Lords Sitting of 19 November 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 Derby.

Lord Carey of Clifton
The Right Reverend and Right Honourable George Leonard Carey, lately Archbishop of Canterbury, having been created Baron Carey of Clifton, of Clifton in the City and County of Bristol, for life—Was, in his robes, introduced between the Lord Griffiths of Fforestfach and the Lord Janner of Braunstone.

Current Affairs
2.43 p.m.
Lord Patel of Blackburnasked Her Majesty's Government:
What plans they have to increase awareness of current affairs in the population at large.
Lord Davies of Oldham: My Lords, news services perform a vital function. They provide a platform for open debate and allow members of the public to make informed and responsible decisions. One of the principles of regulation has been to ensure that high quality, impartial news is available to all viewers. That principle will be carried forward by the Communications Bill.
Lord Patel of Blackburn: My Lords, I thank my noble friend for his reply. Is he aware that a survey entitled Is Britain Dumbing Down? reveals a worrying lack of interest in current affairs and an obsession with show business celebrities? Does he think it worrying that 11 per cent could not name their own Prime Minister, let alone any other international leader? Sixty-six per cent did not know that Mr John Prescott or Mr Gordon Brown were Cabinet members. As we have decided to introduce citizenship tests for immigrants, should we not be equally concerned about the political awareness of our own citizens?
Lord Davies of Oldham: My Lords, we would all share the concern about what was revealed in the survey to which my noble friend refers. There are surprising degrees of ignorance in the population about leading political figures, although all noble Lords will recognise that that is not just a question of personalities. The process and nature of our political decision-making is probably more important.
My noble friend will recognise that we seek, through the provisions of the Nationality, Immigration and Asylum Act 2002, to increase awareness of the way in
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which our society works and of how people can influence it to their own advantage, when they are newly arrived in the country. My noble friend is right to draw attention to the question of whether awareness of those concepts should be broadened to include the whole population. The citizenship curriculum is now, of course, part of the curriculum in secondary schools as well as in junior schools.
Lord Dholakia: My Lords, the noble Lord, Lord Patel of Blackburn. made an important point about citizenship. Is the Minister aware that. in some of our northern towns, women who want to learn English are told to wait and come back in a year's time, before any avenues can be opened to them? Will the Government follow the example of the Canadian citizenship education programme, which makes information available to people in various languages, before they learn English? When does the Minister expect Professor Crick's announcement about citizenship education to be made?
Lord Davies of Oldham: My Lords, I know a little about one of the northern towns to which the noble Lord referred. He is right to say that, if we are to increase the competence in English of substantial numbers of people—particularly women—in the ethnic minority communities, we must make provision for that.
The noble Lord will know that his question is most timely. I understand that the Secretary of State is to make an announcement this week about increasing resources for further education. Classes in further education will provide the basis of the provision of such learning opportunities.
Lord Lipsey: My Lords, does my noble friend agree that it is a question of supply and demand? There is a great deal of supply of high-class information—through the Internet, the BBC and ITV—but there is not quite the demand for it. People do not seem to be as interested as they used to be. Will he increase the Government's efforts to improve citizenship education in schools, in the hope that we can reconnect our young people with politics, political debate and current affairs, so that we have a healthy and vibrant democracy in the future'?
Lord Davies of Oldham: My Lords, I can confirm for my noble friend that we intend to increase the level of citizenship education in our schools. He will recognise that that is a long-drawn-out process. As he rightly said, we face a distinctly disturbing drop in public interest in current affairs programmes. Some may identify the problem as the quality of the programmes or some element of dumbing-down among broadcasters, a view that they would, of course, reject. It is within the Government's power to regulate news and factual information in the licensing system and, secondly, to increase citizenship opportunities for young people.
Lord Elton: My Lords, the Minister began his Answer by underlining the importance of news services. Does he agree that much more would be known about politicians in Parliament if the news services generally reported what goes on in Parliament? Could that not be facilitated if Ministers—in another place, in particular—made a habit of always announcing all new policy initiatives inside the Chamber, so that the press would be there not only to hear them but to hear what Members of another place had to say about them? The public does not know that, at present.
Lord Davies of Oldham: My Lords, I agree with the noble Lord to the extent that it is important that Parliament is reported adequately and that Parliament is the forum for the announcement and debate of government decisions. The noble Lord will recognise that the basis of the reforms to the working hours in another place—we have also made changes—is the need to ensure that debates take place at a time when it is more likely that news providers will be able to focus on them. Certainly it is the case that morning sittings and Prime Minister's Questions, as one illustration, taking place in the morning will aid the provision of news at lunch-time.
Lord Phillips of Sudbury: My Lords, if I could pursue the point made by the noble Lord, Lord Lipsey, about public demand, is that not dependent on the public having a sense that they are up-to-speed with what is going on up here, and is not the volume and complexity of legislation an enemy to that? More importantly, would the Minister accept that unless the public feel that Parliament is vulnerable to its own views and insights, it will never be interested in what we do? Is it not true that if, as is the case, the other place has not seen the Government defeated in a single vote since they came to power, that, of itself, creates a sense on the part of the ordinary person that their views are not worth expressing?
Lord Davies of Oldham: My Lords, I am tempted to apologise for the fact that the Government enjoy such a large majority in the House of Commons, if that is the kind of response which will keep Liberal Benches happy in the short term. Let me emphasise the obvious point. A great deal of what we do in Parliament is focused on the needs of the nation—not just legislation, but the debates that take place on the current issues of the day. It is regrettable that the way in which we have so organised ourselves in the past may have been such that, as far as news is concerned, debates have not always been at their most newsworthy.
I maintain that the reforming agenda is against the background of an awareness that we need to make our discussions and debates more newsworthy,
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carried out at a time which reflects the news agenda of the media, and that is the basis on which we are now proceeding.
Baroness Carnegy of Lour: My Lords—
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, we are in the tenth minute.

International Criminal Court
2.52 p.m.
Lord Wallace of Saltaireasked Her Majesty's Government:
Whether they intend to sign a bilateral immunity agreement with the United States on the jurisdiction of the International Criminal Court.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, we have held preliminary discussions with the United States on the possibility of a bilateral agreement. We shall ensure that any agreement which emerges will be consistent with our obligations under the statute of the International Criminal Court and within the guiding principles agreed by the European Union Foreign Ministers on 30th September.
Lord Wallace of Saltaire: My Lords, I thank the Minister for confirming that preliminary discussions have taken place. Will she also confirm my understanding that Her Majesty's Government have made it clear that they are, in principle, willing to sign a bilateral agreement with the United States? Can she also confirm that two staunch allies of the United States—Canada and the Netherlands—have made it clear that they are not willing, in principle, to sign an immunity agreement? Does she recognise that the praise that the Government have received from these Benches for pushing the Bush Administration on the multilateral route so far as Iraq is concerned, and for resisting those on the far reaches of the Right in Washington who wish to undermine international law and institutions, also causes us to question why Her Majesty's Government are not doing the same to uphold the principle of international law and international institutions on this other important principle?
Baroness Symons of Vernham Dean: My Lords, there are a number of states which have indicated willingness to sign up to bilateral agreements and a number which have indicated unwillingness. However, I take issue with the noble Lord, Lord Wallace of Saltaire. The fact is that the statute itself provides for that type of agreement under Article 98(2). Agreement, of course, has to be within specific circumstances. Under the article itself we are not moving outside the legislation in coming to that sort of bilateral agreement because that is the provision within the statute. Therefore, in making such agreements, it is important to ensure that the United

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States is still able to form part of the important international peacekeeping forces. I must say to the noble Lord, Lord Wallace of Saltaire, that I consider that an important ingredient in multilateralism in the world.
Lord Archer of Sandwell: My Lords, does my noble friend agree that the provision was inserted into the statute at the insistence of the United States? Does she agree that over the past few years this country has built up enormous international respect, not least through its leadership in ensuring that those who commit horrific offences should be made accountable internationally? Would it not be a tragedy to squander that capital paying off the moral debts of the United States?
Baroness Symons of Vernham Dean: My Lords, my noble and learned friend puts his point in tendentious terms. However the article came to be put in the legislation, the fact is that it was agreed. Nothing that we are discussing with the United States will move outside the guiding principles agreed with EU partners and we believe that that is enormously important in securing the United States' continued agreement to continue in the important multilateral forces which I mentioned to the noble Lord, Lord Wallace of Saltaire. We cannot keep going on the basis of deferrals, such as the one agreed in July, to protect the position of the United States. We need something far more solid than that, and we have a means of getting it.
Lord Howell of Guildford: My Lords, does the Minister share my mild surprise at the criticism of the United States implicit in the remarks heard in this Chamber? Is it not the position that the United States is by far the biggest contributor to peacekeeping, providing the most personnel in the whole world? Those personnel inevitably are more exposed than any other to possibly politically motivated or malicious prosecutions. Should we not be doing everything we possibly can to retain the peacekeeping roles of America and to ensure that America continues to safeguard the stability of the international community?
Baroness Symons of Vernham Dean: My Lords, that is precisely the point I have been making. We understand the anxieties that the United States has about the International Criminal Court. The noble Lord, Lord Howell, is right. The United States is an important part of peacekeeping forces around the world. We do not share the anxieties of the United States. We are full-blooded participants in having signed up to the International Criminal Court. The fact is that the reality of the United States, position has to be addressed. We believe that the United States is serious when it says that the absence of assurances in respect of the ICC will constrain its willingness to conduct military operations in support of foreign policy, such as the peacekeeping to which the noble
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Lord referred. In those circumstances it is right and prudent to go along and progress the lines I have outlined.
Baroness Williams of Crosby: My Lords. does the Minister agree that any signing of a bilateral agreement by the UK would go a long way to weaken the moral strength and power of the International Criminal Court? Is it not sometimes appropriate to tell one's best friends that what they are doing is not particularly wise? Does she agree that the matter could be brought before the House of Lords again before the Government decide to sign the bilateral agreement?
Baroness Symons of Vernham Dean: My Lords, as we have discussed on a number of occasions, the fact is that the United Kingdom Government often take issue with the United States Government on a whole range of matters, not just the International Criminal Court—for example, the protocols around chemical and biological warfare and the important issue of capital punishment. We have taken issue over Kyoto. It is certainly not the case that the United Kingdom always agrees with the United States. The noble Baroness, Lady Williams, says that signing an agreement would weaken the International Criminal Court. I put it to the noble Baroness that we shall be far more weakened in relation to the multilateral basis on which we are trying to operate in the United Nations if we reach a position where the United States simply will not take part in peacekeeping forces. That would be a far worse position for us to be in.

Public Bills: Carry-Over
2.58 p.m.
Lord Renton of Mount Harryasked Her Majesty's Government:
Whether they intend to carry over public Bills from one parliamentary Session to another and what statutory authority this would require.
Lord Williams of Mostyn: My Lords, Her Majesty's Government welcome the fact that both Houses have agreed that it should be possible for public Bills to be "carried over" from one Session to the next, as is already the case with private and hybrid Bills. Both Houses are masters of their own procedures and the law and proceedings of Parliament are not, for the most part, underpinned by statute.
Lord Renton of Mount Harry: My Lords, I thank the noble and learned Lord for that Answer. However, is it not a fact that at the moment, following the decision in the other place two weeks ago, any public Bill in the Commons could be carried over for a further Session, whereas in your Lordships' Chamber that applies only to Bills that have had pre-legislative scrutiny? Is that not likely to lead to some confusion between the two Chambers? Is not the greater, more important point that, without any doubt, the power of this Chamber is seen in the other place as at its greatest in the last few

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days of a Session when, rather than lose a Bill, a government will accept amendments because otherwise they fear that the Bill will disappear altogether? Is not that power likely to be put at risk by the changes that have just happened in Standing Orders?
Lord Williams of Mostyn: My Lords, I do not believe that to be true. I believe that both Houses are rightly scrutinising their own procedures. Of course, the procedures in the Commons are a matter for the Commons—I take the noble Lord's point—but my experience of this place is that it tends to be increasingly mulish if it feels that a government of any complexion are not paying proper attention to the fact that we have a legitimate role of scrutiny and revision. I hope that in the next year or two we will be able to renew ourselves, as the Commons are seeking to do, moving co-operatively with the other Chamber.
Lord Strathclyde: My Lords, is the noble and learned Lord aware that no amount of pre-legislative scrutiny or carry-over makes up for the vast number of Bills that we currently see, often ill drafted and sometimes when Ministers are making up policy on the hoof? Secondly, can the noble and learned Lord confirm that there will be no carry-over in this House unless there has been pre-legislative scrutiny, and only when it has been agreed by Peers in all parties and of none in this Chamber?
Lord Williams of Mostyn: My Lords, some legislation over the past years—I do not limit it to the period since 1997—has been voluminous and ill digested. The long-term solution to that is an increasing use of pre-legislative scrutiny.
The noble Lord is right in saying that we cannot have carry-over on a Bill in this Chamber unless this Chamber agrees it. That is a useful sanction which we all agreed knowing the consequences.
Lord Roper: My Lords, will the Lord Privy Seal also agree that the carry-over of any Bill if introduced initially in this House, irrespective of where it is at the end of the Session, will have to be agreed by this House?
Lord Williams of Mostyn: My Lords, I thought I had said that, but, not being entirely familiar with English as a first language, I must have got it wrong.
Viscount Bledisloe: My Lords, have Her Majesty's Government given any further thought to the suggestion made by the noble Lord, Lord Norton of Louth, that all Bills should have a 12-month life during which they have to pass, which is not tied arbitrarily to the end of a Session? Any Bill therefore not enacted within 12 months of introduction would lapse.
Lord Williams of Mostyn: My Lords, I remember the noble Lord, Lord Norton of Louth, making that suggestion and I said that I would consider it with the
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Lord President in the other place. At present, we are moving forward in a period of change—I hope renewal—and plainly that suggestion needs to be attended to.
Viscount Astor: My Lords, can the noble and learned Lord enlighten the House and tell us what is the role of the Parliament Act should a Bill be carried over? Can it still apply?
Lord Williams of Mostyn: My Lords, in some circumstances, yes.
Baroness Williams of Crosby: My Lords, the Leader of the House will appreciate how grateful we are for the efforts he has made to bring about pre-legislative scrutiny of major Bills. Will he give the House an estimate of how quickly the difficulties of staffing pre-legislative scrutiny can be overtaken so that the House can assume that most major Bills will go to pre-legislative scrutiny within whatever period of years he can indicate?
Lord Williams of Mostyn: My Lords, during previous discussions, I said that this was a long-term ambition and the Lord President has reaffirmed that in the House of Commons. I ought to echo what the noble and learned Lord the Lord Chancellor has said. The difficulty is often not a deficiency of resource in parliamentary drafting terms, because parliamentary counsel do admirable work and my noble and learned friend has applied extra resource to them and obtained extra numbers. Often—and I am whispering now—it is the fact that Ministers have not come to policy conclusions that is the difficulty.
Viscount Astor: My Lords, will the noble and learned Lord, who is usually most forthcoming in his answers, be a little more expansive and say what circumstances will apply to the use of the Parliament Act on a Bill that is carried over and what will not?
Lord Williams of Mostyn: My Lords, if the Parliament Act is to bite, it could bite in some circumstances on a carry-over Bill. But that, as the noble Lord, Lord Strathclyde, pointed out, would depend as far as we are concerned to agreeing to carryover. It seems to me that whichever party is in government the power of this House to have its own way on carry-over is a very important check. That was, I understood, what your Lordships intended when we agreed on the new reforms.
Lord Renton of Mount Harry: My Lords, in reply to me the noble and learned Lord used the word "mulish" in reference to some of the amendments passed in your Lordships' House. As a former Chief Whip in the other place, I have sometimes shared that feeling. But does he not feel that, for example, the Animal Health Bill and the Nationality, Immigration and Asylum Bill

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left this Chamber a great deal better with our amendments than when they first came here from the other place?
Lord Williams of Mostyn: My Lords, I used "mulish" as a term of approval. The mule is an admirable beast of burden, is patient and stubborn, persisting on very little by way of intake.
Lord Pilkington of Oxenford: My Lords, echoing the noble Baroness, Lady Williams, will thought be given to having more Clerks available for pre-legislative scrutiny? I sat on the Communications Bill and the Clerks were very much overburdened. In fact, a Clerk had to be changed in the middle of consideration of the Bill. If we are to carry out a great deal of pre-legislative scrutiny, could thought be given to the matter so that we are serviced in the right way?
Lord Williams of Mostyn: My Lords, that is a good point to which I know the House authorities have regard. They were able to be most flexible with the Communications Bill and we can proceed only if the resource is available. I remind myself that the mule is also incapable of reproduction, but that will not be a problem much longer.

Saville Inquiry
3.6 p.m
Lord Peyton of Yeovilasked Her Majesty's Government:
For how much longer the Saville inquiry is expected to last; how much it has cost to date; and what the final cost is estimated to be.
Lord Williams of Mostyn: My Lords, the inquiry has indicated that on current plans it expects to report during 2004. I pause for the hiss to be recorded. Up to the end of October 2002 the total cost of the inquiry to the Government was £93 million. It is estimated that the final cost will be £155 million, subject to the outcome of the judicial reviews of decisions on lawyers' fees.
Lord Peyton of Yeovil: My Lords, I pause to get my breath back. Has the time not come for the noble and learned Lord and his colleagues to reflect on the fact that the inquiry is into events which took place more than 30 years ago; has cost £93 million (I was flabbergasted by the noble and learned Lord's figure); and has gone on for four years?
Despite what the noble and learned Lord the chairman has said, does not the Minister agree that this has come to look more like a trial every day, with the Army, already under very considerable pressures at this time, in the dock? I should hate to be impertinent, but I wonder whether the time has not
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come when the noble and learned Lord the chairman would not be better employed performing his duties in your Lordships' House.
Lord Williams of Mostyn: My Lords, it was a long time ago, but the allegations are of the utmost gravity. Whether the allegations are true ought to be determined. Part of the cost, which is large, is that those members of Her Majesty's Armed Forces who served at that time, whether they are still serving or not, are entitled to have legal representation. It seems to me that what was said by Mr Hague, the then Leader of the Conservative Party, was right. He said:
"if the Prime Minister is personally satisfied—on the basis of the strong advice he has received—that genuine, fresh and compelling evidence has now been submitted which is significant enough to warrant the reopening of the inquiry, we shall accept his judgment".—[Official Report, Commons, 29/1/98; col. 504.]
For my part, whatever the expense and whatever the consequences, I believe that the Prime Minister was right.
Baroness Park of Monmouth: My Lords, does not the Minister agree that there is something very wrong with a peace process which since 1998 has spent all that money on a single event in which 13 people sadly died—and I take his point about its importance—but has allocated only £18.25 million over the same period to the needs of victims? Most of the money has gone to initiatives, strategies and programmes, but does not the Minister believe that as we are dealing with a peace and healing process some of it might have been used to deal with and address the violence from the paramilitaries on the streets? That seems to me to be just as important as the issue he has raised.
Lord Williams of Mostyn: My Lords, the noble Baroness is right in that both issues are important. But it is a false opposition to suggest that an inquiry might to be under-funded in order for other worthy purposes to be achieved. Very substantial public resource is devoted to the problems of paramilitary violence a l the moment, as the noble Baroness knows.
Lord Smith of Clifton: My Lords, does the noble and learned Lord agree that a more general point is at issue here—namely, that it is not only this inquiry that has cost a lot of money? There have been other protracted and costly inquiries. Is it not time that the Government set up one of their favourite task forces—preferably not under a lawyer—to look at how such inquiries can be expedited, rather than to continue going about these things in the conventional way?
Lord Williams of Mostyn: My Lords, the noble Lord makes a valid point. It is a question of the structure of any inquiry and whether it should be more of an inquisition rather than an adversarial proceeding. Certainly I have taken part in an inquiry which was largely inquisitorial and was able to report relatively inexpensively and fairly promptly.
Lord Glentoran: My Lords, I admit that I spoke against the opening of this inquiry. At that time I was

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a Member of the Back Benches. I certainly go along with my former leader in another place, William Hague. Does the Leader of the House agree that in the context of all the tragedies which have taken place over 30 years—the number of people who have been killed, the soldiers who have been murdered, the civilians who have been slaughtered—in the name of terrorism and the unification of Ireland, to spend this amount of money on a continuing sore which must be, and can only be, working from one side to the other to aggravate against the peace process, is not sensible?
Lord Williams of Mostyn: My Lords, I do not think that it is working, ultimately, to the detriment of the peace process. These are, I repeat, serious allegations of criminal activity against servants of the Crown. If wrong-doing occurred, it must be exposed. If wrong-doing did not occur, that must be explained also. Those against whom allegations are made are entitled to their representation and to their day.
Lord Rogan: My Lords, given that many of the key witnesses to events being examined by the Saville inquiry are either very old or deceased, how confident is the noble and learned Lord that an accurate conclusion can be arrived at? Is not the inquiry another down-payment—today we have heard that it will cost £155 million of taxpayers' money—in return for Sinn Fein/IRA's limited engagement in the Northern Ireland political process?
Lord Williams of Mostyn: My Lords, in the nature of things, many of the witnesses will be old and some of them are dead. This is a common experience which judges meet from time to time. The three members of the tribunal are eminent judges who will have to set those issues in their context. But, of course, we have film from the time, we have journalists' recollections at the time and we have many sources of live, direct evidence. It is a matter for the noble and learned Lord, Lord Saville, and his judicial colleagues to weigh all the evidence and to come to their judicial and judicious conclusion.
Lord Brooke of Sutton Mandeville: My Lords, can the noble and learned Lord remind the House of the cost estimate when this long legal journey was embarked upon?
Lord Williams of Mostyn: My Lords, if there was one, I do not know what it was. But my experience is that any estimate of legal costs is normally inadequate.

Parole
3.14 p.m.
Lord Ackner: My Lords, I beg to ask the Question standing in my name on the Order Paper. In doing so, I should say that my Question inquired whether there was a practice rather than assuming that there is one.
The Question was as follows:
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To ask Her Majesty's Government whether they consider that there should be a change in the practice which leads a prisoner, who consistently maintains that he is innocent of the offence for which he has been convicted, to prejudice his prospects of being released on parole.
The Minister of State, Home Office (Lord Falconer of Thoroton): My Lords, I am grateful to the noble and learned Lord for that clarification.
There is no rule or policy which prevents a prisoner who denies guilt from progressing through the system or from being released on parole licence. Such prisoners may be granted parole if their risk is assessed as having reduced to a level which is compatible with the protection of public safety.
Lord Ackner: My Lords, instead of the fulsome praise that one normally accords to an Answer, perhaps the Minister will allow me to express my gratitude at being the first Member of the House to be allowed to ask the first fifth Question. Although it was achieved by ballot, I suspect that it may have had something to do with alphabetical merit.
Can the Minister inform the House when the unfortunate Mr Robert Brown—whose conviction was quashed very recently, he having served 25 years in prison—might have been released but for the fact that the Criminal Cases Review Commission stepped in and referred the case to the Court of Appeal? Apparently his request for parole was refused some 14 years ago.
Secondly, is the Minister aware that, apart from the human suffering of spending another 14 years in prison, the sheer financial cost of the Home Office's inflexible policy in regard to this man involved some £500,000 for those 14 years and, no doubt, will cost something of that nature by way of compensation?
Lord Falconer of Thoroton: My Lords, on behalf of the whole House, I congratulate the noble and learned Lord on being the first asker of a fifth Question. The fact that noble Lords are leaving the Chamber at the moment is not a comment on the quality of his Question.
As to the serious question about the position of Mr Brown, he was sentenced to life imprisonment in 1977. There were seven parole hearings in relation to his case. The first took place in June 1984, the second in December 1988, and I shall write to the noble and learned Lord, Lord Ackner, with the dates of the other hearings. On each occasion the issue raised was not whether he denied guilt in relation to the crime of which he had been convicted in 1977, but what risk did he pose. That was the issue addressed by each of the seven parole hearings.
Viscount Bridgeman: My Lords, in view of the concerns about this case, can the Minister assure the

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House that a thorough review of the parole system will be undertaken to ensure that none of the suggestions outlined in the Question applies?
Lord Falconer of Thoroton: My Lords, I should make it clear to the noble Lord that the position is as described in the Parole Board's annual review for the year 2000–01, which indicated that denial of guilt is not a reason for refusing people parole. The review said that such a policy would be unlawful. It stated:
"The courts have been consistently clear that the Board has to work on the basis that a prisoner applying for parole has been properly convicted. It can place no credence in a denial of guilt … the Board's role is to make an assessment of the risk of the prisoner reoffending if released".
That is the approach that has been taken.
Lord Hooson: My Lords, is it not correct that when the Parole Board takes a judgment in such matters, the assumption is made that the man was guilty of the offence. In coming to that conclusion, does it also consider the fact that he has never apologised or in any way expressed any regret for the act that he is alleged to have committed? So when the Minister states that the matter is not considered, obliquely it is considered, is it not?
Lord Falconer of Thoroton: My Lords, there is an element of truth in what the noble Lord says in this sense: the issue is one of risk. All the circumstances may be taken into account; but the myth that one is seeking to get rid of is the idea that, if one denies one's guilt in relation to a crime, it automatically follows that one will not receive parole. That is not the position. The approach taken by the Parole Board is one of assessing risk. The board assumes that the defendant has committed the crime of which he has been convicted—because there is no other realistic basis on which it can approach the matter.
Lord Ashley of Stoke: My Lords, is my noble and learned friend saying, in other words, that the press reports were totally wrong?
Lord Falconer of Thoroton: My Lords, I am loath to comment on detailed press reports. If and in so far as it has been said that because the defendant denied guilt for his crime he was thereby automatically denied parole, that is wrong. 'That is not a lawful approach, and it is not the approach taken by the Parole Board.
Lord Marsh: My Lords, is it fair to ask whether that aspect is taken into account? There is a widespread view that that is the situation. I suggest that it is probable that people would take it into account. In the light of what the Minister has said, is there an argument for stating that it is in no way to be taken into account and that it is, therefore, not a matter for discussion on these occasions?
Lord Falconer of Thoroton: My Lords, the noble Lord, Lord Hooson, got it broadly right. Of course it could be a relevant matter. If one is denying one's guilt and one is not participating in any programme that seeks, for example, to try to deal with the behaviour that might have led to the crime, that could be a relevant factor in relation to risk. But the important point to address is this: if a person denies the crime of which he has been convicted and is thereby never granted parole, that is not the right approach.
Baroness Stern: My Lords, is the Minister aware that, according to Home Office Research Study 202, the way in which the Parole Board deals with the problem outlined is by ensuring that the prisoner has undertaken a number of offending behaviour programmes? Such programmes are often not available for months; therefore, prisoners who are eligible for parole in every other respect are kept in prison because of the scarcity of prison service programmes.
Lord Falconer of Thoroton: My Lords, again, it comes down to the question of what is the level of risk for an individual prisoner or defendant. If in order to reduce that risk certain programmes have to be gone through and there are shortages in relation to those programmes, that is not a desirable position. However, there is a balance to be struck between the protection of the public on the one hand and the availability of the programmes. Ultimately, the protection of the public has to come first.
Lord Ackner: My Lords, is not the position this: the prisoner is looked upon as adding to the risk automatically if he is released if he has not in the eyes of the Parole Board "addressed the offence'? He has not shown contrition. He has not admitted that he is the person who was properly convicted. Therefore, it is taken into account to that extent—how seriously that is done no doubt varies from case to case.
Lord Falconer of Thoroton: My Lords, I have accepted that it could be a relevant matter if and in so far as it bears on risk. If a defendant persistently denies his guilt and refuses to take part in any programmes designed to address his offending behaviour, that could plainly bear on the issue of risk. As the noble Lord, Lord Hooson, rightly said, that could have an effect on the outcome. But the critical point to make clear is that if a person denies his guilt it does not follow automatically that he will not be granted parole.

Business
Lord Grocott: My Lords, at a convenient time after 3.30 p.m., my noble and learned friend Lord Falconer will, with the leave of the House, repeat a Statement being made in another place on reforming the law on sexual offences and sexual offenders.

Crime (International Co-operation) Bill [H.L.]
3.24 p.m.
Lord Bassam of Brighton: My Lords, on behalf of my noble friend Lord Filkin, I beg to introduce a Bill to make provision for furthering co-operation with other countries in respect of criminal proceedings and investigations; to extend jurisdiction to deal with terrorist acts or threats outside the United Kingdom; to amend Section 5 of the Forgery and Counterfeiting Act 1981; and to make corresponding provision in relation to Scotland and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Bassani of Brighton.)
On Question, Bill read a first time, and to be printed.

Wild Mammals (Protection)(Amendment) Bill [H.L.]
Lord Donoughue: My Lords, I beg to introduce a Bill to amend the Wild Mammals (Protection) Act 1996. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Donoughue.)
On Question, Bill read a first time, and to be printed.

European Union (Implications of Withdrawal) Bill [H.L.]
Lord Pearson of Rannoch: My Lords, I beg to introduce a Bill to establish a committee of inquiry into the implications of a withdrawal by the United Kingdom from the European Union. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Pearson of Rannoch.)
On Question, Bill read a first time, and to be printed.

Business of the House: Standing Order 41
Lord Williams of Mostyn: My Lords, I beg to move that Standing Order 41 (Arrangement of the Order Paper) be dispensed with so far as is necessary on 25th November next to enable the Motion standing in my name to be taken before the Second Reading of the Arms Control and Disarmament (Inspections) Bill.
On Question, Motion agreed to.

Constitution Committee
The Chairman of Committees (Lord Brabazon of Tara): My Lords, a noble Lord has indicated a wish to speak on the Motion on the European Union
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Committee. I shall, therefore, move the first two Motions in my name separately. I beg to move the first Motion standing in my name on the Order Paper.
Moved, That a Select Committee be appointed to examine the constitutional implications of all public Bills coming before the House; and to keep under review the operation of the constitution;
That, as proposed by the Committee of Selection, the following Lords be named of the committee:

L. Acton,

L. Elton,

L. Fellowes,

B. Gould of Potternewton,

L. Holme of Cheltenham,

B. Howells of St Davids,

L. Jauncey of Tullichettle,

L. Lang of Monkton,

L. MacGregor of Pulham Market,

E. Mar and Kellie,

L. Morgan,

L. Norton of Louth (Chairman);

That the committee have power to appoint specialist advisers;
That the committee have power to adjourn from place to place;
That the committee have leave to report from time to time;
That the minutes of evidence taken before the Constitution Committee in the last Session of Parliament be referred to the committee;
That the minutes of evidence taken before the committee from time to time shall, if the committee think fit, be printed.—(The Chairman of Committees.)
On Question, Motion agreed to.

