered as in the changed and more threatening world in which we live it has become a hugely important factor.
  Baroness Amos: My Lords, the noble Lord, Lord King, has considerable experience in the matter we are discussing. He is right to say that the travel advice is becoming more and more important and that the quality of that advice is critical. We are carrying out a widespread review of that advice, and we are already seeing some of the benefits. As the noble Lord said, we make our own assessment of the intelligence material that we receive.
  However, I want to underline to the House a point that the noble Lord knows better than I do; that is, our intelligence stems from a wide range of sources of varying reliability. We depend on our intelligence services to examine that information and to make judgments on the basis of what is available to them. That is an extraordinarily difficult process. Since 11th September, the amount of material received has increased 10-fold. We shall continue to do our best. The security and safety of our citizens is our prime concern.
  Lord Elton: My Lords, I want to make a small practical point. I believe that I heard the noble Baroness say that the travel industry passes travel advice to intending travellers either just before or immediately before they travel. My experience is that the later one leaves a change of plans, the more difficult it is to bring about and the more difficult it is to obtain any kind of refund. I wonder whether giving such advice just before one travels is the right time and whether there could not be more of a lead.
  Baroness Amos: My Lords, I thank the noble Lord, Lord Elton, for raising that point. I was referring specifically to a situation where travellers had perhaps booked a holiday long in advance and were given travel advice at that time but where the advice changed during the period before, or just before, they left. We work with the travel industry, which undertakes to inform travellers who may not be logged into our website or who may have looked at the website six months earlier but then do not look again to see whether any changes have been made.
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  However, I believe that the quality of the advice may vary. I have certainly spoken to individuals who have not been alerted when changes have occurred. Therefore, we must continue to talk to the travel industry about this matter. But we also have to think about ways in which we can put across our messages directly to members of the public. When our travel advice changes significantly, we shall issue press releases and try to get that information into the public domain.
  Lord Marlesford: My Lords, having listened to the Minister and having not yet read the report, it seems to me that one lesson from this whole issue is that there is a considerable limit to the extent to which travel advice or the translation of intelligence reports can, in practice, prevent people from being killed in terrorist attacks of this kind. I also very much underline the point made by my noble friend Lord King about the importance of tourism. We do not want to deter tourism by making people over-frightened.
  However, will the Government at least expedite their consideration in three areas, two of which relate to what, in the United States, is now called "homeland security"? The first of those two is further consideration and action in relation to the introduction of good quality national identity cards in this country with the appropriate biometric information on them. During the summer, an extensive consultative document was issued by the Home Office. Much needs to be done, but the matter has been on the agenda for months, if not years. I believe that the time has come to expedite it.
  The second concerns making our borders a great deal more secure than they are at present. I recently travelled to and from, and within, the United States. In the past few weeks I have also been to Hong Kong and China. I can tell the Minister, as she probably knows from her own experience, that the level of security at the borders of those countries is of a totally different order of magnitude from that in the United Kingdom. We are fortunate to have borders that are relatively easy to police and control. However, they are not being policed and controlled properly, and that could very easily be improved.
  My third point—I mentioned it yesterday and make no apologies for repeating it—is that I believe there is a lesson to be learned from the incident in Mombassa. There should at least be an assessment of the costs, advantages and possibilities involved in fitting civilian aircraft with deflectors. Those would be very effective against most of the short-range, surface-to-air missiles of the kind used in Mombassa.
  Baroness Amos: My Lords, with regard to the three points raised by the noble Lord, Lord Marlesford, discussion is currently ongoing about national identity cards. As the noble Lord said, a consultation document was published on that issue.
  With regard to border security, noble Lords will know that we are ever-vigilant. We are always looking at ways of improving our border security and we share information with our allies on the matter.

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  As the noble Lord said, his third point has already been raised in this House and has been passed on to colleagues for consideration.

  NHS Resources
  5.36 p.m.
  Lord Hunt of Kings Heath: My Lords, with the leave of the House, I shall repeat a Statement made by my right honourable friend in another place. The Statement is as follows:
  "With permission, Mr Speaker, I wish to make a Statement about devolution of resources and responsibilities within the National Health Service. I am today allocating revenue resources to England's 304 primary care trusts. I have written today to all right honourable and honourable Members with information about the PCTs serving their constituencies.
  "The NHS today is the fastest-growing health service of any major country in Europe. Just six years ago under the previous Conservative government, NHS budgets were falling in real terms. By 2008, under this Labour Government, they will have doubled in real terms.
  "The dedication and commitment of NHS staff is turning these extra resources into improved results for patients. Deaths from cancer and heart disease are falling. Waiting times are down. The numbers of doctors, nurses and other staff are up. The biggest ever hospital-building programme is under way. There is a long way to go but real and steady progress is taking place.
  "We can now build on that momentum by coupling record resources to radical reforms. I can tell the House today that I have made significant changes in three major respects to the method by which we allocate resources to the NHS.
  "The first is that, for the first time, locally run primary care trusts will receive funding direct from central government rather than through health authorities. This is about devolving power and resources direct to the NHS front line. PCTs will now control 75 per cent of the total NHS budget. That was an election manifesto commitment we made. Today, we honour it.
  "Secondly, the resources I am allocating today are not just for one single financial year but for three years. Short-term funding has hindered long-term planning in the NHS for far too long. So I am today distributing to PCTs resources for the years from spring 2003 through to spring 2006.
  "This will give PCTs the power to plan with confidence and certainty for the longer term. They will be free to commission services from the public, private or voluntary sectors—wherever they can get the best health services to meet the specific health needs of their local communities. We look to them to use their considerable extra resources to achieve
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  a better balance between services in the community and those in hospitals, to promote prevention as well as treatment.
  "Thirdly, the resources are being distributed according to a new fairer funding formula. The existing weighted capitation formula has been widely criticised for failing to get health resources to the areas of greatest health need. It has held back our ability to address the health inequalities which scar our nation. Poverty and deprivation cause excess morbidity and mortality. They bring extra costs to local health services.
  "That is why I asked the expert Advisory Committee on Resource Allocation to review the existing formula and to bring forward a new formula. The new formula reflects those costs by using better measures of deprivation and by taking greater account of unmet health needs. It also reflects population changes from the 2001 census.
  "The new formula redistributes resources to some of the poorest parts of the country: places such as Tower Hamlets, Newham, Barking and Dagenham in London; Tendring, Basildon and Thurrock in the South; Birmingham, Telford and the Wrekin in the West Midlands; Ashfield in the East Midlands; Liverpool, Knowsley and Manchester in the North West; Bradford in Yorkshire and Easington in the North East.
  "The new formula, in calculating health need, takes account of the effects of access, transport and poverty in England's rural areas, too.
  "In addition, the new formula recognises not just the challenges for the NHS in areas of highest need, but the challenges, too, in areas of highest cost.
  "We all know that the cost of living in some parts of the country is higher than in others. That impacts on the cost of health care too. The new formula takes account of this through a more refined assessment of labour market costs. The allocations also reflect the impact of the recent Agenda for Change agreement on regional pay flexibilities and the need to expand capacity in areas where waiting times for treatment are longest.
  "These changes benefit almost 180 primary care trusts, including over 140 in London and the South and almost 30 in the North West.
  "The new funding formula is fair to all parts of the country. It reflects extra needs and extra costs. It benefits primary care trusts in both the North and the South. The average PCT budget will grow over the next three years by almost £42 million. In real terms this is an increase of 22 per cent; in cash terms of over 30 per cent. No PCT will receive an increase in funding over the next three years of less than 28 per cent.
  "For the information of Members on all sides of the House, this means that the real terms increases in resources for local health services in this Parliament will average almost 7 per cent. In the 1992–97 Parliament by comparison it averaged just over 1 per cent. That is the difference a Labour government makes.

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  "These resources, together with the reforms we are making, will make a difference to the care patients receive: better emergency care; shorter waiting times; improvements in cancer, heart, mental health, children's and elderly services.
  "The allocations to PCTs include resources to finance the costs of pay reform, new drugs and treatments and additional NHS capacity. It includes the commitments we set out in the NHS Plan. However, none of the growth money has been identified for specific purposes. PCTs will be able to use these extra resources to deliver on both national and local priorities.
  "PCTs are about shifting the balance of power in the health service so that while standards are national, control is local.
  "I am today placing in the Vote Office copies of a document which provides details of the help, in cash and in kind, which the Department of Health will now make available to all NHS trusts to raise standards of service for patients.
  "There will be help, support and, where necessary, intervention to raise standards in all NHS hospitals from the best performing to the worst. We on this side of the House reject the internal market idea that NHS hospitals should be left to sink or swim.
  "Equity in health care demands support for all, just as it demands national standards of care. But for over 50 years, uniformity in health provision has not guaranteed equality of outcomes. Indeed, health inequalities have widened not narrowed. Top down Whitehall control has tended to stifle local innovation. It has too often ignored the differing needs of local communities. Sustained improvements in local services can happen only where staff feel more involved and local communities are better engaged; where improvement is something done by local people not just done to them.
  "That is why devolution is at the heart of our reform programme for the NHS. It is why PCTs are so important and it is why we now look to reconnect local hospitals to the local communities they serve.
  "I am today publishing a guide to NHS foundation trusts. Again, copies are available in the Vote Office. These NHS foundation trusts will usher in a new era of public ownership where local communities control and own their local hospitals. NHS foundation trusts will be part of the NHS, providing NHS services to NHS patients according to NHS principles; services free based on need not ability to pay. They will be subject to NHS standards, to NHS star ratings and to NHS inspection.
  "They will be owned and controlled locally not nationally. Modelled on co-operative societies and mutual organisations, these NHS foundation trusts will have as their members local people, members of staff and those representing key organisations such as PCTs. They will be its legal owners and they will
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  elect the hospital governors. In place of central state ownership there will be genuine local public ownership.
  "Subject to Parliament, NHS foundation trusts will be guaranteed in law freedom from Whitehall direction and control so that we can unleash the spirit of public service enterprise which so many NHS staff share and which central control holds back.
  "By putting staff and public at the heart of this key public service these NHS hospitals will have the freedom to innovate and develop services better suited to the needs of the local community.
  "NHS foundation trusts will operate on a not-for-profit basis. They will earn their income from legally-binding agreements with PCTs based on a national tariff. They will not be able to undercut other NHS hospitals.
  "They will be free to borrow either from the public sector or the private sector. They will be able to retain any surpluses and any proceeds from the more efficient use of their assets where this is for the benefit of NHS patients.
  "They will have the freedom to recruit and employ their own staff. Indeed, NHS foundation trusts will be among the first NHS organisations to implement the new pay system we have recently negotiated with NHS trades unions. And, provided they can undertake extra work and make improvements in productivity, they will also be able to offer staff extra rewards.
  "They will operate under a statutory duty of partnership under which they use these freedoms only in a way that does not undermine other local NHS organisations, for example by poaching their staff.
  "There will be other safeguards to protect the public interest. NHS foundation hospitals will operate according to a licence issued and monitored by an independent regulator, accountable to Parliament, to guarantee NHS standards and NHS values.
  "The presumption will be light-touch regulation but there will be intervention powers where they are needed. In extremis, foundation status can be withdrawn.
  "I can confirm today that the proportion of private patient work undertaken by any NHS foundation trust will be strictly capped to its existing level. Indeed, we would be particularly interested to see applications for NHS foundation trust status that propose to convert existing private patient facilities for the exclusive use of NHS patients.
  "And to prevent any demutualisation or any future Tory government seeking privatisation, there will be a legal lock on the assets of NHS foundation trusts. They are there to serve NHS patients, not just for now but for all time. They are about the Labour ideal of common ownership, not the Tory pursuit of privatisation.

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  "The freedoms NHS foundation trusts will have will be a powerful incentive for others to improve. The first round of NHS foundation trust hospitals will be drawn from trusts rated three star next summer. Forty per cent of existing three-star trusts are in some of the most deprived areas of the country; places like Sunderland and Liverpool; Doncaster and Bradford; Southwark and Hackney. As more NHS trusts improve, more will be eligible to gain foundation status. There will be no arbitrary cap on numbers. Over time, foundation trust status will become the norm for many—perhaps most—hospitals in the NHS. Subject to Parliament, the first will be in place by Spring 2004.
  "Today I am announcing large-scale investment accompanied by radical reform: investment to get more resources to the NHS front line and reform to give more power to the NHS front line.
  "This side of the House has an unquestioned commitment to the NHS. It is time not just to invest more resources in frontline services but to invest power and trust in those frontline services. That is what we seek to do. I hope it is what the House will support".
  My Lords, that concludes the Statement.
  5.49 p.m.
  Earl Howe: My Lords, I thank the Minister for repeating the Statement, which, as he will acknowledge, is really two Statements rolled into one. It contains a good deal that we can welcome, but also a good deal that is not yet clear and which we will need to study.
  I shall deal first with the new resource allocations and the revised formula for calculating them. In principle, a three-year allocation is a welcome departure, but I wonder whether it carries risks. Bearing in mind that there has been no consultation on the formula, what happens if there is an error, for example' How would that be dealt with? How would the Government deal with a material change of circumstances in a PCT where, for example, there had been an influx of immigrants? Unless some flexibilities are built into the formula, it could turn out to be a straitjacket, with unpalatable consequences for patients. I should be glad if the Minister could say whether money will be held back at the centre and, if so, how much.
  It is unsatisfactory—indeed, unacceptable—that such a major change in the formula could have been agreed without any public discussion or consultation. It redistributes the NHS budget in fundamental ways, yet we do not know the basis on which this is being done. When will we know? When we find out, how easy will it be to interpret? I hope the Minister agrees that transparency in such an important matter is not just desirable but essential. I note in passing that there is nothing in the Printed Paper Office today to shed any light on any of this.
  The increases to the overall budget are, without question, substantial, but how much extra care does the Minister anticipate that the new money will buy
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  and how many more patients will be treated? The Government's record is of a lot of new money being poured into the service but very little extra activity coming out. That theme was taken up by my noble friend Lady Noakes in our recent debate on the gracious Speech.
  The Statement says that none of the growth money has been identified for specific purposes. Perhaps the Minister can tell us how much that growth money will be, bearing in mind the calls on the budget from pay reform, trust deficits, the drugs budget and all the central targets set out in the NHS Plan. What money will be left over when all those have been funded?
  Turning to the other issue covered by the Statement, as the Minister knows, I welcome the concept, of foundation trusts. I am not sure on what evidence the Government base the proposition that,
  "Sustained improvements in local services can only happen where … local communities are better engaged".
  However, I agree with one phrase in the Statement, which, interestingly, the Secretary of State in another place did not read out. It referred to central control holding back the spirit of public service enterprise. I can only infer that the Secretary of State did not read that out because to do so might have implied an indictment of the policy meted out to the majority of NHS providers.
  If we all agree that such improvements are a goal worth aiming at, the real question is whether the freedoms to be given to foundation trusts will bring about such change over time. There are three key areas in which we can assess how substantive such freedoms will be: autonomy, ownership and accountability. I wonder what sort of autonomy foundation trusts will really enjoy when they will remain subject to star ratings, which, by definition, are arrived at by reference to centrally set targets. I wonder whet her the freedom to recruit and employ their own staff will be all that one might imagine when at the same time they will be forbidden from poaching staff from other NHS organisations, however one defines poaching, which is an interesting question. If foundation trusts will really be able to retain any surpluses and proceeds from the more efficient use of their assets, as the Statement makes out, yet at the same time will have a legal lock on their assets, it is not clear to me that the freedom to dispose of those assets will amount to a real degree of freedom in practice. Perhaps the Minister could shed some light on that.
  The use of the word "ownership" throws up all sorts of issues. Who will choose the members of a foundation trust and how will that happen? In what ways, if at all, will a local authority be represented on a board? Which local interest groups will be represented? If local people really own the trust, how is that consistent with the ability of the Secretary of State to withdraw foundation status? The ownership of the trust will, de facto, rest at the centre.
  Arising out of that, it would be helpful if the Minister could tell me exactly how a foundation trust will be accountable and to whom, bearing in mind on

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  the one hand that it will be subject to star ratings and concomitant targets and on the other that it will be run and owned locally. There is an inbuilt conflict there.
  A key figure in all this will be the independent regulator, who, if I read the documents correctly, will effectively be a proxy for the Secretary of State. He will have considerable powers, but his accountability to Parliament will be through the Secretary of State. I question whether that arrangement is satisfactory. If he is independent, a great deal rests on his judgment. I find that worrying.
  As the Minister knows, my criticism of foundation trust status is that it will not be rolled out widely enough. There is scope for more trusts to become foundation trusts in due course, but the Statement equivocates about how many. To say that,
  "Over time foundation trust status will become the norm for many—perhaps most—hospitals in the NHS",
  carries the implication that many, perhaps most, hospitals in the NHS may not acquire such status. That in turn implies a two-tier system in the starkest possible sense.
  I look forward to the legislation when it reaches us and to the opportunity of debating these and many other questions in close detail.
  5.57 p.m.
  Lord Clement-Jones: My Lords, I, too, thank the Minister for repeating the Statement made in another place. We welcome a number of aspects of it, particularly as much of it represents an admission that the additional resources allocated, amounting to 3.5 per cent, in the Government's first term of office were inadequate, and not enough was done to address health inequalities during that period. We welcome the new resource being allocated to PCTs and the three-year time-span for the allocation.
  I shall raise two issues. First, we are concerned about specialised commissioning by PCTs. As the Minister knows, we have raised this issue a number of times. It currently falls firmly within the remit of PCTs. Now that the resource allocation has been made, can the Minister clear up the confusion surrounding specialised commissioning? When will that be cleared up? When will the review commissioned by his colleague Mr Hutton be produced?
  My second point, touching closely on a point made by the noble Earl, Lord Howe, relates to the whole question of the allocation formula. When will the details be given? We are somewhat buying a pig in a poke today. Of course the extra resources are welcome, but how are they allocated? We have yet to judge whether it will be fair for the different areas of the country. Is it intended that the formula will be reviewed or will it last for three years come hell or high water?
  I do not know whether to be pleased that the Government have published their proposals about foundation hospitals or affronted that, so far ahead of primary legislation, they assume that that legislation
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  will be passed and that foundation hospitals in the form that they propose will be legislated for. I have mixed feelings about the publication today.
  Of course we share the Government's objectives in seeking a form of decentralisation that will improve patient experience and provide value for money. However, the Government's scheme set out in the Statement and the new guide is totally inadequate. It does not go nearly far enough. The starting-point is not to separate sheep from goats by simply rewarding three-star hospitals with special status, and so on; it must be to provide genuine freedom for local hospitals from a plethora of government targets, and to provide inspection that really reflects clinical excellence—not government micro-management, or, as Sir Ian Kennedy put it, "a confetti of regulation".
  The raising standards document goes someway in that direction. I realise that the Government have some intention of moving down that road. There should be fewer and better co-ordinated inspections, but we need an inspectorate that sets the clinical criteria for excellence. We need to rationalise the bodies that exercise clinical governance and inspection. As the Minister is aware, some 20 bodies are now entitled to enter, or inspect, NHS hospitals.
  We also need fewer targets for all our hospitals, not just for a chosen few. Above all, we need local hospitals with their roots in local communities. Noble Lords on these Benches would prefer to see a system that is clearly a much more community-mutual model, and one which is available to all hospitals and not just to a chosen few; otherwise, as Mr Dobson pointed out, we risk having a two-tier National Health Service which would serve only to demoralise NHS staff still further.
  There are many inconsistencies and contradictions in the Statement over foundation trusts. The Secretary of State seems to give on the one hand, while he grabs back with the other hand. For example, such trusts are to have more freedom from Whitehall control, but their status under licence can be taken away and their assets locked at all times. It is said that they are to enjoy more freedom, but they will still be subject to the star-rating system. They will have "light touch regulation", but will still have to meet a plethora of targets. That is not the freedom and real devolution that we were all led to believe would come out of foundation status.
  We look forward in due course to debate on the Bill, which will bring forward such reforms. However, many questions surround foundation hospitals. What will their borrowing powers be? Will they be allowed to borrow both capital and revenue? What freedom in the provision of clinical services will these hospitals have? Will they be able to open or close clinics at will? If they are to have freedom, why cannot they set their own treatment prices?
  What number of foundation hospitals does the Minister plan—if, indeed, this is the case—for the future? The Statement seems to imply that that status will be available for a wider number of hospitals than just three-star hospitals after, say, five years. Can the

