Lords Sitting of 27 February 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.

Violence and Terrorism
Lord Hylton Lord Hylton asked Her Majesty's Government:
What conclusions they draw from the day of united prayer for peace, held by the leaders of worldwide faiths in Assisi, Italy, on 24th January, and in particular their declaration renouncing the use of violence.
The Minister of State, Home Office (Lord Rooker): My Lords, there is no ministerial responsibility or accountability in respect of the event mentioned in the noble Lord's Question. However, the Government welcome this reaffirmation that the main world faiths have common values of peace and tolerance, shared by decent people of all beliefs and of no belief. We welcome their renunciation of the violence and terrorism perpetrated by some in the name of religion. We also welcome the commitment to eliminate the root causes of terrorism through dialogue and education, the promotion of mutual support and respect, and the creation of a world of solidarity and peace based on justice.
Lord Hylton: My Lords, I thank the Minister for his reply, even if he is not personally responsible for the issue raised in the Question. Will he take matters a step further by asking his right honourable friend the Foreign Secretary to ask British missions overseas to seek and positively encourage inter-religious cooperation, particularly in the conflict areas of the world?
Lord Rooker: My Lords, the Foreign Secretary works through the embassies and the diplomatic corps. To be honest, we are being asked to tread in muddy waters. We have made it abundantly clear that we want peace and tolerance and everybody—of whatever faith or of none—to be treated equally.
Lord Campbell of Croy: My Lords, did the leaders of faiths in Northern Ireland take part in the day of prayer? If so, did they also subscribe to the renunciation of violence?
Lord Rooker: My Lords, I am not responsible for listing the participants in the private operation referred to in the Question. It has nothing to do with the Government. The Government were not represented and it is not for me to publish a list of those participating or to discuss that matter in the House.
Baroness Williams of Crosby: My Lords, I appreciate the Minister's reply, but will he consider
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that possibly the most dangerous situation in the world at the moment is the Middle East? If he reads the declaration, he will find that the leaders of the Islamic faith, the Jewish faith and the Christian faith have all said that they would welcome frank and peaceful dialogue over the troubling issues of Israel and Palestine. Will he suggest to the Foreign Secretary that this is an issue that might well he built upon. given that those spiritual leaders have great influence, not least in that very troubled part of the world?
Lord Rooker: My Lords, I am happy to draw these exchanges to the attention of the Foreign Secretary. The whole point of the process is getting people to talk, not fight each other, as a way of finding solutions to the world's problems.
The Lord Bishop of Guildford: My Lords. I am grateful to the Minister for his reply to the important Question asked by the noble Lord, Lord Hylton. Is he aware of how many important dialogues and encounters are taking place in our country and across the world and of the very important role that religions play in peace-building and culture-forming? For example, following on what the noble Baroness, Lady Williams, said, the Archbishop of Canterbury called an important inter-faith meeting in the Middle East recently, which led to the Alexandria declaration among Jewish, Islamic and Christian leaders. Will the Government assure us of their encouragement of the faith communities in those dialogues, which have a significant impact on the peace-making movement?
Lord Rooker: Of course, my Lords. As I said in my original Answer, some people use their religion as a means of waging war and intolerance on their fellow human beings. That is to be condemned. It is also true that people of faith do not have a monopoly on peace and tolerance. We want everybody to be involved in dialogue. To that extent, we shall do what we can to encourage everybody of whatever faith from whatever part of the world to talk to each other as a way of finding solutions to problems rather than going to war.
Lord Campbell of Alloway: My Lords, is the noble Lord aware that the attitude of the Government, as explained by him, appears to some of us to be totally appropriate?
Lord Rooker: My Lords, as that was not a question, there is no answer to it.

Regional Museums
2.40 p.m.
Baroness Lockwood Baroness Lockwood asked Her Majesty's Government:
What plans they have to implement the recommendations in the report Renaissance in the Regions: The Future of England's Regional Museums by the Regional Museums Task Force.
The Minister of State, Department for Culture, Media and Sport (Baroness Blackstone): My Lords, I announced on 22nd January the timetable for implementing the recommendations of the Regional Museums Task Force as set out in the report Renaissance in the Regions: A new vision for England's museums, which was published last October. Resource, the Council for Museums, Archives and Libraries, has subsequently published draft criteria for the selection of museums to act in partnership as regional hubs. My department is continuing to discuss with Resource the implementation of other aspects of the report.
Baroness Lockwood: My Lords, I thank my noble friend for that encouraging response. Does she appreciate how vital it is that there is adequate funding for the successful implementaion of the report? Is she aware that there is a great body of hope and support throughout the country behind a request for additional funding, on which I hope she might draw, where appropriate, in submitting the strongest possible bid for the necessary funding for the implementation of the report? How much flexibility will there be in the regions to allow the current area museums councils or their successors to retain the hands-on assistance that they are giving to the museums, especially the small museums, which may not become a part of the regional hub?
Baroness Blackstone: My Lords, I shall deal first with my noble friend's third question. She is absolutely right to draw attention to the excellent work done by the area museums councils. I can reassure her that the very important services they provide, especially to small museums that need this type of help and support, will not be lost when the new arrangements with regional hubs are introduced. Indeed, I believe that some of the services that have been dropped and have disappeared may return when the Resource report recommendations are implemented. Incidentally, over the next two years, Resource will provide more money—funding is being doubled—for those services.
As for my noble friend's first question, if hope and support from across the country can get us the extra money, we shall draw on both the hope and the support that are being provided.
Lord Pilkington of Oxenford: My Lords, has the Minister given any thought to the position of university museums, such as the Ashmolean and the Fitzwilliam, which, unlike national museums, are not exempt from VAT? They are great museums. Will she give thought to exempting them from VAT?
Baroness Blackstone: My Lords, the university museums are of course great museums with wonderful collections, and the Government very much support the work that universities do in making those collections available. What I cannot do is give the noble Lord any assurance that VAT can be removed in relation to those museums. The Government took a decision to remove the requirement to pay VAT from
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the national museums for which they are directly responsible. What I can say, however, is that the university museums will be very much part of the reform programme to be introduced following the Resource report. I am hoping that they will play a part in the development of regional hubs.
Lord Redesdale: My Lords, will the Department for Culture, Media and Sport examine the role of conservators? The current shortage of posts, and reduction in the number of posts, is leading to a crisis in the profession. That state of affairs will also have a detrimental impact on many of the artefacts in the museums' care.
Baroness Blackstone: My Lords, the role of conservators is enormously important in all of our museums. It is important that that role should be protected and that we recruit enough people to play that role. I hope that when Resource's recommendations are implemented, and if there is further funding particularly for our regional and local museums, that role will be not only protected but enhanced.
Baroness David: My Lords, considering the contribution that museums make to the education service at all levels, but particularly at the primary level, can the Minister tell me what co-operation there is between her department and the Department for Education and Skills? Does she think that there will be an extension of that work under the new proposals? Can she say what that might entail?
Baroness Blackstone: My Lords, I can tell my noble friend that there is a huge amount of co-operation and collaboration between my department and the DIES on the overall issue of the contribution that museums can make to education. There is no doubt that good museum exhibitions and the good work done by museums in developing educational programmes can enhance the curriculum and motivate children by bringing alive history, geography and many other parts of the curriculum. I have seen some truly excellent work by small local museums that has achieved just that aim. The DfES is putting substantial sums into museum education and it currently has 63 projects going. Just recently, my noble friend Lady Ashton announced a further £1 million for that programme. My own department also has a programme for museum and galleries education. It is therefore a very big part of what our museums are now doing.
Baroness Knight of Collingtree: My Lords, is the Minister aware that some local authorities, such as Northampton borough council, are in the process of closing museums that are much loved by the public and much used by the schools? As the Government are on the same wavelength as that particular council, will she perhaps consider using her influence to see that those closures are stopped?
Baroness Blackstone: My Lords, although it may be regrettable in some respects, I think that it would be

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wrong for the Government to intervene in a local authority's decision to close one or possibly two museums. At the same time, I think that we have to recognise that this country has a very large number of museums, and that closures may occasionally be necessary when museums are failing in order to put more resources into museums that are successful. I shall certainly look into what is happening in Northamptonshire—I was not aware that closures were planned there—and investigate the issues that have led to those closures.
Lord Sheldon: My Lords, will my noble friend accept that an important aspect of the issue is the fact that there has been no national strategy for most regional museums? Moreover, local authorities no longer have the finances to subsidise some of those museums as they have had in the past. As a member of the task force. I was most worried by the need to establish these hubs as early as possible, so that the regions are able to support themselves through their own arrangements. The arrangements vary greatly, and work and assistance must be provided as soon as possible.
Baroness Blackstone: My Lords, I very much agree with my noble friend's comments on the need to make rapid progress in this respect. It is true that there have been problems in some regions of the country in sustaining the museum sector. However, we have a quite rapid timetable. The plan is that Resource will look at applications for the creation of regional hubs by, I think, the end of April, and announcements will he made sometime in June.
Baroness Sharp of Guildford: My Lords, is the Minister aware of some of the difficulties faced by the new hands-on science museums, many of which were set up as millennium projects? They were given capital funding to set themselves up but do not have continuing current funding to enable them to keep going and, as a result, now face some difficulties. Given the need to encourage students to study science at A-level and at university, will the Minister consider talking to her colleague, the noble Baroness, Lady Ashton, about that matter to try to sort it out?
Baroness Blackstone: My Lords, I am aware that some science centres are in some financial difficulty in terms of their revenue funding. However, when they were set up it was made clear that they would be provided with lottery funding for their capital needs but that they would then have to survive and operate within their own budgets as regards their revenue. I am certainly happy to discuss that matter with my noble friend Lady Ashton but science centres must try to live within their budgets and raise money where they can. However, I accept that they, like other museums, provide valuable support for the curriculum.
Baroness Hooper: My Lords, does the Minister agree that the eight different components of the National Museums and Galleries on Merseyside, albeit they comprise a national museum, play an
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important role in regional terms? Does she further agree that Liverpool's bid to be city of culture in 2008 is greatly enhanced by those centres of cultural heritage? Can we therefore count on continued support and funding from the Government?
Baroness Blackstone: My Lords, I shall not he trapped by the noble Baroness, Lady Hooper, into supporting Liverpool's bid to be the European city of culture. Some 12 or 13 other cities are also preparing bids to achieve that status. However. when I visited Liverpool recently for the reopening of the Walker Gallery I was extremely impressed by the work carried out by the national museums on Merseyside, in particular with regard to the refurbishment of the Walker Gallery. The Government will continue to fund that national group of museums, as they do many others. Indeed, the Government have been able to increase the funding provided for our national museums by about 12 per cent.

Organic Food: Labelling
2.52 p.m.
Lord Geraint Lord Geraint asked Her Majesty's Government:
What scientific procedures there are to establish that animal meat for human consumption that is labelled organic is truly organic.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, certification of organic meat production entails satisfying EC requirements covering the origin of animals, their feed, permitted husbandry practices and transport. No scientific procedures exist to verify that meat is organic by testing the end product and checks must be undertaken by on-farm inspections supported by associated documentation.
Lord Geraint: My Lords, I am grateful for the Minister's reply which was comprehensive and to the point. However, will he consider introducing legislation to safeguard the interests of consumers when they purchase labelled organic food which is not organic?
Lord Hunt of Kings Heath: My Lords, we have legislation under EU regulations which ensures that rules are laid down under which food that is organic can be labelled organic. A regulatory body in the UK is responsible for overseeing the 10 private sector bodies which certify that food is organic according to the rules laid down. Local authorities can enforce the law and take action against claims which are proven to be false. However, there is no scientific test which can prove that food is indeed organic. The Food Standards Agency has two research projects under way to determine whether such a scientific test can be developed. Obviously, one hopes for a positive

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outcome from that, but we have a regulatory system to ensure that the proper checks, in so far as they can be made, are indeed made.
Lord Skelmersdale: My Lords, will the Minister tell us what sanctions are available when these labels are found to be inaccurate?
Lord Hunt of Kings Heath: My Lords, as I say, it is for local authorities to carry out checks on possible fraudulent claims. They can bring prosecutions under the Food Safety Act. In the year 2000, 41 prosecutions for false or misleading descriptions were brought before the courts and 64 prosecutions were brought for labelling regulations offences and other offences. Those figures are not broken down into organic and non-organic cases but the legal process is in place and it is up to local authorities to enforce the law.
Earl Howe: My Lords, is the Minister aware that the Agriculture Select Committee in another place drew attention to possible discrepancies in the organic standards that are observed in certain third world countries? Bearing in mind that a fairly large percentage of the organic meat sold in the UK is imported, will the Government ensure that action is taken at EU level on the concern of the Select Committee?
Lord Hunt of Kings Heath: My Lords, all cases involving problems in that area will, of course, be reviewed by the Government and if concerns need to be raised at EU level we shall certainly raise them. Within the EU all organic meat must be produced to the same standard. It is up to each country of the EU to enforce legislation in its own country. As regards organic production outside the EU, a number of countries have already demonstrated to the EU that they have equivalent standards. Imports from those countries may take place freely, although the importers must be registered and subject to audit. As regards imports from other countries, importers must show to the control authority that equivalent standards apply. The regulatory framework is in place but clearly, if there are examples where it is believed that the rules are not being applied, the Government will look into those seriously.
Baroness Miller of Chilthorne Domer: My Lords, is the Minister aware of the recommendation in Sir Don Curry's report on the future of food and farming that the Government should introduce a comprehensive strategy for organic food production covering its production, research and development, standards and marketing? I believe that that would satisfy many of the questions raised by noble Lords.
Lord Hunt of Kings Heath: My Lords, the Government are committed to developing an organic food and farming action plan following the recommendations of the Curry commission. That will consider the strategy for the future direction of organic
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farming and assess potential growth for UK production and the market. Alongside that, the Food Standards Agency is reviewing the issue of farm assurance schemes which is important in terms of the consumer knowing and understanding what various labels mean.
The Countess of Mar: My Lords, further to what the noble Lord has just said about farm assurance schemes, does he agree that, in addition to organic food, there is room for food that has been produced with a minimum of inputs of fertilisers, pesticides and veterinary medicines, and a staged assurance scheme which indicates how that food has been produced? Will the Minister ask the Food Standards Agency to consider that matter?
Lord Hunt of Kings Heath: My Lords, I am happy to draw the noble Countess's remarks to the attention of the Food Standards Agency. The substantive point that she raises is that the consumer wishes to know more about the food that he or she buys. Our intention is to ensure—the Food Standards Agency has made representations on this matter in Europe—that labelling is as accurate and comprehensive as possible. I believe that that relates both to organic and non-organic food.
Lord Carrington: My Lords, is the noble Lord aware that organic honey is on sale everywhere? Would he be good enough to let the bees know about that?
Lord Hunt of Kings Heath: My Lords, I shall certainly draw the bees' attention to the noble Lord's comments.
Lord Mackie of Benshie: My Lords, I am sure that the Minister will agree that one can buy plenty of good Scottish beef which has never done anyone anything but good.

Martin Sixsmith
2.59 p.m.
Baroness Blatch Baroness Blatch asked Her Majesty's Government:
Whether the Secretary of State for Transport, Local Government and the Regions was informed or consulted about any proposal to transfer Mr Martin Sixsmith to another post within the Civil Service.
The Minister of State, Department for Transport, Local Government and the Regions (Lord Falconer of Thoroton): My Lords, I refer the noble Baroness to the Statement that I repeated to the House yesterday, which dealt with these matters. In that Statement, my right honourable friend referred to the discussions between Mr Sixsmith and Sir Richard Mottram. He said that he was not directly involved in those

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discussions but that he made it clear to Sir Richard that in his view Mr Sixsmith should not be given a job elsewhere in government. He went on:
"Ultimately. I was not in a position to block any arrangement about his future employment elsewhere in the Civil Service, and I accepted that discussions between Sir Richard Mottram and Mr Sixsmith would continue".—[Official Report, 26/2/02; col. [1342.]
Those discussions focused on Mr Sixsmith getting another job in government or being compensated according to the terms of his contract.
Baroness Blatch: My Lords, does the noble and learned Lord agree that the serious outcome of yesterday's Statement was that the Secretary of State brought the Civil Service and good governance into disrepute? He blamed civil servants for the fiasco in his department, he sought to interfere to end the career of a named civil servant and he publicly denigrated other civil servants before any inquiry. He has admitted to misleading the public on national television and he has been warmly supported for that behaviour by the Prime Minister. What a shameful state of affairs! Will the noble and learned Lord explain how we will know when a Secretary of State is telling the truth?
Lord Falconer of Thoroton: My Lords, I do not agree with any of those premises. The Secretary of State is engaged in trying to improve the transport system in this country, and that is what he should be engaged in.
Lord Richard: My Lords, I wonder whether the noble Baroness who asked the Question had an opportunity to look at the faces of those sitting around her? Is my noble and learned friend aware that those faces suggest—as do those on this side of the House—that she is flogging a dead horse? Is my noble and learned friend aware—he should know better than most, because he repeated the Statement yesterday—that the question was firmly answered yesterday? Will he recall, for the benefit of the House, the gentle, delicate, subdued and even reluctant way in which Mr Ingham dealt with the press and various members of his own government at the time? Does my noble and learned friend agree that compared to that master of the black art of spinning, the present generation of government information officers has a great deal to learn?
Lord Falconer of Thoroton: My Lords, first, it would be unwise and infelicitous of me to comment on the faces of the people around the noble Baroness, Lady Blatch. Those faces are smiling radiantly at the moment and looked suddenly interested when my noble friend asked me to describe what they looked like. Secondly, this matter was fully dealt with—for more than an hour—yesterday in this House. The appropriate step is to go on and examine how one can improve transport. On the third matter, I am much too young to remember Mr Bernard Ingham, but I have read that when he was acting on behalf of the then Prime Minister he would brief against members of the Cabinet when they were still in the Cabinet.
Lord McNally: My Lords, will the Minister therefore comment on a horse that is very much alive? In today's The Times, Mr Peter Riddell writes:
"The latest row reinforces the case for early Civil Service legislation … But 10 Downing Street has been slowing down the promised consultation over legislation".
Will the noble and learned Lord confirm that the delay over that Civil Service legislation is because of blockage in No. 10 Downing Street? If so, will he use his immense influence with the Prime Minister to draw his attention to the opinions of the noble Lords, Lord Butler and Lord Bridges, and of others with vast experience, who suggest that the Government should now give priority to Civil Service legislation?
Lord Falconer of Thoroton: My Lords, I am not aware of any such blockage. I repeat what I said yesterday. The Government have committed themselves to a Civil Service Bill when time allows. That remains our position. I also draw the noble Lord's attention to the point made today by the noble Lord, Lord Butler, who is not in his place; namely, that no Bill or Act of Parliament is going to prescribe for personal relations. He said that in the vast majority of cases, relations between special advisers and civil servants are good, and that is the position in this Government. No Bill is going to make that better or worse.
Lord Waddington: My Lords, in the past, have not Ministers resigned when they were caught out lying? Is not that a desirable practice?
Lord Falconer of Thoroton: My Lords, it is for each individual Minister to make a decision about whether his career continues.
Lord Corbett of Castle Vale: My Lords, may I tell the Minister that the people of Birmingham—
Noble Lords: Question!
Lord Corbett of Castle Vale: My Lords, may I ask noble Lords to let me demonstrate that when I begin a sentence with the word "may", I finish with a question mark—as I have just done? May I tell the Minister that the people of Birmingham, when they are not talking about the need to site the national football stadium on the edge of the city, are much more interested in obtaining better public transport and more efficient services from local councils rather than being bothered about who is working in a Whitehall press office?
Lord Falconer of Thoroton: My Lords, my noble friend certainly may tell me that. May I also say that the views that my noble friend attributes to the people of Birmingham are shared by people throughout the country? They want the concentration to be not on office politics, as the noble Viscount, Lord Astor, described it yesterday, but on making the transport system work.
Viscount Astor: My Lords, have not the Government sought to establish a new principle for Cabinet Ministers—that they can be economical with the truth on Sunday morning on television and stay in office? There was not even a proper apology yesterday; just an expression of regret in the Secretary of State's Statement.
Lord Falconer of Thoroton: My Lords, no, they have not.
Lord Merlyn-Rees: My Lords, is my noble friend aware that when I came in through the Peers' Entrance about an hour ago, there was a kerfuffle across the road and a noise? I said to the policeman, "What's it all about?" He said, "There is one chap". "What's he doing?" "He's shouting, 'Keep your hands off Stephen Byers!'" Listening to the Question of the noble Baroness, Lady Blatch, and the Answer made me wonder whether it was Bernard Ingham off his head.
Lord Falconer of Thoroton: My Lords, I was not aware of that.

National Health Service Reform and Health Care Professions Bill
3.5 p.m.
Lord Hunt of Kings Heath: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the National Health Service Reform and Health Care Professions Bill has been committed that they consider the Bill in the following order—

Clause 1,

Schedule 1,

Clause 2,

Schedule 2,

Clauses 3 and 4,

Schedule 3,

Clause 5,

Clauses 7 and 8,

Clause 6,

Schedules 4 and 5,

Clause 9,

Clause 22,

Clauses 10 to 19,

Schedule 6,

Clauses 20 and 21,

Clause 23,

Schedule 7,

Clauses 24 to 35,

Schedules 8 and 9,

Clauses 36 to 40.—(Lord Hunt of Kings Heath.)

On Question, Motion agreed to.

