Lords Sitting of 14 January 2003

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.

Cyprus: UK Sovereign Bases
Lord Wallace of Saltaire Lord Wallace of Saltaire asked Her Majesty's Government:
Whether the United Kingdom sovereign bases in Cyprus will become part of the European Union on the accession of Cyprus.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, it has been agreed that following Cyprus's accession the sovereign based areas will remain outside the EU, with technical adjustments to ensure the continued smooth functioning of the relationship between Cyprus and the SBAs to ensure that Cypriots who live and work in the SBAs benefit from Cyprus's EU membership.
My noble friend Lady Amos updated the House in a Written Answer on 12th December 2002 on progress in implementing this policy. We expect the detail of the arrangements to take the form of a protocol which will be part of the terms of Cyprus's accession. The accession treaty is due to be signed on 16th April in a Bill introduced to enable its ratification by the United Kingdom.
Lord Wallace of Saltaire: My Lords, I thank the Minister for that comprehensive answer. Is she confident that this rather anomalous arrangement will not risk another Gibraltarian situation in which having elements under British sovereignty on the edge but partly within a member state gets us into all sorts of complications with the other member states?
I note that in the written statement there was reference to co-operation on asylum seekers. What will happen when asylum seekers perhaps succeed in landing in the sovereign based areas and then move across what I understand is an open frontier with Cyprus? Is there any plan to fortify or at least fence properly the frontier between the SBAs and Cyprus itself?
Baroness Symons of Vernham Dean: My Lords, the UK will, as now, exercise controls at the external borders of the SBAs. There will continue to be no controls on the land boundary with the Republic of Cyprus. The situation between Gibraltar and Cyprus is not analogous. The sovereign based areas are completely different from those in Gibraltar. Through our undertaking of the 1960 Treaty of Establishment, the UK is committed not to allow economic development within the SBA.
Lord Corbett of Castle Vale: My Lords, given that the majority of Turkish Cypriots have demonstrated
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that they want to join the European Union and want a settlement to the problems on the island, will the Minister explain what further help the United Kingdom Government can give to both communities to reach a settlement based on the Annan proposals?
Baroness Symons of Vernham Dean: My Lords, my noble friend is right. I understand that there is a demonstration today in Nicosia in favour of the UN plan. Up to 50,000 people have attended, which was larger than the Boxing Day demonstration. The United Kingdom will continue to do all that it can consistent with the UN proposals. Your Lordships will be aware that the noble Lord, Lord Hannay, has—as a former member of the diplomatic service of this country—been of great value in those discussions. Of course, we shall continue to give them all the support that we can.
Lord Howell of Guildford: My Lords, does the Minister agree that the sovereign based areas are even more crucial to global security today than when they were first set up in 1960? Does she accept that we, on this side, strongly welcome the negotiation which has secured a proper status for them? I do not expect her to comment on this, but would mention that their value as a listening post for intelligence right through the wedge up into the Middle East is very great indeed and must be protected. We would expect the full support of all member states of the EU for what has been agreed. Will the Minister tell us, if the UN plan goes forward—as obviously we hope—and Cyprus enters the EU as a united country, whether that would further affect the arrangements that have been worked out?
Baroness Symons of Vernham Dean: No, my Lords. I do not believe that that will affect the arrangements that have been worked out. Those arrangements are enshrined in the protocol to which I referred in my original answer. I welcome the noble Lord's support for the stance that Her Majesty's Government have taken on this. The sovereign based areas are currently outside the EU; it is our firm belief that they should remain so.
Lord Wallace of Saltaire: My Lords, perhaps I may press the Minister on the question of asylum seekers. The sovereign based areas have a substantial coastline which is part of the European Union's external border; it is difficult to defend, particularly at night. If asylum seekers succeed in landing within the sovereign based areas do they become Britain's responsibility? Do we accept them therefore into the United Kingdom or do we pass them on to the Republic of Cyprus?
Baroness Symons of Vernham Dean: My Lords, anyone who requires a visa to enter the Republic of Cyprus will also be required to hold a valid Republic of Cyprus visa in order to enter the SBAs through any external border. The question concerning whether any such individuals would be the responsibility of the United Kingdom or the Republic of Cyprus is a matter on which I shall have to write to the noble Lord.

Iraq
2.41p.m.
Lord Blaker Lord Blaker asked Her Majesty's Government:
What is their current policy towards Iraq.
Baroness Symons of Vernham Dean: My Lords, I set out our policy objectives in a Written Answer on 7th January. Iraq must comply with its obligations under relevant United Nations Security Council resolutions. UNSCR 1441 has served notice on the Iraqi regime that it must now give up its weapons of mass destruction or face serious consequences.
Lord Blaker: My Lords, in addition to the risk of serious damage to the United Nations which could result from military action against Iraq—unless the issue is handled with great skill and care in the United Nations—is there not another perhaps even more serious risk regarding military action? Unless the Government of the United States put a more urgent and stronger effort into resolving the appalling conflict between Israel and the Palestinians— with a result that is fair to the Palestinians—will not the Arab world be confirmed in its suspicion that the United States is in the pocket of Israel? Will not the likely result be that there will be even more instability and terrorism in the Middle East?
Baroness Symons of Vernham Dean: My Lords, I agree with the noble Lord, Lord Blaker, that it is important that the authority of the United Nations is upheld. That is one of the reasons why the United Kingdom has been so concerned that, in so far as is humanly possible, the issue is dealt with under the auspices of the United Nations.
The problems that prevail in Israel and the Palestinian Authority are of enormous concern, but they are free-standing problems. The issues around weapons of mass destruction in Iraq might be solved and there still might be an outstanding and terrible problem in Israel and the Palestinian Authority. However, I acknowledge the noble Lord's point that they are linked in many minds. That is one of the many reasons why my right honourable friend has held discussions today to look at ways in which the Palestinian Authority might be reformed.
Lord Judd: My Lords, does my noble friend accept that within the context of the Government's policy, as she has described it, there is room for anxiety about how well equipped the United Nations inspectors are to complete their task? Will she explain to the House why there has been a delay in sharing intelligence with the inspectors? Obviously, if they are to do their job, they need all the available intelligence.
Can my noble friend assure us that all the available intelligence is now at the disposal of the inspectors and that we are determined that they should be able to complete their task with full intelligence and report back to the United Nations?
Baroness Symons of Vernham Dean: My Lords, I am not going to give the absolute categoric assurance that
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my noble friend has asked of me. I cannot assure him that all available intelligence is communicated to the inspectors. I can assure him that all intelligence that is consistent with the security of this country is conveyed to the inspectors. I do not know whether my noble friend heard the interview with Dr Blix on the radio this morning, but I heard it and thought that he was positive about the co-operation he was receiving from American and British sources.
Baroness Williams of Crosby: My Lords, does the Minister agree with the Prime Minister who said yesterday at his press conference that there had been only one week in which the full complement of inspectors had been available? The Secretary of State, Mr Colin Powell, speaking for the United States, indicated that their intelligence had been made available only last week.
In view of that, will the Government consider sympathetically any requests from the inspectors for a greater amount of time to work on the inspection of what evidence there may be? Furthermore, in view of the fact that the United Kingdom and France are permanent members of the Security Council, will the Government consider permitting a debate immediately after the report of the inspectors to enable the opinions of this House and another place to be considered in the work which our United Nations representatives will do on a second resolution, should their be one, so that they may take into account the views of Parliament?
Baroness Symons of Vernham Dean: My Lords, on the issue of a further debate, I am personally sympathetic to what the noble Baroness says. This is an important issue, as the whole House knows, but that matter will be decided in the normal way through the usual channels. As to whether or not I agree with my right honourable friend the Prime Minister, yes, of course I agree with my right honourable friend. There has been only one week in which the full complement of inspectors has been available. In the time available, they have undertaken some 200 inspections—not in the past week, but in the whole time available.
We expect there to be a report on 27th January. That is specified in UNSCR 1441. However, UNSCR 1441 is not time limited, so greater time is not an issue, and there is no deadline on reports. A progress report must be made by that date, but further reports can of course be made.
Lord Craig of Radley: My Lords, does the Minister recall that in the Iraq dossier the Prime Minister wrote:
"What I believe the assessed intelligence has established beyond doubt is that Saddam has continued to produce chemical and biological weapons, that he continues in his efforts to develop nuclear weapons, and that he has been able to extend the range of his ballistic missile programme"?
Has the Minister or the Government learnt anything from the United Nations inspectors in Iraq that corroborates the Prime Minister's belief?
Baroness Symons of Vernham Dean: My Lords, the facts drawn together in the Iraq dossier to which the

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noble and gallant Lord refers indicated a formidable set of circumstances. There was not one single fact which would automatically lead one to say that, as night follows day, there were weapons of mass destruction, but, none the less, the accumulation of facts was such that a powerful case was made.
From what Dr Blix said this morning on the radio, he believes that there has been evidence that Iraq has been importing weapons-related material in violation of the prohibitions placed on it by the Security Council. However, he went on to say:
"Whether the discovery of these items is related to weapons of mass destruction is a matter that still needs to be determined".
I hope that we will have further information on that on 27th January.
The Lord Bishop of Derby: My Lords, is the Minister able to share the Government's response to the report presented to the United Nations Security Council last month, setting out the likely outcomes of military action for the Iraqi infrastructure? The report indicates the serious degradation of electricity supplies, with a knock-on effect on good water, food, health and sanitation. The report goes on to warn that a refugee migration is inevitable. Given the recent mobilisation of British forces to the Gulf, is the Minister able to give details of any contingency humanitarian plans the Government have in hand or in prospect?
Baroness Symons of Vernham Dean: My Lords, I can assure the right reverend Prelate that we are enormously aware of the problems that would arise from military action, not only through the serious degradation of infrastructure, to which the right reverend prelate refers, but through the appalling loss of life that would occur in an overwhelmingly young population, a matter to which the right reverend Prelate the Bishop of Durham referred last week. All these issues are important. Of course Her Majesty's Government must give thought to the serious consequences of taking military action, but we very much hope that there is still time to persuade Saddam Hussein that that will not be necessary if he complies with UNSCR 1441.
Lord Howell of Guildford: My Lords, can the House assume that American and British intelligence, with proper safeguards and through their governments, will now supply Mr Blix, as he requests, with the details of where the weapons of mass destruction are hidden in this enormous country? Will that request be granted? Does the Minister accept that we on this side of the House welcome the emphasis that the Prime Minister rightly put yesterday on both British interests in an early attack on Iraq and the linkages between rogue states and global terrorism generally? Does she agree that if ultimately we have to proceed under the authority of UNSCR 1441 without a further resolution, much more emphasis needs to placed on those elements and the case for an attack in order to reassure a confused and sceptical British public?
Baroness Symons of Vernham Dean: My Lords, I agree that the British public are sceptical but, in the
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interests of clarity, we must be careful about the direct links we make between terrorism and Iraq. Of course there are issues concerning rogue states and, as we have discussed before in your Lordships' House, there are issues about certain terrorist organisations which find safety and succour within Iraq. The noble Lord asked a specific question about intelligence. Consistent with our own security—by that I mean the security of our sources of intelligence as well as the security of our Armed Forces should there be a necessity for military conflict in the region—we try to make what we can available from our intelligence resources. I cannot give an absolute guarantee that all our intelligence goes to the inspectors. The noble Lord would not expect that—I hope he would not expect that. I hope that he will read very carefully what I said to my noble friend Lord Judd a moment ago.
Lord Richard: My Lords, the Government appear to be advancing the proposition that, even if the Security Council does not wish action to be taken, the United States and this country will certainly consider, and probably take, action in order to enforce a resolution in circumstances in which the Security Council does not wish that resolution to be enforced. If that is the situation, perhaps we should be told. I should be grateful for my noble friend's comments.
Baroness Symons of Vernham Dean: My Lords, I have not said that. I hope that my noble friend will read what I said. What I have said before in your Lordships' House—and what my right honourable friends the Prime Minister and the Foreign Secretary have said—is that, if possible, we would like to secure another Security Council resolution before any military action is taken. But my right honourable friend the Prime Minister, in answering questions from the press yesterday, made it clear that it might not be possible to obtain such a Security Council resolution. In those circumstances, we would have to consider our position very carefully. I stress to my noble friend that it is our wish and our intention to pursue another Security Council resolution. That is the Government's position.
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, I am afraid that we are well overdue now. We have had rather more than 10 minutes on this Question.

Equity Release Schemes
2.53p.m.
Baroness Greengross Baroness Greengross asked Her Majesty's Government:
What plans they have to regulate and promote the development of equity release schemes.
Lord McIntosh of Haringey: My Lords, the Government are giving the Financial Services Authority responsibility for regulating mortgage business, including mortgage-based equity release

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arrangements. In August last year, the FSA published its consultation paper CP 146 setting out its approach to regulating mortgage sales, including lifetime mortgages, which is the FSA's term for regulated equity release mortgages. It is expected that regulation of lifetime and other mortgages will come into force in October 2004.
As for home reversions, we announced in the Green Paper on pensions that we would be looking at options to create a level playing field for the regulation of equity release and home reversion plans. If we decide to regulate home reversions, the likely timescale would be a consultation later this year and we would then decide, on the basis of legal advice, whether secondary or primary legislation was necessary.
Baroness Greengross: My Lords, I thank the Minister for that reply and for the announcement about regulation. It is important that at last we can lay to rest the home income plans scandals of the 1980s. Can the Minister confirm that regulation across the equity release product range will be clear and consistent? That will be very important for consumer confidence and for the industry itself. Does the Minister agree that the vast potential for most older people in releasing housing equity to increase their retirement income is not being met and that only a very narrow band of people benefit? What more can the Government do to promote equity release—for instance, through tax credits or by looking again at eligibility for means-tested benefits?
Lord McIntosh of Haringey: My Lords, I hope that the noble Baroness, Lady Greengross, has read the consultation paper issued by the FSA. It promises a clear regulatory system in accordance with the Sandler report, which is in favour of simplified products and simplified sales processes. While recommending that report to her, perhaps I may commend the Age Concern document, published in July last year, on raising capital or income from your home. I found it excellent and very easy to understand.
Lord Saatchi: My Lords, is it not right that in the good old days, when people called a spade a spade, home equity release plans were known by their true name—that is, second mortgages—and seen as a rather dangerous way of raising money? Since then, have not the Government taught people the lesson that if you change the name of a product you can make it appear much less harmful? That is why the Government like to call means testing "targeting", spending "investment" and benefits "credits". Is it not as a result of those practices that the second mortgage, now sanitised with its new name, is responsible for pushing up the level of household debt in this country as a percentage of household income to a higher level than ever before in recorded history?
Lord McIntosh of Haringey: My Lords, what the noble Lord, Lord Saatchi, calls "the good old days" were the good old days of home income plans which,
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in the absence of adequate financial regulation brought in by his government, caused great scandals. If the noble Lord had listened to Angela Browning in the House of Commons today in an Adjournment debate on the subject, he would know how strongly she and other Conservative MPs feel about how badly the matter was resolved when his party was in power. As to changes of names, he should recognise that there is a difference between increasing an existing mortgage and some of the equity plans which apply whether or not there is a mortgage.
Lord Oakeshott of Seagrove Bay: My Lords, does the Minister accept that in principle there is no difference between home reversion plans—where, as he said, the Government are looking at options for creating a level playing field—and equity release and annuity schemes, which will definitely be regulated by the FSA from 2004? Given that under home reversion plans old people sell their homes outright, can we be assured that they will be treated in exactly the same way? Do the Government accept that, given the problems that pension funds now have, many old people will have to rely on their home for income in old age? Do the Government further accept that if that is not properly regulated, we risk another major misselling crisis, possibly on the scale of the pension misselling crisis of a few years ago?
Lord McIntosh of Haringey: My Lords, I thought I had made it clear in my original Answer that I entirely agree with the noble Lord, Lord Oakeshott. It is an historical fact that because home reversion plans are sale and purchase arrangements rather than financial services, they are not included in the scope of the Financial Services and Markets Act, but that does not mean that there should be any less protection for people who opt for home reversion plans. That is why I made it clear that we are looking at options to create a level playing field. We have to look at whether there is consumer detriment and at what should be the appropriate level of regulation. I am not saying that it will be exactly the same as for home equity plans, but the principle behind what the noble Lord, Lord Oakeshott, said is entirely true.