European Union: Select Committee
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That a Select Committee be appointed to consider European Union documents and other matters relating to the European Union.
That the expression "European Union documents"" shall include the following documents:

(i) Any proposal under the Community treaties for legislation by the Council or the Council acting jointly with the European Parliament;

(ii) Any document which is published for submission to the European Council, the Council or the European Central Bank;

(iii) Any proposal for a common strategy, a joint action or a common position under Title V (provisions on a common foreign and security policy) of the Treaty on European Union which is prepared for submission to the Council or to the European Council;

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(iv) Any proposal for a common position, framework decision, decision or a convention under Title VI (provisions on police and judicial cooperation in criminal matters) of the Treaty on European Union which is prepared for submission to the Council;

(v) Any document (not falling within (ii), (iii) or (iv) above) which is published by one Union institution for or with a view to submission to another Union institution and which does not relate exclusively to consideration of any proposal for legislation;

(vi) Any other document relating to European Union matters deposited in the House by a Minister of the Crown.

That, as proposed by the Committee of Selection, the following Lords be named of the committee:

B. Billingham,

L. Brennan,

L. Cavendish of Furness,

L. Dubs,

L. Grenfell (Chairman),

L. Hannay of Chiswick,

B. Harris of Richmond,

L. Jopling,

L. Lamont of Lerwick,

B. Maddock,

L. Neill of Bladen,

B. Park of Monmouth,

L. Radice,

L. Scott of Foscote,

E. Selborne,

B. Stern,

L. Williamson of Horton,

L. Woolmer of Leeds;

That the committee have power to appoint subcommittees and to refer to such sub-committees any of the matters within the terms of reference of the committee; that the committee have power to appoint the chairmen of sub-committees, but that such subcommittees have power to appoint their own chairman for the purpose of particular inquiries; that two be the quorum of such sub-committees;
That the committee have power to co-opt any Lord for the purpose of serving on a sub-committee;
That the committee have power to appoint specialist advisers;
That the committee and any sub-committee have power to adjourn from place to place;
That the committee have leave to report from time to time;
That the reports of the Select Committee from time to time shall be printed, notwithstanding any adjournment of the House;
That the minutes of evidence taken before the European Union Committee or any sub-committee in the last Session of Parliament be referred to the committee;
That the minutes of evidence taken before the committee or any sub-committee from time to time shall, if the committee think fit, be printed.—(The Chairman of Committees.)
Lord Bruce of Donington: My Lords, I seek some clarification from the chairman of the European Union Committee. Is it possible for him to draw the line between material that goes, or should go, before the committee and material that bypasses the committee and goes directly to Ministers?
The position at present is that material by passes even the Minister himself and goes directly from the European Commission to the ministry concerned. As a result, last year, about 2,000 items were placed directly on to the statute book without any ministerial control at all. They were merely subject to the say-so of whichever senior or semi-senior civil servant was dealing with the matter. I am sure the: House will agree that clarification is required.
I suggest that it is desirable that the chairman of the European Union Committee should give some indication as to how far his writ or that of his committee runs, as to whether or not the decisions of his committee can be taken as a licence for matters to go straightaway into British law, and where the dividing lines are.
In view of the importance of European legislation and the fact that it is now entering into very mixed fields, I suggest that the conditions proposed for the European Union Select Committee are examined in much greater detail in order that there may be a delineation of powers as between the Government and the committee itself.
Lord Renton: My Lords, lest it should be thought that the proposal put before your Lordships by the noble Lord, Lord Bruce of Donington, has no support, I want warmly to endorse what he said. If we are to have a European Union Committee, the views that he has expressed should be recognised.
Lord Pearson of Rannoch: My Lords, in further support of what the noble Lord, Lord Bruce of Donington, said, can I ask the Chairman of Committees how the sift works nowadays? It is not clear from the Order Paper. When I had the privilege of serving on your Lordships' European Select Committee, the chairman of the committee used to sit down with the Clerk once a week to go through the many hundreds of documents that Brussels had deposited in the Foreign Office that week. They would decide which ones were to be examined by the various committees. The result of that sift was put before the whole Select Committee. One member of the committee might realise that a document that needed the scrutiny of a particular committee had slipped through. What is the system now? I and many other noble Lords would support a system whereby all

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members of the Select Committee and the sub-committees for each subject area check the sift to ensure that nothing that requires your Lordships' closer attention has slipped through.
The Chairman of Committees: My Lords, I am no longer the chairman of the European Union Committee. If this Motion is agreed to, the role will be assumed by the noble Lord, Lord Grenfell. I wish him well in his task. I very much enjoyed the 18 months during which I did the job.
The noble Lord, Lord Bruce, supported by the noble Lord, Lord Renton, raised what is popularly known as comitology, an issue not widely understood by noble Lords or anyone else. I can tell noble Lords that the European Union Committee is conducting a review of its role, as proposed by the Leader's group. We were unable to complete that review before the end of the Session, but it is well under way. This subject is among those covered in the review. So, too, is scrutiny, and how it is carried out. I have little doubt that the review will be published fairly shortly, and it will almost certainly be debated in this House in due course, subject, as usual, to agreement through the usual channels. I have no doubt that that will be the best time for the issues to be raised.
The noble Lord, Lord Rannoch, asked about the sift. The sift is conducted—certainly this was the case when I did it—as it always has been. The whole point of the sift is to reduce the amount of paper so that everything is not required to go before the Select Committee or, even worse, before all the sub-committees also. The detailed result of the sift is published fortnightly. So anyone can see exactly what has happened to any given document. I hope that that answers the questions raised, which are not strictly related to the membership of the committee anyway. I urge noble Lords to reserve their fire for the time when the review is published and debated. I beg to move.
On Question, Motion agreed to.

Deputy Chairmen of Committees
The Chairman of Committees: My Lords, I beg to move the five remaining Motions standing in my name on the Order Paper en bloc.
Moved, That a Select Committee be appointed to supervise the general administration of the House and guide the work of the Management Board; to agree the
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annual estimates, supplementary estimates and the three-year spending forecasts; to approve the House of Lords annual report; and to approve changes in employment policy;
That, as proposed by the Committee of Selection, the following Lords together with the Chairman of Committees be named of the committee;

L. Barnett,

L. Burlison,

L. Craig of Radley,

L. Hunt of Wirral,

L. Lloyd of Berwick,

L. Renfrew of Kaimsthorn,

L. Rodgers of Quarry Bank,

L. Strathclyde,

B. Williams of Crosby,

L. Williams of Mostyn (L. Privy Seal);

That the committee have leave to report from time to time.
Moved, That a Select Committee be appointed to consider and report on the law relating to religious offences;
That, as proposed by the Committee of Selection, the following Lords be named of the committee:

L. Avebury,

L. Bhatia,

L. Clarke of Hampstead,

V. Colville of Culross (Chairman),

L. Grabiner,

L. Griffiths of Fforestfach,

E. Mar and Kellie,

B. Massey of Darwen,

B. Perry of Southwark,

Bp. Portsmouth,

B. Richardson of Calow,

B. Wilcox;

That the committee have power to appoint specialist advisers;
That the committee have power to adjourn from place to place;
That the minutes of evidence taken before the Religious Offences Committee in the last Session of Parliament be referred to the committee;
That the minutes of evidence taken before the committee from time to time shall, if the committee think fit, be printed.
Moved, That a Select Committee be appointed to consider science and technology and that, as proposed by the Committee of Selection, the following Lords be named of the Select Committee:

B. Finlay of Llandaff,

L. Lewis of Newnham,

L. McColl of Dulwich,

L. Methuen,

L. Mitchell,

L. Oxburgh (Chairman),

L. Patel,

L. Soulsby of Swaffham Prior,

L. Turnberg,

L. Wade of Chorlton,

B. Walmsley,

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B. Warwick of Undercliffe,

L. Winston,

L. Young of Graffitam;

That the committee have power to appoint sub-committees and that the committee have power to appoint the chairmen of sub-committees;
That the committee have power to co-opt any Lord for the purposes of serving on the committee or any sub-committee;
That the committee have leave to report from time to time;
That the committee and any sub-committee have power to adjourn from place to place;
That the committee and any sub-committee have power to appoint specialist advisers;
That the minutes of evidence taken before the Science and Technology Committee or any sub-committee in the last Session of Parliament be referred to the committee;
That the minutes of evidence taken before the committee or any sub-committee from time to time shall, if the committee think fit, be printed.
Moved, pursuant to Standing Order 74 and the resolution of the House of 16th December 1997, That, as proposed by the Committee of Selection, the following Lords be appointed to join with a committee of the Commons as the Joint Committee on Statutory Instruments:

L. Brougham and Vaux,

L. Greenway,

L. Hardy of Wath,

L. Lea of Crondall,

E. Russell,

L. Skelmersdale,

L. Vivian.

Moved, That, as proposed by the Committee of Selection, the following Lords be appointed as the panel of Lords to act as Deputy Chairmen of Committees for this Session:

V. Allenby of Megiddo,

L. Ampthill,

L. Boston of Faversham,

L. Brougham and Vaux,

L. Burnham,

L. Carter,

L. Cope of Berkeley,

B. Cox,

L. Dean of Harptree,

L. Elton,

B. Fookes,

L. Geddes,

B. Gould of Potternewton,

L. Grocott,

L. Haskel,

L. Hogg of Cumbernauld,

B. Hooper,

B. Lockwood,

L. Lyell,

C. Mar,

L. Murton of Lindisfarne,

V. Oxfuird,

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B. Pitkeathley,

B. Ramsay of Cartvale,

V. Simon,

L. Skelmersdale,

B. Thomas of Walliswood,

L. Tordoff,

B. Turner of Camden.—(The Chairman of Committees.)

On Question, Motion agreed to.

Address in Reply to Her Majesty's Most Gracious Speech
3.34 p.m.
Debate resumed on the Motion moved on Wednesday last by the Baroness Turner of Camden—namely, That an humble Address be presented to Her Majesty as follows:
"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham): My Lords, in 1997, the welfare system paid too many people a fortnightly giro cheque but did little to help them back to work. Social security has always been a big spender. In 1979, it took one penny ill five of government spending. In 1997, it had become one penny in three. If benefit moneys could have solved the problem of poverty, poverty should have been significantly reduced in 1997. Instead, one in five households were out of work. We spent a lot of money keeping people poor—a system disliked as much by those who depend on it as by those paying for it.
We want a fairer, more inclusive society. For that, we must tackle both poverty of income and poverty of life chances. Therefore, we seek first to tackle the poverty of those of working age, who are poor primarily because they are out of work, and, if they are lone parents and in fractured families, the child poverty that follows. Secondly, we want to tackle pensioner poverty, today and for the future. Many pensioners are poor, especially older widows, with little independent provision. A second problem is those who are in work but who are relatively poor. who are not building up pension provision and therefore comport their poverty into their old age.
We are making progress. The number of people in work is now at record levels. Employment has risen by more than 1.5 million since 1997 to more than 27.7 million. Unemployment has fallen by more than half a million and is at its lowest level for 25 years. With the help of the New Deal programme, long-term youth unemployment has been virtually eradicated and longterm claimant unemployment has fallen by around three-quarters to its lowest level for over 25 years. By

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rolling out Jobcentre Plus nationwide, we expect an extra 2 million people by 2006 to benefit from personal interviews and work-focused support.
Disadvantaged and marginalised groups have started to share this success. The lone parent employment rate has increased from 45.6 per cent to 53.6 per cent. However, we want to see further improvements, particularly among people from ethnic minority backgrounds and disabled people; in other words, people who are economically inactive as opposed to unemployed. So we will continue to tackle discrimination in all its forms, ensuring that every citizen enjoys their civil rights. We are also making good progress towards our target to reduce by a quarter, by 2004, the number of children in low-income households. We are a third of the way there after a third of the time. New tax credits and reform of the Child Support Agency will ensure that more—substantially more—money will go to our poorest children. As a result of our measures, including pension credit, the average pensioner household will be over £20 per week, or £1,150 a year, better off in real terms compared with 1997.
Raising incomes through increasing opportunities to work and tax and benefit reform is a central component of any anti-poverty strategy. But it is not the whole solution. Poverty is about life chances as well as low income. The quality of key public services has a vital effect on the well-being of many people. Health along with education defines those life chances. I shall give just two examples. First, a quarter of lone parents do not work. The reason they give us is that they have a limiting health condition. They need welfare to health as much as they need welfare to work.
The second example is that of older people, mainly men and mainly manual workers, who are on longterm disability benefits in the decade before retirement. They are willing to work, failing to work and becoming progressively poorer and as a result in progressively poorer health. We know that people who are suffering poverty or social exclusion are more likely to suffer poor health and to encounter poor services. So we now have national targets for reducing inequality in health—to reduce infant mortality, to close the gap in life expectancy and to reduce teenage pregnancy—the health inequalities that exist between people and between communities, about which I am sure my noble friend will speak much more when he makes his winding-up speech tonight.
In 1997 the Government set out on a programme of modernisation of health and social care services designed to redesign services around the user of those services, and to free up front-line staff to provide such services in line with local needs. We have committed ourselves to a wide ranging set of national standards, as set out in the NHS Plan and in national service frameworks, to ensure that all patients know what service they are entitled to receive and all front-line staff know what standards they are expected to meet. We established the National Institute for Clinical Excellence (NICE) to ensure uniformly high standards right across the country.
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We have committed high and sustained increases in funding to support these standards, but investment has been accompanied by reform. Increases in funding have been accompanied by radical reform of the service delivery structures to ensure a focus on delivery and on the patient. From the first, we recognised the importance of giving power to front-line services by introducing a new focus for local delivery—the primary care trust. Under the NHS Reform and Health Care Professions Act 2002, primary care trusts were given more power and resources alongside new responsibilities. From April 2003, over 75 per cent of all NHS expenditure will be in the hands of primary care trusts, run by front-line doctors, nurses, and other health professionals who are better informed about patients' needs and, therefore, better placed to commission and deliver effective services. We are beginning to see results.
In 2000–01 the NHS delivered 25,000 coronary artery bypass grafts—an increase of almost 10 per cent on 1996–97; 110,000 hip and knee replacements—an increase of 20 per cent on 1996–97; and 245,000 cataract removals—an increase of over 50 per cent on 1996–97.
We met our pledge to reduce waiting lists by 100,000 in our first term and waiting times are reducing. Between June 2001 and June 2002 the number of outpatients waiting 13 weeks to see a hospital specialist fell by almost one-third; that is to say, by 114,000. The number waiting over 26 weeks fell from 85,000 to just over 1,000 in the same period. Between August 2001 and August 2002 the number of inpatients waiting more than 15 months for treatment fell from 10,900 to just 32.
The NHS is working to reduce working times further so that by the end of March 2003 the maximum waiting time for an inpatient appointment will he cut to 12 months; the maximum waiting time for a first outpatient appointment will be cut to 21 weeks. In addition, maximum waiting times will continue to fall year on year so that by the end of 2005 the maximum waiting time for in-patient treatment will be cut to six months and the maximum wait for a first out-patient appointment will be cut to 13 weeks.
Therefore, by the end of 2005, traditional waiting times for all hospital admissions and appointments in all NHS trusts will be replaced with booking systems, which will allow patients to pre-book hospital appointments that are convenient for them. The Government's programme of investment and reform is, therefore, bearing fruit and delivering significant improvements in access to care for the people of this country. We know that there remains plenty to do; but we are getting there.
I turn to pensioners, who make substantial use of both the benefit and the health system. Adults who are unable to build a decent pension because they are not in work risk—on could almost certainly predict—poverty in later life. On average, older people who have already retired are much better off than was the case 20 years ago. Average net income before housing costs was £119 in 1979 and £195 in 1996–97. However,

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during that time, the income gap between rich and poor pensioners widened. The poorest couples' income between 1979 and 1997 grew by approximately one-third, 34 per cent, compared with 80 per cent for the richest—the top Fifth. And the difference was due to occupational pensions and private savings.
Our first priority was to tackle the gap between the poorest and the richest pensioners. MIG (the minimum income guarantee) uprated by earnings during this Parliament will ensure that more pensioners are able to share in rising national prosperity. Around 2 million pensioners currently benefit. From April 2002, a single pensioner is al. least £15 a week better off in real terms than in 1997, as a result of MIG rises.
The basic state pension will remain the foundation of income in retirement. It currently stands at £75.50 a week for single pensioners and at £120.70 a week for couples. For the past two years we have increased the basic pension by rates greater than inflation, and it is set to increase by 2.5 per cent, or the RPI, whichever is greater, in future. So we are narrowing the gap between the rich and the poor: we are getting there. But we need to do more.
Hence the state retirement pension is supported by the state second pension, which, as noble Lords will know, reforms SERPS for those unable to afford private occupational pensions. Low earners will get at least double what they would have got from SERPS; it is heavily redistributive to the poorest. And people can now also build up a second tier pension during periods where they have lost their links with the labour market because of caring responsibilities, or have a long term disability. Therefore. as with the minimum income guarantee, so with the state second pension: the primary gainers are women.
From October 2003, the groundbreaking pension credit means that for the first time we will reward, not penalise, modest savings. As well as a guaranteed level of income below which no pensioner should fall—this should be around £100 in 2003 for single pensioners and £154 for couples—the pension credit introduces a savings credit. Savings will no longer lead to the pound-for-pound reduction in income related benefits such as MIG. Pension credit will signal the end of the weekly means test. Around 45 per cent of all pensioner households will stand to gain. Small savings and small pensions will be worth having. When one remembers that the average pension pot is about £20,000 to £25,000 and that nearly half of them are under £10,000, one realises that because we have a decent level of MIG the small savings of too many pensioners have been wiped off in offsetting. That will no longer be the case with pension credit: they stand to gain.
Stakeholder pensions were introduced to provide a low-charge funded option for those who do not have access to an occupational scheme or good value personal pension. They now have the chance to save for a decent income in retirement. Now, some 18 months later, over 1 million stakeholder pensions have been sold. MIG, S2P, pension credit, and stakeholder pensions all target the poorest off; in other words, they
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rightly target disproportionately and benefit women. We have indeed responded to the needs both of those pensioners who are poor now, as well as those who face an otherwise impoverished retirement.
However, we need to do more: hence our forthcoming Green Paper. We need to reinvigorate the pensions partnership between government, individuals, employers, and the financial services industry. We need to ensure that people can invest with confidence, and that more employers offer pension schemes that meet their employees' needs. Individuals need decent choices and the information required to decide between them.
Finally, I turn to the two health Bills outlined in the gracious Speech. In this Session, my noble friend will introduce—
Lord Fowler: My Lords, perhaps I may interrupt the noble Baroness before she moves on. She made the case for encouraging pension provision, but can she say how introducing the £5 billion pension tax actually fits into that strategy of encouraging pension provision?
Baroness Hollis of Heigham: My Lords, the Chancellor of the Exchequer made a decision, which was entirely correct; namely, that pension provision should not be distorted by a retention tax—an ACT tax. Instead of investing in research and development, companies chose to pay out that money in dividends. Had companies made such investment throughout the 1990s, they might be in a healthier position now. The Chancellor corrected that anomaly, and the benefits can be clearly seen when we look at the current healthy state of the economy compared to that of most of our competitors.
As I said, the gracious Speech mentioned two health Bills. In this Session, we shall introduce a Bill to continue the process of modernising the delivery of healthcare based firmly on the founding principles of the NHS. The Health and Social Care Reform Bill would enable NHS foundation trusts to be created to free hospitals from Whitehall control, starting with the best performers. NHS foundation trusts will be set up as new public interest organisations accountable to local people.
Drawing from the examples of co-operative societies and mutual organisations in Britain and abroad, NHS foundation hospitals would be fully independent of Whitehall control, working for NHS patients and the public interest. They will be governed by a stakeholder council elected by members of the local community and NHS staff, and free to borrow from either private or public lenders up to a prudential limit established by the regulator based on their ability to service the borrowing.
Foundation hospitals will be at the cutting edge of the Government's wider reform programme for the public services. They will provide a new alternative to either monolithic healthcare provision, on the one hand, or shareholder-led for-profit provision on the other. The changes will support innovation and generate a new culture of public service enterprise.

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The Bill will also establish a new inspectorate for the NHS, independent of the Department of Health, to assess performance and enforce standards. A similar inspectorate will be set up for social services. These will strengthen accountability and transparency between the health and social care services and the public who pay for them.
I turn to the second Bill. We have already introduced the Community Care (Delayed Discharges etc.) Bill to bring an end to delays in the discharge of patients from hospital and to ensure that older people receive the right care in the right place at the right time. There are currently about 5,000 delayed discharges throughout the acute sector of the NHS on any given day. These delays are bad for the mainly elderly people who are affected by them and denied the support that they want and need. They are bad for the whole NHS as they take up resources which could be spent on providing direct patient care.
We have committed ourselves to increased funding for older people's services to guarantee faster access to a range of services and greater choice, amounting to an extra £1 billion annually by 2006. For many councils, however, the current system does not provide sufficient incentive to invest in the community services necessary to reduce delayed discharge. This Bill will provide a strong financial incentive for local authorities to use the additional funding to extend capacity. If a patient is delayed in hospital after he has been declared ready for discharge, local authorities will be required to reimburse the acute hospital for the cost of that person's bed, board and any personal care that he requires.
We are investing in our services and investing in our people. We are tackling the poverty of income, the poverty of life chances and education and above all—the poverty of health which for too long have scarred our society. I am proud to draw the Government's achievements to the attention of the House.
3.52 p.m.
Earl Howe: My Lords, the beginning of a new Session of Parliament brings with it a sense of anticipation and, one hopes, a renewal of energy for the hidden delights that lie ahead. By its very nature, it is one of the watersheds of the parliamentary year, and hence a good time to take stock—which is why, unlike some, I positively welcome the debate on the gracious Speech as an opportunity to look at the broad sweep of government policy and government performance. This Labour Government have been in office for five and a half years. That is long enough for their achievements, or the lack of them, to be assessed with reasonable objectivity. By the same token, it is more than long enough to prevent Ministers, with any shred of plausibility, blaming the previous administration for whatever might be wrong with our national life. Of course, it is not impossible that in times of desperation they will continue trying.
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So far as health is concerned, one thing of which we cannot accuse the Government is inactivity. Indeed, the past five years in the health service have been nothing if not brim full of reorganisation and change. So much so that, for some of us, life simply would not be the same without a major Bill each year reorganising one aspect or another of the NHS. This year—heaven be praised—is no exception to the rule. The effect has been one of frenetic activity and upheaval, all in the cause of that marvellous, seductive-sounding and all-purpose objective "modernisation". Modernisation is a word which, as in the language of Humpty-Dumpty, means whatever the Government choose it to mean. To that extent, it allows Ministers to claim success for whatever they happen to have done, however ghastly. Of course, it is another matter entirely whether all this relentless activity has actually improved the health service or made life better for patients.
I remember how, in 1997, the health service reforms initiated by the previous Conservative administration were lambasted by the incoming Government. GP fundholding, in particular, came in for enormous criticism on two grounds: the first being its bureaucratic cost, and the second its supposed tendency to create a two-tier health service. I think that there was a valid basis for criticism on the first count; but the second count was in large measure manufactured and overdone.
I raise the topic again not to rake over past battles, but to make a slightly wider point. Whatever one may have thought of the particular elements of the Conservative reforms—and I know only too well that the Minister did not like them—their objective was quite clear. It was to try to respond to two inescapable trends in healthcare: the increasing need for patients to feel empowered and to have choice; and the well-founded pressure on politicians to devolve to a local level the decision making about commissioning, about healthcare priorities and about looking after patients. The formation of NHS acute trusts was a means of creating autonomy at a local level, with matching accountability for money spent. The internal market, notwithstanding its adverse features, was designed not as an end in itself, but as a means of achieving the wider objectives of choice, autonomy and better treatment.
It was, however, not only the detail of Conservative policy that was repudiated by Labour; it was the wider objectives as well. When the idea of increased patient choice was put to the Prime Minister quite early on in the new administration, it was greeted with blank incomprehension. I remember the bile with which a certain Minister greeted my suggestion, in 1998, that there was a place for healthy competition in delivering healthcare. The Conservative aim of giving doctors greater power to decide what was best for their patients has been systematically undermined and frustrated by the entire sweep of the Government's reforms during their first five years in office. Instead of flexibility and local innovation, the Government introduced rigidities in the purchasing of services, poked into life by a combination of carrots and sticks from the centre.

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We may exchange banter in this Chamber about control from the centre and "getting the balance right", but the reality is that never has there been a Government more intent than this one on issuing directions, instructions, targets, initiatives, implementation plans, protocols, and guidance, clinical and non-clinical, to all segments of the health service. It is a syndrome described by the King's Fund as "relentless, almost hyperactive intervention". The NHS implementation plan for 2003–06 contains 186 separate targets—although I have to say that it is quite easy to lose count.
Lord Forsyth of Drumlean: My Lords, is my noble friend not being excessively modest? Is it not plain that, having repudiated the internal market and the whole idea of devolving power, and having smashed up what was put in place, the Government, as he said, are busily trying to reinvent it with the proposals for fundholding foundation hospitals? Has not my noble friend won the argument, and have not patients lost out because of the confusion on the government Benches over the past Five years?
Earl Howe: My Lords, as is often the case, my noble friend is ahead of me. I shall come to make that point in a moment.
No one doubts the worthy intentions behind the Government's approach. We know that the Government want to make life better for patients. The effect, however, has been little short of disastrous. What you achieve when you keep telling professional people how they must do things is to demoralise them. Morale in the health service is, by common consent, at rock bottom. You cannot make the NHS attractive to professional people unless you give them job satisfaction. They have to feel that they can exercise their professional skills without constantly being second-guessed from outside and being managed to do what is not in the best interests of their patients.
The reason why the consultants voted the other day against the proposed new contract is that trust between doctors and government is now practically nonexistent. They feel deprofessionalised. The reason why there are still 20,000 nursing vacancies is that fewer nurses nowadays want to work for the NHS. A third of new graduate nurses are not registering to practise. More and more GPs are retiring early to escape the burden of red tape and paperwork imposed by government. Junior doctors who have trained to be GPs are deciding in greater numbers to avoid general practice altogether. Doctors now work in what a leading academic recently described as a "macho-management culture". It is the culture of the health service which this Government have damaged, and that is the supreme irony when we know how precious the NHS ethos of public service is to Labour Ministers.
That is why the Department of Health is not achieving the targets for recruitment of consultants, GPs, nurses and midwives. Meanwhile, the Government, who are pouring money into the health service, are getting less and less from every pound they put in. In fact, visible evidence of the new money, as
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the King's Fund has observed, is hard to find. The Government's obsession with bringing down the waiting list numbers and setting targets for A&E waits and setting more targets for urgent cancer waits has resulted in the well-known squeezed balloon effect. You reduce the problem in one area but you inflate it in another. Long-term waits for elective surgery have come down—that is a good thing—but it is doubtful whether elective surgery as a whole has seen any increase in activity. All that has happened is that more and more people are now waiting between six and 12 months, and the capacity problem remains as it was.
Cancer patients deemed as urgent may he seeing a consultant within two weeks, but other patients, who may have life threatening forms of cancer, are, as a result, suffering unacceptable and sometimes critical delays. Maximum waiting times for cancer and heart disease, fine in their intention, have the effect of demoting other, less high profile conditions down the list of clinical priorities. As one consultant anaesthetist graphically put it the other day, "If you don't have a vote-winning illness, then sod you".
And sad to say, the distortions of clinical practice brought about by government interference are in evidence throughout the health service. The orthopaedic department of St George's Hospital is told to stop accepting out-of-area emergencies in order that the targets on routine elective cases can be met. Waits in A&E in many hospitals are getting worse because there are not any beds on the wards. There are no beds for these emergency cases because elective surgery, at the behest of Ministers, has taken priority. So, in an effort to free up beds, patients are discharged too early. The result of that is that the number of emergency readmissions to hospital has risen sharply. That in turn can lead to cancelled operations, the number of which has shot up. Beds are in short supply because they are blocked by elderly patients with nowhere to go. Why do they have nowhere to go? It is because, thanks to the Government's well-intentioned but misguided drive to regulate care homes, there is now a drastic shortage of capacity in intermediary care. None of us can condone the practice of fiddling the waiting time figures but it is no wonder that this has been happening when managers have found themselves utterly unable to fulfil the mutually conflicting imperatives being thrust upon them by Whitehall. It is often the sickest patients who suffer.
We look around to see where the money has gone. Labour's manifesto in 1997 promised to cut the bureaucratic costs of the NHS and to direct the first £100 million saved into treating 100,000 extra patients. What we have actually seen since the Government came to office is not a fall but a rise in administration costs. Taking the latest departmental report as our guide, we see that costs anticipated for 2003–04 are likely to be £100 million up on those for 1997–98—a rise of some 40 per cent. So many administrators. have been appointed in the NHS since 1997 that we are now in the extraordinary situation where, for the first time, there are more administrators in the NHS than there are beds.