Housing
3.6 p.m.
Lord Best Lord Best rose to call attention to the potential of the private rented sector in tackling the United Kingdom's housing problems; and to move for Papers.
The noble Lord said: My Lords, I count myself as very lucky to have been successful in the ballot for a debate and I hope that this discussion will indeed raise awareness of the private rented sector and its role in tackling the UK's housing problems.
I must begin by declaring various interests in this subject. First, I am the director of the Joseph Rowntree Foundation, which invests about 5 per cent of its assets in private rented property. Secondly, I have a long-standing family interest in private renting. My grandparents invested in this sector, which they believed to be an "ethical investment", because it produced a satisfactory return but also gave others a roof over their heads. As with so much privately rented property, these homes have been sold over the years as they became vacant. Today, only a small residue remains, owned by members of my family, although not by myself. Thirdly, I chair—jointly with Chris Holmes, the director of Shelter—a commission on the private rented sector. That includes representatives of all the major bodies representing landlords and their agents, as well as key organisations representing tenants' interests. Our commission is seeking a consensus and will be publishing its report and recommendations in the spring.
Let me place before your Lordships my central proposition. It is that an expansion in private renting could ease two major problems facing the UK: first, the problem of severe shortages of accommodation, particularly in London and the South East; and secondly, the need for regeneration in the cities of the Midlands and the North, where the issue is not one of shortages but of people moving away, with unfortunate economic and social consequences.
The private rented sector in the UK today represents about 10 per cent of the total housing stock. Three-quarters of the rented homes are owned by individuals, not by companies, and two-thirds of those individuals have private renting as just a side-line, representing less than one-quarter of their income.
The sector had declined from some 90 per cent of the nation's homes before the First World War to less than 9 per cent in the late 1980s. Modest growth returned when, after 70 years of rent controls, the Housing Act 1988 removed those restrictions from all new lettings and the requirement that tenants should have lifelong security of tenure. The removal of those restrictions came just when the property boom in the owner-occupied sector turned to bust and many people who could not sell their homes could let them instead. From the mid-1990s this phenomenon subsided, but new investment—almost all by private individuals, many taking advantage of the low interest rates for buy-to-rent mortgages—has injected more than £2 billion each year into the sector, helping it to sustain its modest growth.
But the UK remains firmly out of line with other advanced economies. The percentage of its homes in the private rented sector is less than half of that in most European countries and still less compared with Germany and France, let alone the USA, with all those apartments that we see in "Friends" and other TV series. It is a very small private rented sector that marks out the shape of housing in the UK as quite different from other countries. If the UK could expand its stock of private renting to comparable levels of competitor countries, the economic and social gains would be immense.
In relation to housing shortages, we know that to meet the Government's projections of household growth we need to create well over 200,000 extra homes each year in England alone. Yet house building, both by speculative private house builders and by the housing associations, is producing fewer homes than in any peacetime years since the 1920s. A deficit is now appearing of some 50,000 homes a year. As this shortfall accumulates and the gap widens, very severe problems, reflected not just in high house prices and long commuter journeys but in severe overcrowding and homelessness, are bound to escalate. London and the South East will continue to be the worst affected areas in terms of housing shortages.
The Government's figures, however, show that 40 per cent of all the extra households are likely to be for just one person of working age. Those represent a huge market-place for private renting. In France, for example, an average of over 40,000 extra homes have been provided each year by the private rented sector over the past 15 years. Why are we missing out on this stream of investment? It could finance, for example, 100 apartment blocks in East London, close to the jobs in the City. It is estimated that the number of people working in London may rise from the present 4.5 million to 5.5 million by 2025. Many of London's workforce are single people for whom high-density living, which may be unsuitable for families, is more than acceptable and for whom private renting is often ideal.
But while the value of the private rented sector in easing pressures in the South may be obvious, your Lordships may find it harder to believe that private renting could also help with the other problem that I identified; namely, that of the need to regenerate many of our cities in the Midlands and the North.
Perhaps surprisingly, it is my contention that the time is right for large-scale investment in private renting to attract and retain middle-income people in the centres of many of our older industrial cities. We need to prevent inner cities becoming segregated areas just for the poorest households instead of containing the kind of social mix which any thriving neighbourhood requires.
After undertaking market research among single people on middle incomes working in urban areas, my organisation, the Joseph Rowntree Foundation, has built two blocks of apartments—one in Birmingham and one in Leeds. We call them "CASPAR" schemes, which stands for city-centre apartments for single
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people at affordable rents. The developments are on recycled, somewhat uninspiring Brownfield sites close to the centre. But both are the subject of high-quality architecture aimed at fashion-conscious. trendy, single young people looking for a city lifestyle.
Those developments at market rents, of 46 and 45 apartments respectively, have proved to he very popular and very profitable investments for us. They have outperformed the rest of our substantial investment portfolio, with immediate income returns of over 6 per cent net per annum, indexed probably in line with earnings, plus prospects of excellent capital growth. We plan to undertake further CASPAR developments, and there is no reason why other investors should not do just as well as we have and thereby boost regeneration efforts in cur older cities.
Why is it that the institutional investors— the big investors such as pension funds and insurance companies—stay away from residential property? First, for many years antipathy to the sector was undoubtedly based on so-called "political risk". When rent controls were lifted at the end of the 1980s, the fear of institutional investors was that the position might be reversed by a new Labour government. However, in the 1980s the noble Lord, Lord Rooker, as shadow housing Minister, had the sensitivity to seek to reassure potential investors that an elected Labour government would not overturn those changes, as did successive shadow Ministers and the then government Ministers after 1997. The Government's assurances in their housing Green Paper in the year 2000 were absolutely explicit. It is impossible now to believe that "political risk" should deter investment.
Secondly, investors in the 1980s came to believe that equity investments on the stock market could continue to appreciate without limit. We now know better and property may well appear a safer and more sensible bet in the future.
A third turn-off for major investors has been the poor image of the sector. Since the days of Rachmann, the stereotype of the "wicked landlord" has persisted. A small minority of bad landlords is linked to criminal activities—not only housing benefit fraud but also harassment, drug dealing, prostitution and intimidation. The sector needs to be rid of those elements.
Local authorities need the resources to do more to help in positive ways with the regulation, accreditation and education of smaller landlords and in supporting both landlords and their tenants. I am hopeful that the Commission on the Private Rented Resitdential Sector will help to promote a new settlement for the sector which could enhance its reputation and improve its public image. But these issues should not concern institutional or individual investors using properly qualified managing agents.
Fourthly, there are issues of taxation. The final abolition of mortgage interest tax relief has now levelled the playing field in tax terms between renting and owning. Tax incentives could bolster private renting. That technique is common in other countries. The business expansion scheme here created 81,000

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private rented homes in the 1990s but it cost the Exchequer £1.7 billion, and many of those properties have now been sold into owner occupation.
UK Chancellors are likely to prove resistant to introducing any more tax incentives; and, indeed, they can distort investment decisions. But private renting deserves simply not to be taxed at higher levels than comparable investments or equivalent businesses. For example, the British Property Federation would like to see fairness over the rates of stamp duty, which can currently mean the Exchequer receiving far more if a block of apartments is purchased by one investment institution for letting rather than being bought by a whole number of separate individuals. That is not fair.
More important than special—probably temporary—tax incentives is a shift in attitude by all the key players. The shape of housing requirements has changed. A new market has opened up of more mobile people who settle down 10 years later than the generation before them, or who are now divorced or separated. House builders need to recognise that renting can suit that new market. Some builders are already selling to individuals who buy to rent. It is not a big leap to expect partnerships between developers and investment institutions. Selling a whole development to a single investor achieves economies for both.
Housing associations should certainly receive more support to help those with the highest priority needs, but some housing associations want to diversify. They have the capacity to organise CASPAR-style developments in more places. They should be encouraged by the Housing Corporation and local authorities. Sometimes they could build up portfolios of apartment blocks that institutional investors could then buy off-the-peg.
Pension funds, insurance companies and trade unions which continue to invest in office blocks need to seize the new opportunities in the residential property sector. That ethical and profitable investment could ease growing shortages in London and the South and could produce the attractive apartment blocks needed to revive city centres in the Midlands and the North.
I hope that this debate calls attention to the potential of an effective private rented sector in tackling the UK's housing problems. I beg to move for Papers.
3.21 p.m.
Lord Graham of Edmonton: My Lords, I welcome the noble Lord, Lord Best, to the housing repertory company. Some members are present. They perform regularly. However, I am sorry to see that I am the only Labour Member to speak in this debate. After all the years in which I have been involved in the subject, I would never have believed that only one Labour Member was prepared to speak in a debate on housing.
What noble Lords have heard so far cannot be bettered. I hope that at the beginning of the Minister's notes are the words, "Give this a very warm welcome".
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I do not see how any noble Lord can add detail to the authoritative introduction to this debate that we have heard from the noble Lord, Lord Best. He comes to the House with a lifetime's work in this area.
When I saw the subject of the debate, I said to myself, "That is my subject; I shall speak on that". The noble Lord has drawn my attention to the main theme in his address, which is quite simply that there has been change. When I was a boy I lived in a place called Sutton's Dwellings, Barrack Road, Newcastle upon Tyne. I was never lucky enough to be a council tenant. Those who were council tenants had a stroke of luck in getting their tenancies.
During my working life in housing, there was, first, predominantly rented accommodation or council housing and then gradually owner occupation. Over the years, as the noble Lord, Lord Best, has told us, the percentages of those types of accommodation have changed and the private rented sector, which once was dominant, has faded gradually. Under the 1924 Wheatley Act, councils used their powers of slum clearance and rebuilding, and repaired some of the damage caused by neglect in the private sector. In the 1960s we found that the urge for owner occupation came to the fore. Sadly, in the 1980s the ravages that were done to affordable housing by the right-to-buy legislation resulted in the modest growth of housing associations.
The noble Lord, Lord Best, has declared some interests, as I shall. As a councillor, council leader and chairman of a housing committee, I say that there is no single activity of a council that bears more upon the quality of life of the people that it seeks to represent than housing. Considering that the Government want to improve health and education and to reduce crime, I say to the Minister, who has my highest regard and respect, that no single factor will help the Government to achieve those aims more than improving the quality of housing, whether private, rented, co-operatives and so on. The quality of a house in which a family is brought up has a major bearing on those issues, and on people's quality of life and satisfaction.
In regard to the state of housing, the noble Lord, Lord Best, in a roundabout way, mentioned that the Government have produced statistics to show that £20 billion needs to be found to make habitable the housing that is currently unfit for habitation. Much of the money spent by the Government by subvention to the Housing Corporation has not been spent on building new houses, but on trying to keep in decent repair neglected housing.
I have here the English Housing Survey of 1996 which starkly points at the sector of housing where most damage has been done and where most money needs to be spent. In 1996 it reported that of housing unfit for human habitation, 17.9 per cent was in privately rented homes, 6.8 per cent in council housing, and 3.9 per cent in housing association property. That is partly due to the age factor. Housing associations are fairly modern; council housing can be up to 100 years old; and much privately rented accommodation may be even older than that.

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My attention was drawn to a well researched brief from Shelter, for which I am grateful. Shelter is pre-eminent in keeping the pot boiling, in reminding the Government of what is needed and in coming up with suggestions. Shelter says that there is a need for reforms to housing benefit, incentives to promote greater investment in the sector, modernisation of the legal framework for private renting, support for best practice in management, and better regulation.
Shelter gives a good illustration of where it should be possible to move faster. It says:
"Over £2.25 billion a year in housing benefit is paid to 750.000 tenants in the private rented sector".
That number is declining, partly due to landlords who have pulled out of letting to housing benefit claimants due to poor administration. In other words, because it can take so long for the benefit to be determined, people lose the house they are after. That is chaotic administration. Between 1995 and 2000 the proportion of new claims that took more than the statutory requirement of 14 days to determine rose from 18 per cent to 37 per cent.
I cannot believe that the Minister and his advisers are not aware of what will be said in this debate. They must be aware. I do not raise these issues in order to castigate the Minister or his staff; I do it as a peg upon which to point a plea. When the Minister is wondering what initiatives may be taken, can he look to see whether the position of those who wait is the same—that is, a doubling from 18 to 37 per cent—or whether something can be done.
That brings us to the role of the local authority. As a previous local government man, I am well aware of the burden and responsibility that is placed upon councillors. I have previously told the House that when a Member of Parliament, more than once I left my surgery, got into my car and cried because of the hopelessness that I felt at my inability to ease the housing problem in a place such as Edmonton. I cannot believe that it has changed very much. The councils' need to have weapons to deal with the problem that still exists.
The noble Lord, Lord Best, drew my attention to this phenomenon. At one time private rented accommodation and the landlord were well known, but the sector was not very big. There are a number of people, as unlike Rachman as one can get, who are not in the business of buying rented accommodation or of buying accommodation to rent, purely for the sake of making the lives of those who occupy it a misery and of making a profit. They are genuine modern businessmen and women who see a role for their business in providing good accommodation under guidance and control by the local council.
Can the Minister say something helpful about the initiatives that the noble Lord, Lord Best, referred to, whereby there is an opportunity for local authorities, tenants, estate agents and others to come together to get a better deal for the people who need housing?
We know the extent to which people who are made redundant and lose their homes or who come to this country as immigrants, asylum seekers—call them
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what you like—need accommodation at the lower end of the scale. I should like the Government to encourage individuals, with the sanction of the local authority, to do something in this area. The local authority has a strategic role to play in policy and planning. It has an enabling role in advising, guiding and regulating those who want to invest in private sector properties and in regulating and promoting well-managed rented homes.
There have been some self-inflicted wounds. One was the right-to-buy legislation. I hear colleagues on this side of the Chamber, particularly those from rural areas, bemoan the fact that affordable accommodation is no longer available. It was built by the local authorities, then bought by the tenants and has disappeared. It will never come back. The Minister and his colleagues are well aware that the ability of a council to build new housing is virtually non-existent.
Therefore, one must look at alternatives. The private rented accommodation sector is one. But there are others. I declare an interest. I am the chairman of a body called the United Kingdom Co-operative Council, which is the all-embracing body for the co-op societies—housing, the bank and insurance. In that capacity I keep in touch with these issues. I was particularly struck by remarks made by David Rodgers, the executive director of CDS Co-operatives, a co-operative housing association of which I am pleased to serve as honorary president. He tells me that the CDS Co-operatives is working with the New Economics Foundation. Its chief executive is Ed Mayo, the former adviser to the Chancellor, the right honourable Gordon Brown. It is studying the feasibility of developing a new sub-market form of cooperative housing for key workers.
The study, which they hope will be jointly financed by the Housing Corporation, is a response to the excellent report by the Greater London Authority's Affordable Housing Scrutiny Committee, chaired by GLA member, Meg Hillier, into the need for key worker housing in the capital. The study will look at the prospect of giving key workers in high cost housing areas the same opportunity to invest in their homes through membership of a limited equity housing cooperative as key workers living in lower cost housing areas.
That is only one of the possibilities. The Minister, in a very busy life, gives maximum attention to these matters. I allude to other aspects of housing— to those who live in mobile homes, park homes and so on. I believe that he will not only look upon this debate as one which is worthy of his attention, but one from which he can produce some ideas along the lines of the initiative taken by the noble Lord, Lord Best. I congratulate the noble Lord on setting the scene and the tone. I am certain that the Minister will give a sympathetic reply.
3.37 p.m.
The Earl of Caithness: My Lords, I am extremely grateful that the noble Lord, Lord Best, succeeded in the ballot because this is a debate that this House

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needed to hold. Although there are not many speakers, it will be a high-quality debate because those who do speak, such as the noble Lord, are highly qualified and well respected within the profession.
Like the noble Lord, I declare an interest. I am a surveyor. I am a consultant to a firm of residential agents in Chelsea. Therefore, I advise clients and have friends who are directly affected by the current law.
As the noble Lord, Lord Best, has said, the UK has only a small, by international standards, PRS with a large number of owners with small portfolios. Fifty per cent of all landlords in England let seven or fewer homes. Over a quarter of landlords have only one letting, and many are "accidental" landlords; for example, as a result of inheriting a property, or having difficulty in selling one or needing to move abroad for employment reasons. These landlords have little chance of becoming expert property managers and turn to letting agents for help, whose standards of competence and probity vary greatly. Others have entered the sector as an investment, but have done so only very recently as mortgages for the acquisition of properties to let have become available on attractive terms through "buy to let" schemes. They are still very inexperienced.
As the noble Lord, Lord Best, said, something like £10 billion of new investment has come into the sector in the last six years. That is very welcome. But we need to be very careful that we do not increase a raft of amateur landlords to the market. We do not want to go back to that state of affairs. Managing property is not like managing stocks and shares or having a broker to manage stocks and shares. Property is a much more complicated exercise. Only by continued training of landlords and agents will one get the standards that are sadly missing at the moment.
I know that the noble and learned Lord, Lord Falconer, would be very upset if I did not once again remind him that it is high time that agents were licensed on a proper basis and were trained on a regular basis. That, too, must apply to landlords.
About 60 per cent of the private rented sector comprises lettings to people under the age of 30, many of those being corporate lets. At the other end of the spectrum, in poorer areas, many tenants are on housing benefit. In some areas, investment values are sustained exclusively by the availability of housing benefit at levels that bear little or no relationship to housing supply and demand.
The Royal Institution of Chartered Surveyors recently highlighted the issue of the 760,000 homes currently empty in England. That is a greater number of homes than the population of Leeds, which is England's third largest city. That is a disgraceful and unwarranted state of affairs, which has three effects. First, there is a strong body of evidence to suggest that areas that include significant pockets of empty homes suffer from higher than average levels of crime and associated problems. Secondly, during the period 1991 to 2016, we need to accommodate 3.8 million households within the UK. Empty homes could fulfil
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a percentage of that. Thirdly, by allowing 50 per cent council tax relief to owners of empty homes, the Treasury loses an annual income of the order of £75 million. Those empty homes represent a considerable wasted asset to the UK in terms of the investment already made in constructing them, the ongoing maintenance and security cost of keeping them empty and the cost of bringing them back into use.
First, will the Minister consider extending the role of the Empty Property Advisory Group and making it accountable to a specific Minister? Secondly, will the Government formulate a strategy setting out targets to reduce the number of empty homes and establish a benchmark against which government agencies and local authorities can be required to act?
What have the Government done? They published a housing policy statement, The Way Forward for Housing, on 13th December 2000. It was one of a linked series of policy statements on regeneration and social exclusion, including the urban and rural White Papers, the National Strategy for Neighbourhood Renewal and the planning policy guidance for housing published that year. Sadly, that did not convince anyone that the Government understood the private rented sector. Furthermore, it gave the impression that they do not have the time or resources to acquire such an understanding or to think deeply about the matter. As a result, they fall back on gut instincts, political preconceptions, and token gestures. The only point on which I differ from the noble Lord, Lord Best, is that I do not believe that the political risk from government is all but dead. I say firmly that it is alive and kicking and is a major deterrent to investors—not only in the private rented sector.
Let us consider the Homes Bill, which many of the your Lordships will remember. At a recent meeting of the National Association of Estate Agents. the Government official responsible for the Bill was given a severe grilling. On a show of hands, three quarters of those present voted against the proposed seller's pack and people left the meeting with the distinct feeling that the Government do not understand the housing market at all.
I shall now consider in a little detail the problems that prevent the private rented sector from playing the role that it should in this country. The private rented sector is possibly the only sector of the economy in which the tax and regulatory systems work to prevent the growth of small and medium-sized enterprises into larger businesses. That is the consequence of several discriminatory anomalies within the tax system in how private landlords are treated compared with other businesses.
First, let us take the anomaly of trading status. Property letting is one of the few business activities that is not treated as a trade for tax purposes. Income from property is taxed under Schedule A as investment income, regardless of whether the income is generated from pure investment or from a property ownership and management business.
Then there is the question of management costs. Because this form of business is not regarded as a trade, a landlord managing his own property is unable

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to claim the costs of managing his property and lettings business against tax. However, he would be able to claim those costs if he were using the services of a managing agent. As I said at the outset, the high percentage of landlords who have a small number of dwellings to let do not want to employ managing agents. The tax position is discriminatory.
Then there is the question of capital gains tax rollover relief. Unlike other businesses, because they are not regarded as a trade, lettings businesses are unable to claim roll-over relief from capital gains tax when they sell a capital asset with the intention of reinvesting the funds realised in their business. I am sure that your Lordships would agree that that severely limits the flexibility, mobility and above all the efficiency of investment, particularly among smaller investors. as the decision to sell to reinvest carries with it the same tax penalty as the decision to sell to take the profit.
Then there is the anomaly of earned income. Full-time landlords, whose sole activity is managing their property and lettings business and who have no other source of income cannot contribute to personal pension schemes because tax relief on contributions is permitted only on earned income and excludes investment income. That is provided by Sections 639(1) and 644 of the Income and Corporation Taxes Act 1988. It may be argued that the property holdings offer a more than adequate substitute for a pension fund. However, the snag is that that implies that the owner will sell the portfolio on retiring, thus preventing business passing from one generation to the next. Even if I he portfolio is sold, the landlord will still face a substantial capital gains tax liability on the proceeds.
I turn to self-investment personal pension schemes. Some landlords have generated Schedule D income, usually through trading properties, and have used that to contribute to SIPPS. The SIPPS rules allow investment in commercial property and allow it to be let, but expressly forbid direct investment in residential property or land connected with such an investment, except where commercial property includes a residential element that is either occupied by an employee as part of the job or is an integral part of the business premises and is occupied by a person who has no family connection with the owner.
The result of that has been that professional residential landlords have bought commercial properties, often shops with flats above them, and have been compelled to leave the flats vacant, despite their having a residential lettings business, because of the potential adverse impact on their pension arrangements. That restriction is equally frustrating the other way round, because some small pension fund investors who are looking principally to invest in commercial property are frustrated from making the most effective use of their funds because the flat above a prospective investment is tenanted. So people are caught both ways.
I am sure that the noble and learned Lord would expect me to raise the anomaly of value added tax. Residential rented property is an exempt supply for
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VAT purposes, so any payments of VAT made to suppliers of goods or services—for example, building contractors or managing agents—are irrecoverable. That increases the cost to the landlord and, when combined with the tight margins under which smaller landlords operate, can act as a disincentive to repair.
I turn, as did the noble Lord, Lord Best, to stamp duty. Stamp duty has quadrupled from 1 per cent to 4 per cent. Perhaps I can give an example to illustrate the point made by the noble Lord. If, as an investor, I wanted to buy 20 flats, I could buy all 20 individually and pay no stamp duty if the flats were valued below the threshold—say at £50,000 each. If I bought all 20 flats as an investment, I would have to pay £40,000 in stamp duty, which is a windfall to the Government that practically equates to the value of one of the flats. So, I am deterred right from the beginning from making the purchase.
Then there is the problem with developers, which was touched on by the noble Lord, Lord Best. There is no incentive for developers to develop a property for investment purposes. They are likely to get more profit from selling partly to investment people and partly to owner-occupiers. There is a great opportunity being blighted at birth, and, as a result, no developers have taken it up.
It is clear that housing investment trusts, which were introduced in 1995, will not work. The structure that was put in place is too complex. No trust has been launched successfully to date, and no one seriously believes that one will be introduced in the future. However, there is a need for a tax-transparent securitised vehicle for indirect property investment, following the 2000 Budget.
The industry has spoken to the Government about it, and the Government said, "No" to the industry's proposals. It is no good the industry trying to come up with another set of proposals and trying to second-guess what the Government really want: it is time for the Government to identify the areas in which the industry has something to offer, specify the help that they will give and recognise that the private rented sector can play a significant part not only in reducing the number of empty properties but in reducing the shortages in the South East and providing better accommodation in the North, as the noble Lord, Lord Best, said. The Government must say, "This is what we want you to do to help us. We are the enablers; you are the professionals. Get on and do it". Sadly, under current legislation, with the current anomalies, that will never happen.
I hope that the noble and learned Lord. Lord Falconer of Thoroton, will, as a result of the debate. grasp the opportunity to do something revolutionary and take a major step forward for everybody.
3.52 p.m.
Lord Ezra: My Lords, like other noble Lords, I shall declare an interest. I am president of the National Home Improvement Council and, until recently, I was patron of National Energy Action, both of which organisations are committed to improving the quality of the housing stock in this country.

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I am therefore delighted to take part in the debate so ably initiated by the noble Lord, Lord Best, and I fully support the thrust of his remarks, namely that the private rented sector could and should play an increasing part in meeting the country's housing needs. We heard from the noble Earl, Lord Caithness, about the difficulties, particularly of a fiscal nature, that he, as someone who is familiar with the property market, sees in the way. No doubt the noble and learned Lord, Lord Falconer of Thoroton, will cover some of those points in his reply.
I shall deal with a different aspect, which was raised by the noble Lord, Lord Graham of Edmonton, who referred to the most recent House Condition Survey. He said that it demonstrated the relatively poor quality of a large part of the private rented sector, compared with the rest of the nation's housing. There is little doubt that the sector contains a large amount of poor housing. Under the general heading of poor housing, as defined in the English House Condition Survey of 1996, 31 per cent of private tenants are in poor housing, compared with 14 per cent overall. That is on page 76 of that report. Both those figures are well in excess of those for comparable European countries. We have a relatively high proportion of poor housing in Britain, and it is particularly noticeable at the lower end of the private rented sector.
Because of my particular interest in energy, I shall deal with that aspect of private rented property. Poor housing equates to poor health, and poor health is largely due to inadequate heating. There is a sombre statistic for this country that is often quoted in debates such as this: the rate of winter mortality is higher, relative to the rest of the year, than in any other west European country. Our rate is something like 15 per cent or more above the normal rate, whereas elsewhere it is an average of 6 per cent. In some countries, such as Denmark, where they pay particular attention to housing quality, there is no difference between the rates of summer and winter deaths.
We have a long way to go to improve the quality of our housing. Regrettably, in the private rented sector the proportion of poor housing is greater than elsewhere. To be fair to the Government, they have made efforts to deal with the problem of heating in poor homes. The Home Energy Efficiency Scheme, now known as the Warm Home Front, seeks specifically to improve heating and insulation in houses, particularly those of the elderly, that are poorly equipped in that respect. Unfortunately, the proportion of funding from HEES that has gone into the private rented sector has been much smaller than elsewhere. In fact, something like 5 per cent of HEES funding has gone to improving the private rented sector, when at least 10 or 15 per cent should have gone in. There are many reasons for that. In some cases, it is the reluctance of the landlord; in others, it is the tenant's lack of knowledge. Whatever the reason, there is a slower rate of improvement at the lower end of the private rented sector than elsewhere.
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My noble friend Lady Maddock was responsible for successfully introducing in another place the Home Energy Conservation Act 1995—known as HECA—the objective of which was to improve the standard of heating in homes throughout the country. Unfortunately, progress under that Act has not been as great as was anticipated, and, for that reason, Dr Desmond Turner introduced a further Bill in another place—the Home Energy Conservation Bill—which was strongly supported at Second Reading. Unfortunately, the Government proposed several amendments in Committee that severely weakened the Bill's impact. I know that my noble friend Lady Maddock will refer to that matter. I hope that the Government will use all possible forms of legislation and fiscal measures to stimulate improvements in the quality of the private rented sector.
The relative energy efficiency of buildings can be assessed using energy ratings. There is a well-established system of energy rating known as the standard assessment procedure or SAP. Estimates were made of the SAP value of different types of housing in the English House Condition Survey. SAP estimates are made out of 100—the nearer to 100, the more energy efficient the house. The SAP standard laid down for new buildings is 80. That is in Building Regulations. However, the estimated average for the whole housing stock in England—I refer to the English House Condition Survey—is 44. That is about half. In the private rented sector, it is 35, and what is worse is the fact that one in three elderly households in that sector occupy properties with a SAP rating below 20. In severe winter conditions, anyone who is elderly and lives in a house with a SAP rating of 20—a quarter of what is estimated to be desirable for new housing—could get very ill, if indeed they survived. That is a deplorable situation. We must sort it out in contemplating a major expansion of the private rented sector. At the very least, we must ensure that that end of the sector does not continue to suffer from these disadvantages.
I should like to propose that, in that part of the private rented sector where the Government are contemplating the introduction of licensing, such as in areas of low demand and in houses in multiple occupation, they should include an obligation to have an energy rating. Thus, when the properties are registered, levels of energy efficiency will be known and can be improved as necessary. I believe that such a simple measure, added to the points which other noble Lords have made, could help to achieve better standards in the private rented sector and could contribute to the objectives referred to by the noble Lord, Lord Best, in introducing the debate.
4.1 p.m.
Baroness Gardner of Parkes: My Lords, I am delighted to be able to join in with the debate and I thank the noble Lord, Lord Best, for bringing forward this subject. I shall start by declaring an interest. I do not know whether I would describe myself as an "accidental landlord", although I like the description coined by my noble friend Lord Caithness. I think that