Genetically Modified Organisms
3 p.m.
Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer asked Her Majesty's Government:
What arrangements they have put in place to involve the public in their proposed public debate on genetically modified organisms; and how they propose to evaluate the public's opinion at the conclusion of the debate.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, the public debate on GM issues is being managed by an independent steering board, which is drawing up proposals on the best way

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to involve the public. It has begun with a series of discussion workshops to identify the questions and concerns that the public have on GM. The steering board will submit a final report on the debate to the Government by the end of June. The Government will then consider the report very carefully.
Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for that reply. However, will he accept that it is far from satisfactory that we are half way through the timetable proposed by Mrs Beckett for public debate and the public have not been involved at all? Will the Minister re-consider his phrase "independent steering board"—when the group includes the head of communications at DEFRA, who is in my view far from independent? Lastly, given that this matter is of intense importance to public health and to the environment in Britain, do not the public have the right to a far greater input than is currently planned by the Government?
Lord Whitty: My Lords, the steering board has already set up a number of public workshops, and more are to be set up in the coming two or three months. There will, therefore, be a substantial opportunity for members of the public and organisations interested in this subject to give their views. As to the independence of the board, the chair was designated and was asked to run matters by the Government, but he had complete independence in terms of choosing the other members of the board. The communications director is there in order to ensure adequate communications. That does not indicate that the board is a government-controlled body.
As to additional activity, the Government are currently considering requests for additional resources. I think that we shall look favourably on that, but we have yet to make a final decision as to whether this exercise needs more resources. What the board al ready has in the pipeline is adequate public consultation.
Lord Carter: My Lords, when the Government come to consider this subject, will they take account of the experience in America? Is my noble friend aware that a substantial proportion of food crops in America are genetically modified—a high proportion of the soya bean crop, for example, which is used in food? Is there any record of ill effects on human health, or have any agronomic or environmental problems arisen in America from the use of GM crops over a number of years?
Lord Whitty: My Lords, public consultation is only part of the exercise in which the Government are engaged. We are examining the whole range of GM matters, not simply crops. Scientific and economic assessments are taking place. In that context, we shall look at the experience in other countries. The experience in the United States is that a high proportion of both soya and maize is genetically modified. GM proposals that have been licensed in the United States have clearly passed safety tests; there is,
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therefore, no safety implication. On the issue of environmental damage, the jury is to some extent still out. That is the area being addressed by the current farm-scale trials in the UK, rather than the issue of human health. It is not yet clear what the balance will be in terms of the environmental impact.
Lord Hylton: My Lords, does the Minister agree that the scale of the English countryside is so small, and its biodiversity is so great, that it requires far greater care than is needed, say, in the American prairies?
Lord Whitty: My Lords, clearly, agricultural methods, topography and size of operation are different. The same considerations are necessary in relation to public health and environmental damage. There are two issues: first, whether there is direct environmental damage; and, secondly, how far—if in general the European public want to have a choice between GM and non-GM—the growth of GM crops within Europe might contaminate non-GM crops. That is one of the issues that we are addressing.
Lord Swinfen: My Lords, what steps are the Government taking to ensure that bodies with different points of view on GM organisms are properly funded, so that their views can be put forward? Or do the Government intend to fund only their own point of view?
Lord Whitty: My Lords, the Government are funding the operation of the steering board to allow every point of view to come into play. We are funding neither pro-GM nor anti-GM groups, commercial or voluntary; we are allowing the debate to take place.
Baroness Hayman: My Lords, following the point made by my noble friend Lord Carter, will the Minister confirm that in regard to GMOs not only have there been no reports of adverse health implications, but there is considerable evidence of the beneficial effect of GMOs in the production of medicines, and in particular of vaccines?
Lord Whitty: Yes, my Lords. In the medical field there have been substantial developments which depend on GM technology, some of which have been put to use.
Lord Phillips of Sudbury: My Lords, perhaps I may return to the spirit of my noble friend's Question, which relates to public engagement. Is it not necessary for the Government to be a great deal more imaginative and to attempt to draw into this debate a much wider slice of the public? It is no good confining the debate to those who are already in the know. Surely we need to spend some money on producing the kind of materials that will reach out to a much greater part of the population if we are not to run into the usual argument that Parliament carries on its affairs over the heads of the public.
Lord Whitty: My Lords, that is exactly what this exercise is designed to do. We have produced materials

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to present the arguments and the facts in an understandable and attractive way. The workshops and the various proposals for further activities proposed by the steering board are not based on the parti pris companies and lobby groups on either side of the argument; they are based on a more random selection of members of the public.
Lord Geddes: My Lords, just what is a public workshop? How many are there, or will there be, in this context; and how often will they meet?
Lord Whitty: My Lords, there are currently nine public workshops and the steering board is about to begin a full roll-out of the programme. Roughly speaking, there might be 100 people at each workshop. But there are other activities besides the workshops and it is open to any individual or organisation to submit their views to the steering board and have them reflected in this process.
Earl Howe: My Lords, does the Minister agree that crop trials are an important ingredient in this context? Why is this debate due to take place before the results of the crop trials become available?
Lord Whitty: My Lords, the debate that we are stimulating relates to the issue of GM in all its contexts. The issue of the farm-scale trials is a relatively narrow aspect; namely, whether, on what basis, and under what regulation one might allow the commercialisation of particular crops. That is a specific question which requires a commercial-scale trial evaluation, the results of which will begin to come through in the next three months, with completion due to take place next year.
Lord Winston: My Lords, does my noble friend agree that there has been a general failure on the part of the public to recognise that, in the past 20 years, genetic modification in the case of animals has led to one of the most important advances in our understanding of a whole range of medical issues such as cancer? Does he further agree that genetic modification holds huge prospects for parts of the world where people are starving, or are short of water? The modification of crops could lead to alleviation of the effects of drought and to an improvement in much-needed food sources in the under-developed world?
Lord Whitty: My Lords, I accept that there are substantial potential advantages from certain forms of genetic modification. As I said, some have been demonstrated in the medical field. I accept, however, that there are significant public anxieties about how, and how far, we allow the commercial development of genetic modification in the provision of foodstuffs and its impact on the environment as a whole. Therefore, there is a valid and profound discussion to be had. The whole point of this public debate is to ensure that all points of view are considered and, we hope, to create a greater consensus. One of the difficulties is that
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supporters of GM are gung-ho about its benefits, while opponents are equally doom-laden about its likely effects. We need to attempt to find an area where the point of view of each side can be taken into account and be recognised, and where there is a rational basis for going forward.

Schools: Literacy and Numeracy Strategies
3.10 p.m.
Baroness Blatch Baroness Blatch asked Her Majesty's Government:
What changes are being made to the literacy and numeracy strategies in schools.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, there are no substantive changes to the core literacy and numeracy strategy. We will continue to develop and to raise standards. We will intensify support to schools, examine further the success of phonics teaching in the light of good practice, and introduce a major new leadership programme for primary head teachers. Our literacy and numeracy strategies will be at the centre of our over-arching strategy for improving teaching and learning within a broad and enriched curriculum.
Baroness Blatch: My Lords, I am grateful to the noble Baroness, but her colleague Mr Stephen Twigg in another place did, in fact, announce changes to the literacy and numeracy strategy. Why are the Government so prescriptive? Why can they not leave the best schools and the best teachers to teach literacy and numeracy in the way they know best and at the time they believe appropriate, and instead concentrate their efforts on failing schools and teachers?
Baroness Ashton of Upholland: My Lords, my honourable friend Mr Stephen Twigg announced that we would appoint a national primary strategy director and bring together the field forces. The Question that I answered was about the substantive changes in schools. There will not be substantive changes. We believe that the numeracy and literacy strategies have been successful.
As for prescription, the results speak for themselves. The literacy and numeracy strategies were based on good work undertaken by teachers and developed to enable other schools to benefit from that good practice. The results have been good. We will continue to build on that work and enable schools to develop the strategies in the way that best suits them and their pupils.
Lord Tanlaw: My Lords, do the Government's strategies in this area include the use of broadband communication? In the rural and upland areas of Scotland and northern England, access to broadband looks as if it is a long way off. That must include schools. Will any financial help be given to small

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communities not big enough to influence BT and other companies to produce broadband? How will schools in those areas produce the strategies referred to by the Minister without access to broadband?
Baroness Ashton of Upholland: My Lords, broadband is an important part of the ICT strategy in the department. It will be important as we develop Curriculum Online to ensure that schools can access broadband. That is part of a strategy towards which we shall move.
Baroness Sharp of Guildford: My Lords, will the Minister confirm that Ofsted, in recent reports, said that numeracy and literacy strategies work best and achievements are highest when teachers combine them within the general curriculum? Why, therefore, do the Government continue to pursue the strategies as independent programmes rather than encourage teachers to broaden out and do what they want and so bring the strategies within the curriculum?
Baroness Ashton of Upholland: My Lords, I hope that I partly addressed that question in my Answer. We believe that there is one primary school curriculum: it is an enriched curriculum. It is very important, as the noble Baroness said, that we build on the success in the primary schools that have strengthened and developed the literacy and numeracy strategies right across the curriculum. It is our wish to build on the best and to ensure that all schools are involved.
Lord Rotherwick: My Lords, the Minister talked about leadership programmes for primary head teachers. What do those programmes consist of? What would be the cost of funding them?
Baroness Ashton of Upholland: My Lords, my honourable friend Mr Twigg is holding conferences with primary head teachers. The ambition within the Government is to ensure that primary head teachers have the opportunity to develop leadership skills. I do not have the figures before me. I will write to the noble Lord. I can tell him that this year we have made available £42 million to support head teachers in providing booster classes for children. We have made available a further £11 million to enable local education authorities to develop the kind of workshops that will support classroom assistants and enable schools to have booster classes and teaching within the Easter period if they so wish.
Baroness Howe of Idlicote: My Lords, does the Minister agree with me that, in today's world, literacy includes foreign language literacy? Given that, and the considerable shortage of teachers in this area, does she agree that the BBC's approach to producing help with online curriculum studies is a plus rather than, as some people think, a minus?
Baroness Ashton of Upholland: My Lords, the Department for Education and Skills has been
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involved with the BBC in determining the proposals that have come forward. We have been supportive of the work that my right honourable friend Tessa Jowell has done with the BBC in Curriculum Online. Having said that, we recognise that many companies and organisations make an enormous contribution and will continue to do so as we progress. We believe that, with Curriculum Online, we will be able to provide opportunities for teachers to have greater teaching materials and for students to access the kind of high-quality and, dare I say, exciting teaching materials that will enhance their skills in English, other languages and other subjects.
Baroness Blatch: My Lords, the Minister said that there would be more exploration of phonics teaching. Until a greater proportion of teacher training deals with phonics teaching, that progress cannot be made. Are there any plans to beef up the proportion of phonics teaching for teachers in teacher training?
Baroness Ashton of Upholland: My Lords, in the next few weeks, the department will be looking at bringing together experts on phonics to help to examine how best we might develop a more supportive framework for those in teacher training and teachers themselves. I can tell the noble Baroness that, in the next financial year, we are supporting year 3 teachers, in particular, in attending training on phonics. We think that year 3 is the right point to focus on at this time. I shall come to the House and talk further about our phonics strategy as it develops. The noble Baroness's point is well made.

Equality Bill [H.L.]
3.16 p.m.
Lord Lester of Herne Hill: My Lords, I beg to introduce a Bill to make provision making it unlawful to discriminate on the grounds of age, gender reassignment, religion or belief or sexual orientation; to make new provision with respect to discrimination on the grounds of disability, race or sex; to make provision making it unlawful to harass or victimise another person on any of those grounds; to make provision facilitating progress towards the achievement of equality as between persons of certain descriptions; to establish and provide for the functions of the Equality Commission for Great Britain; 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 Lester of Herne Hill.)
On Question, Bill read a first time, and to be printed.

House Committee
The Chairman of Committees (Lord Brabazon of Tara)The Chairman of Committees (Lord Brabazon of Tara) rose to move, That the First Report from the Select Committee (HL Paper 19) be agreed to. The noble Lord said: My Lords, the effect of the

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committee's recommendation would be to approve the publication, from autumn 2004, of information relating to Members' expenses in accordance with the requirements of the Freedom of Information Act 2000. The information, which would be published annually thereafter, would set out the aggregate expenses claimed by each Member during the year. Those figures would be calculated by the Accountant's Office on the basis of claims submitted by the Members. Similar information is already published by the Scottish Parliament and the Northern Ireland Assembly. I understand that similar conclusions have been reached in the House of Commons with regard to the publication of expenses claimed by Members of that House.
Legal advice considered by the House Committee suggests that the two Houses could not easily justify doing less than that in fulfilling their obligations under the Act. I should draw your Lordships' attention to one point in the report. Publication in autumn 2004 would include claims made in the three previous financial years—2001–02, 2002–03 and 2003–04. The Act, which comes into effect on 1st January 2005, is fully retrospective, and, as the report states, data are retained by the Accountant's Office for three years with the agreement of the National Audit Office.
I do not think that I need to go into further detail at this point, although I shall do my best to answer any questions put to me. I believe that the method proposed by the committee will enable the House to present information on expenses to the public in a balanced, fair and comprehensive form. The alternative of requiring the House authorities to respond on a case-by-case basis to requests from the media or the public once the Act comes into force in January 2005 would be time-consuming and expensive.
Finally, I believe that this method of publication strikes the right balance between the rights of individual Members and the public interest, and that it will fully satisfy the requirements of the Freedom of Information Act. I beg to move.
Moved, That the First Report from the Select Committee (HL Paper 19) be agreed to.—(The Chairman of Committees.)
Following is the report referred to:

DISCLOSURE OF INFORMATION RELATING TO MEMBERS' CLAIMS FOR EXPENSES
1. Earlier this year the Finance and Staff Sub-Committee twice considered the question whether information relating to claims for expenses submitted by Members would need to be disclosed when the rights of access to information held by public authorities under the Freedom of Information Act 2000 come into force on 1 January 2005; and whether the House should publish such information in advance of that date. The Committee has given further consideration to this question and now makes this report to the House.
Background
2. The Freedom of Information Act gives a general right of access to all types of recorded information held by public authorities and sets out exemptions from that right. The Act applies to both Houses of Parliament and specifically identifies them as public authorities.
3. As required by section 19 of the Act, the House has agreed a Publication Scheme setting out the classes of information which it publishes or intends to publish. The Scheme, which must be periodically reviewed under the Act, was itself published in November.
4. The Finance and Staff Sub-Committee took the view that disclosure of information relating to expenses was likely to be required from January 2005 and favoured publication of such information before that date. However, it did not. recommend that Members' expenses should be included in the initial Publication Scheme pending legal advice on the matter which had been sought by both Houses of Parliament.
5. Allowances claimed by Members of the Scottish Parliament are published in the annual report of the Parliament's Corporate Body in aggregate form, broken down by Member and by each allowance, in accordance with section 83 of the Scotland Act 1998. A Standing Order of the Northern Ireland Assembly provides for similar publication by that Assembly.
Legal Advice
6. Legal advice suggested that the House should publish, in aggregate form, the expenses claimed by each Member, broken down by the main categories of expenses, and that it could not easily justify doing less. It would still be open to individual Members to give notice under section 10 of the Data Protection Act 1998 if they consider that the disclosure of the expenses claimed by them would, or would be likely to, cause them substantial damage or distress that would be unwarranted. Any such notice would be dealt with in accordance with the provisions of that section.
Recommendations
7. The Committee makes the following recommendations:

(a) The House of Lords' Publication Scheme should be amended to include information relating to Members' expenses. This information should be published annually (related to financial years), broken down by the main categories of expenses available, namely: travelling expenses, day subsistence, night subsistence, secretarial etc. costs and the costs of the post-paid envelope scheme for correspondence on parliamentary business. Since travel costs vary widely, an indication should be given of the location of each Member's main residence.