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The Minister should not get me wrong. My purpose is not to belittle or rubbish every single initiative the Government have taken since they took office. Some, of course, have been positive. But having in 1997 reversed the direction of travel taken by the Conservatives in the sense that I have indicated, they have, it seems to me, taken the health service in the wrong direction for the better part of five years, and the NHS and patients have been the clear losers. It is only with the announcement of foundation hospitals in the gracious Speech that we see a welcome reversal of what has gone before. We hear a return of the language of choice, diversity of provision, professional autonomy and local ownership. We again hear about money following the patient. There is still much in the way of detail that we do not yet know but I say to the Minister that this is a new development in health policy which we find very welcome. It is time for the centre to let go.
If I have a criticism of foundation trusts as so far announced, it is that they are not to be rolled out more widely. Only three-star performers will be eligible for foundation status. But, as Gill Morgan of the NHS Confederation has observed, the very time when organisations need the most freedom to innovate is when they have been performing poorly. If devolution to front-line staff is a good thing, then more front-line staff should have the benefit of it. To contemplate only a handful of foundation hospitals, with freedom to borrow and expand, really does imply a two-tier health service to a degree that dwarfs anything that may have ensued from Conservative health policies. There are obvious questions about governance arrangements. But the real question about foundation status is the nature and extent of the freedoms to be accorded to them. Freedom means not simply "freedom to", but "freedom from". How much external monitoring and performance management will they remain subject to? How many restrictions will be placed on them by the financial regulator?
One issue of particular concern is pay. I wonder whether the Minister could tell us the extent to which foundation trusts will be able to determine their own levels of pay. Many people see a danger in staff being siphoned away from non-foundation hospitals and recruitment difficulties thereby being exacerbated. Freedom to set pay and to borrow is desirable but if foundation status is not extended more widely, the repercussions could be serious.
The measures to establish the commission for healthcare audit and inspection and the commission for social care inspection are, again, broadly welcome to us. Indeed, as the Minister knows, we have long argued for a rationalisation of the various health inspectorates. I put down only one marker at this stage, and it is a marker called "independence". We shall look very carefully at how CHAI in particular is legally constituted and the degree to which it is free not simply in managerial terms but also in terms of its budget.
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It is a shame not to be able to end my speech with a welcome for the remaining NHS measure announced last week, but I cannot. The delayed discharges Bill is, to my mind, an idea that is wholly misconceived. The root cause of bed blocking is not any lack of cooperation between hospitals and social services, it is the loss since 1997 of 60,000 places in care homes—a loss both caused and acquiesced in by the present Government. Fining local authorities for something over which they have little, if any, control is simply to deprive them of the very resources they need for care home residents. Far from stabilising services, it will destabilise them. Far from cementing local partnerships, it will undermine them. But worst of all perhaps, it will bring with it the inevitable consequence of such artificial mechanisms—the perverse incentive. All of a sudden, a GP trying to find a care home place for a patient need only refer that patient to hospital to ensure that a place is found. Independent care home providers looking for fee rises will see local authorities under the threat of fines as an easy target for such rises. To place such undue emphasis on hospital discharges will mean that those waiting for help from social services at home may well be disadvantaged.
The Local Government Association has condemned those proposals as,
"costly, unworkable and based on a flawed analysis of the real problems".
That is the position in a nutshell, and it is why I fear that the passage of this Bill through your Lordships' House will not be an easy one.
I started my speech by referring to the hidden delights of the coming Session. It is a Session which, in so far as it relates to health and social services, shows every sign of being as lively and as intense as any that I can remember. On these Benches, we stand ready to ensure that the House continues to hold Ministers to account fully, systematically and in detail, in their pursuit of the radical proposals outlined today.
4.10 p.m.
Lord Clement-Jones: My Lords, I, too. welcome the new parliamentary Session, although it has clearly started in the same old way. In the debate on the Queen's Speech in the other place, the Secretary of State for Health insulted everyone left right—and particularly—centre; we have the general bandying about of statistics without hard evidence of progress; and we still have huge capacity problems.
It appears that it is unlikely that the 2004 targets—of 7,500 more consultants and 2,000 more GPs—will be met. The total numbers applying to medical school, even with the prospect of five more medical schools, appear to be dropping fast and will, it seems. be too low to meet the 2008 target of 15,000 more doctors. Moreover, what new money there is does not appear to be reaching where it should. Cancer treatment and research and hospice care are just a few examples. Targets for accident and emergency waits are not being met. Meanwhile, the Secretary of State and Mr Nigel Crisp play a "bad cop, good cop" routine with NHS staff. The Prime Minister gave a worthy interview to the Health Service Journal on the state of the NHS and

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promised further modernisation of the health service. Then, lo—just to add to our pleasure—we had the announcement in the Queen's Speech of yet another NHS reform Bill. We have all been here several times previously. It is "Groundhog Day" in the NHS.
My point is not just that we have another NHS reform Bill but that we still have countless loose ends from previous Bills. First, specialised commissioning is an area of real concern in many specialties. When the Health Act was going through the House, we were repeatedly assured by Ministers that everything would be fine with clusters of primary care trusts developing specialised commissioning skills. That ideal appears to be as far away as ever. Ministers are now desperately trying to find a better way of doing things with a review that started in March. Can the Minister today enlighten us on what progress is being made?
My second point involves the abolition of the CHCs and the creation of patients' forums and the Commission for Patient and Public Involvement in Health. That was finally agreed in the Health Act but the saga stumbles on. It appears that the Department of Health is contemplating only 600 staff being available for 600 patients' forums. That will clearly be grossly inadequate in light of their new responsibilities, particularly in relation to primary care; it is also contrary to earlier government assurances. ACHCEW, which is still with us—just—calculates that 1,600 staff are in fact needed. An anticipated 300 offices now seem to have been boiled down to 28. How many offices will there be? What are the Government's conclusions about the resources that are needed? Is not a decision long overdue?
Nothing demonstrates the knee-jerk reflexes of the current Secretary of State more than his reaction to the recent rejection of the new contract by consultants in England and Wales. He did not examine the reasons for the rejection. Those reasons are a desire for flexibility; basic mistrust of the way in which government performance management can impact on hospital management; and concern that the new deal would be available only to the "deserving few", in the words of the NHS's head of human resources. What did the Secretary of State do? He announced the reform of merit awards in a way that punishes consultants who do not conform to the new terms and introduced a new sub-consultant grade in the teeth of opposition from junior hospital doctors.
I come to the legislation announced in the Queen's Speech. The NHS reform Bill has two main elements: the introduction of foundation hospitals and the introduction of the new commission for healthcare, inspection and audit. On foundation hospitals, the Liberal Democrats share many of the Government's aspirations as regards decentralisation. Only through that do we believe that we can properly devolve responsibility to where it belongs and deliver better patient care. However, we want to go further. We want decentralisation to democratic regional bodies that can take a strategic role in decision-making, and we want the decentralisation of commissioning to local authorities.
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We agree that there is a need for greater diversity and provision but there are many unanswered questions. Why force that status on a select group of hospitals? It appears that that will involve at most the 35 or so three-star hospitals, although the figures could even be even lower. The figure of 12 hospitals has been quoted, out of a total of 400 or so hospital trusts. As the BMA and others have put it, why not make the freedoms that are available to foundation hospitals available to all hospitals? Furthermore, why should we not allow local communities to choose whether their local hospitals become foundation hospitals? Why not establish how foundation hospitals operate through a series of pilot schemes? As the Government's own adviser, Mr Adair Turner, has warned—in a report that the Government failed to publish—that carries the danger of creating a two-tier system of healthcare. That system will reward the few at the expense of the many.
Will foundation hospitals be genuinely independent from the Department of Health, or will the Department of Health continue to tangle them in targets? Will the command and control complained of by chief executives continue?
In a press release on 22nd May the Secretary of State talked about NHS foundation hospitals being established as,
"free-standing legal entities free front direction by the Secretary of State for Health".
However, they will be subject to performance monitoring from commissioners. The concern here is not that there is proper enforcement of contracts for patient care but that that will become just another way of enforcing government targets at the expense of local patient priorities.
When will the Government give more details about the powers that the new hospitals will have, and in particular about financial powers and real independence? Will they consult on those powers?
On the new CHI, it has taken a long time for the Government finally to stumble on the right solution for the inspection of acute hospitals. A series of Bills has moved towards the conclusion that we now see appearing before us. The first NHS reform Bill tinder this Government set up the Commission for Health Improvement. The National Care Standards Commission was set up under the Care Standards Act 2000. The next NHS "re-reform" Bill amended the provisions affecting CHI. As soon as the NCSC was set up, the Government decided to merge the inspectorates so that private and NHS hospitals, for example, would have the same inspection regime. We were arguing for the conclusion that was arrived at in the latest NHS reform Bill during the passage of the first reform Bill. However, the Government were not listening at the time.
The crucial test for the new CHI is whether it is truly independent of Government and whether it can genuinely provide a focus for the myriad inspection powers that currently exist in the health service.

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I have argued on previous occasions that we desperately need to simplify our performance management, clinical governance and inspection regimes in the NHS. The position at the moment for each hospital is similar to the fact that roads in London are dug up just when the last lot of workmen have gone away.
Currently more than 20 bodies have the right to enter and inspect NHS hospitals. We need to ensure that CHI has the authority to ensure that it is the key body to which all other bodies look for validation on the ground, whether that involves the NPSA, the National Clinical Assessment Authority or the royal colleges.
As regards independence, when the Secretary of State announced the merging of CHI and the acute independent hospital inspection side of the National Care Standards Commission, he said that the new body would be at least as independent of government as the Audit Commission. But will it, for example, be allowed to choose its own meaningful performance measures, along with the need to check for adherence to NICE guidance and national service framework standards? I have the highest regard for Sir Ian Kennedy, the new chairman, but we will be scrutinising the provisions of the new Bill very carefully to make sure that this is indeed so. We shall also be arguing for direct accountability to Parliament.
A key plank of the Queen's Speech is the plan to fine or—in new Department of Health-speak—to cross-charge local authorities that fail to arrange for swift discharge of hospital patients into care homes. It is quite clear that not a single organisation supports the proposals—not the NHS Confederation, not the Local Government Association and not the directors of social services. The Government, after some prompting, have finally begun to understand the need for integration between social services and the NHS. Pooled resources and joint working were the product of one reform Bill and care trusts and partnerships were the product of a subsequent Bill.
We supported those concepts, although we argued for more radical change at each stage. Yet, we must now assume that none of that is working. The Government believe that they need to coerce local authorities at high speed—by next April—into compliance with the Government's wishes. Yet, as all of us know, the lack of care home places and of capacity is a direct result of lack of resources. This bright idea is the result of what is now called "health tourism", where a government Minister latches on to an idea gained from a brief trip abroad and then tries to implement it in the wholly different context of health and social services. This particular idea was the product of a trip around Sweden. The foundation hospitals were the product of a trip to Spain. Ministers do get about, don't they?
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The report by the Select Committee on Health pointed out that, even if the highest estimates are discounted, we have lost 34,000 care beds in recent years. With 6 per cent year on year increases in funding for social services, there is a reasonable prospect of attracting more players into the care home market and finding better home care solutions. But fining local authorities and social services departments for the failure of investment by this and the previous government is grossly unfair.
I know that my noble friend Lady Barker will be referring in more detail to the findings of the Health Select Committee in its excellent report. The report took a far more balanced view about how the problem of delayed discharges could be dealt with. It pointed out that management of discharge needs radical overhaul in many hospitals; a multi-agency team is needed to manage the process of discharge. It pointed out that the system could create the wrong kind of care: support at home is crucial.
Finally, it stated that cross-charging brings a real risk, as the noble Earl mentioned, that perverse incentives will be created that will undermine partnerships that have taken time to develop and foster an unproductive culture of buck-passing and mutual blame between health and social care. The committee argues strongly for positive not negative incentives. I hope that Ministers will read the report from cover to cover before they bring a Bill forward to this House.
A mental health Bill was the key Bill that did not appear in the Queen's Speech. On these Benches, we thoroughly approve of the fact that it did not. Despite all the indications to the contrary, it is clear that the Government have shied away from trying to force through that draft Bill in its current form. The Bill, as drafted, fundamentally confused the needs of mental health patients and service-users with a Home Office security agenda relating to people with severe personality disorder. I am not surprised that there have been tensions between the Home Office and the Department of Health.
The final nail in the coffin of the Bill was the report by the Joint Human Rights Committee, which pointed out the lack of safeguards in the Bill and that it could include those with learning difficulties. We urgently need to update our mental health laws. At the same time I welcome the pledge by the Leader of the other place to bring back a mental health Bill in due course. I just hope that the Government will have listened to all those organisations and the opposition parties and will bring back a Bill that is in far more acceptable form.
Finally, it was a pleasure to see the Tobacco Advertising and Promotion Act pass into law recently. I hope that the Government will redeem themselves for their tardiness in backing the Bill by now seriously considering a ban on smoking in public places, so that passive smoking is reduced and public health improved, as recently recommended by the BMA

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which calculates deaths from passive smoking at 1,000 a year. I look forward to the Minister's response to that particular point and to the debate generally.

Sex Offenders
4.24 p.m.
Lord Falconer of Thoroton: My Lords, with the leave of the House, I shall now repeat a Statement made in another place. The Statement is as follows:
"Mr Speaker, with permission I wish to make a Statement on the reform of the laws on sex offences and offending.
"Today we are publishing a command paper outlining proposals to increase public protection and modernise current laws.
"First, I pay tribute to my right honourable friend the Member for Blackburn who, as the former Home Secretary, established these reviews. I pay tribute also to those who contributed to the reviews and to the consultations that followed. A summary of responses has been placed in the Library.
"Protection of the public from dangerous and sex offenders is a priority for this Government and this House.
"All crime has a damaging effect on individuals and communities. But sex crimes, particularly against children, can tear apart the fabric of society.
"We have already put in place important protection measures. We have established public protection panels to manage offenders in the community, and introduced sex offender and restraining orders. We have set up a task force on child protection on the Internet and introduced disqualification orders to stop unsuitable people working with children.
"The registration requirements in the Sex Offenders Act have already been strengthened. But there is more that needs to be done, in addition to the revision of sentences and monitoring included in the new criminal justice legislation.
"We are working within government and with other agencies to develop new measures to catch offenders who abscond or change their names without telling the police. As a step towards this, all sex offenders will be obliged to register with the police every year. Fingerprints and photographs will be renewed. Offenders will be required to provide their national insurance details. In future, we will aim to use biometrics to ensure we know who they are and where they are.
"Those entering Britain who we know have been convicted abroad will have to register and to comply with the Sex Offenders Act.
"The research we are publishing today shows that some violent offenders have a greater propensity to commit sex crimes. We are not prepared to wait until they do before we take action. For that reason, we will allow sex offender orders and restraining
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orders to be taken out against anyone convicted of a serious violent offence if the police believe they present a real risk.
"The law on sex offences is archaic and incoherent. The Sexual Offences Act is 46 years old; and was mostly a simple consolidation of 19th century law. Our proposals for reform reflect changes in society and social attitudes and, most importantly, will better protect the public, particularly children and the vulnerable.
"All sex crimes are abhorrent. But none more so than those committed against children. The Internet has opened up a new world. Chat rooms allow children to contact each other. But we must deal with those who use the Internet to groom children for abuse. To tackle this both on-line and off-line we will create a new offence of sexual grooming. This implements the recommendations of the Task Force on Child Protection on the Internet.
"To further strengthen protection we will create a new civil order to prevent inappropriate adult behaviour such as sending children explicit e-mails or photographs. A further offence of an adult committing a sex act with a child will cover anyone over 13 but under 16 and where the ostensible consent of the child has been claimed. It will carry a maximum sentence of 14 years.
"We do not believe that any very young child truly gives consent to an adult. In a recent case a 32 year-old man was tried for having sex with a 12 year-old. The judge pronounced he was not a paedophile. I beg to disagree. In future, such cases will be treated as rape. The issue of consent where a child of 12 or younger is involved will not be relevant.
"We have no intention of interfering in consensual relationships between adults. But some people with a severe mental disorder or a learning disability are particularly vulnerable to abuse. Convictions under current laws are hard to achieve. There are often difficulties in gathering evidence from someone who is not only deeply distressed but does not understand what has happened.
"For that reason we will create a new offence of sex acts with a person who could not have had the capacity to consent".
Baroness Knight of Collingtree: My Lords, might I ask the noble Lord—
Lord Falconer of Thoroton: My Lords, I am repeating a Statement, so I cannot take questions.
"Mr Speaker, I want more criminals to be convicted. Not at the expense of the innocent but because of the cost to society. Giving more rights to victims and communities does not erode the rights of defendants. This is not a zero-sum game. It is a miscarriage of justice when an innocent person is wrongly convicted. And it is a travesty of justice when the guilty walk free.
"Rape is one of the most terrible crimes there is. The current defence of honest belief in consent means that a rapist can claim in court, no matter

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how unreasonably, that he 'honestly' believed consent had been given and walk free. That is not justice.
"We do not wish to convict anyone who genuinely and reasonably believed that consent was given. But we do expect a defendant to show that his mistake was not only an honest one, but in the circumstances a reasonable one. I have no intention of asking anyone to keep a pen and paper by the bedside. But, we will include a test of reasonableness in the law.
"All rapes, including drug rape, will continue to carry a maximum penalty of life imprisonment. A new offence of administering drugs with the intent to commit a sex crime will carry a maximum penalty of 10 years. We are sending out a clear message that such offences will be treated very seriously.
"A new offence of sexual assault will cover a wide range of offending, from minor assaults through to serious, violent attacks. At the top end of the range, offences will carry a maximum sentence of 10 years.
"Much has been written about the question of anonymity. I am not minded to change the present situation for defendants who have been accused of a sex crime. But I am prepared to listen to the arguments of those who feel strongly on this point.
"There is increasing concern about the role of transnational and organised crime in trafficking children and adults for sexual exploitation. New offences with tough penalties will cover these crimes. We will apply these offences to persons trafficked within the UK, whether they are British citizens or foreign nationals.
"Many in this House will be aware of the terrible exploitation of women and girls through organised criminal activity and the use of pimps to promote and control prostitution. Often, this is linked to drug dependency and what amounts to organised slavery. It is time in the 21st century to face the reality of this sub-world of degradation and exploitation.
"We therefore intend to examine the scope for a review of prostitution. We need to listen carefully to those communities affected most. From anti-social behaviour to Mafia-style criminality, communities are bedevilled by this terrible trade. We must aim to create safer neighbourhoods and an escape route for those trapped by vice.
"Our current laws on sex offences are not only archaic, they are discriminatory. Criminalising acts between homosexuals that are not against the law for heterosexuals goes against the principle of equality and previous reforms. We will therefore update the law to ensure equality of treatment. Consensual sex in private that does not harm anyone should no longer be a criminal offence.
"For the sake of absolute clarity and my own peace of mind, I wish to point out that we will not be legalising sex in public. Existing provisions in the Public Order Act 1986 together with common law offences will remain in place. However, as well as
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these we will introduce a new offence to deal with specific sex acts in a public place. This will reinforce a sense of decency and respect for others.
"Mr Speaker, our overall aim is to create laws fit for the 21st century which provide confidence and protection—laws which remain true to the time honoured and accepted parameters of a free and civilised society.
"I commend this Statement to the House".
My Lords, that concludes the Statement.
4.34 p.m.
Baroness Anelay of St Johns: My Lords, I thank the Minister for repeating the Statement made in another place. On these Benches, we welcome the content of the Statement. Of course, the White Paper deals with a wide range of issues relating to sex offences. In general, subject to a few caveats, it appears to have struck a sensible balance in dealing with questions that are, by any standards, difficult.
I was grateful to the noble and learned Lord the Leader of the House for indicating last week that this Bill would be a House of Lords starter in the new year. We will need to scrutinise the detail to ensure that the practical effect of the proposals does not undermine the entirely laudable objectives of protecting children and vulnerable adults and of closing unintended loopholes in the current law.
I am delighted that the Government have decided to adopt four of the key proposals to protect children from sex offenders put forward by my right honourable friend Oliver Letwin earlier this year. We also welcome the Home Secretary's refusal to make the sex offenders register public. Will the clauses relating to grooming be drafted in such a way as adequately to distinguish between a clearly evil pattern of behaviour intended to secure later sexual activity with a child and harmless behaviour by an adult towards a child? That will, no doubt, be particularly difficult to define when dealing with the pattern of behaviour in an extended family.
We welcome new measures to increase protection from sexual abuse for people with mental incapacity. When we debated the matter last month, in the debate so ably led by the noble Lord, Lord Rix—I am delighted to see that he is in his place today—I put several questions to the noble and learned Lord, Lord Falconer of Thoroton, who was kind enough, at the time to say that they were too difficult. He ducked them then; I am having another go now. I hope that I may be luckier this time round. Will persons who are held to lack the capacity to consent to sexual relations themselves be liable for prosecution if they engage in sexual activity with another person who lacks the capacity to consent to sexual relations? Paragraph 62 of the White Paper is not clear. Have the Government gone along with the Law Commission's recommendation that, if neither has capacity, there should be criminal culpability only if there is evidence of abuse or exploitation? Will volunteers who offer their services in residential care or nursing homes, hospitals or the personal home of an individual

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receiving care be liable to prosecution on the same basis as employees if they abuse their position of trust to abuse vulnerable people in their care? Will the definition of a vulnerable adult cover people required to be resident in the accommodation centres that the Government plan to set up to process the applications of asylum seekers?
I turn to the definition of consent in rape cases. I am sure that we agree that every allegation of rape must be taken seriously. We are aware of the widespread concern that it has become more difficult to secure the conviction of those who are guilty of rape, particularly date rape. However, we must all be cautious. In our desire to obtain the conviction of those who are guilty, we must ensure that we do not sacrifice the need to secure the freedom of those who are falsely accused. We must find the right balance so that juries feel able to convict where it is right to do so.
We believe that the Government have made an important start in a difficult area of policy. As Her Majesty's Loyal Opposition, we shall now do our job of scrutinising the Bill carefully, constructively and effectively to ensure that the balance struck is struck in the right way when the Bill becomes an Act.
4.38 p.m.
Lord Dholakia: My Lords, we thank the Minister for repeating the Statement on the reform of the laws on sex offences and offending. The issue is of concern to almost all members of the community. We have made several efforts, during the passage of past criminal justice Bills, to ensure that legislation is enacted that will protect children, who are possibly the most vulnerable of our community. We must effectively protect children from exploitation by bringing the law on sex offences into the 21st century. We welcome the Statement.
We will work constructively with the Government and other parties to ensure that children's welfare is of paramount importance. We shall utilise fully the opportunity for reform. We say that because we want the reforms to meet the needs and values of modern Britain. The laws on sex offences are outdated, and there is a danger that they discriminate against some sections of the community. That is well recognised in the White Paper. Almost all aspects of the Statement are welcome. That includes the new sexual offence to protect children, including sexual abuse of a child, grooming and trafficking and commercial sexual exploitation of children. We would expect legislation to improve the involvement of local communities in the planning system in this important aspect of sentencing and release of offenders.
We welcome the Statement on consent. Does the Minister accept the idea that an individual who is intoxicated cannot consent? It is right to ask the jury to consider the reasonableness of the defendant's claim that he had an honest belief that consent had been given.
We welcome moves to tighten the law on child prostitution to protect the victims from exploitation. Surely, it is right that we have a presumption that
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under 13 year-olds cannot consent to sex? On the Criminal Records Bureau issue, we have expressed our concern in the past that the Government's policy has gone badly wrong. Indefinite suspension of record checks is putting thousands of children and vulnerable adults at risk. We need assurances from the Minister that that will be put right at the earliest opportunity.
Assurance is needed regarding "sex tourists" who escape the current system by committing offences in countries where there is little awareness of the issues and the means to tackle exploitation of children is not in place. On the minors and sex offenders' register, can the Minister clarify the position of minors who commit sex offences? Has he considered that the Scottish children's hearings system might be a useful model for responding to juvenile sex offenders? There is also need to examine the linked issue with proposals in the criminal justice White Paper regarding jury trials for juveniles.
As regards Sarah's law, can the Minister confirm that there will be no systematic public access to the sex offenders' register? The UK has a high compliance rate—97 per cent, compared to 50 per cent in the United States. On the matter of sex offender treatment, what plans are there to improve treatment facilities in the community? The Wolvercole clinic—the only residential unit in the community—closed in July. On consolidation, I suggest to the Minister, that this is a once in a generation opportunity. Is it possible that there may be a way to consolidate all sex offences Acts within this legislation? That may be the right way to proceed.
A further concern is about police resources to ensure that the offences are prosecuted. The proposed offences require law enforcement to investigate and prosecute successfully. The recent Operation Ore, investigating over 7,200 people who have bought indecent images of children from a website in the US, highlighted the enormous task facing the police dealing with Internet related cases of child abuse The proposed grooming offence will require police resources to ensure that children are not left at risk. The NSPCC is calling for child protection to be a police priority in the forthcoming national policing plan.
In conclusion, we must ensure that the justice system can determine between offenders and those who may be incorrectly charged. In many cases, prosecutions are brought where the recollection of past years has faded. It is important to have tape recording of interviews and not simply reliance on police notes. The Home Affairs Committee in the other place reported on that proposal; I hope that we shall seriously consider it.
4.43 p.m.
Lord Falconer of Thoroton: My Lords, I thank the noble Baroness and the noble Lord for their welcome overall of the paper. I agree wholeheartedly that the Bill will need scrutiny in relation to its detail. The detail is very important. Perhaps I may deal first with the specific points raised by the noble Baroness, Lady

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Anelay. In relation to some of them, she wrote to me and to the noble Lord, Lord Rix, who sent her a reply in detail and then sent me a reply saying he was doing my job for me, which I quite agree with. The noble Lord was extremely helpful in the answers that he gave.
The noble Baroness asked whether we shall be drafting the Bill to distinguish between genuine grooming, in the sense of a criminal offence, on the one hand, and innocent contact on the other? The purpose of the grooming offence is designed to catch those people of 18 or over who undertake a course of conduct with a child under 16 leading to a meeting where the adult intends to engage in sexual activity with the child. An element of the offence, no matter how it is put, has to be an intention to have sexual activity with the child. It will be a matter for a jury to be satisfied beyond reasonable doubt that that is the purpose. The noble Baroness is right to distinguish between that sort of case and one where there is innocent contact.
Will a person who lacks capacity to consent be capable of committing the offences referred to in the Command Paper? Again, that will be a question of fact. There will need to be mens rea established on the part of any defendant against whom such a crime is alleged. In addition, there would be an issue of public interest. The same answer arises in respect to the noble Baroness's third question. She asked what would happen where two people, neither of whom had the capacity to consent, engaged in activity that might otherwise be unlawful.
Her fourth question raised the issue of volunteers—would they be caught? The essence of the crime is the abuse of a position of trust. If someone gets into a position of trust in one of the specified circumstances referred to in paragraph 60 of the Command Paper and then abuses that position of trust in ways specified by the law, it should not matter that that person is a volunteer as opposed to an employee. I did not understand the noble Baroness to be asking a specific question in relation to the rape crime; she was saying that it was important to get the balance right. The Government agree.
The noble Lord, Lord Dholakia, raised a number of issues. In relation to consent, we specify in the Command Paper a number of circumstances—in paragraph 31—where there will be a presumption that consent was most unlikely, though it would be open to the defendant to prove on the balance of probabilities that, in fact, consent was given. Intoxication is not one of the circumstances referred to in paragraph 31. The noble Lord made the point, in my view rightly, that under 13 one should not be capable of treating it as consent. We agree. It is not just a question of there being a presumption against consent for children of 12 or under. We are saying that a child of 12 or under cannot consent where consent is a relevant factor in the crime.
The noble Lord, Lord Dholakia, referred to the Criminal Records Bureau. He said that it was most unsatisfactory that certain checks are not currently in
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place. That is correct. However, it is worth pointing out that more checks are taking place now than at the time before the CRB was introduced. The Government are working hard to increase the numbers, but it would be wrong to rush the process if the CRB could not cope with the level of demand.
The noble Lord raised the question of juveniles on the sex offenders' register. Our position is that where a juvenile is charged and convicted of a sex crime to which the sex offenders' register applies, because the register has an element of public protection, it is right that that person should be on it.
The noble Lord raised the question of Sarah's law and asked me to confirm that there would be no systematic publication of the sex register. I am pleased to give that confirmation which my right honourable friend has given in another place. He expressed concern that Wolvercote has closed and that replacement arrangements should be made. We are looking at that. That has been made clear on a number of occasions.
The noble Lord said that this might be the opportunity to consolidate all the laws in relation to sex offences. The consequence of the Command Paper is that there will he a considerable body of law in relation to sex offenders and sex offences in one place. However, I cannot give him an assurance that it will be the whole law because there will still be other statutes that are of relevance.
Finally, the noble Lord referred to the importance of tape recording of interviews, particularly in crimes or potential crimes such as this, where great sensitivity is required. I agree and support what he said.
4.50 p.m.
Lord Morris of Aberavon: My Lords, I welcome the Statement repeated by my noble and learned friend. Fortunately, I have been involved in only a few but serious cases relating to paedophiles. Will he accept that the situation can be insidious and more widespread than perceived in the first instance by many? Will the police have the resources to investigate such cases?
I welcome in particular the proposals regarding e-mails and the consent of children. We must look at the issue of rape very closely. It is a question of balance. The real problem behind the complaint about so few convictions is that it is usually a one-to-one relationship and there are only two witnesses; the complainant and possibly the defendant. I agree that it must always be a question of balance.
As regards anonymity, I understood my noble and learned friend's remarks to mean that his mind is not closed and he will hear the arguments.
Lord Falconer of Thoroton: My Lords, I thank my noble and learned friend Lord Morris of Aberavon for his remarks, which are gratefully received and come from a source of considerable experience in relation to the trial of serious sex crimes. I agree that child sex abuse is insidious and much more widespread than thought and that it should be a priority for the police.