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  Minster give the House an estimate of how many foundation trusts might exist after that period? I share the doubts expressed by the noble Earl, Lord Howe, about exactly how such hospitals will be accountable and how independent the independent regulator will be. Most crucially, will the latter report to Parliament or to the Secretary of State?
  In summary, I suspect that we are witnessing a reinvention of fundholder status but at acute hospital level. That is why in the House of Commons, although not so much in this House, Conservatives have given these reforms such a warm welcome. However, we have grave doubts about whether, in the words of the Statement,
  "the spirit of public service enterprise",
  will be unleashed. We look forward to continued debate.
  6.3 p.m.
  Lord Hunt of Kings Heath: My Lords, I am grateful for the somewhat constructive comments made by the noble Earl, Lord Howe, and the noble Lord, Lord Clement-Jones. I very much look forward to introducing the Bill and to our no-doubt consensual debates on the important questions that surround it.
  Judging by my experience of the NHS, the risk in terms of a three-year allocation is well worth taking. When I started to work in the service in the 1970s, the allocation used to arrive halfway through the financial year in which the money was meant to be spent. This has gradually been pulled back. The value of certainty for a three-year period is well worth while. If there is some inflexibility involved, so be it. I should point out to the noble Earl that we are not holding back money. Indeed, despite the scepticism that has been expressed by some, we are determined to ensure that primary care trusts do receive the vast bulk of resources destined for the NHS.
  A review of the formula was supervised by the Advisory Committee on Resource Allocation (ACRA), which had a broad-based membership—NHS management, general practitioners and academics. The latter were given a very clear mandate. I believe that the committee has produced a very sensible outcome. In addition to our existing policy objective of equal opportunity of access for equal need, the committee was given a mandate that the formula should also contribute to a reduction in avoidable health inequalities. In my view, the formula meets the criteria. As far as concerns more detail being made available, the new need element of the formula was carried out with the help of a team of researchers led by the University of Glasgow and ISD Scotland. I can confirm that the report on the allocation of resources will be published in English areas after allocations have been announced.
  The noble Earl, Lord Howe, asked me to provide precise figures on how much money we would expect to be spent as regards different resource demands on the health service. However, I shall not do so. PCTs are all in different circumstances. They also face generic cost pressures relating to pay inflation, capital charges,
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  and the increase in prescribing. The minimum increase that PCTs will receive is 8.3 per cent in the first year, 8.9 per cent in the second year, and 8.5 per cent in the third year, which represents a large level of increase—indeed, an unprecedented increase. I do not deny that the health service will continue to have to make difficult judgments about where the extra resource is spent.
  Similarly, I do not deny that it is most important that the health service should look at existing resources to ensure that the money is wisely spent. However, the combination of the extra resources and the three-year certainty will enable PCTs to plan in a way that has not previously been available to the health service. The ultimate aim is to ensure that we deliver on the NHS Plan. The noble Earl, Lord Howe, seemed to suggest that the health service was not spending the extra money wisely. I disagree with that view. I believe that the increase in capacity that we are seeing, the increase in the number of training places available, and the new services to be provided, all reflect greater resources as well as an improvement for the public. This announcement will allow us to move on to ever-better improvements in the future.
  Concerns were expressed about whether foundation trusts will have real autonomy. They will certainly enjoy real autonomy. There would be 'very little point in the Government going down this route of transferring ownership from Ministers to local communities if we were not also determined to ensure that the fullest use is made of the freedoms that such trusts will receive. There is no inconsistency between establishing a national framework in which foundation trusts work and ensuring that they have much greater autonomy. The fact that we have star ratings, national standards, and national service frameworks means that we can remove our power of direction over foundation trusts, as we intend to do. We can then give those trusts much inure freedom in the future.
  As for accountability, each foundation trust will be accountable to its membership. We want such trusts to have as broad-based a membership as possible. The majority of the members of such trusts will be representatives of public and patient groups. They will elect a governing body, which, in turn, will appoint the board of directors, including the chair. As to accountability to Parliament by the regulator, it is appropriate that that is through the Secretary of State. I think that that is consistent with a number of other regulators at the present time.
  The noble Lord, Lord Clement-Jones, and the noble Earl, Lord Howe, asked whether this is a two-tier approach. Surely it makes sense to put one's faith in investment in the best performing NHS trust. It is the trusts that will innovate. They will use those freedoms to best effect.
  I cannot answer the question regarding how many foundation trusts there will be in five years' time. I hope that there will be many. That is the aim. The aim is for all trusts to improve. Those that get through the

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  barrier to three-star trust status will show that they are capable of becoming foundation trusts. We wish to see that happen.
  I have overspent the time that I am allowed. I just say that as to the provision of pinnacle services, the licensing regime will ensure continuity of services for NHS patients. Foundation trusts will be subject to an obligation to offer certain NHS services for NHS patients. These will be known as regulated services. That will ensure that foundation trusts concentrate on their core purposes of providing a wide range of services for all NHS patients.
  6.11 p.m.
  Lord Chan: My Lords, I also thank the Minister for repeating the Statement on NHS resources. I particularly welcome the three main areas: 75 per cent of NHS funding to go through primary care trusts; funding in primary care trusts to be for three years; and a new formula for deprivation. Here I must declare that I am a non-executive director and vice-chairman of a primary care trust in the Wirral—the Birkenhead and Wallasey Primary Care Trust.
  It was said that the deprivation formula was based on population changes in the 2001 census. I understand from the census office that in some inner-city areas even fewer people filled in their census forms in 2001 than in 1991. I fear that that deficiency in statistics will be a disadvantage to some inner-city areas.
  As to the issue of the 30 north-west PCTs which will benefit from the deprivation formula, I heard Liverpool and a number of other places, but I did not hear any names from the Wirral. That gives me cause for concern. However, I have no doubt that we shall be getting details about that because our PCT has five wards, as I mentioned previously, where there is severe deprivation, some of which are within the worst 20 wards in England.
  The increase in funding is to be welcomed. I am pleased to note that, on average, it is under 9 per cent per year, which is higher than in previous years. The issue here is that at the moment we, the primary care trust, need to give money to the hospital. If the hospital is expecting a greater, or at least a 9 per cent increase, then we would be in big trouble because that means our growth money would be further restricted.
  The other issue concerns foundation hospital trusts. We have only one hospital in our area. If that becomes a foundation area, would we need to continue to give it money?
  Finally, there is the issue of debt. I have mentioned before that we are still dealing with debts inherited from the defunct health authorities. Will that still be the case in the future?
  Lord Hunt of Kings Heath: My Lords, I am grateful to the noble Lord, Lord Chan. I have the figures for the Cheshire and Merseyside Strategic Health Authority. Bebington and West Wirral will receive a 28.85 per cent increase over three years; Birkenhead and Wallasey,
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  31.85 per cent; Central Cheshire, 31.33 per cent; Central Liverpool, 40.32; and Cheshire West, 29.76 per cent. I would be happy to place a copy of this list in the Library rather than to read out any more primary care trust allocations. But I think that the noble Lord would agree that there is a great deal of money there. We need to make sure that it is spent wisely.
  As to the issue of funding responsibilities, I am quite clear that the liabilities of restructured NHS organisations must be passed on to their successor organisations. That principle has been adopted through any number of reorganisations and restructurings and must apply to primary care trusts. Primary care trusts must operate in financial discipline. The very fact that they have a three-year funding certainty must make it much easier for them to be able to respond to some of those challenges.
  In relation to the foundation trusts, the point I make to the noble Lord is that the great bulk of their resources will come through the service agreements that they reach with primary care trusts. So primary care trusts will be in the driving seat in terms of defining the range and quality of services they wish to see provided. Of course there will be a major challenge for primary care trusts. We know that. But from what I have seen so far in the few months that they have been up and running throughout the country, I am confident that they can meet that challenge.
  I noted what the noble Lord said in relation to the census. I must say that overall the ONS is confident that the 2001 census data are probably the most accurate that it has ever been able to receive.
  Baroness Pitkeathley: My Lords, this morning I was at the Middlesex hospital, where I was for a long time last year a patient. The charge nurse was telling me how much better things are since I was last there in terms of numbers of staff and the equipment available. He raised with me concerns about the employment of nurses who are currently employed by one trust and should move to a foundation trust. Can the Minister give us information about that?
  My other area of concern is whether the boards, including the chairmen of the new foundation hospitals, will have any system for sharing experience and learning. While I think that it is excellent that they will relate to the needs of their local area, we would not want them to be reinventing the wheel.
  Lord Hunt of Kings Heath: My Lords, I was very glad to hear my noble friend's comments about the changes at the Middlesex hospital. It has dynamic new leadership. I should like very much to pay tribute to it and to the staff of that hospital. As to the staff nurses, he should have no concerns at all. People who are employed by NHS foundation trusts will be NHS employees. There is no change. We expect that the greater flexibilities through the Agenda for Change agreement will be adopted with enthusiasm by NHS foundation trusts.
  One of the tests to be applied as to whether a trust receives NHS foundation trust status is its ability to use the freedoms and flexibilities that we want all NHS

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  trusts to operate under Agenda for Change. Those staff will be NHS staff. Foundation trusts will be NHS organisations. They are fully part of the NHS. The difference is that they are accountable to their local community rather than to the Secretary of State.
  Baroness Pitkeathley: My Lords, my noble friend did not answer the second part of my question about sharing experience.
  Lord Hunt of Kings Heath: My Lords, I apologise to my noble friend for not answering her second point. I very much agree with the need to share experience. We have already met with the chief executives of three-star trusts to talk to them about foundation trust status. Over the next few months, as we develop the programme and reach decisions about which trusts will go forward to the next stage, it will be important to enable them to meet and share experience. I accept the point that my noble friend made in relation to governing bodies. We are drawing on mutuality concepts and organisational concepts from the Cooperative movement. That will be new to the National Health Service; we shall have new governing bodies and new boards of management. It will be a new experience and we will want to learn from each other to ensure that, as more foundation trusts are established, they learn the lessons that the first NHS foundation trusts have learned.

  Traffic and Transport in London
  6.20 p.m.
  Baroness Oppenheim-Barnesrose to call attention to the impact of traffic conditions and public transport services on the life and economy of London; and to move for Papers.
  The noble Baroness said: My Lords, Dr Johnson famously said:
  "When it man is tired of London, he is tired of life".
  If he were alive today, he would be feeling just a little weary, because this beautiful and great city is grinding to a halt. It has recently been claimed that nationally, over the past four years, car journeys have been lengthened by 16 per cent while the volume of traffic has remained the same. In the same four years, congestion in Britain as a whole has increased by 38 per cent. If one applies a fair proportion of those figures to London—if anyone is willing to do so—the outcome is even more devastating.
  The traffic crisis that London faces today is undermining the quality of life, health and safety and the economy of London at an alarming rate. It is no exaggeration to say that lives are being threatened and even lost as a result of stress, leading to heart attacks, and pollution, leading to all sorts of bronchial diseases and complications, a great deal of which is avoidable. People arrive at their workplace stressed, exhausted and frustrated by their journey and less able to perform at their best as a result. When their work is over, their anxieties return as they attempt to calculate
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  how long their journey home is going to take. Of course, they will never be right whatever their calculations.
  That applies equally to those travelling by car, bus or Tube. Passengers travelling in the rush hour sit or, usually, stand in buses which are held up in traffic jams nearly as bad as those encountered by drivers of private cars. Tube passengers are subject to uncertainty and overcrowding, which before long can only lead to tragedy or even disaster. The jams that motorists encounter are often greatly exacerbated by the fact that trunk roads leading in and out of London have not been improved at all, or only very belatedly, while main roads to and from the suburbs at rush hour are invariably grid-locked. The congestion charge will not help those drivers very much; quite the reverse, it will make matters worse.
  In addition, roads have become increasingly unsafe in London because the police, for whatever reason at whoever's bidding, have largely abandoned personal traffic supervision in favour of money-spinning cameras. I do not know who has told them to do that but, as a result, abuse is widespread. A senior police officer from outside London, speaking on the television a few weeks ago, said that he was horrified to see a group of London policemen chatting on a pavement outside a public building, who did not raise an eyebrow when a cyclist rode past them on the pavement. Of course, cyclists are a menace on London roads, with the notable exception of my noble friend the Opposition Chief Whip, and a number of your Lordships. They ride through red lights and weave in front of cars, while motorcyclists, who fill hospital wards at great expense to the National Health Service, dice with death on every corner. They regularly come up on the inside of cars and cross in front of cars, but I have never seen a motorcyclist stopped by a policeman.
  To make matters worse, "savant" motorists, no doubt frustrated by the conditions and knowing which traffic lights have cameras and which do not, frequently drive right through red lights. In the past month alone, I have seen no fewer than three taxis drive through red lights with impunity. Several of your Lordships have told me that they have been passengers in such taxis and that they were terrified.
  In many areas of London, police stations operate only in office hours, which creates an increasingly dangerous situation. One old gentleman said to me recently that if he stayed one minute over on a parking meter he was fined £40, but if he was mugged he had to wait three hours for a policeman to come.
  I turn to some of the economic consequences of London traffic chaos. Retailers, theatres and tourism all find themselves losing out because their customers face daunting difficulty in time and cost in reaching them. Parking, when it can be found, is the most expensive in the world. Taxis are vastly more expensive for everyone including tourists, because of the delays. As we all know, public transport is proving to be completely inadequate. This is hardly a boom time for shops, theatres or tourism—far from it. Unsurprisingly, they are all finding

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  it increasingly difficult and costly to attract quality staff to work in Central London, which should be the showcase for the whole country.
  I turn to some of the main causes of the problems that I have outlined, many of which could be avoided completely or very much alleviated. The first of those is our old friend, or rather our old enemy, the proliferation of roadworks. We learnt recently that in one year alone there were 160 roadworks in the Strand—in one street. My noble friend Lord Peyton has fought valiantly for reforms in this area, but I fear that not much has been gained. I am told that the most disbelieved statement, which was formerly "the cheque is in the post", is now "men at work", because they never are at work when roads are coned off.
  The Government have made a well-meaning stab at regulating these abuses, but new ruses have sprung up, including the practice of dividing roadworks so that they appear to finish in time. In fact, they take longer because they have been divided in two. Signs warning of roadwork delays appear too late, are often out of date and often have the wrong information on them. Until co-ordination of roadworks is tackled by local authorities at the behest of the Government, the problem will not be avoided.
  To add to those largely avoidable delays, which are not Mr Livingstone's fault, we have the rephasing of traffic lights. They are rephased deliberately to add to congestion—I repeat, "deliberately to add to congestion". That is Mr Livingstone's fault and it is wicked, whether it is a pre-congestion charge ruse or not.
  That brings me to the congestion charge itself. It will not be a remedy or a palliative; what it will probably be is the last straw. Given the layout of central London, it will be impractical from the outset. London is not Trondheim or Singapore. London transport is already overcrowded and cannot cope, while the system is bound to fail to catch numbers of evaders because of the registration system in this country, which tends to be fallible. We do not know how impractical the scheme will be because little or no information has been disseminated about its operation. Like 40 per cent of women, I do not have access to the internet; I do not want it and am not going to have it. I understand that some information is available on the Internet. However, I have not received a single piece of paper notifying me of the requirements of the charge. I have heard rumours—only rumours—that payment is to be by credit card, either in advance or before 10 p.m. when telephone lines will be jammed by others making similar calls. No refunds will be given for unused advance payments. I have already learnt that registration application forms for the disabled are fiendishly complicated. My noble friend Lady Knight of Collingtree has told me that after completing her registration form for resident's qualification, she took it direct to the post office, where staff told her that they did not know anything whatever about it.
  Even if the charge raised enough to cover installation, maintenance, operation costs and surplus revenue, it would be only a drop in the ocean in terms
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  of improving public transport. However, it will certainly make congestion and parking problems much worse on the edge of the zone, which is itself part of central London, at a time when public transport is unable to cope. Anyone who imagines that reducing the number of cars on London's roads will make a great deal of difference should look at Oxford Street even out of rush hour, where cars are banned. The buses are nose to tail and at a standstill the whole length of Oxford Street. The charge will be a tax on the less well off while corporate bosses, business fleets and ladies who lunch will not be feeling very much pain.
  Anomalies will abound. For example, Smithfield workers, who go to work at 5 a.m. and come home during the morning, will have to pay the charge, which will add, they estimate, £2,000 a year to wage costs. Costs will be passed on by businesses big and small through higher prices or—worse—lost jobs. They cannot be covered by increased efficiency. BT and the Post Office have calculated that it will cost them £1 million each a year to comply. All of that is being inflicted on the people of London by a Mayor who is totally unaccountable between elections.
  The Government, the Minister responsible for transport and the noble Lord the Minister cannot sit back with a smile and claim that all of this is not their fault and nothing to do with them. They permitted the legislation to go through that allowed the congestion charge. They have built hardly any new roads or improved old ones. They fatally cancelled—at great cost in reparations—the improvements at Gypsy Corner on the Westway, and now, much too late in the day, they are restarting them. I urge them to take action now to analyse the main causes of the intolerable situation in London today and to develop a comprehensive, informed and common-sense strategy that will overcome avoidable delays, study the effects of one-way systems on traffic flow and cover the placement of islands and crossings, inadequate carriageways and underused bus lanes out of rush hour. It should also determine which of the choked feeder roads in and out of London can be improved and where more flyovers and tunnels are necessary—they exist in other great cities where there is less congestion.
  The Government's much-vaunted and very belated conversion to accepting the need for new roads, which was announced yesterday, apparently does not involve proposing a single road improvement of significance in the London area. I urge them to stop persecuting London motorists and to tackle all of the contributing factors to the crisis that I have described before this great city comes to a complete halt. My Lords, I beg to move for Papers.
  6.34 p.m.
  Lord Faulkner of Worcester: My Lords, it is a pleasure to follow the noble Baroness, Lady Oppenheim-Barnes, although she will discover that I part company with her on a number of the points that she made with such vigour.