(b) Details of expenditure on select committee and parliamentary delegation travel should be published separately.

(c) Details held by the House of claims for Financial Assistance to the Opposition parties and the Convenor of the Crossbench Peers ("Cranborne money") should also be published.

(d) This information should be made available before the rights of access under the Freedom of Information Act come into force on 1 January 2005. It should be published in Autumn 2004, once all claims by Lords for the financial year 2003–04 have been submitted and paid. The House should also publish information in respect of the financial years 2001–02, 2002–03 and 2003–04 because the Act is fully retrospective and records of expenses are retained in the Accountant's Office for a period of three years, as agreed by the National Audit Office.

The Committee understands that these recommendations are broadly in line with policy developed in the House of Commons.
8. Before Autumn 2004 the Committee will give further consideration to this matter. It will ensure that all Members are notified in person of the decision of the House and that they are given the opportunity to see in advance the data relating to their own claims. The Committee will also consider in detail the categories of expenses to be disclosed and the form in which the information should be published. The Committee will report further to the House as appropriate.
9. The Committee recognises the sensitivity of these recommendations. We strongly believe that, since public funds are involved, accountability and transparency are necessary in this area. Our recommendations strike the correct balance between the rights of individual Members of the House and the public interest, and they are necessary to ensure compliance with the Freedom of Information Act.
Lord Tordoff: My Lords, I have a slight feeling that I handed a hospital pass to my noble successor in the first meeting of the House Committee, but clearly the committee has done well and made some progress, on which I congratulate it. It is quite clear—as it was to the old Offices Committee, that terrible machine which we managed to get rid of—that it is necessary for us to be open about the question of expenses because we are spending taxpayers' money.
I have just one question for the noble Lord which has crept in since he took over from me. Paragraph 7(b) of the report, on page 2, states:
"Details of expenditure on select committee and parliamentary delegation travel should be published separately".
Is that to be done against individual Members? If so, I think that it should be made clear that they are operating on behalf of the House and not on their own behalf.
Lord Geddes: My Lords, I am not sure whether it is in order to raise another point at this stage, but I should like to ask the Chairman of Committees for clarification on Paragraph 8. The paragraph states:
"Before Autumn 2004 the Committee will give further consideration to this matter".
It goes on to say:
"The Committee will also consider in detail the categories of expenses to be disclosed and the form in which the information should be published".
Finally, it states:
"The Committee will report further to the House as appropriate".
Does the Chairman of Committees envisage that a further report will be made to the House before autumn 2004 and that the House will have a chance to discuss it?
Lord Skelmersdale: My Lords, as my noble friend Lord Geddes has started the ball rolling with questions to the Chairman of Committees, I have a question of my own. As I understand it, the recommendations before us are to publish details of Members' expenses by the headings—this is the important point—to which they relate: daily, overnight, secretarial and so on. As this is to be a published document, it is inconceivable that the press will not occasionally make use of it, no doubt annually in the autumn when, as the noble Lord said, it is published. That would not matter if all noble Lords were treated equally, so that a fair comparison of individuals could be made. However, I find it hard to believe that the press will not print expenses in a global fashion, rather than by heading of expense to which I have just referred, and so produce a batting order of Members' costs.
If that were done fairly, it is clearly in the public interest that daily, overnight and secretarial expenses are revealed and a fair batting order could be obtained.
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Surely, however, it will be skewed by the inclusion of travel expenses. A noble Lord residing in Northern Ireland or the north of Scotland, for example, will certainly claim more than a noble Lord living, for example, in Nottinghamshire or the Midlands. It is a truism that for any given number of days, the further away from Westminster one lives the more one will claim. We immediately see a built-in unfairness.
It is true that the Committee intends that an indication of where Members live will be given. I have no idea whether the press will use that information, but it raises another point. How detailed will the indication be? There could be security implications in this for many noble Lords. If the Chairman of Committees could answer those points, I for one would be considerably happier.
Lord Roper:My Lords, we on these Benches are broadly in favour of the proposals. However, I should like to reiterate one point that has been raised. In publishing this information, will there be reference to the number of days on which individual peers attended?
Earl Ferrers: My Lords, I wonder whether the Chairman of Committees could deal with one or two points. First, what exactly is the purpose of this? Who is going to make use of the divulged information other than the press who go round ferreting in order perhaps to make trouble? Secondly, will noble Lords at the top of the list as the greatest attenders and drawing the greatest expenses emerge as good people and good followers of the second Chamber in so far as they have attended regularly, or will they go down as baddies who have attended as otter as they can in order to collect their expenses?
The Chairman of Committees: If I may, my Lords, I shall answer the last question from the noble Earl. Lord Ferrers, first. We are obliged by the Freedom of Information Act to publish this information whether it be for the benefit of the press or the public. I do not intend, nor is it my role, to comment on the merits or otherwise of the Freedom of Information Act. If the noble Earl does not like the Freedom of Information Act, he should not have allowed it to be passed. As to whether those who attend most days are goodies or baddies, I must leave that to others to judge. It is certainly not a matter for me.
I turn to the more substantial points. The noble Lord, Lord Tordoff—to whom I am grateful, I think, for his work in starting this process—asked how the expenditure of Select Committee and parliamentary delegation travel would be eventually published. That has not yet been decided, but we have quite a long time further to refine the details.
I think that that also answers the noble Lord, Lord Geddes. As the report says,
"The Committee will report further to the House as appropriate",
on further matters of detail. The report also says that, before this information is published, noble Lords will be shown what will be published about them, If the noble Lord, Lord Geddes, looks at the last sentence in Paragraph 8, he will see it says that,
"The Committee will report further to the House as appropriate".

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In reply to the noble Lord, Lord Skelmersdale, travel will indeed be itemised separately, as all the headings are going to be. It is suggested that an indication should be given of the location of each Member's main residence. The suggestion was made because those living in the outer Hebrides, for example, might claim 10 times as much in travel expenses as those, for example, living in Surrey. We hope that the press will not leap on that difference and say that it is outrageous, but genuinely understand the reason for some travel expenses being that much more. It will not be compulsory to publish the location of one's main residence, and I appreciate that some noble Lords feel quite strongly about that. The location would, however, be given only by county, or perhaps by region, and certainly not in further detail than that.
The noble Lord, Lord Roper, asked whether the number of days that noble Lords attended would be included in the figures. As those figures are already published, there is absolutely no reason why they should not be included in the table produced.
Lord Geddes: My Lords, the noble Lord quite rightly referred me to the last, short sentence of Paragraph 8. I became confused by the words "as appropriate". It could be interpreted either as "the committee will report if it feels that it is appropriate", or as "the committee will, willy-nilly, report on whatever happens to be appropriate". Perhaps the noble Lord could enlighten us on that.
The Chairman of Committees: My Lords, I think that it is fairly obviously the second one—if there are matters on which it is appropriate to report, they will be reported. The scheme will not come into force for 18 months. We can use that time to refine the details.
Lord Berkeley: My Lords, the Chairman of Committees said that the different categories of expense, including travel, will be itemised. Will that include the means of travel, whether that be air, car, bicycle or bus?
The Chairman of Committees: No, my Lords.
On Question, Motion agreed to.

European Labour Markets
3.30 p.m.
Baroness Harris of Richmond Baroness Harris of Richmond rose to call attention to the flexibility of European labour markets in the light of the report of the European Union Select Committee Working in Europe: Access for all (Session 2001–02, 15th Report, HL 88); and to move for Papers.
The noble Baroness said: My Lords, I commend to the House the report by the Select Committee on the European Union on European labour markets. It is rather unfortunate that it has taken such a long time to bring the debate before your Lordships' House—11 months, to be exact. Nevertheless, it remains an
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important and relevant report. It is wide-ranging, and touches on the work of a number of Government departments, principally the Departments for Education and Skills and for Work and Pensions, but also the Departments of Trade and Industry and of Health, the Treasury and the Inland Revenue.
I am grateful to Professor Roger Vickerman, our specialist adviser, who drew on his considerable expertise to guide us through the many different aspects of policies that are affected by the desire to increase the flexibility of labour markets. I should also like to thank most sincerely Dr. Richard McLean, our Clerk, who has moved on to other areas of work in the EU committee structure, and Dr. Valsamis Mitsilegas, our legal adviser, who is thankfully still with us. They gave us invaluable assistance.
The wording of today's Motion has deliberately been chosen so as to allow a wide debate that covers the economic impact of flexible labour markets as well as the educational and social issues, on which the report primarily focuses.
As Members will be aware, the Treasury's second test for UK entry to the euro is,
"whether there is enough flexibility to cope with economic change"—
and a key component of the test is the flexibility of labour markets. The test asks whether, if problems emerge, the economy is sufficiently flexible to deal with them. In particular, the Treasury is assessing whether labour markets can respond flexibly to skill shortages and unemployment in either areas or sectors, and thereby sustain economic growth.
We were not attempting to mirror this wide test on the flexibility of the economy, or to pre-empt the important work of the Treasury. Rather, our inquiry focused specifically on the flexibility of European labour markets and was based on a Commission communication on New European Labour Markets, Open to All, with Access for All, which was submitted to the Stockholm European Council in March 2001.
The committee concluded that it is important to work towards removing inefficiencies within labour markets, thereby making them more flexible, so that they are able to respond quickly to these changing times, when we have so many changes in technologies and demand.
There are various ways in which labour markets can be flexible, such as being flexible about wages or working patterns. The committee therefore questioned what the best way was of achieving flexibility in labour markets. The inquiry focused in particular on two forms of flexibility: occupational or skill mobility, enabling workers to be flexible about what work they do; and geographical mobility, enabling workers to be flexible about where they work.
On the first of these, the Committee wholly supported the Commission's objective of improving skills and thereby attaining higher occupational mobility. Indeed, the committee called on the Government to come up with additional policies in order to achieve an increase in the skill level of workers. I will return to these shortly.
On geographical mobility, which was the second form of flexibility examined during the inquiry, the committee concluded that,
"a degree of geographical mobility is desirable for European labour markets to work efficiently and thus for the economy to be prosperous".
People who wish to move for work should not be prevented from doing so.
The principle that, as a single market, the European Union should comprise an area without internal frontiers, is long-established. One of the Community's key objectives is the abolition of obstacles to freedom of movement for workers and services between member states. Furthermore, free movement within the Union is a right of EU citizens, added by the Maastricht Treaty and reiterated recently in the European Charter of Fundamental Rights. While a number of steps have been taken to secure the free movement of workers, it is clear that barriers inhibiting their mobility still remain. The committee therefore considered that securing the right of freedom of movement through the removal of barriers is essential.
The committee analysed several different barriers to movement that still exist in Europe and made recommendations as to how these might be eliminated, and I shall return to these in a minute. However, the committee received no evidence of the number of people who currently want to move, but are frustrated from doing so. The committee therefore questioned the need for policies whose objective is to increase the aggregate level of geographical mobility in Europe. The aim should be to provide a framework within which those who wish to move can do so easily and not to increase geographical mobility for its own sake.
There is a complete lack of evidence on the factors influencing people not to move. The extent to which geographical mobility is artificially restricted by barriers is not known. It is not clear whether the low levels of mobility observed are an expression of individuals' general reluctance to move or of their inability to do so because of barriers. The committee was extremely concerned that policy is being drafted despite the absence of significant statistical information in this area. We strongly believe that the Commission and member states should invest in research in order to be able to judge effectively to what extent geographical mobility is an important factor in the development of flexible European labour markets.
The Government response frequently acknowledges the limited amount of research on migration patterns within the EU and on the reasons why individuals decide not to move. In a letter to the noble Lord, Lord Brabazon, the then Chairman of the Select Committee, on 16th May 2002, Margaret Hodge said that the Government had noted the committee's concerns in this area and were,
"considering raising the issue about research with the Commission",
as the Government felt that the Commission was best placed to undertake an EU-wide survey.
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I therefore ask the Minister what representations the Government have made to the Commission on this issue. Are they putting pressure on the Commission to initiate such research? Until we know the reasons why few people move between member states for work, governments cannot sensibly draft policies.
We examined several of the potential barriers to people's geographic mobility. We looked at the economic and administrative barriers, such as the difficulties people face trying to understand different systems of housing, taxation, pensions and social security. It is important to increase understanding of these issues so that people understand their rights. The committee recommends that basic information on such rights should be freely available to all as part of a publicly-provided service, and hopes that the Commission further develops its website in this way.
We found clear evidence that the lack of mutual recognition of qualifications is a barrier to individuals and employers. The committee welcomes the Commission's intention to propose a simplified, more uniform, transparent and flexible regime of recognition for vocational qualifications in the regulated professions. However, as the committee is concerned that the benefits of mobility to the individual should be available to all groups in society, initiatives should be encouraged concerning the mutual recognition of qualifications in non-regulated professional and other vocational skills, in order to ensure the removal of barriers for all. The committee is also in favour of the Commission developing art overarching transparent framework for the assessment and recognition of non-formal and informal learning. Could the Minister please update us on the work of the European forum on the transparency of vocational qualifications?
The committee agrees with the Commission that a lack of language skills represents a significant barrier for those considering geographical mobility. The UK record here is appalling and shameful. Yet still the Government are not doing enough to rectify the problem of our poor ability to speak foreign languages. The Government's announcement just before Christmas on the teaching of foreign languages in schools is very disappointing. The leaching of the first foreign language to all pupils should start from age eight at the latest. An entitlement to some teaching, perhaps to be administered by someone with no teaching qualification, is not enough. Furthermore, we consider that it should remain a statutory requirement for all pupils to continue studying a foreign language until the age of 16.
I turn now to occupational or skill mobility. The globalisation of markets, industrial change and the unprecedented rate of technological innovation are producing rapid changes in the types of skills that are considered valuable and relevant in the labour markets. As a consequence, an increasing number of people may have to adapt to a change of job or career, involving different skills, during their working life. It is vital that people are equipped with the skills to adapt to these changes.
A workforce that has high levels of skill mobility can adapt to labour market shocks more easily and respond to increasing unemployment in one sector by moving to another. Conversely, a low level of occupational mobility constrains the ability to fill job vacancies. Moreover, the CBI ranked skills among "the most important areas" for creating open, flexible labour markets.
I welcome the establishment of the Learning and Skills Council and the national Skills for Life strategy. These are encouraging developments. However, they are also much needed developments and are still at an early stage. The CBI maintained that, while the Government had improved the situations in schools, they had done little to address the needs of the older workforce. The CBI warned that the size of this problem should not be underestimated. Based on the findings of the working group chaired by the noble Lord, Lord Moser, the CBI said that in the UK 20 per cent of the workforce are functionally innumerate or illiterate. This is an appalling figure and is by far the highest in Europe. We cannot just address the UK's skills problems overnight. They are very difficult issues that will require a lot of time and probably a lot of money. The upskilling of the workforce must be an urgent priority for the UK. In order to increase occupational mobility and fill the identified skill gaps, the teaching of basic skills has to be coupled with the provision of lifelong learning. The committee supports the targeting of lifelong learning and training initiatives at third country nationals, women and older workers.
Yet, as the Government acknowledge in their written response to our report:
"little progress has been made across the EU to turn lifelong learning into a daily reality for most adults".
There is a consensus, shared by the Government, experts, the TUC and the CBI, on the need to raise the skills of the UK workforce. There is a particular need to address poor basic skills of literacy and numeracy. Will the Minister tell us if the Government are planning to introduce a statutory right to time off for training to tackle the problem?
I very much look forward to hearing the rest of the debate and I commend the report to your Lordships. My Lords, I beg to move for Papers.
3.45 p.m.
Baroness Gibson of Market Rasen: My Lords, I welcome the debate, which the committee's members have long awaited. I place on record my congratulations and thanks to the chair of the committee, the noble Baroness, Lady Harris of Richmond, for her patient, kind, but firm guidance of what was, on occasions, her wayward group of Peers.
The report concentrates on the major barriers to labour force mobility within the European Union. We started from the agreed premise of the importance of the issue for workers in the UK and the need to equip them with the skills necessary to compete in the European labour market. Whether we like it or not—
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and personally I do—we are part of the European Union and therefore we have to consider the position of our workforce within the Union. As has been said and as the TUC pointed out in its evidence to the committee, the right to move and work within the European Union is a fundamental right of EU citizens.
We cannot mention today all the findings of the report, so ably highlighted by the noble Baroness, Lady Harris. I want to concentrate on what for me are the key issues. First, I want to consider how to establish skills across various workplaces. The need for increasing numeracy and literacy skills became ever more obvious as we gathered evidence for the report.
Over recent decades the labour market has changed substantially. More women have entered that market, the flexibility of working patterns has increased and information technology has changed working lives beyond all recognition in many areas. Workforces and their skills training have to improve.
We are talking about encouraging employees to gain basic and fundamental skills, but also about employers assisting in the task. That involves all citizens, regardless of age. Consideration must be given to expanding skills training to the newer entrants to the labour market, such as women, and to third country nationals, and to the retention and reskilling where necessary of older workers whose knowledge gained during their working lives is invaluable to a country's wellbeing. Basic skills are vital for increasing choices for workers, but alongside these we have to consider providing and improving academic skills and vocational skills as well as recognising the skills picked up through life which can be such an asset in a workplace.
I am mindful here of the undervaluing of women's skills which have arisen from bringing up and playing a pivotal role in a family. These include the organisational skills developed in ensuring that the family get to the workplace and/or to the school, on time; the financial skills gained by juggling the family budget, which is often still left to the female partner or the single parent; and the skills of dealing with people, gained by stopping siblings arguing and creating harmony in the family. These are all instances of what I am talking about.
Closely associated with these foundation skills is the question of language skills. As we continued our work in the sub-committee, it became ever more evident that language was undoubtedly a barrier to the movement of workers within the European Union. As the TUC said in its evidence, while English is widely taught and spoken as an additional language throughout the world, the language skills of the indigenous British workforce remain poor. This reduces significantly the scope for such workers to seek employment in non-English-speaking countries. I am afraid that in some quarters the myth remains that if we, the English, shout loud enough, we can make ourselves understood. I shall give a little anecdote. Some years ago, I went on a trip to Spain. On the first morning in the hotel, I came across two of our party bellowing at