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I probably did start in that way. However, I do not agree with my noble friend that it is not possible to learn through the process.
I had a spare basement and so I let it out. I have many memories of that basement. I let it out in the days when Harold Wilson's government froze all rents. I cannot tell the House how damaging that rent freeze was. It stopped everything dead in its tracks. Later, when one wanted to re-let a property or to increase the rent, the increases appeared to be huge to those who had to meet them. Smaller, more regular increases would not have been as bad. During the period when no increases were allowed, it was not even possible to meet basic overheads such as the supply of heating and other services.
It is no wonder that commercial enterprises are not moving into residential lettings; people have long memories. The noble Lord, Lord Best, stated that it was impossible to believe that anyone could consider it to be a political risk. I believe that everyone still considers it a political risk to build or buy a large structure to let out at reasonable rents to those who desperately need such places. That is a great pity, because until we achieve large-scale ownership, small landlords really only comprise "potterers" like myself. That is not the way positively to address housing need.
In the days of statutory tenancies, rent levels were not even sufficient to cover repairs or maintenance. The noble Lord, Lord Ezra, drew our attention to the poor state of a great many properties. The Housing Act 1988 made a big difference and assured shorthold tenancies have worked well.
The noble and learned Lord on the Front Bench knows that I have referred to the situation in Australia on previous occasions. When I was in Australia on 11th September and afterwards, I inquired into what renting and letting was like over there. While in the United Kingdom an agent is paid 10 per cent, 15 per cent or even more, plus VAT, for managing a property, in Australia the cost amounts to only 4 to 6 per cent for full management, while the letting fee is set at one week's rent. In this country, tenancy agreements can be extremely complicated. Although it is possible to buy a standard form from a legal stationery office, if one has had any kind of unfortunate experience then it is wise to have a lease prepared properly. To do so will set the landlord back at least a couple of hundred pounds. Even then there is no way of ensuring that the tenant will actually pay.
I heard the statement with regard to the deposit scheme that is to be introduced. That scheme is already in place in Australia and rental deposits are secure. I am very much in favour of the proposal and I am delighted that the pilot scheme is to be continued. However, if such a system is ever established, it will be essential to put in place a safeguard, as is the case in Australia. If tenants fail to pay the last month's rent due on their tenancy agreement, there must be a way of securing an eviction within 14 days. It is now a common ploy for tenants, having paid the deposit, perhaps to trash their accommodation or even damage things acidentally—who would know whether the
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damage was deliberate? The tenants then fail to pay the last month's due rent, knowing that the original deposit could not possibly cover both the damage and the rent. Thus, on a year's tenancy, the landlord can be left thoroughly out of pocket, receiving rent for only 11 months out of the 12—if that, after seeing to the repair of any damage. If we are to introduce secure deposits then we must also be fair to landlords. Instead of landlords having to wait many months to regain possession of their properties, a procedure must be put in place to ensure that it is done quickly.
I turn now to another way of providing good accommodation in London. This city presents a particularly difficult problem because of its high property values. Those building large developments in London are now obliged to provide a certain amount of social housing. In the past it was possible to buy out those rights. The price of a buy-out per unit rose from around £40,000 a time to £80,000. However. on the whole, most local authorities now insist that social housing should be provided on site. Of course that means that it can be provided only by a registered social landlord. That is because those building large new developments do not want the bother or nuisance of coping with a small number of social tenants.
There are special difficulties in London. I turn to those encountered in sheltered accommodation. If such accommodation is provided by a large charity or enterprise such as the Joseph Rowntree Foundation or the William Sutton Housing Trust or Land Securities, then the philanthropic attitudes of those organisations ensure that funds are put in. However, if other people are to be attracted into providing rented residential accommodation, the businesses would have to he self-financing. People are looking for a return on their money and want to be confident that they will be able to carry on their businesses successfully.
I understand that housing associations are permitted only very restricted rent increases each year and that some of them are encountering difficulties. The position is not too bad at present because interest rates on loans are fairly low, hut if they rise housing associations may find themselves in great difficulty. If they have to borrow on the open market, that money will be linked to the London InterBank Offered Rates, LIBOR, which is an important factor.
Perhaps I may emphasise the importance of the point made by my noble friend Lord Caithness with regard to the tax situation. If property rental were to be reclassified as a trade or a business, more people would move into the sector, which suffers from the great disadvantage of not being so classified. That is why some people are regarded as "amateurs" in the field; rented accommodation is not considered to be a business and does not enjoy any of the associated advantages.
I personally consider the greatest disadvantage to be the fact that it is not possible to "roll over". If one has a house in which one flat is let, that cannot be rolled over to something that might be let to two people, or from two to four people. Nothing is done to encourage that kind of practice. That would not happen in any

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other business. If I sold my dental practice, I could move into another dental premises, using the money from my original business to set up a continuing enterprise. However, because rented accommodation is not classified as a business, it is constantly at a great disadvantage.
I wonder whether the future for London accommodation will lie in flats such as the tiny units I recently saw advertised. I do not suggest that we go to the Japanese extreme, where I understand that such accommodation is like the sleeping compartment in a railway carriage into which one can move for the night. However, I read that a number of micro-flats are being built. Perhaps there is a future in such flats because so many people in the nursing profession, in the police and so forth, have seen the accommodation that was available now disposed of.
We are crying out for people to come and work in London. I have seen blocks of police flats sold off all over London. When I was chairman of the Royal Free Hospital, the nurses' home was sold off because nursing had changed and we no longer had to provide accommodation for nurses. Because they had all become university students, we had to accommodate them for only one year. The local council had put such huge orders on the properties that it was not viable to do them up, and therefore the property was sold. Once sold it was gone forever. I do not know about the situation of a person needing accommodation now—I am not involved in that area any longer—but nurses' homes all over London have been disposed of.
The noble Lord, Lord Best, referred to the CASPAR scheme. It sounds most interesting and I should like to hear more about it. I wonder whether it works only because it operates in an area where house prices are low and possibly rents are low. The major problem in London is how to provide essential properties for rent when property prices are as high as they are at the moment.
Mention has been made of housing benefit schemes. Again, these are a problem. Questions have been raised previously in your Lordships' House about the huge backlog and the time it takes to deal with applicants for housing benefit. Very often the landlord gives up totally and says that he cannot possibly let the property because of the time an application takes to process and because of a lack of confirmation and a sense of security about the tenants taking the property. Something will have to be done about that.
I declare an interest—not a financial one—as an honorary vice-president of the National House Building Council. Reference has been made to people building estates and so on. It must be made clear that these people are in business—as I would like to be in regard to my lettings
Many kinds of people would like to rent. There are many older people who would like to release the capital in the house that they own, move into a pleasant rented place and be able to use their capital for healthcare, holidays, to help others and so on.
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Many people would like to do that. In London at the moment, they have the option of paying an expensive rent in an expensive area or very little else.
The high-rent sector in London has been very hard hit since 11 th September. The same thing happened during the Gulf War. Virtually no tenants arrived and there was a period of about six months when one was lucky if one could get anyone to rent anything. At the moment the agents are saying that this is exactly the situation in London and that there is a huge surplus.
But it is not the kind of accommodation that will help those in need at the bottom end; it is luxury accommodation that is available in London at the moment. There are many properties vacant in Mayfair, for example, but they are largely in foreign ownership and, although they are little used, we have no control over them. People are entitled to do what they want with their own property. If they keep it empty and use it for only six weeks a year, it is not something with which we can deal.
I do not think that those kind of people would accept an incentive to enter the rental market, but, if we reclassified property rental as a trade, it would be a first step. If we then encouraged people to provide accommodation and made it easier for them in terms of tenancy agreements and the costs involved, that would be a big factor.
4.14 p.m.
Baroness Byford: My Lords, the private rented sector caters for those who do not want or do not qualify to live in council housing, and for those who do not want to buy or are waiting to buy their own homes. As we have heard today, as the demand for homes grows, so, too, does the demand in the private rented sector.
Like others, I should declare a humble interest—again, as a part-timer—in that at home I have two cottages that are rented out and on the farm in Suffolk we have cottages that are rented out and cottages that are rent-free for employees and past employees.
I should not like anyone to run away, however, with the idea that the growth in private rented accommodation is caused by population expansion. Here in the UK, annual population growth runs at less than one-quarter of 1 per cent per year. As other noble Lords have said, the increased demand for housing is caused by people choosing to live alone, by others forced to live alone after the death or abscondment of their partner and by families splitting up because the main breadwinner moves jobs. Many such moves are caused by companies, government departments and agencies shifting their operations closer and closer to the seat of power here in London and the South East, or to the burgeoning centre of excellence, for example, at Cambridge.
The lack of balance involved creates a vicious circle: too many people in a popular area chase too few houses, and so prices rise; back from where they came, too many houses wait for too few people, and so prices fall. Caught in a chain, many have to rent—but the prices in the rented sector continue to rise.

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As people flood in to one particular area or region, the number of "caring" professionals required also rises. They come into an area to find that house prices are often too high for their income, and so they turn to the rented sector. The rest, as we have said today, is history.
One answer to the problem would be to build affordable homes to meet the demand. In a housing shortage, developers, by and large, do not want to build such homes, and so they offer alternatives. When building estates, they do not provide affordable homes but offer new schools and other facilities which the area needs. They often build three, four and five-bedroom houses, but they do not build affordable housing.
A more sensible answer would be to encourage companies, government departments, agencies and others not to build offices and factories on green belt land but to move to where such buildings already exist. They could also look at the question of their distribution centres and warehouses, which are often built on green belt land. In areas where there is a high housing demand, they should not build on brown field sites that are suitable for housing.
The noble Lord, Lord Graham, referred to previous housing debates in which we have both spoken. I should like to draw the attention of the House to a development in Leicestershire where, on a 32-acre redundant brown field site, surrounded by a canal, the old Pex textile factory site was converted into one and two-bedroom flats. It is bang in the middle of Leicester and ideal for people who wish to live in the rented sector. I suspect that had it been another time it would have been pulled down and office accommodation erected. It is a very good example of where warehouses and industrial buildings can be converted to suitable one and two-bedroom houses.
Incentives could be offered to persuade some companies to move to areas where jobs are in short supply and where abundant housing is ready for renovation and conversion of the kind we have seen in London. Most noble Lords will remember that it was not that many years ago that the housing in certain parts of London that are now considered very fashionable was thought to be of fairly poor quality.
On 13th December 2000 the Government published The Way Forward for Housing. It listed six key measures which it claimed would promote a healthy private rented sector. I hope that when the Minister comes to reply he will give examples of what has happened since then. In recognising that an inability to remove unsatisfactory tenants is a disincentive to potential private landlords, a point made by my noble friend Lady Gardner of Parkes, one of the specific targets in that document was for all evictions to be carried out within four weeks of the bailiff receiving the warrant. Can the Minister give us a list of examples? If not, perhaps he will write to me later. The matter may have progressed so that people who seek to remove unsatisfactory tenants are achieving that. Will the Minister say whether the time involved in dealing with this issue is becoming shorter or longer?
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Urban and rural regeneration programmes were intended to bring into occupancy empty houses and vacant units above shops. Will the Minister say how many have been filled as a result of those regeneration incentives?
The Way Forward for Housing names administration of housing benefit as the fundamental challenge in improving housing availability in the private rented sector. Does the Minister have any idea about the position today? Has it worsened, or is it better? Is he aware of the growing number of evictions caused solely by non-payment of housing benefit entitlement? Has he read the report from the CAB on the growing reluctance of private landlords to accept as tenants people on housing benefit? Despite the claims in paragraphs 10.15 to 10.55 of the document, does the Minister accept that the severity of the problem is acute and will he tell us whether any practical measures are under way to improve the position?
I remind the Minister that the Housing Corporation issued a clear warning in July 2000 in reply to The Way Forward for Housing policy document. Paragraph 9.11 on page 23 states:
"There is strong evidence that the delivery of housing benefit is getting worse".
I shall share some figures with the House.
In a Written Answer on 19th December last year, the Housing Minister, Malcolm Wicks, provided figures on the number of housing benefit regulations, statutory instruments and circulars issued year by year from 1988 to 2001. In those nine years, up to and including 1996, there were some 36 housing benefit regulations, 81 statutory instruments and 316 circulars—an amazing total to a paper-hater like myself. In the past four and a half years up to 2001, there were 29 housing benefit regulations, 90 statutory instruments and 400 circulars. I shall repeat that because in half the time there were 29 housing benefit regulations as against 36, 90 statutory instruments as against 80 and 400 circulars as against 316. No wonder housing benefit is running late. Perhaps officials are reading government literature instead of paying the clients.
The CAB stated in a recent briefing:
"Over four million tenants rely on housing benefit to pay their rent, with average payments of £48.30 per week".
The briefing continued:
"In many parts of the country the housing benefit sy stem is in crisis. DSS figures show that between 1998/9 and 1999/2000 there was a drop of 10% in the number of claims processed within the statutory 14 days. The Audit Commission has indicated that only 56% of local authorities are administering housing benefit efficiently and the Local Government Ombudsman reported a 73% increase in housing benefit complaints in his 1999/2000 annual report".
I think that all noble Lords would agree that that is unacceptable and I wonder whether the Minister will respond to that specific issue.

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I turn to rural housing, and affordable rural housing, in particular, which in some areas is as crucial and under pressure as it is here in London and the South East. In a White Paper on rural issues, produced in November 2000, the Government said:
"We will promote more flexible lettings policies by local authorities, so as to take more account of specific rural needs in their area. We propose changes to social housing lettings to promote a more customer-focused approach giving applicants more say and greater choice in where they live".
They continued:
"Over the next three years, we will be providing £1 1m to support pilot schemes involving local authorities and registered social landlords which test choice-based lettings policies".
I wonder whether the Minister has information about how many pilots have begun and what progress has been made.
The White Paper also touched on the question of empty homes. It stated:
"We are funding the Empty Homes Agency to work with local authorities to bring more empty rural property back into use".
Questions have been asked both in your Lordships' House and the other place about the disgraceful number of empty properties in our stocks. Perhaps the Minister will refer to that matter, too, when he replies.
The Benjamin Foundation was referred to in the White Paper. It stated:
"The Foundation will now be able to set up a rent deposit and housing support service for young people who are vulnerable to homelessness. This will provide practical help to enable young homeless people to find and secure accommodation locally, close to their natural support networks".
Again, I ask the Minister to respond to that issue when he replies to the debate.
I return to a comment made by the noble Lord, Lord Graham. Our previous debates on these issues in this House have always shown the strong link between the welfare of the people living in the houses and the quality of such houses. Whether one lives in one's own home or a rented one, regardless of whether it is privately rented, it is important that the standard of the house is acceptable. We have heard this afternoon that the private rented sector offers tremendous potential. I am extremely grateful to the noble Lord, Lord Best, for giving us the opportunity to debate some of these issues and to make suggestions to the Government which we hope will be taken forward quickly and urgently.
I add my congratulations to the noble Lord on highlighting the changes that have taken place in the work force. In the olden days, people used to stay in jobs for perhaps 10, 20 or 30 years, but today people change jobs and homes several times. The rented sector has a great role to play.
4.27 p.m.
Baroness Maddock: My Lords, I add my congratulations to the noble Lord, Lord Best, on introducing the debate and on setting the scene so well. Although not many people are taking part in the
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debate, it has been extremely wide ranging and well informed, making it quite difficult to come in at this point.
Like other noble Lords, I declare my usual interest. I am president of the National Housing Forum Trust, vice-president of the National Housing Federation and patron of the Empty Homes Agency. I have also recently agreed with my noble friend Lord Ezra to become a vice-president of the National Home Improvement Council.
The debate has brought out two reasons why the private rented sector does not play as important a part in contributing to a flexible housing system in this country as it could, although it is important to have such a system. We have created a flexible economy, about which the Government are quite proud, but we have failed to achieve flexible housing to go with it. That is why this debate is very important.
The issues that have been highlighted are the size of the private rented sector, which is very small, and how to create conditions in which to increase its size. Another problem, to which many noble Lords have referred, is the condition of much of the sector and the problems surrounding its management. Only 11 per cent of housing is in the private rented sector, and the people who live in it tend to be rather polarised. The noble Earl, Lord Caithness, has been reading the same briefing, which tells us that many of the people who live in this sector are under 30. However, there is another large group of tenants living at the poorer end of the sector who are on housing benefit. A further consideration is the quality of the housing in this sector. It is very varied. We have heard graphic descriptions of some of the worst housing, not least from my noble friend Lord Ezra, particularly in reference to energy efficiency. The noble Lord, Lord Graham of Edmonton, also touched on the matter.
The housing Green Paper published in 2000 identified the need to improve this sector. Chapter 5 was headed "Promoting a healthy private rented sector". In the Green Paper the Government identify the need to bring forward many of the matters that have been referred to. There is not enough social rented housing. We have not managed to expand this sector in a period of two governments. Sometimes it is not appropriate for people to buy, or there is no affordable property. Therefore, there is a great need to develop this sector.
The Green Paper identifies some of the measures that could help in this regard. It accords with many of the points made in the debate. We need to encourage good landlords and to assist them to raise standards. We need to persuade more people to invest in this sector. In particular we need to raise the standards of some of the worst landlords. The debate then arises as to how that can be achieved.
There was an interesting section in the Green Paper on the role of taxation, and the noble Earl, Lord Caithness, made some interesting proposals in that regard. Perhaps the Minister will enlighten us as to where we have arrived on this issue in the past two years.

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A further area in relation to tax and business is the situation of small landlords. Many landlords own fewer than seven properties. I have great sympathy with the points made by the noble Earl, Lord Caithness. More support is needed for small investors. The noble Baroness, Lady Gardner of Parkes, touched on the matter. Private landlords who operate to professional standards should be treated in the same way as others who have small businesses. I hope that the Government will respond. I believe that they are considering certain proposals.
One important approach would be to reduce the rate of VAT on all refurbishment works to the level of that for newly built homes. It would be extremely helpful also if tax relief could be introduced to offset the cost of improvements as well as the cost of repairs and maintenance—a point touched on by other speakers.
The noble Earl, Lord Caithness, talked about extending tax relief—currently available to landlords using a managing agent—to those who manage properties directly. I have some sympathy with the idea, but there is a difficulty. We are all saying that we want to encourage landlords to manage properly and to use managing agents if they cannot do it themselves. Therefore, we need to be careful as this is a difficult area.
One approach that could help on the tax front would be to simplify capital allowances on the costs of converting flats, particularly those over shops and other commercial premises. I read with interest that the Minister is very interested in the concept of people living over such premises in London. Some of us in t he housing world have been talking about this for a number of years. There have been some very good schemes. I am glad that, having taken up his new portfolio, the Minister is keen on the idea. That is good news. Many of the properties in this category are empty. In northern Europe and Scandinavia people live in town centres; they are happy to live over shops. It means that there are people living locally who use the restaurants. The towns do not become empty in the evenings with people being afraid to go out. The Minister has signalled that he thinks this a very good idea: I wait to see whether he will offer anything concrete.
People may inherit a house. Or they may have one or two properties but are not sure how to manage them. There is talk in the Green Paper of registered social landlords taking on this role. The point was touched on by the noble Baroness, Lady Gardner of Parkes. It is a problem in some ways for registered social landlords. They are in the business of social letting and it is not easy for them. However, there have been some very good schemes whereby registered social landlords have taken over empty properties in their area and managed them for the people who own them. It is an excellent idea and we should continue to encourage such schemes. None of the regulations surrounding registered social landlords should prevent them from doing that.
Various other approaches could help. One that has been touched on at the edges is the modernisation of the legal framework for private renting. Since the
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introduction of the Housing Act 1996 it has been lawful for properties to be let on shorthold tenancies without a written tenancy agreement between landlord and tenant. The idea is not promoted by those who want this area to be very professional. It mitigates against tenants being aware of their rights and responsibilities and is often the cause of landlord and tenant disputes. Agreements between residential landlords and tenants should be regarded in the same way as other professional agreements between businesses and their customers. That reflects comments by other speakers about this area being a proper business. Therefore, such agreements should he subject to written contracts.
I understand—the Minister may be able to explain the matter further—that the Office of Fair Trading is working with the Law Commission to develop a model contract for pre-formed standard assured and assured shorthold tenancies. I believe that the law should oblige landlords to provide written tenancy agreements at the start of all tenancies. I hope to hear reassuring noises from the Minister on this matter when he replies.
Reference has been made to the tenancy deposit scheme. That is a positive approach taken by the Government and I welcome the fact that the pilot scheme will continue. However, I am rather disappointed in regard to the regulation of houses in multiple occupation. It is one of the worst areas in this sector in relation to the condition of the houses. Such regulation has not been forthcoming from the Government—in the previous Session or in this one. We are talking about a period of some five years.
As my noble friend Lord Ezra said, the Home Energy Conservation Bill is attempting to build on the Act that I was able to see through another place in 1995. But attached to that is a proposal about regulating houses in multiple occupation. This was a manifesto commitment by the Government at the previous two elections. I ask the Minister if he will study carefully what happened in Standing Committee in another place yesterday to the proposal attached to the Home Energy Conservation Bill. I make that request because the definition of a house in multiple occupation has been deleted from the face of the Bill and will now be dealt with by regulation. Moreover, the threshold—that is, the number of occupants, or perhaps storeys, above which a house in multiple occupation must be compulsorily registered— has also been deleted from the Bill's provisions and left to regulations. The timescale for introducing this seems to be slipping back.
As this happened only yesterday, it is possible that the Minister is not in a position to say as much as I would wish. Nevertheless, I hope that he will give an assurance that he will seriously consider what is happening in this area. One aspect that concerns me is the fact that the Bill will be placed before the Delegated Powers and Regulatory Reform Committee. I hope, therefore, that the Minister will also consider my request and look into the matter.