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I note what my noble and learned friend says in relation to the consent issue for children of 12 and under and that we will need to look at that carefully when the Bill comes to the House. As regards anonymity, he is right. My right honourable friend said in another place that he is presently inclined not to grant anonymity. However, his mind is not finally made up and he will be interested to hear the arguments.
Baroness Knight of Collingtree: My Lords, will the new measure mean that when schoolgirls announce that they are pregnant at the age of 12 there will be some prosecution? Is the Minister aware that there is great concern at the unreasonable number of children as young as that—the latest case only two weeks ago—who have said that they are pregnant but no prosecution seems to follow? Does the new measure mean that that situation will change? Unless there is a clear and unequivocal notice that children must not be attacked and made to have sex, I fear that it will continue.
Lord Falconer of Thoroton: My Lords, the effect of the proposal, should it become law, is that a girl of 12 is not capable of consenting to sexual intercourse. It does not necessarily follow that in every case a prosecution will take place. First, there must be an investigation as to what happened in such a case. Secondly, I refer the House to paragraph 37 of the Command Paper. It states:
"This means that where it is another child or someone in their mid teens who has sexual activity involving physical contact",
the example given is sexual intercourse,
"with someone under 13, the only charge available will be a nonconsensual offence".
That is rape. It continues:
"However, in some circumstances, particularly where the partners arc close in age and apparently agree to take part in sexual activity, it may be more appropriate to pursue the matter through child protection rather than criminal justice processes".
There will be a public interest aspect in relation to that.
It must be down to the circumstances in every case. Obviously, there will be some serious cases but there will be others in which the kind of consideration referred to in paragraph 37 should be taken into account.
Lord Rix: My Lords, I congratulate the Minister and thank him for his prognostications when replying to the Second Reading of the Sexual Offences (Amendment) Bill which I moved on 11th October last. In that reply, he went as far as he could in hinting that we might well hear something of a similar nature in the gracious Speech. Well, we did and today we have the Statement on the same subject. I am both glad and grateful.
Will the Minister confirm two points? Are all the proposals we made regarding vulnerable adults and those with a learning disability firmly stated in the Command Paper? When the eventual Bill is forthcoming, can the Minister assure me that the clauses will not be lost or diminished by the fierce
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arguments which are sure to rage over various other headline-grabbing clauses in the Bill? I shall sleep more easily tonight if he can give me such assurances—and I must warn the Minister that I am an extremely light sleeper.
Lord Falconer of Thoroton: My Lords, everyone in this House knows that the noble Lord over many years has campaigned to provide proper protection for vulnerable people in relation both to sex crimes and other matters. The noble Lord introduced the Private Member's Bill to which he referred as part of that campaign which has gone on for many years.
The precise detail is not the same, but the import of what the noble Lord sought to achieve in that Bill we seek to achieve in our Bill. He paved the way for it in his Bill and the debate which occurred on the Second Reading of his Bill reflected many of the concerns with which we seek to deal in this Bill.
We are determined to introduce these measures. No doubt they will excite great controversy in this House and in another place, but we are determined to see them through.
The Lord Bishop of Chester: My Lords, from these Benches, I thank the Minister for his Statement and offer a general welcome to the Bill which is in prospect, particularly in relation to the protection of those in our society who are most vulnerable. The Church has been involved in well publicised ways with paedophilia from the position of trust in which ministers often find themselves. The Church of England has in place as tight a regulation of these matters and protection of children as any institution in the country and we have worked hard for that. We now welcome the broader extension of the definition of those who are vulnerable in our society.
Defendants can also be vulnerable. In the general atmosphere in our society, which one could sum up as sexual chaos, there is a danger of looking for scapegoats. One sees that in the popular press all the time. I would ask the Minister to bear in mind the danger of embracing in legislation any definition of certain people who can be singled out in that way by the popular press. That leads me to suggest that some protection for those who are accused when it is one person's word against another might well be appropriate, but that will be for the detail.
The Minister also said that it would be inappropriate to discriminate in any way against those engaged in consensual acts in private which harm no one. Harm can take different forms. One of the untold stories in our society is of an epidemic of sexual disease of all kinds. AIDS grabs the headlines but there are many other such diseases. It is a little like deaths on the road; we do not like to talk about them because we are so fond of our motorcars. I hope that when we come to think about what does and does not harm people we can bear those wider issues in mind and test the question of non-discrimination against a wider concept of harm. We on these Benches will want to do that, although we acknowledge that it is improper for

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the law wrongly to interfere in the private lives of individuals. In general terms, we offer a warm welcome and look forward to the details of the Bill.
Lord Falconer of Thoroton: My Lords, even though no specific question was asked, I am told that I must rise in reply. I am grateful for the right reverend Prelate's welcome for the Command Paper. He raised a number of issues. He pointed out that defendants can be vulnerable in certain circumstances. That is true and it requires us to look at the appropriate protections. He also raised the issue of private sexual behaviour. Part of the proposals seek to try to bring an end to discrimination against homosexuality in certain circumstances which is specific in our law. That is one of the purposes of the Command Paper.
Lord Hooson: My Lords, as the purpose of the criminal law system is to convict the guilty and to protect the innocent, and as both are equally important, does the noble and learned Lord not agree that there is a great deal to be said for looking at our laws of evidence? Over the years I have suggested to two successive Lord Chancellors—not to the present one—that we should do so.
As regards rape, for example, cases are fought over the question of consent; the difference between the seduction which has been a little overpowering and true rape. It is a matter which can be decided only by a jury, but it would be greatly assisted if there was a review of our laws of evidence. I have suggested over the years that we should consider the French system of an interrogating magistrate and adapt it for this country. A video could be taken of a man accused of rape being interrogated by a police officer in the presence of a magistrate. The video could then be produced as evidence in court. It is no purpose of a lawyer to be part of a conspiracy to cheat justice, and so the defence lawyer could be there to advise his client but not to interrupt the interrogation. The jury could then eventually see what happened on the video.
This could be an important development in our law. It is important to look at the evidence—at what is admissible and what is not admissible—and, as anyone who has practised at the Bar for any length of time knows, it is the initial reaction of a man charged with a serious offence which is often the key to the case.
Lord Falconer of Thoroton: My Lords, I entirely agree about the importance of the evidential issues, particularly in cases of rape, which are peculiarly difficult. People on juries always find them extremely difficult to deal with.
As the noble Lord knows, we have looked at the issue from a slightly different angle—that is, by seeking to provide better protection for the victims of such crimes in the giving of their evidence. We have sought to reduce the strain on them by restricting the ability of the defendant to cross-examine in person, by providing greater protection in court and by softening the process to some extent.
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The noble Lord suggests a wider range of changes, which we need to think about, but such changes are not covered in the Command Paper which addresses the issue of the substantive law relating to sexual offences. The introduction of a reasonableness element in relation to consent will enable a jury to look more critically at that issue. It still will not make it an easy issue, but it will give us a broader canvas on which to paint.
Viscount Bledisloe: My Lords, the noble and learned Lord used the phrase mens rea. Can he explain why it is thought that rape is the one crime for which we will abandon the test of mens rea? In all other serious crimes it is the accused's belief that is in question. If he has taken my property but has an honest belief that he was entitled to it, he has a defence whether that belief is reasonable or not. Why is that test to be abandoned in cases of rape? Above all, why is the onus to be put on the accused to prove that he honestly believed there was consent?
As the noble and learned Lord, Lord Morris, said, normally there are only two witnesses. The lady in question—we will assume it is a heterosexual rape—will say, "I did not consent. After we got back to my flat I said no", and the accused will say, "No, she did not. She may have jokingly said no but I thought it was quite all right". Probably both of them will have had a bit to drink. So why is rape suddenly to be singled out as the crime for which we abandon the normal test of mens rea?
Lord Falconer of Thoroton: My Lords, the Command Paper states:
"We believe the difficulty in proving that some defendants did not truly have an 'honest' belief in consent contributes in some part to the low rate of convictions for rape. This in turn leads many victims, who feel that the system will not give them justice, not to report incidents or press for them to be brought to trial.
We have a situation in relation to rape where the prosecution has to prove no honest belief in consent. There may well be cases where there has been no consent—the victim has been raped in any common parlance—but the prosecution fails to prove lack of honest belief and the defendant is acquitted. That is not a sensible situation for the law to reach.
Viscount Bledisloe: My Lords, in what other area of law have we ever abandoned a test because it is difficult to prove?
Baroness Jay of Paddington: My Lords, I was pleased to hear my noble and learned friend say in reply to an earlier question that the child protection agencies played an important role in many of these issues. I hope that he can confirm that many of these matters, particularly when they refer to vulnerable young people, are more appropriately and more sensibly dealt with in that way.
But when one comes to look at matters which are susceptible to the criminal justice system, we have heard several noble Lords refer to the problems of evidence in this area. Can my noble and learned friend

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develop a little on how some of these crimes—the new crime, for example, of "grooming" children over the Internet—can properly be investigated when we all know the difficulties of regulating and, indeed, enforcing anything to do with cyber space?
Lord Falconer of Thoroton: My Lords, I can confirm to my noble friend that some of these matters, even though they may constitute a crime, will be better dealt with by child protection agencies, particularly when we are dealing with acts committed between two people both under the age of 18.
As to "grooming", this issue has been looked at in the context of the Internet. In order for an offence to be committed there has to be a meeting. So matters must have moved beyond simply communication through the Internet.
It is worth making the point that the offence of grooming is not restricted to the Internet. It can also be committed in other ways—for example, by telephone or through correspondence to start with—but the critical element is that the meeting is the trigger. Even then, the purpose of the meeting and what went before must have been with the intention on the part of the adult to have a sexual relationship with a child.
Lord Ackner: My Lords, has the noble and learned Lord considered whether there should be sexual offences less than rape but involving sexual intercourse?
He has no doubt considered the reasons for the low conviction rate, but perhaps I may suggest to him that there are probably one or two to which he has not given regard. At the Bar, it was widely accepted that one of the reasons for the low conviction rate was the abysmally low fees that the CPS paid to the Bar. The former Attorney-General nods. That has been—I will not say put right—altered in that what the Lord Chancellor's Department agreed on the subject of graduated fees for the defence has been reduced, despite the agreement, in order that the reduction may be added to what is paid to the prosecution. So it may be that we will see a better balance between the two.
Secondly, the word "rape" strikes horror in the mind of everyone, and in a jury in particular. It knows that the starting rate of imprisonment is probably six years or thereabouts. It looks at the weeping family of the prisoner and it comes to the conclusion that not all that much harm was done—they were on reasonable terms, they flirted, they drank together—and for the man to go to prison for six years or thereabouts offends its sense of proportion, and accordingly the jury acquits. A lesser offence with a lesser tariff would make a big difference.
As has been pointed out by the former Attorney-General, these cases are usually a one-to-one contest. The onus of proof is beyond reasonable doubt—or, to use the phrase of Lord Goddard, which I always found put it up a bit, you have got to be satisfied so that you
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feel sure—and that is a very high onus. With a one-to-one situation, you cannot expect a high rate of conviction. Those matters should be borne in mind.
Lord Falconer of Thoroton: My Lords, as to the inequality of alms between prosecution and defence, that was an issue at the time when my noble and learned friend Lord Morris was the Attorney-General and I was the Solicitor General. My noble and learned friend took steps to ensure that the issue of equality was dealt with, and that has made a considerable difference to the nature of prosecutions by the CPS.
As to the noble and learned Lord's second point, the essence of his question was—this is putting it simplistically—"What about a charge equal to rape but of a lesser seriousness in relation to what might be described as 'date rape"?". That matter was considered before publication of the Command Paper, but the view we have taken is that rape is rape and cannot be divided into more and less serious offences. It can be equally as traumatic to be raped by someone you know and trust, who has chosen you as his victim, as it can be to be raped by a complete stranger. Always there will be difficulties in relation to these kinds of offences for the reason given by my noble and learned friend Lord Morris—that is, they frequently involve a one-to-one relationship. Having regard to the seriousness of the offence and the fact that there will always be that difficulty, we do not think that it is right to divide it into two in the way suggested by the noble and learned Lord.

Address in Reply to Her Majesty's Most Gracious Speech
5.11 p.m.
Debate resumed.
Lord Faulkner of Worcester: My Lords, it is a particular pleasure to follow the noble Lord, Lord Clement-Jones, as this gives me the opportunity to pay a personal tribute to him for his tenacity in introducing and subsequently taking through this House the Tobacco Advertising and Promotion Bill.
I want also to pay tribute to my noble friend Lord Hunt of Kings Heath, who supported the Bill at every stage and, crucially, succeeded in persuading his colleagues in another place to take over the Bill and turn it into a government Bill, which was finally enacted two weeks ago.
I must pay tribute also to the noble Earl, Lord Howe, who made no secret of his support for the Bill, despite some difficulties during our debates. He did not in any way obstruct its passage.
It was an important piece of legislation for two reasons. First, it will save the lives of 3,000 people each year, many of them young adults who would otherwise have been tempted to smoke and would have been killed as a direct consequence. Secondly, it was the first demonstrable piece of anti-smoking legislation to be passed by this Government since they came to power

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in 1997. It builds on the excellent Smoking Kills White Paper, published by the Department of Health in December 1998.
There has been a decline in smoking levels among adults, but these tend to be older people and people in the higher socio-economic groups. There has been almost no reduction in the under-24s, and none at all in females under 19. In 1998, 42 per cent of people between 20 and 24 smoked, and 26 per cent of 15 year-olds were regular smokers.
These are all Department of Health figures, published quite recently. They underline the need to do everything possible to discourage young people from starting smoking. That will mean taking on the tobacco industry—which knows that, as its product kills its older consumers, it must find youngsters to replace them and get them hooked through the addictive properties of nicotine. The companies must not be allowed to skirt around the legislation with "brand stretching"—using glamorous merchandising such as boots, clothing and adventure travel to sell tobacco.
The commercial placement of cigarettes in films, video games and other settings must be stopped. It is deplorable that the tobacco industry should be celebrating the conversion of Mr James Bond to cigar smoking in the new film and regard this as a very successful piece of product placement.
I hope that my noble friend will not think me churlish if I express my disappointment at the absence of further smoking and health related measures in the gracious Speech. Public opinion is moving steadily against tobacco smoking, especially in public places such as restaurants and pubs, on public transport, in the workplace and in front of children.
There is a growing awareness of the dangers of passive smoking, a point made by the noble Lord, Lord Clement-Jones, as well as a revulsion among non-smokers against inhaling other people's smoke and having their clothes impregnated with the stench of stale tobacco smoke.
This is the time when the Government should be building on their achievement in passing the Tobacco Advertising and Promotion Act. They should be coming forward with new measures which both reflect the public mood and lead opinion.
For if we can prevent 3,000 premature deaths each year by banning advertising and sponsorship—that is a very significant figure; it is as many as die on the roads each year, and far more than die from all illegal drugs put together—how many more lives could we save with fresh anti-smoking initiatives? The number that die each year from smoking tobacco is 120,000.
It seems to me that there are three strands of policy-making within the Government. First, there are those who recognise the dangers of smoking and passive smoking and are determined to do something about it. In this category I place my noble friend Lord Hunt of Kings Heath and his ministerial colleagues and officials in the Department of Health.
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The second strand consists of those in government who sympathise with the need to do more, but are required—perhaps through international obligations—to take measures which are against their instincts but which are none the less helpful to the tobacco industry.
Two examples of this are the maintenance of subsidies under the common agricultural policy for tobacco-growers in the EU, mostly in Italy and Greece, and the recent relaxation on the personal import of drink and tobacco from across the Channel.
One billion euros is spent on subsidising tobacco growing in the European Union, of which our share is some £80 million—£80 million, my Lords! That is £25 million more than we spend on health education programmes trying to protect our own public from the harmful effects of tobacco.
In a Written Answer on 28th March 2001, my noble friend Lady Hayman, then a Minister of Agriculture, said:
"The Government strongly disapproves of the common agricultural policy support scheme for tobacco which was introduced in 1970 … We believe that the Community should progressively disengage from support for tobacco production on grounds of health and cost".—[Official Report, 28/3/02; col. WA 41.]
But it continues.
The other example is the recent decision to raise—or indeed virtually abolish—the limit on the number of cheap cigarettes people can bring in from continental Europe, largely, it appears, in response to a tabloid newspaper campaign. In replying to the debate, will my noble friend explain why no effort was made to reinforce anti-smoking messages when the Treasury made the announcement that people could bring in up to 3,200 cigarettes per person?
I wonder whether my noble friend saw the letter in the Independent from Professor Stephen Spiro of University College, London. The professor wrote:
"This relaxing of the rules is an encouragement to smoke more, and it also deprives the Government of a huge tax income that could have gone towards health … Surely this is another depressing negative step in our facing up to tobacco control. It is a very sad reflection that so little is being done to actively prevent cigarette consumption".
The third strand of policy-making in the Government in this area covers those who have successfully resisted the introduction of measures that would make a real difference to the health of the nation, and at the same time would make life more pleasant for the 80 per cent of the population who are non-smokers.
This means tackling the scourge of second-hand tobacco smoke. Passive smoking is a cause of fatal disease such as lung cancer and heart disease in nonsmokers. In addition, it is a hazard to those with lung conditions, who are in effect being excluded from smoky environments at work or in public—a very obvious case of discrimination.
So many of us are just sick of the stinking atmosphere it creates. Normally, when one person's actions affect the well-being of another, society intervenes. That is not so with passive smoking, even though it can prove fatal.

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Tobacco companies and their apologists still try to argue that "the jury is out on passive smoking". That is not true. According to the Daily Telegraph on 7th November, a report by the British Medical Association's Board of Science and Education and the Tobacco Control Resource Centre concluded,
"that there was no safe level of exposure to second-hand smoke and that millions of people were particularly vulnerable".
That is 8 million with lung disease, 2.1 million with angina, 1.3 million who have had a heart attack and 300,000 who have had a stroke. A total of 5.1 million people are receiving treatment for asthma, 1.5 million of whom are children. They are all at risk from passive smoking, as are 0.75 million pregnant women.
It is not as if the Government are unaware of what needs to be done. They have been consulting for almost four years on the approved code of practice on passive smoking at work prepared by the Health and Safety Commission. It is also possible to see how the problem is being tackled by other countries, many with tobacco-smoking traditions even more ingrained than ours. The Irish Republic has just announced that from next year it will outlaw smoking in all restaurants and pubs where food is served. Early this month, the Senate in Italy approved an anti-smoking measure that would forbid cigar and cigarette smoking in public places and require restaurants to confine smoking to special sections and to install ventilation systems.
By contrast, we continue to drag our feet here. The lack of action on an ACOP is unacceptable. Its absence is denying people a statutory right to work in a smoke-free environment. It is no secret that the Department of Health wishes to see it introduced without delay. Here again, I exempt my noble friend Lord Hunt from any criticism in this regard. It is the hospitality industry that seeks to block its introduction in pubs and restaurants thereby denying bar and waiting staff protection from customers' second-hand smoke. It continues to argue for its own voluntary public places charter. The editor of the The Good Pub Guide is in no doubt about the worth of that charter. In his introduction to the 2003 edition, Mr Alistair Aird draws attention to new signage that has gone up in pubs this year stating that smoking is allowed throughout the premises. I quote from his introduction:
"These notices have been produced and promoted by an outfit which gets funding from the Tobacco Manufacturers Association. This flies directly in the face of the main purpose of the legislation to prohibit cigarette advertising, which is of course to stop the promotion itself".
Far from creating new rights and opportunities for non-smokers, the charter is encouraging the notion that smoking, and drinking and eating in pubs and restaurants are inseparably linked. Given that the new Licensing Bill, which comes before your Lordships next week for its Second Reading, will remove the restrictions on children from entering pubs, can my noble friend assure me that children will not be allowed to enter sections of licensed premises where they will be exposed to tobacco smoke? Will the Government look favourably on amendments to the Bill that would seek to achieve that?
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On cancer research, I declare my interest as a patron of the Roy Castle Lung Cancer Foundation. Will my noble friend comment on why lung cancer attracts only 3 per cent of research money even though it causes 22 per cent of all cancer deaths and accounts for 15 per cent of new cases a year? We know that stopping people from smoking, persuading them not to start and protecting non-smokers from the effects of passive smoking would have by far the greatest impact on lung cancer figures. But it is undeniable that if lung cancer is diagnosed early, survival rates are much better. The University of Iowa has conducted research that shows that people are 40 times more likely to survive if diagnosed early. Early diagnosis needs to be followed by early intervention. That means that we need more—many more—thoracic surgeons to bring us into line with European average standards for thoracic surgery. GPs need the confidence that, if they refer patients for lung cancer surgery, they will be operated on quickly. At present, there is much evidence that older patients do not get referred because their GPs are not confident that that will happen.
These issues are at the forefront of the Global Lung Cancer Awareness Month, which was launched by Macmillan Cancer Relief and the Roy Castle Lung Cancer Foundation on 5th November. I hope my noble friend will be able to give his unqualified support for this initiative and reassure me that the Government's commitment to reducing smoking and combating the influence of tobacco companies remains firm.
5.24 p.m.
Lord Fowler: My Lords, it is always a pleasure to follow the noble Lord. I will make a further point on smoking and tobacco later. In some ways, this debate marks the final demise of the old Department of Health and Social Security, which was created by Harold Wilson to get art overview over both sides. In this debate it is gently suggested that we should indicate which side we will be speaking on. When I was Secretary of State, it was frequently suggested that the DHSS should be split. When I was forever being battered by organisations such as the National Association of Health Authorities, whose director bears a striking resemblance to the Minister who will be making the winding-up speech on this debate, it was proposed as a way forward. When looking at cuttings featuring the Minister, I noticed that he had a rather interesting suggestion. When the department was divided, he said:
"A more fundamental reform would have been to separate the NHS management board from the DHSS and run it as a separate agency which would allow the NHS to develop in an efficient way without too much central interference".
I am not sure that most of us recognise that as an entire description of the Government's health policy. Perhaps it is their secret agenda that they will come to.
I was told that, when the department was split, all the problems would melt away and that if health had a department of its own, it would be clear and uncontroversial sailing from then onwards. I am not

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sure that any Minister who has served in either the Conservative government or the Labour Government would recognise that as a description of what has happened. That is not to say that Ministers have not tried. I asked the House of Lords Library to find out how the number of press officers had changed since the department was split. In its efficient way, the Library told me that the Department of Health now employs 22 press officers and that the Department for Work and Pensions now employs 21 full-time press officers. Between them, they now employ 43 full-time press officers. The Library Clerk added:
"In relation to the number of press officers employed by the Department for Health and Social Security in 1986, the Department of Health have told me that they are not able to provide the figure at short notice, as the relevant files are held in Lancashire".
A few days later, they wrote again to say that the department had been,
"unable to find a record of the number of press officers employed by the Department for Health and Social Security in 1986. They are not aware of any other sources that may hold this information".
My department did not have 43 press officers. Even when I employed Edwina Currie, I did not need that number of press officers. I suggest that the number has doubled, if not more, in that time.
The truth is that however you organise a department, and these two departments, the issues covered remain among the most important in any government. I wish to touch briefly on three of them. The first is on what the noble Baroness who opened the debate referred to in the context of pensions. I would call it the pensions crisis, because I believe that it is just that. I have always believed, rather like her, that the basic pension provision should be in the hands of the government. The second tier, however, should be from personal provision. I make no complaint of the Government's policy on the basic state pension. Similarly, I make no complaint on pension credit. As the Government know, I support that, because they keep on quoting my words in support of their policy. I need no persuasion on that. I do, however, make complaint about the Government's policy to personal provision. Rather than encouraging personal provision, they have discouraged it over the past four or five years.
We did not all recognise the noble Baroness's reply on the £5 billion a year pension tax as a description of what has taken place in this country. The policy is likely to go down as a classic mistake, introduced on a false assumption that the stock market would continue to go up and up, when entirely the opposite took place.
I also condemn the Government's refusal to do anything about the annuity problem and compulsory annuities at 75. We now hear suggestions that tax reliefs are under threat and that there will be a Green Paper on the subject in due course. Doubtless there will be a debate on it, so I shall leave my full remarks until then. However, the Government will not be forgiven if they make the position even more difficult for those who are trying to make some provision for their
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retirement, in contrast, perhaps, with those in some of the public sector schemes. There is a serious danger of there being two nations in retirement in this country. We should avoid that.
My second point concerns health generally. I support the concept of devolving power and the step forward on foundation hospitals. I suspect that had we done that in government, the Labour Party would have attacked us outright, but we should not complain about that. I also suspect that right now the Government would prefer the support of former Labour Health Secretaries rather than former Conservative Health Secretaries on that policy.
The health debate should not just be about hospitals, as it so often is. It should also be about primary care and community care. I shall give one example. The Minister who will wind up the debate was responsible for an important paper on Pharmacy in the Future. I immediately declare an interest as chairman of Numark, which is the biggest organisation of community pharmacists in the United Kingdom. It has always seemed to me that pharmacists could play a much greater role in healthcare. They are an enormous resource of professionally qualified men and women who are capable of relieving pressure on general practitioners and of playing a much greater role advising the public on the treatment and prevention of ill health. As the Minister knows, there arc important decisions ahead, with the OFT report. Above all, how should all this be organised? The nightmare would be if we went the way of the United States, with pharmacies too often relegated to the backs of supermarkets. Coming to the noble Lord's point, already we have the spectacle of a pharmacy in one part of a supermarket and the company's cigarette kiosk on the other side of the checkout. Make them ill at one end and try to alleviate at the other does not seem an entirely sound health policy. In conducting and informing policy, I hope that the Government will take their decisions above all on health grounds.
My third and most fundamental point concerns a crucial aspect of health policy that risks becoming neglected in this country: the policy on HIV/AIDS, which was referred to in an intervention by one of the Bishops. Internationally, the scale of the tragedy is clear and terrible. At the start of the 1980s, the World Health Organisation predicted that by 2000, 40 million people would be infected. The WHO was criticised and attacked for exaggerating the problem. In fact, by 2000, 56 million people were infected, of whom, it is estimated, 20 million have died. Some 13 million children have lost one or both parents. Eight thousand people a day are dying from AIDS. The vast majority of people with HIV live in the developing world. AIDS is reversing years of development gain and bringing untold misery from Africa to India, from China to eastern Europe and central Asia. We should underline that the predictions are that the problem will continue to increase, not decrease.
I shall seek to return to the international challenge on another occasion. The response from the West has not matched the challenge. Of course our figures in the

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United Kingdom—thank God—are not on the African or Asian scale, but we might remember that there have already been 15,000 HIV deaths. It is estimated that there are currently 30,000 to 35,000 people living with HIV. New reports of HIV infection last year approached 5,000. That is the highest ever annual total and represents the fourth year in succession that there has been an increase. Worst of all, the evidence is that young people are ignoring safer sex messages or have no understanding of the risks that they are taking. Anyone who wants further proof of that should look at the figures for sexually transmitted diseases generally. Attendance at the special clinics has doubled over the decade. We now have more than 1 million people attending per year. That has put the clinics—much admired around the world, but underfinanced—under enormous pressure so that the whole policy of open access and self-referral is under challenge, putting at risk much of the policy in this area.
To be blunt, there is not much for our comfort here. We face a deteriorating position that demands action from the Government. Self-evidently, this is not remotely a party issue, but I must say in all seriousness to Ministers that I know of no one working in this area who believes that the response in the past few years has been adequate to the scale of the problems. What is needed? At a dinner of the Terrence Higgins Trust last week I asked that question to a professor who is working closely in the area. His response was clear: educate the young. That must be right. We need to remember that there is still no cure and no vaccine for HIV/AIDS. We hope for a vaccine, but none of us knows how long it may take. Public education is our chief prevention weapon and our only vaccine.
I am more than occasionally lectured that my 1986 campaign was too shocking, together with various other criticisms. I regret that the press officers at the Department of Health—perhaps to excuse their own inactivity—now quietly brief against it. The figures show clearly that that campaign and the needles exchange policy that we introduced had a clear impact on reducing the infection rate and improved knowledge and understanding. There is no doubt about that.
I am not arguing that the campaign that we carried out in 1986 is appropriate for 2002, but some campaign that has real impact is urgently needed if we are to reverse the present position. We also need a new effort with schools at the same time. The 2002 Ofsted report says that schools have cut the time spent on HIV and sex education. The Schools Health Education Unit has concluded that four out of 10 teenage boys have not heard of a disease called AIDS or HIV, yet it is one of the biggest killers that the world has ever seen.
The responsibility for that must lie with the Government. They have the ability to put out straightforward messages that spell out the dangers and say what can be done to avoid them. One of the real tragedies of HIV/AIDS is that it can be prevented. We are not doing enough to prevent it today. That puts
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us in a very weak moral position when we come to advise other countries. As we enter the third decade of HIV/AIDS, this is no time to relax our efforts.
5.39 p.m.
Lord Oakeshott of Seagrove Bay: My Lords, I declare my professional interest, noted in the register, as an investment manager of pension funds for the past 26 years. I shall concentrate today on the plight of occupational pension schemes, on which half our working population still depend. In a sobering debate in this House in May, I joined the noble Lords, Lord Fowler and Lord Higgins and others in warning of the financial crisis facing pension funds in this country. I think it is fair to say that in essence, the reply from the noble Baroness, Lady Hollis, was, "Crisis? What crisis?". We shall see. If she wants the quote, I have it here.
I cannot recall a time in my working life when people were so fearful—and, frankly, cynical—about the future of their pension schemes. The Maxwell scandal, shocking though it was and clearly though it showed the scope for outright fraud, was rightly seen as a one-off, which did not threaten the long-term compact between employers, pensioners, older and younger workers on which our final salary pension schemes depend. By contrast, the Equitable Life tragedy corrodes confidence in the pension promises week after week and month after month.
In the worst pension crisis before Maxwell, the runaway inflation and stock market collapse of the mid-1970s, most employers behaved responsibly: they held their nerve and showed their commitment to their workforce by raising, not cutting, their pension fund contributions, even when their own profits were going through the wringer. Courtaulds was a notable example. When I joined as its pension fund manager in 1981 the fund was worth twice as much as the company, but we kept faith with the scheme members. We invested more in real, long-term assets when markets were depressed and yields were high. Our pensioners and the company both reaped the benefit when equity markets recovered, as they always have done in Britain on a 10-year view, or sooner. Pension fund investment is a long-term business. The worst mistake you can make is to go liquid, or close your fund when markets are cheap and shares offer their best long-term value.
Many employers' reactions to the problem of the past few years have been quite different. A devastating report from the Association of Consulting Actuaries only last week showed that over half of all occupational pension schemes had now closed to new members. Many well-known companies are even breaking faith with existing employees by stopping them contributing now to get their promised proportion of final salary when they retire. There are, of course, honourable exceptions; for example, Northern Foods, which is increasing its contribution rate by 2 per cent of salary to protect its final salary scheme. But many mean and short-sighted employers are only too happy to start a race to the bottom in pension provision. The John Lewis Partnership has