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one of the waitresses, "Where is the local market?". On receiving no response, one turned to the other and said, "Ridiculous. She doesn't appear to understand English.".
Matters have improved somewhat, but there is still a large language gap. That became increasingly clear as witnesses gave evidence. The committee feels very strongly that the Government should concentrate urgently on remedying that situation. The fear arose in our discussions, based on elements of the educational Green Paper, that the Government might be travelling in the opposite direction to that we had hoped. I ask the Minister to bring us up to date with the Government's thinking.
We recognise that some employers provide language training, for which they should be praised. Rather than a hit-and-miss approach, however, we feel that it should be part of the scheme for lifelong learning. We also feel very strongly that it should not be up to employees to use their own free time for such learning. Competent basic language skills would also help employers.
The question of mutual recognition of qualifications arose frequently in our deliberations. It was obvious from the evidence we received that the lack of such recognition proves a barrier to both individual workers and employers. The CBI, in its evidence, recognised that the question had been under consideration for a long time without a solution, but it believes, as does the TUC, that it must be overcome if workers are to be able to move within the EU effectively.
The CBI points out that employers remain unfamiliar with foreign qualifications. It would like to see a system that is able to,
"read across each EU country",
and relate to all qualifications including a degree and professional qualifications. It would be interesting to hear from my noble friend any ideas that the Government have about the mutual recognition of qualifications.
Obviously, as a former trade union official, the question of workers' rights was high in my mind during our considerations. As has been pointed out, they differ from country to country. If there is to be true mobility and access to employment, far more consideration of that problem is needed. The TUC pointed out in its evidence the difficulties that workers face in understanding employment contracts when moving to another country and finding on arrival that the terms and conditions are not what they expected. The workers involved frequently lack both the knowledge and language skills to enforce their basic rights.
Workers' rights cover many areas, such as pensions, health service provision and better information on taxation. Especially needed are full details of taxation liability. The subject exercises the minds of both sides of industry. The CBI confirmed,
"that the current social security and pensions regulations also proved to be a burden for firms, especially smaller firms".
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Various proposals were made during the taking of evidence as to how some solutions could be reached. I ask the Minister what the Government's reaction would be to a social security card system. It might simplify procedures without changing existing rights and obligations.
My final subject is the obvious difficulty we face in gathering our evidence on mobility of the workforce, which is vitally important to us. That difficulty is a lack—I would go so far as to say a drastic lack—of information available, as highlighted by the noble Baroness, Lady Harris, who outlined proposals on the matter. The sub-committee became increasingly concerned about lack of information. I await with interest the Minister's response to those proposals. We believe that they could help to encourage more mobility and therefore flexibility for both EU employers and employees.
There is much more in the report than the issues I have raised. It deals with housing, children's education and providing assistance to the partners of those planning to move so that they can find employment too. However, the issues to which I have drawn attention—skills and qualifications, the mutual recognition of those skills, the importance of language and its teaching, the co-ordination of workers' rights, and the increase of information about mobility—are linked. I look forward to my noble friend's response.
3.55 p.m.
Lord Brittan of Spennithorne: My Lords, I welcome the debate, because of the importance of the subject and the excellence of the work done by the noble Baroness, Lady Harris, and her committee. I have an extra reason for welcoming the opportunity to participate in this debate, which is that, when I was the Member of Parliament for Richmond, she was a distinguished constituent of mine.
The report points out the low levels of mobility in the European Union, and also that there is no evidence as to the extent to which that is caused by barriers to mobility as opposed to other factors. None the less, it is clearly desirable that whatever barriers there are should be removed. Therefore, I very much welcome what is said in the report about mutual recognition of qualifications, the lack of language skills, the importance of improving people's knowledge of their rights and, with regard to occupational mobility, what is said about lifelong learning.
Perhaps the most important statement in the report is about putting geographical mobility of labour into its proper context. Paragraph 26 states:
"When looking at ways to improve the efficiency of labour markets, it is widely recognised that geographical mobility should not be considered in isolation. The Commission's Communication points out that occupational (or skill) mobility should be considered as equally important … The CBI went further and in a report identified six forms of flexibility, of which geographical mobility was one. The others were: flexibility in working patterns [hours flexibility]; wage flexibility [pay]; skills flexibility; numerical flexibility [such as limited by employment protection legislation]; functional flexibility or internal flexibility [how much people are moving within jobs or within the organisation]".

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Continuing with the subject of rotation:
"They found that 'the overall level of flexibility' of labour markets, rather than any single dimension, was important".
In paragraph 186, the committee said:
"The Committee appreciates that it is important to work towards removing inefficiencies within labour markets, so that they are able to respond quickly to changes in demand. Yet increasing geographical mobility is only one means of improving the flexibility of labour markets, and improving flexibility by other means … can reduce the need for geographical mobility".
That being the case, I very much welcome the fact that the debate is stated to be about the flexibility of labour markets more broadly, as the noble Baroness, Lady Harris, pointed out, and not just about the mobility of labour. The point that I want to stress is that there is a clear and strong relationship between the introduction of the euro and the flexibility of labour markets.
One can say that there have been three phases in the results of the introduction of the euro. The first phase was the preparation for the introduction, with the need for those who wished to participate in the euro to conform to the Maastricht criteria, which were essentially criteria about introducing sound finance where it had not previously existed. That meant changing countries such as Portugal, Spain, Italy and Greece from having high inflation and high budget deficits into following sound financial policies. That was a remarkable and beneficial transformation over a wide part of the European Union.
The second phase in the introduction of the euro occurred when the euro was actually introduced; I refer not simply to the movement to notes and coins but to the period before then, when the euro was introduced as a virtual currency. We then saw corporate restructuring because, as a result of the removal of the exchange rate risk, we saw a great bout of mergers and acquisitions in the European Union and the massive explosion of the corporate bond market—the growth of corporate bonds across the EU. There was also reorganisation within companies of distribution arrangements because it was no longer necessary to have distribution arrangements in penny packets because of the risk of exchange rate changes. All of that is beneficial, although the full benefit takes a long time to come forward, as we found in relation to the changes in the early 1980s in this country.
The third phase in terms of the results and consequences of the introduction of the euro is only just starting. It involves economic restructuring and in particular moves towards labour market flexibility, which is the subject of this debate. The relationship between the introduction of the euro and the gradual start of much-needed economic restructuring, including labour market flexibility involves the introduction of the euro and removes and prevents the possibility of soft—
Baroness Knight of Collingtree: My Lords, I am most grateful. If I have interrupted a sentence, I am more than happy to wait until it has been completed.
Lord Brittan of Spennithorne: Go on.
Baroness Knight of Collingtree: My Lords, it may be relevant at this point that on two occasions, when we were taking evidence from witnesses on these matters, I raised the question of the euro and Britain's membership of it and was told that that was not relevant to the matters that we were discussing. The witnesses were unable to answer.
Lord Brittan of Spennithorne: My Lords, that is why it is so beneficial that this debate is not just about the report but also about the flexibility of labour markets more generally. I welcome the fact that if the committee was constrained, the House is liberated.
I was going to say that the third phase of the evolution of the euro is economic restructuring and in particular moves to labour market flexibility. That came about because the creation of the euro has removed the soft options that governments of all political complexions are tempted to follow when they get into difficulties. I refer to soft options such as devaluation, which governments cannot pursue because there is a currency for the whole of Europe, not for any one country. Another soft option is that of artificially low interest rates and exactly the same reason applies—there is one interest rate for the whole of Europe. The result is that countries are gradually but increasingly being forced to face up to fundamental structural problems such as the inflexibility of labour markets. Such problems are painful to deal with but it is essential to do so if European competitiveness is to increase.
The stability and growth pact plays a positive role in this regard. I add in parenthesis that I fully support the modifications of that pact that were proposed by the UK Government and the Commission to take account of the full economic cycle and to distinguish between capital and current expenditure. The main thrust of the pact is wholly positive. In this country, governments of both major parties learned very painfully that you cannot spend your way out of recession. The noble Lord, Lord Callaghan of Cardiff, was the first major British leader who said so and the noble Baroness, Lady Thatcher, reinforced that approach, in word and deed, in spades. Commissioner Pedro Solbes, who was the economics Minister in the Spanish socialist government, did so recently in the call for Germany to put its finances in order. He said:
"Sound public finances are a condition for durable growth and rising employment".
By insisting on that—by removing the alibis that otherwise might be resorted to and the drugs of inflationary finance and devaluation—the single currency and the stability pact are proving to be the greatest possible spur to structural reform, including increased flexibility of labour markets. A vivid example of that is being played out in Germany today. Far from the euro being the cause of Germany's problems, it may be the single greatest spur to its solution.

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As has been pointed out in recent articles in the Wall Street Journal and the Financial Times by two prominent Liberal Democrat MEPs, Nick Clegg and Chris Huhne, real interest rates in Germany are at the lowest level since 1980 and are substantially below the level that obtained in several periods when there was more spare capacity in the German economy than there is now. It is probable therefore that if the Bundesbank was still in charge, interest rates in Germany would have been higher, not lower, than they are today. There is no justification for making the euro the scapegoat for Germany's problems. The real problem is that instead of using a period of strong growth to put public finances in order and to introduce labour market flexibility and other changes, Germany introduced cumulative tax cuts and public spending increases, which amounted in total to 1.9 per cent of GDP. That failure to deal with structural issues, such as the lack of labour market flexibility, is the real cause of Germany's problems.
It is significant that when telling Germany that it must curb its excessive budget deficit, as the Commission has just done, what else did it say? It told Germany to introduce,
"far reaching structural reforms to raise Germany's low growth potential".
That, in the Commission's view, should include liberalisation of Germany's sclerotic labour market, reform of the overburdened social security and benefits system and a radical reduction in the layers of red tape imposed on German businesses by federal and regional governments. That is what the European Commission is demanding. I believe that this is a seminal moment in the evolution of the euro.
I hope that the pressure of the stability pact and what has been said by the Commission will have a major impact on the debate in Germany. I hope that what has been done will make it clearer to those who rightly deplore the rigidity of labour markets in continental Europe that it is the impact of the euro and the rules associated with it that are by far the most powerful force for genuine structural reform, where such reform is so sorely needed.
4.7 p.m.
Baroness Greengross: My Lords, I start by saying that it is a great privilege to have served on the subcommittee that addressed these issues. I congratulate our excellent chairman, the noble Baroness, Lady Harris, on guiding us with such sensitivity and clarity in our work.
I want to highlight a few points that struck me as being of extreme importance; many of them have already been mentioned in this debate. The first point, which has been mentioned, is that of the lack of information held by government authorities across government departments about what is possible and feasible in terms of flexibility of labour markets across the European Union. I refer also to the lack of information for individuals who wish to broaden their experience and travel, as they have a right to do, across different countries of the Union in the course of their working life.
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It is awfully difficult if one's qualifications are not recognised. We seem to do much better in that regard with academic qualifications than with manual or professional vocational qualifications. Some of those difficulties are quite simple. We mean different things if we compare an engineer in Germany with one in Britain: a host of different meanings and various levels of qualifications are involved. We need to get that right. The issue is more important than it sounds. We need to get equivalence at many levels in relation to qualifications. That is particularly important in the caring, health and social care fields, such as child care, nursing and teaching. However, I believe that it is also important across the board.
Another issue that was highlighted for me was the importance of true portability of benefits, including pensions, across the Union. Much more work needs to be done along these lines, and it is important that the Government facilitate that work so that it can move along. We also need to remember the self-employed. Although we concentrated a great deal on what employers can and need to do in order to help their employees to be flexible and move across the Union, far less help seemed to be generated towards the self-employed.
I was very aware that we kept comparing what goes on in this country and Europe generally in terms of mobility—I am talking here mostly of geographical mobility—with what goes on in the United States. I accept that there is a big difference when everyone shares the culture. And, although there are huge differences between people in the United States because of their origins, it is one country and it has a common language. Mobility presents an enormous barrier and it will continue to do so, however well we achieve in language skills and so on.
However, we also have to accept that the level of geographical mobility in Europe, and, in particular, in this country, is too low for greater efficiency. That mobility needs to be increased and to become easier. In order for that to happen, we need to improve our language skills and our knowledge generally of the cultures of other countries in the Union.
The irony of the Government's announcement about the importance of language skills in secondary schools and about when they should begin is not lost on many members of the committee. I hope that, in some ways, the Government will address that issue because those conflicting announcements seem to be made at the wrong time. One topical way to make it easier for people to travel and to increase their mobility would be to use the international baccalaureate a little more than is currently the case in this country. That would ease the difficulties experienced by people.
As mentioned by the noble Baroness, Lady Gibson, in particular, we considered the role of lifelong learning and its current importance when the demographic picture across the Union is one of an ageing situation. We can take that situation as being of great benefit to all of us or a threat. If we are to treat it positively, we must make it easy for people to return