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Other speakers mentioned housing benefit, the administration of which is often a hindrance. Sometimes it is an advantage to landlords, but sometimes it is not. An awful lot of public money has been going into substandard housing over the years. I know that this problem was referred to in the Green Paper. I do not say that it is easy for the Government to deal with housing benefit, but progress has been very slow; indeed, it is a bit of a stop-start process. We often hear that it will be reformed and that everything will be wonderful, but then the Government backtrack, partly because it is such a difficult area to reform. In the Green Paper, consideration was given to whether there was some way that housing benefit could be used to help improve the condition of property.
Today's debate has ranged far and wide. I believe that there is general agreement between us, as well as among bodies outside like the Royal Institution of Chartered Surveyors, Shelter, and the Empty Homes Agency. I am sure that all those participating in the debate are grateful for the information that we receive from such bodies. All those people, across parties, and local authorities want to see more investment in this sector so that standards can be raised. There should be measures to ensure effective management and regulation. It is important that the management, or any regulation that is introduced, should be carried out in such a way that we do not drive people out of this sector. When the Minister responds, I hope that he will be able to update us on all that was said in the Green Paper, which was published nearly two years ago, and tell us where we stand at present.
The noble Lord, Lord Best, is always very generous in the way that he perceives governments. He was very hopeful about what might happen, while other noble Lords were a little sceptical. Over the past five years I have become more cynical myself. I had hoped that this Government would move faster on housing matters. I was most interested in the observation made by the noble Lord, Lord Graham of Edmonton. He pointed out that he is the only person from the Labour Party, apart form the Minister, talking on housing in today's debate. This was the big issue for past Labour governments. I am sure that I do not need to point the Minister in the direction of The House Magazine where, just recently, his honourable friend in another place, Austin Mitchell, the Labour MP for Great Grimsby, said:
"Every Labour Government since 1945 can be proud of its record in housing. Not this".
It is for the noble and learned Lord, Lord Falconer, to prove him wrong.
4.44 p.m.
Baroness Hanham: My Lords, I should like, first, to thank the noble Lord, Lord Best, for being successful in the ballot. I shall not congratulate him because I think it is a matter of thanks that he should have managed to promote such an extremely interesting debate this afternoon. I also thank the noble Lord for bringing some fresh and original thinking to the
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subject. One would not really expect anything else from the noble Lord. He has immensely long experience in housing. Indeed, having listened to what he said, I believe that his current chairmanship of the Commission on the Private Rented Residential Sector ought to be bearing, or about to bear, good fruit.
One of the areas to which the noble Lord drew particular attention is the difference between the amount of housing in the private rented sector in this country compared to that elsewhere. Indeed, my noble friend Lady Gardner gave us some very good examples of what happens in Australia. Clearly, we are very deficient in this country in terms of the way that we deal with the private rented sector, especially as regards our encouragement of it.
I welcome the thoughts expressed by the noble Lord, Lord Best, and his premise that large-scale institutional investment into housing for rent should be encouraged. It would certainly provide new resources for a sector that currently accounts for some 2.3 million tenancies. As other noble Lords have pointed out, 53 per cent of those tenancies are provided by individual landlords, with rather less than 8 per cent of investment being provided by corporate or institutional means. The sector quite often serves a mobile, short-stay population, or, increasingly plays an important part in the requirements of those on low incomes who are finding it difficult to find accommodation at a price that they can afford. Indeed, in many instances, they are supported by housing benefit.
I see that the noble Lord, Lord Graham, is no longer present in the Chamber. He rightly drew attention to some of the problems that have occurred with housing benefit, so I do not need to venture any further into that aspect. However, had the noble Lord stayed long enough, I should have congratulated him on representing the Labour Party extremely well; indeed, because of his very wide-ranging experience in such matters, one voice in the shape of the noble Lord, Lord Graham, is probably sufficient to encompass the Labour Party's views on housing. My noble friend Lady Byford also drew attention to the problems experienced not only in the administration of housing benefit but also by those to whom it applies.
The participation of the corporate or institutional investor is not new. When I first came to London, most of the mansion blocks were owned by large insurance companies—indeed, companies such as the Prudential and Norwich Union were wide owners. The flats were all on leases, which were usually quite short. Those companies divested themselves of all their properties. In many instances they sold them to overseas, absentee investors who often reaped the fast return by selling the flats on long leases, while, in others, they left no managing agents so that repairs went undone and tenants did not know who was responsible for the maintenance of the property. Consequently, a very substantial proportion of the rented sector dried up.
As we heard this afternoon from all the speakers who have taken part in this debate, the absence of the latter is now manifested by a dearth of housing that

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can be afforded, especially by those on low and middle incomes. My noble friend Lady Gardner drew our attention to the problems experienced by key workers. As a director of a hospital, I well remember being forced to sell housing that was designated for staff on the basis that it was "paternalistic" to maintain it. It seemed to be an extraordinarily curious way of looking at the situation, but I suppose that nurses' homes and places of residence for medical students and doctors at that time had hostel-like status. None the less, the loss of such housing is now coming home to roost. Indeed, much police housing has also been sold. This means that there is no housing sector to assist those who need to live and work within the metropolitan areas. It has also led to the necessity for us to talk, again, about providing housing for key workers, and to look to the affordable sector in order to do so.
As we have heard, London and the South East have particular pressures to address in this respect. Land for new development is becoming increasingly expensive. The result can be seen in the spiralling cost of housing.
The first question that we need to ask is whether there could he enough incentives and enough return to make it worth while for investment companies to come back into the market for rent. If not, what might be required to enable them to do so? We have talked about some of the measures that might be necessary. Any renewal of the rented market may be possible only if the Government are prepared to consider further enticements such as those proposed by the previous government—the scheme for tax credits, lower VAT on brownfield developments or conversions and reductions in corporation tax. My noble friend Lord Caithness went into considerable detail about those measures. I bow to his expertise in that area, as his professional life encroaches on it.
As my noble friend said, it is important that incentives do not encourage amateur landlords who find business management difficult, but encourage those who can, on a long-term basis, manage a property portfolio, tenants, links with the local authority if necessary and the repayment of mortgages.
My noble friend Lord Caithness also rightly drew attention to the fact that an enhanced private rented sector will require more management and letting agents. During our discussions on the Commonhold and Leasehold Reform Bill, amendments were moved to try to ensure that there was a regulatory basis for management and letting agents because of the problems that have been caused all over the country, but specifically in London, by those who were not up to it and who, in some cases, were corrupt. I hope that the Minister may be able to tell us that attention is being given to providing a regulatory framework for such agents, who will inevitably have a larger role if the private rented sector increases.
As other noble Lords have said, there is some evidence that the private sector is remaining robust, particularly on the back of buying to let, when mortgages or finance are provided for property specifically for rent. However, without the ability to
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ensure an adequate return to maintain the standard, that market could provide a false dawn. The last Conservative government made strident efforts to increase the proportion of private sector tenancies from the existing low base of 9 per cent of households by introducing shorthold and assured tenancies to speed up the process for a landlord who needs to repossess a property and introducing pre-tenancy determinations of rent eligibility for housing benefit, as well as introducing new housing benefit rules. All those measures continue, as do the housing investment trusts that were introduced. My noble friend Lord Caithness drew our attention to the limited success of those trusts, which may be due to the rules being too complicated. Despite all those measures, the proportion of private rented sector lettings has risen to just about 11 per cent.
Reverting to one of the main points made by the noble Lord, Lord Best, I suspect that the lack of enthusiasm for institutional investment stems from the difficulties with management costs, maintenance, service charges and the adequacy of the return on the investment. If the sector were re-enthused, would investors be satisfied with the amounts of rent that they could charge, which would almost certainly have to be set with rent assessment panels in mind? If the rents were too low, it would not be worth the investment. If they were too high, the whole purpose of such provision would be lost.
I was interested in the comments of the noble Lord, Lord Best, about the Rowntree Trust's success with the CASPAR scheme, which seems to show that there can be a return on investment that would encourage institutional investors. I very much hope that that will be developed. We may hear more about it in due course.
Like all those who have spoken, I have no doubt that there would be demand for such accommodation. Reliance on the "For Sale" market has in general been a successful investment for most people over the past 10 or 20 years, but it inhibits mobility. The long processes involved in selling and buying in many instances prove to be a deterrent to those seeking to move to job opportunities in other parts of the country. However, home ownership is becoming less accessible, not only because of the increasing cost—the National Housing Federation has estimated that across half of England home ownership is beyond the reach of those earning less than £30,000—but also because of the Government's policies, which have brought about higher stamp duty and council tax and the abolition of mortgage income tax relief. The revivification of a reliable and affordable private sector in housing would be welcome and valuable. My noble friend Lady Byford also referred to the problems in rural areas, where affordable housing is greatly lacking and where the rented sector could play an increasing part.
My noble friend Lord Caithness and others have also drawn attention to the 750,000 homes that are currently empty in this country. This is not an easy problem. We laboured with it in my clays as chairman of a local authority housing committee and it is still

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prevalent. When we are looking to provide more than 100,000 new units a year in a country in which land is becoming less and less available, 750,000 empty units represents seven years worth of renewing our assets and requirements.
I by no means wish to be negative about the proposals put forward by the noble Lord, Lord Best. If incentives and investment returns could be provided that would entice such institutional interest back to the housing market, providing a nucleus of professional landlords, we might see a major improvement in that sector of housing and thus further choice across the country. I welcome those proposals and look forward to seeing how and whether they can be implemented. I also look forward to the other suggestions coming from the noble Lord's commission, which will be of great interest to all those who have had an opportunity to take part in this enormously interesting and important debate.
4.57 p.m.
Lord Falconer of Thoroton: My Lords, I join other noble Lords in congratulating the noble Lord, Lord Best, on initiating this very interesting debate. It comes on a particularly apposite day, because today is the first day after the Homelessness Act received Royal Assent. The noble Baroness, Lady Maddock, asked what the Government had done about homelessness. I do not want to sound remotely churlish, but I must point out that the first legislation that we introduced after winning the election was the Homelessness Bill, which she played a significant part in improving in this House. This is an auspicious day.
Secondly, this is a time when there is huge pressure on housing in London, the South East, the South West and other parts of the country. The private rented sector has an important role to play in seeking to reduce those pressures. The noble Lord has raised a particularly apposite subject today.
The noble Lord's basic proposition was that an expansion of private sector renting could ease the problem of shortage of accommodation in London and other areas of high demand and could assist with the problems of regeneration in the North and the Midlands. I entirely agree with that basic proposition. We also all agree on the need for improvements as far as necessary in the standard of landlording in the private rented sector, the need for improvements in the quality of the properties in the private rented sector and the need to attract as much investment as possible into the private rented sector. We all agree on those propositions. The question is how to achieve those particular aims. I shall therefore first go through the debate's main themes and then deal with the specific points that noble Lords have made in a debate that has been of the highest possible quality.
How does one attract investment into the private rented sector? Political risk was the first issue raised by the noble Lord, Lord Best, and it is important to touch on it. The lower the political risk in relation to the private rented sector, the more a landscape will be
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created for investment by both smaller landlords and institutional investors. The private rented sector is sensitive to changes in regulation. Although the Government have made it clear that they will act on houses in multiple occupation and on the selective licensing of private landlords in areas of low demand—to cover unscrupulous landlords, particularly in the North where there is abandonment, who put in tenants who are very frequently guilty of anti-social and criminal behaviour and destroy communities—the Government have no intention of changing the regulatory framework covering the private rented sector.
The political risk is therefore low, as was emphasised both by shadow spokesmen when Labour was in opposition and by spokesmen and Ministers since the party has been in government. I entirely agree with the comment of the noble Lord, Lord Best, that the political risk is low.
How do we attract investment in a context of low political risk? I shall first outline tax measures affecting both individual small landlords and institutional investors. First, however, I should declare an interest. I and/or my wife are owners of properties that are rented out. We are therefore, as it were, accidental landlords. I should have made that clear at the outset and apologise for not doing so.
I shall deal first with the point on tax raised by the noble Earl, Lord Caithness, and others, particularly the noble Lord, Lord Best. We want reputable investors to expand the supply of decent rented homes. Buy-to-let schemes may now have brought 160,000 better quality properties into the private rented sector. Measures in the May 2001 Budget which, were introduced in response to the urban White Paper provide for 100 per cent capital allowances for conversion of redundant space over shops into flats and zero or reduced VAT rates for refurbishment of empty properties and residential conversions. I think, however, that the noble Earl would agree that although financial institutions are showing a growing interest in the sector they have yet substantially to commit funds.
There is a clear reluctance among institutions to become involved in property management. One solution which the noble Earl mentioned is a tax-transparent vehicle for onshore indirect investment—the so-called US-style real estate investment trust. Although, as he said, that solution has been rejected because of the distortion it might create between the tax treatment of industry and of property, we have not completely dismissed such a vehicle specifically for investment in private rented property. The noble Earl effectively said, "We, the market, have tried; now it is for you, the Government, to present ideas on how to take it forward". Although such decisions are ultimately for the Chancellor of the Exchequer, I should think that the right course is to continue discussing with the industry whether vehicles can be developed to encourage institutional investors without falling foul of the types of distortion to which I have referred. It is very important that we continue that

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discussion, as we have committed to do in the Green Paper. It is sensible for discussions to continue with an open mind on both sides.
The noble Earl also raised the slightly different issue of the tax treatment of landlords. Although, as I said, we are keen to encourage institutional investment in the private rented sector, we also value the contribution of small landlords—who, numerically, as all speakers have recognised, form the backbone of the sector. The fact that residential landlords are classed as investors rather than traders for tax purposes—which was the noble Earl's point—has long led to calls for a level playing field. The noble Earl added to those calls in his excellent speech. Although we have some sympa thy with that view, we cannot ignore the fact that landlords do not face the same degree of risk as traders because of the asset value of their business. Nevertheless, we remain open to sensible suggestions for tax changes.
As we said in the housing Green Paper, we do not want artificial tax breaks that distort investment choices and do not tackle the problems faced by the sector. It is another sphere in which we have taken some action, to which I referred at the outset of my speech. We recognise, however, that other action may be possible. Let us sit down together and see if there are real options not only in the tax treatment of landlords, but in relation to institutional investors. We believe that, in the medium and long term, to encourage the private rented sector, it is very important both to attract institutional investors and to encourage small landlords.
The noble Lord, Lord Best, also referred to house builders and partnerships between house builders and investors. Of course we would encourage that, as we would encourage CASPAR-style developments. Noble Lords who have seen those developments will know how successful they can be. I thoroughly support the comment of the noble Lord, Lord Best, about the potential of such development.
I have dealt with the issue of attracting more money. As for the quality of landlording, we would thoroughly support helping well-intentioned landlords to improve their expertise. We would encourage it through local authority accreditation schemes and other best-practice initiatives. We also believe that various separate but connected initiatives such as tenancy deposit schemes are a thoroughly good idea. I was very glad that, on 13th February, I was able to announce that the tenancy deposit pilot scheme will continue for another two years while we determine whether take-up can be proved, how the scheme can be made self-sufficient, and what legislation might be required to support it in the long term. We all support the idea of improving the standard of landlords.
A connected and very important issue is raised particularly strongly, although not only, in the north of England—where people in areas of low demand frequently say that they are most concerned about antisocial behaviour and criminal activity. As the value of property decreases in areas of non-social housing—which is owned by private landlords—landlords buy
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property and put in tenants who have no regard for the community, commit criminal or anti-social behaviour and cause a rapidly accelerating flight from that community. We have issued a consultation paper, and we are keen to obtain views and act on the issue as quickly as possible—to permit the licensing of property and landlords and to stop landlords from obtaining housing benefit while watching the community be destroyed because of tenants' behaviour. We consider that an issue of considerable urgency.
As the noble Baroness, Lady Maddock, made clear, houses in multiple occupation were the subject of a Government manifesto commitment in both 1997 and 2001. As was said recently— I recommit myself to it now—we shall legislate on houses in multiple occupation as soon as a legislative slot is available to do so. It is an important issue. All the statistics show that the largest proportion of bad quality property is in the private rented sector. Within that sector, the largest proportion of had quality property is composed of houses in multiple occupation.
Baroness Maddock: My Lords, I am slightly worried by the Minister's statement that the Government will legislate when time is available. A Private Member's Bill is going through the other place at the moment which has a section on houses in multiple occupation. Are we to understand that the Government will not support that and will introduce a separate measure?
Lord Falconer of Thoroton: My Lords, we have given support to that Bill but it does not contain full provision for the licensing of houses in multiple occupation. It only contains provisions that pave the way for that. I do not know what happened at the Bill's Committee stage yesterday as I am not as up to speed as the noble Baroness in that regard. Although that Bill goes some of the way, it does not go all of the way to provide a licensing scheme for houses in multiple occupation. That will have to be provided by a subsequent Bill and that is why I say that legislative time is needed to complete the process.
The question of the quality of homes was also raised by the noble Lord, Lord Ezra. He referred to the importance of energy efficiency and gave terrifying statistics on the percentage of homes in the private rented sector with ratings which he rather modestly described—these were not exactly the words he used—as ones that would seriously damage the health of an elderly or vulnerable person who had to live in them during the winter. What is being done? There is grant assistance. We provide help from public funds largely through grants. These are targeted by local authorities on occupiers of poorer condition housing w ho cannot afford to keep their homes in good repair. Renovation grants are given for structural work and average about £10,000 per dwelling. Home repairs assistance grants are given more frequently and tend to be used to pay for non-structural work such as rewiring or essential upgrading. We estimate—this is local authority distributed money—that local authorities will spend annually an average of £280 million of their housing investment programme money on private sector renewal over the current spending period.

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The grants regime currently is constrained by a complex set of rules. We are in the process of sweeping those away by means of a regulatory reform order currently before Parliament. Under the simplified rules local authorities will have greater flexibility to aid home owners by means of grants, loans and loan guarantees. As the noble Lord knows from our conversation on the subject this morning, we also help to fund the Home Improvement Agency which comprises small teams attached to local authorities who help primarily elderly and vulnerable people to identify necessary repairs and improvements. The noble Lord also referred to the warm front zones. He said that when we introduce legislation to license houses in multiple occupation and in relation to the private rented sector we should consider incorporating an energy efficiency requirement in the licensing. That is a sensible idea which we shall certainly examine in considering those two areas of licensing. The three main areas mentioned were: investment, quality of landlords and quality of property. Those are issues that we need to keep under constant review. I have mentioned the steps that we are taking to advance those further.
I believe that three other areas were emphasised. As regards housing benefit noble Lords should make no mistake that we recognise the effect that the poor administration of housing benefit can have on tenants in the private rented sector. It is not just a question of constant difficulties for the landlord making housing benefit tenants unattractive but also the fact that from time to time housing benefit tenants are evicted because housing benefit is so slow in being paid. Delays in payment seriously affect both tenants and landlords. Steps are now being taken to help authorities improve their performance in that regard. The Department for Work and Pensions has developed and consulted on the first ever set of national performance standards. We have increased administration funding for the first time in eight years and established a help fund for local authorities. The new DWP help team has given direct practical support to individual authorities. A pilot scheme has involved social landlords in verifying tenants' claims in order to speed up processing. Last year a more realistic single room rent definition was adopted so that young people can obtain decent privately rented accommodation. This is an important issue. We recognise that more work needs to be done on it. However, we recognise the consequences of not getting it right. We are trying to get it right.
I touch briefly on other issues that were raised. The noble Lord, Lord Graham of Edmonton, was not present when the noble Baroness, Lady Hanham, bewailed the fact that there was only one speaker from the government Back Benches but said that the noble Lord, Lord Graham of Edmonton, was the equivalent of 20 members of our party. The noble Lord's experience in the field is second to none. He gave a warm welcome to the proposals put forward by the noble Lord, Lord Best. He also said that there was no single factor more important than housing in
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contributing to this Government's aims in relation to health, education and fighting crime. I thoroughly agree with that. The noble Lord emphasised the importance of the reform of housing benefit, incentives to encourage greater investment, better management and better regulation. Those are all points with which I agree subject to the point that the regulation must not, as it were, unhinge the political risk. The noble Lord emphasised that local authorities have a role in encouraging investment in the private rented sector. I agree with that. They have a strategic role as regards housing right across their boroughs whether that be in relation to social housing or the private sector. The noble Lord said that the right-to-buy was a self-inflicted wound. However, it is now part of the landscape and we shall not fundamentally change it. We must consider the problems of housing in that context.
I believe that I have dealt with many of the points made by the noble Earl, Lord Caithness. However, I refer to one other point that he made. He said that I would be disappointed if he did not refer to an effective refrain of his during the passage of the Commonhold and Leasehold Reform Bill; namely, the licensing of agents. During discussion on that Bill he said that although there are many extremely reputable and competent agents a few rogue agents of a low standard bring the whole profession into disrepute. As I indicated, we shall consider the question of licensing agents. We shall shortly produce a consultation paper to enable a whole range of options to be considered without giving a particular steer one way or the other.
The noble Earl referred to empty properties, as did a number of other speakers. He mentioned the figure of 760,000 empty homes. He asked whether we would expand the role of the Empty Property Advisory Group. That group, which the department set up in 1999, was established to make recommendations to feed into the Urban White Paper. It was disbanded after the White Paper was published. We are working closely with the Empty Homes Agency to take forward many of the recommendations, including the production of good practice research for local authorities in establishing empty property strategies. The Empty Homes Agency and its partners in the research project are setting up an advisory group of experts which will have a similar role to that of the Empty Property Advisory Group. As I say, the Empty Property Advisory Group was disbanded but a similar body will be set up.
I believe that I have dealt with the main point that the noble Lord, Lord Ezra, made. The noble Baroness, Lady Gardner of Parkes, described herself rather unfairly as a potterer in this area. Having heard her contribution to this debate and to the debates on commonhold and leasehold reform, she may be a potterer as a landlord but she has an extremely effective understanding of the private rented sector. She referred to the benefit of tiny units. In so far as density is an important issue in relation to dealing with the problems of a shortage of affordable housing, I entirely agree with that comment. She mentioned tax, as did other noble Lords. She also mentioned the

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regulatory framework within which private landlords operate. I reassure her that there is no political risk in the private rented sector.
The noble Baroness, Lady Byford, referred to The Way Forward for Housing and sought an update of how that is progressing. I hope that my comments on the quality of landlords, the quality of property, trying to seek institutional investors and encouraging the small landlord have covered many of the points that have been made. I shall read her speech to establish whether I should reply to her in writing about how we are getting on in relation to the Green Paper, The Way Forward for Housing.
I pick tip the point that the noble Baroness made about the importance of affordable housing in rural areas. I thoroughly endorse what she said. Two weeks ago, Mr Alun Michael, the Minister responsible for rural affairs, and I went to visit a rural affordable housing scheme in Lewes. All of the points that the noble Baroness raised were strongly and effectively made by the local authority down there and by the housing association that was setting up the scheme. That matter can all too easily be overlooked. I hope that she will recall that in our 2001 manifesto we committed ourselves to a specific number of affordable houses in rural areas for a number of years—I cannot remember the exact figures—because we recognise precisely the problem that she identified.
I believe that I have dealt with all of the points that were raised by the noble Baronesses, Lady Maddock and Lady Hanham. Once again, I congratulate the noble Lord, Lord Best, on an effective and important debate.
5.21 p.m.
Lord Best: My Lords, I thank all noble Lords who have contributed to this debate. It has been a joy to be part of it. I especially thank the noble and learned Lord the Minister for a very full response to all of the matters that we have discussed and in particular for saying on four occasions that he is open to bids and offers and is very willing to sit down and talk through a number of issues, including regulation, taxation and much more. I assure him that his offer will be accepted, not least in relation to the report from the commission on the private rented sector, which will come out in the spring. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Poverty and Terrorism
5.22 p.m.
Lord Dahrendorf Lord Dahrendorf rose to call attention to the links between third world poverty and terrorism; and to move for Papers.
The noble Lord said: My Lords, as I rise to,
"call attention to the links between third world poverty and terrorism".
I hasten to add the reservation:
"Poverty does not cause terrorism and conflict, but it increases the risk of it".
Those are actually the words of the Secretary of State for International Development, Clare Short, and I agree with her in that, as in her conclusion that what is needed is "more aid, better spent". But why does poverty increase the risk of terrorism? And how can aid be spent better?
On the extent of third world poverty in this age of globalisation there can be no doubt. Former President Clinton has, in his Dimbleby Lecture and elsewhere, cited the figures, which bear repeating:
"One billion people live on less than one dollar a day; one billion people go to bed hungry every night; a quarter of the world's people never get a clean glass of water; every minute one woman dies in childbirth".
This is, as Mr Clinton argued, the flip side of globalisation. It creates a lot of angry people. Some of them remain just frustrated and apathetic. Some want to "destroy the civilised world". However—this is Mr Clinton again—
"a lot of people are angry because they want to he a part of tomorrow, but they cannot find the open door".
That in fact is my theme, and helping them find the open door is our task.
Perhaps I may offer one further quotation—not from a politician but from the thoughtful and compassionate analyst, Michael Ignatieff—which identifies the link referred to in my Motion in words that I could not have chosen better. Mr Ignatieff said:
"One of the unacknowledged underlying causes of the September 11 events was the coincidence of globalised prosperity in the imperial world with disintegration in the states that achieved independence from the colonial empires of Europe in the 1960s. The collapse of state institutions has been exacerbated by urbanisation, by the relentless growth of lawless shantytowns that collect populations of unemployed or underetnplo)ed men who can see the promise of globalised prosperity on the TV in every cafe, but cannot enjoy it themselves. In states like Pakistan, where the state no longer provides basic services to the poorest people, Islamic parties, funded from Saudi Arabia, step into the breach, providing clinics, schools, and orphanages where the poor receive protection at the price of indoctrination in hatred".
We do not have to go to the third world to find the Ignatieff syndrome, if I may call it that. The so-called "shoe bomber" from Bromley, Richard Reid, illustrates the path from rootlessness to petty and not-so-petty crime, to prison, and from there to the hands of caring Muslim mullahs, on to the community of the faithful and further to militancy, ending in training for terrorism in Pakistan.
In the third world, the syndrome occurs in a systematic way. There are several kinds of terrorism, and what I have to say does not apply to all. One major strand, however, is related to the frustrations of the pathways out of poverty. It is not the truly destitute who organise themselves or turn violent, nor is it the traditional poor; it is those who have left the traditional cycle of poverty—for the most part of village life—but have failed to find a place in the new scheme of things. They have smelled a life which has inspired their dreams—often through American symbols, such as Hollywood, Coca-Cola and the rest, which is why America looms so large in their minds—but they cannot find a place in it. The noble Lord,