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  I suspect that as I develop what I have to say, I shall feel like a character in a Bateman cartoon. It would probably be entitled, "The Peer who spoke up in the House of Lords in favour of the congestion charge".
  I am conscious that the Mayor of London has very few friends in your Lordships' House, and there are undoubtedly many who are hoping that the congestion charge will fail. That, I respectfully say, would be a great mistake and a lost opportunity. Unless those who oppose the charge put forward alternative initiatives to tackle congestion, there is little else that can be done to solve the problem in London.
  The noble Baroness referred to the option of building more roads in London. That strategy was finally abandoned by the Conservative government and has not been resurrected by the present Government. Given the upheaval that would be caused to so many thousands of households if there were a meaningful road-building strategy in London, that policy is absolutely right. We have moved away from the "predict and provide" approach to road building, which was prevalent in the 1970s and 1980s so far as cities and conurbations are concerned.
  Equally unacceptable is the option of doing nothing. There is no policy that is more anti-motorist than simply letting congestion pile up. When he summed up in the debate on the Greater London Authority Bill on 20th May 1999, my noble friend Lord Whitty, then a Minister at the Department of the Environment, Transport and the Regions, commented on the congestion charge. His comments bear repetition. He said:
  "The worse thing to do for the motorist in London is to leave things as they are. We need to develop a new instrument for guiding motorists in their choice of road and their choice of time for coming into the centre of London. Only about 13 per cent of the total number of people who work in central London go there by car. They cause all the pollution, congestion and economic loss for the rest of us. It is important that we use the price mechanism via road user charges to discourage some of that access to London. Other elements can contribute. Taxis can contribute and cycling can contribute. But at the end of the day we have to discourage the use of the car".—[Official Report, 20/5/99; col. 533.]
  I agree with that, and I believe that most people in London also take that view.
  We should not of course be tackling this problem from the point at which we currently find ourselves. The transport problems in London have built up over a long period, and have been made much worse by the failure of successive governments to invest adequately in public transport. London now lags behind many other European cities, where measures have been developed to reduce car use and encourage the alternatives, such as walking, cycling and reducing the need to travel, as well as improving public transport. For example, only 2 per cent of journeys are made by bike in London, compared with 12 per cent in Munich and 20 per cent in Copenhagen. I suspect that in both of those cities, cyclists are rather better at observing red lights and other traffic regulations; I wholly agree with the noble Baroness's criticism of them.
  It is to the Government's credit that Parliament granted the Mayor two new powers to tackle transport problems in the Greater London Authority Act. The
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  proceeds of those powers would be ring-fenced for transport expenditure. One of those was the power to impose a levy on work-place parking. So far, the Mayor has declined to introduce that, but I understand that he has now commissioned a report to investigate its implications. We await the results of that study with great interest.
  The introduction of the congestion charge has been supported by London First, London CBI, and initially by the London Chamber of Commerce, although its enthusiasm has now cooled with the change of director there. Raising revenue is not the main objective of the congestion charge. Its main aims. according to Transport for London, are to reduce traffic by up to 15 per cent in the charging zone, to reduce congestion by up to 30 per cent and to enable an improvement in public transport.
  The idea that motorists are hard done by is one of the great myths of our time. Winding up for the Government in the Second Reading debate on the Transport Bill on 5th June 2000, my noble friend Lord Whitty discussed motoring costs. He said:
  "The real cost of motoring from 1975 to 1999 did not increase, whereas the real marginal cost of public bus transport rose 80 per cent. We must do something to change the marginal costs and reduce the attractiveness of using cars, particularly in congested urban areas".—[Official Report, 5/6/00; col. 1032.]
  Professor Stephen Glaister of Imperial College, London, pointed out in an article in the Guardian on 16th October 2000 that,
  "the index of the overall cost of motoring has hardly changed at all in a generation, after allowing for general retail price inflation.
  "Although the real price of fuel has been rising for more than a decade, petrol has been nearly as expensive on occasions in the past as it is now.
  "Furthermore, the real cost of purchasing vehicles has fallen steadily—and the government has been successfully pushing for further cuts. Relative to rising real incomes, the cost of motoring has fallen by 30% since 1964".
  Everyone agrees that public transport must be improved. The difficulty is that there are no quick fixes for the Tube or for the overground railway. Improvements would take years, even if all the funding were in place. It is vital that long-considered rail schemes, such as CrossRail, Thameslink 2000, the Chelsea-Hackney line, the new routes from the south and west to Heathrow Airport, are authorised soon, because they will create genuine new capacity for people who decide to give up driving into London.
  There will also be a place for new tramway systems, such as extensions to the Croydon Tramlink and the imaginative plans for north-south and east-west tram routes across central London. Most cities would regard the River Thames as a transport resource, not as a bit of a nuisance.
  More immediately, it is vital that there is no further delay in implementing the public/private partnership for the Tube. I agreed with a recent editorial in the Evening Standard last Friday, in which the paper called on the Mayor to drop his legal challenge to the PPP. I know that many share the scepticism of the Mayor and the Evening Standard about whether the PPP is the right way forward. But there comes a point when one

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  has to accept that there is no other way that the Tube will get the extra investment that it so desperately needs.
  However, all those plans—essential though they are—will take years to come to fruition, while the congestion charge starts on 17th February. The only form of public transport that can be improved in the short term is the buses. Commendably, much work has been done in London on improving capacity on the buses. By the time the congestion charge starts, there will be an extra 11,000 spaces on buses in the peak hour. An additional 14,000 people are expected to travel into central London by bus—approximately 7,000 of them during the peak hour.
  There has been much irresponsible press comment about the introduction of those measures. The Evening Standard, in particular, with its "Gridlock London" campaign, has described them as anti-car and has been almost obsessed by them. It has also alleged that Transport for London has introduced restrictions on traffic movement in order to remove them when the congestion charge starts, so that the charge appears to be a success. Those allegations—some of which we heard from the noble Baroness, Lady Oppenheim-Barnes, focus particularly on changes to traffic light times.
  There are two reasons why the phasing has changed. The first is the need to bring the crossing times for pedestrians at traffic light junctions into line with national standards already met elsewhere. I hope that those will not be reversed: pedestrians have rights, too. Every year, 6,000 pedestrians are killed or seriously injured in road traffic accidents in London. The changes are part of a programme under way since 1994.
  The second reason for the traffic light phasing changes is to restrict the flow of traffic to areas, such as Trafalgar Square, where major road works have been under way. Those traffic light changes will be reversed when the scheme is complete and operating smoothly. Today, I received confirmation of that from Transport for London.
  What do Londoners think about what Transport for London is trying to achieve? An opinion poll survey of 1,074 Londoners, conducted by YouGov for Transport 2000 and published last month, showed that there is broad support for the programme of measures now being introduced to complement the congestion charge. The survey found that 64 per cent want more bus lanes; 67 per cent want more cycle lanes; and 61 per cant want better pedestrian facilities, such as wider pavements and more crossing places.
  If the predictions for traffic and congestion reduction prove accurate, there will be obvious benefits for public transport and for the quality of the environment in central London. Bus services will be quicker, more efficient and more reliable. The sort of problem to which the noble Baroness referred in Oxford Street will be a thing of the past. The walking and cycling environment will also improve, and so will the quality of many of London's most important streets and public spaces.
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  The relief of congestion will also bring an immediate benefit to business. The vast majority of customers at retail and other businesses in central London already arrive on foot and, even if they drive to central London, still make part of their journey on foot. An improved pedestrian environment will encourage more people to shop and to use the restaurants and other businesses in central London. The experience of many cities that have implemented traffic reduction strategies has been one of an increase in retail turnover and commercial rental values.
  So I hope that the faith expressed in congestion charging by my ministerial friends when piloting the Transport Act 2000 and the Greater London Authority Act 1999 through your Lordships' House two-and-a-half years ago will be repaid when the London scheme starts in February. It must succeed, for, frankly, there is no other show in town.
  6.45 p.m.
  Lord Brooke of Sutton Mandeville: My Lords, I pay tribute to my noble friend Lady Oppenheim-Barnes for securing the debate and for her admirable speech. Perhaps I may add a footnote to it. Fewer than 20 per cent of the holes in the road to which she referred are either planned or notified in advance to the highways authorities. The noble Lord, Lord Faulkner, is a veteran of our previous debate on the subject on 14th November last year, and it is a pleasure directly to follow him.
  I declare an immediate interest as a former Member of Parliament for Cities of London and Westminster, as a constituency into which or within which about 700,000 people come to work each day. As the average constituency figure nationally for employment is fewer than 50,000, that makes my former constituency about 15 times as employment-intensive as the average. Unsurprisingly, it contains more Underground stations than any other in the system and a fair number of termini, which conclude the 10 radial railway routes created into London in the 19th century.
  Transport and traffic are of critical importance to the productivity of the constituency. The last hay for horses was sold in the Haymarket in 1831, but the last horse-bus ran on the day that war broke out in 1914. The term "rush hour" first occurred in 1898. By then, rail and Tube had already been established.
  This debate is necessarily more about the past five, 10 or 20 years, and involves both demand and investment. As both the public/private partnerships, and Mr Kiley's prediction of how long it will take to get the Underground into shape, stretch to a time-span of 30 years, the debate has a half-century's perspective.
  As for demand, overall travel demand in Greater London has risen by 14 per cent since 1993. The Strategic Rail Authority stated in 2001 that every train operator in London was carrying loads in excess of planned capacity, and planned capacity is defined as including a 35 per cent ratio of standing spaces to seats. Overloads above planned capacity range from 1.6 per cent to 9.8 per cent during the three peak hours of 7 a.m. to 10 a.m.

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  Overall, bus journeys have increased by 1.35 million in the past decade, but the total distance covered by buses has increased by about a third, with the result that actual bus occupancy has decreased—although of course I acknowledge the figures cited by the noble Lord, Lord Faulkner, to be added under the congestion scheme.
  Unfortunately, buses are not the true key to our solution. Tube passenger kilometres exceed bus passenger kilometres by a factor of more than 50 per cent in a travelled year. Tube passenger growth has risen by 8 per cent during the past decade, leading—as mutatis mutandis on a barometer—to conditions between "crowded" and "very crowded" during those same peak hours of 7 a.m. to 10 a.m. I take my terms from the Mayor's consultation document.
  The sadness is that the only major infrastructure project recently completed has been the Jubilee Line extension, whose stations, admirably, won the Building of the Year award, but the principal beneficiary of that is the satellite development area of Docklands. In the same period—the past decade—Paris. Berlin, Madrid and Frankfurt have all completed their third or even fourth public transport infrastructure scheme. In the contemporary joke, when the Berlin Wall came down, the Stasi were out of a job and become the best taxi drivers in the world, because you had only to give them your name and they automatically knew your address.
  Ninety-one per cent of those who work in the City of London reach it by public transport. Our competitive position in metropolitan transport is slipping. More than a decade ago, the City of London Corporation paid for the assembly and co-ordination of all the recent London traffic research and transport plans, and Lord Mayors of London cannot be blamed for going on about where we are now. They do so not in the context of competition with the Mayor of London but in the context of getting something done.
  In the years up to "big bang", the economy of London grew more slowly than that of the rest of the country; after "big bang", it grew faster. As London generates £20 billion of revenue taxes that are then spent elsewhere in the country, there is a national interest in London being healthy and profitable. London's economy is still larger than that of Greece or Portugal.
  I shall not get into a weary slanging-match about who is responsible for what in where we are now, although, if others were to start it, I should be happy to give as good as I got. I acknowledge that there is shared responsibility. The important thing is that we start putting drive and momentum into changing things round. CrossRail is an east-west joiner-up of the radial routes that I mentioned. Thameslink 2000, the East London Line extension and Cross River Transit—the tram link between Euston and Waterloo—promise to add 15 to 20 per cent of new capacity to central London, at a time when the railway network cannot reasonably carry any more trains. All peak period terminal station platform capacities are full, and modern crash prevention systems being
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  introduced through train protection and warning systems reduce the system throughout. It would help if the Minister could give us an update on any of those four projects.
  In the other place, in the first debate on the Underground in the previous Parliament, as a senior Conservative Back-Bencher, I offered Mrs Hodge—now a Minister but then chairman of the London Labour Parliamentary Party—the olive branch of an alliance between Back-Benchers on both sides to help to make something happen. For whatever reason, she declined the offer. Since then, as my noble friend Lady Oppenheim-Barnes said, the Government have wished on us a strategic authority and a Mayor of London. I know from past occasions that the Minister does not regard himself as responsible for the Mayor—I understand why—but the Government are more responsible for the existence and role of the Mayor than are we on these Benches. Therefore, it is reasonable for us to look to the Government to make the most of London's new strategic powers. In the mean time, we still have ahead of us airport developments and the London Olympic Games hid. There is plenty to play for.
  I end with two individual tributes. Charles Pearson was solicitor for the Corporation of London from 1839 to 1862 and, briefly, MP for Lambeth. He was a driving enthusiast for many metropolitan improvements, such as embanking the Thames, the establishment of a new meat market at Smithfield, and the building of a metropolitan underground railway. He moved for the construction of an underground railway designed to link the city's major railway termini. It became the Circle Line, to which, under Pearson's influence, the corporation contributed. The company behind the line offered him a reward for his efforts, but the city solicitor replied:
  "I am the servant of the Corporation of London: they are my masters and are entitled to all my time and service. If you have any return to make, you must make it to them".
  That is the spirit that—metaphorically, at least—should underlie any modern public/private partnership.
  In case anyone says that the spirit of the Victorians is dead, I pay my second tribute to the London Underground planners and engineers who kept services on Westminster's District and Circle Lines going for years, while, simultaneously, Portcullis House was built over their heads and the Jubilee Line was excavated beneath them. That was a Victorian achievement of massive capacity.
  6.54 p.m.
  Baroness Thomas of Walliswood: My Lords, the noble Baroness, Lady Oppenheim-Barnes, has started off an interesting debate. As I fear that I do not agree with many of the things that the noble Baroness said, before I go any further, I must say that I agree thoroughly with her about the bad manners shown by people driving in London. The worst, in my view, are the car drivers.

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  As a county councillor, I spent a good deal of time trying to find ways of dealing with the growing menace of traffic congestion. Surrey's roads carry nearly three times the national average volume of traffic, and traffic congestion topped the list of local people's gripes. At that time, I attended a private conference on the health implications of the growing traffic burden. We were addressed by the deputy mayor of Copenhagen, who described the near-pedestrianisation of the city centre. I knew from experience the difficulty of getting any agreement on how to tackle congestion rather than just complain about it. I therefore asked how Copenhagen had achieved so much. "Well," came the reply, "We started 20 years ago". My point is not that Copenhagen is the same as London. What I do believe, however, is that we in this country must tackle the problem of congestion, or not only will our cities become unliveable in, but they will not be successful business centres either. That applies especially in London.
  In turning to the problems of London, I should perhaps declare an interest as a born Londoner who has recently established residence in the capital after many years of absence. London is a wonderful city. It is a world business centre with a marvellous built heritage and a huge choice of leisure activities. It deserves better treatment than it has received over many years, nowhere more than in the field of transport, in which a continuing rapid pace of improvement is needed for both business and residents.
  Recently I have noticed a growing gap between two sorts of ghetto: one is conspicuously rich, and the other noticeably less well provided with goods, including the public goods such as transport. Transport is not just needed to keep business going or to take workers to their employment; high quality public transport could, in itself, become a unifying factor for the citizens of London.
  London First recently published a progress report on transport improvements in London. The report noted the somewhat unsatisfactory completion of the Jubilee Line—late, over budget and with poor signalling. However, it welcomed a wide range of other improvements, such as the Docklands Light Railway, the Croydon Tramlink, road improvements on the eastern side of London, new buses and upgraded bus routes, both achieved and to come. Looking ahead, it broadly welcomed the congestion charging scheme, albeit with some warnings as to the need for care in its implementation. However, the report also noted that £110 billion would be required over the next 15 years to make good past neglect of the city's transport infrastructure and to deal with the forecast growth in population.
  Finally, the London First document looked ahead to what would be needed if the UK were to make a successful bid for the 2012 Olympics to be held in London. The bid is seen as a huge opportunity to focus attention on transport and to ensure that existing transport infrastructure schemes—CrossRail and others—are brought into operation on time, to the permanent benefit of our great city. Together with new
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  housing developments, this could contribute to solving the problems that would otherwise be caused by a rising population, via the redevelopment of east London and the Thames Gateway.
  I must confess that I am an enthusiast for the Olympic bid for London. I hope that all public and private authorities will support the bid and show confidence and determination in planning for its success. We cannot be left saying, "Oh well, we'll never manage to do it, and, therefore, we won't bid for it". We must adopt a more confident approach, based on, for example, the successful completion of the Channel Tunnel Rail Link which is going ahead brilliantly and demonstrates that this country can still produce what the noble Lord, Lord Brooke of Sutton Mandeville, described as a Victorian attitude towards achievement.
  I turn to the Mayor's congestion charging, the changes in traffic light phasing to assist pedestrians, and the provision of more bus and cycle lanes. It is worth noting that, according to a Transport 2000 poll—to which the noble Lord, Lord Faulkner of Worcester, referred—the measures are popular with residents, even if they do not all please London First. They even approve of the purposes of the works in Trafalgar Square and at Vauxhall Cross, which has caused such grief to some Members of your Lordships' House. They want more, not less, of the same.
  Some people say that congestion charging will cause chaos on public transport which will not be able to take on the extra passengers, and that view has been expressed today. The figures do not seem really to sustain that argument. It is estimated that the total additional number of people travelling into London by public transport during the morning peak, as a result of congestion charging, will be up to 20,000 a day. It sounds a lot—does it not?—but it represents only an extra 1 or 2 per cent on top of those using public transport already. As the noble Lord, Lord Brooke of Alverthorpe, has already told us, that is because the vast majority of commuters already use public transport
  Meanwhile, that shift away from use of the car would result in a 10 to 15 per cent reduction in traffic in central London and an even larger decrease in congestion. The effect of these new transport users is estimated to be one person per carriage on the Underground during the morning peak. More people will travel by bus than on the Underground, but the planning for that increase is already in place for delivery starting early next year. We should be able to obtain a significant gain in terms of lessening congestion in return for a relatively minor increase in the number of people using public transport in London.
  We should not be too dismissive of the capacity of bus services and the way that they have been planned—London First certainly is not. My understanding is that bus ridership has increased in London and the rate of the increase is now about 7.5 per cent per year—that is faster than at any time since the Second World War. It is helped by the new buses, routes and pricing policy, and despite traffic work.