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to the labour market and not so easy for them to leave it. Wherever they work in the Union, their skills and experience must be recognised. We must make it easier for them to travel and to gain the opportunity to continue working. Indeed, we must also encourage people to be retrained for new occupations in later life.
We also have to take seriously the difficulties that dual-career families face when they want to move. We should address what employers can do to help employees who are part of dual-career families and consider the opportunities available. The difficulties faced are partly due to a lack of information but it is also partly a case of making the opportunities for such families more trans-national across the Union. Those opportunities include schooling but they go wider than that. We must also address the question of how people with careers can travel so that they at least have the opportunity to live with their partner, husband or wife.
As mentioned by other speakers, the need for occupational as well as geographical mobility has highlighted the appalling level of basic skills in this country. If there is one priority, it is to get that right in terms of labour efficiency and flexibility here as well as across the Union.
4.14 p.m.
Baroness Whitaker: My Lords, I shall make some brief points on geographical mobility—brief partly because so many other points have already been so ably made and partly because my voice may not hold out.
All of us on the committee which produced this report appreciated the skill with which our chairman, the noble Baroness, Lady Harris, guided us through some very surprisingly uncharted territory. Surprisingly uncharted because when one considers the founding of the European Community from its earliest days, free movement of labour was one of the cardinal principles of the single market and one of the first to be implemented. Yet when we took evidence for our inquiry all these decades afterwards, we could find virtually nothing to tell us how mobility of labour within the European Union works for the people who move, and not much to confirm its economic advantages, though common sense indicates there are many.
So the need for more research, as the noble Baroness said, is one of our key conclusions. It is of particular importance because when someone moves countries to take new employment, more than a job is at stake. A family will often move too. The culture and values of one community will be substituted for another. A community network will be left behind. Children's schools, and in our case the public examination system will be new; as has been said, healthcare, social security and tax will be different; even the weather might take some getting used to.
Fortunately, the basis of the European Convention on Human Rights can make a sort of bedrock of common values; but above that there are many pressure points, positive and negative, which it would be very helpful to know more about. What are the
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reasons people do not move to work, when it would help their own economy as well as the wider one to do so?
When I was in the Employment Department, as it then was, the UK was famous for not having much of an internal mobile labour market. People would not get on their bikes. They would face unemployment or less attractive employment in order to remain close to their community and their extended family. It was the despair of the planners. But were these people so wrong? Is not the reliability, flexibility and cheapness of childcare provided by the extended family an advantage? Is not the company of friends worth balancing against a bigger income? Some disadvantages of moving can be compensated for: childcare arrangements, facilities for dependent relatives, ease of transport to visit back home and so on. But if we do not know what the key factors are, we cannot give relevant information about them and we cannot plan to accommodate them.
Information about the new workplace was another surprising gap. As has been said, we did not find systematic provision of information, nor a harmonised system of mutual recognition of qualifications, particularly at ancillary and skilled levels as opposed to professional and academic levels. We welcome, as does the CBI, the European Commission's intention to close this gap, and hope your Lordships' House will have an opportunity to look at the proposals. May I ask my noble friend more precisely what the state of play is on this draft directive?
When we looked at the part schools play in mobility decisions we saw two striking opportunities. One was in our schools, to provide the sort of information which meant that life in another member state was not such an unknown quantity, particularly again, not for those intending to work in professional and academic spheres, who already have more access to such information, but for precisely the people who could take advantage of particular skill or labour shortages. As Professor Christoph Schmidt of Heidelberg University told us:
"the attitude towards Europe as a whole or the European Union is shaped very much early on in school age … would be scope for improving knowledge and acceptance in European countries for the idea of being a member of a larger common Europe".
The other striking opportunity was the possibility of mutual recognition of public education examinations. The barrier to mobility most consistently cited was anxiety about the education of the children of the potential mobile worker. Children were at particular stages which should not be disturbed, they would have to face teaching in an unfamiliar language, they would not manage in a different public examination system, they would lose out when they returned home—all real and significant problems.
When we took evidence for this report, the Government had not completed their "Languages for All" strategy and so our recommendations have been overtaken by events—or perhaps, they even influenced events. However it came about, the Government's undertaking to give more stimulus to early learning of a foreign language, including our neighbour European

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ones, is in keeping with the European High Level Skills and Mobility Task Force's recommendation that foreign language teaching should begin at eight and our recommendation, supported, as my noble friend Lady Gibson said, by the TUC evidence, that it should continue to 16. I echo the call to my noble friend the Minister to update us on progress in achievement of the strategy.
But finally, my Lords, there is a ready-made tool for making the lives of schoolchildren who move within Europe easier and more educationally rewarding—the adoption of the international baccalaureate, which is available in very few UK schools at the moment, but is consonant with all the continental public examination systems and acceptable as an entry to many universities in this country. My noble friend Lord Williams of Elvel asked, in his very timely debate a year ago why this could not be done—in his words,
"an 'international baccalaureate' … would enable school leavers to go to university or into the job market with an educational qualification—including that of foreign languages which would allow them to choose where in the European Union they want to work and live".—[Official Report, 16/1/02; col. 1117.]
He did not, I am sorry to say, receive an answer from the Government. Perhaps we could have one now. I commend this report to your Lordships.
4.22 p.m.
Lord Higgins: My Lords, this is an interesting report, although in some ways the debate is more interesting, despite the lack of an official contribution from the Liberal Benches. My noble friend Lord Brittan of Spennithorne said that the committee was confined but that the House is liberated. I confess that I do not understand why the committee felt confined. This is an issue that needs to be put in the widest possible context, as some of the contributors have sought to do.
There is certainly no lack of documentation on this issue. In February 2001 the Commission adopted a new strategy for a new European labour market by 2005. In March 2001 there was the communication on which the noble Baroness's committee has commented. In June 2001 there was the establishment of a high-level task force and so on, and in February last year there was the publication of this report. I join those expressing some regret and surprise that the report has not been debated earlier. Inevitably, if one delays for a year, there is a possibility that matters may be overtaken by events.
That appears to be so because in July 2002, after the publication of the committee's report, the Government, through the Treasury, the DTI and the Department for Work and Pensions, published a good document entitled Towards Full Employment in the European Union. So far as I can see, that does not refer at all to the report of the committee, which is rather extraordinary. One would have expected that it would.
As has been pointed out, the report deals, on the one hand, with skills mobility and, on the other, with geographic mobility. In a sense the mobility in relation to skills is vertical and in relation to the location of jobs it is horizontal. As my noble friend Lord Brittan
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pointed out, there is a clear link between the two and the extent to which there is geographical mobility may well depend on the extent to which a particular country's workforce has a degree of vertical or skill mobility.
There is much in the report with which one can agree, although to some extent parts of it express a view that is fairly apparent. Noble Lords have stressed the matter of education, as did the noble Baroness, Lady Whitaker, particularly with regard to language. The committee rightly said that it found the situation in that regard appalling.
We are not simply talking about language in terms of tourists. The kind of training concerned here relates to the language skill that would enable someone from one country to work in another. A vastly greater level of language ability is required for that than if one simply wants to spend a weekend in Calais. I speak from experience, having spent much of my time in Holland. In regard to language I do not believe that many Dutchmen would have great trouble acquiring a job in this country, but I believe that a number of people in this country would have considerable trouble acquiring a job in Holland. I give way to my noble friend.
Baroness Knight of Collingtree: My Lords, I am most grateful to my noble friend. Does he also recognise that many people come to this country for a brief time as seasonal workers to pick a crop or to work in the catering or hotel industry? I support what he is saying—it is not quite the be all and end all that it may appear.
Lord Higgins: My Lords, I am sure that my noble friend is right. It is a matter of the level of skill. Working in the catering industry one can probably survive with relatively little English; it is another matter if one wants to work as a doctor in this country. Those two matters clearly interact, as a number of speakers have pointed out.
I believe we can all agree about the argument on qualifications, as mentioned in the report. It is unfortunate that someone who is equally as good at carrying out a particular job as someone else finds him or herself immobilised—that is the strict way of putting it—from acquiring such a job in another country because his or her qualifications are not accepted. Surely, that is an area in which the European Union can take a positive line, as the committee suggests. As the committee points out, it is true that the language side—I am a victim of the English educational system in that respect—is a real problem.
I turn to a point on which a great deal of time was spent in the committee, although it has not been referred to at all in the debate. It concerns whether one should have a benchmark for mobility and whether the United States could provide such a benchmark. I believe it was suggested that the level of mobility in the United States may provide a benchmark for the European Union. By and large the committee is sceptical about that—I understand its view—not least because any such comparison is pretty invalid given

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the problem to which we have been referring, namely language. Given the level of immigration over the southern borders of the United States, on the whole it does not have a language problem in relation to mobility.
The committee makes an interesting point that the United States' market is somewhat different because in many places there is a kind of specialised local skill, say in silicon valley in California or wherever, that is not reflected to the same extent in the European Union. The committee was right to be sceptical about that matter. What I find more puzzling is the committee's very clear statement regarding lack of information about barriers to mobility. It categorically states that there is a need for greater study of that.
We are talking largely of geographical mobility. I have some experience in the study of that. A long while ago I was an economic adviser to Unilever. I had to look into the question of whether and where we should site a factory in Italy. I reached the conclusion—I was very young at the time—that it would be best situated in the southern part of Italy because that was an area of low labour costs. I returned to Milan and told them that that was the situation but that there would need to be a three-shift system of work. That was greeted with howls of laughter. It was pointed out that no lady in the southern part of Italy would be very happy if her husband was on the night shift. But, we have a lot of data—more than the committee says—about barriers to mobility.
The other point that I am not clear about is that the committee does not appear to have gone to any great lengths in academic circles to see what the literature says about barriers to mobility, although there is a large amount of academic study on these matters.
Baroness Whitaker: My Lords, does the noble Lord accept that our specialist adviser was recruited to do that very job? He looked everywhere. We certainly could have found out about professional and academic mobility to a degree, but not about lesser skilled mobility. So if the noble Lord has any sources it would greatly enlighten the House if he could produce them.
Lord Higgins: My Lords, I am out of date. But even 20 years ago there was a degree of information on this issue. The committee draws attention to some of the barriers, which we have been debating today. It will not do any harm to get more information on those barriers. One or two particular barriers have been mentioned this afternoon; for example, problems as to housing, childcare or the existing structure of pensions. There is a range of fairly obvious barriers which inhibit geographical mobility, and certainly more work in that regard is needed. But it might have been worthwhile to have taken rather more specific evidence on this issue, given the powers which the committee has to send for persons and papers.
I wish to make one or two other points. I said at the beginning of my contribution that it was important for the study to be placed in the widest possible context. A huge change will be taking place in the European
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Union with regard to immigration and to the extension of the Community to new countries. The same problems of language and disqualifications and so on will arise with regard to immigration, both legal and illegal and the extent to which those barriers affecting mobility within the previous size of the European Union will change. One has a slight feeling that to some extent immigrants to the European Union will be more mobile when moving from one country to another—and certainly that is suggested by the situation at the Channel ports and so on—than previously was the case, but the committee does not touch on that area.
There is also no discussion with regard to particular markets; for example, agriculture, where it is clear that the effect of the common agricultural policy, in terms of product markets, has a considerable impact.
Finally, there is the very important point made by my noble friend Lord Brittan as to the single currency issue. That matter is not touched on in the report. But the reality is that if one adopts a single currency over any given area—which area will vary a great deal with the accession of the new countries—it is apparent that mobility not only of labour but of factors of production generally are extremely important in the adoption of that currency. If there is the adoption of "one size fits all" interest rates, which are in existence in a large part of the European Union, although not of course in the United Kingdom, and if the factors of production are as immobile as this report clearly illustrates, there is a considerable transitional problem which may last a considerable time.
My noble friend Lord Brittan took an optimistic view that if one introduced a single currency, that is fine, everyone will adjust, Thatcherite-type deregulations will take place, and there will be nothing to worry about. The reality I believe is that, given the level of immobility suggested in the report, there will be a considerable period when those in the euro currency area will find that the stresses and strains are considerable. If, as a result of that, there is unemployment in one part of the European Union, it would obviously be greatly alleviated if the individuals concerned moved to another part. But, if they are, for whatever reason, immobilised, that unemployment is likely to remain for a considerable time before the immense but very strategic pressures, to which my noble friend has drawn attention, have the desirable longer-term effect.
None the less, this is an interesting report and we have had a fascinating debate. We look forward to hearing what the Minister has to say, in particular in relation to his own government report which appears to deal with these issues but to be unaware of the committee's report. At least now the Government are aware of the report, and the debate has been very useful in that respect.
4.37 p.m.
Lord Davies of Oldham: My Lords, I can certainly assure the House that the Government are well aware of the report. I shall seek to establish their awareness as I develop my speech in reply to the debate.