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Lord Puttnam, who would have liked to have been here for this debate, sent me a recent statement of his in which he talked about,
"the very real prospect of a fundamental 'dislocation' between the world of the imagination created by the moving image, and the everyday lives of people around the globe".
It is not just cultural dislocation that I am talking about; many of the people in question end up in favelas and shantytowns within sight of the glittering city lights and far away from the homely misery of their origins. They are lost between roots that are cut and fruits that will remain distant hopes. This is where that cocktail of envy and hatred is brewed, which makes terrorism so vicious.
Nor is that just a failing of individuals. The seriousness of the predicament that I am describing lies in the fact that it is an almost inevitable stage on the path from poverty to prosperity. Modernisation initially means uprooting. Remember The Bleak Age of industrialising Britain—described so vividly by social historians and novelists—Gin Lane, the workhouses and the acts of Luddite destruction and of burning down prisons? For whatever reason, there is no straight path from poverty to prosperity. Things get worse before they get better. The process called "development" begins with a valley of tears, and many lose patience during the trek. They seek a shortcut to a better life by what the authors of The Bleak Age, the Hammonds, called "the remedy of the New World"—that is, by migration—or they express their frustration by committing crime, including terrorism. Many do both in a "runaway world".
That is the background and central thesis of my Motion. But of course for us, in Parliament, the key question is: what can we do to mitigate the process at which I have hinted? Let me leave no doubt. So far as terrorism is concerned, it must be fought. Nothing offered here by way of explanation should be misread as an excuse. I agree wholeheartedly with former President Clinton that,
"there is no excuse ever for the deliberate killing of innocent civilians for political, religious or economic reasons".
But once this battle has been won, the major task remains. As Mr Chris Patten put it in a recent speech, after the "smart bombs" we need a "smart development policy".
In order to indicate what that might mean, I want to make five points which are also five questions to the Government. The first is that a smart development policy is not only about money. To be sure, such a policy is bound to be costly, but neither debt relief nor financial aid transfers to governments will achieve what is needed. In particular, we should stop talking about a Marshall Plan for the developing world. In so far as the Marshall Plan after World War II was successful, it served to aid reconstruction in countries which had had a developed infrastructure and, above all, a population trained and motivated to go forward to a modern economy and society. The money needed for development today needs much more careful targeting.
Secondly, the major task of any smart development policy is institution-building. This is no longer a new idea; the World Bank and even the IMF know it. Certainly the Government are aware of it, and I commend the recent Strategic Defence Review paper, A New Chapter, for including sections headed "Tackling the Basis of Terrorism" and "Engaging the Causes". Action has not yet quite reached the level of such knowledge. Governments could do worse than take Professor Amartya Sen's book, Development as Freedom, as their guide. Without what Sen calls "political freedoms", "economic facilities", "social opportunities" and "transparency guarantees", there will be no sustainable development.
Translating such principles into action is not easy. In essence, it means giving more emphasis to the social infrastructure of third world countries than to their physical infrastructure. Establishing the rule of law is critical, and it has to do with creating an incorrupt judiciary. Teachers have to be trained, and nurses. One is obviously hesitant to recommend the creation of further international institutions; there are probably too many already. However, given the collapsing state structures in many third world countries, there is a case for charging particular international agencies with building a social infrastructure that lasts.
I have quoted Sen's "types of freedom", as he calls them, except for one, which brings me to my third point: protective security. In developing countries in particular, it is, in Sen's words, necessary,
"to provide a social safety net for preventing the affected population from being reduced to abject misery, and in some cases even starvation and death".
I would add the argument: for preventing those frustrated by the long trek through the valley of tears from turning to terrorism to express their frustration. "Fixed institutional arrangements", in Sen's words, for cushioning the difficult passage to relative prosperity are hard to create and costly to guarantee. But, without them, we shall all pay an even higher price.
My fourth point is simple. We need examples of success in order to gain support for the smart development policy. That means concentration on particular countries. Whoever aims at everything will probably achieve nothing. That is why I believe the work which my noble friend Lord Ashdown is going to do in the Balkans is so important, and it is why I believe that Europe would be well advised to concentrate on the critical country of Turkey as much as on any other.
My fifth and final point has to do with Europe. The record of the European Union in development policy is mixed. It is certainly not a model of the smartness which Commissioner Patten had in mind. Yet such a policy would be an important contribution to a true partnership with the United States of America. America's readiness to intervene in many parts of the world by military means is not coupled with a similar readiness to contribute to building sustainable liberal institutions in foreign parts. We Europeans, whose collective military capabilities are likely to remain

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weak for a long time to come, have a task here which is suited to our experience, our interest and our capacity. My Lords, I beg to move for Papers.
5.37 p.m.
Lord Stone of Blackheath: My Lords, I believe that the debate will show that there are links between poverty over there—wherever "there" is—and terrorism over here. But there are those who believe that, because of that link, we should do more over there for our own good and to protect ourselves. I hope that the debate shows a closer link and a different motivation for our concern.
I returned only yesterday from Ecuador. The level of absolute poverty there has just risen from 35 per cent to 70 per cent. The links between poverty and terrorism there are obvious, immediate and local. I met Jennifer on Sunday. She is four-and-a-half years old. She had been kept in a cardboard kennel in a back yard until last Thursday by adults who were not her parents. She had been hit so hard that it broke her jaw. She had lost most of the sight in one eye and one ear was badly affected. She had also been sexually abused. Her story is not uncommon, and I believe that that is the terrorism which is linked to poverty.
But I have come to report positively for this debate. I saw at first hand the type of work that wins over the hearts and minds of those who find themselves confronting extreme poverty and other difficulties. In Santo Domingo de los Colorados, the group of five people whom I accompanied, four of whom were British. went to help Orphaids, an organisation which helps children of parents with HIV or AIDS. John and Brenda Hart work for that NGO, running a project which provides a local home for such children just before or after their parents' death. The children receive bereavement counselling and the security of knowing that they will have a family and a safe home after their parents die. The parents have the comfort of being able to die knowing that their children will be safe in the future. I am sure that your Lordships will he pleased to know that the British Government will he supporting that project.
On a wider scale, since our trip, which was linked with Orphaids, PLAN International, a child-centred community development organisation, is now working in Ecuador with more than 70,000 families, with 3,400 local volunteers in seven localities, to help communities to improve the lives of their children. There are tangible results. The children now have access to better education, health and water, all thanks to partnerships between their parents and their local communities, local governments and NGOs. Over 100,000 people in Britain contribute to that work. Our own Department for International Development is also making a difference, supporting a very important child rights programme, giving children a voice and changing adult behaviour on issues such as abuse and child labour.
I also visited the indigenous Colorados Indians, who. with help, are improving their own society. They invited me to their meeting house, where they were
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discussing alternatives to the traditional hereditary method of finding their leaders. They asked for my views. They also said that their priorities for their community are education, health. crime and economy. I asked them, "What about transport?", and they said that they did not have much. They asked whether I could help them to find a couple of vehicles. I said I would ask.
Ecuador is not a country that experiences much international terrorism. It is certainly not a country that sponsors state terrorism. However, I believe that there is little room for complacency. Ecuadorians living in the border provinces, in Esmeraldas and Carchi, have experienced years of extreme poverty. Until recently they have received little help from either the central government or the international community. Some of their people are now forced to work in cocoa plantations across the border in Colombia, where the cocaine production business is run by terrorist organisations such as FARC, ELN and AUC. Those organisations began over 30 years ago as extreme left or right-wing movements fighting poverty. That is the fertile ground in which terrorist groups can recruit new members.
Our targeted help at the right time is exactly what is needed to reverse that type of situation. But in my view that work is best done altruistically, concerned with the violence and terror that is perpetrated on their children, rather than as an afterthought for our own self-preservation. I want to report to your Lordships' House that in Ecuador I saw wonderful British people doing just that.
My hope is that this debate will help those who live in extreme poverty in Ecuador and elsewhere to continue to receive the help that they need and I hope that we decide to increase resources in the future for their sake and not for ours.
5.42 p.m.
Baroness Park of Monmouth: My Lords. we are all grateful to the noble Lord, Lord Dahrendorf, for initiating this important debate. A terrorist is defined as one who favours or uses terror, whether in governing or in coercing a government or community. Just such effects can be seen in the Sudan, Myanmar, Indonesia, Cambodia, Vietnam (for a long period after the Vietnam War), Iraq, Sierra Leone and Nigeria, and today there are the very different but almost equally menacing situations in Afghanistan and Zimbabwe. I saw state terrorism for myself in the Soviet Union in the 1950s. For once I shall say nothing about our own home-grown terrorists.
However, I do not believe that terrorists spring from the poor and the oppressed, although poverty has necessarily been enhanced and prolonged by terrorist activity. Osama bin Laden and his followers are not poor, nor do they profess any mission to help the poor, but only to destroy what they hate in society, whether in the US or in some rich Arab state. Like the BaaderMeinhof gang, like Carlos the Jackal who was harboured by the Sudan, like Patty Hearst in the US, many are angry, spoilt, power-seeking children of the rich and privileged who want to destroy, not build.

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Unfortunately there is a potent extra ingredient in the make-up of Al'Qaeda and that is the religious fanaticism that attracts some young men who lack purpose in their lives. To some extent that is our fault as we offer them nothing satisfying in which to believe. So far as I know, Al'Qaeda has never claimed that it wishes to redress poverty or to help the poor. Its members want to impose their particular brand of fanaticism.
Indeed there was a time when, in Latin America. extreme poverty and anger was a breeding ground for revolution and for ideologically inspired violence, which was understandable. However, today the very poor in Africa—the continent that I know best—are astonishingly patient, courageous and ready to try to make things work. They are not destroyers. Changing continents, my cook in Hanoi had one modest ambition: that his daughter should be a teacher. That is not much to ask. Zimbabwe and Sierra Leone are two examples of the fundamental, solid decency and sanity of people under attack, whether from state terrorism or violent men.
If the events of 11th September have given the world a wake-up call so that we may act more effectively to help to relieve world poverty that is good. I hope that all those Tokyo pledges will be kept. However, I do not believe that those events happened in the name of the poor.
It is nearly half a century since the colonial era in Africa ended. In that time the African formula for power residing, if not with one leader then at least with one powerful group, whether tribal or military, still effectively obtains in many countries. As Lumumba once explained to me, to tolerate an opposition is to demonstrate weakness not strength. Therefore, we are dealing with small, privileged groups.
It often puzzles me that the British are ashamed of their colonial past, which left a relatively sound administrative and economic infrastructure, the English language and the rule of law in a continent ruled and fragmented until then on tribal lines, wholly unadapted to the modern world. Yet we deliberately leave action on Zimbabwe to the EU on the grounds that, unlike us, it has no colonial overtones. The EU contains such brutal and incompetent so-called colonisers as the Belgians, the Germans, the Spaniards and the Portuguese and even, to some degree, the French.
NEPAD is now the "in" thing. The concept is admirable, although because of the African power structure I have doubts about how far any economic wealth will trickle down to the people. However, if we are rightly bent on treating African states as we would treat any other economic partner, we must recognise, as the World Bank does not, that Uganda does not yet enjoy the sophisticated infrastructure of Switzerland. En revanche, the African leaders must no longer be allowed to manipulate us by rejecting constructive criticism as colonialist, as has happened in the past, in regard to many of our best aid programmes. Colonialism has been dead a long time. It survives only
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in the minds of some politically correct gurus who believe it to be a credible reason for failure or, worse, inaction.
What is needed, and soon, is energetic measures to help each country to strengthen its infrastructure; for instance, through extensive training courses for administrators. It was the total absence of that that was Belgium's criminal legacy to the Congo, which should have been prosperous. Finally we must begin by reinforcing strength where it exists. Such countries as Zimbabwe, and to some extent Uganda, can be regional hubs of success. Let us build on that. Prosperity and law and order for the ordinary people will be one of the best, although slowest, ways of countering terrorism.
I have two further points. It is time we ended the proliferation of increasingly useless new organisations and made the existing international bodies, such as the UN and the Commonwealth, more effective. The Harare declaration has proved to be a hollow joke. The real test of the Commonwealth now will be the report of the observers of the Zimbabwe election. I am deeply grateful to the Government for the further injection of money that was announced yesterday. Nevertheless, once we have the result of that election, the Commonwealth will have to take some action.
My last point is that we should be seen to believe more in ourselves. Sierra Leone wanted us hack because the colonial experience for them—surprise, surprise—was good. Every important black leader in anglophone Africa whom I have known had at least one loved and admired colonial service friend and mentor. They respect us when we respect ourselves. We should believe in ourselves more.
Touring round Africa with the French, who have a different agenda, and incidentally who were responsible for much of the violence and tragedy of the Great Lakes region, may do us good in the EU, but in Africa we should and could stand on our own decent record and act fearlessly.
5.48 p.m.
The Lord Bishop of Guildford: My Lords, I must pray the indulgence and forgiveness of the House. Today I am on duty in place of my good friend the right reverend Prelate the Bishop of Hereford, who had hoped to contribute to this debate. I was determined to be present for this debate as chair of the board of Christian Aid, but this evening I have a longstanding engagement in Guildford that I cannot escape, so I doubt that I shall be here for the duration. That is my loss because the noble Lord, Lord Dahrendorf, has introduced a subject of profound importance to all noble Lords. I share the gratitude of the House for that.
I want to establish a basic principle. One can raid moral and ethical thought and philosophy; one can dig deep into the heart of all the main religious traditions of the world; but nowhere will one find anything to justify the slaughter of innocent people. Whether one considers the terrifying experience of total war that was our lot in the 20th century, the suicide bombers

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who blow themselves up in open markets, or helicopter gunships and tanks firing shells at innocent people, one looks in vain for any principled justification for killing the innocent.
I am proud, if I may say so, to belong to a Church which owns the memory of Bishop George Bell, who had the profound courage in the midst of the last war to question the carpet bombing of German cities. We said, post- 11th September, that we must respond to those wicked acts of terror by holding to the values of our history and culture in the practice of our international politics. If we allow an unprincipled pragmatism, which can sound so sensible in the immediate, to govern our politics, what response will we make to those who say that the only way we will shift injustice in our world is by indiscriminate acts of violence? "If it works, it must be OK", is not a principle of moral and religious conviction that we can accept.
So let us begin by drawing that moral line. But if the challenges of poverty and injustice in our time are not to be addressed by the route of violence, how are they to be tackled? The despair that many feel that there are no answers and that there is no hope will tempt people into seeking whatever way seems available to them if those of us with power and opportunity are not seen to be facing those challenges with urgency and commitment.
The moral challenges of poverty and injustice are huge, as the noble Lord, Lord Dahrendorf, ably set out before us this afternoon. We cannot go on, through the process of globalisation and liberalisation in our international economic order, increasing the prosperity of the developed world while we leave billions of the rest of the human community behind. What strategies do we have for dealing with those challenges?
It is easy for us to point to war, civil disorder and mismanagement across the continent of Africa, for example, as the reason for so much poverty. There is truth in that. But following the suggestion that we should be specific, let me take noble Lords to the nation of Tanzania. It is one of the poorest nations in the world. But it is a peaceful country which, because it is at peace, can easily be forgotten in the cycle of need in our international community. The greatest contribution that its founding father, Julius Nerere, made was not rural socialism, but the uniting of its culture into one language and one political community. It is a country of equal numbers of Christians and Muslims, of people of many tribal and cultural backgrounds now owning a common commitment to the nation. People can walk the streets of Dar es Salaam, as I have, in peace.
I am told that 40 per cent of the world's population is under the age of 15. In countries like Tanzania the vast majority of the people are under the age of 25. The tackling of poverty can only happen by deliberate strategic action seeking to ensure that the systems of trade and international finance work for the poorest nations of our world. We have much still to do in that regard. Yesterday I was at a meeting, one year on from
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an international conference on child poverty addressed by the Chancellor of the Exchequer. As was indicated there, we still have huge strides to take.
In relation to the issue of terrorism I turn to the Gaza Strip, to which some noble Lords may have been. If you enter some of the Palestinian refugee camps on the Gaza Strip you encounter the deep, seething anger of people about the injustice. This is the feeding ground of violence. We must tackle those issues politically. We must say to our American friends, "Unless you confront the issues of justice in places like that and not simply talk about the violence, you will go on feeding the possibility of terrorist action in our world".
Across our world emerging generations are looking to us to see whether we have the moral courage to meet the demands of justice for the poor and dispossessed. As the prophets of old made clear, protesting our religious or ethical purity carries no weight unless it is accompanied by actions which demonstrate our commitment.
Later this evening I shall be addressing a meeting in my diocese on the passion of Christ. There is an unbreakable golden thread of hope which links that theme to our debate this afternoon. It calls us to costly action for the helpless, and that is the meaning of this debate so beautifully moved by the noble Lord, Lord Dahrendorf, this afternoon.
5.55 p.m.
Lord Rea: My Lords, I agree with the right reverend Prelate that the noble Lord, Lord Dahrendorf, has chosen a crucially important subject. Since September 11th many voices have spoken about eliminating the root causes of terrorism. Those have included the Prime Minister. His words at the party conference are familiar:
"Out of the shadow of this evil should emerge lasting good—above all justice and prosperity for the poor and dispossessed".
Former President Bill Clinton voiced similar wise words, as the noble Lord said, at the Dimbleby Lecture. However, the present incumbent in that post has been much more insistent on being—to borrow a phrase—tough on terrorism rather than tough on the causes of terrorism. Tackling those causes is a much longer-term project. Some might say it is an endless task, not worth attempting; that terrorism as an evil must first be stamped out. I suggest that that would be the endless task, rather like the war on drugs—and that will be the case even if the body now being examined by the United States turns out to be that of Osama bin Laden.
Optimists suggest that September 11th should act as a stimulus to redouble the efforts we are making through DfID and international organisations to eliminate poverty, promote democracy and good governance. But as far as I am aware no systematic analysis of the links between underdevelopment and terrorism has been carried out. The noble Lord, by initiating this debate, has started the ball rolling.

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As he pointed out, third world poverty underlies some "terrorist" activity, but the relationship is neither direct nor, as the noble Baroness, Lady Park, pointed out, universal. Terrorism means different things to different people. The definitions of terrorism in both the Oxford and Chambers dictionaries are interesting. Chambers says that terrorism is:
"An organised system of violence and intimidation, especially for political ends".
The Oxford Dictionary defines it as a "system of terror" or "government by intimidation". The words used by both tend to suggest more that terrorism is a system used by states against the people than vice versa; and that the activities of many repressive states constitute terrorism.
The purpose of torture, for example, is more often than not to intimidate and terrify people than to extract information. The extra-judicial killing of political activists, as well as eliminating the activist, is an instrument of intimidation directed at the population. When there is widespread feeling that a government are not responding to legitimate concerns and are violating human rights, activists and the population that supports those activists are driven to direct action. At first that may be non-violent—demonstrations, for instance, or the occupation of buildings—but if it is then resisted by state security forces using force or brutality, popular movements are driven to take up arms against the state. In that way coercive states can generate "terrorism" which is then directed against themselves in response to their own negation of human rights and intimidation of the population. The indirect link between terrorism and popular political action to reduce poverty by the people of the state in that kind of situation I hope I have made reasonably clear.
Mary Robinson, the UN High Commissioner for Human Rights, said in a lecture that I attended last November that extreme poverty was,
"the worst problem in human rights in our world today … [It] means a denial of the exercise of all human rights and undermines the dignity and worth of the individual. And yet, even in situations of extreme poverty the human spirit triumphs in fighting back".
The example she then gave was of a benign NGO-led project in a Delhi slum. But for many others poverty and a desperate and frustrating life, as suggested by the noble Lord, Lord Dahrendorf, lead people to seek desperate remedies. Among these may be to join a religious movement which welcomes them into a faith and brotherhood and offers the promise of a better life and, at the same time, a target for their anger. Fundamentalist Islam fits this bill very well.
In an article in the Telegraph on 24th November, a South African, RW Johnson, described,
"the third world's love affair with Islamic fanatics".
He further stated that,
"the fall of communism deprived the so called non aligned bloc of the leadership it had [formerly] implicitly accepted".
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More crudely, the noble Baroness, Lady Thatcher, recently described militant Islam as "the new Bolshevism", with the implication that it was to be confronted and fought rather than be made redundant through increasing prosperity.
Again I echo the right reverend Prelate. Although poverty may underlie terrorism, the immediate trigger is almost always widely perceived as unbearable injustice. An example is the central—but not the only—reason for the anti-American stance of Al'Qaeda and similar radical Islamic movements. That is, the United States support for Israel while it is illegally occupying parts of Palestine. A solution to this problem would truly be a "giant leap for mankind" against terrorism. Let us hope that George W Bush, in cautiously welcoming the current Saudi initiative, has perhaps seen the light.
6.1 p.m.
Lord Moynihan: My Lords, I commend the noble Lord, Lord Dahrendorf, on his choice of debate. I congratulate him on his success in the ballot.
One of the consequences of the terrible events of September 11th was the establishment of a consensus; not only for a global coalition against international terrorism, but also for a global coalition against poverty. Nations and institutions alike agreed that action to alleviate poverty worldwide was needed to prevent a repeat of those atrocities.
We can only eliminate terrorism if the fertile conditions which breed it, such as poverty and marginalisation, are removed. I have fears that the political will for this view is likely to be difficult to sustain in the long term. It may become a poor relation to the more specific coalition against international terrorism. As the noble Lord, Lord Rea, has stated, poverty reduction is a long-term mission. There are no easy short cuts nor quick fixes.
The only way to eliminate the terrorist threat permanently is to understand and to treat its causes. Healing its symptoms can only ever be a temporary cure—neutralising the threat perhaps, but not removing it. The international coalition against terrorism has more easily measurable goals and is capable of more rapid successes—witness the collapse of the Taliban in Afghanistan. But the reduction of poverty and inequality is perhaps our most potent long-range weapon against terrorism.
Poverty and terrorism are often two sides of the same coin and our response must continue to be a twin-track one. One track is the uprooting and destruction of the Al'Qaeda network and its allies around the world. Parallel to that runs the equally important track of rendering infertile the soils of poverty, suffering and resentment in which the seeds of terror grow.
There is a minority school of thought which disputes the linkage between terrorism and poverty. Its advocates argue against a connection between socioeconomic indicators and involvement in terrorist activities and suicide attacks in particular. Some even lean towards a darker view of humanity altogether, in

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which the evil of terrorism is part and parcel of the human condition—the tainted countenance of human nature.
Those who dispute the linkage between poverty and terrorism argue that the common stereotype of terrorists as uneducated, impoverished, disenfranchised unfortunates is no more than a myth. Some of the evidence supports that position. Osama bin Laden, born into wealth and privilege in Saudi Arabia, is held up as proof that it is not poverty which causes terrorism. It is often pointed out that the perpetrators of the World Trade Center and Pentagon attacks did not fall into the category of the poor and the hopeless, but were college-educated men, from middle-class Saudi Arabian and Emirate families.
That has led to a search for other reasons to explain the lure of terrorism. Some believe that the lack of democracy and the state-centred systems of government in countries such as Saudi Arabia, which allow their young subjects no official outlets for dissent or opposition, are to blame.
Terrorism is a many-headed hydra. Sometimes terrorism has a coherent political agenda; and sometimes it is used in a less focused way, to express rage and protest, or to advance an extreme and fanatic religious agenda, or even for more obscure pathological reasons. In all cases, terrorism makes no distinctions in its choice of victims. The young and the old, the rich and the poor, the politician and the bystander, are all legitimate targets to the terrorist. The power of modern communication to project the horror of terrorism has made it a devastating weapon. The ancient Chinese strategist, Hsun Tzu, defined terrorism as:
"Kill one, frighten ten thousand".
With the communications revolution and the power of television, many more today are frightened, but the principle is the same. While the aims and objectives of individual terrorists groups may differ, there is common ground to be found in the root causes of terrorism. Kim Dae-Jung, the Nobel Peace Prize winner stated the matter well:
"At the bottom of terrorism is poverty. That is the main cause. Then there are other religious, national and ideological differences".
I do not say that there is always a direct linear route between poverty alone and the extremism or fanaticism which is so often the driving force behind terrorism. Nor does all terrorism have its roots in poverty, but when its origins lie elsewhere terrorism's adherents have tended to operate on the margins of society. But where terrorism finds resonance and support in the mainstream of a society, where it is perceived as a genuinely viable option, in those cases, poverty and despair will be found cheek by jowl with violence and fear.
I have said before that I do not believe there would have been the same level of popular support among so many in Pakistan for the Taliban and Osama bin Laden if Pakistan was not one of the world's poorest, most illiterate, most malnourished and least gender-sensitive regions in the world. Forty per cent of
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Pakistan's population lives below the poverty line; 36 million of its inhabitants live in absolute poverty; over two-thirds of Pakistan's adult population is illiterate; and half of all child deaths each year are linked to malnutrition.
Likewise, and I agree with the right reverend Prelate, I believe that the poverty of the Palestinians has nurtured their support of terrorism against Israel. Their standard of living has fallen by some 40 per cent since the signing of the Oslo accords, while unemployment rates are between 20 to 30 per cent in the West Bank.
A life lived in poverty, a life of hardship and a life devoid of hope, is one where terrorism may find the support it needs to succeed and where those who feel that they have nothing to lose and all to gain are willing to sacrifice everything, including their lives. This is one of the most important challenges of our time.
6.8 p.m.
Lord Maclennan of Rogart: My Lords, I too am grateful to my noble friend Lord Dahrendorf for highlighting, in what may only be a quiet period between outrages, the threat of terrorism and the need to look more fundamentally than has been done here and elsewhere at what we can do to eliminate that irrational reaction to civic dissatisfaction.
I agree profoundly with what my noble friend has said. Therefore, I shall focus my remarks on the rebuttal of arguments that are not likely to be heard in this Chamber but which may be adduced elsewhere to qualify some of the prescriptions that he has offered. First, there is the argument that we do not know what causes these suicidal terrorists to commit to irrational self-destruction. It is true that the psychology of suicide bombers is not to be read like an open book. Few of them leave suicide notes in purported explanation of their actions. Comments about motivation made by third parties seeking to magnify the effects of their horrific actions may be exploitative rather than truly explanatory, but none the less the general thesis advanced by my noble friend is right. I support it entirely.
In answer to those who would argue otherwise, it is not so much the fact of destitution as an awareness of contrasting relative affluence elsewhere that provides the seedbed for terrorism. That awareness is inevitable. We cannot insulate ourselves from it or erect barriers against it. It is simply inconceivable that growing populations in North Africa, for example, enjoying direct media information on European life in all its affluence, will simply accept a large adverse disparity of income without seeking to do something about it. As Sam Brittan wisely observed,
"The situation in which capital is mobile but labour is not is hardly permanent. Movements across the Rio Grande between Mexico and the United States are surely suggestive of what will happen in Europe … Migration, whether legal or illegal is about the most peaceful move they might attempt".
It will not do for affluent countries to found their policies towards the third world on the belief that the prevailing distribution of wealth and income is sacrosanct. Nor can we regard the' alleviation of