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  We should not forget that all London's transport is controlled by TfL and/or the Mayor. Commuter trains, despite the efforts of my noble friend during the passage of the GLA Bill, are in the hands of the rail companies and the Strategic Rail Authority—both ultimately dependent on central government. Meanwhile, the Government have spent £400 million, not on improving the tube, but simply to conclude the PPP deal—a deal which we on these Benches have opposed from the start and of which we still do not approve.
  I hope that the Minister is not going to play the usual ministerial game of earnest defender of the principle of devolution while washing his hands of any responsibility for Transport for London. Instead, I hope that he will tell us what improvements he sees in the pipeline for the appalling commuter rail services into London.
  I notice that a rumour is being put about that the Mayor and/or Transport for London will not put the income from congestion charging into public transport. Memory tells me that the London Authority Bill said just that, but limited the time to 10 years for any one project. Following concerted efforts from these and other Benches, an assurance was given that the time could be extended. I am sure that the Minister can confirm that.
  Returning to a more theoretical approach to traffic management, I believe that it is time that everyone accepted that road space is in short supply in London and is unlikely to be substantially increased. My view is that like any other commodity in short supply, road space needs to be rationed and/or priced in such a way as to let all those who have a right to use it get their fair share. That means pedestrians, buses and cyclists, as well as private cars and business vans.
  No single interest has a right to dominate the public highway. If that means that businesses need to replenish their stocks as part of a planned exercise rather than "just in time"—which in London too often seems to be within the next 10 minutes—so be it. The habits of business, like those of the individual, will change slightly to meet the change in circumstances.
  I hope that all public and private authorities will collaborate purposefully to improve transport in London for all of us and that 20 years from now Londoners will be able to look back and say, "It took a lot of effort and it was a fearful nuisance, but the change to our quality of life is really worth it".
  7.5 p.m.
  Lord Brooke of Alverthorpe: My Lords, I, too, should like to express my gratitude to the noble Baroness, Lady Oppenheim-Barnes, for sponsoring the debate and to apologise for missing the first two minutes of her opening speech. I assure her that I shall read it in Hansard tomorrow.
  This debate gives us an opportunity to not solely be critical but to look forward constructively to deal with the mounting common problems. Unless those problems are faced urgently, we shall continue to see a declining quality of life for those who spend much time
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  in London. Like my noble friend Lord Faulkner, I believe that we have a legacy. I do not attach responsibility for that to any particular party. There has been under-investment over decades in the Tube, buses, rail and road infrastructure, and the problems will not be solved quickly.
  The noble Lord, Lord Brooke of Sutton Mandeville, touched on the inadequately co-ordinated forward thinking and strategic planning for the future in London. To some extent, I am of the opinion—I know that this may not necessarily be supported by others—that the problem has arisen, in part, through the abolition of the GLC. While there were reasons for the GLC to come under the heavy criticism that it did, increasingly we now see, with the GLA in being, that there is a requirement for co-ordination. Boroughs cannot be permitted individually to plough ahead in isolation without regard for the consequences of their decisions for their neighbours.
  I live in the borough of Wandsworth, which has a vigorous policy of maintaining a low council tax. To that end we have seen virtually every piece of land that has become available sold off, or planning permission for residential accommodation has been granted. That has had its consequences. I fear that Wandsworth has little idea of how to deal with the gridlock that is now developing in many places within the borough, not to say, how to address the consequential environmental pollution issues.
  During the week I live in Battersea, where we have poor public transport facilities. We are now virtually encircled for much of the day by cars queuing. It is difficult to get out of the estate in which I live, and it is almost impossible to get into it, too. That has changed within the course of the last 10 to 15 years when we first moved there. However, on the other side of the estate there is the River Thames, which is a great under-utilised asset. I make no apology that this is the topic on which I intend to speak primarily today. It is one on which I have spoken in previous debates—alas, without, as yet, a great deal to see for my efforts.
  I want to urge the authorities—and I am not sure whether any government responsibility still remains or whether it rests with the GLA—to embark on fresh thinking. Whoever it is, people must come together and utilise all the opportunities because the accumulation of all those different initiatives will lead to the better quality of life that we are seeking.
  London's transport problems are now becoming so acute that unless all the options are examined within the next two to three years, and if the congestion charge does not work, we shall have a problem of real magnitude facing us. It is a pity that today we do not have a contribution from some of the eminent architect Members of your Lordships' House. They have a responsibility, too, for what has been developing in certain parts of London. The noble Lords, Lord Rogers and Lord Foster, have been involved in substantial property developments south of the Thames between Westminster and Wandsworth Bridge. Those who know the area will be aware that a terrific amount of ribbon development is taking place

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  there. New housing will be coming on stream there within the course of the next two years. I have spoken on this in the past and indicated that that was likely to happen.
  The buildings which are going up there are, in the main, replacing former industrial premises. They are for residential accommodation, which means more people and more cars, and yet there are no solutions immediately before us to deal with the consequential problems.
  Regrettably, Wandsworth council has not taken all the opportunities available to it. It controls a substantial part of the south-of-the-river boundary to which I refer, but it has not carried out much long-term planning and strategic thinking. As far as I am aware, no new piers have been built. The only pier we had was at Battersea Park, and that has been dismantled by Wandsworth council.
  As Wandsworth council is responsible for granting planning permission, it has had substantial opportunities to ensure that greater advantage was taken of Clause 26 of the planning arrangements. The House will be aware that that requires that if it is anticipated that there will be consequential problems with transport, then, before planning permission is granted, the developers can be required to assist with new bus services or the partial funding of bus services; to assist with changes to road services; and to assist in the building of piers or jetties to improve transport on the river. Regrettably this opportunity has not been taken and we have missed out on it for the time being. However, I hope that there is some prospect of returning to this issue in the future.
  London River Services, a wholly owned subsidiary of Transport for London which was formed in 1997, is doing its best in difficult circumstances, but it has produced relatively little change for its efforts so far. There are two principal reasons for this. First, river services have to pass value for money criteria before projects for new river services can be supported and developed. It is much more difficult for river transport to meet such criteria than for other forms of public transport such as buses, primarily because of regulations governing safety and so on.
  Secondly, projects receive relatively little backing by way of funding from the GLA. I believe that in the last GLA budget review river projects received next to nothing. If I am wrong about that, the noble Baroness, Lady Hamwee, who is a member of the GLA and who will speak later, will put me right. Such projects do not seem to have any means of raising cash other than looking for a vote from the GLA.
  So, in effect, London relies entirely on the private sector for the development of its river services and for the maintenance and expansion of existing services. This is virtually all driven by the market, and the private sector's business on the river is not primarily concerned with solving the social and environmental problems that we currently face in London in regard to transport.
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  The LRS has invited tenders for the proposed central London multi-stop riverboat service—which will, it is to be hoped, come on stream—and tenders for service providers to use the Millbank pier. These tenders have to be submitted by the end of January 2003. So there is a possibility that the private sector will come forward with new proposals for ensuring growth in river transport. I hope that that will be the case.
  But when one probes the organisation, it is difficult to find any real strategic plans, certainly not for developing public transport services. There is a great opportunity for services to run between Wandsworth Bridge, at least, through to Westminster and on to the City. I recognise that there will be considerable problems in going beyond Westminster Bridge because of the wash and limitations on speed. These proposals will come before Transport for London and I hope that some movement will take place.
  We need new initiatives. Very little seems to be happening strategically within the mayoral office. Again, if I am wrong, I shall be pleased to be put right by subsequent speakers. I find it rather strange yet fascinating that, when it comes to the Tube, the Mayor is opposed to the involvement of the private sector and private capital—primarily, he argues, on the grounds of public safety—but that when it comes to the Thames there is next to no public involvement, very few public initiatives and next to nothing by way of public finance. Virtually all of these matters—including public safety—are left to the private sector. It is left to the private sector to maintain existing services, reduce them or expand them.
  Even though the river offers opportunities to ease congestion—and if initiatives were taken quickly we could soon have a number of short-term fixes—apparently little lies ahead of us. I hope that the one thing that comes out of the debate is that we will know whether the Government continue to have an interest in London and its problems. If they do not, they should state that clearly so that we know where we stand. I hope that the Minister will give us comfort on that point.
  As previous speakers have said, I should like to see a more co-operative approach between the mayoral body, the GLA and the Government. This is a common problem which affects all of us. I trust that the Government, who have been prepared to look for private capital to assist with the Tube, will similarly be prepared to be innovative and to explore the possibilities for expansion on the river. As the Mayor does not have any public service proposals for fundamental changes on the river, that would at least present him with a kind of partnership, perhaps with private capital, and he might this time be prepared to take a different line and we shall see some quick changes taking place on the river.
  7.17 p.m.
  Lord Bowness: My Lords, I add my thanks to my friend Lady Oppenheim-Barnes for securing the debate. I declare past interests as a London borough

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  councillor for 30 years, as a leader of the London borough of Croydon for 18 years, and as chairman of the former London Boroughs Association for a number of years.
  I hope that the noble Lord, Lord McIntosh, will not dismiss the debate as the House attempting to be an urban district council, as he did the other day. Issues involving the capital are of national importance and go far beyond the capital itself. The economic health of the capital is evidence of the economic health of the nation as a whole. It is important for us to persuade other parts of the United Kingdom of the importance of London and its need for resources—particularly resources to address the issues the subject of this debate—and that they should not view the capital only as a convenient source of redirected tax revenues.
  Equally, I hope that the debate will not be dismissed as an attempt to by-pass the democratically elected mayor and Greater London Authority. I make no apology for remaining unconvinced about the wisdom of the authority and the Mayor and for believing that mechanisms bringing the boroughs together in a statutory framework would have been preferable—but that is a battle fought and lost. Nevertheless, I do believe—I have always believed—that, given the size of the nation's capital, there is a case for national government retaining a greater role—especially in the transport area—particularly as major schemes will only ever come to fruition if governments support them and provide the money. The sheer physical size of London makes it very different from many of the cities which are often cited as examples of good practice.
  I say to the Minister that the statute does provide for the state to challenge the Mayor's transport strategy if it is shown to be contrary to national policy and adversely affects areas outside Greater London. If the current policies ultimately affect business, they will affect employment; and the employment effect of the capital goes far beyond its boundaries. Is the Minister keeping the position under review?
  I do not propose to speak about the congestion charge, save to say that it seems remarkably bureaucratic in its operation. Also, I believe that spending on public transport has to come about before you can seriously introduce measures of restraint.
  I turn to some specifics on road transport. First, much is made of the work of statutory undertakers, but there is also the work carried out by Transport for London and the London boroughs. Presumably, the cost of the job dictates how and when it is done. Is it not time to consider the cost to the community of the daytime delay and consider whether night-time and weekend working might be more appropriate—especially now, when even the smallest job to the smallest pavement seems to require a partial coning off of the road; and when, presumably to reduce the number of people employed on a job, the largest plant is employed in the smallest street for the smallest job?
  Secondly—I know that this will not receive arty approbation from my noble friend on the Front Bench—what about parking enforcement? I have to admit that I was one of those who persuaded the then
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  Secretary of State to introduce an amendment to a Bill in this House to give control of parking to local authorities. We naively thought that it would produce local control on the streets to keep the traffic flowing. What happened was that the offences were decriminalised, so that the moneys went to the local authorities—and, oh dear me, instead of becoming a locally sensitive controlled service, it has been a means of raising revenue. Perhaps the penalties should return to the central Exchequer, even if local authorities are reimbursed for the costs of carrying them out. Certainly, no purpose is served in many cases. The local control, the ever-present presence, does not exist. The squads, as we used to see with traffic wardens, row swoop on the places where the most revenue will be raised in the shortest possible time.
  Lastly, the noble Baroness, Lady Thomas of Walliswood, raised the question whether we should have traffic management powers to control businesses servicing their premises during working hours.
  I turn to the allocation of resources for these major projects. Great emphasis is always placed on central London—understandably—East London and the Thames gateway. So far as the last two are concerned, we all want to see regeneration, but not at the expense of existing parts of Greater London. They, too, have their workforces, their businesses. To starve them of resources is to condemn them to decline. With activity moving to the new areas, the existing areas do not have the means of keeping up, modernising and competing.
  One of the last acts of the old Greater London Council was to cancel a bypass around Coulsdon, part of the borough that I used to lead. During the years when it was in limbo, years of negotiation brought the bypass back to being a reality. One of the first acts of the Mayor of London was to delay it again. What do they say about wasted years?
  Croydon Council was deeply involved in the promotion of Tramlink, one of the only significant public transport investments for decades in the south of the capital, certainly in terms of east-west transport. It took 14 years to bring it to fruition. Such timescales are not acceptable. In parenthesis, I would say that it was achieved without a strategic authority, but in co-operation with our neighbouring authorities and London Transport. How many years will it be before we see any noticeable improvements to public transport in Greater London, bearing in mind the established time-scale of introducing a relatively modest scheme of 26 kilometres of tramway? Where do the promises now stand, as we are told that the Strategic Rail Authority is apparently out of funds? Is there to be another 10-year plan?
  When we speak of London, we all too often speak of the central areas. But there are other places in outer London—all those places which are told that the justification for being in Greater London, with all its costs, is that they are physically part of London. But for many of them CrossRail and even the Underground do not feature in their consideration. Even my noble friend referred to people travelling by car, bus and tube. But in many parts of Greater

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  London people rely on the commuter services referred to by the noble Baroness, Lady Thomas of Walliswood.
  I do not know how many of your Lordships commute to this House using a commuter service. I do so relatively frequently using South Central. Hardly any day is free of some delay. The trains are old; many are still the old slam-door trains. Breakdowns and signal failures are commonplace. Stand on a station: the tracks are overgrown. I wonder whether your Lordships remember spaghetti westerns, where some creaky railway line faded away into the distance, the rails slightly bent and the track overgrown. It shimmered in the heat. I can show your Lordships similar tracks without the heat.
  The stations are as they were built in the Victorian heyday of the expansion of the railways. East Croydon station is one of the busiest—if not the busiest—railway station outside central London; and it stands still virtually in its original Victorian footprint. There were various attempts to re-develop it to meet modern needs. The plans always foundered for lack of funds.
  One of my first meetings as leader of Croydon Council was to discuss the future of East Croydon station. It was so long ago that I cannot remember when the meeting took place, but I remember that the chairman of British Rail at that time was Sir Peter Parker. Eventually, there was a glass and plastic facelift within the operational boundaries. But like all facelifts, it has not lasted for ever.
  The station that I use to travel to this House was opened in the 19th century. We now go in through the back door, not the front door, for some reason of progress that I do not understand. Virtually no physical changes have been made to it. The roof leaks. To stand on the open platform is virtually the same as standing under the roof when it rains. The change machines, which I suppose are a symbol of the 20th century—but only the 20th century—have yet to be altered to accept new £10 and £20 notes. I say "new"—if we ever join the euro, goodness only knows what we shall do! If we cannot do better than this more quickly than this, how will London ever be a world-class city that can contemplate hosting the Olympic Games; and, more importantly, how will it ever be a place in which anyone who is concerned about quality of life wants to live and work?
  7.29 p.m.
  Baroness Hamwee: My Lords, I, too, thank the noble Baroness for introducing the debate. She painted a very gloomy picture. One of the oddities of the unpredictability of travelling around London is that, just occasionally, a journey goes very smoothly. One does not know whether to be irritated on those occasions!
  I declare an interest as a member of the Greater London Assembly. I should explain that the assembly is the scrutiny arm of the Greater London Authority. We have no executive responsibility. That is not to say that I disclaim responsibility for everything that is going on, but simply to explain.
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  What is London? This first question picks up from where the noble Lord, Lord Bowness, left off, although it does not relate solely to Croydon. The noble Lord, Lord Brooke of Alverthorpe, took us out of the centre. I agree that we must use all available resources, including the river, which is underused but difficult to use. I am often frustrated that many journalists, tourists and politicians paint London as being only the centre. Too often, that is also how the Mayor of London tends to identify it.
  For the purposes of this debate, I ask your Lordships to remember outer London, where access to public transport is shockingly patchy. There are swathes of south-west and south-east London where public transport links are poor, which are inaccessible by Tube and dependent on heavy rail. Today we had news of fares increases. No solution is offered to passengers who commute in competition with interregional passengers and who cope with such conditions as we heard about.
  The best solution, as the noble Lord, Lord Faulkner, said, is to reduce the need to travel. One of the success stories is the buses over the past couple of years, with increased ridership. My noble friend Lady Thomas referred to the 7.5 per cent increase in the second quarter of this year. There is increased frequency, new routes, better night services, new buses and improvements in how to pay. There is a fast move towards cashless arrangements—not that one does not pay, but a stream of passengers are not held up by people paying on the bus. I am a great fan of what is happening to London buses and the service that we now have. I see further improvements on the way.
  But it is a worry that there is an enormous hole in Transport for London's budget. Leaving aside the cost of the Tube, if it ever is to be transferred, there is a £2.4 billion funding gap in the next six years of Transport for London's business plan. That is an enormous sum of money. Much of that results from expenditure on buses, with what now costs £240 million rising to £615 million in 2005–06.
  The mayor has decided to freeze fares until the end of the mayoral term—he would call it his first mayoral term. I applaud the keeping of manifesto commitments, of which this was one. But a few more caveats should have been attached to it, and more research is needed than Transport for London is giving it. So far as I have been able to ascertain, it has not undertaken the detailed modelling of what happens if fares remain the same in cash terms and in real terms. In other words, if inflation increases, what happens if you increase or reduce them substantially? Does that, for instance, increase ridership, and, therefore, is it a net gain?
  On the other hand, the IPPR has carried out research. It suggests that a single 70p fare, with the bus priority routes and extra services in the programme, could increase use by almost 40 per cent at an annual subsidy cost of £80 million, and that the net economic benefits would be worth about £500 million a year.
  I am critical of the lack of research behind the fares policy, but I support measures that assist those who suffer the pervasive effects of poverty. This policy must