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complained that its competitors in retailing are eagerly closing their pension schemes. Therefore, what we have now is a modern version of Gresham's Law: bad pension provision is driving out the good.
The latest figures from the Government Actuary's Department show that the average employer's contribution is 11.1 per cent of employees' salaries in defined benefit—that is, the traditional final salary schemes—against only 5.1 per cent in defined contribution, or money purchase schemes. Almost always these days, closure of a final salary scheme and its replacement by a money purchase scheme means a unilateral pay cut by employers. Employees, their trade unions, or other representatives, and the TUC, are quite right in my view to protest vigorously, and, in the last resort if employers refuse to consult, to strike against that pay cut. Alan Pickering sums it up succinctly at the start of his report: employers must keep to their side of the bargain with employees and meet their pension promises.
But far too many employers do not do so. The whole fabric of occupational pension schemes in this country is being torn up before our eyes. Solvent as well as struggling companies are able to close their schemes with impunity and break a moral, if not a legal contract with many of their longest-serving employees. Whatever the attractions in principle of moving towards more portable, money purchase pension arrangements for younger and more mobile employees, they do not justify welshing on existing scheme members. Ministers may wring their hands, but what are they actually going to do to protect those pension rights?
In response to an earlier intervention today from the noble Lord, Lord Fowler, the noble Baroness, Lady Hollis, claimed that by abolishing pension dividend tax credits the Chancellor of the Exchequer "corrected" an "anomaly" and that that is why our economy is healthy today. Does the noble Baroness really believe that our pension funds are healthy at present? Let us look carefully at that claim.
The Government's raid on pension funds is a key part of the pension problem. In his July 1997 Budget speech the Chancellor justified it by saying that,
"many funds are in substantial surplus and at present many companies are enjoying pension holidays".
As the noble Lord, Lord Fowler, pointed out, how fast the world has changed! Markets are cyclical. Pension funds and insurance companies have always built up surpluses in the good times to see them through the bad. If Gordon Brown takes your pension overcoat away because the sun is shining in July, it is no surprise when you shiver in January.
Geoffrey Robinson, the honourable Member for North West Coventry, and Paymaster General at the time of that Budget, gave the real reason for the pension fund tax in his memoirs:
"The calculations we commissioned from Andersen's suggested abolishing tax credits would benefit the Exchequer to the extent of approximately £5 billion per annum on an ongoing basis. We needed the money. It had to come from somewhere … This, we
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all realised, was a politically explosive issue. We anticipated a huge hullabaloo from all quarters. But if the target was going to be met, the tax credits had to go".
They got away with their raid because the markets were strong in 1997–98, but I can assure the Government that they will face the hullabaloo now.
Myners, Pickering, Sandler—we have had review after review after review in short order—all tell much the same story. Myners says:
"There is a lack of confidence in and knowledge of the pensions system".
Pickering comments:
"The negative public perception of the financial services industry is not just a commercial problem for providers, distributors and advisers, but also a key impediment to meeting the Government's aim of raising levels of retirement saving".
And Sandler observes:
"The current taxation regime for long-term savings has increased consumer confusion, exacerbating the problem of consumer weakness. The significant majority of consumers find savings products confusing and have little confidence in their ability to discriminate between products and providers".
Most significant of all, Sandler's report concludes by raising the question of the need for compulsory saving for retirement, as in Australia. He says that this,
"has an obvious and strong appeal in that it deals directly with the problem of insufficient saving, rather than trying to tackle it at second hand. If the savings level is to be raised, it may be necessary to confront difficult issues such as this one. Compulsion is an important question which deserves serious and wide ranging debate".
We on these Benches agree with him. We shall set out our proposals fully in our response to the forthcoming pensions Green Paper.
If noble Lords remember their 1066 and All That, which I have been re-reading recently, they will recall that the authors invented "The Review of Reviews of Reviews". They must have seen the Government's pensions policy coming. What we need in the forthcoming Green Paper is not another review; we need to see urgent action on five key problems. The first is Gordon Brown's crippling pension fund dividend tax. The second is the rising tide of pension fund closures; and the third is the lack of protection for contributors—not pensions in payment, but contributors—when pension schemes wind up. The latter is a particular example of the current ASW problem, as featured on last Sunday night's "Panorama" programme in which that point was clearly made.
Fourthly, we need action on the ridiculous rule forcing 75 year-olds to buy annuities; and, finally, there is the £27 billion long-term savings gap, as estimated by the Association of British Insurers. If that is not a pension fund in crisis, could the Government please tell us what one would look like? It is far too serious for any more government dither, drift and delay.
5.47 p.m.
Lord McColl of Dulwich: My Lords, despite the fact that more and more money has been pumped into the NHS, morale seems to be at a very low ebb indeed. But

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what exactly has contributed to this state of affairs? Perhaps I may give your Lordships an example. A consultant-surgeon arranged to remove a benign tumour from a patient's neck as a day case. He arranged the operation six months in advance, because there was no hurry. It would mean that the operation would he completed during the winter. However, 24 hours before the operation was due to take place an administrator approached the surgeon and said, "You can't do the operation because the patient is outside the catchment area of the hospital".
Therefore, to avoid inconveniencing the patient and wasting valuable theatre time, the surgeon, in desperation, offered to pay for the operation. The administrator said that it would cost £3,500, whereupon the surgeon pointed out that he could have the operation carried out in the private sector for £600. The administrator explained that the patient would have to stay in the hospital for three days because that is what was laid down in his book. After a rather heated discussion during which the surgeon pointed out that the administrator knew nothing about surgery, they eventually agreed that the operation could go ahead on a day-case basis and the surgeon gave the administrator a cheque for £600 made payable to the hospital.
The operation went ahead and was successful. However, being a Scot, the surgeon telephoned his bank a month afterwards to see whether the cheque had been cashed. On discovering that it had not been, he cancelled it; and nothing more was heard about the matter. Noble Lords need not be surprised at that, such is the financial control in the NHS.
Heart surgeons are pretty demoralised these days. They are very unhappy about the bureaucracy which demands that they should not have a mortality of more than, say, 5 per cent. Consider the example of a heart surgeon who has done 90 operations and has lost one patient, giving him a mortality rate of approximately 1 per cent. Suppose he is then presented with 10 patients, all of whom need a heart operation and will die without one. Such are the risks with these 10 patients, however, that half of them will die even with surgery. The surgeon realises that if he takes on the 10 patients and five die, his mortality rate will increase to 6 per cent. So he declines to operate on the 10, maintaining his mortality rate at 1 per cent. But is it really 1 per cent? As 10 patients have died as a result of not having treatment, one might argue that his rate is 11 per cent. The bureaucracy, however, does not take that into account.
That is the way in which the ethos of medicine is being radically changed. The surgeon has to think first and foremost not of his patient, but of himself and his family. If his mortality rate goes beyond a certain point, he may be suspended and lose his job. That is truly had for patients and truly bad for morale. It is one of the things that is truly undermining the NHS.
The BMA says that consultants want to provide the best possible care for their patients and do not want to be driven by targets which distort the delivery of care for those in greatest need. It is in the patient's interests that the consultants retain their professional
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autonomy and clinical independence, which is why the majority of consultants rejected the proposed new contract. The Secretary of State has been reported as saying that he does not want to renegotiate this contract and that no more resources are available. However, he misunderstands the position. Money has not been the primary issue leading consultants to reject the contract in England and Wales. Indeed, sonic of the problems identified could be resolved quite easily without additional resources.
In the psychiatric sphere, it has been laid down that children must be seen within a very short time. The administrators are fearful that if this is not accomplished, they may lose their jobs. So they become like demons attacking the clinicians to comply with the targets, often reducing the clinicians to despair. What actually happens is that the children are seen within the target time, hut, as there is not time to treat them, they are put on a waiting list to be treated later. So the actual treatment is delayed even longer. That really is a farce. One of the cris de coeurs that I hear not only from surgeons but from clinicians of all kinds is that they wish that the administrators would stop telling them what they cannot do and start encouraging them to do what they can do.
Morale among junior staff is also very low. Consider the example of a young surgeon training to be a maxillo-facial surgeon. First he has to qualify in dentistry; then he has to qualify in medicine; then he does junior jobs and higher diplomas; and then, finally, 22 years later, he is fully trained. He then picks up the newspaper and reads that there is going to be a sub-consultant grade. So, at the last minute, this chap has the prospect of waiting another 10 years before he becomes a consultant. The idea of introducing a sub-consultant grade is certainly another factor demoralising the profession.
Quite understandably, the BMA is firmly opposed to such a move, fearing that the quality of care available to patients will suffer if the gold standard of UK consultant training is abandoned. There is do doubt that morale is low. Adding to the problem, of course, is the fact that the number of people applying to do medicine is beginning to decrease. Just this morning, on the "Today" programme, the President of the Royal College of Pathologists said that morale among pathologists is very low and that, unsurprisingly, there are now more than 1,000 vacancies in the pathology service.
The diagnosis is quite clear that something is radically wrong, and it might be wise of us to look at ether organisations from which we can learn, despite the difficulties that that presents. I have spent several months in each of the past six or seven years working on a hospital ship, visiting the poorest countries in Africa. That floating hospital is one of the happiest hospitals I have worked in. In fact, it is the only hospital where I can operate from early morning to late night all week long without anyone trying to stop me or saying that they are off duty or anything like that. One Easter holiday, we operated all day on Good Friday, Easter Saturday and Easter Monday, although we did have the Sunday off.
There are difficulties in making comparisons between different organisations, but when one encounters an organisation where morale is so high

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and productivity is so good, surely it is worth looking at. The astonishing aspect of that charity, and what appeals to me as a Scot, is that no one on the ship is paid. All of us, including the captain, even have to pay for our food and keep. As it is a ship, of course it has to be under tight control and there have to be regulations; but there is no oppressive bureaucracy. The nurses, doctors, cooks, engineers, teachers and children are from 30 different nations, and they all work and live together in very good harmony.
No organisation is perfect, and, as a surgeon, I recognise that some surgeons are occasionally described as aggressive psychopaths. The solution which I have found is to have my wife, who is a doctor, assist me; having one's wife on the other side of the table provides a certain controlling influence. Although we have done this work for years, the nurses sometimes think that I am being a bit fresh with my lady assistant. When I explain that she is my wife, they say, "That's what they all say". Nevertheless, it is worth considering the example of that type of organisation. It is not controlled by a distant bureaucracy but is allowed to govern itself, and it does so with great enthusiasm.
It was encouraging to hear in the Queen's Speech that the Government are going to introduce foundation hospitals. I look forward to hearing how those will differ from the trust hospitals and—going further back—from the old teaching hospitals, which, in the 1940s, 1950s and 1960s, certainly ran their own affairs. Morale in teaching hospitals was very high and everyone was delighted to work in them.
It is essential that something radical is done to restore morale. The Government need to have urgent talks with the professions to get the NHS back on an even keel and to create conditions in which the workforce are happy and content. The imposition of the consultant contract on the profession is seen as an infringement of liberty and an attempt to dragoon doctors into being state employees. There was enormous goodwill when the NHS was started; altruism was there, and a very important component it was. It is essential that we try to take the petty party politics out of the NHS and focus principally on the needs of the patients. In order to do that, we have to have a happy workforce who are treated reasonably and are not subjected to suffocating bureaucracy.
5.59 p.m.
Lord McCarthy: My Lords, the Government are having a bad time in this debate. I apologise for continuing in the same vein. I want to talk about PFIs and PPPs. I also apologise for the fact that this is the third time in 12 months that I have tried to do so in this House. My explanation is that I have asked a series of questions to which I have not received answers either from the noble Baroness, Lady Hollis, or from the noble Lord, Lord McIntosh. But tonight the noble Lord, Lord Hunt, is to reply to the debate and I am more optimistic.
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I should also say that I shall not be ideological. As I have said before, it is the other fellow who is ideological. One insults him or her for being ideological. I am not ideological: I am reasonable. Neither shall I be pragmatic, although frequently the Government say that we should be pragmatic. I am always worried about the word "pragmatic". I have warned the Government about it before, so I looked it up. The OED says that to be pragmatic is to be officious, interfering, opinionated and doctrinaire; so let us hear no more about being pragmatic.
I want what I say to be, as the IPPR report on PFIs said, "evidence based". That is the issue. To hell with ideology and to hell with pragmatism. What is the evidence that PFIs or PPPs have done what we expected them to do?
First, it is self-evident—if someone wants to contradict me I shall be pleased—that the Government do not seek to justify anything that was done in the bad days of Tory privatisation. No one wants to justify what the Government are doing by reference to the contracting out of laundry services, catering services, cleaning services and certainly no one wants to justify railway privatisation. We do not want to justify any of that. We did not at the time and we said it was terrible. So, according to new Labour, there is no history of the privatisation of public services succeeding. On the contrary. What was done before 1997 did not succeed and we said it was a bad idea.
Secondly—if anyone from the Government wants to defend it they can—we do not wish to defend PFIs or PPPs by reference to those early scandals: for example, what happened in the Public Health Laboratory Service, or the National Insurance Contributions Agency or the Housing Benefit outsourcing activity or the computerisation of the Passport Service. No one wants to justify those examples. They were all disasters.
So what can we justify? What has happened? What have we developed since the Government came into office that is different from what the Government said was the previous disastrous legacy of privatisation in the public sector? Here we have to go back to a statement made in 1994 by the present Chancellor of the Exchequer, the Deputy Prime Minister and the Leader of the House of Commons. In that statement the Labour Party gave three reasons why we had to change our previous policies, change our previous attitudes and embrace a measure of privatisation in public services. At the time they were good reasons.
The first reason was that various studies had been carried out. The study of the national institute was crucial in this respect. In the early 1990s it produced a magnificent report to show that the past rate of investment in the public sector, particularly in the 1980s but also in the late 1970s had not been sufficient to cover the rate of depreciation. In other words, net asset values in the public sector were declining and there had been no effective expansion at all. So something had to be done. Secondly, it said that among the public there was a rising level of demand and a rising possibility of treatment in the health

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service because of innovation and technological advance. There were also rising demands in education and in the area of crime prevention; therefore there had to be a significant increase in the rate of public investment. Finally the report said—it is important in terms of what happened subsequently—that there were still restrictions on what could be done by public provision in terms of the money available. There were still problems about the PSBR, the Growth and Stability pact, and so on. Therefore it said that there were real limits to what could be expected as a result of the borrowing requirements in the public sector.
Something had to be done to deal with those problems. As I understand it. the solution, as it was developed at that time—if I have it wrong I hope that the Government will tell me—was that private money should be injected to provide increased services across the board in the public sector. I am trying hard to be fair to the Government: no one ever said that that would he a net addition of funds. They were concerned about the hump costs, given that the initial injection of capital at the beginning would be very substantial. But if we could persuade the private sector to develop consortiums and give us something like 50 per cent of the hump costs to be repaid by rents and by the charges for actual services which the consortium would provide, that would solve the problem. New Labour said all that before it took office and that was what it tried to do when it came into office.
Of course, there were a number of problems. I suggest that the first problem—I shall be happy to be corrected—is that it was inherently implausible and counter-intuitive. One had to raise the money in a much more expensive way, the debt had to be serviced, a profit had to be provided and, at the end of the day, it somehow had to be cheaper. That proposal was inherently counter-intuitive.
However, the Government provided two explanations, one positive and one negative. The positive one was that there would be "innovation"—the magic of innovation. I have never seen that word defined; perhaps the Government will define it tonight. Innovation would come from the private sector; what it would do no one could know, but it would transform the situation. Innovation would make matters cheaper, more efficient, more effective, quicker, less likely to fall down on delivery and so on. "Innovation"' was the buzz word. No figures were provided but there was to be considerable innovation.
The negative explanation was that there would be what was called at the time a "public sector comparator". Before becoming involved in privatisation, or in contracting out, or in a PFI or whatever, one would ask the sponsoring department to find out the cost if the work was done in a traditional way. So there would be a public sector comparator. Unless it was shown that the private sector initiative or partnership or PFI was cheaper and gave better value—that phrase was used—than the public sector comparator, it would not go forward. So there was a positive test and a negative test. I believe that that was the theory.
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What is the evidence that that has happened? What is the evidence that innovation has risen like a flower and solved the situation? What is the evidence that all the public sector comparators were tested carefully and that all projects had public sector comparators and they all passed the test? What is the evidence?
There have been a lot of publications and surveys. This has been a period during which various semiofficial and unofficial research organisations have developed their positions. There have been the Institute for Public Policy Research report, various parliamentary committee reports and the Herculean work of the National Audit Office. How the NAO performs as it does with the number of staff it has I do not know. Various other perhaps more prejudiced or one-sided reports have been published. Most interesting has been the recent survey of the Association of Chartered Certified Accountants, which is the most representative body of chartered accountants and has a special interest in accountants in the public sector who have been responsible for PFIs.
The IPPR said that we had obtained value for money from a few PFIs. It could not say that about most PFIs. Looking back, the most important thing about the IPPR report was its admission that it could not make a judgment at that stage on whether the system as a whole worked—whether, overall, it produced more benefits than disbenelits. The IPPR then tiptoed out of the room.
I turn to the parliamentary committees, the Select Committees on health, education and transport and, above all, the Public Accounts Committee. On the whole they attacked individual PFIs. They were critical of what was going on. The Select Committee on Transport considered the London Underground, the National Air Traffic Services, and so on. They warned—especially the Public Accounts Committee—about the erosion of the test of the public sector alternative. The Public Accounts Committee said that there was a danger that the Government's enthusiasm to sell PFI would create a "Buy now, pay later", situation. As far as I know, that was the first mention of a danger that the PFI would become "the only game in town".
The National Audit Office produced three or four reports. In all of them, so far as I know—I have asked Ministers questions but I do not get answers—it was equally reluctant to provide overall verdicts on the PFI as it proceeded. It is true that in one report it conducted a survey of the sponsoring departments. The report stated that 81 per cent were satisfied that they had received value for money; only 4 per cent said that they received poor value for money.
I am not trying to undermine the report; it is by far the best the Government have. The point is that it relates to the sponsoring departments. It is unlikely that they would say much else, because they would then be in a rather difficult position. It is hard to avoid calling it the Mandy Rice-Davies defence: "They would say that, wouldn't they?" It is difficult to reconcile with a statement that I recently came across

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made by Jeremy Colman, a senior official of the National Audit Office. In the Financial Times of 5th June 2002, he stated:
"Public sector comparators suffer from a spurious precision … Value for money exercises",
are,
"pseudo-scientific mumbo jumbo where financial modelling takes over from thinking … it becomes so complicated that no one, not even experts, really understands what is going on … people have to prove value for money to get a PFI deal, but because that is wrongly seen to be demonstrated only by the public sector comparator, it becomes everything".
Here is the pay-off:
"If the answer comes out wrong, you don't get your project. So the answer doesn't come out wrong very often".
I do not know the Government's answer to that. All I am saying at the moment is that we do not have much evidence.
The most recent report of the National Audit Office begins to dig up what in another context one might call scandals. For example, when PFIs work and considerable sums of money are available for what is called the refinancing of a PFI, the tendency has been for the consortium not to tell the Government. Only under a few contracts negotiated in the early stages were consortia under any obligation whatever to tell the Government. When that was uncovered in the report, there was a rush into the dovecotes.
I stress that it was possible for the agencies to renegotiate, so that at least now new contracts are negotiated on a 50:50 basis. But that is a kind of scandal. How did we get to a state in which we entered negotiations in which there was nothing in the contract to say that if it was paid off—if it came in under cost—there would be no splitting of the money with the public sector and that the private sector consortium could take away all the cream?
I turn to a final study: the survey of chartered accountants. They were asked whether they thought that PFIs in which they had been directly involved were generally resulting in value for money; 57 per cent said no. That is a sharp contrast with the response from sponsoring ministries. Chartered accountants were also asked whether they thought that the public sector comparator was operated objectively—58 per cent said no. Only 4 per cent of those accountants who had been directly involved in the operation of the PFI said that they "strongly believed" that it had been a good thing.
The most gentle and reasonable conclusion to draw from all this evidence is that the jury is still out on the PFI. We are spending untold millions on that way of adding to our social services, but we do not know whether it is working. At the next election, the Government and the Labour Party will be asked to explain what they have done. If the electorate believe—and they almost certainly will, because it is the way with electorates—that not all of it has worked, or not worked enough, or not worked in their local hospital, or on the railways, we will need an explanation.
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The explanation must be that we have done our best, that we have tried to find a way through and that, where the PFI turned out not to be 100 per cent effective, we corrected and sought to improve it as we went along. We must have transparency—the jargon word of the day. We must be able to prove that the best has been done. But we do not have the evidence or the institution to provide the evidence. No one is really trying to find out whether we are getting value for money. That must be done; and it must be done now.
6.19 p.m.
Baroness Carnegy of Lour: My Lords, the noble Lord made a fascinating speech. I look forward greatly to reading it because it is about something which I am trying hard to understand and which I certainly do not understand yet. I shall take a different line from that taken by any speaker thus far. I do not know whether my noble friends on the Front Bench will approve of what I say—doubtless they will tell me afterwards.
It seems to me that modern techniques of focus groups and spin enable a government to respond to public opinion at any given moment. They enable them to legislate copiously and, at the same time, to stay popular. What focus groups do not do is to help to identify the deep-down causes of national problems, let alone give a government courage to take a lead and tackle those problems at their roots.
So, after five-and-a-half years in power and no shortage of legislative change, this Government are still popular and spending unprecedented amounts with some notable successes—one of them being to bring down dramatically unemployment, as the noble Baroness, Lady Hollis, described when she spoke earlier. Yet we find them presiding over a country deeply worried about crime—especially youth crime and drugs—about vandalism, about disruption and violence in schools, about too many miserable environments for inner-city living, and about a health service stretched to its limits.
In the face of that, we have a Queen's Speech which proposes legislation to rearrange how the courts deal with crime, legislation about co-operating internationally in catching criminals and drug dealers, legislation to tackle anti-social behaviour and truancy, to protect the environment and to bring the public closer to planning, and yet more reorganisation of the National Health Service. And today we have heard about a new set of targets and benefit shifts.
No doubt many of the proposed changes will prove positive. We shall see when we come to scrutinise the relevant Bills. But this Queen's Speech deals largely with the symptoms of our nation's problems, not with the problems themselves and their deep-down root causes.
I remind the House of what is certainly one main root cause: the fact that, despite countless ameliorating measures, far too many young people and, indeed, younger adults continue to succumb to behaving problematically. The reasons, we know well, are the insecure setting of many young lives, the lack of support and discipline, and guidance and loving

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encouragement. Above all, there is the lack of opportunity to learn at home the give and take of everyday relationships that a stable family provides. That poverty of experience too often reflects downwards to the next generation.
Noble Lords know all that, of course. The detail is fresh in our minds—it was much discussed during the passage of the Adoption and Children Bill. There is more divorce and fewer marriages—nearly one-third of marriages are remarriages. Of children with stepparents, 25 per cent are unhappy enough to run away from home. Cohabiting is a rapidly increasing way of family life. We know that. But of unmarried partners having a child, within five years more than 50 per cent split up, many to new partnerships. Twenty-five per cent of all children now live in a family with a single parent, with 15 per cent of those children developing a mental disorder. Thirty-five per cent of children are brought up in relative poverty, seeing on television and among friends lifestyles to which they cannot possibly aspire. And, of course, far too many are brought up in care.
Yet, for all the pressures of modern living, it does not have to be like that. The United Kingdom has more divorces than any other country in Europe with 2.7 divorces per thousand people—the European average being 1.8. We have the most one-parent families—twice as many as in Germany and France. We have by far the biggest teenage birth rate—again, twice as many as in Germany, two-thirds more than in France and five times as many as in the Netherlands.
What can be done? It seems to me that the clock probably cannot be turned back. But, in moving it on, surely a priority must be somehow to return to more stable homes in which children can grow up. Surely the time has come to give couples who are parents—married or unmarried—incentives to commit themselves more strongly and longer term to one another and to their children. More should be done to reduce the tensions, particularly for lone parents, between parenting and work and to make it easier for those who want to stop work for a while and be at home.
It was of course a Conservative government who introduced independent taxation for married couples—the fulfilment of a longstanding aspiration of women and appreciated by very many. But it has resulted in a financial disincentive to marry. Family rates of tax are nearly as high as those for single persons, whereas in Europe parents' tax is at a much lower rate.
Most European countries—Sweden excepted—in some way support marriage through tax. In France, it is mandatory; in most other countries, married couples can choose. In Germany, they can combine their tax allowances; in France and Belgium, joint assessment includes children's income. And in most countries reliefs and payments are linked either with marriage or with proven documented long-term cohabitation.
I personally hope that this Government, with the strength of their parliamentary majority, will have the courage to go beyond focus groups' perceptions and
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find a way to do two things: first, to formalise more strongly the long-term commitment of parents with children by way of marriage for those who see it simply as a ceremony and by way of non-marriage; and, secondly, to provide incentives for that stronger commitment, particularly using the tax and benefit system.
Of course, that would be only a beginning. But it would, in my view, he a move in the right direction. It is important to realise that most people want to do their very best for their children. Most people want, for the sake of the children, to stick together. They need, when the pressures come—as pressures do, and they can be very heavy—for it to be a more normal, usual way, and they need it to be a way that is recognised by financial encouragement.
If that could happen across this United Kingdom of ours, then perhaps much crime and school disruption, much vandalism, bad community relationships and the bad health that overburdens the health service could be avoided. It seems to me that the sooner the Government look beyond the symptoms and get to the heart of the matter, the better.
6.29 p.m.
Earl Baldwin of Bewdley: My Lords, before I address my main health theme this afternoon, I should like to anticipate the noble Lord, Lord Colwyn, alongside whom I have argued the case for complementary medicine for a good many years. He and I are both officers—the noble Lord for much longer than I—of what is now called the All-Party Parliamentary Group for Integrated and Complementary Healthcare. I am aware of what he proposes to say about the regulation of herbal medicines and vitamin and mineral supplements, and I think that it will save time if I simply associate myself strongly in advance with what he is going to say on this, but possibly not on other medical subjects that he may raise.
In parenthesis, listening with interest to the noble Baroness, Lady Carnegy, who has just spoken, I wonder whether she is aware of the extremely interesting study published in the British Journal of Psychiatry, in which vitamin and mineral pills were given to young offenders—the noble Lord is aware of that—resulting in a reduction of some 35 per cent in reoffending. This is one of a long line of studies, largely in America, which are achieving increasing validation. It is a very powerful study indeed. It is an interesting add-on, if you like, to other means of dealing with some of the problems in society which is certainly worth considering in the health context.
I want to say a few words about a controversial health topic where legislation has always been in the air. This is the topic of water fluoridation, long advocated by dentists as a means of preventing dental decay. The noble Lord the Minister has been spared my interventions for over a year now, but because of certain recent events I must raise the matter again.
First, some history. The practice of putting fluoride in the water supplies began some 50 years ago in America. Since then this country and a handful of

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others have followed in varying degrees (some 10 per cent of this country is currently fluoridated artificially). But there have always been scientific doubts, whatever dentists or governments may claim, and three years ago, after much questioning of the evidence, this Government agreed to my request, supported by Sir fain Chalmers from the UK Cochrane Centre, to set up a full-scale scientific review of the evidence from around the world. This was conducted to the highest international standards by the NHS Centre for Reviews and Dissemination at the University of York, and I spent nearly a year on the advisory panel which helped to shape its final report. I must emphasise that this review was, and remains, by virtue of its thoroughness, transparency and systematic approach, the only reliable source of scientific information on the effects of fluoridation.
What it showed was what some of us had suspected: that there was no sound evidence for any of the claims traditionally made for fluoridation. It is the aftermath to the publication of this report that has disturbed me and some of my scientific colleagues from the York review.
It is fair to say that government and the dental and medical professions have had some difficulty, because of their previous beliefs and assertions, in coming to terms with a changed situation; and in the face of much misrepresentation Professor Sheldon from York issued an open letter nearly two years ago to make clear that the effects of fluoridation were still uncertain, and in particular that,
"The review did not show water fluoridation to be safe".
Quite reasonably the Government referred York's findings to the Medical Research Council for advice on how the research agenda should be taken forward in an area of such surprising uncertainty. And here once again, the trouble started.
The MRC was given a remit, before recommending appropriate research and priorities, to advise on the current scientific evidence. But this had already been done by York, with exceptional thoroughness and skill and at no small cost. Some of us from the York review wondered what was going on. When I wrote to the Minister at the time, he assured me that the MRC was only going to "fill in the gaps" of the York review. The MRC reported this September, and it is clear that things were not as the noble Lord had said.
This is not the time or place for a scientific argument. I should simply like to put one or two points to the noble Lord and seek an assurance from him. We have a situation here where one scientific body has gone over much of the same evidence as its more high-powered predecessor, and produced some different conclusions with significantly different implications for public health policy. Whom do we believe? Whom will the Government believe? The areas of difference include: the overall effectiveness of fluoridation in preventing tooth decay—where the MRC actually misquoted York's findings; its ability to reduce inequalities in dental health across social groups; various aspects of fluoride's safety; and the quality of
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research now needed. Supported by the two leading scientists from the York review I have detailed the major discrepancies in letters to the Medical Research Council and the Chief Medical Officer. The latter has assured me that there is,
"no intention to use the [MRC] report to detract from the York review's findings",
which I take to be an answer consonant with good science. I should be grateful if the noble Lord would confirm this assurance on behalf of his department.
There were some soundly-based and welcome recommendations in the MRC's report, and if I omit the positive things it is only to save time in a busy debate. But there has been rather a sense of "The Empire Strikes Back" in the aftermath to York. I had thought that at last after 50 years we could proceed from a truly authoritative and unbiased verdict on the state of the evidence. But it is astonishing how little it has been taken on board, and how dentists and even doctors can pay lip service to the need for further research, while pressing for new fluoridation schemes, and not see the inconsistency between these two positions.
And this is to say nothing about the non-scientific issues which York flagged but the MRC omitted—the questions of the ethics of giving a medicinal product to millions via their tap-water, and of putting a toxic substance into the wider environment without any real knowledge of its likely effects. I know of at least one European country which has rejected fluoridation for this latter reason alone. I should be interested to know what means the department has in mind for addressing these broader issues, recognising that, as York recorded in a website fact-sheet, the scientific evidence forms only a small section of the total fluoridation debate.
Finally, I should be grateful if the noble Lord could let me know how his department's thinking has developed—if it has—since he last wrote to me about procedures for local consultation, including any future possible legislation, should any communities be unwise enough to want to extend fluoridation in the present state of the evidence. I appreciate that I have asked him a number of questions with very little warning, and if he would prefer to write to me that would be perfectly acceptable.
6.36 p.m.
Baroness Greengross: My Lords, I wish to concentrate my remarks on one Bill, the Community Care (Delayed Discharges etc.) Bill, but will speak briefly on others in passing. I should like to touch on a couple of issues that were not mentioned in the gracious Speech.
First, I wish to discuss mental incapacity. It is now more than seven years since the Law Commission report, more than five years since the Green Paper, Who Decides? and three years since the White Paper, Making Decisions. When can we expect legislation on this important issue and a long overdue reform of the law relating to the most vulnerable people in our communities? Many others in both Houses and