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poverty mainly as a matter of voluntary insurance or private benevolence. I must say that I have heard that kind of argument recently—last week, in fact—in both Washington and New York from people whose views I regard as well-intentioned but entirely mistaken.
My footnote is to seek to address a little further the imperative for institutional reform to which my noble friend referred, and which is powerfully argued by Amartya Sen in his book on development. The argument is sometimes deployed that it is no business of ours to seek to export our western notions of democracy and liberty to other countries that have their own way of doing things. That view is simply ahistorical and superficial. It fails to understand the philosophies expressed, especially on the Asian continent, far further back even than our own Christian dispensation.
The Buddhist convert, Asoka, who presided in the third century BC over an empire greater than the British Empire, promulgated views of religious toleration that would do well to be adopted by countries today, although India is by no means the country that one looks to for their enshrinement in law, for it is already among the most tolerant countries in Asia. Akbar, to take an example from another religion, was responsible for promulgating views about tolerance in legislation in 1590 in the Mogul empire, which should also be drawn to the attention of the intolerant Islamic extremists who have sought to deny such toleration.
Perhaps the most insidious anti-western view has been expressed by Lee Kuan Yew and his followers, who argue that an authoritarian solution is the only way forward and the only system compatible with economic growth. That too is shallowly based and does not stand up to scrutiny even in Africa, where Botswana, notably, has a highly successful developed democracy and the highest rate of growth.
This debate should be regarded as commenced by our discussion today. Given the enthusiasm of Members present to speak, all of us inevitably must confine our remarks, but I hope that we can take practical steps to support initiatives by governments—especially our own—to promote democratic underpinnings which make expenditure on aid more likely to be fruitful in defeating the frustrations that have given rise to terrorism.
6.15 p.m.
Lord Desai: My Lords, one of the minor tragedies of September 11th was that it led to much muddled thinking. This debate on terrorism and poverty is an example of such muddled thinking. Of course, we should all do everything to eliminate poverty; that is quite right. I may turn to some dubious statistics about poverty later, if I have time. But we should never eliminate poverty because if we do not people may terrorise us. That is the perfect incentive for everyone to pick up a brick and throw it. We cannot establish any sort of invariable link between poverty and terrorism. The noble Lord, Lord Dahrendorf, is a
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distinguished social scientist. He knows how difficult it is to establish correlation between anything in social science, so let us not go down that road.
We ought to think of eliminating third world poverty, but the connection lately made—since 11th September, as if there had been no terrorism before then—is misplaced. It leads us to fallacious thinking about globalisation, among another things. One statistic that has not been mentioned is that during the past 30 years more people have been brought out of poverty than at any time in human history. I do not deny that there is still a lot of poverty, but the spectacular growth rate in Asia, China, Korea, Indonesia, Malaysia, and so on has brought perhaps—I am guessing—1 billion people out of poverty during the past 30 years. So let us not hear anything about globalisation increasing poverty and all that nonsense. There is no hard evidence for that. There is a lot of poverty; it is very bad: and we should do something about it.
If I may add a footnote, we are not going to give anyone any aid. Forget about it! If we do not even help our own poor, we are not going to help the Third World. But we can at least stop subsidising ourselves with 300 billion dollars of subsidy for our own agriculture. We can stop being protectionist, so that we keep out the goods of the Third World as if our jobs are so much more important than their jobs. Recent articles in the press depicting a plant in Romania as a great enemy of our jobs in Britain showed how close protectionism is to all our hearts. Any money given abroad is our enemy because we care only about our jobs, their jobs do not matter. So the first thing that we ought to do is to stop being protectionist, stop subsidising ourselves and stop polluting the world. The poor will then take care of themselves and get themselves out of poverty. We should get out of the way rather than hinder them.
I have two minutes left in which to say something about terrorism. One root cause of terrorism is nationalism. There are lots of nationalist struggles—struggles that arise from injustices felt by nationalists against colonial or other oppressors—which lead to terrorism. Terrorism played a part in the creation of the state of Israel. It was born because its people had a grievance against an occupying power and took to terrorism. I have said before in your Lordships' House that the history of our Commonwealth has been one of terrorists becoming Prime Ministers. So, the new-fashioned idea that terrorism is all bad and that, therefore, we ought to do something about it is very dubious. It is bad thinking.
When we consider Northern Ireland, Palestine, Kashmir or Sri Lanka, we see that many struggles arise from the ills of nationalism—nationalism frustrated or denied and people not given as much territory as they thought they should have had. That is why people rise in revolution. It used to be said during the Cold War that if the first world did not give aid to the third world everyone there would become a communist. Well, we did not give them aid, and they did not become

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communists. Simplicities such as the belief that if we do not relieve poverty there will he more terrorism will not do.
As the right reverend Prelate the Bishop of Guildford said, it is important that we settle the major problems of injustice, and they are political injustices. It does not require money to solve the problem of Palestine or the problem of Kashmir. In Sri Lanka, which is an exemplary country in terms of human development, they have been killing each other for 20 years. They have been killing each other not because there is no clean water but because there is a nationalist struggle between the Tamils and the Sinhalese.
We should do lots of things about terrorism and lots of things about poverty, but we should not mix the two up.
6.21 p.m.
Lord Hylton: My Lords, I thank the noble Lord, Lord Dahrendorf, for his powerful introduction to the debate. It would be helpful to find a consensus about the causes of terrorism. No doubt some links between third world poverty and terrorism can be shown. However, they do not explain why relatively affluent Britons and Americans should rush off to join Al'Qaeda. They do not explain why, in the past, rich, well educated Germans and Italians joined the BaaderMeinhof gang or the Red Brigade. The long-standing use of terror in Northern Ireland, the Basque country and Corsica seems to have little to do with poverty. Nor does the extreme violence of some animal rights campaigners in this country.
Poverty is a depressing and depersonalising situation, but I doubt whether it is a prime cause of terrorism. Terrorism is more closely connected with powerlessness and injustice, with a sense that all channels of non-violent or political progress have been blocked off. Basic human needs theory maintains that subsistence needs are the most immediate and pressing. Once those have been satisfied, even inadequately, people try to meet their non-material and spiritual needs. Prominent among such higher needs is the quest for identity, which is both personal and corporate. It concerns the identity of the family, the tribe or the nation. Identity is denied if people are obliged not to use their own language or culture. Their identity is threatened if they feel that they have no economic or political rights. When identity is denied, people often become violent. Ideology or religion then provides the spark for terrorist violence, even suicidal violence.
I shall give some examples. In Northern Ireland discrimination and unemployment over a period of 45 years from 1922 led to nationalist alienation. There was fertile ground for IRA violence, once civil rights marchers had been attacked. Now, after the Belfast agreement, we are trying to cope with Unionist alienation. In South Africa, the ANC long maintained a non-violent stance. Only when apartheid became a wholly closed system. withholding the franchise and freedom of movement from most black and coloured people, did the ANC reluctantly agree to somewhat
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half-hearted terrorism. Later, when negotiations began to dismantle apartheid, some whites and some black leaders felt their identities to be deeply threatened. They too responded with terror. Now, thanks to great statesmanship, combined with Christian patience and forbearance, we can hope that those days are gone, in favour of a multi-ethnic democracy.
Israel, as has been said, provides another case study. When the Jews felt that they had no more than a toehold in their promised land, they produced their terrorists, in the form of the Stern Gang and the IZL. Israeli victories, in turn, generated Palestinian terrorism. The Palestinians saw themselves as second-class citizens in Israel, as a people under military occupation and rule in the West Bank and Gaza or as refugees and exiles in other countries. It is not surprising that they produced the PLO, the PFLP, Hamas and Islamic Jihad. Palestinian terrorism has ebbed and flowed with the prospect of a political solution. There was hope at the time of the Oslo agreement and for a while afterwards. Now, we can only trust that those on every side will appreciate that war is unwinnable and that peace will have to be negotiated.
I hope that I have said enough to make it clear that people become violent when their identity is denied or suppressed. Terrorism in the hands of the powerless is seldom mindless; often, it is precisely calculated. Reactions to oppression and discrimination are similar in widely varying cultures. Terrorism that has popular support can rarely be suppressed by force and security measures alone. When that is tried, violence is likely to recur in the next generation. Poverty is not. in itself, a major cause, although relative poverty and envy may be an ingredient. Ideology and excessive religious zeal often trigger terrorism. Of course, we should not ignore poverty, hut, as far as concerns terrorism, it is more important to pay attention to the loss of identity and self-respect, often accompanied by a burning sense of injustice.
6.27 p.m.
Lord Parekh: My Lords, I thank the noble Lord, Lord Dahrendorf, for sponsoring and initiating such an important debate.
We can all take it for granted that terrorism is evil, and the modern form that it has taken is even more so. It is more indiscriminate, inflicts heavier casualties, makes vague and non-negotiable demands and has turned into something of a spectacle, designed to dazzle and impress. We are all agreed that terrorism must be fought and prevented. Is that enough? I do not think that it is.
Terrorism springs from deeper causes and will continue for as long as those causes are not systematically dealt with. More important, terrorism is often engaged in by people who think little of their life, for religious or other reasons. If there are people who are prepared to throw away their life for worthwhile causes, there is nothing that we can do to prevent it. Terrorism, therefore, cannot be seen in

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merely military terms. It is not a military problem; it is a political problem. As a political problem, it can be dealt with only by addressing the deeper sense of injustice or the deeper causes from which it springs.
What are the causes of terrorism? In our debate, we seem to have established some kind of connection between poverty and terrorism. My noble friend Lord Desai, with his customary eloquence and flair, highlighted some of the difficulties with that. The poor do not, by themselves, engage in terrorism. In fact, there are few examples in history of the poor engaging in terrorism. Generally, they are too demoralised, too disorganised and too unsophisticated to engage in any form of terrorism.
Although poverty is not directly related to terrorism, there is, however, a connection at a deeper level. That connection springs from the climate in which terrorism grows. The poor have no stake in society and, therefore, tend to fall easy prey to terrorist propaganda. They are desperate and therefore easily seduced by the terrorist fantasy of a Utopian society in which all their problems would be solved. Being disorganised, they can also easily be terrorised into doing things that otherwise they would not do.
Being brutalised by poverty, they tend to see little wrong in terrorist activities, in taking innocent lives. That is because their own innocent lives have been stifled by terrorist factors springing from poverty and the state. In short, the poor provide a readily available and mobilisable material for religious groups who relieve the poverty of the poor only by capturing their souls for fanatical causes.
For those reasons, world poverty needs to be treated as a matter of urgency. That is partly—but only partly, as my noble friend Lord Desai pointed out—because it leads to terrorism. But, more important, it is morally obscene. It creates instability in the regions concerned and produces weak states and, equally important, because prosperity in one part of the world is closely tied with prosperity in others.
While poverty is one cause of terrorism, it is not the only one. People react violently when they feel humiliated, used as pawns in an international power game, unjustly treated, marginalised or trampled upon. We in the West built up and used the mujaheddin in Afghanistan to fight the Soviets and we have not been entirely even-handed in our approach to the Israeli-Palestinian conflict. We have also supported obnoxious and repressive regimes in many parts of the world and stifled secular and progressive forces.
Sometimes we have trained and funded terrorists and have given state terrorism legitimacy. We have taken advantage of the vulnerabilities and ignorance of developing societies by manipulating them, either by imposing unfair terms of trade or using them for our own purposes. All these tend to provoke bitterness, anger, rage and hatred in some parts of the world and create a climate in which the likes of bin Laden have taken unscrupulous advantage of the people involved.
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In short, while tackling world poverty, we must also address these and other causes of terrorism. We need to respect other societies, to treat them as equals, to cherish their cultural diversity and not think in terms of imposing our own way of life on others. We must stop intervening in the affairs of other societies in order to promote our own interests and we must be fair in our approach to international conflicts. Above all, we must abandon the isolationist illusion that somehow we can create an island of peace and civility in a world seething with desperate poverty, injustice, marginalisation and humiliation.
We now know that the caves of Afghanistan were closely connected with the World Trade Centre in New York. Just as the rich and prosperous cannot live happily in gated communities in their own societies, the rich and powerful nations cannot isolate themselves from the rest of the world. In a globalised world, we are interdependent and share a common fate. While we pay lip service to the rhetoric of human unity and interdependence, I do not think that we have even begun to grasp its full economic and political logic. Unless we do so, terrorism in one form or another will continue to haunt us.
6.33 p.m.
Lord Astor of Hever: My Lords, there can never be any excuse for terrorism. The root causes are many and varied and we have heard several interesting reasons and theories during the course of the debate this afternoon. The wealth divide certainly plays a part but, as my noble friend Lord Moynihan pointed out, the terrorists who attacked the World Trade Centre and the Pentagon were not living in poor. third world countries. Many of the hijackers were well educated and middle class. Many of the foiled terrorist attacks since September I I th have been carried out by people from this country, the United States, France and North Africa, not third world countries. Behind every terrorist organisation there is a financial, recruitment and training infrastructure.
Terrorists such as Osama bin Laden are not motivated by poverty, but by ideology, religion and a festering resentment of the West. Most of the recent acts of terrorism have been prompted by religious or nationalist extremism, not by poverty itself.
While poverty may not automatically lead to terrorism, poor people in countries with bad governments are vulnerable to influence by terrorists. This harmful indoctrination can be programmed into the minds of the poverty-stricken, who suffer inadequate education, a lack of decent sanitation, healthcare and human rights.
Some 80 per cent of the world's population has just 20 per cent of its wealth. Vast tracts of mankind live on less than one dollar a day. We must reduce that number. The circumstances of under-development do matter. When an African child dies every three seconds, the developed world has a clear duty to act. We must continue vigorously with well-targeted development assistance. We need to help create capable states that encourage economic growth and invest in public services.

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When poor countries are committed to good governance, there is a better opportunity to encourage a reduction in poverty while discouraging the control of terrorist networks. Under good governance, public institutions function transparently, accountably and responsibly on behalf of their citizens. Without it, the benefit of public programmes will not reach their targeted recipients, notably the poor.
It seems almost callous to suggest that anything positive might have come out of the events of 11 th September. But a greater awareness of the misery that engulfs much of the world's population and a real determination to do something about what everyone has come to see as a morally indefensible divide, may be one of the lasting legacies of those terrible events.
After September 11th, the West must show that it is serious about constructing a just global economic order. Rich countries have responsibilities to the poorest of the world to open our markets arid to transfer resources. Growth is essential for poverty reduction. This depends on having market-based policies which promote investment and deliver effective macro-economic management. At the same time, however, policies are needed to protect poor people from shocks and adjustment costs.
Trade has played an important role in encouraging the spread of democracy to the developing countries. Western economies need to create new markets into which global capitalism can expand. Louis Schweitzer, the chairman of Renault, has said that the market for cars in the West is saturated. To sell more cars, a prosperous middle class in other, less developed parts of the world, will have to be developed. In that way, poverty reduction in developing countries is good for developed countries. As incomes rose in Far Eastern countries such as South Korea, Taiwan and Thailand, so too did the people's expectations for the establishment of democratic forms of government. China's entry into the World Trade Organisation is leading to such significant changes in its economy that its political system will also become more open.
6.39 p.m.
The Earl of Sandwich: My Lords, the noble Lord, Lord Dahrendorf, has raised a very difficult question. I support his analysis that the poor are not to be blamed yet again for our discomfort. The Question easily leads us into a cul-de-sac because it is said that poverty can be a breeding ground for terrorism. But even if all the Chancellor's highly publicised dreams—I should like to believe in them—were to come true, we would still be unable to smooth over all the wrinkles of the developing world. We have to deal with the world as it is and try to work out what lies behind the appalling acts of terrorism that we have seen.
The gunmen who opened fire in a Rawalpindi mosque yesterday, or the murderers of Daniel Pearl, will be found only through the normal process of the police and intelligence services—and they need more support than ever.
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Poverty is only one indirect cause. A more obvious one is oppression, which afflicts rich and poor alike. VS Naipaul said oppression does not exist—the noble Lord, Lord Desai, may agree with him—but it is widely understood to be an abuse of power. It is one of the conditions of man which leads to frustration and intolerance and, ultimately, to violence or terror.
Another much quoted cause is the disaffection of youth—the revolt against authority which thrives on poverty and oppression, although it comes in almost every family. Linked with this is religious indoctrination—the pressure on young men and women to conform and fight for a particular fundamentalist credo.
The corollary is militancy, the love of fighting which persists in many societies. Who is surprised by the aggression of tribesmen, for example, in Yemen, Sudan or Afghanistan until it is directed towards foreign embassies or a financial centre in Manhattan? As the world contracts, such violent cultural and religious clashes are bound to be more frequent. and they are not cured simply by freezing bank accounts or denying passports.
What about the actual ideological causes which can lead to uprising and intifada?All this is now branded as terrorism. One familiar example for us is the resistance against the Germans in occupied France. Surely all of us, or our parents, would have attempted to join that resistance, or at least would have sympathised with it. As has been said, there is a very fine line between soldiers in uniform and guerrillas who resist occupation. Is the terror on the side of the state or on that of the resistance fighter? In Zimbabwe, the Middle East and many areas on the brink of civil war, this line has eventually to be drawn.
The yardstick of terror is fear among the civilian population, and the reality in the West Bank and Gaza today is that there are terrorists on both sides putting fear into the population. We all know, and have heard again, that one-time terrorists are also fighters turned politicians who become our respected friends, our trading partners and even our allies in the coalition against terrorism.
There are also much wider cultural causes. I do not doubt that Anglo-Saxon superiority in its various economic and political forms plays a role in this vicious prejudice born of poverty, oppression and madness. Here I advocate world awareness and citizenship, which is the language of contemporary education. We have started on this road under this Government and we must stay on it.
The US likewise. But why is it that the American view of foreign affairs still looks like cowboys and Indians? The Government, by placing themselves so close to the United States, are entering a dangerous world of black-and-white solutions—a world which Europeans have long rejected. I am thinking, of course, of the US policy in countries such as Sudan, Israel-Palestine, Iraq and other points further east on the famous "axis of evil".

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We all hope that the US will play a more significant part in eradicating poverty, but now that the Taliban has been defeated, will the US pay more attention to the plight of the people of Afghanistan? Weeks after the Tokyo conference, the aid agencies are still waiting for that answer. because on so many battlefields they have too often seen billions of dollars of military hardware rolling along past forgotten civilians.
Our Government have an important role in Afghanistan. They have made bold statements about poverty in Africa and parts of Asia. Gordon Brown and Clare Short have taken a strong stand, but the latest aid statistics from DfID tell their own story. The international development targets are becoming more elusive. Education and infant mortality have improved and yet adult literacy in countries such as Yemen, Mauritania and even Pakistan is still as low as 40 per cent, as mentioned by the noble Lord, Lord Moynihan.
The latest partnership in Africa is not adequate. The unpayable debt relief and trade programmes are regarded as more effective routes to poverty alleviation, but there are no new initiatives which suggest that developed countries are making significant concessions.
In conclusion, areas of terrorism may coincide with the world's poorest societies, and NGOs continue to do their essential work. But at a higher level there is little to indicate a major shift in policy resulting from September 11th. All we are seeing is a half-hearted political coalition against terrorism. In the Middle East, the latest Saudi moves are encouraging, but unless General Sharon can be forced into a settlement—this is at the heart of our anti-terrorist campaign—the US and Britain, in the name of antiterrorism, will, in effect, connive at continuing illegal occupation and persecution of both Palestinians and the substantial and growing Israeli minority who would like to see an immediate cessation of violence.
6.46 p.m.
Lord Judd: My Lords, I declare an interest having spent most of my professional life outside Westminster working with humanitarian agencies. I am still very much involved—albeit now in a voluntary capacity—with organisations such as Oxfam, Saferworld and International Alert.
The noble Lord, Lord Dahrendorf, is to be congratulated on and thanked for a particularly scholarly and powerful introduction to the debate. Listening to our deliberations, I cannot help reflecting that in some ways we are in an almost classic pre-revolutionary situation—the grotesque concentration of power and wealth in the hands of a very few; the dispossessed billions; and the alienated, often well-educated, bitter elite which itself feels excluded and therefore sets out to exploit the impoverished.
It is that constituency of ambivalence that provides the ideal basis for terrorist activities. Many people would never contemplate terrorist action, but, in the context of struggling every day to survive until the next
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morning, sometimes inevitably ask themselves whether the terrorists are not on their side. When we talk so glibly about fundamentalism, we should ask ourselves how far fundamentalism really is a cause or how far it is a vehicle for the dispossessed. We do not have to look very far from where we are now to see evidence of that in the history of our own islands.
I want to talk very briefly, in the context of our concern about the link between terrorism and poverty, about some issues on which we should concentrate if we are to get things right for the future. First, there are the structural issues—not only the internal structural issues to which the noble Lord, Lord Dahrendorf, referred, but the structural issues internationally of trade and debt and of enabling the developing countries not simply to play on a level playing field but to climb on to the playing field in order to begin playing. If that is to happen, we must look at what we ourselves must do in terms of tariffs, restrictions on trade and so on.
There is also the issue of demography. In 2001, the world population was 6.1 billion. It is likely to be 7.2 billion by 2015. Ninety-five per cent of this increase will be in the developing countries, mostly in rapidly expanding urban areas. Imagine the pressure that will put on fragile political systems. Imagine the consequences of that in terms of unemployment and under-employment.
In the context of that population growth, a disproportionate number of children are under 15. In Algeria, 60 per cent of children are under 15. As I have seen for myself from my own work in the past, many of these children feel better off and more secure in an armed band that is fighting for their interests than left destitute in the city streets.
Then, of course, there are the refugees. In 1970, there were 2 million refugees, and by 2001 there were 21 million, not to mention the internally displaced people who do not have the formal status of being classed as refugees because they have not crossed a frontier.
Already the refugees from Afghanistan are destabilising Pakistan and the region. The same problems are occurring in west and central Africa, central Asia and the Caucasus. Above all, we see the kernel of destabilisation, alienation and resentment in the Middle East. The noble Earl, Lord Sandwich, is right to refer to that constantly. Until the issue is resolved, we cannot look forward to a stable world.
Then there are the deprived ethnic minorities within many societies of the world, not least our own. Deprived, dispossessed and disadvantaged ethnic minorities are often in a structured way unable to break out of their predicament, which leads to a breeding ground for conflict.
There are other issues, too. We can imagine the pressures that will develop if we do not, for example, tackle effectively the issue of climate change. Imagine what will happen as pressures develop because of the increasingly short water supplies in the world, or the dislocation caused by the irresponsible arms trade. It is extraordinary that the permanent members of the