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  be acknowledged as such. Many Londoners do not have access to a car. Holding down child and adult bus fares benefits those who cannot afford other means of travel.
  CrossRail has an important part to play in ensuring that London remains an attractive location for international business. International businesses and residents look at quality of life. First impressions count. One of those is getting into the centre of London from Heathrow. It is not just because of that that CrossRail is important. I hope that the Minister can give us some clues as to whether CrossRail will become a reality. It would, or will, serve very important functions in its links to the east and west. But I worry that, because it is such a major project, all transport investment eggs will be put into that one basket. Nevertheless, I support it. It is one of the reasons why I support a London bid for the Olympics in 2012. We could not hold the games without CrossRail.
  Inevitably, the congestion charging scheme has been a focus of attention. I am another character from a Bateman cartoon. It may invalidate the cartoon if there are two or more of us. Congestion has a huge cost: personal stress and the economic cost of £2 million to £4 million a week. So it is no wonder that, as the noble Lord, Lord Faulkner, said, the business community welcomes the problem being tackled.
  We have heard in the London Assembly from representatives of the business community. As recently as September, the CBI said,
  "we are supportive of the principle and remain so".
  It says that it is not convinced about the detail. Fair enough. I shall come to that in a moment. London First said:
  "On congestion charging, it is essential that we do get successful implementation".
  At that time, the London Chamber of Commerce and Industry said:
  "We're generally in favour because of the transport problems in London. We think that we've got to have an emergency solution for emergency times".
  I share the views of London business representatives. It is a pity that the mayor appears to have been driven by an electoral timetable. If a little more time had been spent on the scheme, its supporters might have had more confidence that it would work smoothly. The mayor has spent £200 million on setting it up, but we do not yet have much indication of the broader impact that he expects.
  It must not have an adverse effect on London's economy; it must have a positive effect. But there are fears among individuals, especially small businesses, who will have to travel in and out of the zone. I can see that it is hard for them to envisage that the time they will save in travel is a real gain compared with the outgoings that they face. It must not have an adverse effect on the areas outside the zone or on the environment at its edge. Quite rightly, there are concerns, to which I add that only around a quarter of the associated schemes managed by the boroughs will be completed before 17th February, when the scheme
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  is to be introduced. There are fears about so-called rail-heading; that is to say, people driving to stations on the outskirts of Greater London and parking there.
  I wish to try to reverse the inevitability that people will view the scheme as getting at drivers instead of a bold attempt to solve one of London's greatest problems. At a recent focus group, someone said:
  "So the residents are just collateral damage in Ken's war against the car".
  The politician who was involved said:
  "Well I wouldn't go quite that far".
  Nor would I. The scheme must reduce congestion.
  As I said, we are concerned that so few targets are in the public domain. One of the contractors, Capita—whose name is well known in public circles—is dealing with the computer elements of the scheme. We do not have details on the contract between Transport for London and Capita because each of the parties has agreed to keep them confidential. I am currently involved in a minor campaign to persuade them to waive the confidentiality provision so that we can know the performance indicators which Capita must meet and the costs which London would have to meet were the Mayor to pull out of the scheme early. However, although there are many outstanding issues, to reduce traffic by 10 to 15 per cent, as forecast, is a very big prize indeed.
  No debate on London would be complete without a reference to holes in the road. At Question Time last week, I questioned the Minister on the position of the so-called "holes czar". The Minister stoutly defended devolved government, for which I thank him. Although I do not think that there should be one executive body, because the boroughs have a role, if one body is to deal with the holes problem, I think that it should be London's devolved strategic government—in other words, the Mayor. I raise the issue only to ask the Minister what the role and responsibilities of that officer might be; or is the issue something that we can quietly forget about?
  While on the subject of holes, I should again say that not everything is always bad. In September, I was alarmed when notices went up in my part of Mortlake saying that there would be disruption for 17 weeks while Transco did some work. However, Transco has dealt with that work admirably. There has been one-way working on the road, but only on short stretches; and the knock-on problems have been kept to the minimum.
  I turn finally to the Tube. One of the factors in the success of the congestion charging scheme is the capacity of public transport to take the transfer from roads. Although the figures to which my noble friend Lady Thomas referred stack up, one has a horrid doubt about whether they will in fact work and whether the Tube can play its part, Most of the passengers included in the figures are already Tube passengers.
  More widely, however, hundreds of millions of pounds have been poured into concluding the PPP. I do not think that it is still simply an issue of devolution. The public want, in the immortal phrase,

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  "something to be done", and they do not much care who does it. There is, however, a dilemma. The Mayor has said that improvements will not be delivered in the first seven years of the PPP. Now, we have a Secretary of State who has reassured the PPP companies by offering them indemnity, we hear, of £1.6 billion in case of further delays should the Mayor appeal to the European Court against the ruling on state aid. Coincidentally, that sum is the precise shortfall in funding which he identified and is what the row is really all about. As the Irish say, I would not start from here.
  So there is good news on buses and good news on the money going to the boroughs for road maintenance. There is bad news on the Tube. There are also many urban myths to be dispelled, such as the traffic-light myth, the explanation for which I do not have time to repeat. Road safety, happily, also has improved, except for motor cyclists. I hope that the Minister will tell us what central government are doing to contribute to London's transport.
  7.44 p.m.
  Baroness Hanham: My Lords, this debate is long overdue. I join in the thanks to my noble friend Lady Oppenheim-Barnes for being so successful in generating the debate and for moving it so well. I should also declare an interest—everyone else is. I am a council member of the Royal Borough of Kensington and Chelsea, an inner-London borough which is quite involved in the congestion charging.
  The difficulties of moving round London are becoming the topic of everyone's conversation in London. While reference has been made to the improvement of buses, the words that I hear are more often than not about the invisibility of buses. I also hear complaints about an over-crowded, dirty and unreliable Tube. The citizens of London are being denied an even half-passable public transport system.
  As we also heard, in February, when congestion charging is a reality rather than just a potential nightmare, there will be more restrictions on people's movements and implications for the overall economic activity of the City. This is a policy gifted to the Mayor under the Transport Act 2000. Under the Greater London Authority Act 1999, the policy was designed to provide funding for Transport for London. In fact, the scheme is a tax on London motorists as well as an impost on the activity of London.
  The Mayor initially estimated that the scheme would raise about £300 million annually, but that sum has already been revised downwards, to less than £150 million. The noble Baroness, Lady Hamwee, has already described the current £2.1 billion budgetary hole in relation to buses. Consequently, that estimated sum is not going to make much of a contribution. The starting charge of £5 will surely be increased when the Mayor thinks that he needs more money for Transport for London. It is already painfully obvious that he will need to do that in short order.
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  Much has been said about the impact of the charge. However, it is worth reflecting on the fact that the only exempted vehicles will be ambulances, taxis, buses, disabled cars, motorbikes, mopeds, cycles and alternative fuel vehicles. The latter has only recently appeared on the horizon as an exempt category. I presume that such vehicles will be powered by liquid gas, mulched vegetables or fuel extracted from refuse. However, every other vehicle will be caught. Let us think about that. The charge will be levied, for example, on families who live just outside the zone but have small children at school within it. It will catch vans and lorries delivering to shops and offices. It will hit those sufficiently sick to require hospital access but who cannot be described as requiring treatment for a chronic complaint, another exempted category.
  The charge will catch Post Office vans and those carrying out work to premises within the zone. Plumbers, electricians and builders will all have to pay the £5 charge. If they have to pay the charge, it is much more likely that they will not bear it but pass it straight on to their customers. It is an additional tax to customers who may already have paid the charge themselves to enter the area.
  What about those who live outside the area but have to enter to shop for more than they can carry, such as the elderly, who will inevitably be less inclined to risk public transport? What about those who suddenly, either on a whim or from necessity, have to enter the zone for some reason? The list is endless.
  What purpose is all this meant to serve? The scheme is being implemented because of a suggestion, and that is all that it is, that it can reduce congestion by 10 to 15 per cent—but 10 to 15 per cent of what? Every day in London is different. Some days, there are traffic queues in one place; other days, there are queues in others. On many days—and there are currently many such days—the roads are remarkably clear. Where there are traffic queues and congestion, the traffic is usually stalled by roadworks, deliberately—I do not take issue about that—long and hopelessly phased traffic lights, "improvements" or works by statutory undertakers. But they are not usually in the same place unless the work is to carry on for a long time. The congestion is more often outside the proposed zone, in the surrounding inner boroughs, as well as those farther out to which my noble friend Lord Bowness has already referred and to which the noble Baroness, Lady Thomas of Walliswood, also drew attention. They will now bear the brunt of cars trying to avoid the control zone.
  I understand that Bob Kiley has admitted that the zone cannot be extended because the technology is not available to make it work. Are there inadequate "spies in the sky" to focus on number plates? Without embracing the enthusiasm of the noble Lord, Lord Faulkner, practically everyone believes that a control zone such as the M25 ring, which prevented commuters from coming into London, would be much more sensible and would mean that the residents of London could move freely round their own home city. It is this almost more than anything else that people

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  resent; that is, that their freedom of movement within their home area is being limited by what still appears to be some half-baked scheme.
  It is reported that the current Secretary of State is against the principle of congestion charging—well, so he should be. As London commercially comes to a halt and people are charged out of their own city, he might acknowledge that it is his Government who have brought this debacle about. The Government have left themselves no room to stop the process or give it any guiding principles and it is doubtful—though it would be a good first step—whether the new tsar will step into the fray.
  But, as we have heard, almost as irksome is the situation over the Tube. It is here also that the Government cannot shirk the major burden of responsibility for a fine old mess. Because the Deputy Prime Minister, when he was Secretary of State for Transport, refused to hand over the Tube to the Mayor, from the outset there has been a complete stand-off between the Department of Transport and the Mayor. I refer to the department in favour of the public private partnership agreement, which initially was due to deliver improvements to the system, as my noble friend Lord Brooke of Sutton Mandeville pointed out, within 30 years. But who is counting now? It has not even started. Many companies which in good faith became involved in the PPP process have been expensively stalled while the Mayor fights his way through the courts. And now we hear that he is likely to go to the European Court as well, which will take another few years.
  The Mayor is fighting this because he believes that there are better ways of spending zillions of pounds. Where that leaves London is on a shambolic system in which track and infrastructure continue to deteriorate, rolling stock goes unreplaced and the system, which is quite unsuited to a major capital city, remains paralysed by inertia, disagreement and lack of cohesive thought, with no evidence of any likelihood of improvement in the medium to long term.
  Many noble Lords have referred to CrossRail. So, where is it and where is the Chelsea-Hackney line? They have both gone into infinity apparently, although both would benefit cross London travel immeasurably, as, indeed, would the extensions to the East London Line and Thameslink, which again have been referred to by other speakers.
  I agree with the noble Lord, Lord Brooke of Alverthorpe, with regard to the greater use of the river. Unfortunately, that has been tried a number of times and each time the company concerned has gone bust because such a scheme was not practical. Something about the tidal nature of the river makes it not amenable to having transport running up and down it.
  But even if all those projects were announced today, they could not be expected to be completed within the next 10 years. On innumerable occasions over the past months Members of this House have endeavoured to raise even a blink of interest in the eye of the Government on the appalling situation which is the result, I am afraid, of their legislation. On each
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  occasion when such matters have been raised by noble Lords, Ministers have stonewalled. That includes, I fear, the Minister who is to respond to the debate from the Dispatch Box today. Ministers have said that the situation has nothing to do with them and that all these matters are devolved to the Mayor. But that is no defence when one of the effects of the Government's own legislation is the potential collapse of the commercial life of London because the transport system is still stuck in the 19th century—when actually it was probably rather good. Business becomes frustrated by the inability of those who work within it to access it and citizens and visitors alike are exasperated by the inefficiency of it all.
  The economy is the business of the Government. Today's debate has shown that they really cannot shuffle off that responsibility. As the noble Baroness, Lady Hamwee, said, London wants answers. It does not seem to be getting them.
  7.55 p.m.
  Lord McIntosh of Haringey: My Lords, I start by thanking the noble Baroness, Lady Oppenheim-Barnes, for initiating the debate, having won the ballot, and for eliciting a number of exceptionally well informed and interesting contributions to it.
  I say at once, particularly to the noble Lord, Lord Bowness, who reminded me of my jibe about urban district councils, that I object to the House's time being taken up with matters which are strictly speaking not at all the responsibility of this Government. The Standing Orders confirm that. In other words, such debates should not take place, or at least the Government should not be asked to respond.
  But, of course, we do not turn our back on London. The life and economy of London are in many respects the responsibility of government and we do not back away from our responsibilities. I intend to give a Full reply to the debate. I shall describe what the Government are doing and, where I think that there is a risk of misunderstanding, I shall describe some of the things that are being done by the Mayor and the Greater London Assembly and, indeed, by the London boroughs. London's success is essential for our international standing. It is one of the world's major financial centres. It is the European base for a third of the world's largest companies and it is a major economy in its own right. Someone mentioned Greece and Portugal in that regard. I shall mention Sweden, Belgium or Norway.
  The noble Lord, Lord Brooke of Sutton Mandeville, was right to mention the need For comparisons with Europe. London has been identified by a number of private sector firms, such as Healey and Baker, the European cities monitor, as the top European city for doing business and top for internal—I find that more surprising—as well as external transport links. I refer to the subject matter of the debate—traffic and transport in London. It is enormously in the interests of the Government and of the people of this country as a whole that we should tackle the problems that have been described this evening.

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  That is not to say that I shall intervene in the decisions of the Mayor whom the noble Baroness, Lady Oppenheim-Barnes, described as unaccountable between elections. That happens with regard to a lot of democratic politics. To some extent governments are unaccountable between elections and so are local councils. The noble Lord, Lord Bowness, was more generous when he described the Mayor as being democratically elected.
  It is clear that the Government have an interest not least because of the amount of money that we provide for transport in London. But we have given the Mayor and Transport for London responsibility to deal with many of the matters that have been mentioned.
  As a country we should have invested more in road and rail public transport over decades. It is true that as prosperity and GDP rise some of these problems become more difficult because car ownership continues to increase. So there has been neglect over many years—that is not particularly a party political point as it happened under both parties—and the consequences of rising prosperity.
  Our starting point is that people need to travel. They want to travel, and they can afford to do so. It will not be acceptable for us to turn our back on that demand. We need to move people and goods as quickly and efficiently as possible and we need to do so in a way that is consistent with our environmental objectives. That means that we must invest more in road and rail; we must improve the reliability of journeys; and we must get the balance right between public and private transport.
  In the past week or so, there has been almost a cascade of announcements about the future funding of transport. We have seen the rather gloomy projections of the chairman of the Strategic Rail Authority. He does not in any way say that the items planned under the 10-year plan are not necessary, but he gives a very timely warning against cost increases in some of those plans. He says that they will not be affordable if we allow the costs to run away with us. Is he not right? Surely we all agree on that. At the same time, only yesterday we saw the Secretary of State make a major announcement about investment in road patterns.
  However, when we are told by the noble Baroness, Lady Oppenheim-Barnes, that what is missing is expenditure on roads in London, in reply I have to say that I agree strongly with my noble friend Lord Faulkner. Surely this battle was fought many years ago. Again, this is not a party political point but it is now being recognised that, as a policy, building more roads in London will simply not deal with congestion or improve conditions. The better use of roads and improvements in public transport will achieve that, but road building of the kind that was thought possible in the 1960s and 1970s is no longer an option other than in very special circumstances, some of which I shall describe.
  I turn to the subject of investment, which must be sustained over many years. That is why we have a £180 billion transport plan over a 10-year period.
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  Again, within the past month the Chancellor has confirmed that, with a relatively strong economy in an increasingly dangerous world, the right thing for this country is to stick to its public spending plans rather than increase taxation or cut public investment. That is directly relevant to the subject matter of today's debate.
  I turn from the national to the very specific and look at Transport for London's grant over the next three years, which was confirmed last week at an average of £1.15 billion a year. That is an increase of 50 per cent over grant in the past year and double the equivalent of the year before. The noble Baroness, Lady Hamwee, told us that Transport for London claims that there is a gap in the funding. However, the GLA budget committee itself acknowledges that increased funding has been given and calls for realistic planning. Surely we all do. That is exactly the right thing for us to do. It does not mean that there is an unlimited amount of money available.
  I turn to the subject of the railways. The noble Baroness, Lady Thomas, is right to say that public transport is an indicator of the quality of life for all of us. Here, again, our plans are enormously more ambitious than those of preceding governments, but we must keep the costs under control. Substantial amounts are available to invest in public transport and in railways but we are not in the business of signing blank cheques. The SRA is providing the leadership. The irresponsibility of Railtrack is behind us. We are now acting in the public interest, and the rail franchising policy will mean more rational and efficient use of the railways.
  I acknowledge what the noble Baroness, Lady Thomas, calls an "appalling commuter service" and I acknowledge the graphic and painful description which the noble Lord, Lord Bowness, gave of his own experience of commuter travel by rail. The changes to the franchises will mean that most stations will move to a single franchised operation instead of the divided responsibility which I believe, in many cases, is responsible for what the noble Lord, Lord Bowness, described. There is new rolling stock. More than 2,000 vehicles have been ordered for routes south of the Thames. There has been more investment, and the franchise replacement programme is starting to deliver improvements.
  With regard to the specific point about South Central trains, the SRA is continuing to negotiate. For early passenger benefits in the South West, it reached agreement in a deal costing £29 million. In August, it announced the negotiation of a new franchise agreement of up to seven years for South Central. That will deliver new trains, station upgrades and information systems. And about time too!
  Reference has been made to major rail projects for London. Support has been given by my noble friend Lord Faulkner and by the noble Lord, Lord Brooke of Sutton Mandeville, for the CrossRail and Thameslink services. I have been asked for an update on CrossRail. That has had a very mixed and, in my view, very