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outside are agreed on that. Although it is the responsibility of the Lord Chancellor's Department, it is also most relevant to the Department of Health so I hope that the noble Lord on the Front Bench can enlighten me.
As I said in May when we debated reforms to the Public Guardianship Office—affecting those with mental incapacity—this Parliament often seems to give greater priority to foxes than human beings. It has again with this legislative programme. That is a sad reflection in my view. I was, however, encouraged to learn that a mental health Bill may be introduced even though Her Majesty the Queen did not specifically mention it. Although there is much to debate about the merits of that particular draft Bill, I am not against its key aim to reform our mental health legislation or even its proposal that some mentally unstable people may have to be compulsorily detained. One wonders, to speed things up a little, whether those two issues which, while quite distinct from one another, are nevertheless related in that they both relate to the condition of the human mind, could not be included as two parts of one Bill. That could be rather like the expected company law reform Bill, another omission from the gracious Speech, which would have covered a range of disparate but connected issues on corporate governance, although I hasten to add that I know that that particular Bill is not within the remit of the Ministers on the Front Bench tonight.
A second issue I wish to raise is that of pensions and savings. It is a hugely important issue and I look forward to the Green Paper but with some reservations. I welcome the assurance from the Minister that much is going on but I worry as the business of pensions and benefits seems to become ever more complicated with each passing year while we read that people are saving less and less for their ever longer lives. No doubt we shall see more pensions legislation in the next Session but I feel that after almost six years we should by now have had our fill of pensions reforms, both state and private sector, yet it seems without resolving the problems or, as I said before, simplifying matters.
There is a full agenda to consider, which includes the following five issues, on which I hope the Green Paper may touch. The first issue, which I have previously raised in this House, involves acknowledging the policy impact across society of our rising longevity. I declare an interest as a former head of Age Concern and chair of the International Longevity Centre-UK. I remain unconvinced that all government departments or business have fully woken up to the policy implications, a point made by the US think-tank, the US Center for Strategic and International Studies, and reported in the Financial Times last Friday.
The second issue is that of enabling older people to stay in the workforce, not just giving them warm words. We do not have much time before 2006, when legislation should have been put in place to ensure that that happens.
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The third issue is that of tackling related ageist attitudes and assumptions by employers in particular but also in the media and the general public, especially in relation to health and social care, where they must be eliminated. I know that the Government are committed to that. Careful and instant action is needed.
The fourth issue is that of simplifying pensions and savings so that more people understand them, for example by acting on some of the recommendations of the Sandler and Pickering reviews, as was mentioned by the noble Lord, Lord Oakeshott. The final issue is that of informing women aged under 52 of the implications of the impending rise in the age for the state pension in just seven years' time.
I turn to the Community Care (Delayed Discharges Etc.) Bill. It has already been introduced in another place but it will be many months before we consider it. In advance of our Second Reading debate on it, I shall set out some of my concerns in the hope that the Minister can reassure me. I have long wanted to see a breakdown of the barriers between acute healthcare services provided by our community's hospitals and non-acute and community care, which is largely provided by social services and other parts of the NHS. They should have, and they deserve, equal status. That is why I welcomed the Statement by the Secretary of State for Health in July in which he referred to the importance that he attaches to community care. I welcome the Government's commitment to spend £1 billion more on that by 2006.
I have not yet formed an opinion on the Bill or decided whether it will work and achieve what it sets out to do. Along with the noble Lord, Lord Clement-Jones, and the noble Earl, Lord Howe, I, too, am worried about the new perverse incentives that it may create. I am also worried about the new bureaucratic arguments that it may foster and that it will do little for those whom we all want to help: the older people needing care and their families, who need support.
We all saw the unintended consequences of community care policies in the 1990s. Many more people entered residential care, which was often not even in their own community, rather than being cared for in their home. I recognise that the approach is a well-intentioned attempt by the Minister to deal with a severe problem that needs addressing; that is, unnecessarily long stays in hospital by older people. I appreciate that extra money is being given in return for reforms. We all know that hospital is not the right place for such people unless they are critically ill or need acute care. The Bill appears to be as much about improving the performance of social services through a system of fines for poor standards, as about improving services for older people.
We know that the vast majority of older people want to—and can and should—return from hospital to their own home, not to a care home. Many delayed discharges are caused by getting the home care package in place—that involves the fitting of handrails, providing someone to help with the shopping and so on—rather than by a shortage of

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care-home beds, although that is a particular problem in London and the South East. The NHS cannot wash its hands of responsibility for such matters. If appropriate aftercare is not in place, the older person, as we know, is just as likely to be readmitted to hospital. It is no surprise to learn that some areas with no delayed discharge cases also have among the highest rates of emergency re-admission.
I therefore believe that hospital discharge must be a shared responsibility. The Health and Social Care Act, which was introduced during the previous Session, encouraged joint working and pooled budgets. Might this Bill build a new kind of "Berlin Wall", setting one against the other?
It crossed my mind that the Bill could even be turned on its head. Could we argue that the NHS should pay more of the costs associated with developing appropriate home-care packages so that older people can be discharged when they are ready to leave hospital? After all, we know that the NHS is not formally cash limited but that social services departments are.
I am, however, worried about the opposition of the Local Government Association—I declare an interest as one of its vice-presidents—and about the fact that many other organisations, such as the BMA, the RCN and the NHS Confederation, appear to be unconvinced. Age Concern said,
"it is a short-sighted measure that puts the system before older people".
I very much hope that it is wrong.
My judgment is that social care for older people and their families is already too complicated. Will this Bill really simplify the process? I remain to be convinced, although I am sympathetic to the Government's overall aim.
6.46 p.m.
Lord Turnberg: My Lords, I shall restrict my remarks to two specific proposals in the gracious Speech, the first of which is the set of proposals designed to enhance care in the community for patients discharged from hospital. Any proposals in that regard are welcome. The ideas about jointly developed discharge plans and an enhancement of services in the community are valuable initiatives. The impact on the hospital service could be significant if they work as intended. That impact would be on the length of stay in accident and emergency departments; on reducing patient waits in hospital, with all the attendant dangers that that brings; and, in turn, on waiting lists to get into hospital. Nowadays, it appears that it is almost as difficult to get out of hospital as it is to get in.
The size of the current problems, which those efforts are intended to resolve, should not be underestimated. Patients are now commonly in an acute medical or surgical ward for six to 12 weeks. That is the norm in many hospitals. Social services are very over-stretched and it is often difficult to get hold of a social worker, for example, to deal with a patient. If the relevant
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social worker is away on holiday, it is almost impossible to find another to take on the case. There are nowhere near enough places in the community to house patients needing to be discharged. The deficit that the new Bill seeks to remedy is large and will need considerable investment. I am afraid that that cannot be achieved overnight.
Investment in the relevant services can work and has been demonstrated in those geriatric and psychiatric services in which there are dedicated social workers and in which joint discharge plans operate. However, those are rare in the acute medical and surgical fields. That is where we should focus our efforts.
We also need to focus on community facilities for the young and middle aged. For example, it is almost impossible now to place a young stroke victim. My noble friend may cover those details when we discuss the Bill, but the purpose of raising them tonight is to point to the size of the problem that the Government are trying to tackle through these very welcome proposals.
The second proposal in the Queen's Speech is one which, I am afraid, I am somewhat less convinced will improve patient care; that is, the idea of foundation hospitals. I can easily be persuaded that encouraging those hospitals that can show that they give a good service is worthwhile. I should, however, be uncomfortable if the form that that encouragement took led to resources being diverted from less well-performing hospitals to the good ones. That would be an unfortunate result for an egalitarian Government such as this. I wonder whether the Minister is slightly uncomfortable with the considerable support being given by Opposition Benches both here and in another place to the concept of foundation hospitals. I remember that under a previous administration not all was rosy in the NHS garden. I seem to remember hearing for the first time that, "Morale has never been lower" during those heady days.
The desire to free hospitals from stifling central control is admirable. If hospitals are to be released from the myriad of targets and executive directives that is much to the good. I expect that foundation hospitals will have fewer targets and directions, but perhaps my noble friend can say a word or two about whether the less fortunate majority of hospitals will see a reduction in this burden too.
The problems that exist in hospital services lie less in hospitals performing well and much more in those performing badly. If we are serious about tackling these problems, surely we should focus efforts on raising standards in hospitals at the bottom of the scale.
If the NHS was simply a business, we would probably close down or sell off the poorly performing bits of the business. But that is not an acceptable solution when we are talking about a service for patients. It is the patients who suffer if we do not support and improve failing hospitals. Punishing institutions for failure is not an option. In medicine we treat patients who are sick and we put much of our effort there.

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So, we should certainly encourage the best, but we should avoid any actions that would worsen the plight of the others—for example, by allowing the well off to poach scarce staff by unfair pay deals. So my question to my noble friend is whether particular attention can be given in the proposed Bill to improving the standards of hospitals which are not providing acceptable standards of care for our patients.
The Government have undoubtedly shown their admirably clear intention to improve the health service. It seems only reasonable in that light that they put their efforts where the problems are most severe.
Before I leave the hospital service I should like to put in a plea for another concept; that of the university hospital. The idea here is—as I am sure noble Lords know—that hospitals closely associated with medical schools should be jointly managed by university and trust as a combined approach. Too often these two organisations do not co-ordinate their efforts well enough Occasionally, they are in conflict. Certainly, it is a problem for academic clinical staff who have to serve two masters.
There would be enormous advantages to both the university side—the clinical academics—and the NHS side from much more closely co-ordinated work. That is not a new concept, but it has been frustrated over the years by rules and regulations that are too often unnecessary and, I am afraid, the two government departments—health and education—not working as closely together as they should.
I wonder whether my noble friend the Minister will offer some encouragement to the new interdepartmental committee which he has so invaluably helped to set up, to take up again the university hospital idea. Who knows, it might even be as good at encouraging trusts as the foundation hospital concept—or even better.
Finally, I want to put a tentative toe in the rather murky waters of the unfortunate consultant contract fracas. I realise that consultants are not exactly flavour of the month with the Secretary of State for Health, nor indeed for that matter with many politicians. But I wanted to offer one or two reasons why the consultants might have wished to turn down what on the face of it seems to be an amazingly generous offer of 15 per cent on top of their current salaries. It was certainly nothing to do with an attempt to squeeze even more money out of the Government, and everything to do with the strings that were attached. There must be something significant to turn down such a seemingly generous offer.
Basically, they were unwilling to accept that hospital managers could, as they saw it, demand that they work nights and weekend shifts without any room for negotiation. They perceived that the way that some managers would exert control over the way they worked was too oppressive—especially, when they were already more often than not on call at night and coming in at the weekends, as professionals do and should. They knew that on average they already worked 56 hours a week for the NHS. That is the average across all specialities according to a MORI
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study. They also knew that they did riot get their consultant posts until they were about 36 or 38 years old and after spending 10 to 14 years as a so-called junior doctor, working day and night in the NHS.
They were upset to be thought of as resisting change and reform when they know that the great majority of innovation in clinical care of patients has been introduced, not by governments nor by managers, but by the doctors. It is not surprising then that the majority of grass-root consultants rejected the contract, not the BMA. Although of course some doctors behave badly at times, it is unreasonable to believe that the majority do so. That would fly in the face of most patients' experience.
I am sorry to have gone on about this matter, but this is a profession that I believe is dedicated to the NHS and we rely on its members to deliver the reforms that we will be discussing. There must be a better way of encouraging them.
6.56 p.m.
Lord Colwyn: My Lords, I am delighted to follow the noble Lord, Lord Turnberg. For many years I sat on the council of the Medical Protection Society and he was the president. His experience is much revered in the MPS and has been much appreciated on this side of the House today.
In the gracious Speech, the Government announced an intention to modernise the delivery of healthcare by devolving power and resources given to frontline healthcare staff, building on the Government's commitment to decentralise public services.
In August, David Lammy, the Parliamentary Under-Secretary of State, Department of Health, when he introduced the report NHS Dentistry: Options for Change, said:
"The Government is determined to bring dentistry back into the mainstream of the NHS and looks forward to working with the profession to make 'Options for Change' a reality".
I declare my interest as a dentist when I say that the proposed legislation potentially has enormous implications for NHS dental services. I understand that the Bill will place a duty on primary care trusts to provide primary care dentistry to meet the "reasonable" needs of the population. For the first time an NHS body will be obliged to provide dental services, thus bringing dentistry into line with medical services in both primary and secondary care.
Although the report represents a clear view of future strategy and does finally indicate a direction for change, it is not a blueprint for change. The document was largely put together by dentists and now the ideas in it will be tested by dentists in the NHS Modernisation Agency and its modernising dentistry programme that will test out different ideas in different parts of England.
Despite well publicised announcements about better funding—up to £35 million to modernise NHS dental practices and equipment, £4 million for the dental care development fund to help dentists expand their practices and treat more patients, and £18 million to reward dentists who are committed to the NHS—this

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is not an ongoing arrangement. There seems to me to be very little funding available until the reforms have been shown to work.
Mr Lammy announced that over the three-year period from 2000 to 2003 more than £125 million would be made available to the NHS to improve local services in addition to the scheme introduced in April 1999 to encourage dentists to increase their NHS commitment. So far as I am aware, that money relates only to spending in the salaried services and excludes general dental practitioners who provide treatment for the vast majority of patients within the NHS. The modernising dentistry programme has been allocated only £1 million to set up and run the field sites.
Trying to modernise within existing resources simply will not work. Despite the long-standing NHS dental service provision, there are still areas of social deprivation where oral health is poor. In many of those areas, there is little or no service available, and uptake is poor. Attendance for treatment often occurs only when the patient suffers pain. Forty per cent of practices are not taking on new NHS patients. The present GDS fee scale is described in the policy document as iniquitous, driving,
"high levels of productivity via an outmoded approach".
For many years, dental magazines have had articles offering advice on how to get out of the NHS and how to go private. To encourage practitioners to remain in the NHS, there should be a basic practice allowance, addressing local factors such as property and wage costs, as well as allowing primary care trusts to build up provision in areas that had lacked a dental service and to address the problem of areas with high overheads. Regular payments could be made for regular attenders. For patients who need little treatment but need regular screening and preventive gum treatment, dentists could be paid on some form of regular basis, such as capitation. For new patients or those with an irregular attendance pattern and those who needed advanced treatments, it would be necessary to retain some form of simplified item of service fee scale.
The recent report by the Audit Commission, which is too complex to cover this afternoon, is broadly supported by the British Dental Association. It has advocated many of the findings for years. The BDA and the General Dental Practitioners Association campaigned for an emphasis on prevention and for a review of patient charges. I still hear Ministers saying that the NHS is free at the point of delivery; that is simply not true for NHS dentistry. A high percentage of the treatment cost is borne by the patients, unless they have an exemption.
I am reluctant to mention fluoridation again for fear of restimulating the noble Earl, Lord Baldwin of Bewdley, whose views I respect but cannot agree with. If the Government cannot make it available to more than 10 per cent of the country, as is the case at the moment, should not more emphasis be given to fluoridated salt or milk? It is time that the argument was resolved. I hope that the Minister will tell the House that the plans for fluoridation are progressing.
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The impact of primary care trusts on dentistry is an important area for the field sites to consider. In July 2001, the Minister, in response to my plea for a dental presence on the professional executive committee of all primary care trusts, said that he would look carefully at how dentists and dentistry were represented on PCT boards, so that we could be assured that advice on dentistry, including dental public health, could be secured. If Options for Change is to succeed, we must go further. Managed clinical networks are now established in the NHS throughout the UK. That should include dentistry, and the field sites will provide an opportunity to test them out. I am attracted by the BDA proposal for managed dental networks, as a part of individual PCTs. Dental networks could provide a formal network to enable PCT-wide dental care providers to provide a joined-up service for patients. easing their movement through the system and providing improved access to NHS dental services, an improvement in the oral health of the community and a reduction in oral health inequalities.
I turn to some of the problems with European legislation relating to herbal products and food supplements. My interest has already been declared for me by the noble Earl, Lord Baldwin of Bewdley. In October, at a meeting between the Medicines Control Agency and representatives of the herbal forum, the noble Lord, Lord Hunt of Kings Heath, responded to the concern about potential over-regulation and highlighted the public health issues that had arisen in the past through the lack of a systemic approach to the safety and quality of herbal medicines. In July, the Minister asked concerned representatives of the herbal sector to send to the MCA specific concerns about the proposed European directive. The agency has been examining the 1,000 or so products submitted. That request came in response to fears that many currently legal products would fall outside the directive's proposed definition of traditional use and would become illegal.
The Minister sought to allay fears about that and called for a dialogue between the MCA and the herbal sector to continue on all the issues that had been raised in response to the directive. He said that the proposed directive could give sufficient flexibility to provide a regulatory home for herbal nutrient combinations. The scope of the current herbal directive is restricted to herbals alone, thereby making many safe and popular products that combine herbals and food nutrients ineligible and excluding many important combination products used in traditional Chinese and Ayurvedic medicine.
Article 16 of the directive requires,
"an assessment of the possible extension of the traditional use registration to other categories of medicinal products",
at a date as yet unspecified. Even if an early date were agreed, such products might, effectively, be outside the EU regulatory system for several years. I hope that the Minister will support an amendment to Article 16 that will allow for the introduction of national rules. I know that he will have been made aware of the specific amendment that has been suggested.

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Many of the companies in the UK's specialist health product industry are small. The economic impact of the directive will be heavy. The costs incurred in meeting the criteria for plant, machinery and personnel will be high, and the MCA is required to charge fees for product registrations. To continue to be able to supply consumers with the products that they seek, many companies will need to register a considerable number of products. The fees for registration must be kept low, and the development of a national positive list, made up of products with a long tradition of safe use in the UK, should require only minimum regulatory assessment. One example is the MCA consultation on a proposal to prohibit the sale of kava-kava. A final decision is awaited. I ask the Minister not to impose disproportionate and unnecessary restrictions on a herbal product in respect of which there is no evidence of a risk to consumer health. Such an action would have serious implications for manufacturers, retailers and consumers.
The food supplements directive has two annexes that list the vitamins and minerals and sources of both that may be used in the manufacture of food supplements. The directive allows for a derogation period for the continued use of vitamins and minerals that are not listed of up to seven years, provided that safety dossiers for their inclusion are submitted to the Scientific Committee for Food within three years from the date of the implementation of the directive. That is an expensive and lengthy process, appropriate for new substances but quite inappropriate for the many missing ingredients with a long history of use that are already accepted as safe by UK regulators. I urge the Minister to encourage argument in Brussels for a system whereby the SCF can accept minimum data requirements for safety dossiers for products with a history of safe use.
Finally, turning to a different subject and declaring my interest as co-chairman of the All-Party Jazz Appreciation Group, I urge the Government to reexamine the Licensing Bill in relation to public entertainment. I am not allowed to speak twice, so I have to mention it this afternoon. Successive governments and Ministers have agreed that current licensing for musicians performing in public is seriously flawed. It seems that the current Bill will change the "two in a bar" rule to "none in a bar". That would be a disaster for thousands of British musicians, particularly young musicians, who have few venues in which to perform.
It cannot be right that broadcast entertainment that can attract significant crowds and cause noise nuisance is exempt, while one unamplified performer will be illegal, unless licensed. I hope that the Government will amend the Bill to pull it back from the regulatory musical abyss that it is in at present.
7.8 p.m.
Baroness Finlay of Llandaff: My Lords, following the gracious Speech, the Government's plans to modernise the delivery of healthcare were reiterated by
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the Secretary of State for Health in the other place. He said that the Government stood where they had always stood—for an NHS that,
"provides patients with care that is free, based on the scale of their needs, not the size of their wallet".—[Official Report, Commons, 14/11/02; col. 165.]
The NHS Plan also states that care,
"will remain free at the point of delivery—whoever provides it".
Is there a subtle difference in the wording? Is some system of charging or reimbursement in the offing? I do not know, but the debate would detract from important plans—some welcome and some less welcome. As a practising clinician, I found it difficult to restrict my remarks to four areas.
The creation of the Commission for Healthcare Audit and Inspection—CHAI—should really be called "CHI Mark II". Of course, there must be standards. The drive for quality of care must not be lost to the pressures of financial tracking and accreditation audits which are easier to deal with and, therefore, can hijack the agenda.
All the evidence from organisations around the globe is that quality is pushed up by the approach that CHI has taken and not through punitive measures. To be effective the new CHAI must be completely independent. Widening its remit to include the complaints procedure and the Mental Health Commission is welcome. It should also include the recommendations in the joint report of chief inspectors of the agencies responsible for child abuse and child protection and its recommendations on staff, resources and joint working between agencies if offences against children are to fall.
Foundation trusts are interesting. They remove the hand of Whitehall from the day-to-Clay running of the service and, as such, are to be welcomed. In Committee on the National Health Service Reform and Health Care Professions Bill the noble Baroness, Lady Cumberlege, moved an amendment to create a National Health Service agency for England. I moved a similar amendment to create a National Health Service agency for Wales—I do not believe that I see the Minister laughing at that. However, the idea was to remove the direct management of the NHS from the clutches of Whitehall and politicians. Foundation hospitals may be in the spirit, but the Spaniards have cautioned against them in the BMA News recently.
Those hospitals given the freedom and independence to manage their affairs will be an elite. The three star trusts have "played the game" to reach targets set by Government—targets which are criteria of management and not monitors of quality of care. Meeting targets can be subject to wide fluctuations year on year, can distort other aspects of care provided and do not necessarily represent the best hospitals clinically. However, there seems to be a link between good care and good management. There is a danger that such hospitals will milk away nurses, radiographers, physiotherapists and others in short supply from neighbouring NHS trusts, just as NHS Direct appears to have taken many nurses from the bedside arena.

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Seven is a magic number, and foundation hospitals have five to seven-year contracts. The longer contract provides security, but it should include flexibility to allow patients to go elsewhere if they wish and for changes in service provision. Primary care trusts are new and coming to grips with their roles and responsibilities. Perhaps details of the commissioning process would be a better marker of stability of the hospital than stars.
The criteria for foundation status should be based on a good outlook and sound partnerships, with a hospital committed to meet the needs of the whole population it serves, including emergencies and those with high risk and high need. The noble Lord, Lord Turnberg, has outlined university hospitals which may answer some of the issues in the Follett report. A commitment to research, education and training is absolutely essential for the future NHS to develop scientifically with evidence-based care, meeting its manpower needs and fit for purpose.
If foundation hospitals fail will they lose their status? If they sell off NHS assets without consulting others, will planning for the future needs of the population become impossible? If they destabilise local services by draining resources, how will the widening gap in care provision be countered? As a foundation hospital is, I understand, a contracting authority for the purposes of Regulation 3(1)(u) of the Public Works Contracts Regulations 1991, will it be subject to EU contracting directives?
New ways of working must be evaluated by randomised trial. Results at two years will be revealing. Until the evidence base is there, I am pleased that we shall not have foundation hospitals in Wales and also that we shall be keeping community health councils.
The European courts pose another looming challenge to the NHS. The European Working Time Directive and the SIMAP judgment mean that to avoid sanctions the 48 hour week will need to be in place by August 2004. The latest Royal College of Physicians' census shows that, on average, consultants work 61 hours per week, as compared with 58 hours in 2000. Many would like to reduce their hours but say that they are unlikely to do so because of an adverse effect on patient care and on their colleagues.
Staff numbers do not add up. There are not enough trained specialists and doctors in higher training. The complex diagnostic skills required mean that the care of the very ill can be delegated only up to seniors. It cannot be delegated safely to those less skilled. Mortality is greater in hospitals where medical cover is low. Tonight, each junior doctor will, on average, look after 67 in-patients overnight. One cardiac arrest and one critically ill patient simultaneously can make high quality care almost impossible to achieve. Many hospitals do not have the numbers of staff now and consultant expansion has fallen from 6.1 per cent per annum between 1993 and 2000 to only 3.2 per cent in the past year.
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Continuity of patient care is becoming impossible, but the recent confidential inquiry into peri-operative death targets shift working as a major risk factor as continuity is lost. No hand-over can substitute for the same doctor looking after the same patient across the course of their acute illness.
Much was publicised about the consultants' rejection of the new contract. Consultants know that there is a monumental shortfall in trained specialists, making the contract unworkable. My colleagues feel distrust of a system of failed initiatives where the managers are under enormous political pressure to deliver against targets. Those targets meet the needs of some at the expense of others. The divisive and now infamous "slide 9" from the Department of Health only reinforced that, splitting doctors from management especially where management is weak. The proposed code of conduct for NHS managers is long overdue.
William Jeffcoate in the Lancet states that doctors in the UK:
"embark on a medical career because they wanted to help people who are sick—not because they are motivated by money. Their primary duty is to the patient and they must not allow this to be deflected by the need to meet other non-clinical objectives. They would have no problem if they trusted that those targets would always be compatible with the needs of their patients. Sadly, UK doctors do not have this confidence".
It has been that concern with the individual and the duty to patients that has driven the universal outcry against part of the previously proposed mental health Bill. The Government are to be congratulated for omitting it from the Queen's Speech. That signals surely a radical rethink. Everyone wants change. The Mental Health Act of 1983, based on the 1959 Act, is out of date. It does not reflect modern therapeutic practice, the voice of users and carers, advocacy and the move to community care. Any new Act must be ethically fair, practically workable and effective.
The previously proposed Bill was none of those. It was based on a concept of public risk rather than on the proper treatment of people with mental illness who had temporarily lost the capacity to make judgments for themselves. My noble friend Lady Greengross has already addressed that comprehensively. Public order was confused with health. In recent years compulsory treatment has increased despite no change in legislation because psychiatrists practise defensively in fear of litigation and blame. It is said:
"better an overcrowded ward than being the subject of an enquiry".
Wards are already overcrowded. Poor environments and staff shortages make them poor therapeutically. Community teams are staggering under the weight of numbers. Do not forget that one in four of the population will suffer treatable mental illness in their lifetime.
The proposed Bill would not have decreased risk, it would have increased it. The number of crimes committed by those with serious mental illness have fallen as a percentage of all homicides during the past 10 years. A child is much more likely to be murdered by parents with a catastrophic event in their lives than

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by a stranger with mental illness. By stigmatising mental illness, those affected would present later in an illness, if at all. Acute services would be further overwhelmed and unable adequately to assess and care for those in need. Psychiatric internment on suspicion would have broken the service.
Lastly, but very importantly, the diagnostic criteria for dangerous severe personality disorder do not exist. It is not featured in any textbook of psychiatry; it is not a treatable condition. Dangerous severe personality disorder is a civil issue needing criminal justice and a Home Office Bill. Mental health is a health issue and a new mental health Act is indeed needed.
The Government must continue to listen to those doing the job. Just as I did in the previous Session of Parliament, I make a plea for seven years without massive reorganisational change that is not evaluated by hard evidence.
7.20 p.m.
Baroness Noakes: My Lords, the NHS has been wounded by five-and-a-half years of interference by this Government. One of the few positive things that can be said about their stewardship is that they put some more money in and they plan to put some more in. But few, including those in the NHS, expect that the extra money will solve the problems.
I shall focus today on efficiency in the NHS. It is a somewhat dry subject and I fear that it involves figures and statistics. However, it shows the harm that has been done to the NHS. Noble Lords may remember the Chancellor of the Exchequer introducing public service agreements when he announced his 1998 comprehensive spending review. The PSAs were supposed to be contracts between the Treasury and the spending departments for the departments to deliver specific things in return for the money that was being put into public services.
The Prime Minister told us,
"By publishing clear and measurable targets, we are making it possible for everyone to judge whether we meet them".
The Government's White Paper which published the targets in December 1998 stated that PSAs were,
"commitments by the responsible Minister to those who were affected by public services".
It was supposed to herald a brave new world in ministerial and government accountability.
The department's public service agreement included the NHS achieving efficiency and other value-for-money gains for 3 per cent per annum. It was a clear commitment, not hedged by any qualification, and it said how it would measure it. So how has the department done against that target? In its annual report of 2001, it assessed its progress as,
"slippage—final figure not available".
So it knew it was not on target to achieve the 3 per cent each year but it hid behind the fact that there were no final figures.
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Let me turn to this year's annual report. This is confusing. First, the department said that the measure was now,
"overall delivery of PSA targets".
There was nothing at all about measuring efficiency gains. But even more surprisingly, under "Progress" it reported that the target was "Achieved". And in justification it said:
"The best measure of health authority efficiency is the extent to which other targets have been met".
I am a simple accountant. I do not understand a target which says that it requires 3 per cent annual efficiency gains and which was not on track in 2001 but is suddenly achieved on a totally different measure in 2002.
Let me translate those weasel words into plain English. They mean, "Last year we thought we were going to miss the efficiency target but we didn't want to own up to it. Now we know that we have missed the target so we are going to pretend that it does not exist and that other targets are the ones that matter". Why the Treasury has let the Department of Health get away with sliding out of responsibility is a mystery.
What has happened to the accountability that the Prime Minister promised us? When Ministers fail to deliver on their commitments, should they not take responsibility? I hope to explain what has really happened to efficiency. I think that what should happen to the responsible Minister will be clear enough—and I should say that I am not pointing my finger at the noble Lord the Minister opposite. There is another person in another place who should take responsibility.
Let me first take noble Lords through what the department's annual report says about efficiency. At page 71 the report gives a hospital and community health services cost weighted activity index. That has been given for many years and it is a standard way of comparing the activity of the NHS and the resource inputs. The report explains,
"A faster increase in activity than in expenditure, after allowing for changes in input costs, constitutes an efficiency gain".
That is just what we were looking for in the PSA target.
The index is reported a bit in arrears, so when this year's departmental report was published the latest figures given were for 1999–2000. Noble Lords might think that a departmental report which gives such out-of-date analysis has something to hide and I shall turn to the more recent figures in a while.
However, the report gave analyses for the 10 years ending 1999–2000. It shows an increase in efficiency of 3 per cent. That is not 3 per cent per annum, like the PSA target set in 1998; it is 3 per cent over the whole 10 years. And so the question is: what was happening in that 10-year period?
The first seven years were under my party. Flow much of the 3 per cent did we account for? The answer is: nearly 11 per cent. Noble Lords will quickly see that this means that for the last three years, for which this Government are accountable, the NHS went