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United Nations Security Council are the world's greatest exporters of arms. The culture seems to be that arms are good things to export unless there is an overriding reason for not doing so. In the context of what we are talking about, in terms of stability and the campaign against terrorism, the culture must change to one in which arms are seen as extremely dangerous things to export which should be exported only when there is a good security reason for doing so.
Those long-term issues must be addressed. In the midst of all this, there is an urgent challenge to talk honestly and closely to our American cousins. There seems to be a difference of emphasis between their unilateralism and militarism as a solution and the European emphasis on multilateralism and the realisation that, in the end, the battle will be won in hearts and minds. I hope that the Minister will reassure us that that difference is being debated strongly with our friends in the United States.
6.52 p.m.
The Duke of Montrose: My Lords, it is not an easy task to follow a speech such as that made by the noble Lord, Lord Judd, with his powerful rhetoric and experience in the subject. I also wish to thank the noble Lord, Lord Dahrendorf, for giving us such a telling analysis of most of the problems that our world will face in the next 20 years.
In view of the many approaches that we have heard this afternoon, it may seem a little simplistic to suggest that international terrorism today seems to require three components before it is triggered in such a way as to become a threat. Those components have been touched on in different ways. The first is a sense of injustice; secondly, there is leadership with a reasonable degree of education; and the third component is money.
Ever since 11th September the hunt for a cure for terrorism has assumed a new urgency. The statesman who says that he has a cure for terrorism will find people beating a path to his door. Our Prime Minister has journeyed far and wide hoping to build up links to enable him to say that he has the influence to achieve something in that field. In his speech to the Nigerian Parliament on 7th February he was anxious to make a specific link between terrorism and poverty when he spoke about failed states, dictatorships and economically bankrupt countries as being a major source.
The trouble is, as the noble Lord, Lord Dahrendorf, emphasised, using the words of the Minister for International Development, that poverty alone is not sufficient to ignite terrorism. It requires a perceived sense of injustice to get the fire going—passions in the human heart, envy, hatred, hurts from being excluded or insulted, or fears of privilege being undermined. Nowadays that is assisted by our modern world of instant communications in that the injustice does not have to be entirely one's own. Many of those who hold resentment over some relatively minor injustice are fired up to accumulate many other injustices to stoke the fire. Thereby, they add what they hope will bring
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meaning to their lives. As has been pointed out, they may be people whose lives lack meaning because of wealth as well as because of poverty.
Nobody is suggesting that we should deprive the third world of the other two elements that I analysed—education and money—simply to achieve an easier life for ourselves even if we had the power to do so. Our development programme aims to give the third world more education and more money. But because of that, we have to work with ever more serious dedication towards defining injustice, taking care not to invent injustice and removing it whenever it is in our power to do so.
I have known men of the political Left and the political Right who have been classed as rebels—some even as terrorists—in their own countries. Of those countries, in the four that can be classed as third world, I can spot only one in which the motive that drove them was poverty.
I do not know whether my final point will contribute to the fourth point of strategy outlined by the noble Lord, Lord Dahrendorf. I shall touch on Lebanon because it is an area that has been wracked by terrorism. My brother-in-law happened to be one of the first western reporters to cover the Sabra and Shatilia massacres of Palestinian refugees in the Lebanon. My other rather limited source of knowledge of the country comes from my younger son who, after two summers staying in Palestinian refugee camps, made it the subject of his university degree.
He has recently brought to my attention an interesting development in the field of what newspapers would at the outset have labelled the cause of the conflict—religion. There can hardly have been two more ruthless opponents than the so-called Christian and Muslim militias who fought it out in the streets of Beirut. But there is now a dialogue between former participants from both sides. It is headed by a former senior officer of one of the Christian militias and has a great deal more to do with the actual practice of the Christian religion. He apologised in the press for what he had done in the name of his nationalism and Christianity. He has found an equal response from individuals who had been engaged equally violently on the Muslim side and who were prepared to see that a fuller understanding of their own religion entailed a denunciation of the kind of violence in which they had been engaged. Together they can now talk about a better future for their children in a shared country.
I raise this subject because I am anxious for our country with its wide experience of world affairs to look for ways in which to address the all-important roots of terrorism. Luckily, no noble Lords have suggested that we should confine ourselves to addressing only the economic problems. The right reverend Prelates are unfortunately unable to be here, but I hope that they will forgive me when I say that my fear is that if we were to refuse to address all the elements, we would be accused of something that has been said about the Christian religion, which is that it has not been tried and found wanting, but that it has been found difficult and not tried.
6.59 p.m.
Lord Bhatia: My Lords, I thank the noble Lord, Lord Dahrendorf, for initiating this debate. In a few words, such as "third world", "poverty" and "terrorism", he has captured the essence and headlines of much of today's malaise around the world. Poverty and terrorism are not necessarily confined to the third world. They exist in the West, too. At times, poverty breeds terrorism; at other times, terrorism creates poverty.
Apart from the usual forms of terrorism, I wish to draw attention to state terrorism when governments behave as terrorists, with a veil of democracy in some cases, or sheer gun power in others. The irony is that when the populations under such regimes rise to defend themselves or to oppose the state, they are called terrorists by that state. On the other hand, the populations that rise up to oppose the state call themselves freedom fighters. Who is right? Who are the terrorists? We look at the same conflict from two different windows and see a different picture.
I want to talk about poverty in the third world and touch on some of the root causes of terrorism. In the third world, in many cases, there is constant tension and conflict between people and the state. In many cases, the state has a thin veneer of democracy to legitimise its control, but is not truly democratic. In some cases, democratically elected government has turned into dictatorship. Avoiding, delaying or rigging elections to stay in power becomes the norm. The example of Zimbabwe is right in front of us.
As we examine the links between poverty and terrorism in the third world, we need to examine also the links between lack of democracy and poverty which lead to terrorism. Who are those who support the regimes that deny the human rights of their own people? We in the West must accept some blame. In our national interest, we continue to support and prop up undemocratic regimes—and the population of such countries pays the price for it. We allow arms exports to such countries and allow the arms brokers to sell arms to the people who want to fight their government. There is a spiral of violence and conflict fuelled by arms. The product of such processes is that poverty grows and breeds terrorism, not only within a country against the government, but against those who have supported that evil government. Why are we surprised when we see those products of poverty become terrorists?
What are the solutions, and what is the possible way forward to deal with third world poverty and reduce terrorism? Here is a menu—fixed or à la carte, as you will. First, we must increase and support the process of democracy. Secondly, we must promote and ensure human rights globally. Thirdly, we must forgive third world debts. Fourthly, we must deal with corruption everywhere, whether in the West or in third world countries. Lastly, we need to establish a type of Marshall Plan—it could be called a "Clare Short Plan" or a "Tony Blair Plan", but such a plan must be established to help in these processes.
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In the global economy, the rich and the poor countries—North and South, first world and third world countries—are intractably linked. What happens to the poor will affect the rich. If we wish to deal with the root causes of terrorism, we need to address the causes of poverty, not only for our security and peace but because it is the right and moral thing to do.
We need to remind ourselves of some of the statistics of poverty. Half the world's people live on less than two dollars a day. About I billion people do not have access to safe drinking water. One in five children never go to school. One billion adults cannot read or write. Malaria and TB kill 7 million children annually in South Africa, Zimbabwe and Botswana. That is abject poverty. Unless there is a will to deal with these issues and a will to provide actual cash resources, the poor will become poorer and many will become easy prey to terrorism.
Let us remind ourselves about the Marshall Plan. In 1945, the US Secretary of State, George Marshall, transferred 1 per cent of the USA's national income for four years to Europe. In today's money it would be about 75 billion dollars. This was not an act of charity but an investment to create peace and prosperity for both the USA and Europe.
Just as the Marshall Plan brought peace and prosperity to the USA and Europe, investment in a type of Marshall Plan for the developing world, particularly for Africa, could also eliminate poverty and terrorism in the world. It is estimated that there is a need for 50 billion dollars over the coming years for that purpose. That is a massive sum of money to be transferred to the developing world—but the issues of poverty and terrorism are massive.
Before concluding my remarks, I must raise the question of free trade and the opening up of markets for the third world. The Doha round can he successful only if it is fully implemented and can play as important a part as the Marshall Plan did for Europe. With three-quarters of the world's poor living in rural areas, market access for their agricultural products could make a colossal difference in the eradication of poverty. It is estimated that agricultural subsidies in the West run at the rate of 1 billion dollars a day—six times the amount spent on development assistance. I submit that the single act of removing agricultural subsidies—which are an abrasion on the landscape of free trade—could save lives, reduce poverty and deal with one of the root causes of terrorism.
I end by quoting President Bush and the Prime Minister, Tony Blair. In July 2001, President Bush said:
"Our goal is to ignite a new era of global economic growth through a world trading system that is dramatically more open and more free. We must reject a protectionism that blocks the path of prosperity for developing countries. We must reject policies that would condemn them to permanent poverty".
The Prime Minister said in October 2001:
"If globalisation works only for the benefit of the few, then it will fail and deserves to fail. But if we follow the principle that power, wealth and opportunity should be in the hands of the many not the few—if we make that our guiding light for the global economy—then it will be a force for good".

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I hope that your Lordships will join me in saying to President Bush and to the Prime Minister, "Well said. Now deliver it. The hungry and the poor of the third world wait for your words to be translated into reality".
7.5 p.m.
Lord Haskel: My Lords, in introducing this Motion for Papers the noble Lord, Lord Dahrendorf, has asked us to consider one of the more unexpected aspects of third world poverty: terrorism in the third world and terrorism in the developed world.
Some noble Lords blame the prosperous nations for the poverty of the third world. Unlike my noble friend Lord Desai, I believe that, sadly, there is a grain of truth in such arguments. We must eliminate that grain of truth. I agree with the right reverend Prelate. Attempting to do this with aid is a tricky business. As the noble Lord, Lord Bhatia, said, over the years corrupt rulers have been allowed to misuse aid. Aid has been, and still is, tied to trade—which in itself leads to corruption. Equally, aid has been used as a substitute for trade and has thereby weakened the economy of the receivers instead of strengthening it. As my noble friend Lord Desai pointed out, rich countries have put barriers between themselves and third world countries, and that has caused much resentment. The noble Lord, Lord Bhatia, made the same point. The European Union's "Anything But Arms" initiative is a welcome attempt to overcome that in the field of manufactured goods, but the common agricultural policy still keeps agricultural products out of Europe. As the noble Lord, Lord Dahrendorf, said, all this has caused impotent outrage and anger; and we now know that in some countries that fuels terrorism.
If aid is going to work to reduce terrorism, not only will it have to help a country's economy; it will have to help to put in place more effective political institutions, capable of providing resources to fund better public services, especially health and education. There must he better targeting, as my noble friend Lord Stone put it. The aid must be designed to deliver order where there is disorder. Fortunately, many progressive development agencies and progressive countries are trying to provide aid along those lines. What terrorism has done has been to make the situation more urgent. The whole process must be speeded up.
My right honourable friend the Chancellor of the Exchequer has been aware of the importance of aid ever since he became Chancellor. He has been taking initiatives in the public sector in regard to debt reduction and has set ambitious targets for reducing poverty and increasing aid. But in the private sector, too, attitudes may have to change. Business is currently promoting initiatives to counter these difficulties in terms of corporate social responsibility and voluntary codes of conduct for operating in a deregulated market. If international terrorism signals the failure of these initiatives, then international business will find that it will have to give up some of its rights and freedoms in favour of greater world-wide
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regulation on the environment, on human rights and on tax, and it will have to accept the jurisdiction of international organisations.
As other noble Lords have pointed out, terrorism is a complicated matter, involving outrage and anger at other matters as well as at poverty. I agree with the noble Lords, Lord Dahrendorf and Lord Astor: it is certainly not poverty alone that has stimulated Islamic fundamentalist terrorism. As the noble Duke, the Duke of Montrose, said, terrorism needs money. The Economist magazine recently pointed out that the jihad movement continues to attract some of the Arab world's richest, most privileged and best-educated people. The reports in last week's Financial Times on terrorist finances described the huge array of sources of funds for these terrorists: businesses, charities and private donors.
Terrorist funds have been blocked in 147 countries. So if it is not poverty that has outraged these terrorists, what is it? I believe that it is outrage at the competitive, modern and glamorised world in which we live, especially, as the noble Lord, Lord Dahrendorf, pointed out, in the United States. It is the fear of secularism; the intolerance caused by fundamentalist religious certainty in all religions. The press recently carried a number of articles by Arab commentators calling on their countries to open their economies, to modernise their societies, to modernise their education and their systems of government and to stop blaming the West for all their ills. Nor is the answer forcing Mr Sharon to do something, as the noble Earl, Lord Sandwich, suggested.
Of course, what precipitated all this was the attack on September 11th, and it has been kept alive by President Bush's speech about the axis of evil. I was in the United States when he made that speech. I believe that he was saying to North Korea, Iraq and ran that the policy of engagement—the policy of building bridges—has a limit. In Afghanistan that limit had been reached. What he is looking for is a sign that these countries understand this, and that the USA is ready to fight terrorism. Mr Bush also went on to praise the international alliance against terrorism and poverty, but that was hardly reported. What I found more disturbing in the United States was the stifling of dissent. Any questioning of this policy towards terrorism was labelled as "unpatriotic".
So the noble Lord, Lord Dahrendorf, is right to draw our attention to the links between terrorism arid poverty in the third world. By doing so, he has given an urgency to the elimination of poverty.
7.12 p.m.
Lord Wallace of Saltaire: My Lords, we have had a most interesting and expert debate. I hesitate to add to much of what has been said. Most of all, in the opening speech of my noble friend Lord Dahrendorf, I was fascinated by the subtlety of his argument about the relationship between poverty and terrorism, and the way in which he stressed that terrorism is at least as much a disease of modernisation as it is a disease of absolute poverty. I very much agree with him and wish

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to take that argument further. After all, we have had the same experience in Europe over the past 200 years; namely, that fundamentalism was part of the disease of modernisation and of the immense dislocation of society and of values as a result of the shift from the village to the town and the city and the shift from traditional assumptions about life to bourgeois education and all the different matters that accompany it.
Due to the speed of transition in Saudi Arabia, people in one generation have gone from traditional villages where they lived in wooden houses and moved around by way of donkeys right through to seeing universities being built in new towns, and engineering being provided as a subject for a university degree. Indeed, that has meant a huge dislocation. The younger generation find themselves arriving in a different world into which they are not entirely accepted, in which they do not feel entirely at home, and from which many feel themselves alienated and excluded.
We had the same experience in 19th-century Europe. This country had the tremendous advantage of being the first to go through the Industrial Revolution and the population explosion. We went through that process more slowly than those who followed. After all, it was Germany that went through that revolution most rapidly and, therefore, found it most dislocating. Thereafter, it was the turn of northern Italy and the countries of what was then the Austro-Hungarian empire. Outside Europe it was Japan. Some years ago I can remember hearing a very elderly Japanese person talking about going up to visit a village that was still effectively living in the Middle Ages, and then moving into a city that was going through the Industrial Revolution.
Fundamentalist movements in Europe were often forms of secular fundamentalism, anarchism, faschism and communism. However, they brought with them the same pressures—rapid population growth and urbanisation—which are now afflicting societies across North Africa and Asia. As a number of noble Lords have said, those pressures are made more acute in that area by the immediacy of global communications and by the rich world's attempted blockage of the safety value of outward migration that was there for 19th-century Europe. These people have images of the forbidden promised land, the sense of exclusion from the rich but foreign world. It is, therefore, not at all surprising that those who were directly involved in the events of 11th September were very often people who had been educated in the West but were not in any sense assimilated into it.
The problems in Africa south of the Sahara are in many ways different. With respect, I believe that our Prime Minister exaggerates the link between poverty and terrorism in trying to justify NEPAD as a defence against terrorists. There are many other ways to justify the development of Africa, but, at present, there is no threat of terrorism exported from Africa south of the Sahara. There are many other threats that face us from the many weak and failed states across Africa; namely,
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uncontrolled migration, desperate refugees fleeing from corrupt governments and internal conflict, disease spilling out from societies where traditional structures have collapsed, and trans-national crime and illegal trade in drugs, diamonds, timber, and so on.
The latter are also threats to our comfortable, rich world. It is in our long-term self-interest to respond to them. However, there are some dangers in attaching the label of "terrorism" to all the problems of the third world. The problems that developing countries face are much more complex and deserve a broader and more modulated response. But what should our response be? Of course we have to respond to terrorism, but that requires good intelligence and cooperation among police forces more than investment in heavy weapons. It requires a long-term response, not the drawing up of the sort of posse that is being called for in the United States.
I recommend the article by James Woolsey in last Friday's Wall Street Journal to the noble Earl, Lord Sandwich. The article compares the current situation to the film "High Noon": the United States is, indeed, the sheriff standing up to the evil men as they return to town, and the Europeans are the wimps who are finding excuses to slip away. It is a most unfortunate image. We must recognise just how far the current European consensus on what our response should be is from the current consensus within policy-making circles in the United States. We have to talk about nation building not only in Africa but also, as my noble friend said, in Bosnia and in Turkey. After all, Turkey is going through a huge population explosion, with all the dislocations that follow, as well as experiencing problems of urbanisation. We do have a stake in demonstrating that a secular state can grow successfully and democratically out of Islamic roots.
We also have similar long-term problems across west and central Asia; that is, in building a civil society, in building institutions that arouse the trust of the community, and in building a more liberal approach to education. It is a long haul and this will pre-occupy the rich West for more than a generation. We also have to keep the door open to migration—not a popular statement to make when standing for election in this country, or in many others—to allow the elite of those countries, the desperate, to come and join our societies and to begin to feel that they are not excluded by the West.
We must also recognise that adjustments have to be made in the North in our patterns of conspicuous consumption and, in particular, in our consumption of energy resources. Nothing depresses me more about the current response from the United States than the denial that US consumption of energy is part of what is seen as the arrogance of the West and that the US drive for security of energy has biased American policy towards the Middle East for the past 30 or 40 years. There are some enormous problems with the widening gap between American and European understandings of how to respond.

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The events of September 11th and their aftermath were a shock to the United States. I am struck and depressed by the extent to which Americans believe that the situation is entirely different from any terrorist threat that European states have had to face in the past 30 or 40 years. I am also struck and depressed by their faith in a military response to the exclusion of other areas and the denigration that one faces when arguing for the European emphasis on the social underpinnings of fundamentalism and anti-westernism and of the importance of assisting in social and economic development.
There is also a denial that the American image is at stake. The Israeli-Palestine conflict is clearly linked to what is happening in the Middle East, but the perception in central and western Asia that the United States does not care about social and economic development outside Israel is very much part of the enormous problem. The sadness that Israel is now destroying the Palestinian economy and thus creating a much more fertile basis for future Palestinian terrorism is part of where we now find ourselves.
As the noble Lord, Lord Bhatia, said, not only does poverty breed terrorism, but terrorism and corrupt and weak states lead to poverty. Sadly, we are now seeing that in Zimbabwe and we have to an extent seen it from the relatively weak state of Pakistan. It will not be easy for the West to take on and maintain the delicate task of promoting good and less corrupt government across the world. We face the very hard task of explaining to our comfortable citizens that they cannot shut out the problems of the developing world or the frustrations of the newly educated and that we have to invest in their development and adjust some of our most cherished patterns of consumption to the requirements of creating a more balanced global community.
7.22 p.m.
Baroness Rawlings: My Lords, I congratulate the noble Lord, Lord Dahrendorf, on initiating this important debate. I thank the noble Baroness, Lady Symons of Vernham Dean, for replying in the absence of her noble friend Lady Amos, who I gather is representing us in Australia. We quite understand that. The debate has been most informative, with many extremely interesting and convincing contributions. I agree with many of the points that have been made by most noble Lords.
As has been said, we were all stunned by the terrorist outrage on 11th September, which shocked and shook the complacency of the West. We have been horrified and outraged yet again by the more recent terrorist attacks in the Middle East. The Government and her allies have the support of these Benches in their actions to tackle terrorism and the causes of terrorism. It is this second point—the causes of terrorism—that has provoked today's debate. We have heard several noble Lords refer to the links between third world poverty and terrorism. We on this side have long emphasised the importance of humanitarian assistance. That has been particularly relevant in the rebuilding of
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Afghanistan, where humanitarian aid has gone hand in hand with combating the evil forces of the Taliban, who occupied that country for a number of years.
In the wake of the terrorist attacks on the United States last September, the question of where and why terrorism originates has preoccupied leaders and governments throughout the world even more than it did before. But the war against terrorism has erroneously broadened into a war against poverty. Poverty was soon identified as a major cause of disaffection, which could easily lead to extremism in certain circumstances. That link was the theme of the Prime Minister's recent visit to Africa.
The causes of terrorism are wide and varied, as we have heard from many noble Lords, especially the noble Lord, Lord Parekh. It is not my intention to argue that poverty does not contribute to the causes of terrorism, but to emphasise that any problem often has many root causes. With terrorists, we are not dealing with the African poor, as my noble friend Lady Park so eloquently described, but with an exceptionally dangerous trans-national network of political conspirators who employ terrorism as a strategy—that is, they strike at non-military targets to gain publicity for their cause, to demoralise and discredit governments and to gain popular support by provoking the authorities into overreaction. Those are the classic tactics of the weak, not the poor.
Terrorism today, as in the 1960s and 1970s, is mostly about destabilising the West by extending the classic von Clausewitz definition of war as the continuation of politics by other means. The main tools for dealing with terrorists are the same today as they were then: the intelligence services and the police, backed, where necessary, by specialist paramilitary units, not necessarily international aid.
My noble friend Lord Moynihan was quite right when in October he argued that:
"Terrorism is a malignant disease, and like all diseases, prevention is better than cure".—[Official Report, 18/10/01; col. 770]
That quite accurate sentiment makes it important that we do not lose track of the wider issue by focusing on just one cause of terror. Indeed there is an argument that, far from breeding global terrorists, poverty makes countries more introspective. Global terrorists may use impoverished, unstable countries as cover, but they need money, technology and sophisticated organisations. In many cases, recruits to terrorist organisations have been identified as disaffected, well educated youths from relatively affluent: backgrounds. The terrorists who attacked New York last September were not Afghans, but Saudis and Egyptians. The threats from weapons of mass destruction come from oil-rich Iraq and Iran. The very poorest countries are often too preoccupied with internal affairs to foment trouble far away on different continents.
Traditionally, terrorism has been a method used to achieve a specific political objective. In 19th century Russia it was the overthrow of the Tsarist regime. In the Bosnia of Gavril Princip or the Ireland of Sinn Fein it was liberation from alien rule. Once their objective

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is achieved the terrorists—now transformed into "freedom fighters"—are welcomed into the community of nations and become respected heads of state or, at the very least, are provided with offices in Westminster.
In the case of Al'Qaeda, the ideological war against the West, and particularly against the United States, goes way beyond the impoverishment of Arab territories. To the Al'Qaeda network, US policy towards the Middle East is seen as a just cause to attack the perceived oppressor. That policy includes the presence of American forces in Saudi Arabia, the impact of 10 years of sanctions on the Iraqi people and the American support for Israeli measures against the Palestinians. Their roots go far deeper and their objectives are infinitely more ambitious. They are rooted in a visceral hatred and contempt for Western civilisation as such and resentment at its global ascendancy. Their object is to destroy it altogether.
Those factors make it very important that an explanation of the current inflammatory situation cannot be confined to poverty. As my noble friend Lord Astor of Hever so clearly and rightly said, although the alleviation of poverty should be high on the world's agenda, we should perhaps be cautious about viewing it as a solution.
During this debate, speakers have identified a wide range of other causes of terrorism, including religious intolerance, lack of respect for human rights and individual liberty, and—as the noble Lord, Lord Desai, said in his interesting speech—narrow nationalism. Moreover, as the noble Lord, Lord Hylton, so rightly said, we should not forget to include animal rights terrorists.
Over the years, the factors that I have mentioned have influenced terrorist organisations such as the IRA, ETA in Spain, Hamas and Islamic Jihad although poverty was not the issue.
Alexis de Tocqueville pointed out a century and a half ago that revolutions are caused not by poverty but by rising expectations and by the whole process of development—without which poverty cannot be eliminated. As Professor Sir Michael Howard, the renowned military historian, rightly said,
"historical precedent suggests that poverty itself is not the problem as has been frequently emphasised, it is not amongst the poorest countries that al Quaeda finds its recruits but the richest. Our object in combating terrorists must be not to exact revenge but to bring them to justice for the crimes they have committed and prevent them from committing any more".
The issue of injustice, whether real or perceived, has woven its way throughout this debate, as my noble friend the Duke of Montrose has reaffirmed. In the end we cannot escape the evil of terrorism. Andrei Sakharov, when in forced exile in Gorky, said much the same as did President Bush after September 11th. He said:
"I hope that people all over the world will understand the deadly nature of terrorism whatever its goals and will deprive them of any kind of support, even the most passive, and surround them with a wall of condemnation".
7.32 p.m.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, I, too, thank the noble Lord, Lord Dahrendorf, for initiating this debate. His speech established a pattern for an extraordinarily well-informed and thoughtful debate.
If I may say so, initiating this debate has also been a very bold initiative. The discussion of poverty and terrorism is at once both enormously important and highly sensitive. My noble friend Lord Rea reminded us that, in recent months, Members of this House have experienced some difficulty in defining what we mean by terrorism, let alone in agreeing on its causes. In recent weeks, I have sat in international meetings and experienced precisely the same definitional problems with colleagues from overseas. I have heard IRA activities in Northern Ireland described as "freedom fighting", and I have listened to those who, in seeking to explain the causes of the horrors of 11th September, have come all too dangerously close to justifying what happened on that terrible day.
Like many others who have spoken today, including of course the noble Lord, Lord Dahrendorf, let me be absolutely clear and unequivocal: terrorism cannot be justified. Whatever the perceived cause or grievance, terrorist activity is always repellent and evil, involving as it almost always does, violence, murder and terrible suffering to innocent people. I disagreed a little with the noble Lord, Lord Wallace of Saltaire, because I do believe that terrorism is as old as history; we have only to remember the massacre of the Jews in York, or of the Huguenots in France. I agreed very much with the comments of the noble Lord, Lord Moynihan. Since recorded history began, there have been examples of those who believe that their cause was so different, so powerful and so justified that they had the right to force others through any means at their disposal to acquiesce in their demands.
What makes the voices of some individuals, filled with that potent combination of zeal and hatred, so persuasive to others? At what point do people with a legitimate political, social or religious objective turn from pursuing their causes through civil or political means and turn to violence, murder and other forms of criminality? As the noble Baroness, Lady Park of Monmouth, reminded us, some terrorist acts arise from the particular obsessions of individuals who do not find support and might even be described as outsiders in their own communities; examples include the destruction of the Federal Building in Oklahoma City, the sarin gas attacks in Tokyo and the 1970s kidnappings undertaken by relatively affluent and very self-absorbed European youth terrorists. Such acts were one-off because the terrorists were unable to draw on the support of the people who shared their sense of injustice and frustration.
Elsewhere, however, terrorism has taken deeper root. The noble Lord, Lord Dahrendorf, is again right: terrorist groups most likely to do significant damage are able to draw on support from within their own communities to enable them to plan and finance their activities. There are people who are prepared to