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  unhappy history. After all, some years ago it was killed by a Private Bill committee in another place. That was most regrettable.
  At present, the range of route and service options is being considered by the Strategic Rail Authority and Transport for London. I hope that there will be a positive outcome of that fairly soon. We need a workable, affordable and deliverable plan, and Ministers have asked for a business case to be produced by February next year. Again, for the East London Line, we are expecting a new business case very soon. We can then discuss with the private sector how to pay for these developments, which will certainly bring huge benefits to businesses as well as to individuals.
  Rightly, much has been said about the Tube. However, I simply reject the view of the noble Baroness, Lady Hamwee, that we are still in a stand-off with the Mayor of London. We announced only last week that we would provide the indemnities, which will not cost £1.9 billion as an increase in public expenditure. We shall identify the contractors against the threat of the Mayor to appeal against the state aid decision of the European Commission, and against that risk only. The result is that we shall start work on one of the contracts within a month and on the other within a month or two after that. That must be good news. That means that we shall spend £6 million every working day; £16 billion—not zillions as the noble Baroness, Lady Hamwee, said—over 15 years, and double what is being spent now. That will properly address for the first time the Tube's investment backlog.
  It is simply not true to say that nothing will be visible in a relatively short time. In the first seven-and-a-half years of a 30-year contract there will be a 12 per cent increase in Tube capacity. There will be 25 per cent fewer delays on the Northern line; 30 per cent on the Bakerloo line; and over 30 per cent fewer delays on the Metropolitan line. There will be 200 stations modernised and hundreds of new trains. The very first thing that Metronet will do is to deep clean their stations. The noble Baroness, Lady Hanham, referred to dirty stations.
  The Mayor has been wrong to hold up matters as long as he has. We have now called his bluff and things will start. I was grateful for the comments that were made about the Docklands Light Railway and the Croydon Tramlink. I agree with the noble Lord, Lord Bowness, that 14 years is far too long for getting the Croydon Tramlink started. Certainly, the approach we are now adopting to co-ordinate planning decisions with transport decisions should reduce that in future.
  I was somewhat surprised to hear some of the comments about buses. Buses are doing rather well. Their operational mileage is at its highest since the mid-1960s. We have had 2,600 new buses in service in the past two years and 16 new night bus routes. Over 4.5 million trips are made by bus each year and patronage rose by 6 per cent. I should not continue with the figures because the noble Lord, Lord Faulkner, kindly gave them to us. We are working actively on disabled access, security and
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  safety. I have to say to the noble Baroness, Lady Hamwee, that there are concerns about the affordability of the continued expansion of the bus network, which is proposed by the Mayor. I think that the budget committee shares those concerns.
  I turn to roads, as I must. We must improve the basic road infrastructure. The noble Baroness, Lady Thomas, is right to say that road space is in short supply and to draw the conclusion that there must be some form of rationing. After all, that is what congestion charging is. There are lessons for control of street works as well as for congestion charging. We have debated street works at length in this House. I do not know that I have anything much new to say except that the Secretary of State, Alistair Darling, has made clear that he is not prepared to put up with the present situation. We have been trying out charging and lane rental. We may have to move to a system of permits for street works as they have in New York. That may need legislation and if it does we shall not shrink from that.
  Traffic lights are entirely a matter for the Mayor. They deny, and I believe them, that this is not done deliberately to add to congestion, as the noble Baroness, Lady Oppenheim-Barnes, claimed.
  Finally, I turn to congestion charging. I was astonished to hear the unequivocal condemnation by the noble Baroness, Lady Hanham. This scheme has the support of Londoners, the CBI and London First. In principle, congestion charging has the support of this Government and always has had. As to the Mayor's particular scheme, the Secretary of State has made clear that any scheme needs to be workable. It needs to be supported by public transport alternatives and needs broad public acceptance. Although we provided the powers, or rather Parliament provided the powers, to the Mayor, the particular scheme is the responsibility of the Mayor. He must work through the consequences because it is in no one's interest for this scheme to fail. Obviously we hope it will be successful, but it will be for the electors in London to judge.
  My noble friend Lord Faulkner asked some pertinent questions about that. He asked what alternative there was and said there was no other show in town. I have not heard of any other show in town. A 15 to 20 per cent reduction in congestion in central London is a very large prize. It is not a tax on London motorists as such; it is a way of speeding up the roads of central London for business and for public transport. That should make a significant difference to the quality of life.
  I come back to my first point. The economy of London is a matter of national concern. This Government take those concerns very seriously.
  8.14 p.m.
  Baroness Oppenheim-Barnes: My Lords, I am extremely grateful to all those who have participated in the debate and to the Minister for his careful reply. I particularly thank my noble friend Lord Brooke and the other noble Lord, Lord Brooke, for their contributions, which were historically interesting and constructive.

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  We know where the noble Lord, Lord Faulkner, is coming from. Like several other noble Lords, he talked about lights being re-phased to allow pedestrians more time. A few years ago I was the chairman of a public inquiry on the safety of pedestrian crossings at ungated railway crossings. Believe me, I carried out a number of experiments on how long it took pedestrians to cross roads, even if they were old and halt, as I am. I thought that I allowed the maximum time. I point out to noble Lords who think that lights have been re-phased to allow pedestrians more time that most pedestrian crossings are divided in the middle so that pedestrians arrive on an island in the middle of the main crossing where they can wait for the pedestrian light to change again, so I am a little sceptical about that argument.
  I am also a little sceptical about the arguments of the noble Baronesses, Lady Thomas and Lady Hamwee, who thought the congestion charge was going to reduce a lot of congestion. It will just move the congestion from one place to another. They spoke of the 20,000 more people who will be using public transport. That does not mean that there will be 20,000 fewer cars on the road, because that assumes that there is only one person travelling in each car.
  Baroness Hamwee: My Lords, there usually is.
  Baroness Oppenheim-Barnes: In that case, my Lords, why is not the noble Baroness proposing that we look at car pooling and special lanes for it if she feels so strongly about that?
  The noble Lord, Lord McIntosh, who is usually most courteous in this respect, obviously did not listen to me, because he seemed to think that I was asking for a lot of new roads to be built. I was not. I was asking the Government look at existing roads, traffic systems, one-way systems, turnings, flyovers and flyunders and to carry out a constructive, common-sense inquiry into the way in which the traffic system works. I want the Westway and the other main feeder roads into London to be improved, not rebuilt. If the argument is that if they are too good they will bring too many people into London, the opposite argument must be that if they are too bad, the extra people who have come into London will not be able to get out of London very easily. I do not accept that argument.
  I do not think the Minister answered in full about what the new traffic tsar will do. It has been said that this is window dressing and a knee-jerk reaction. I would not say anything as churlish as that. I leave it to others to comment.
  Finally, I thank my noble friend Lady Hanham for her contribution. She said all the things that I wished that I had had time to say and said them considerably better. I beg leave to withdraw the Motion for Papers.
  Motion for Papers, by leave, withdrawn.

  Angola
  8.19 p.m.
  The Earl of Listowelrose to ask Her Majesty's Government how they are working with the Government of Angola and the international community to consolidate peace in post-war Angola.
  The noble Earl said: My Lords, I begin by thanking all noble Lords who at this late hour are to contribute to the debate. I am especially grateful to the noble Lord, Lord Hughes of Woodside, who has cancelled a long-standing business engagement in order to participate this evening.
  In September of last year, UNICEF invited a group of parliamentarians to visit Angola to survey projects that it supports. Many of those we met asked us to draw the attention of the international community to the situation in Angola. I tabled this Unstarred Question in response to that request, and in response to the serious humanitarian situation currently prevailing in the country. I also wanted to provide the House with an opportunity to consider the achievement of peace by the Government of Angola. I intend to tie my remarks to what I observed on that visit.
  On that occasion, we visited a therapeutic feeding centre in Kuito in the central uplands of Angola. We were introduced to Mary-Ann, a two or three-year-old child who was bloated in appearance. When a centre worker touched her legs, there was no response because she was so under-nourished. The worker then passed her the empty tray and the box of a match box, indicating to the child that she should try to put it together. Mary-Ann succeeded in doing so. The worker pointed out that that was a sign that the child was on the road to recovery. Because the child's system was so weak she was being fed 12 times a day with Formula 75, which is a special milk formula with reduced nutrients. Her digestive system would have been overwhelmed if she had been fed a normal diet.
  Until peace was achieved this spring, I believe that it is right to say that more than two-thirds of Angola was inaccessible. Therefore, an additional 1 million people are now dependent, and will remain so for the next year, on humanitarian relief from the UN, the NGOs, and the Government of Angola. The UN predicts that 2 million people will be utterly dependent on assistance from the UN, the NGOs, and the Government of Angola in 2003. Can the Minister tell the House how Her Majesty's Government are supporting the humanitarian effort? Can she say what representations the Government have made to the Government of Angola about streamlining administration procedures? There is some concern that relief is being delayed because of difficulties encountered by personnel in obtaining visas, and delays in the processing of material by Customs.
  We also visited a camp for internally displaced people in Viyana, which is situated in Luanda, the capital of Angola. Two thousand people live in an area of about the size of two football pitches. I believe that some have been there for as long as 10 years. Those

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  people share one small latrine, with water being obtained and purchased from a tanker positioned a little way beyond.
  Following the peace agreement achieved by the Government of Angola, legislation was introduced to resettle and reintegrate the displaced population, together with the demobilised UNITA rebel forces. The Angolan Government's figure regarding the number of internally displaced people is 3.5 million, which represents about one-quarter of the country's population. Approximately 445,000 former soldiers and their families are waiting to be reintegrated. There are also about 440,000 refugees set to return, or who are in the process of returning, from neighbouring countries. Can the Minister say what assistance the UK is offering in this resettlement process? Can the noble Baroness indicate whether the agreed norms for that process are being respected? Further, can she assure the House that internally displaced people are not being forcibly returned, and that the agreed minimum conditions are being met in the settlements where they are placed?
  We visited the home of two HIV positive children. Their aunt had taken them into her home following the death of their parents. We also went to observe a project, Prazedor, through which young Angolans provide advice on HIV/AIDS to other young Angolans. We witnessed information and lapel badges being distributed in the street to passing vehicles. We also saw a young woman explaining the correct use of condoms and femidoms to a large group of very intrigued young men.
  Can the Minister say how Her Majesty's Government are helping to assist the prevention of HIV/AIDS in Angola? Is there a clear plan of intervention in this area involving the UK Government, the international community, the Government of Angola and the NGOs? Are there clear responsibilities laid out in that plan for what needs to be done? The Minister may need to write to me on the matter.
  We In ere also introduced to elected members of the Children's Parliament. We were told that recently on the radio these young people had given a Cabinet Minister a grilling on the standards of services provided for the people in the country. There is a developing civil society and an emerging pluralism in Angola. The Government of Angola intend to hold elections in 2004.
  We visited a hospital in Lubango in the south of the country. The town was relatively unscathed by the war and seemed to be prospering. There were four incubators for premature babies in the hospital. The doctor said that they needed at least 10 but there were no funds to obtain the equipment. There is an extremely high maternal mortality rate in Angola. The UN figures are that there are 1,850 maternal deaths per 100,000 live births. I make that approximately one mother dying for every 50 infants born alive. There are 150 infant deaths to every 1,000 live births. That is about one infant dying for every six infants born alive. The United Nations tells us that fewer than 30 per cent
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  of the population have access to adequate health services and that hundreds of thousands die from easily treatable diseases.
  Yet Angola is one of the world's foremost diamond producers. In a few years it will produce 2 million barrels of oil per day—production on a similar scale to that of Kuwait. There is a great need for financial transparency. That will be essential to a consolidation of the peace.
  The World Bank has said that economic reform in Angola has been halting, but that real progress has been made over time. In August 2002, the initiative by the Government of Angola to publish oil production data was described by one authority as a material step towards transparency. I know that several noble Lords will address the point about transparency.
  We also visited a school for homeless girls. 'We saw some of their ceramic work in the pottery workshop: two parrots facing each other, brightly coloured and strongly patterned. It was the kind of work with which my noble friend Lord Freyberg, a sculptor, would have been delighted.
  Angolans are resilient. There is an unrealised potential among the Angolan people. The country is undeveloped. Angola is well watered and in a few years might be able to feed itself and to export feed to neighbouring countries. It has a large and mostly untapped hydroelectric power potential. Angola might still act as a pole of development for its region.
  There are significant challenges for those who lead Angola, and the humanitarian situation is grave. I look forward to hearing from the Minister how Her Majesty's Government are assisting.
  8.29 p.m.
  The Lord Bishop of Guildford: My Lords, I am sure that those of us in the House at this late hour are grateful to the noble Earl, Lord Listowel, for moving this debate. If I dare say so, the issues that it addresses are rather more significant to human life in our contemporary world than the delicate problems of traffic in London with which we dealt previously. We are dealing with vital issues this evening.
  I hope not simply to repeat the noble Earl's remarks but to endorse them. I chair the board of Christian Aid, one of whose teams has just come back from a country visit and has given me its briefing. I refer briefly to the pivotal role the Churches can play in these matters in a fragile civil society. The Churches represent 86 per cent of the people of Angola. I am anxious to stress that the extraordinary power of faith and the commitment to peace and the common good that the Churches represent are among the most important grassroots agents for developing a new opportunity in that country.
  Achieving the absence of conflict is but one step on the road to lasting peace. The other is to harness the extraordinary resources of the country, which are its vibrant people, some of whom I have met, and its natural resources. I would add to that its resources of faith, as represented in the Churches. Just as one would be a fool not to harness the natural resources of

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  the country, so I believe that it would be extremely foolish to address these questions without considering the grassroots shape of the community's life.
  Let me give your Lordships some illustrations. Radio Ecclesia, the Roman Catholic radio station in Angola, is the best source for independent news and education in the country, yet it struggles to have the confidence of the government and politicians in ensuring that its work is given resources. It has a vital role to play in finding a language for peace, which is itself a profoundly political and spiritual process. I understand that the process is greatly assisted by the Church leaders, who are uniquely placed to exercise leadership.
  In the 1980s, I remember taking into the Minister's department the bishops from Namibia, in the middle of the conflict there. The Minister's predecessor recognised that the bishops and other Church leaders from that country could give information and perspectives to the government that no one else could give. I suspect that the same is true of the leadership of the Churches in Angola today.
  I endorse the noble Earl's remarks about the crisis of HIV/AIDS. All my sources in Christian Aid tell me that it is a mega-crisis in Angola, and war exacerbates it. How high up on the Government's agenda is that matter in terms of resourcing and development? Does the Minister recognise that the Churches have played a pivotal role throughout Africa in dealing with the HIV/AIDS crisis? That is evidenced in the collaborative work in Uganda. In January, I am going to Nigeria, where the Roman Catholic Church has given a lead and the Anglican Church is hard on its heels. I shall be talking with the Department for International Development and the Church leaders about developing the potential for projects with Christian Aid and others. That is an important issue.
  I raise two questions for the Minister, referring to my experience of visiting Mozambique in 1999 on behalf of Christian Aid. In rural areas, I witnessed at first hand people coming out of villages and bringing guns, grenades and rusting weapons for a "swords into ploughshares" programme. In public view, those guns were cut up and destroyed as part of the programme, and the communities that brought the weapons in for destruction were given the resources to develop agricultural life by being equipped for the purpose. That was a local civil society agency with which Christian Aid and others were working in Mozambique in order to build peace. That did not require vast financial resources but it had a powerful cultural impact on the country. My question for the Minister is: with regard to funding arrangements, how flexible is that in terms of working with agencies at that level?
  A related issue is that some of the civil society agencies in Mozambique found direct funding from political sources in western Europe, including Her Majesty's Government, difficult to handle because that appeared to compromise their political independence. They were much easier handling funding via the NGO networks, such as CAFOD and
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  Christian Aid, because that preserved their independence from the political process. That was vital at a delicate moment in Mozambique in terms of bringing warring parties together into a democratic alliance to rebuild the country.
  I should be encouraged to hear from the Minister that there is some flexibility in the Government's thinking about the relationship between funding programmes and NGOs and civil society agencies in countries such as Angola. That is important because it is sometimes suggested that NGOs in that country are northern agencies, and funding NGOs in that country to fund civil society agencies in the south creates a rather charitable, power-based relationship. From the point of view of the Churches, agencies such as CAFOD and Christian Aid are part of an international network. In Angola, we have Anglican bishops and there is a strong Roman Catholic network, and we are in a relationship of communion with them. Those networks work. Are the Government able to find practical ways of working with those networks to deliver development on the ground?
  I put that question to the Minister because agencies such as mine and Christian Aid are hugely grateful for what the Government have achieved in terms of development work. We are delighted with their policies and drive to improve resourcing for that work. We want flexible mechanisms to achieve development on the ground. In places such as Angola, we need to work with networks in the community and at the grassroots. The Churches are a key part of that programme.
  8.38 p.m.
  Lord Hughes of Woodside: My Lords, I join the right reverend Prelate the Bishop of Guildford in congratulating the noble Earl, Lord Listowel, on this timely debate on Angola. The House should be aware that I am the president of Action for Southern Africa and honorary president of the Mozambique-Angola Committee. I immediately enter the disclaimer that the views that I express are my own and do not in any sense reflect on the two organisations that I have named.
  The noble Earl, Lord Listowel, eloquently set out the scale of the humanitarian crisis and how that affects individuals. The right reverend Prelate the Bishop of Guildford pointed out the need to work with as many organisations as possible in order to make progress.
  In order to understand the problems of the peace, we must remind ourselves briefly of the problems of war-torn Angola. Angola has had no peace since the early 1960s, when the liberation movements began their war against Portugal. Except for a brief period in 1974–75, the government of Angola and UNITA—the organisation of Jonas Savimbi—were in virtually continuous war for 27 years. It ended only early this year with the death of Jonas Savimbi in combat. Throughout the period, every effort to achieve peace was thwarted by UNITA's intransigence and the way that it constantly reneged on agreements that it had