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backwards in efficiency by some 8 per cent. So the majority of the efficiency gains that we bequeathed to the Government have been squandered.
The story goes on. In 2000–01, the resources available to the NHS increased by nearly 8 per cent in real terms. What happened to activity? Finished consultant episodes, including day cases, went up by less than 1 per cent. One does not have to be a genius to work out that efficiency took another spectacular dive in 2000–01.
What about 2001–02? Spending was set to increase by nearly 9 per cent in real terms. We do not have final figures for activity, but in May this year we were given an estimate which showed that the increase in activity was estimated to be between 0.25 per cent and 1 per cent. So we have another year of major economic loss in the NHS.
The story is always the same. Under this Government, far from meeting a target of 3 per cent efficiency gains each year, the NHS has been going backwards at at least that rate. We know why that has happened. The Government have pursued an agenda of relentless restructuring. GP fundholders were abolished and replaced by primary care groups. Then primary care trusts, once claimed to be voluntary, were imposed. Health authorities were compulsorily merged and then replaced by so-called strategic health authorities, which have no strategic function whatever. NHS trusts were placed in a tight grip of central control, although a privileged few may now be allowed to escape as foundation hospitals. What has all that achieved?—organisational turbulence, plummeting morale and restructuring costs, and for no gain whatever.
The Government claim to have abolished the internal market, but all they did was to institutionalise rigidity in the funding system. Belatedly, they are now reinstating some of the flexibilities in their new financial flows initiative. What has all that achieved? Patient choice went out of the window, together with patient responsiveness.
The Government have used a lot of fancy words to describe what they are imposing on the NHS: "co-operation", "partnership", "network", "modernisation" and so forth. The fanciest set of words is "performance management". What has this achieved?—the kind of performance that has people waiting in A&E departments far longer than they were in 1996, and still more than 1 million people on the waiting lists.
The Government have made many promises about money being directed to specific activities—£50 million for palliative care, £100 million for IT, £300 million for counter services and so on—but most of it did not get there. What has this achieved?—another string of broken promises and loss of trust.
The Government have created many quangos—I last counted about 20, plus several hundred patient forums—some of which have inspection or audit roles. Most of them impose burdens on the NHS, and we are
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promised more quangos in the next health Bill. What have they achieved?—a lot of jobs for cronies and a lot of interference for the NHS.
Before the 1997 election the Labour Party bragged that there were 24 hours to save the NHS. Saved for what?—saved to be subjected to the most wasteful period of experimentation in its history. The Government have no idea how to get the NHS to work well. Their only idea is to throw money at the NHS in the desperate hope that some will stick and hold it together. Unless the Government learn from their mistakes—and do so quickly—we shall see further periods where money will be wasted. The money will disappear into a black hole created by the Government's own ineffective and misguided policies.
Like most noble Lords, I value the NHS and want it to be great. Under this Government the NHS is in a downward spiral, and that is a matter for the most profound fear and regret.
7.32 p.m.
Baroness Pitkeathley: My Lords, the House will not be surprised to hear that, unlike the noble Baroness, Lady Noakes, I feel optimistic about the health service. I am delighted that the Government remain committed to modernising the delivery of healthcare based on those founding principles of the NHS which are so dear to many of us, especially those who, like me, owe their lives to the NHS.
The Health and Social Care Bill will shortly be before us and we shall, as ever, have many long and significant debates about the proposals contained in it. Feelings run high in the House, and quite rightly, about the principles of devolving power and resources to front-line staff, about giving greater freedom to certain institutions while increasing their accountability, and about proposals for regulation and inspection. I very much look forward to these debates but, in the interests of brevity, I shall refer only to foundation hospitals and local authority support for older people awaiting discharge.
The Government have, in my view and in the view of many of those who work in the NHS, made huge strides towards making it much more patient centred than it has ever been hitherto. Your Lordships may perhaps remember that this was the most important lesson I learnt from my own prolonged stay in the Middlesex hospital last year—that at all levels of staff, medical, nursing and ancillary, there is nowadays a great deal more emphasis on communicating with the patients, asking their opinions and engaging their commitment than was the case when I was previously a patient some years ago.
I am convinced, therefore, that the Government's commitment to the principle of patient first, to which lip service has long been paid, is now much closer to being a reality. If foundation hospitals are to be a further extension of giving patients more power in decisions about their own treatment, I support the idea.
Some criticism has been voiced of the idea in case the proposals lead to a two-tier system. We have to understand that, in some senses, we already have a

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two-tiered—or, perhaps more accurately, a several-tiered—system when it comes to hospitals. Everyone knows that in, for example, a London teaching hospital you are more likely to have access to a wider range of skills, experience and treatment than in an ill-equipped hospital in a community setting which finds it difficult to attract the right staff.
I am greatly in favour of the proposal for the stakeholder councils which will govern these new style hospitals as I feel this will surely be another important step along the road to placing decisions about the health needs of a community in the hands of the community itself, ensuring greater accountability and much better evaluation of the outcomes for patients. It is, I believe, too easy to consider output when it comes to evaluating health services when what really matters is what the actual outcome is from the patient's point of view.
The New Opportunities Fund, the largest of the lottery distributors, which I chair, has put in place the most extensive evaluation process for its healthy living centre programme which covers issues such as the overall health improvement of a community. I am sure that stakeholder councils will wish to do the same. Indeed, through the Department of Health, we shall be more than willing to share our experience, if that will be helpful.
I imagine that the department will be especially interested to see how the encouragement of taking exercise, in no matter what form, education about lifestyle choices and knowledge about healthy eating is developing through this programme, and how our fruit in schools programme and our major programme in physical exercise for schools and community are affecting the health of communities. I hope that the foundation hospitals will be pioneers and innovators in addressing some of these issues.
My reservations—and no doubt we shall have many opportunities to debate this—centre around the dangers of further aggravating geographical disparities in the provision of hospital care and the danger of too much specialisation, leaving a community without adequate cover across the full range of its services and needs.
Another problem with the proposal is that it may encourage us in the danger of slipping back into thinking that the health needs of the community are served by its hospitals when the vast majority of healthcare is provided by primary care and community services. We have, I believe, made excellent progress in getting that idea across to both the health service and the public at large, and I would not want this focus on hospitals to impede that progress.
I turn now to the proposal for charging local authorities for delayed discharges. I am sure that there are some merits in the proposal, and it will surely concentrate the minds of some local authorities, but we have to understand that there is absolutely no substitute for adequate discharge planning. I seem to have been banging on about this all my working life—indeed, I wrote my first book about it in 1977—and sometimes I despair of it ever getting any better.
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Your Lordships will not be surprised to know that I am particularly concerned about the effect of these proposals on patients' families, their carers. It is absolutely essential to ensure that these most vital of all providers of any kind of care in the community are not put under more pressure to take home people who are not ready for discharge just to free up a hospital bed.
While I am talking about carers, and as I see that my noble friend is in her place, I must take the opportunity to acknowledge the improvements in carers' benefits which have taken place in recent years—for example, access to the state second pension and the huge increase in the earnings disregard. This is largely thanks to the efforts of my noble friend Lady Hollis.
My concern about the delayed discharge proposals is that in some cases they might exacerbate bad and poor practice rather than improve it. The fear is that carers will not be involved, consulted or properly assessed before the person they are about to care for is discharged from hospital. Research by Carers UK found that between 1998 and 2001 the number of carers who did not have their concerns taken into account rose from 36 per cent in 1998 to 45 per cent in 2001. The proportion of people being cared for who had to be readmitted—this is a very important figure—within two months because they had been discharged too early rose from 19 per cent in 1999 to 43 per cent in 2001—we should take careful note of that figure—and 43 per cent of carers were not given sufficient help on the patient returning home. Comments showed that even if support was promised, it did not seem to be delivered. Carers often had to make numerous telephone calls to secure the support that they had been promised, and in several circumstances the support did not materialise at all.
I hope that the Minister will be able to assure me that, if these proposals go ahead, safeguards will be written in to protect carers from undue pressure to take someone home. For example, a duty could be placed on the trust and local authority to ensure that carers are consulted and offered an assessment.
I suggest that the Government could update and reissue the statutory guidance on hospital discharge. They have already pledged to update the hospital discharge workbook. It would be good to have further information about when this will be published.
I look forward to debating these and other important issues as the Bills reach this House, and to working together in this House. as we do so successfully, to ensure that all the proposed changes bring about what we all seek most—real benefits for patients and their families.
7.40 p.m.
Lord Chan: My Lords, I welcome the Government's priority in the gracious Speech to continue to modernise the delivery of healthcare based on access that is free according to need rather than the ability to pay. Better access to the National Health Service is dependent on good information for potential users, comprehensive facilities that are open during hours

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when patients can conveniently use them appropriately, and adequate numbers of trained staff with an understanding of the local population they serve. Such healthcare services are still not generally available throughout England, particularly to people living in deprivation in our cities. I shall focus on primary care trusts, foundation trusts and the strengthening of the inspection of NHS trusts.
I declare an interest as a non-executive director and vice-chairman of a primary care trust on Merseyside serving 220,000 residents, one in four of whom live in five electoral wards that are among the 20 most socially deprived in England. They are: Bidston, Birkenhead, Leasowe, Seacombe and Tranmere on the Wirral peninsula south of the River Mersey.
A number of changes took place at the beginning of the current financial year to shift the balance of power from health authorities to primary care trusts (PCTs). I welcome this legislation, which has devolved power and resources to front-line staff. But the expected outcomes of this excellent and innovative policy have been hampered because many PCTs have inherited debts accumulated by their predecessor district health authorities which were abolished in April this year. These debts impede the ability of PCTs to address the public health needs of their residents, particularly those living in postcode areas of deprivation. These include: help to improve their diet from birth by increasing breast feeding; fresh fruit for children; encouragement to adults, particularly young women, to stop smoking; and a reduction in teenage pregnancies. The burden on PCTs is further increased because, by statute, it is illegal for them to carry over debts into the next financial year.
As a result of this rule, priority has been given to consultation with neighbouring PCTs and acute hospital trusts on how to handle the debt rather than in essential partnership with local authorities and other agencies on initiatives that can make a significant difference to the health and well-being of disadvantaged people living in deprivation. The aim of our PCT is to change these areas now marked in red on the map into areas of better health colour-coded green.
The Birkenhead and Wallasey PCT has recently proposed a three-year plan of debt repayment to our strategic health authority. This plan involves spreading the PCT's debt to our acute hospital because hospitals are permitted to carry over deficits into the next year.
But our acute NHS trust is a three-star hospital that is likely to lose a star if its annual accounts show debt. The hospital trust has aspirations to apply for foundation hospital trust status which will be thwarted because it has to help our PCT to solve this legacy of debts incurred before the PCT came into existence. In spite of these problems, my PCT has reduced waiting times for patients to see a GP to 48 hours in 37 of our 40 GP surgeries since April. So great advances can take place in a very short time.
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I therefore look forward to the Minister's reply on how financial burdens may be reduced in order that modernisation of services may take place sooner rather than later to make a difference to our residents living in deprived districts.
In this regard, I await information on the funding formula for people living in deprivation. I welcome the Government's promise to give PCTs three-year budgets so that we can plan improvements in the way we work for the benefit of our needy population. Time is of the essence because all our deprived districts in Wirral have most of our children when compared with better-off districts.
If we do not intervene soon, particularly in the first five years of a child's life, we shall have condemned our children to an unhealthy adulthood and to lives of unfulfilled potential. We cannot afford to allow this to happen in a Britain with an increasing proportion of older people who are living longer.
If PCTs were not distracted by negotiating their debts, they could pilot greater patient choice for the treatment of chronic conditions. For example, the pain of arthritis and other degenerative disorders can be successfully controlled by complementary therapies such as acupuncture. This could also reduce the budget for pain-killing drugs and save patients being exposed to complications from long-term drug therapy. In this connection, I declare an interest as the independent chairman of the Acupuncture Regulatory Working Group currently in discussions to produce a report to be submitted to Ministers.
The Government's proposal to give greater freedom to successful hospitals while increasing their accountability to local communities is another area that is likely to hamper improvements in healthcare services in areas of deprivation.
Successful hospitals are those with three-star status because they have fulfilled targets set by the Department of Health on waiting times and the treatment of sick patients. Primary care trusts are held accountable if acute hospitals do not achieve their targets.
In our acute hospital trust in Wirral, future patient needs will require more beds and new wards will need to be built if we do not change the way in which we work. Our PCT is proposing that we innovate so as to improve care in the community and by following up patients discharged from hospital in primary care rather than increasing bed capacity in our hospitals.
The attraction of foundation hospital status may run counter to the modernisation that we propose, because hospitals will find it more attractive to increase their capacity. This is a worry that PCT boards would like Ministers to address.
Finally, I welcome the proposal to introduce an independent health inspectorate. The undoubted success of the Commission for Health Improvement (CHI) is something of which the Government can be justly proud.
The new independent health inspectorate, which will combine the best practices of CHI in its clinical governance review of hospital trusts with the functions

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of the Audit Commission, is to be welcomed. I hope that this development will lead to a stronger inspectorate that can offer help to all NHS trusts to implement best practice, including those for equal opportunities in the employment of a diverse workforce as well as equal access to all, including ethnic minority groups and the disabled.
The inspectorate will ensure that all NHS trusts provide appropriate care to all who use their services. I look forward to the inspectorate's influence to improve the provision of trained interpreters for all patients who are not fluent in English in GP clinics and in hospitals. By auditing the ethnic mix of patients in diabetes clinics, for example, staff should provide better care for ethnic minority groups who are at a higher risk of developing this disease and all its serious complications, such as renal failure and an increased need for kidney dialysis and kidney transplants. All this treatment is very expensive, and it is projected that it will cost the NHS billions of pounds. I hope that the inspectorate will not only improve standards of NHS healthcare but prevent many patients from developing serious complications that would severely increase the cost of healthcare.
7.50 p.m.
Lord Blackwell: My Lords, it is a privilege to follow the noble Lord, Lord Chan. Like him, I shall focus my initial remarks on the Government's programme for health, but I will add a few comments on pensions. Like some of my colleagues on these Benches, I welcome the Government's belated conversion to the notion of independent fund-holding hospitals. Like others, I detect stronger support for it on these Benches than on the Government's own Back Benches.
Against the forensic analysis of statistics set out by my noble friend Lady Noakes, my criticism is that the Government have not gone far enough and do not intend to go quickly enough in pressing forward in this new direction. However, I welcome the recognition that I think I detect from the Government, at last, that running a health service of 1.5 million people as a nationalised state monopoly simply does not work. The noble Baroness, Lady Pitkeathley, talked about the founding principles of the NHS. In 1945, Nye Bevan said that the objectives of the health service were to provide the medical profession with the best and most modern apparatus in medicine, enabling them freely to use it to the benefit of the people of this country. He said:
"Every doctor must be free to use that apparatus without interference from secular organisations".
The trouble with running the NHS as a nationalised industry, as it has been run for the past 40 years, is that, like every other nationalised industry, it promotes a culture of managing upwards to meet the targets and directives set from above rather than responding at local level to people's needs. The plethora of central initiatives and central controls acts as a block on local initiatives. If we are ever to get efficiency and better patient care in the NHS, just as we learned that we could not run telephone systems or steel industries as
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a nationalised industry, we must return to the pre-1948 structure of the health service based on local independent voluntary and charitable organisations. Fortunately, the Government have already started to do that. These organisations would he run by professionals for the benefit of patients in the way that Nye Bevan set out in his vision.
We will need to see the legislation to understand whether the Minister's promise of fully independent hospitals is lived up to in practice. I have my suspicions, but I am hopeful. We will wish to ensure, so far as we can, that the legislation provides for that. Since the Government are now on to a good thing, I encourage them to set out a timetable to go much further—a timetable to enable more hospitals to benefit from the status of being fully independent voluntary and charitable trusts.
That, of itself, is only part of the answer. Reform of the supply side alone is not enough, when we continue to have a state monopoly of healthcare purchasing—a monopsony, in effect. So long as there is a single purchaser of healthcare, purchasing will still he used to enforce centralised targets, priorities and initiatives. The truth is that supply rationed by bureaucracy always disadvantages the weakest members of the community. Whether it is a Soviet state trying to supply housing or the borough of Hackney trying to provide social services, it is the weakest who always fall victim to state bureaucracy. That happens because it is those who are most articulate and most capable of finding their way through the system who can get treatment out of a rationed bureaucracy. The least articulate and the least able have the least power. The Minister is shaking her head, but there is a raft of relevant statistics, which I will quote to her on another occasion. The NHS Executive itself has published a report to show that someone in social class 5 is far more likely to wait for more than three months for treatment in the NHS than someone in social class 1. It is a huge advantage to be articulate and able to work one's way around state bureaucracy.
PCTs may help. For some of the reasons set out by the noble Lord, Lord Chan, I suspect: that they will not provide the whole answer. The only way to provide the level of effectiveness that the NHS needs, alongside freeing up the supply side, is to create real customer power, or patient power. I am not talking about dismantling the NHS and replacing it with private insurance; I am simply talking about recreating the NHS in the image that Nye Bevan envisaged. This would be done by allowing patients to take their part of the NHS budget—an NHS credit, if you like—and apply it in a way that would give them power and choice over the kind of healthcare they receive. Rather than have an NHS monopsony, patients could use their NHS credit in one of various independent healthcare management organisations that would then contract with the hospitals and primary-care agencies, competing to provide the best healthcare possible.
Until we grasp that nettle and remove all vestiges of centralised state monopoly out of the health service, we will unfortunately continue with such inefficiencies as those my noble friend regaled us with. I recognise

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that such a change cannot be brought about overnight. But now that the Government have started on this path of reform, I encourage them to think about going the whole hog and addressing the idea as part of their plans.
Beyond what I said about health, my one criticism of the Government is that the biggest social welfare issue that this country faces is dealt with wholly inadequately in any of the Government's plans so far. I recognise that a Green Paper is promised soon, but I detected a note of complacency in how the Minister addressed the issue in her opening remarks.
We have an ageing population. More and more of the population will become dependent on retirement funds. In 15, 20 or 30 years' time, the funding required for that will not exist; we are grossly underfunded. The Government's own estimates of the liabilities to pay for the future basic state pension add up to more than £1,000 billion, which should be declared on their balance sheet. To that we must add the extra cost to taxpayers of paying the second state pension that we heard about. It has good aims, but it will result in additional cost to taxpayers. I fear that even with the state second pension, there will not be enough coming out of the state purse to meet the expectations of many people when they retire.
Let us be clear. We are talking primarily about people in the lower half of the income distribution who will face these problems, because they do not have enough savings. As my noble friend Lord Fowler said earlier, we are in danger of creating two nations, because those in the lower half of the income distribution often do not have their own savings to supplement what they can expect from the state. There are a number of reasons for that. First, in many cases they cannot afford to put much aside. Secondly, as the Minister has recognised, for many of them, at least recently, it may not have been economically sensible to put money aside. If they got best advice from a financial adviser they would be told that it was not sensible for them to save, because any funds that they accumulated would be knocked off their minimum income guarantee and they would be worse off. I note the Minister's reassuring words about the impact of the state pension credit. I recognise that that may help to ameliorate the problem. However, I doubt that it will be enough to make it truly worthwhile for people who do not have very much to save enough to make a difference.
A further problem is the cost of compliance. For the insurance and pension companies it has not been economic to try to sell products to the lower income group. Although stakeholder schemes were aimed at the poorest part of the income distribution, they have failed to achieve what was intended because it is not economic to distribute products on a small scale to small savers.
If we do not tackle all those problems, I fear that we shall have a ballooning legacy of costs for the next generation that is not addressed by any of the Government's proposals. I do not suggest that I can offer solutions to all those problems tonight, but I have
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two brief suggestions that the Government might like to pick up in their Green Paper, if it is not too late. My first suggestion, which has been made in other quarters, is the notion of a top-up for people on low incomes who make pension contributions. For every £1 that they put away, the state could put an additional £1 in their pension bucket. That would seize the imagination and would enable people to see that they were getting a real accumulation of money that they would not get if they did not save for themselves. Secondly, allied to that proposal, we should allow people to move that part of the state pension fund that is attributed to them into their personal pension pot. To do that, the Government would simply crystallise the liability that they currently have for that state pension, issue debt to the individual to be put into their pension pot and, over time, allow the individual to invest that in other assets where they might get a higher return. Over and above that, it would be a real incentive to the individual to see that they had a bucket of money to which they were adding rather than starting from scratch.
Those are two ideas to put into the Green Paper considerations. Something bold and imaginative will be needed to avoid facing a real pension crisis for future generations.
8.2 p.m.
Lord Hodgson of Astley Abbotts: My Lords, I follow my noble friend Lord Blackwell in discussing the strategic challenges that lie ahead in providing a framework for savings and pensions over the next 25 to 50 years. I begin by declaring an interest. I am a trustee of two final salary pension schemes and the chairman of the trustees of one of them. These final salary schemes are now closed to new entrants. Before I fall into the category of welshers described by the noble Lord, Lord Oakeshott, let me make it clear that we intend to fulfil all the obligations to those who are still contributing and those who are in pension.
Why have we had to close the schemes? Three reasons spring to mind. The first is the continuing sharply rising cost of administration. The second is the Financial exposure to our parent company—our employer—through the provisions of FRS 17, as we live in a time of extreme stock market volatility. One of our funds lost 15 per cent of its value in the last quarter. It is a perfectly sensibly administered fund. It is in a tracker fund. It is not anything very dramatic. However, the exposure for the employer has become very great. Thirdly, I am concerned as a trustee that we might begin to make promises to people that we would subsequently find that we could not fulfil.
The pension scheme relates to a manufacturing business. It is a very good pension scheme. However, amid the fusillade and torrent of statistics given by the Minister at the start of the debate, one thing cannot be concealed: the Government have been extraordinarily careless with the manufacturing base of this country. We are now facing a contribution rate of 35 per cent in the scheme—for every £1 that we pay, we have to put

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35p into the pension scheme. That cannot now be afforded given the Government's policies towards the manufacturing sector.
I see at first hand the difficulties and perhaps the crisis facing the pensions industry. Some of those reasons, such as increased longevity, are clearly not of the Government's making. While it is a matter for private delight that people are living longer, there is a public cost, not least in pension funding. However, the Government have contributed significantly to the worsening of the crisis, in some ways by sins of commission and in others by sins of omission.
The greatest of all the sins of commission, as mentioned by my noble friend Lord Fowler and the noble Lord, Lord Oakeshott, was the raid on the pension funds by the changes in ACT. To change the basic terms under which people save for their pension mid-way through a savings plan is an outrageous breach of public trust. If a similar action had been undertaken in the private sector, there would rightly have been a widespread outcry.
As has been pointed out, the change has drained £5 billion a year out of pension funds. The Prime Minister defended it at the time by saying that a buoyant stock market had given better returns than expected. That was then. If you had put your money into the FTSE 250 share index on 1st January 2000, it would now be down 42 per cent. In the light of that, does the Prime Minister now intend that the Government return the money? I think not.
The second problem is the increasing burden of regulation. It has fallen on companies and has been particularly damaging to smaller companies running final salary schemes. However, it has also fallen on trustees, who feel increasingly exposed. There is an interesting article in today's Financial Times headed, "On the hoard, a good man is hard to find". It is written by a lady, so I imagine that it also means that a good woman is hard to find. It is about the dangers for outside directors and trustees. It says:
"Nowadays, outside directors sense that they are more likely to become a casualty of a future scandal than to prevent that scandal".
The article also points out:
"By far the strongest deterrent to board service is the very general 'name in the newspaper' factor".
Then there is the rising tide of form-filling and bureaucracy. No doubt much of it is worthy in intent, but of how much practical significance I know not. Some noble Lords may have heard the interesting interview recently broadcast on Radio 4 with the Abbot of Downside, who is retiring as headmaster of that distinguished school. In the programme, he referred to the emergence of what he called the "geek" culture—that is to say, tick the boxes, fill in the right forms, and you will have covered your backside and you will be okay.
The Government have also added their own list of complexities with the steady expansion of means-tested benefits, about which we have heard much this evening. Those of us who had the pleasure of taking part in the proceedings on the State Pension Credit Act
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saw this in spades—a worthy enough objective in danger of being lost in a fog of regulation. When reform could have been introduced to improve the situation, the Government have too often fluffed the opportunity. The planned reform of annuity provision in a way that would enable people to plan for their own needs, as opposed to being forced to take actions that may well not be in their best interests purely on the basis of an arbitrary date or age, seems to be an opportunity sadly missed.
But perhaps most damaging to public confidence has been the Government's attempt to deny any responsibility for the position in which we now find ourselves. Everyone else has been blamed: the City has been blamed for being short-termist; the employers have been blamed for being hard headed, and welshers; the pensions industry has been blamed for being rapacious; and, when that does not work, the previous Conservative government have been blamed for the inheritance. The combination of all those factors has led to a comprehensive undermining of people's confidence in the value of long-term saving. The result is a savings ratio that has fallen steadily and halved since this Government took office from 9.1 per cent to 5.4 per cent.
The Government should now be guided by three important principles that should form the basis of what will appear in the Green Paper. First, they need to allow flexibility; secondly, they need to give clarity a strong framework; and, thirdly, they need to be honest, above all, about what can or cannot be achieved. As regards flexibility, the Government need to trust people to use their savings in a way that suits them, provided that enough remains in their personal savings pot to enable them to stay above welfare levels. The latter does not mean just reforming the annuities legislation; it means enabling people to use their other savings flexibly. I have in mind ISAs—withdrawing and replacing the ISA because people have different needs: they need to spend but they also need opportunities to save.
Secondly, there is the need for clarity. The huge range of complex means-tested benefits needs to be reduced by focusing on the basic state pension. The cost of administering these means-tested benefits is huge and, because of the complexity involved, they too often fail to reach people who most need them. Moreover, in the interests of clarity, the Government should consider permitting individuals to deduct fees for professional financial advice from their tax payable. Without this change, people will inevitably continue to choose to have their charges deducted from their premiums. This will mean that we shall continue to have product bias.
Of course, none of that will happen. The noble Baroness opened the debate arguing cogently and persuasively, as is always the case. But she knows, and we know, that the real obstacle to pension and savings reform does not lie in her department; it lies in the Treasury. The Treasury may weep tears over the declining savings ratio, but they are crocodile tears. Its

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concern, its age-old obsession, is about tax leakage. That is why the Treasury will oppose any such changes.
Thirdly, the Government must come clean and be honest. They must stop trying to make people think that if only 30 out of 80 years of life are spent working—that is to say between the ages of 25 and 55—pensions can be provided on exactly the same basis that applied when people worked for 40 or 45 years out of 70 years of life. They need to stop trying to make people believe that certainty can be achieved. Funding over 50-plus years in today's volatile world is inherently uncertain. An actuary friend of mine compared his job of forecasting retirement pensions to trying to lower a ping-pong ball on the end of a fishing line into a bucket 25 yards away in a force nine gale.
If the Government are clear, flexible, and honest, people will be encouraged to make the additional savings necessary to give them a comfortable old age. But on the record to date, one cannot be optimistic.
8.10 p.m.
Baroness Barker: My Lords, I begin by making my customary declaration of interest in that I work for Age Concern. The debate on the gracious Speech is perhaps one of the most interesting points in the parliamentary calendar. I very much welcome the changes that we have made this year as regards the way in which we have improved the structure of the debates compared to previous years. That struck me particularly when listening to the wonderful speech made by the noble Lord, Lord Fowler, with his apposite and moving comments about AIDS. On whatever day the draft plan for Africa was being discussed, I suspect that the subject of AIDS would have been mentioned. That highlights some of the remaining structural problems with these debates. As the noble Lord so rightly said, we can no longer turn our backs on problems in Africa.
The gracious Speech provides an opportunity to stand back and consider the extent to which joined-up government has become a reality. It is also a moment when those of us who provide effective opposition are challenged to do so outwith the restrictions that apply to debates on specific legislation. This year's debate on the Loyal Address has given those of us on these Benches a welcome opportunity to set out our own approach to the funding, the delivery and, crucially, the governance—a word which has not been heard today—of health and social care.
For the past 20 years, this Government and their predecessor have grappled with a key issue: how to fund old age. Both governments have sought to address the issue against a background of real reductions in state pensions. In her opening remarks, the noble Baroness, Lady Hollis, set out the plethora of initiatives which this Government have introduced, but she neatly side-stepped the issue of the real level of the basic state pension. She mentioned one of the key themes which I should like to talk about today, complexity, but she avoided a central concern—the
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crisis in private and company pensions, which was expertly explained by my noble friend Lord Oakeshott of Seagrove Bay.
Governments have tried in various ways, both negative and positive, to increase private provision for retirement income. For some, it has taken many years for the message to get through that any state pension they might receive will not sustain the standard of living that they envisaged. Currently, those who have been prudent and saved, often in company or private pension schemes, are looking at the closure of final salary schemes and starting to lose faith. For the past decade, for many investment in property has been a far more attractive option, offering a higher rate of return and certainty about the control of assets. However, with the property market surging at a seemingly unsustainable rate in some parts of the country, one wonders how long it will be before those who invested in property as a security for retirement also find themselves staring at an extremely bleak future.
This Government and their predecessor—as the noble Earl, Lord Howe, and the noble Baroness, Lady Noakes, might concede—have returned time and time again to one fundamental issue: how to cope with increasing demand for health and care services; with demand for new and effective but costly treatments; and with greater demands from an increasingly older population who are living longer. The National Health Service and Community Care Act 1990 was a first attempt to align health spending with what was then called community care spending. At that stage, however, a fundamental decision was taken which created an in-built flaw in health and social care planning which has persisted ever since: the decision to concentrate resources on acute conditions and high dependency. Only this year, that policy was reinforced in the fair access to care services guidance in which commissioners were told to allocate people to four eligibility bands—critical, substantial, moderate and low needs.
The guidance explicitly states:
"Councils should prioritise needs that have immediate and longer term critical consequences for independence ahead of needs with substantial consequences".
It is doubtful whether any authority in the land seriously envisages making any provision whatever for low-level needs. Yet there is evidence—cited, among other places, in the National Service Framework for Older People—that low-level interventions which enable older people to manage their own lives independently pay massive dividends in the avoidance of acute care and in continued mental health.
Such thinking on the subject of managing demand was the starting point for a policy paper on the public services which the Liberal Democrats developed and adopted earlier this year. We saw our task as policymakers as the need to develop systems which enable the development of services that meet needs effectively, appropriately and—above all—sustainably. We realised that the best way of reaching effective solutions would be to enable users,

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practitioners and those in the local community who know the real problems and issues to develop frameworks and solutions that work.
We also realised that this approach, if it was to work, would have to be based on various important requirements, the first of which is agreement on basic minimum service standards, discussed and negotiated from the bottom up, not the top down. Secondly, adequate resources, coupled with local tax-varying powers, need to be in place nationally. Thirdly, democratic local control and accountability of decision-making must be coupled with an effective flow of information and evidence. It is on that basis that we on these Benches judge the two main health and social care measures in the gracious Speech, on foundation hospitals and delayed discharge. I have to say that, on that basis, we have found some very big holes in both pieces of legislation.
The proposal for foundation hospitals was trailed as long ago as last May. From the outset it has been clear that they are destined to be entities built on contradictions. They are to be selected from hospitals that have gained three stars by meeting centralised targets. Whether or not they have succeeded in meeting local health needs, or have simply met arbitrary targets for waiting list management, they are to be handed over to public benefit organisations. As I listened to the noble Baroness reel off the official line on waiting times, I could not help but note that the time that it takes to get on to some waiting lists—for example, for minor surgical procedures or for outpatient services such as audiology—did not get a mention and yet the preventive value of such services is commonly agreed to be high.
As my noble friend Lord Clement-Jones said, foundation hospitals will provide services that are commissioned largely by PCTs and the funding of PCTs is determined by their ability to meet targets which are set in Whitehall. In view of that, the notion of local accountability begins to seem unreal.
The noble Lord, Lord Turnberg, made an eloquent speech. I took to heart his point about health inequalities and the question that people in the NHS have about how a system as currently set up for hose hospitals that already perform well can possibly work to reduce health inequalities. As the governance of those hospitals will be turned over to communities, I believe that in areas where there are more articulate people with time, energy and resources to become involved in the running of the hospitals, that is bound to lead to some of the problems mentioned by the noble Lord, Lord Turnberg.
One aspect of this sudden and somewhat unconvincing rush to decentralise is the proposals on delayed discharge. The Government's proposal is part of just one of a series of initiatives that first arose in the Wanless report. Noble Lords may remember the Wanless report, which was commissioned by the Treasury and which was produced earlier this year. Referring to a point made by the noble Lord, Lord Hodgson of Astley Abbotts, it is interesting to note
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that many reports often lie about for a long time before they are given a response, but this one was picked up within 24 hours.
I say it is only part of the response because the Wanless report advocated three points, only one of which the Government have chosen to implement. First, Mr Wanless stressed that it is impossible to make accurate predictions about future healthcare demands without a thorough analysis of future need and patterns of provision of social care. He advocated that there should be a strategic view, a recommendation on which there has been silence. Will the Minister say whether future social care reforms will be based upon such a strategic view, or are we to expect a series of piecemeal measures?
The Secretary of State in another place in his speech to the National Social Services Conference on 16th October stated that the strategic commissioning group chaired by Jacqui Smith will produce a report on how local and community groups can take a bigger part in the delivery of services. That is not the same as an analysis of need, but it is an important element of working out the future of the whole health and social care economy, so I ask the Minister to update us on the progress made on that.
Secondly, there is the matter of the disappearing measure from the Wanless report. It advocated a system of fines to local authorities, but it did so in conjunction with a system of fines for hospitals where re-admissions were deemed to be the result of inappropriate discharge. The Government must have seen some merit in that proposal because it is included in Chapter 8 of Delivering the NHS Plan. However, more accurately, over the course of the summer that proposal disappeared. I simply ask the Minister: why? My honourable friend in another place Mr Paul Burstow has produced evidence of re-admission rates growing at an alarming pace—up 18 per cent in the past two years. Moreover, voluntary organisations, such as my own, are beginning to detect patterns where re-admission rates climb in the same areas where discharge rates have increased. Common sense suggests that there must be a correlation.
Unlike the noble Baroness, Lady Greengross, I have many reservations about the forthcoming Bill, but the aspect that should cause the greatest concern is that nowhere does it mention informed consent. Under the Bill, patients will be discharged apparently without ever having had the opportunity to agree whether they should be, or to exercise any choice at all. For those of us who work in the field, that is worrying—not just for those older people but, as the noble Baroness, Lady Pitkeathley, said, for their carers, many of whom are extremely elderly and unable to care for people with complex health needs.
Furthermore, the Bill makes no mention of mental incapacity. There appears to be no mechanism to establish what is in the best interests of the most frail older people—those who cannot express their own will. That seems totally to contradict standard 2 of the National Service Framework for Older People, which requires that older people receive the care that meets their needs as individuals.