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support or acquiesce in terrorism as they share the terrorists' goals and are somehow able to condone their methods. There are many deep and unresolved conflicts in the world, many of which have been mentioned today, including those in Nepal, Colombia, Sri Lanka, Somalia, and—one of the deepest and bitterest—in the Middle East, which was the focus of the noble Earl, Lord Sandwich, and my noble friend Lord Judd.
Some seek to justify terrorist activity because they believe that globalisation has made them powerless and that—as the noble Lord, Lord Hylton, said—forces beyond their control have marginalised their ability to act legitimately in their own interests. While acts of violence in pursuit of such arguments can never be justified by reference to poverty or deprivation, we have to deal with the arguments themselves. The right reverend Prelate the Bishop of Guildford was right: there is terrible poverty in the world, innocent people are suffering and there is appalling injustice. As the noble Duke, the Duke of Montrose, argued so very powerfully, a sense of injustice, perceived or real, is a very potent factor.
The issue for us is how we use the resources available to us to deal with that poverty and injustice. As the noble Lord, Lord Bhatia, reminded us, the Prime Minister said,
"power, wealth and opportunity must be in the hands of many not the few—if we make that our guiding light for the global economy, then it will be a force for good and an international movement that we should take pride in leading".
Some terrorism is criminal not only in its outcome of violence and destruction but in its motivation. My noble friend Lord Stone reminded us of the drugs trade in Colombia, where powerful armed groups finance themselves through the drugs trade, the illicit diamond trade in Sierra Leone and Liberia, and the appalling trade in human beings that is perpetrated right around the globe. Intimidation may be used to force support, but poverty too can be a powerful recruiting sergeant in such cases.
I return to a comment of the noble Lord, Lord Dahrendorf, in which he was supported by my noble friend Lord Parekh and the noble Earl, Lord Sandwich. The truly destitute—those who live on the edge of starvation—do not engage in terrorism. However, those who have the means to perpetrate violence also have the means of communication; they have the means of organisation and the technology. They also have money and resources, as the noble Baroness, Lady Rawlings, argued.
I therefore agree with the noble Lord, Lord Dahrendorf, my noble friend Lord Rea and the noble Baroness, Lady Rawlings, that the link between third world poverty and terrorism is a highly complex and difficult one. It is perhaps less contentious to describe it in terms of the relationship between poverty and conflict. However, I agree with the noble Baroness, Lady Park, and the noble Earl, Lord Sandwich, that to imply that poverty causes conflict or terrorism would be a huge injustice to the millions of the world's poor who work hard day in and day out and never turn to violence. Nevertheless, poverty can provide fertile
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ground for conflict to grow and for those with evil intent to pervert the thirst for social and economic justice into violence and terrorism.
One issue is all too clear: conflict causes poverty. However, although it causes poverty everywhere, it does so perhaps most obviously in Africa. As the Prime Minister said last October, the state of Africa is a scar on the conscience of the world. Twenty of the world's poorest countries are either involved in violent conflict or have recently emerged from it. The stark truth is that the poor are terrorism's most numerous victims.
Let us take an appalling example that is so brutally fresh in all our minds. The World Bank has estimated that the additional slowdown in the world's economy resulting from the 11th September outrage will mean that, in 2002, 10 million more people will have to survive on less than one dollar a day. The World Bank has also argued that tens of thousands more children will die as a result of poverty related illnesses. So the terrorists who perpetrated that evil are also responsible for hurting the most vulnerable people and the weakest countries in the world. I assure my noble friend Lord Stone and the noble Lord, Lord Maclennan, that Her Majesty's Government believe in tackling poverty because it is right to do so and because our humanity and our sense of justice demand that we do.
I believe that the noble Lord, Lord Dahrendorf, mentioned the statistics that Bill Clinton gave in his Dimbleby lecture. I add that a quarter of the world's population die of the diseases related to poverty: AIDS, TB, malaria and diarrhoea. Some 10 million children die every year from malnourishment and preventable illness. Moreover, 113 million children do not have access to primary education and as a result 800 million people cannot read or write.
The impact of poverty is not just an individual human tragedy. As the noble Lord, Lord Moynihan, said, poverty destabilises societies. It can be the soil in which terrorism thrives. Even stable poor countries a re unlikely to have the resources to implement effective counter-terrorism measures. To stop money laundering or the illegal movement of arms and explosives is difficult enough in a county like ours, let alone in the poorer countries of the developing world. Countries without resources to provide basic services for their populations may find those with extremist ideological messages coming in to fill the gaps, particularly in the field of education.
As conflict is such a powerful factor in preventing development and keeping people poor, resolving or avoiding it has become central to the international development agenda. In pursuing the prime purpose of our international development effort—the elimination of poverty—we in this country help address the potential causes of conflict and strengthen countries' individual capacities to counter terrorism. I agree with the noble Lord, Lord Maclennan, that it is very important to do that at a practical level. For example, we help countries to improve the effectiveness of their administrative systems. We support legal and judicial

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reform. We assist in the development of accountable and democratic government and transparent financial and commercial systems. We promote the will and capacity to crack down on corruption. Helping countries stamp out money laundering supports their efforts to combat corruption, organised crime and the drugs trade and helps them contribute to the fight against terrorism. The noble Lord, Lord Wallace of Saltaire, is right—where there is conflict, we can support institutions set up to encourage power sharing, inclusiveness and moderation. We support security sector reform in recognition of the devastating role that unaccountable and repressive security services can play in fostering conflict and inhibiting development.
An example of that is the work we have undertaken in Indonesia, a country of 200 million people, 300 ethnic groups, 350 languages and many problems with poverty and exploitation. Our aid programme focuses on three areas: policy formulation and budgetary management which benefits the poor; governance reforms; and forest management for the benefit of forest communities. It includes support for a policy dialogue on security service reform, parliamentary oversight of defence, law enforcement, budget management, a strategic defence review and a democratic framework to police what is happening.
I refer to what is happening in transforming Sierra Leone. Our training there has constituted a vital part of our effort. We have achieved much with our own military resources. British short-term training teams provided basic infantry training to some 10,000 men. We are now continuing to provide training, support and advice through the UK-led International Military Advisory and Training Team.
In the year 2000–01, DfID committed more than £26 million to projects and programmes whose principal aim was conflict reduction and over £272 million was committed to projects and programmes whose principal aim was to improve the quality of governance in developing countries. I hope that that gives an illustration of the real commitment that exists to building up those institutions. Improving the quality of governance has been a significant objective—alongside other objectives—of over half DfID's bilateral spending commitments in the past year. NGOs play an important part in that. Total expenditure through UK civil society organisations in 2000–01 was £184 million, the largest sums being sent to the British Red Cross, Care International UK, Oxfam, Save the Children Fund and the VSO.
Faced with the obvious threat which terrorism poses to our way of life since September 11th, we have also redoubled our efforts to deal with terrorism head on. We can all take pride in the part that Britain played, alongside the United States and our other allies, in the international coalition against the Al'Qaeda terrorists in Afghanistan. We can take pride in what has been achieved: severe damage to the terrorist networks and the liberation of the Afghan people from that very brutal regime. I assure the noble Lord, Lord Moynihan, that we remain committed to Afghanistan
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for the long term, including through our development and reconstruction efforts. British troops are leading the early phase of the international stability assistance force which is providing such an important element of security for the fledgling civilian government.
We are also fully engaged in the international community's efforts to thwart terrorism more generally. We have been working with our colleagues in the G8 on ways of cutting off terrorist financing, strengthening aviation security and enhancing cooperation on intelligence and security matters. In the EU, we have agreed to create a European arrest warrant, a common EU definition of terrorism and a specialist anti-terrorist team in Europol.
In the UN, Security Council Resolution 1373 requires all member states to respond to the global terrorist threat, and establishes the Counter-Terrorism Committee to monitor progress towards that goal. The fact that that committee is chaired by Sir Jeremy Greenstock, our Permanent Representative at the UN, is, I believe, in part a recognition of the lead which Britain has long taken internationally on action against terrorism.
Next week at the Commonwealth Heads of Government meeting—the noble Baroness, Lady Rawlings, was kind enough to mention that my noble friend Lady Amos, together with my right honourable friends the Prime Minister and the Secretary of State, will represent us at that meeting—we shall strongly support the Commonwealth response to international terrorism.
As for this country, our own anti-terrorist legislation means that we have already complied with many of the obligations of Resolution 1373. We are one of the few states to have ratified and implemented all 12 of the international anti-terrorist conventions. We are looking again at what we can do in terms of having the right forces and the right capabilities to meet the additional challenges we face from international terrorism as regards what our Armed Forces are doing. The noble Lord, Lord Dahrendorf, referred to the new chapter in the strategic defence review which is indeed very important. We have a string of anti-terrorism legislation in the Terrorism Act 2000 and the Anti-terrorism, Crime and Security Act which received Royal Assent last December.
My right honourable friends the Prime Minister, the Chancellor of the Exchequer and Clare Short have led the international effort to place the reduction of poverty at the core of the international development effort. Since 1997 the UK has increased its official development assistance spending from 0.26 per cent of gross national product to a planned 0.33 per cent in the year 2003–04. We are committed to making substantial additional progress. I assure the noble Lord, Lord Astor of Hever, that we are also using our influence internationally to strengthen the global commitment to reduce poverty in every poor country in the world. I assure my noble friend Lord Judd that we put that argument to everyone. We put it as much to our friends in the United States as we do elsewhere.

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The noble Earl, Lord Sandwich, and the noble Lord, Lord Judd, were also concerned about debt. The Government have strongly supported the heavily indebted poor countries debt relief initiative which the World Bank and the IMF began in 1996. We have tried to accelerate that initiative. We have pledged over £300 million to the trust fund established to help multilateral institutions provide debt relief and to help the indebted countries. I remind the noble Lords, Lord Bhatia and Lord Judd, of the much firmer arms control policies that we have and the far greater transparency that has been in place on arms exports since 1997.
We should also remember that all countries have signed up to the United Nations millennium development goals. Prime among those is halving the proportion of people living in extreme poverty by 2015. That will enable 1 billion people to free themselves from extreme poverty. But to do that, there will have to be much greater international efforts than are currently being made. By some estimates, the extent of those efforts will have to double; even then, as the noble Earl, Lord Sandwich, reminded us, billions will remain in poverty.
Our efforts will not succeed simply by rich countries handing out more money. Success will critically depend on the governments of developing countries adopting accountable and representative forms of governance, combating corruption and upholding the rule of law, and strategies for poverty reduction, which will ensure that their resources are used to the most productive effect.
Success will also depend on development assistance being used as effectively as possible. It should be focused where it has the greatest impact. The noble Lords, Lord Desai and Lord Bhatia, and many others were right to emphasise the importance of the Doha trade round. The globalisation of politics that brought the terrorists to the United States has to be matched by the globalisation of our efforts to eliminate poverty. We must act on the growing understanding that desperate poverty is as morally unacceptable in Africa or Asia as it is in Britain, and it is every bit as dangerous.
7.51 p.m.
Lord Dahrendorf: My Lords, it remains for me to do three things. The first and most difficult is to resist the temptation to engage in further debate. The second and easiest is to thank all noble Lords who participated in this extremely thoughtful debate. It gave much food for thought; it gave much food for thought for action. I am particularly grateful to the Minister for having responded not only to the analysis that many noble Lords offered but also to the demand for an explanation of government action in this field. The third and relatively easy task, since I am really moving for action rather than Papers, is to beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Police Act 1997 (Enhanced Criminal Record Certificates) (Protection of Vulnerable Adults) Regulations 2002
7.52 p.m.
Lord Rooker Lord Rooker rose to move, That the draft regulations laid before the House on 7th February be approved [19th Report from the Joint Committee].
The noble Lord said: My Lords, it might be helpful if I indicate briefly at the outset that the provisions of these regulations are compatible with the rights protected by the European Convention on Human Rights.
The regulations are a crucial element in the package of measures that we have been putting in place under Part V of the Police Act 1997 and which will be operated by the new Criminal Records Bureau. The bureau will allow wider access than hitherto to information about convictions, which may have a material bearing on a person's suitability for employment in particular jobs. Special emphasis has been placed on the protection of children and also of vulnerable adults.
The 1997 Act left a number of detailed matters to be prescribed later under secondary legislation. The issue before noble Lords this evening is the definition of those positions involving work with vulnerable adults which should be eligible for the highest level of certificate—or disclosure, as they are to be known—that the Criminal Records Bureau will issue.
The provisions in the regulations reflect widespread consultation. They set a high test. That is appropriate because enhanced disclosures should be treated not as the norm but as a high level of check to be reserved for those who are at greatest risk. It also reflects the clear view of those representing the disabled that people should not be categorised as vulnerable solely because they are disabled. The regulations therefore strike a balance, which will ensure that those who are at particular risk are afforded the higher level of protection that an enhanced disclosure will provide. Those people are receiving specified services and, because of their disability or condition, are heavily dependent on others, are seriously impaired in their ability to communicate, or would have difficulty protecting themselves. They obviously require and deserve this added protection. I beg to move.
Moved, That the draft regulations laid before the House on 7th February be approved [19th Report front the Joint Committee].—(Lord Rooker.)
Lord Dholakia: My Lords, I have looked at the website of the Criminal Records Bureau. The terms of the regulations appear to be slightly broader than the definition of "vulnerable adult" that is set out on that website. I do not know for sure whether that means that the Government have expanded the initial definition or simply that the website did not fully lay out the definition. The main difference is the addition

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of "social care services" as a service covered, which is in the regulations but not on the CRB website. The other main difference is that the website refers to,
"serious reduction in physical or mental capacity",
in the "conditions" section, whereas the regulations simply require a reduction in capacity.
We are not here to oppose the regulations, because the definition in terms of the services covered, condition of the individual and disability appear to be reasonable. However, this is an appropriate opportunity to press the Minister on the consultation that he said had taken place. What consultations did the Government undertake in drafting the definition and what changes have there been to the original definition? How many jobs will be affected, and how many enhanced certificates do the Government expect to be issued? What plans are there to update the law on sex offences in relation to vulnerable adults following the review, Setting the Boundaries?
This debate also gives us an opportunity to ask the Minister for an update on the establishment of the CRB. What are the reasons for the delay? Has Capita been responsible in any way and what assurances are there that it will meet the new deadline? We seek an assurance from the Minister on the accuracy of the information given in the certificates.
The Earl of Northesk: My Lords, I thank the Minister for his customary courtesy in explaining the regulations. Self-evidently it is right that special emphasis should be placed on the protection of children and vulnerable adults in the context of assessing an individual's suitability for employment in certain jobs. The enhanced criminal record certificates embodied in the regulations offer such protection.
That said, I have an oblique query, with which I hope the Minister can help me. Notwithstanding compliance with the ECHR, to which the Minister attested, how does the proposed disclosure regime meld with the Data Protection Act, particularly in respect of disclosure of data held to the individual concerned and not just to the prospective employer? I look forward to the Minister's satisfying my curiosity on that point. In the mean time, we on these Benches are satisfied that the regulations are sensible and are content to give them a fair wind.
Lord Rooker: My Lords, I am grateful to both noble Lords for their comments.
In response to the question raised by the noble Lord, Lord Dholakia, about the number of jobs, I shall have to take advice and write to him. With regard to the website, I freely admit that I do not have a copy of it in my briefing notes. However, I have the form of the definition to hand. It is important to put on the record the kind of people we are talking about. The provisions relate to people who are receiving various services, including accommodation and care in a care home, or in a hospital, or in an establishment catering for people
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with learning difficulties, or support to live in their own home; who have any of a range of conditions, such as a learning or physical disability; and who, as a result, are heavily dependent on others, or suffer problems in communication, or have limited ability to protect themselves. We are therefore looking for enhanced disclosures for that vulnerable group of people.
In the brief time that is available I am happy to put on the record the organisations that were consulted on the drafting of the definition. They are: the National Association of Citizens Advice Bureaux, Mencap, the Salvation Army, WRVS, John Grooms, Leonard Cheshire, MacIntyre Care, the Queen Elizabeth's Foundation for Disabled People, the Royal National Institute for Deaf People, the Royal National Institute for the Blind, Scope, Sense, the Sue Ryder Foundation, the Disabilities Trust, the Multiple Sclerosis Society, the Papworth Trust, the Shaftesbury Society, the Winged Fellowship Trust and the Voluntary Organisations Disability Group. That suggests the large range of groups that were involved. I cannot give details of what might have changed in terms of the presentations that were put to them.
I fully accept that originally another order was laid in which the word "substantial" was removed. The wrong draft was laid; it was not a mistake. We consulted the Department of Health about the use of the word "substantial"—that is, in paragraphs 2.3.a and 9.c. In those two paragraphs we believed that the test was set too high. It was considered to be too stringent, and that is why the word was removed. It was not a change. It was simply the case that the wrong draft was laid.
With regard to the Data Protection Act, measures relating to the Criminal Records Bureau are based on the fact that the individual, not the employer, applies for a certificate. It is the individual who applies for a job, and it is his information and not the employer's which is in question. Therefore, I can assure noble Lords that we are not setting up an operation which is incompatible with the data protection provisions.
I turn to the grossly unfair question raised by the noble Lord. Lord Dholakia, about setting up a debate on the Criminal Records Bureau. It is, of course, currently being set up. It will begin to issue standard and enhanced disclosures in March in cases in which police checks are currently available and from the beginning of April 2002 in all other cases. It is expected that basic disclosures will become available later in the summer of 2002. I can give further and better particulars, but a full launch of the Criminal Records Bureau will take place in April this year. It is a new executive agency of the Home Office set up under the legislation to which I referred earlier.
In respect of questions which I have not answered, I shall write to both the noble Lord and the noble Earl and shall place a copy of the letter in the Library.
On Question, Motion agreed to.

Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) Order 2002
8.2 p.m.
Lord Rooker Lord Rooker rose to move, That the draft order laid before the House on 4th February be approved [18th Report front the Joint Committed].
The noble. Lord said: My Lords, I am pleased to have the opportunity to debate this order. As I recall, the Rehabilitation of Offenders Act 1974 was the first piece of legislation to become an Act before the second election of that year. It was passed within weeks of the general election at which I was first elected to the other place in February 1974. Over the years the Act has performed a valuable function in getting people back into society following difficulties that they have encountered.
I should place on record—I believe that it is important to do so—that we are satisfied that the measures contained in this statutory instrument are compatible with the rights protected by the European Convention on Human Rights.
I do not know how much detail noble Lords want, and I should like to be brief. But I believe that it is important to put on record that the 1974 Act had an underlying philosophy. It concerned the importance of reforming those who commit offences, helping them to pick up their lives and make a fresh start in the hope that they would not return to crime. It accepted that, by definition. they would have paid their penalty and would be able to make a more valuable contribution to society.
That is not to undermine the principle of punishment—far from it. But we must have in place a means for rehabilitation if we are not to have an underclass of people who can never work again. That makes no sense whatever. On the other hand, we must balance that against the risk to society from exoffenders—in particular, the risk to the most vulnerable members of society.
Ever since the Rehabilitation of Offenders Act has been in place, there has been a list of positions in relation to which an offender cannot escape his past, even if his conviction under the Act is spent. In certain circumstances, he is still required to make a disclosure about his previous criminal activities and convictions. He cannot use the excuse that, because those convictions are spent, he does not need to answer certain questions. Of course, the legislation is 25 years old, and the Home Secretary announced last year that there is to be a fundamental review of the Act. That review will be reported later this year.
Perhaps I may run briefly through the changes in the order. There are some important exceptions: some are wholly new; others amend and update existing exceptions. I believe that I should place those on the record for those who follow our affairs. With regard to applicants for taxi and private hire vehicles drivers' licences, the order will put criminal records checks on a statutory footing and allow the Criminal Records Bureau to provide the information. Another exception concerns RSPCA inspectors and other staff who are
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authorised as part of their duties to carry out the killing of animals with firearms or lethal drugs. The intention is to ensure that such staff are eligible for a firearms licence on completion of training and that those with access to lethal drugs and other humanitarian killing devices are fit and proper persons.
There is a new exception for air traffic control personnel because of the privatisation of the service. This point was previously covered by the Civil Aviation Authority exception. The public also have the right to assume that a registered chartered psychologist is a fit and proper person to practise. The exception will allow the British Psychological Society better to ensure that that is the case.
The Court of Protection appoints receivers. I declare a previous interest, having been a receiver for a late friend. When I was a Member in another place I found it illuminating to see what checks were in place for receivers. Nevertheless, we are now taking the view that it is important to do whatever is possible to guard against unsuitable individuals being appointed as receivers and to have them added to the list.
The inclusion of registered foreign lawyers and Fellows of the Institute of Legal Executives brings them into line with others in the legal professions. Normally I refer to the "legal industry", but in this respect I shall settle for the "legal professions". There is a new exception to bring actuaries into line with colleagues in the legal and accountancy professions. The Crown Prosecution Service is included purely as a technical tidying-up of the exception for the Director of Public Prosecutions and any employment in his office.
The inclusion of the Serious Fraud Office and Her Majesty's Customs and Excise will bring them both into line with the Crown Prosecution Service. The inclusion of the National Criminal Intelligence Service and the National Crime Squad is necessary to ensure that all employees—not only police officers—are subject to full criminal record checks.
There is a new exception to cover people employed by Internet service providers and others who monitor conversations in electronic chat rooms better to ensure the protection of children. The order updates the existing social services exception to allow full criminal record checks on those who provide social and care services to vulnerable adults. There is movement of the exception covering National Lottery licensing from the National Lottery etc. Act 1993 to its rightful place in the exceptions order.
The policy objective is to ensure that the right balance is struck between the beneficial effects of rehabilitation with its neutralising effect on employers' potential prejudices on the one hand, and, on the other, the genuine need for access to information on the grounds of public protection. Of course. focus has been sharpened by the Human Rights Act. The disclosure of an individual's spent convictions potentially could infringe Article 8 of the European Convention on Human Rights. We are satisfied that the exceptions as drafted achieve the right balance and

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are therefore compatible with the legislation. Therefore, I hope that the order will receive the approval of the House.
Moved, That the draft order laid before the House on 4th February be approved [18th Report from the Joint Committee].—(Lord Rooker.)
Lord Dholakia: My Lords, I am grateful to the Minister for that information. On 25th April 2001 the Government announced that they were establishing a full review of the Act. They said that the review will follow the recommendation from the Better Regulation Task Force in its Review of Fit Person Criteria in 1999. I shall not spell out the terms of reference, as the Minister will be aware of them.
However, it is not clear whether this statutory instrument and last year's statutory instrument have anything to do with the work of this review. I have one or two questions and I hope not to stretch the patience of the Minister. I shall be happy for him to write to me with the answers. However, it would be helpful to know on what research the statutory instrument is based and what consultation there has been. What input has there been from the two groups—the core group and the advisory group—that are reviewing the Act? I am grateful to the Minister for having specified the exceptions. This area is crying out for reform. It is a step through which offenders will ultimately be able to get to the rehabilitation process which will help in their development.
The Earl of Northesk: My Lords, I thank the Minister for his explanation of this order, which we on these Benches support. In particular, I welcome his reinforcement of the point that the Rehabilitation of Offenders Act, which is over 25 years old, is being reviewed and that the Government have it in mind to introduce legislation in due course to bring it up to date. It would he somewhat invidious to try to pin down the noble Lord as to the timescale so I shall not do so. None the less, that appears to be a more coherent way forward than the somewhat piecemeal way in which such exceptions have been added to by secondary legislation.
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At the risk of trying the patience of the Minister, I am tempted to repeat my query about the Data Protection Act, although I am sure that his answer to me in the previous debate will carry over to this order. So I shall content myself with that. We support the order and are content to give it a fair wind.
Lord Rooker: My Lords, I am grateful for the comments of both noble Lords. I do not have a date by which the review will be concluded, but the expectation is that it will report later this year. It is being conducted in an open and inclusive way and the review team has been keen to listen to what people have to say.
Off the cuff, this order is not a consequence of the review. This is a review of the fundamental rationale behind the Act. Over the years several orders have been added. As can be seen from some of the points that I have made, some of these exceptions are wholly new and some are modifications as a result of legislation. The wholly new ones are chartered psychologists, Court of Protection receivers, registered foreign lawyers, legal executives, actuaries and Internet chat room monitors. I suspect that some of those, by definition, have come about because of changes in technology since the original legislation was passed. particularly the last one. Some of the others that I have mentioned, like air traffic control personnel, are purely a consequence of privatisation and moving people from one area to another.
In response to the noble Lord, Lord Dholakia, my answer on data protection is the same as I gave in the previous debate. There is no fundamental change. This is a modification to some of the areas concerned. I understand that the existing legislation conforms to the data protection legislation. No one has queried that. I have certainly not seen a note to that effect. If the noble Lord has any particular problems I shall be happy to look into them. If I have not responded to any points I shall do so in writing.
On Question, Motion agreed to.
House adjourned at thirteen minutes past eight o'clock.