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I am in a little difficulty—not a completely unpredictable difficulty—because I did say to my officials after the debate had been tabled by the noble Baroness, Lady Harris, that it might operate on more than one level. There was the possibility of it being substantially about the report and the issues contained in it and the advantages which we could derive from that substantial body of work, to which I pay tribute, but it might also be an occasion where a number of our well known colleagues rode their hobby-horses into the European debate as yet another opportunity to brief the Government on the great decision that lies ahead of us with regard to the euro and allied matters.
I do not think that the noble Lord, Lord Brittan, rode a hobby-horse but a great white charger for his presentation and advocacy of the euro and its significance in the context of this debate. Of course he is absolutely right. The noble Lord, Lord Higgins, is right to follow the position that the nature of the macro-economy is absolutely crucial to the question of the labour market and other price factors in the development of our economies and the general European position.
So I am in no way critical of the introduction of that dimension to the debate. I merely stress that inevitably, given the nature of that introduction based on the report from the Committee, most of my remarks are directed at that point. The noble Lord will forgive me if I resile from this wonderful opportunity to engage from the Government's perspective on the exciting opportunities that lie ahead in resolving this debate, which certainly exercises members of his party with great frequency, both in this House and in another place. It is also a matter for government as to the decisions to be taken about the economic tests and the eventual referendum, if one takes place, on the euro. Suffice it to say that we are grateful to the noble Lord for having introduced that broader context to our debate. However, I shall primarily seek to respond to the other issues raised, predominantly by members of the committee.
I ask the noble Lords, Lord Higgins and Lord Brittan, this question. Is it not refreshing and a sign of changing times that we should have a debate about labour mobility, manpower, job opportunities and employment in which most of the participants in the debate are Baronesses rather than Lords? Both the noble Baronesses, Lady Harris and Lady Gibson, emphasised that in today's labour market, women play such an increasingly significant part that one cannot approach the matter without recognising the need to attune to those changes. The increased employment of women is reflected right across Europe, although our country represents a significant example.
Let me emphasise—I suppose that I am reflecting the element of gentle criticism made by the noble Lord, Lord Higgins—that a year has now gone by since the report, and things have consequently moved on. The Government are eager for work to develop in the context of the single market and the Lisbon agenda. The principle that the European Union should comprise an area without internal frontiers is long
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established. As the noble Lord, Lord Brit tan, emphasised, we need the context in which that will be effectively advanced.
It is vital that we work to remove the clear obstacles to freedom of movement for workers and services between member states. The Government believe that if we are to achieve the Lisbon goals, we must concentrate both on removing the barriers to mobility—which have been so accurately identified in the report and today's debate—and on increasing the level and transferability of skills. Several contributions to the debate emphasised the necessity of improving skills, to which I shall turn in a moment.
The Government have placed the achievement of the Lisbon strategy at the heart of our European labour market policy. At the Spring Council in 2000, heads of government signed up to an ambitious objective for the EU, which is:
"to become the most competitive and dynamic knowledge-based economy in the World by 2010, capable of sustainable economic growth with more and better jobs and greater social cohesion".
That is a significant objective to which to sign up— not least, as has been mentioned, because other markets of some significance, not least the United States, have some of the attendant advantages of a common language—or, perhaps increasingly, two languages—and a single state structure.
The European Union is aiming for an overall employment target of 70 per cent by 2010. That is a good measure of people's ability to engage in work and have valid skills for the job market. Let us not be too bashful about our achievements. The UK, alongside Denmark, the Netherlands and Sweden, already operates at that 70 per cent level of employment. We have met the target; more work needs to be done in other member states that fall considerably below it.
If Europe is serious about becoming the most competitive knowledge-based economy in the world we must equip our people with the skills and knowledge that the digital age demands. That is why UK Ministers argued vigorously for education ministers as well as employment ministers in the European Union to take seriously the role that education has to play in meeting the Lisbon goals. That is also why the Government are, as will be recognised throughout the House, making such major investments in education, training, skills and lifelong learning, all of which are geared to achievement, attainment and the effective equipping of our people with the requisite skills.
We are engaged in many of the areas raised in the report introduced by the noble Baroness, Lady Harris. We are working in partnership at the national level with the devolved administrations and at the EU level with our counterparts. Working groups have been established at EU level to take forward work in the areas of education and training. We have been urging the Commission and our European counterparts to adopt an approach that is practical, timely, flexible, non-bureaucratic and responsive to the needs of our citizens. We have taken the initiative by pioneering an innovative approach in the field of basic skills for adults.

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The deficiencies in our society were rightly identified and should be recognised when there is such a high percentage of people who lack basic skills. In a sophisticated labour market, that significantly devalues their opportunities to engage in work and to contribute fully as citizens to their society. However, it was suggested that Britain was poorly placed in those terms—perhaps even uniquely so. That is not the case. Other European countries are as anxious as us—indeed, have every right to be more anxious than us—about that problem. Illiteracy and innumeracy are European-wide features. Other countries are desperately worried about that and, at times, have been only too keen to embrace the kind of strategies that we have been employing in the UK and apply them within their borders.
A few years ago, I recall attending a European meeting at which it was recognised that we in Britain had identified and taken the first significant steps to deal with what is a problem that goes back for generations—certainly decades. It was recognised that Britain was in the lead, first, in having analysed the issue and, secondly, in pursuing strategies to cope with it. I do not decry the significance of the role that we must play in improving basic skill levels; I am merely saying that we ought not to hide our light under a bushel. We should not suggest that the problem is unique to Britain—it is certainly not; it is one that we all need to tackle.
We should also recognise that a considerable amount of work has been done to improve movement of skilled people between countries. It is true that that tends to be at the higher levels of qualification, for all the reasons accurately identified in the debate, but we are also all too well aware that our health service—at high levels but also at some more basic levels—is dependent on significant contributions from those here from overseas. We should not underestimate the European contribution to that.
Following a pilot study, the Anglo-Spanish programme has recruited more than 520 Spanish nurses and more than 30 doctors to work in England, with more to come. A pilot campaign to recruit pharmacists has been initiated. Last year, nearly 10,000 nurses from outside the UK were accepted onto the Nursing and Midwifery Council register. Those health professionals have an opportunity to gain experience working in a different healthcare system and they, in turn, can share their experience and expertise with new colleagues.
As the House debated at considerable length on many occasions during the desperate days of the acute period of the foot and mouth disease crisis, we were able to bring in trained veterinary inspectors and veterinarians from Europe to assist our over-pressed colleagues working in that area.
The noble Lord, Lord Higgins, rightly alluded to the enlargement of the Community, which will bring a fresh dimension to the issue. We have co-operation agreements in place with the Czech Republic, Slovakia, Poland, Hungary and Estonia that are the
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basis for active exchanges of best practice in education, including higher education and lifelong learning. We also have good relations with the accession countries in the field of education, youth and training programmes. We are mindful of that important dimension, to which the report alluded.
The importance of lifelong learning was emphasised by nearly all noble Lords who participated in the debate. I emphasise that the Government are committed not just to extending the concept of lifelong learning at a European level but to extending opportunities in our own country as effectively and rapidly as we can. Tribute has been paid to the initiatives taken. The Learning and Skills Council is a dramatically significant body in the process of enhancing the skills level of our people. It is still in its early days, and it has much to prove, but, together with the sector skills councils, learndirect and the Union Learning Fund, it is part of our strategy to create opportunities for learning for mature people, people at work and those looking for work throughout the nation.
Today, as we all recognise, no one trains for a career for life. There is inevitable mobility between jobs for all our people. So, it is essential that the structure for lifelong learning and training is reinforced. I have also mentioned the extent to which the Learning and Skills Council will reinforce our strategy on basic skills, to ensure that we continue to address ourselves to that issue. That is another matter that was raised in the report and in our discussion this evening.
The committee rightly flagged up the importance of making information on mobility and skills available to our citizens. The UK has played an instrumental role in pushing for the development of a one-stop European information mobility site. Progress has not been as rapid as we might have wished, but the building blocks are in place, and most member states have now integrated the European Employment Services database into their employment service sites. The website receives 25,000 visitors a week. Vacancy information will be available to all job seekers throughout the European economic area—the 15 member states plus Norway, Iceland and Liechtenstein.
The prototype for the Portal on Learning Opportunities Throughout the European Space was launched by the European Commission in November and is being tested. The "Dialogue with Citizens" portal provides practical information on other member states, such as access to work, study, goods, services and travel. We are trying to meet the point that was made about our people being less than well equipped with the information that they need to obtain jobs in the European Community and recognise the opportunities there.
Language is the one great barrier that all noble Lords mentioned. That is the most obvious factor that differentiates our single market from that in the United States. Several speakers suggested that the Government were going the wrong way. I think that my noble friend Lady Whitaker suggested that we were

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pointing in the wrong direction. We do not think that that is so. We seek to extend language teaching to the crucial early years at the junior school stage—ages seven to 11—so that all our students will get exposure to languages, at the time when they are most enthusiastic about learning and most open to it. That has occurred in other countries but not this one. It is a major and significant step forward in encouraging enthusiasm for languages.
It is true that we suggest that language teaching after the age of 14 should be concentrated on students who choose to follow language courses at that time and have developed the necessary enthusiasm and commitment.
Baroness Whitaker: My Lords, for the record, I said—I meant to say—that the Government were moving very much in the right direction with language teaching at an early age. I should not like Hansard to show the opposite.
Lord Davies of Oldham: My Lords, I am grateful for that intervention, and I am sorry if I misinterpreted my noble friend's original remarks. My noble friend will recognise that anxiety was expressed in the report about the position on languages in this country. I emphasise that the Government regard language teaching as an important part of the education of our young people. That is the strategy that we propose to adopt.
The recognition of qualifications is of surpassing importance. As the noble Baroness, Lady Greengross, said, it is more apparent and more readily achievable with higher-level qualifications at graduate level. At that level, institutions are more successful and work hard for mutual recognition of achievement. The noble Baroness was right to emphasise that it is, at least, as important in the broader vocational areas. That is where a great deal of work must be done. Under the Danish presidency, education ministers from 31 European countries adopted the Copenhagen Declaration on enhanced European co-operation in vocational education and training. We are committed to developing that and to developing credit transfer for vocational education and training. That is some way off, but it is the right way to go and will allow people who have achieved qualifications at a certain level to take them to institutions in other parts of Europe to develop their skills and get recognition for that.
I recognise that, even in this lengthy contribution, I have still not done full justice to the report and all the issues that it raises. That is probably because the subject is a major one and is probably the most fundamental issue relating to the economies of our country and of all European countries. The wealth of our countries depends on the skills of our people. That means that we must have strategies for guaranteeing that we develop those skills to the highest level and increase the opportunities for such development to all who seek to enhance their opportunities. Without those skill levels, people cannot be mobile in Europe. It is important that we get standardisation and understanding of different qualifications in different
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areas and respect for those. However, if the skill levels are not attained, employers here will not take seriously applications from people who come from elsewhere in Europe to our country or vice versa, as the report points out.
I am grateful to the noble Baroness, Lady Harris of Richmond, for introducing the debate. I appreciate the contributions that have been made. I apologise to the noble Lord, Lord Brittan of Spennithorne, for the fact that, after he elevated the debate to a particular level, we were not all able to operate at that macro-economic level on the role of the euro. However, our debate has put the general issues into the context of a developing European economy.
4.58 p.m.
Baroness Harris of Richmond: My Lords, it has been an interesting and enjoyable debate. I thank the noble Lords who made such kind remarks about my chairmanship of the sub-committee. I can assure your Lordships that it was always an enormous pleasure and privilege to work with my colleagues on the subcommittee. I thank all noble Lords who contributed to the debate.
I shall raise some of the issues. The noble Baroness, Lady Gibson of Market Rasen, said that there was still a great deal of work to be done and spoke about the value of experience gained during life, especially the skills gained by women, who have to juggle so many roles in their life. That was particularly appropriate.
All noble Lords referred to the language gap. It was interesting to hear from the noble Baronesses, Lady Greengross and Lady Whitaker, and from the noble Lord, Lord Higgins, about the international baccalaureate and the problems of dual-career families.
The mutual recognition of qualifications was mentioned particularly by the noble Baroness, Lady Greengross. I refer also to workers' rights and the understanding of workers' contracts when people move between countries. The security card system which the noble Baroness, Lady Gibson, mentioned is an interesting idea, and perhaps the Minister will reflect on it.
The noble Baroness, Lady Greengross, mentioned the portability of benefits. She reminded us of the lack of help for the self-employed. That area could certainly be considered. The noble Lord, Lord Brittan of Spennithorne, said that it is not just a matter of the mobility of labour. He mentioned the thorny issue of the introduction of the euro which, as I said, we did not touch on during the course of our inquiry. I am extremely grateful to the noble Lord for raising the matter in the debate. I had hoped that the debate would be broader than its title and, indeed, that has been the case.
The noble Baroness, Lady Whitaker, asked for more research, especially in schools, and spoke of the scope in our schools as regards knowledge of other EU countries and the need to understand the skills that are required to obtain work abroad. I thank the noble Lord, Lord Higgins, for mentioning the time that

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elapsed before the report was debated. Indeed, we were concerned about that time lapse. I am glad that he shared our view that we should not compare the US with the EU. We did not consider that a useful comparison. I say to the noble Lord, Lord Higgins, that with the best will in the world an inquiry can cover only so much. Our difficulty was to ensure that we focused on the Commission's proposals. That was our brief and we tried to keep to it. It was extremely difficult to do so as there were so many directions that we could have taken.
I thank the Minister for his contribution. I was disappointed that he did not take up the challenge to discuss the euro, if only on the margins of the debate. On behalf of the committee I accept his apology for the time lapse before the report was debated. I was disappointed by the rather rosy glow that he put on the areas that the Government are tackling, especially as regards education and training. The Minister reminded us that illiteracy and innumeracy constitute an EU-wide problem. Indeed, they do, but as the report reminded us, we have a serious problem in that regard. I do not think that we should keep repeating that the EU also has the problem. We have a serious problem as regards illiteracy and innumeracy that we must address. I congratulate and encourage the Minister with regard to some of the measures that the Government are taking to try to overcome some of these great difficulties.
However, the situation with regard to language teaching is not good enough. I wonder how the Minister reacts to the suggestion that half of secondary schools are preparing to drop language teaching when pupils reach the age of 14. That cannot be the right way forward. Does he not consider that full-time language teachers are required rather than assistants with no teaching skills? I am sure that we shall return to that matter in the future.
I am most grateful to all noble Lords who took part in the debate. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Delegated Legislation
5.4 p.m.
Lord Dahrendorf Lord Dahrendorf rose to move, That this House takes note of the third report of the Delegated Powers and Regulatory Reform Committee on Henry VIII powers to make incidental, consequential and similar provision (HL Paper 21).
The noble Lord said: My Lords, the special report by the Select Committee on Delegated Powers and Regulatory Reform on Henry VIII powers is in one sense highly technical. It is concerned with the proper wording of certain enabling clauses which appear in many Bills before this House. In another sense, however, this technical report goes right to the heart of the key constitutional question of the limits of executive power, and of the ability as well as the duty of Parliament to prevent the unchecked extension of these limits.
Let me remind the House of the immediate reason for the Delegated Powers Committee report. In the course of the Third Reading of the Nationality, Immigration and Asylum Bill on 31st October 2002, the Government introduced an amendment to the effect that,
"The Secretary of State may by order make provision which he thinks necessary in consequence of or in connection with a provision of this Act".—[Official Report, 31/10/02; col. 417.]
The Delegated Powers Committee happened to meet on the day between the tabling of this amendment and the Third Reading debate. It reacted with the promptness which the House has come to expect of it. While the committee accepted the thrust of the amendment which it found had numerous precedents, it commented adversely on the late tabling of
"a significant Henry VIII power"
which made effective scrutiny impossible, and also on the vagueness of the reasons given for the amendment. Your Lordships were less charitable in the ensuing debate and used strong language to express their feelings. For example, the noble and learned Lord, Lord Mayhew of Twysden, said,
"I regret to have to say this, but I should feel ashamed if I were a member of any government who brought forward a provision of this character at any stage of a Bill, let alone at Third Reading".— [Official Report, 31/10/02; col. 301.]
The noble Lord, Lord Renton, at col. 302, added for good measure:
"I have been in Parliament for 57 years and I have never known any provision that went as far as this one".
The right reverend Prelate the Bishop of Guildford, also at col. 302, concurred for his own reasons:
"A wide-ranging and general power of this sort is open to deep question when it relates to people with the sort of vulnerability who are dealt with by this legislation".
After a Division confirming that this was indeed the majority view of your Lordships' House, the Government amended the clause to say,
"The Secretary of State may by order make consequential or incidental provision in connection with a provision of this Act".
The amendment, in this more specific and restricted form, the House found acceptable. In the course of the debate on Commons amendments on 6th November 2002 which led to this conclusion, I promised the House a report on the precedents and arguments for Henry VIII clauses of this kind. The noble Lord, Lord Filkin, speaking for the Government acknowledged this intention and added:
"No doubt the Government will want to reflect on [the Delegated Powers Committee's] comments and give their views on any report that it produces".—[Official Report, 6/11/02; col. 766.]
Here, then, is the opportunity to do so.
The report is brief but it has a long history. After all, Henry VIII's infamous Statute of Proclamations—enabling the king to legislate by royal proclamation rather than due parliamentary process—was issued in 1539. It had a relatively early sunset as it was repealed on the king's death in 1547. The statute was not then called a Henry VIII power. In fact, I had some difficulty tracing the origin of this intriguing "nickname" as the then Chairman of Committees, Lord Donoughmore, called it in his 1932 report by a