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  signed to produce a peace. Angola suffered badly from the conflicts of the Cold War. Although the Cold War has ended, there are still some Cold War attitudes about.
  The actions of the Angolan Government are treated with suspicion and mistrust. For example, I think that we all agree that democratic government is necessary to cement stability and to try to bind the country together. However, in recent days we have heard suggestions—tentative ones, I admit—that the Angolan Government are pushing ahead too fast towards the democratic process, because UNITA will not be ready and not have any policies on which to fight the election.
  It is going too far to say that that is a possible cause of tension. It is imperative that we say now that early elections are not designed to harm UNITA. UNITA must not be given any excuse to disengage from the peace process. It must not feel that democratic solutions are an attempt to do it down.
  Perhaps I may interject an irreverent—even irrelevant—note by saying that we might apply in this country the novel idea that elections should be postponed until the opposition are ready to face them. That might release tensions in certain quarters—perhaps, not to be provocative, I should not mention who they are.
  I return to the serious situation in Angola. The humanitarian crisis is huge and accelerating. Returning refugees are adding to the burden. Agreements have been reached for a voluntary and orderly return of about 450,000 refugees living in southern Africa. It is estimated that there are 210,000 in Zambia; 24,000 in Namibia; 193,000 in the Democratic Republic of the Congo; 16,000 in the Republic of the Congo; and 10,000 in South Africa. However, it is estimated that about 70,000 refugees have already returned in advance of any preparations for their arrival. Obviously, that throws great strain on the system and much more aid needs to be given.
  The United Nations points out that the consolidated inter-agency appeal for 2002 received only 60 per cent of the total requested. As of 3rd December, only 180.4 million dollars was donated, compared to the stated need for 296.4 million dollars. It was also claimed that the UN has received nothing of its requirement of 10.25 million dollars for de-mining. I know that the Government have said that they have donated money to that project; but the UN still claims that it has not received it.
  Is that a communications difficulty? Is the time-lag between the declaration that money was to be given and receipt of the money the cause of the problem? Can my noble friend tell us how much has been donated to the de-mining programme? There are similar complaints and discrepancies surrounding other moneys donated to the UN. Can my noble friend say what financial assistance has been made to Angola, through all sources, for 2002 and, specifically, how much has been donated to the consolidated inter-agency appeal?
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  I immediately accept—I always have done—that the Angolan Government made mistakes during the 27 years of war. It is of course proper that they should be transparent and accountable for the spending of their oil revenues; some moves are being made to make that information available. But some balance needs to be introduced.
  For example, will we ever know how much money the Central Intelligence Agency and American business pumped in to support UNITA? Will we ever know how much UNITA received in illegal diamond sales? Will we ever know what happened to UNITA's income. I accept that most of it, like the government oil revenues, may well have been spent on arms purchases.
  However, the United Nations monitoring mechanism on sanctions on UNITA reports sales of UNITA-related diamonds worth 10 million dollars as recently as this July in Tanzania. Meantime, the Angolan Government fund UNITA.
  I agree that we should look to the future. The war in Angola became known as the forgotten war. Angola has been described by Dame Margaret Anstee as "the Cold War's orphan". We must ensure that the people of Angola are not forgotten in their time of need. Despite the failings of political organisations, which may still rear their head, we must demonstrate that we understand the needs of the people of Angola and that those needs are paramount. Again, I congratulate the noble Earl, Lord Listowel, on securing the debate.
  8.45 p.m.
  The Earl of Sandwich: My Lords, I, too, am grateful to the noble Earl, Lord Listowel, for providing this opportunity, for introducing the debate so well and for allowing me to speak specifically on the building of democracy in the region.
  Last weekend, I returned from a Commonwealth parliamentary visit to Mozambique, on the occasion of the 25th birthday celebrations of its Parliament. It is also the 10th anniversary of the introduction of multiparty elections in both Angola and Mozambique. Apart from the lusophone connection, the two countries experienced years of terrible civil war, following independence. Mozambique has inherited, perhaps, the worst colonial legacy in Africa. I was there 20 years ago, and I am impressed by the country's transformation since and its determination to move forward, despite many problems. After the death of Jonas Savimbi, Angola has also finally achieved peace in all but one of its 18 provinces. We are almost at the end of the Lusaka Protocol process. This week, the United Nations concluded this stage of its peacekeeping operations. It is truly a time to celebrate peace in both countries and to recognise the role of the UN, governments and NGOs in conflict resolution over many years.
  The peacekeeping work must continue in new forms, humanitarian and political. Both countries now seek to join the democratic process, but at their own pace. Foreign donors' checklists of good governance, democracy, transparency, public service reform, participation by civil society are undoubtedly

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  important as new forms of aid conditionality and play a role. However, there is a recognition in Angola and Mozambique that the people are exhausted, that a plural economy must be re-built from its base, that corruption must be tackled and that new structures must be created to take account of the different needs of society.
  The electoral system in Angola is already 10 years old, but it was never given a chance to work, as the noble Lord, Lord Hughes of Woodside, said. Instead of joining the dialogue, Savimbi continued to sulk in his tent. His refusal to give up the armed struggle and accept defeat at the ballot box led to prolonged war, more bloodshed and further delay in the democratic process.
  By contrast, Alonso Dhlakama of Renamo, Savimbi's counterpart in Mozambique, is already on the Damascus road. At first, he disputed the election results in 1999 that gave Renamo 48 per cent of the presidential vote. Privately, he still does, but, having lost his appeal, he swallowed defeat,
  "in the name of peace and democracy"
  the words that he used to me last week. To everyone's relief, he has agreed to fight next year's municipal elections. Still more, while remaining Renamo's leader, he has gradually devolved power in the party away from himself. To some degree, that may be a bid to match President Chissano's encouragement of a similar process in Frelimo, including the choice of a successor, Armando Guebuza. However, Dhlakama was firmly re-elected party leader last year and is likely to hold the reins for some years to come.
  We should not underestimate ruling parties such as the MPLA and Frelimo, which have, in a sense, governed for decades and retain some of the old Marxist characteristics. They do not give up power lightly. They remain the structures by which the two countries are governed, and it will be a long time before a multi-party parliamentary system can seriously challenge the executive. I take the point made by the noble Lord, Lord Hughes of Woodside. No one should any longer expect the Westminster model, whatever the electoral forms, to be suited to the African system, even in Anglophile countries.
  Clare Short said yesterday to an all-party group meeting on African conflict that the West had pushed multi-party systems too quickly in Africa. However, there are opportunities for training and for an exchange of ideas within the southern African region itself. Mozambique—being politically a few years ahead of Angola, but behind in economic wealth and potential national unity—may have some ideas to offer the new Angolan Parliament once re-elected, if the Angolan Parliament is ready to listen.
  Both Roberto de Almeida, the Angola Speaker, and Eduardo Mulembwe, his opposite number in Mozambique, are strong believers in information sharing. They both attended the SADC parliamentary forum in Mauritius last month. Last week Mr Mulembwe told me that MPs began to be paid only in 1995 and some still do not have a vehicle to take them
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  to, or around, their constituencies. Of course, in some there are no roads either. A fortnight ago, Mr Almeida said that he was concerned about the working conditions of MPs in Mozambique and expressed the need for a new parliamentary building, like the one in Maputo.
  The MPLA will now have to reform its own organisation. What will be most difficult will be persuading the faithful to accept a new multi-party process. In the early 1990s, Frelimo, having renounced large areas of doctrine, took care to wean its own members away from the concept of a single party before declaring publicly for multi-party elections. The MPLA must do the same. We are told that it is now working closely with UNITA on the constitution, but it must move rapidly to elected local authorities and, even more important, elected provincial governors.
  During our visit to the Mozambique Assembly last week, with some difficulty I sought to explain the composition of our Parliament. I hope that they understood that although I was accompanied by only three Labour MPs, there was no monopoly of power in the United Kingdom by our own ruling party—even though it seemed, at times, that Independents from the House of Lords were the only true opposition.
  During a workshop in the Assembly, we had an interesting discussion about declaration of interests. Mozambican MPs were asking, with great sincerity and some amusement, how they could ever persuade electors not to bring them gifts and, without such gifts, how they could possibly ever be elected. There will be some sympathy for that view in Angola today.
  The question of smaller minority parties is another critical issue. In Mozambique, a minimum of 5 per cent of the vote is the qualification for the Assembly, although Frelimo may agree to relax that in an attempt to break up the coalition within Renamo. In Angola, there are already many more smaller parties and the civil opposition parties—or POC which is a coalition of more than a dozen parties—are currently challenging the MPLA to move to a more consensual style of government until the long-delayed elections finally take place, we hope early next year.
  As the right reverend Prelate has mentioned, important players in this process are the NGOs and Churches, which have a much stronger position in the political spectrum in Angola than in Mozambique. Historically, the Protestant Churches in Angola have been closer to the various liberation movements, but there is now a much wider coalition called COIEPA—the Interdenominational Committee for Peace in Angola—which is much respected and includes the Catholic Bishops Conference.
  We are all looking forward to the Minister talking about her own experience, but I am sure that she will comment on the role of civil society in so far as she could see its development during her visit. In Mozambique, I was continually reminded that too much cannot be expected too soon, especially when it comes to progress with the poverty reduction strategy. Donors are continually learning patience with the strategy, but the contribution of NGOs at this point in

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  Angola's peace process will be vital in achieving reconciliation both during and after demobilisation and the critical return of refugees. This obviously includes the difficulties of child protection, a matter referred to so movingly by the noble Earl, Lord Listowel. It will become a means of consensus building in the political process which will lead to a truly Angolan form of democracy.
  I agree with the right reverend Prelate—I declare an interest as another member of the Christian Aid board—that direct funding of local NGOs can be a problem if it is threatening their independence.
  This important process will require workshops, leadership training, civic education and must involve independent media such as Radio Ecclesia to reflect current concerns such as law and order, corruption and human rights abuse, and to bring about a genuine debate in society and parliament.
  I know that the noble Baroness has visited development projects, including a de-mining project, but I hope that she will also comment on the role of our Government in their support for civil society in such matters as election monitoring and relevant forms of electoral training. Having seen this at work in Mozambique, I am convinced that this form of targeted capacity building is essential if political parties in both countries are to put aside their many genuine grievances, which persist, and move towards a society which more faithfully reflects people's needs.
  8.56 p.m.
  Lord Joffe: My Lords, I, too, would like to express my appreciation to my noble friend Lord Listowel for initiating this debate on Angola. It comes at a particularly appropriate time when there is the potential to transform the lives of all Angolans.
  Angola is one of the poorest countries in Africa and its people have suffered tremendously because of the brutal civil war that has ravaged the country for more than 30 years. The statistics given by my noble friend—which I shall not repeat—tell a story of terrible deprivation and human suffering. But at long last this year has brought peace across most of Angola. A combination of peace, vast natural resources and a population of only 12.5 million people creates a unique opportunity for the lives of all Angolan people to be transformed.
  Already much has been achieved by the Government of Angola. This includes, as the noble Earl, Lord Sandwich, pointed out, the peace agreement itself, with fighting continuing in only one of 18 provinces. It includes the nomination of UNITA party members to the Government of Angola and to representational posts in communes, principalities, provinces and embassies. It includes the NPLA and UNITA working closely together on a new constitution and Angola taking its rightful place in Africa with the presidency of the Southern African Development Community for the next two years.
  Naturally, however, this is only the beginning and a great deal needs to be done to exploit this unique opportunity by both the Government of Angola and
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  the international community. It is of critical importance that the peace agreement is implemented fairly and effectively. If it is not, widespread insecurity and dissatisfaction are likely to result, which could undermine the entire peace process.
  Since the ceasefire in April 2002, widespread population movements have begun to take place throughout the country. While some of these movements have taken place satisfactorily, there has been, not unnaturally given the scale of the problem and the resources required in terms of both human beings and money, a lack of co-ordination around the return of many from one province to another. Return and resettlement areas often lack infrastructure. basic services and adequate administration; food securities are tenuous and the promised redistribution of resettlement kits to all registered UNITA personnel has not taken place in many cases. Linked with this, there are reports that some ex-UNITA personnel have been rejected by the communities to which they have returned.
  Displaced populations, particularly when on the move, may be vulnerable to a wide range of human rights abuses. There is concern about a number of protection issues that are presenting themselves in relation to the movements of populations and with regard to populations currently remaining within gathering areas/displaced people camps.
  It is naturally the responsibility of the Government of Angola to support and protect the returned displaced peoples, but it is to be hoped that the donor community, including the United Kingdom, will support the government in this critically important area. It would be interesting to hear the Minister's judgment of what is happening with the resettlement programme.
  Another key issue, referred to by my noble friend Lord Listowel and others, is transparency in relation to oil and diamond revenues. Now that the civil war is over, there is an opportunity for the Government of Angola to ensure that there is transparency in relation to the revenues received from oil and diamonds.
  In this regard, the oil companies operating in Uganda have an important role to play. It is enormously encouraging that BP has agreed to publish details of all payments it has made to the Angolan Government, and I understand that this approach has the active support of President dos Santos. If that is so, it is a great step forward. Will the Minister advise the House whether Her Majesty's Government will be in a position to put pressure on other oil companies to do the same and use their influence with the European Union and the USA to ensure that oil companies based in those countries will do likewise?
  BP's willingness to publish details of payments made to governments is an important step forward and it will be welcomed by the Global Reporting Initiative, the aim of which is to make sustainable reporting as routine as financial reporting. Perhaps I may take this opportunity to ask the Minister what the Government's approach is to this initiative.

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  The development of greater capacity in government institutions at all levels to deliver public services equitably and efficiently, and within civil organisations to influence government policy and actions, will be a key factor in building a new Angola that responds to the needs of all its citizens including the poorest.
  However, there is concern about the potential constriction of the political space within Angola. By way of example, NGOs were not able to comment on the new NGO law which will affect all national and international NGOs working in Angola. On the other hand, there is the good news that Angolan NGOs and civil society generally have been invited to comment on the proposed land legislation.
  Our Government would be making an important contribution to the future of Angola if they were able, by reference to the importance that they themselves place on consultation with the NGO sector, to influence the Government of Angola to extend and deepen their partnerships and dialogue with NGOs and representatives of Angolan civil society.
  Over the past month, there has been an increase in mine incidents throughout the country, including several fatal accidents. For example, on 13th November, six Médecins Sans Frontières staff and one non-staff member were killed and a further six were injured while at work when an anti-tank mine exploded under their vehicle near Mavinga.
  Increasing population movements over the next few months, including movements into non-cleared areas, will make the situation more hazardous. Mine risks also pose a considerable security concern to humanitarian actors working in the field within Angola and place very real constraints on their work. What priority do the Government give to de-mining, and what action might they be able to take to assist the Angolan Government with this?
  There has been much talk, and much has been made, of the tremendously important need for humanitarian assistance to deal with the current position, particularly in inaccessible parts of Angola, during the next year or so. Ultimately, development is even more important than humanitarian assistance. It will be interesting to hear what aspect of development the Minister's department is focusing on. I will also be interested to hear her views on the point made by the right reverend Prelate the Bishop of Guildford on flexibility in grant-making and in achieving development. It is to be hoped that the UK and the international community will maintain their funding for humanitarian operations at this crucial time.
  Finally, reference was made to the HIV/AIDS epidemic. Vast numbers of Angolans have died as a result of the civil war. It would be a tragedy if, now that the war is over, millions more were to die of AIDS. My noble friend Lord Listowel has drawn attention to what he has seen in Angola as regards prevention.
  As the Minister would know, there has been a remarkably successful AIDS prevention campaign by the government in Uganda. Is the Minister aware of
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  any steps towards a similar campaign in Angola? If not, could our Government bring their skills and experience to bear in this area, working in collaboration with the Angolan Government?
  Failure to halt the spread of AIDS in Angola could imperil the entire recovery process and the unique opportunity that now exists.
  9.7 p.m.
  Lord Avebury: My Lords, I congratulate the noble Earl, Lord Listowel, on the remarkable timing of this debate, to which the noble Lord, Lord Joffe, has just referred. Angola is on the threshold of peace and preparing to embark on a huge reconstruction programme. I also congratulate the new Prime Minister, Mr Fernando dos Santos Nando, on his appointment, which was announced last week, and on his reported priorities: the consolidation of the democratic process, transparency in public management, the control of inflation and combating poverty. I am sure that he has the good wishes of the international community in carrying out those formidable tasks. I expect that he will also be able to rely on practical help from the United Nations, the European Union and the UK with such a programme.
  Reference was made to the calamitous 27-year civil war and the 40 years of conflict, which the noble Lord, Lord Hughes, mentioned. There should now be a peace dividend as defence expenditure is reduced and economic activity revised, particularly in the former war zones. The government should now tell the Angolan people and the donor community how much they expect to save on military spending, including foreign arms purchases. The armed forces, with 100,000 men, are still the largest in southern Africa and, I think, on the whole continent. They have taken on another 5,000 from the disbanded UNITA forces. Although the troops are said to have been withdrawn from the DRC, they are still engaged in the Republic of Congo and, we now read, in the Cote d'Ivoire. An extra 7,000 troops have been put into Cabinda.
  A country that cannot afford to educate two thirds of its children and is relying on foreign aid to feed 2 million of its citizens cannot afford to be involved in these foreign military adventures. It should be demonstrating that it intends to retrain former combatants from both sides for the reconstruction of the economy. We have heard that Angola is still infested with hundreds of thousands of landmines. The noble Lord, Lord Joffe, referred to an incident last week, when seven people were killed by a landmine that exploded under an MSF vehicle.
  I suggest that Angolans themselves should be retrained to clear mines and other unexploded munitions, rather than bringing foreigners to do this job, and that it would be a very useful task for the ex-combatants on both sides to undertake. Surely Angolans should also be involved in the AIDS programme which has been mentioned by several noble Lords and in the programmes for democratic education and leadership training which was referred to by the noble Earl, Lord Sandwich.