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Many noble Lords have mentioned bed-blocking and the lack of care homes as a causal factor. It is indeed. However, as we consider the Bill—I must tell the noble Baroness, Lady Greengross, that I expect that it will be here sooner rather than later—we shall hear an acronym that we all know and love: "sit reps", situation reports on hospital discharge. They are the common currency of social services and acute hospitals, the locally collected statistics that give the reasons behind delay of discharge.
No noble Lords have mentioned, and nor have the Government made much of the fact, that a substantial proportion of delayed discharges—up to 25 per cent, and in some areas a great deal higher—are caused by delays and inefficiencies within the NHS: failure to communicate within departments; failure to have discharge procedures in place; or failure to agree a process between acute and other wards. The Bill is not aimed at the right targets or in the right way.
Finally, I turn to accountability. One reads reports that the legislation came from Sweden; but it has been plucked from a different health and social care context. In Sweden, both health and social care are largely monopolies; in this country, social care most certainly is not. It is difficult to envisage at either a strategic level or for individuals where accountability for what may happen to people will lie and where complaints and advocacy are properly to be sited.
In view of all that, I have been desperately searching for an analogy. I have come to think that this is a community care congestion charge. Rather like Mr Livingstone's proposal, of which the Minister will no doubt be well aware, this provision is premature. Rather than being based on a whole system of care, it is an attempt to address one particular bottleneck. That may deal with the symptom but not with the cause.
The noble Lord, Lord Chan, in an excellent speech, highlighted one area of concern: the ability of primary care trusts to deliver the current system. In view of what he and other noble Lords had to say, there is a strong case, not necessarily for delaying the Bill for a long time, but for saying that the Government's hopes of having the system up and running by April 2003 are somewhat premature.
I fear that the wheels are beginning to come off the Government's perpetual revolution in the NHS. NHS forecasts are beginning to have all the credibility of Soviet five-year plans for the wheat harvest. Taking these two single measures, I believe that the future for older people in this year is beginning to look very much starker than it was previously. These measures, in particular, will receive thorough and tough scrutiny as they move through this House.
8.30 p.m.
Lord Higgins: My Lords, to some extent I shall concentrate on work and pensions issues and, therefore, I begin by declaring an interest as chairman of an occupational pension scheme and an interest in Equitable Life.
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However, before I turn to those issues, I want to pick out one part of the gracious Speech which I do not believe has attracted enormous interest. It states:
"Parliament will be invited to scrutinise legislation in draft on a number of measures, reflecting the importance that my Government places on pre-legislative scrutiny by Parliament".
I am most enthusiastic about pre-legislative scrutiny. In fact, it is 30 years since I was the first Minister to introduce in full a draft Bill which abolished purchase tax and SET and introduced value added tax. As a result of that pre-legislative scrutiny, I believe that the legislation has lasted the test of time, except for the fact that successive Chancellors have increased the rate from 10 per cent, which was nice and simple, to 17 per cent.
I am profoundly worried about the way that we now scrutinise legislation. From our experience in the previous Session on the Tax Credits Bill, which arrived in this House in an unworkable state due to the fact that the Minister in another place clearly did not give it sufficient scrutiny, and from the way that the Home Secretary's proposals on asylum were not discussed at all in the other place, other than when we happened to defeat the Government on a particular amendment, we know that the system is not working. The process of programming and modernisation in another place is placing a bigger and bigger burden on your Lordships' House. One cannot help but feel that somehow the proposal for more pre-legislative scrutiny is intended to make up for the fact that this House does not carry out legislative scrutiny in the way that it should.
In the course of the debate, many noble Lords have spoken on both health and pensions issues. With regard to the health issues, I have a strong impression that noble Lords are mostly warning of dangers. The noble Lord, Lord Faulkner of Worcester, warned about the danger of smoking. I strongly agree with that. My noble friend Lord Fowler dealt with the problems of the AIDS epidemic, and my noble friend Lord McColl spoke about falling morale in the health service. Going more widely, my noble friend Lady Carnegy of Lour warned about the problems of dysfunctional families and the breakdown of family structures. Therefore, we heard a whole series of warnings on which, no doubt, the Minister will wish to comment when responding to issues raised in the health service field.
However, I want to turn primarily to the issue of pensions. We are promised a Green Paper in the near future. Whether this is a question of the calm before the storm from a legislative point of view, given the welter of legislation with which the noble Baroness and I have dealt over the past five years, or whether it is simply the calm before a damp squib, we shall have to wait to see. But, at all events, I believe that it is worth referring to the previous Green Paper, Partnership in Pensions, published in December 1998. A crucial part of that paper set out the Government's expectation that total spending on pensions would change from 60 per cent from the state and 40 per cent from private sources to the reverse—that is, 40 per cent from the state and 60 per cent from private sources.

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From statements made by the noble Baroness the Minister on the Front Bench and outside, it would seem that she has been saying that the department is thinking about the matter again. She did not mention the issue in her opening remarks. But it is crucial because almost everything that the Government have done since the publication of that Green Paper has pushed the balance in the opposite direction. Crucially, it undermines provision in the private sector and, very largely, has failed so far as concerns provision in the public sector.
The noble Lord, Lord Oakeshott of Seagrove Bay, and my noble friends Lord Hodgson and Lord Blackwell all referred to the stealth tax on ACT. The total take now with regard to pension funds is around £25 billion and rising. That has meant that more and more companies have felt obliged to change final salary schemes to defined contribution schemes, transferring the risk from the company to the individual. A recent survey indicated that around half—rather more, in fact—the final salary schemes that existed at the time of the previous Green Paper have been closed to new entrants or future accruals. That is a fundamental change of the greatest importance.
As regards the stakeholder pension, the survey to which I have just referred suggests that fewer than 1 per cent of employees based in firms covered by the survey have joined stakeholder schemes and that 46 per cent of stakeholder schemes have no members at all. Again, the legislation on stakeholder pensions that we ploughed through has largely been a failure. Increasingly, outside experts are calling into doubt the state second pension and moving towards the views of the late Barbara Castle, whose contribution to our debates we miss very much. She was always in favour of raising the basic state pension and not going down the means tested route. The National Association of Pension Funds, the IPPR and the Pensions Policy Institute have all produced proposals that concentrate on the basic state pension rather than move towards the state second pension. Commentators such as Mr Timmins in the Financial Times have expressed similar doubts. The Minister has been cagey about the 40:60 split. However, it would be helpful to know whether that is still the Government's expectation or whether, as a result of their own actions, matters have moved in precisely the opposite direction.
I turn now to the point made by my noble friend Lord Hodgson in particular, but also by the noble Lord, Lord Oakeshott, and others. The reality is that pensions are in a state of crisis. That is what we are faced with at the present time both with regard to those who become pensioners now or those who will become pensioners in 20 or 30 years' time. My noble friend Lord Blackwell pointed out the enormous future liabilities that ought to appear on the Government's balance sheet but which they refuse to make explicit in their accounts.
This is not just a crisis in the pensions industry but a crisis in confidence. It is that which is deterring people from saving at a time when, quite clearly, it is vitally important that they should if they are ever to retire on a reasonable income. That brings me to a point made
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by the noble Lord, Lord Oakeshott. I agreed with virtually every word of his speech. He referred to Equitable Life. Only last weekend we heard that, as a result of the serious situation at Equitable Life, some people with pensions already in payment—perhaps having retired 20 years ago—will suddenly find that their pensions are cut by about 20 or 30 per cent. I cannot recall that ever happening previously, even when the Policyholders Protection Act 1997 was introduced. I hope that the Minister will tell us whether that is the case.
As regards this matter there has quite clearly been a complete failure on the part of the regulator and the Government. Originally, the matter was the responsibility of the DTI. Then a number of officials moved to the Treasury and the matter was for a considerable time the responsibility of the Treasury. It then became the responsibility of the Financial Services Authority acting as the agent of the Treasury and then, finally, the responsibility of the Financial Services Authority itself. However, the reality is that the failure of Equitable Life is equally a failure of the regulator, and the regulator was the Treasury. There should have been a proper inquiry. The Government set up the Penrose inquiry. No, I am wrong; the Treasury set up the Penrose inquiry and the Treasury determined what its terms of reference should be. The report will be made to the Treasury. We now find that the inquiry has been set up in a such a way that it is not likely to be possible to publish the report in full anyway. It is absurd to have the failures of the Treasury investigated in that way. However independent Lord Penrose may be, he is closely confined by the very organisation that he should be investigating.
As a result, the ombudsman felt that his inquiries should be put on hold. I have a qualification to make in this context. I had an exchange with the noble Lord, Lord McIntosh of Haringey, in the House on 31st October, when I made exactly the point that I have just raised. When he replied that the matter had not been put on hold, I asked him to check his Facts. Very courteously and in his usual way, he has done so and he wrote to me. He is right that the inquiry now being carried out by the ombudsman has not been put on hold. However, that is only a tiny period of the overall period that has affected Equitable Life. The overall range of complaints that the ombudsman has been investigating has been put on hold; he is not going to produce an inquiry until such time as the Penrose report has been published, if it is ever published.
The ombudsman's views on this subject are very clear. He said—he has of course just retired and been replaced by a lady—in his annual report that:
"The root cause of the problem, in my view, is the failure of the authorities to establish at the outset a single inquiry with terms of reference covering all aspects of the Equitable Life affair".
That is what should have been done, but it was not done; it should be done now. Lord Penrose must be given unlimited terms of reference to go into all aspects of the affair and he must produce a report that is genuinely independent and not circumscribed in the

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way that the Treasury, in its own interests, has managed to do so far. That meant that some people found that their pensions, which had been in payment for 20 years, had suddenly reduced. Many people are suffering serious loss and we do not know even now what the future of the company will be. Consequently, there has been widespread concern and a widespread crisis of confidence in financial institutions generally and in relation to the regulators. I believe that that was pointed out on "Panorama", although I did not see it the other night.
These are very important issues because we must do all that we can to ensure that the pensions industry functions on a viable basis. We must do all that we can to ensure that so far as possible company schemes remain of the "final salary" sort rather than of the "defined contributions" sort. As my noble friend Lord Hodgson clearly spelt out, the pressures on companies are growing. Not all the reasons for that are the fault of the Government; as my noble friend rightly pointed out, there is greater longevity and a number of other factors, including the decline in the stock market, make the situation very difficult. However, that, to a significant extent, is the problem.
Incidentally, I welcome the situation regarding FRS17. I pay tribute to the Minister, who I believe was probably incidental in persuading the Secretary of State—she has done so in relation to many issues—that the FSR17 issue will be delayed until such time as the international standard is agreed. However, to what extent that standard reflects some of the problems associated with FRS17 remains to be seen. That measure has been one of the factors contributing to the breakdown of the traditional pension system in this country, which the Government, when they came into office, asserted was the jewel in the crown of the British pension system.
In her opening remarks the Minister was not as analytical as she normally is. Her speech was little else than a long stream of statistics. She did not anticipate, understandably, the Green Paper, but she did not deal with the fundamental issues of the split between private and public and so on, to which I referred in my opening remarks. That stream of statistics must itself be suspect because the department and the Government generally have recently made a number of rather serious mistakes. The Financial Times reported the other day that the Ministry has agreed to clarify the figures.
We all know that both parties in government have not had an impeccable record in the SERPS saga. Having said that, one would have thought that at least the department would be trying to get its figures right, whereas it appears that its projections did not adequately allow for the problems of contracting out and so on.
It is also the case that, as my honourable friend Mr Willetts in another place has pointed out, the Government made a most appalling error in estimating the amount of money that was being invested each year in pension schemes. They were under the impression that the sum was £86.4 billion. It
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turned out that those figures were totally wrong. It was £43.7 billion. I leave noble Lords to deduct one figure from the other to see the magnitude of the error. That was reflected by a most extraordinarily complacent attitude by the Government on this whole issue. They were basing their ideas on statistics which were wrong. That is one of the reasons why the noble Baroness has been inclined to say that there is not a crisis as regards pension provision. I believe that that is the situation.
There are other problems regarding complexity that we have been over many times. Prudential recently produced a study stating that £1.2 billion in benefits are unclaimed. If one looks at the documentation which explains to people how to fill in the relevant forms, one can well understand why that is so. The Government said, "Oh, well the form is now much shorter". Yes, the form got shorter and the explanatory memorandum on how to fill it in got longer. This did not really work out as the Government proposed. Curiously enough, it has almost exactly the same number of pages overall.
The other aspect of the matter about which we have expressed grave concern—and on which the Government are continuing to plough in the wrong direction—is means testing. We are told that in 1997, when the Government came into office, 14 million people were in households where there were means-tested benefits. By next year the number is expected to be 25 million. In 1997, 38 per cent of pensioners were on means-tested benefits. By 2003 the figure is expected to be 57 per cent.
I am not generally speaking in favour of debate by statistics, even though the Minister decided that that was an appropriate way to approach this debate. But I am profoundly concerned about—my noble friend Lord Blackwell raised this point—what will happen in the future with minimum income guarantee being uprated in earnings, and with more and more people on means-tested benefits. The prospect for vast masses of people in our country in 20 or 30 years' time is grim indeed. We will see more and more people on means-tested benefits and a smaller and smaller number of people paying for them. At some stage—I probably will not be here in 30 years' time to see it—the people who are responsible for paying for means-tested benefits will not be able to finance them.
The prospect for pensions is desperately uncertain. I shall make one final point about Equitable Life. We must set up a proper inquiry, so that we can restore confidence in the savings industry, in the regulator and the prospects for the future. At the moment, the Government are going in the wrong direction. There ought to have been a system, from 1997 until now, to move the pensions industry in the direction in which it wished to move, which was towards a greater emphasis on private provision and a smaller emphasis on public.
8.50 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, in the debate on the Queen's Speech, we are often called upon to display considerable feats of

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ingenuity in pulling together the threads of what is always a wide-ranging debate. The point raised by the noble Lord. Lord Colwyn, about the licensing of musicians takes the debate even wider.
I enjoyed the reminiscences of the noble Lord, Lord Fowler, about the glory days of the old DHSS, although I thought that his reference to a comment that I made rather a long time ago was a bit below the belt. Later, I shall demonstrate—to my satisfaction, at least—that there is a coherent line between what I said then and what I say tonight. None the less, I agree with the implication of what he said: however we cut the cake in Whitehall, we must always work across departmental boundaries. There are strong links between ill health and the other problems that we face, such as unemployment, poor housing, poor educational achievement or, as the noble Baroness, Lady Carnegy of Lour, mentioned, the insecurity faced by so many young people. We will always have to work together throughout Whitehall to sort out such problems.
The issue for health, in the wider sense, is the irony that, although today we are healthier and more prosperous and live longer, the health gap between the most disadvantaged in our society and the rest is very wide. At birth, men in Manchester can expect to live nearly 10 years less than their counterparts in north Dorset; women in Manchester can expect to live nearly seven years less than women in west Somerset. That is why we must have a radical programme to tackle health inequalities. I say to the noble Lord, Lord Chan, that that is why we have made the reduction of such inequalities a key criterion for the allocation of NHS resources to different parts of the country. It is why we must do everything that we can to encourage healthier lifestyles, improve diet and physical activity and tackle drug and alcohol misuse.
I believe that we can see encouraging progress. There has been a reduction in teenage pregnancies among the under-16s and under-18s. On sexual health more generally, I agree with the noble Lord, Lord Fowler, that we cannot be complacent. I share his view that a focus on public health promotion is essential, and that is what we seek to have. I pay tribute to the noble Lord's leadership, in his time as Secretary of State, over the issue of AIDS.
It is not just a matter of sexual health. We must ensure that there is a healthy start to life, through action to reduce infant mortality. The Sure Start programme, targeted at disadvantaged children and their families, has much to offer. We must do more to help people to improve their diet. I am glad to report that, from this autumn, nearly 600,000 children will receive a free piece of fruit every day in school. Physical activity is equally important, and I pay tribute to my noble friend Lady Pitkeathley for the work of the New Opportunities Fund in sponsoring healthy living centres and for the new programme to encourage physical exercise. I do not believe that one can overestimate the importance of that. We shall do everything that we can to encourage the NHS to support schools in that important programme.
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Smoking is equally important. The smoking cessation services that we have launched are showing great signs of success. I thank my noble friend Lord Faulkner for his generosity in relation to the Tobacco Advertising and Promotion Act. I pay tribute to the noble Lord, Lord Clement-Jones, for his initiative in bringing it forward, and no doubt the noble Earl, Lord Howe, would want to thank the noble Lord, Lord Faulkner, for his kind remarks on that matter.
As far as the implementation of the Act is concerned, we have announced that the commencement date for most of the Act's provisions will be February 2003. We have power to make regulations allowing sponsorship agreements to continue in certain circumstances until 2006. We intend to make those regulations in the near future and are currently consulting on them.
As regards the approved code of practice on smoking in the workplace, the Government are giving careful consideration to the commission's proposals. As part of that process the Health and Safety Commission has been asked to consider further both the implications of the code of practice on the hospitality sector and the role the public places charter can play.
I agree with my noble friends concerning the common agricultural policy and we would certainly, as a country, like to see tobacco subsidies phased out. We are working closely with the European Commission. I assure my noble friend that we take up that issue as every opportunity arises.
Sticking with the public health arena, I would like to say to the noble Earl, Lord Baldwin, that I welcome him back to our debates on fluoridation. I want to confirm the assurance that he has been given by the Chief Medical Officer that we shall not use the Medical Research Council report to discredit the York report. I am happy to write to him on the further matters that he raised in our debate today. I consider dentistry an important component of public health. The noble Lord, Lord Colwyn, will know that we are working very hard with the BDA and the profession to find a way to get ourselves through the treadmill impact and have the right incentives to encourage dentists to work under the NHS dental contract. The noble Lord will know that I have a great deal of respect for the dentistry profession and I am as committed as the Government are to finding a way through.
The noble Lord, Lord Chan, emphasised the key role of primary care trusts in relation to public health and the important role that they have to play. I agree with that. That is why we were determined to place public health at the primary care trust level. I believe that the noble Lord has shown the potential of primary care trusts to take those public health programmes forward. Certainly, I believe that they have an important contribution to make to our overriding commitment to break the cycle in which previous generations have condemned children to a lifetime of ill health, merely because of where they lived or what their parents did for a living.

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That is why it has been so important to reduce unemployment, and to make good progress towards our target of reducing the number of children in low income households by a quarter by 2004, as the first step on the road to eradicating child poverty within a generation. I agree with the noble Baroness, Lady Barker, that the funding of old age is just as important in that context.
That brings me to the question of pensions. My noble friend Lady Hollis dealt with a number of the issues that have been raised. It is clear that the Green Paper will be of great importance. I hope that when it is published it will commend itself to the noble Lord, Lord Higgins. As a former member of an Equitable Life AVC scheme I have a particular interest in a number of the matters raised by noble Lords tonight.
I hope that the noble Lord, Lord Higgins, will forgive me for not being drawn on the questions he raised in relation to the Penrose inquiry. I believe that we need to wait for that inquiry to report and the timetable is very much a matter for Lord Penrose.
Lord Higgins: My Lords, the noble Lord has not taken the point. The way in which the inquiry has been set up is totally inappropriate. Lord Penrose is looking into the Treasury and the Treasury has set up the inquiry in such a way that it will be extremely difficult for him to say anything sensible about the broader issues, as the ombudsman made clear. It is quite wrong—it is totally wrong—for the Government to have set it up in that way. It has delayed others, such as the Treasury Select Committee in another place and the ombudsman, going into the issue. The whole thing is, in short, a cover-up.
Lord Hunt of Kings Heath: My Lords, I cannot accept the suggestion the noble Lord has made. It seems to me that the inquiry terms of reference are broad. They are to inquire into the circumstances leading to the current situation of Equitable Life, taking account of the relevant life market background, identifying any lessons to be learnt for the conduct, administration and regulation of life assurance business, and to give a report thereon to the Treasury. It is independent and it is up to Lord Penrose to decide how he conducts the inquiry within those terms of reference.
More generally on the question of pensions, I say to the noble Lords, Lord Oakeshott, Lord Fowler, Lord Blackwell and Lord Hodgson, that of course the Government are not complacent about the current situation in relation to pensions. I am not complacent, nor is my noble friend. We have put in place a structure of state support, increasing retirement pension as the noble Lord, Lord Oakeshott, acknowledged; increasing the minimum guarantee; reforming SERPS to become the most generous state second pension; and introducing stakeholder-funded pensions for those without private funded schemes of their own. I would say to the noble Lord, Lord Hodgson, that pension credits make even small pensions worth having.
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However, I understand the issues facing the pension funds. It is the case that long-term gains in life expectancy, the current situation with the stock market and the move from final salary to money-purchase schemes has produced concerns over people's pension expectation. There is no doubt whatever that people need to build up greater pension savings to provide for an increasing length of retirement. I do not believe that there can be any disagreement about that.
I also agree with the noble Lord, Lord Oakeshott, that what also matters is employers' contributions to those schemes. The move to money-purchase schemes has seen those contributions reduced. I agree that employers' contributions are pivotal and I refer the noble Lord to the fact that Legal and General have estimated that where employers contribute to stakeholder schemes so do around 80 per cent of their employees. Where they do not, only around 10 per cent of their employees make such provision. I say to the noble Lord, Lord Higgins, that I do not accept that stakeholder pensions have been a failure—more than 1 million have been sold—but I believe that we need to encourage employers to contribute.
The issue of compulsion, which the noble Lord, Lord Higgins, raised, is a major step to contemplate. The response to the Green Paper will no doubt argue the merits and demerits of compulsion. The Green Paper will look at pensions policy in the round, including opportunities open to people around retirement, and it will set out proposals to enable people to build up more pension savings. It will also take into account work underway at the Inland Revenue to simplify pension scheme taxation. Furthermore, I say to the noble Baroness, Lady Greengross, that it will pick up many of the issues she raised in her speech.
Of course it is necessary to strike the right balance between competing goals and we have to devise policies for the long term. We recognise the important issues raised by noble Lords today and there will be further opportunity to contribute to the debate on pension provision in the consultation period after the Green Paper has been published.
I have so far focused on health equality, the links between health and poverty and the specific responsibilities of the Department for Work and Pensions, particularly in relation to pensions. Continuing the theme, the NHS has a key role to play in improving health and healthcare for all. That is why the NHS Plan is so critical; that is why we are setting national standards; that is why we are building up capacity in hospital beds and in community and primary care provision; and that is why we are increasing the number of staff employed within the National Health Service.
I did not recognise the extremely gloomy picture painted by the noble Baroness, Lady Noakes, of where the NHS stands at the moment, nor did I recognise her rather rose-tinted analysis of where the NHS stood in 1997. Indeed, I should say to the noble Earl, Lord Howe, that many of the critical challenges we face now

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are as a result of chronic under-investment by the previous government. I give but one example of that—the number of nurse training places. In 1993 the number was reduced to 13,000; we have now got the number up to more than 20,000. We have had to invest considerable resources in the infrastructure because of the previous government's neglect.
My noble friend Lord McCarthy said that the jury is still out on PFI. I should say three things to my noble friend, the first of which is that the traditional approach to building hospitals in the NHS has clearly not worked. He will know, and many noble Lords will have experienced, the dreary process and the years it has taken to build NHS hospitals under the traditional route—the phase 1, the phase 2, the phase 3, the phase 4—so that by the time a hospital has finally been built it has become obsolescent.
PFI is an opportunity to fast-build hospitals in the future, and evidence is coming through of its success. For instance, all the major hospital schemes completed so far under PFI have been delivered on or ahead of time. That compares enormously favourably with the record of the NHS under the previous funding capital regime.
My noble friend referred to comments made by the Deputy Comptroller and Auditor General, but the evidence that PFI is better value for money has been provided by the National Audit Office. Many reports on PFI schemes now completed across all areas of government activity show value for money benefits of varying degrees, as indeed they have to.
Lord McCarthy: My Lords, can the noble Lord explain how that is the case? The Minister is saying that the deputy comptroller totally disagrees with his own reports.
Lord Hunt of Kings Heath: My Lords, that matter should be addressed to the Deputy Comptroller and Auditor General rather than to me. The reports that the NAO have produced show value for money, albeit of varying degrees.
Turning to the question of foundation trusts and the comment made by the noble Lord, Lord Fowler, it is true that for a long time I considered that the best way of getting the Department of Health out of micromanagement—and it was as keen on micromanagement under the noble Lord's stewardship as it has been ever since—was down the public corporation route. I did believe that. But time has moved on and I am not sure now that a public corporation role is the right way forward. I suspect that the danger is that a public corporation might be just as keen on micro-management and interference, judging by the record of public corporations that we have all known and loved, as the Department of Health.
The big difference, and the reason why we can have confidence that through foundation trusts we can seriously devolve to the field, is that we have established in the past few years national standards and an independent inspectorate. That gives us the
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confidence to be able to say that through foundation trusts we can indeed devolve much more than has ever been devolved previously.
I know that noble Lords are worried that we are taking in the first instance a limited number of trusts and that they will have a greater advantage over the rest of the health system. But in a sense—the noble Lord, Lord Clement-Jones, is always asking for pilots—it is surely better that we should use trusts which, being three-star, have proved themselves successful.
The great expectation is that, as further trusts achieve three-star status, they too will become foundation trusts. In time, I hope that there will be many foundation trusts completely under local ownership which will be accountable to the local population and to their members. The hope is that they will be able to innovate and breathe, and be able to deal with the issues referred to by my noble friend Lord Turnberg and the noble Baroness, Lady Finlay, in terms of good relationships between doctors and nurses and other members of staff.
I have no doubt that there is great potential in establishing foundation trusts—in changing the relationship between the Department of Health and the NHS at local level. But it is through our establishment of national standards and through the independent inspectorate, which has received a warm welcome in this debate, that we are able to have confidence in those arrangements.
So far as concerns the new inspectorate, of course we want it so be independent. I should have thought that the appointment of Sir Ian Kennedy as chairman of the shadow commission is a visible sign of our desire to see it robustly independent.
If we are to have a first-class health service, we clearly need to have more effective integration of health and social care. That brings me to the delayed discharge Bill. Delayed discharge from hospital is a serious problem. It can have knock-on effects throughout the whole of the health and social care system. That is why we are bringing the Bill forward. I say to the noble Baroness, Lady Greengross, that I believe it will be sooner rather than the many months that perhaps she was hoping for. I hope that we shall come to it very shortly.
I do not believe that the interests of older people are served by the current blurring of responsibilities. The point of the Bill will be to make clear where responsibilities lie and to provide the financial incentives which local authorities have not previously had in order to make discharge arrangements effective.
Of course, we do not want perverse incentives. In fact, the incentives will be there to encourage health and local government to work together. If the NHS does not perform effectively, it will be penalised through the funding system. There are issues around how this is to be organised. But I say to my noble friend Lady Pitkeathley, and to the noble 13aronesses, Lady Barker and Lady Greengross, that we want this to work with the grain of good partnerships between health and local government. We want to work with

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the grain of care trusts in terms of pooled arrangements. But it is very important to ensure that we do not continue with the blurring of responsibility that leads to a failure to act effectively and to the real problem of older people being stuck in our NHS hospitals when they ought to be receiving care in the community.
On the mental health legislation, I make it clear that we shall press ahead with the reform of mental health laws. This is presently subject to a consultation process. When we finish considering those consultations, we will bring forward a Bill during this Session.
In conclusion, the debate has been extremely successful. The issues that we discussed hang together. It has been a very welcome, high-quality debate. I agree with the noble Lord, Lord Higgins. I share his
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enthusiasm for pre-legislative scrutiny. I do not feel that I can respond to his criticism of some of the Bills. All I say to him is that he has had a flavour of the kind of debate that we often have on health Bills, and I look forward to enormously helpful scrutiny of the Bills that I will bring forward later in this Session. Undoubtedly, they will be carefully scrutinised, and rightly so, but I will also commend them to the House. They deserve our wholehearted support.
Lord Grocott: My Lords, on behalf of my noble friend Lady Blackstone, I beg to move that the debate on the Address be now adjourned until tomorrow.
Moved, That the debate be now adjourned until tomorrow.—(Lord Grocott.)
On Question, Motion agreed to, and debate adjourned accordingly until tomorrow.
House adjourned at seventeen minutes past nine o'clock.