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committee on Ministers' powers. When our legal adviser asked the omniscient Internet about Henry VIII powers, the ever mysterious Web came up, lo and behold, with our own report, which we are debating today, which was flattering for your Lordships' Delegated Powers Committee but less than wholly informative. Fortunately, it is clear what the powers in question are about.
The first report by the Select Committee on the Scrutiny of Delegated Powers, as it was then called, in 1993 stated:
"A 'Henry VIII' clause is a provision in a Bill which enables primary legislation to be amended or repealed by subordinate legislation with or without further Parliamentary scrutiny".
In an address to the Commonwealth Conference on Delegated Legislation in 1989, the first chairman of the Delegated Powers Committee—the late Lord Rippon of Hexham—cast the net wider and defined the "so-called 'Henry VIII' clause" by referring to,
"the way in which primary legislation includes clauses providing that the Minister may amend or at times even repeal not only the primary legislation by order but sometimes other Public or even Private Acts".
It is worth reminding the House that in 1989 Lord Rippon emphasised how rare such clauses had been after the first one appeared in the Local Government Act 1888. Between that Act and 1932—in other words, in 44 years—there were only nine instances of such clauses, all of limited scope and validity and usually coupled with a sunset clause. Lord Rippon deplored the fact that by the late 1980s Henry VIII clauses were used,
"in Act after Act on a scale that would have been absolutely unthinkable until recently".
He explained this sprouting of executive powers by insufficient,
"forethought in drafting the legislation"
and warned,
"Ministers now take power to amend and even repeal primary legislation almost as a matter of common form … In effect we are continually passing legislation which virtually permits Governments to make new laws as they go along".
I have already referred to the Donoughmore Committee set up 60 years earlier, in 1929, which reported in April 1932. To the present day, that report is the most detailed and trenchant analysis of delegated powers, of their origins and their less than felicitous effects. Lord Donoughmore commented on the growing number of laws and the shortage of time for parliamentary scrutiny, on the curiously unsystematic growth of delegated powers and on the need to heed what the Select Committee called the two "distinguishing characteristics" of delegated legislation,
"one positive and the other negative".
I quote from the committee report:
"The positive characteristic is that the limits of the delegated power are defined so clearly by the enabling Act as to be made plainly known to Parliament, to the Executive and to the Public, and to be readily enforceable by the Judiciary.
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The negative characteristic is that the powers delegated do not include power to do certain things, namely—

(i) to legislate on matters of principle or to impose taxation;

(ii) to amend Acts of Parliament, either the Act by which the powers are delegated, or other Acts".

I shall not dwell further on the parliamentary history of Henry VIII powers except to emphasise that today, as three-quarters of a century ago, it is important to resist what Lord Donoughmore called, "executive autocracy" even if one agrees with him that the comparison of current governments with Henry VIII "is certainly far-fetched".
In the light of these reminiscences, however, it will be clear to the House that its Delegated Powers and Regulatory Reform Committee has produced a measured and modest report, although there should be no doubt in your Lordships' minds that we shall endeavour to live up to the high standards set by earlier guardians of parliamentary rights.
The Delegated Powers Committee, in producing its report, was well-served by its new legal adviser, Mr Allan Roberts, who examined precedents and consulted widely, not least with the parliamentary draftsman. The result of his labours can be seen in Annexes 1 to 12 to Appendix 2 of the report. Perhaps I may draw the attention of the House also to the helpful letter by first parliamentary counsel to the legal adviser, which is reproduced in Appendix 3.
The core of our report and the recommendations are simple and largely self-explanatory. In our first recommendation we recognise that,
s"there are occasions when Henry VIII powers to make incidental, consequential and similar provisions are justified".
Such occasions arise above all from practical considerations such as the length of the Bill or the need to accommodate unforeseeable technical adjustments.
The second recommendation tries to deal with the fact that standard Henry VIII clauses on,
"incidental, consequential and similar provisions"
are nevertheless worded in varying ways. First parliamentary counsel has given some reasons for such variations. There is possibly a risk that the "one clause fits all" principle would in some cases lead to a wider empowerment of the executive than is either necessary or desirable. Still, I would note that even in 1932 the Donoughmore committee referred to,
"opportunist considerations, peculiar to the occasion"
leading to an "accidental" choice of terminology, as a result of which,
"the nomenclature of delegated legislation is confused".
Your Lordships' Select Committee suggests therefore that the Explanatory Notes sent to the committee with each Bill should include reasons,
"why a particular form of wording has been adopted in each case".
A more systematic approach is desirable also with regard to our third recommendation which concerns the level of parliamentary scrutiny. That is a major issue to which the House may well wish to return on another occasion. The present report merely states that in the case of Henry VIII powers there may be cases in which the negative procedure is sufficient, but

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there should always be a presumption in favour of the affirmative procedure. That means that whenever it is not adopted reasons must be given in the Explanatory Notes accompanying Bills why this should be so.
I must resist the temptation to return once again to my hobby horse—sunset clauses. It is all the harder to resist the temptation in view of the fact that the Donoughmore committee in 1932, to which I have made many an appreciative reference, recommended that all Henry VIII clauses should,
"be subject to a time limit of one year from the passing of the Act".
Were I to add such a revolutionary proposal to the recommendations in the committee report, I should be transgressing my chairman's remit considerably. Let me stick therefore to the present text and invite the House to take note of the special report by the Select Committee on Delegated Powers and Regulatory Reform. I beg to move.
Moved, That this House takes note of the third report of the Delegated Powers and Regulatory Reform Committee on Henry VIII powers to make incidental, consequential and similar provision (HL Paper 21).—(Lord Dahrendorf.)
5.19 p.m.
Lord Temple-Morris: My Lords, it is a pleasure for me, as the new boy on the committee on which I am pleased to serve, to follow my chairman, the noble Lord, Lord Dahrendorf. The committee is specialised, it tends to be legalistic and it is extremely important. Its subject matter is very much business for your Lordships' House: it is a specialist area which down the corridor in another place would not attract much attention. I leave out the question of Whips, control and so forth. In judging these matters the noble Lord, Lord Dahrendorf, in the leadership of the committee, appreciates more than anyone the importance of the subject.
I was party to the report and agree with every word of it. In following the noble Lord, Lord Dahrendorf, I want to emphasise his words that the duty of Parliament is to prevent the unjustified extension of Henry VIII powers. I also underline his interesting observation that historically they have been rarely taken up. However, as Lord Rippon of Hexham pointed out, their use has recently become more frequent and therefore they must be monitored. Your Lordships' House must take care.
I turn to the cause of the report and the debate: it was the Nationality, Immigration and Asylum Bill. I must plead guilty to your Lordships because I was not in the Chamber during the debate on the legislation. It has proved illuminating to me to read the debate; perhaps more so than had I been in the Chamber. It was an outstanding debate; one in which legal expertise was displayed around the House. The Minister answering, the noble Lord, Lord Filkin, took a reasonable attitude, but it transpired that his legal advice was, if anything, inferior to that given by noble Lords in this Chamber.
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To me, as a new boy, it was interesting to see that and to realise—I cannot resist saying this because of the facility for appointment rather than election—that we can field various people who are qualified to "out gun" the government department of the day. I was delighted that in the Commons the Government gave way on the proposal and that throughout the attitude of the noble Lord, Lord Filkin, was that it was extremely reasonable.
If anyone checks the voting list, they will see that I voted, as ever, with the Government. Many years ago at the beginning of my career in another place, a deputy chief whip said to me, "You don't want to worry, Temple-Morris, about knowing anything about what's going on in the Chamber. The more you know about it, the more difficult you are as far as we are concerned". Having gone into the Chamber and voted on an issue without knowing what it was about, the process was made more illuminating after having read your Lordships' debate.
I have to say that had I been in the Chamber and listened to every word, I would have congratulated those who drew the Government's attention to the particular facet of the clause. I am sorry that the noble Lord, Lord Kingsland, who is a long-standing friend of mine across the divide—formerly we were not divided—is not in the Chamber. His contribution to the debate at all stages was outstanding and I want to pay him a small compliment. I do not need to go into the detail of the clause, but it was draconian. One facet was gripped by various Members present and the Government sensibly surrendered on it.
I return to the report. The overall power to make consequential and secondary legislation is necessary. No government of the day can foresee everything and legislation is complex enough. If in such an atmosphere one tells the draftsmen that it is necessary to cater for everything, there will be no end to the legislation concerned. Such a power is therefore necessary in order to conserve parliamentary time, particularly in this day and age when it is under increasing demand.
The emphasis must therefore be on control and scrutiny on three levels. I pray in aid my chairman, the noble Lord, Lord Dahrendorf, because he heads the special services in this regard. The Delegated Powers and Regulatory Reform Committee is the first into the breach. Although I am a new member, I have been most impressed by the way in which it works. It is totally non-party political and works for the benefit of servicing this House. It is unique. I congratulate the noble Lord on his leadership of it and it has a valuable job to do.
Furthermore, it is indicative of the balance, which we seem to have got right and the government of the day—not just this Government—tend to go along with its observations. Indeed, tomorrow we shall consider sensible responses that have been made by the Government. We do not abuse our powers, but it must be said that we will not hesitate to take them.

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That leads me to the second level of control, which is your Lordships' House. If we get into difficulty, we must depend upon this Chamber, and the debate on the Nationality, Immigration and Asylum Bill was an outstanding example of how that can be displayed. The Select Committee reports and the House must then use its experience to sort out aspects that have gone wrong. It did so excellently in regard to that Bill. Ultimately, at the third level we can turn to the law and the courts; they are the end of the line in any challenge of constitutional abuse. However, I would have thought that your Lordships' House should be available, willing and capable of dealing with such matters.
Finally, there is the question of whether we should have a standard form for the legislative expression "delegated powers". The Select Committee considered the matter in detail and with a certain expertise. I believe that it is unnecessary. It will lead to more complication and is impractical. It will lead to my legal colleagues having a field day, applying lengthy, all-embracing formulae. It will also lead to more powers, not fewer, being taken.
In conclusion, I want to refer to the excellent response by the first parliamentary counsel. It deserves quoting, but I shall mention only paragraphs 4, 5 and 6 of the letter contained in the report. They say it all and I shall paraphrase them for the sake of brevity. As regards the various kinds of delegated powers, we have mention of "consequential provisions"—that is the one to which we always refer. We also have mention of "incidental or supplementary provisions" and "transitional, transitory or saving provisions". In addition to that, and coming to dear King Henry VIII, we must decide whether the power should be given to amend primary legislation and also to amend the very Act itself.
As is said by the first parliamentary counsel, all those issues cross borderlines but all have different ingredients. Ultimately, it is an art form—he suggested that in his letter—as regards the necessary blend and choice which befits any Bill or Act of Parliament. I do not believe that it should be put into some kind of great big formulae which will not work.
I turn to the best answer that we can put forward. It emerges from the report and it is up to us to demand it; that is; a sufficient explanation from the department. As regards the Nationality, Immigration and Asylum Bill, we had that; it was astonishing that a department of state should come forward and say, "We ain't got time here. This is too late. We have to take all these enormous powers because we haven't got time to bring it before you chaps". That was what, in effect, was going on and therefore there was a frankness which was commendable in the circumstances.
We must have a sufficient explanation from the department—and it is the duty of the Select Committee to ensure that it is sufficient. Above all, we must have scrutiny from the Select Committee under the wise leadership which presently prevails and with the support and help recently shown by your Lordships' House.
5.30 p.m.
Baroness Carnegy of Lour: My Lords, it seems to me an extremely good thing that the House is considering this important matter outside the discussion that takes place during the passage of a Bill. We can thus sand back and ask ourselves about the principle at stake. Is it really right and proper for the government of the day so frequently to take powers to enable them to alter in the future any part of a particular Act of Parliament that they feel like altering, and to do so simply by order and possibly by negative resolution?
With 12 examples of such provisions in recent Acts of Parliament before us in the report—nine introduced by this Government and three by the previous government—we can ask ourselves whether such clauses should be acceptable at all to Parliament. If they are acceptable—or, at least, if they seem unavoidable—should Parliament insist on parameters limiting their use? It is a point of democratic principle, and an important one for the future.
In introducing the debate, the noble Lord, Lord Dahrendorf, reminded the House of how the committee came to report. He gave a very interesting historical account of how we got to where we are. He explained how the committee accepted that it would be difficult to ban these clauses altogether and what the conditions for acceptability set by Parliament might be. Like the noble Lord. Lord Temple-Morris, as a member of the committee I congratulate the noble Lord, Lord Dahrendorf, on his admirably clear explanation. The House can see for itself—if it has not seen already—how fortunate the committee is to have the noble Lord as its chairman and how worthy a successor he is to his predecessor, my noble friend Lord Alexander of Weedon.
From a personal point of view, I should like to add a word about what the committee did not say. This was touched on in a subtle, sideways fashion by the noble Lord, Lord Dahrendorf, and by the noble Lord, Lord Temple-Morris, perhaps in a more friendly way than I feel is possible. The committee did not say it because it eschews, as far as possible, what it sees as politically controversial points.
It did not say this: that the problem is a good deal more than the fact that this most extreme form of Henry VIII clause is of itself undemocratic; the problem is also, perhaps primarily, the way that governments—at present this Government—use such clauses and the way in which future, less responsible, governments might use them.
We were reminded by both noble Lords of the latest example of this in the Nationality, Immigration and Asylum Bill. I am sorry that the timetable for the House was changed at very short notice and that my noble friend Lady Anelay, who was deeply involved in the Bill, is not able to speak today. That Bill, after months of Home Office research and a White Paper, had been through all its stages in both Houses. At the last moment, at Third Reading in this House and with no time left before the end of the Session, the Government introduced a very wide-ranging Henry