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  One consequence of the peace is that the Security Council dissolved the UN Sanctions Committee and Monitoring Mechanism, although it intends, it says, to give full consideration to the report to be submitted by this Friday on the breaches of sanctions against UNITA that may have occurred since last April and the identification of the frozen UNITA funds and financial resources referred to by the noble Lord, Lord Hughes.
  There are still some issues left over from previous reports of the mechanism. In October, the chairman, Mr Juan Larrain, said that, although increased international vigilance had put some of the sanctions breakers out of business, the persons identified had been only the tip of the iceberg. The criminal networks—and I am using his words—that had profited from the conflict had not been fully identified, prosecuted or eliminated. I ask the Minister whether they are still being pursued. Are we trying to locate and destroy the huge amounts of military materiel which are unaccounted for and which now might be traded by the same people into the DRC? Who is going to do that as the mechanism has been scrapped?
  I congratulate the noble Baroness, Lady Amos, on the wonderful work that she has been doing across the continent of Africa and the tremendous travel she has undertaken on behalf of this country. When she was in Angola last week, did she read the speech of the oil Minister, Bothelho de Vasconcellos, addressing the fourth Conference on Oil in Angola? He said that oil revenue would be used increasingly to solve the problems of social and economic recovery. With production at 740,000 barrels a day, increasing to 1 million in 2003, and, we are told, to 1.4 million in 2004—LNG may also be coming on stream; currently, most of the gas is flared—in 10 years, Angola's oil income may be larger than Iraq's, but with only half of Iraq's population. At current prices, the gross oil revenue could reach 14 billion dollars in 2015.
  In the past, Angola's published accounts have not been open to public examination, as has been said, and there have been serious allegations, particularly by Global Witness, about the way in which money has been diverted into shady arms deals as well as into the pockets of Ministers and their favourites. So it was particularly welcome when the Prime Minister put transparency high on his list of priorities. As Global Witness points out, the OECD guidelines for multinational enterprises advocated a strong disclosure regime though they stop short of making it mandatory for companies to disclose the payments they will make to host governments.
  I should like to join in the congratulations expressed to BP, which is aiming for "radical openness" and says that it will not engage in any form of bribery or corruption, thus setting a very good example which has not been entirely welcomed by its competitors, although Chevron, Shell, Texaco, Occidental and Statoil have all signed up to the Sullivan principles which bind companies not to offer pay or accept bribes. There is legislation in the US, the Foreign Corrupt Practices Act; there is an OECD Convention on Bribery; and there is an EU directive against bribes,
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  but irregular payments are still being made. These measures fall short of the demands made by the "Publish What You Pay" coalition.
  At the Johannesburg Summit, the Prime Minister announced that Britain would convene a discussion among governments, companies and NGOs or. the problem, and the Government have since launched the extractive industries transparency initiative, a set of principles to which a growing number of multinationals have signed up. I think that I am right in saying that the only state which has so far adhered to these principles is the Central African Republic, whose Prime Minister paid a useful visit to Britain just a few weeks ago.
  As we have heard, Sonangol, the state oil company, does not publish its accounts. It receives some payments from companies into bank accounts outside the country. Marathon Oil Company, for example, is reported to have paid 13.7 million dollars into a Sonangol account in a Jersey bank on 15th July 2000. The IMF has since found that an estimated 900 million dollars went missing from Angolan government accounts in the year 2001 and a total of 4 billion dollars over the previous five years. Its report, which was leaked to the BBC, refers to "extensive corruption" and poor financial management.
  The Angolan Government did agree to what they called a "diagnostic" of Sonangol's accounting practices as one of the conditions for the restructuring of their debts. KPMG looked at the records for 1999 onwards and produced three reports, none of which has been published. But research by Global Witness showed that between September 2000 and October 2001 Angola took out 3.55 billion dollars worth of oil-backed loans on which payments of principal and interest are made direct to creditors from the proceeds of oil sales, and that was in spite of an agreement with the IMF to limit new borrowing in 2001 to 269 million dollars. Those loans are probably at excessively high interest rates and Angola would do much better to borrow from the IMF, but that would mean conforming to IMF rules, particularly on fiscal transparency. The rules of the NePAD Declaration on Democracy, of which Angola is a signatory, also commit members to the principle of transparent and accountable government, and that is the declared policy of the new Prime Minister. I hope that we can explain the principles of the transparency initiative to NePAD and discuss whether it could form a useful model for a protocol to its declaration.
  Britain enjoys cordial relations with Angola. BP is a substantial investor in offshore oil; Crown Agents have been extremely successful in managing the Customs service, more than doubling the revenue to 550 million dollars this year, and British Airways has just opened a direct service from London to Luanda. As we heard from the right reverend Prelate, our Churches have a vital role to play in mobilising aid communities in the forthcoming task of reconstruction.
  As a trusted friend, we should offer our help in promoting a new agreement with the IMF which will be necessary if international backing is to be secured for a huge programme of post-war reconstruction. As

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  the EIU points out in its recent survey of Angola. But it also says that there are powerful vested interests against reform because political and economic power is wielded through secret offshore accounts and shadowy oil funds which bypass the Treasury and the budget. As Angola emerges from the nightmare of internal warfare that has scarred a whole generation, she must also escape from the miasma of corruption and elitism which still prevents the people from realising their great potential. We should do our utmost to help the people gain the power that is rightfully theirs.
  9.18 p.m.
  Baroness Rawlings: My Lords, the House is most grateful to the noble Earl, Lord Listowel, for initiating this debate on Angola. The noble Earl spoke most movingly of his visit to that country for which we are grateful.
  It is always a pleasure to follow the noble Lord, Lord Avebury. This is a timely debate as the noble Baroness, Lady Amos, has recently returned from her first official visit to Angola. It will be interesting to hear of the Minister's first hand experience. Like the noble Lord, Lord Avebury, I congratulate the Minister on all the good work that she does in Africa.
  As we have heard from several speakers, Angola today is one of the world's poorest countries despite being blessed with outstanding natural resources. It was always said that Angola was the one African country that had great potential if only it could have peace. Now is the time, with the civil war over, to test that potential even though there still remains low intensity fighting in the small enclave of Cabinda, north of the River Congo, where disunited guerrillas demand separate independence. Although this is the key area of oil production, it had hardly affected the oil industry.
  Angola has, at last, achieved peace. It was interesting to hear the Church's contribution from the right reverend Prelate the Bishop of Guildford.
  The reconstruction can now be partly financed by Angola's oil and diamonds, by the assistance of 100 million dollars from the United States and by £15 million of aid from the United Kingdom. That money is vital for the reconstruction of Angola following, as we heard, years of civil war, which hampered the ability of international aid organisations to alleviate Angola's immediate serious problems.
  According to a recent BBC report from the IMF, it was found that last year nearly 1 billion dollars had disappeared from Angola's finances. The sum is far greater than the value of humanitarian assistance sent to the country this year. The report adds that, over the past five years, a total of more than 4 billion dollars are unaccounted for. In the longer term, the lack of transparency in Angola's accounting systems threatens to jeopardise progress towards restoring the country to self-sufficiency and sustained peace. I agree with the noble Earl, Lord Sandwich, that it is wrong to press our form of government on Africa, but we all feel that transparency is needed world-wide.
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  Despite their potential wealth, millions of Angolans are now wholly dependent on aid for their survival. Seventy per cent are below the poverty line. This is a country that has a population of only 12 million people. It is the eighth largest supplier of oil to the United States. At present, seasonal rain threatens to prevent aid trucks from reaching their destinations. The outlook for those depending on the country's natural resources is poor. Few Angolans have any crops. Fighting has prevented them from planning for the future. They have the added problem of landmines, which still scatter the countryside—a sick reminder of the civil war, as pointed out by the noble Lord, Lord Joffe.
  The Foreign Secretary supported the peace process. Therefore, can the Minister tell your Lordships what the Government are now doing to help to rehabilitate Angola? As many of your Lordships suggested, the potential for sustainable development is certainly present in Angola. I repeat: the oil industry is enormously lucrative. It is estimated that this year it will earn Angola £4.46 billion. Clearly that could offer the country a promising future. It has recently been estimated that oil production will peak at 1.8 million barrels a day.
  Sadly, however, Angola's politics are such that the expansion of the industry is fraught with difficulty. Even if that were not the case, there is little evidence to suggest that the profits of the oil industry would do anything to alleviate the terrible poverty and famine that blights the country. Why?
  We were all shocked to hear from recent reports that over the past five years more than 4 billion dollars remain unaccounted for in Angolan Government finances. The IMF report containing that information also noted that there had been little progress in terms of governance and fiscal transparency. I believe that that lies at the heart of the noble Earl's concerns, and it was also mentioned by the noble Lord, Lord Joffe.
  The only way that the Angolan people can ever benefit from their country's resources is through the development of a fully transparent system of accounting. Oil companies working in the country suggest that the improvement of transparency in economic affairs is the responsibility of the Angolan Government. While acknowledging that improvements need to be made in terms of transparency and stamping out corruption, the Government deny all allegations of discrepancy in their accounts.
  The multinational oil companies are wary of criticising the Government because they are involved in sustained negotiations over the right to exploit newly discovered oil fields. They are also obliged to work in partnership with the state oil company, Sonangol, which was named in the IMF report as being responsible for many of the problems in accounting in the oil industry.
  Clearly, there are complex problems facing all those with an interest in the Angolan oil industry, not least the Angolan people. I should be grateful if the Minister could explain the current involvement of our Government in encouraging and assisting the Angolan

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  Government, either independently or through the International Monetary Fund, to improve its record on transparency and corruption.
  Like the noble Lord, Lord Avebury, I congratulate the new President and wish him well. President Jose Eduardo dos Santos, in his speech last month, said:
  "Our government needs to face all these problems with determination and courage.
  "A few days ago we formed a national commission in the fight against AIDS, which will centralise state actions aimed at reducing this disease. We are aware of our responsibilities, which are immense",
  as mentioned by the right reverend Prelate the Bishop of Guildford.
  Angola was elected to the United Nations Security Council on 27th September with 181 votes; more than other countries elected for a two-year term; more than Chile. Germany, Pakistan and Spain.
  The recent signing of the "Kimberley process" in Interlaken was most welcome. The new regulations will come into effect in the New Year, potentially bringing about the end to the trade in "blood diamonds". As your Lordships know, diamonds have fuelled wars all over Africa. During the final years of Angola's civil war, UNITA depended on diamond sales to fund its war effort. A recent UN report suggested that the UNITA rebels are still in possession of large quantities of illicit diamonds. However, there has been some concern over the stringency of the regulations. Diamonds are such a valuable commodity to warmongers throughout the world. They are an easy way of moving finance and there is little hope of a fully comprehensive tracking process ever corning into effect.
  I should like to see a self-regulating diamond industry with effective ways of tracking the progress of diamonds from mine to the point of retail. I should be grateful if the Minister could explain to your Lordships how the UK is working within the context of the Kimberley process to ensure that illegal diamonds do not enter the United Kingdom. It has been estimated that 20 per cent of the industry is blighted by corruption. I should be reassured to know that this country is not contributing to the survival of that 20 per cent.
  There have been achievements in Angola since April. I commend the efforts of the Chevron Texaco Corporation, the UN Development Programme and the Angolan Government in bringing about the Angola Enterprise Fund. That fund is intended to help small businesses and is precisely the kind of development that can contribute to the stabilisation of the economy in the long term.
  As many of your Lordships have suggested, Angola is in desperate need of sustained peace in order that it might stabilise its economy and stamp out any remaining corruption. It is clear that corruption continues to kill by preventing the population from ever seeing its rightful income. For a country that could be so rich, the true extent of the humanitarian crisis is shocking.
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  I am confident that the Government are fully committed to working with the international community in bringing about peace and stability. I greatly look forward to hearing the Minister's comments.
  9.29 p.m.
  Baroness Amos: My Lords, I thank the noble Earl, Lord Listowel, for initiating this important debate, and noble Lords for their kind comments about the value of my own work.
  I visited Angola for the first time last week. I had an opportunity to meet a number of Ministers, opposition leaders and civil society. I also visited Huambo, a city that suffered badly in the war. I was briefed by the humanitarian agencies and visited an orthopaedic centre which helps victims of landmines.
  In the discussions I had with everyone it was clear that no one wants to return to the fighting. Angola needs a long-term sustainable and inclusive peace. The Government and UNITA, with the support of the international community, have made much progress towards this goal. The completion of the Lusaka process on 21st November has helped. The objective of full reintegration of ex-UNITA soldiers into the FAA and back into civil society remains a priority, but follow-up work is critical. Ex-UNITA soldiers and their families—almost 400,000 of them—expect at least a minimal peace dividend: to return to their homes with some means of making a living. It is vital that their modest aspirations are met.
  The situation on the ground remains difficult. The noble Earl, Lord Listowel, asked about the resettlement of displaced people. We welcome the incorporation into Angolan law of the norms for the resettlement of displaced populations, but we remain concerned by claims that a significant proportion of recent resettlement has not been carried out in line with those norms. We shall continue to press the Angolan Government and the international community to Help ensure that those norms are applied in future resettlement programmes.
  There continue to be allegations that people are being forcibly returned. In my discussions with the Government, I was assured that the tight timetable that had been set for return has now been set aside. We have to be vigilant in our dialogue with the Government of Angola to ensure that this is put into practice.
  The noble Earl also asked what assistance we were providing in resettlement. We provided technical assistance to the Government of Angola and the World Bank in designing a national programme for the reintegration of ex-combatants arid their families into the community.
  Our embassy in Luanda is continuing to press the Angolan Ministry of Foreign Affairs and the Angolan Embassy in London to introduce a more reciprocal arrangement on the issuing of visas. Visas for the UK are multiple entry and valid for six months. We think that doing something reciprocal will assist the process.

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  The humanitarian situation, which was mentioned by many noble Lords, including the noble Earl, Lord Listowel, the noble Lord, Lord Joffe, and the noble Baroness, Lady Rawlings, remains very serious. Since the ceasefire, already overstretched agencies have been able to reach many thousands more severely malnourished people. However, humanitarian agencies are still unable to reach about 200,000 people and 40 per cent of the countryside due to damaged infrastructure, inadequate road networks and extensive landmine infestation.
  I was asked specifically about what the Government are doing to help. We have provided almost £8 million in humanitarian support so far this year. This includes £2 million for the International Committee of the Red Cross and Médecins sans Frontières and a recent contribution of over £3.5 million to the 2000 UN country assistance plan. I think I was asked specifically about that.
  My noble friend Lord Hughes of Woodside mentioned the situation of refugees in neighbouring countries. Some 500,000 Angolans took refuge in the neighbouring countries of Zambia, Namibia, DRC and Congo-Brazzaville during the war. On 29th November, the UN High Commissioner for Refugees signed an accord with Zambia, Namibia and Angola to facilitate the voluntary repatriation in 2003 of 264,000 refugees. Similar accords are expected with the DRC and with Congo.
  When I was in Angola I was struck by the vacuum between the policies that are set in the capital and delivery on the ground. That clearly needs to be addressed. There is a lack of capacity, but a myriad of priority needs, including the need to rebuild the infrastructure and the need to de-mine the country. I saw for myself the risks from landmines, with schools adjacent to minefields and people using the fact that we are now in the rainy season to plant very close to mined areas. The presence of mines is also hampering the delivery of food and of humanitarian services—a point made by the noble Lord, Lord Joffe.
  I can confirm that NGOs are building the capacity of Angolans to demise; indeed, that information was passed on to me personally. Both UNITA and the government are assisting in identifying mined areas, which is also helping the deep demining process. We have allocated almost 500,000 dollars to UNDP to improve the effectiveness of mine action. We also contribute to EC mine action work in Angola.
  We are also working to raise the living standards for the poorest in Angola. As part of that process, we are providing £7 million to the Luanda Urban Poverty Programme, which aims to put in place replicable and sustainable ways of improving economic livelihoods, and access to basic services.
  The issue of HIV/AIDS was raised by many speakers, including the right reverend Prelate the Bishop of Guildford and the noble Earl, Lord Listowel. The World Bank is considering a major project as part of its transitional support
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  strategy. This is not an area that the UK Government are supporting at present. We hope that the World Bank will put considerable resources into that area.
  We are also considering the issue of additional support for Angola. There is a proposed donors' conference. I had much discussion with the Government of Angola about this, because they need to have the confidence of the donor community before undertaking such a conference. I take on board the comments made by the right reverend Prelate the Bishop of Guildford about the importance of flexibility in funding.
  If Angola is to flourish, its government need to devote more of the country's considerable resources to meet the humanitarian needs of its people. We understand the constraints on their budget. The war has only recently ended, and there are many priorities. But, as many noble Lords have said, Angola is a nation of enormous economic potential, not just from oil, diamonds and other minerals, but also in terms of its fertile soil and abundant water resources.
  In the early 1970s Angola was a major exporter of coffee and virtually self-sufficient in food. Our aim is to work in partnership to help the country to help itself to get back to that productive capacity, with all the attendant benefits in employment and poverty reduction. The Angolan Government need to make the right kind of investment in the well-being of their people.
  I agree with my noble friend Lord Hughes of Woodside and the noble Earl, Lord Sandwich, about the development of the democratic process. The end of the war has opened up the opportunity for Angola to become a fully democratic state. It will be possible to hold elections in the foreseeable future. All sections of Angolan society need to be included—UNITA, other political groups, the Churches, and civil society. I explored with UNITA its own view of its transition. It is critical that Angola should lay the right foundations now for its future political architect]ure. The stability of the state and the freedom and prosperity of its people depend on it. The more inclusive the process, the more likely that good governance will not only emerge but will also be sustained.
  I have a few words to say about the important role played by the Churches. I met Tony Nzinga, the head of the Protestant arm of the Council of Angolan Churches, and was able to hear at first hand not only about its work but also about the issues that he saw as priorities in terms of taking the country forward.
  I also had discussions about the Angolan Government's agenda of economic reform and transparency. I stressed to the Minister of Finance, and to the governor of the Central Bank, the importance for Angola of resuming productive dialogue with the IMF and the international financial institutions (the IFIs). Full publication next year of KPMG's oil diagnostic would be a major step forward. I was encouraged to hear that it is intended to publish at least the executive summary of that diagnostic.

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  Sustainable reform is a key building block in a number of sectors. The international community would like to see genuine reforms in the security sector and improved transparency in the legislature, judiciary, military, police and other agencies.
  Once the right political and economic infrastructure is in place, investment will follow. We shall encourage British businesses to maintain the highest standards of corporate citizenship and good corporate governance.
  I turn to the issue of transparency, which was raised by the noble Lords, Lord Avebury and Lord Joffe, and the noble Baroness, Lady Rawlings. At the WSSD the Prime Minister announced an initiative to promote transparency over payments in revenue in the extractive industries. I have had discussions with my G8 and NePAD colleagues—the noble Lord, Lord Avebury, will be pleased to know—about this becoming a global initiative. I also discussed it with the Government of Angola. We see the Publish What You Pay initiative as complementary to the work that the Government are doing on this. The aim of the initiative is to develop effective mechanisms in order to achieve transparency of payments and revenues in the extractive industries. It will increase the knowledge of revenues that will empower citizens and institutions to hold governments to account.
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  There are opportunities for Angola to emerge from the shadow of war and to play a regional role, especially as it is now chair of the Southern Africa Development Community. It helped to broker the Uganda/DRC agreement. We look forward to it taking on more responsibilities and in time perhaps contributing in a regional peace support role.
  As the noble Baroness, Lady Rawlings, said, Angola has gained a seat on the UN Security Council starting in January. We look forward to working with Angola as a fellow Security Council member. I believe that there is a great deal that Angola can gain from that membership. Having membership will carry much responsibility, particularly for promoting peace and stability in Africa and the world and national reconciliation and reform within its own borders.
  I end by saying that Angola has an historic opportunity that neither it nor we should waste. Much has already been achieved—more perhaps than might have been expected at the outset. If we had been having this debate a year ago, we would not have thought that we would be where we are today. But there is still a long way to go. The Government are ready to work with all Angolans to help their country realise its full potential.
  House adjourned at seventeen minutes before ten o'clock.