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VIII clause, stating quite openly that the Bill was still incomplete and that they must continue to amend it after it became law.
The Home Office had not done its work in time and the Home Secretary felt justified in using this device to get it out of the hole it was in. That is what happened, as I think the noble Lord, Lord Temple-Morris, agrees. Both opposition parties here expressed deep concern, as did the noble Lord, Lord Clinton-Davis, from the Government Benches. It should be emphasised that no Member of this House, apart from the Minister, argued in favour of this particular clause and, on a Division, the House removed it from the Bill. But, as the noble Lord, Lord Dahrendorf, reminded us, the Government amended it slightly, the House of Commons reinstated it into the Bill, and it is now the law of the land.
That is what I mean when I suggest that it is the way in which governments use such clauses, as well as the clauses themselves, that is dangerous. The Nationality, Immigration and Asylum Bill was urgently needed—the asylum problem was acute and is still mounting—and the Government knew that this House was therefore unlikely to refuse to give it a Third Reading because, in the very last days of the Session, that would have meant the Bill falling and having to be reintroduced in the current Session. I do not believe that anyone wanted that to happen.
So the Government forced through a Henry VIII clause——it is still very much a Henry VIII clause—which, until then, had not been considered necessary. At the very last moment the Government forced it through simply to enable them to go on making outstanding amendments by order. In doing so, they have opened the way for changes to the Bill which may be much less innocent and go quite beyond the reasons they gave at the time. Indeed, another government might do the same.
There have been, and doubtless will continue to be, many proposed clauses used for good and less good purposes, each of which may have a different effect and different wording but which open the way to the kind of changes we are discussing. The least Parliament can do is to establish the kind of parameters the report suggests, or perhaps stronger parameters, before it accepts such clauses. I shall be extremely interested to hear what other speakers have to say on this matter.
5.37 p.m.
Lord Roper: My Lords, like other speakers, I am grateful to my noble friend and to the committee for this valuable report. Although I am not a member of the committee, I am speaking in the debate because I believe it to be an extremely important one, not only in regard to the incident which provoked the study but because the whole question of the balance between primary and secondary legislation is central to the way in which we in this House scrutinise the process of government.
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The report is brief and is a model of how a short report can be extremely useful. It says all that needs to be said. Other Select Committees may learn from this report, which will have more impact because of its length.
In his magisterial introduction, my noble friend Lord Dahrendorf set the scene, and I shall return to some of the points he raised. Clearly there were particular problems with the late introduction at Third Reading of the clause in the Nationality, Immigration and Asylum Bill, but it is extremely useful that, as a result, the committee has had an opportunity to examine the issue and we now have an opportunity to debate it.
Annexes 2 to 9 of the report, which were compiled by the staff of the committee and its new legal adviser, set out in detail different Henry VIII clauses and explain why, in different contexts, they are needed and important. These will be important documents for all those considering legislation and its preparation, in this country and perhaps well beyond in other countries which follow similar procedures in drafting.
As has been said, Henry VIII clauses are important because they deprive Parliament of its power to legislate directly. They enable primary legislation to be altered without a full opportunity to debate and, particularly, to amend. Any changes which are made by regulation under a Henry VIII power can be debated if they are brought forward under an affirmative order, but they cannot be amended. Therefore it is a significant restriction on the powers of Parliament and of parliamentary scrutiny.
Secondly—I raise this issue as a Back-Bencher, because I may have a slightly heretical viewpoint on the matter—why are Henry VIII clauses necessary in general terms; and why have they become more frequent over the period so well described by the noble Lord, Lord Dahrendorf? The noble Lord said that nine such clauses had been introduced between 1888 and 1932; and since then an accelerating number, growing at an exponential rate over recent years. Why does legislation now contain so many Henry VIII clauses?
One of the reasons—set out in detail in the annexes—is to provide a certain degree of flexibility, to enable us to deal with changes that could not be foreseen when the primary legislation was prepared; or, for example, in such matters as the pay-as-you-earn legislation, where it would be inappropriate each year to return to the Finance Bill and deal with the detail of the legislation and all the consequential changes. Those examples are relatively straightforward.
But there is a further point which presents a dilemma for parliamentarians—the point on which I suspect I may be considered by many of my noble friends to be presenting a slightly heretical or unusual point of view. There is a dilemma as between the pressure—with which I have engaged, like members of most Opposition parties—to press for as much detail as possible on the face of the Bill, at the same time probably generating a need for more Henry VIII type powers. The more one insists on detail on the face of a

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Bill, the greater is the risk of including ephemeral matters which may subsequently have to be changed. Therefore, there is a dilemma in our arguments: as between the relative importance of primary and secondary legislation, the kind of detail that should appear on the face of the Bill and how we wish to have it altered. Provision of a detailed kind may in itself generate the need for Henry VIII type powers. So there is a fundamental dilemma in regard to the drafting of legislation.
The committee or this House may need to return to this matter in considering issues of statute law and how it is prepared. I put the issue forward for consideration. I am not sure what the right answer is, but the problem needs to be considered.
I take the point, which was raised in the report and mentioned in the debate by the noble Lord, Lord Temple-Morris, that a standard form of words, as explained by the first parliamentary counsel, would possibly create more problems than it would solve. None the less, the committee recommends that, where it is necessary to have a particular form of words., the reasons should be made clear in the Explanatory Notes, as well as in the memorandum to the Delegated Powers and Regulatory Reform Committee; and that the committee should, as a matter of course, when it receives a note on the matter, report to the House on the reason why a particular form of Henry VIII clause has been necessary.
I return to the issue raised in paragraph 6 of the report—which was mentioned by my noble friend Lord Dahrendorf; namely, the question of the negative or affirmative procedure. As the committee states, whenever a Henry VIII clause is used, the presumption should be that the affirmative rather than negative procedure will be used. If in the future a scrutiny committee comes into existence—the sifting committee on statutory instruments derived from the work of the noble and learned Lord the Leader of the House and those of us who served with him on the working practices committee—I believe that it will want to give attention to this matter as part of its sifting process in reporting matters to the House.
Like my noble friend Lord Dahrendorf, I am tempted to return to the idea of sunset clauses. 'The model that he gave—of an automatic period of a year being imposed by means of a sunset clause—may be considered somewhat excessive by some, particularly by those on the other side of the Chamber. None the less, we shall need to re-examine the issue of sunset clauses in relation to Henry VIII powers.
As I have said, this is an extraordinarily valuable report. Together with the debate that we have been able to have today, it will be invaluable for the future scrutiny of legislation.
5.46 p.m.
Lord Desai: My Lords, as the fifth speaker on a fairly short report, it is difficult to say anything that has not already been said. So I shall be brief.
Why do governments use Henry VIII clauses? As has been argued by the noble Lords, Lord Dahrendorf and Lord Roper, it is for convenience. It is obviously
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hard to foresee everything that might happen, go wrong or change. Therefore, some such provision is necessary.
The more complex Bills become—as has happened even in the brief time that I have been in this House—the more one needs Henry VIII clauses. Indeed, I believe that every Bill should have a standard Henry VIII clause—it would save us all time and effort!
At the same time, although governments may require such clauses for their convenience, we as parliamentarians must be suspicious of all governments, of whatever party. We cannot allow governments to get away with Henry VIII clauses without giving a proper explanation of why that is being done. That battle will continue.
It is always a good thing to be able to spot a Henry VIII clause in all its various forms and then to hold the Government to account in explaining why they have introduced the clause. Although the explanation may not vary too much from Bill to Bill, it is still good to have it.
Unlike the noble Lord, Lord Roper, I believe that it is good to have as much detail as possible on the face of the Bill, even though it complicates matters. In my personal activity, I find it difficult to concentrate on instruments when they occur later, negative or affirmative. It is very hard to keep track of what is going on.
I should like to see a study of how often, in relation to a particular Bill, the Government return to the House with instruments, negative or affirmative. If we had such a study, we might be able to understand whether it is necessary for governments to do this. We may have a belt-and-braces provision in the form of a Henry VIII clause, but how often do we use it? Having made a great deal of fuss about a Henry VIII clause during the stages of a Bill, has the House been able to discuss what has come subsequently by way of amendments? It is inevitable that Bills will command more attention than subsequent instruments. That is a law of life. Therefore, there is a tension in terms of how often we allow governments to do this.
It was all right to regard Henry VIII with great suspicion in terms of what he was up to. When governments are democratically elected, we can be slightly kinder; but we must still maintain vigilance and make sure that governments do not get away with what they want to get away with.
I want to make a further point which is not germane but is somewhat relevant. I find the language of legislation very complex. I have been a Member of the House for 11 years but I still do not understand Bills. I must wait for either a probing amendment or a Minister's explanation to find out what certain clauses say. They are written in English, but not in plain English. This is not a controversial remark: the Maastricht Treaty is much easier to read than any legislation I have read in this House. I was told that that is because it must make sense in 12 different languages so it cannot be obscure. But, believe me. I do not understand legislation. Something must be done

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about it—I do not know what. Having said that, I thank the noble Lord, Lord Dahrendorf, for his excellent introduction to the debate.
5.50 p.m.
Lord Dixon-Smith: My Lords, I met the noble Lord, Lord Dahrendorf, in the corridor shortly after this debate was reintroduced to the Order Paper late last week. I asked whether he would mind if I introduced a subject closely related to Henry VIII clauses but not specifically in the committee report that we are considering. I apologise to the noble and learned Lord the Leader of the House for not raising the matter with him, but I was not sure whether he was making the winding-up speech on this debate until I saw the list of speakers today. If, at the end of the debate, he says only that he will consider further the issue that I have raised, I will be pleased.
The issue I raise, which is a slightly different aspect of the same subject, is what I regard as Henry VIII Bills. They are skeleton Bills that consist of nothing but powers to make regulations. The first Bill I had to introduce on the Front Bench of this House was such a Bill. I was exercised as to how to introduce it. I am afraid that I hit on the slightly dubious wheeze of using the main part of my remarks to quote the report of the Delegated Powers Scrutiny Committee, then under the chairmanship of my noble friend Lord Alexander of Weedon. After I introduced the debate from our side, I knew what it was like to be an infantryman in a landing craft approaching the beaches on D-day; because, having quoted the report, such was the depth of its criticism of the Bill, there were salvos from the battleships behind me. One could see them scoring on the shores opposite. It was an interesting experience.
I am now dealing with a second skeleton Bill—the Waste and Emissions Trading Bill. The first was the Pollution Prevention and Control Bill. The noble Baroness sitting next to the noble and learned Lord the Leader of the House will recognise it. The point about both Bills is that there is almost nothing in them to discuss. We do our best; we debate it in detail. But the Executive action in those Bills is wholly dependent on regulation. We must debate the Bills without any sight of that regulation so that we are flying blind with few instruments to guide us. Is that an appropriate procedure?
Both skeleton Bills—the first is now an Act—were responses to European directives. It is normal procedure to deal with European directives as far as possible by regulation. But, are those procedures satisfactory with regard to primary legislation? That is why I raise the issue.
A second related matter—it is not essentially part of the report—is that, as a consequence of our approach, this sort of legislation is the subject of three levels of discussion in the United Kingdom. As the United Kingdom Parliament, we discuss the framework Bill in such detail as we can. We try to probe from the Government what lies behind the legislation and what its meaning is. The Bill then goes to Scotland where,
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within the framework that the United Kingdom Parliament has defined, the Scottish Parliament can have full discussion and debate and pass its own laws, provided that they are consistent with the framework law that we have passed. The National Assembly for Wales has a different function. Its function is very much to consider the question of regulations. So, the regulations receive detailed, careful consideration there.
Here, in England, regulations that require the positive assent of the House are none the less take-it-or-leave-it regulations. One cannot amend them. They must be accepted or rejected. In many cases, the need to pass the good elements of the regulation mean that one cannot deal with the flaws. Whether that is a satisfactory procedure is a serious question, particularly when under the Pollution Prevention and Control Bill one of the regulations brought forward was 150 pages long. Despite that, it had to be passed on the nod.
This is a serious aspect of our legislative process. I accept entirely that it is not the sort of subject that we could, or should, deal with hastily. It needs careful consideration. I wish to see the matter referred to a Select Committee. The Delegated Powers and Regulatory Reform Committee would be an appropriate forum for dealing with it, so I would be happy to see it referred there. I am grateful to the House for allowing me to raise the issue, which, although appropriate, cannot be dealt with today.
5.57 p.m.
Lord Wedderburn of Charlton: My Lords, I apologise to the House for not having my name on the list. I intervene merely to make one point. I am happy to follow the speech of the noble Lord, Lord Dixon-Smith. I do not criticise the report, certainly not the important and erudite opening speech of the noble Lord, Lord Dahrendorf. It may be one of the most important reports since the Donoughmore report of 1932. One is tempted to reflect on the increased need for measures such as Henry VIII clauses arising, at any rate at the same time as, and possibly as a result of, the increase in social legislation. One need only look at social security Bills to understand the need for more and more detail.
My point may fall outside the examples in the report's annexes. We have had recent examples not exactly of skeleton Bills but of those purporting to tell the legislature what they are about. They contain Henry VIII-type provisions that allow the Minister, by order or regulations, to change the very core of the Bill, and thereby the Act. They are, I suppose, not skeleton Bills but what might be called narcissistic Henry VIII clauses.
One such example is in Section 32 of the Employment Act 2002. Subsection (8) provided that the Secretary of State could by order,
"(a) amend, repeal or replace any of subsections (2) to (4);
(b) amend Schedule 4".

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Those were the very core of the provisions that limited access to justice for workers whose rights had been infringed and whose complaint would go to an employment tribunal.
That section was largely conceived out of a genuflection and response to employers' complaints that workers' complaints to employment tribunals were too costly. In the nine weeks in which my noble friends and I sought to retain that Bill in the Grand Committee to which it was sent without many people knowing what was going on, we got no alteration of that particular response from the Government at all. The CBI, quite naturally, thought that that was the Bill's most important clause. Your Lordships' joint Committee on Human Rights had two whole sittings on that section and the Bill and eventually concluded that it was valid as being proportionate. Yet, what the Human Rights Committee judged was valid and proportionate could be totally changed by the Minister by order. If ever there were an example of the correctness of the report now before us, surely that was it.
I make no apology for raising this point. It was a matter of principle for some of us but was ultimately ignored by both Houses. The Government knew what they were doing. Indeed, in the debate on the Bill's Second Reading, my noble friends and I suggested that the Minister, in proposing Part 3, should come forward, as I put it on 26th February, with a spirited rendering of that grand old Harry Champion number, "I'm Henry The Eighth, I Am". We got no such rendering. Nor did we get a clear explanation of why the Minister should have power to amend by order the core of the Bill.
My time is up. However, if ever there were a recent example justifying this report, it is that.
6.2 p.m.
Lord Goodhart: My Lords, I am most grateful to the Select Committee on Delegated Powers and Regulatory Reform for producing this excellent report. My noble friend Lord Dahrendorf has, through this report and his speech in introducing it, shown himself to be a worthy successor to his predecessor, the noble Lord, Lord Alexander of Weedon. who I am extremely pleased to see in the Chamber to listen to the debate. I was a member of the committee when the Nationality, Immigration and Asylum Bill was going through your Lordships' House, but I have since been rotated off it. I have therefore played no part in the drafting of this report.
Henry VIII powers have become increasingly common. It should, I think, be particularly noted that the Regulatory Reform Act 2001 provides for regulatory reform orders that use Henry VIII powers on an exceptionally wide scale. They will need to be monitored very carefully to see that they are not exceeding the legitimate purposes for which they were created.
Today's debate, however, concentrates on one particular type of Henry VIII power—the power to make consequential provision orders. I say
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"consequential provision" as a type of shorthand to include orders that cover matters which may be described also as "incidental", "supplementary", "transitional" or by one or two other adjectives as well. Such powers are, of course, not included in all Bills or even in all major Bills, but they have certainly become quite common in major Bills. They have been used, as Appendix 2 to the report shows, at least nine times in the past three years. The reasons, as explained it this debate, are uncertainty about whether the schedules amending or repealing existing legislation are complete, and uncertainty as to what consequential powers will be needed.
There is, however, one lacuna in this debate, identified by the noble Lord, Lord Desai, which is that we do not know how these powers have in fact been used. I should be very interested to know whether any or all of the powers listed in the second appendix to the report have been exercised, for what purpose, and how long after the power came into force. While I do not expect the noble and learned Lord the Leader of the House to be able to provide that information now, I should be most grateful if he could obtain that information and provide it in a letter to all noble Lords who have spoken in this debate.
These consequential provisions clauses have been going through the Delegated Powers Committee on a regular basis without attracting a great deal of attention. Sometimes the affirmative procedure has been used, and sometimes the negative procedure. It may be that the committee should have paid a little more attention to these clauses than we did. The situation changed because of the late introduction into the Nationality, Immigration and Asylum Bill of an amendment introducing wide consequential powers. Those powers were wide but were not unprecedented. Several of the other clauses set out in the annexes to Appendix 2 to the report contain rather similar powers. However, the fact that that particular clause did not appear in the original Bill, but was introduced at a very late stage, did indeed concentrate people's minds.
Some speakers have attributed sinister motives to the Government which I do not believe exist or existed. However, the challenge to that clause not only resulted in the modification of the clause itself., but performed what I believe is a very useful service in making your Lordships' House think again about the role of consequential provisions clauses.
I believe, with some regret, that such clauses are sometimes justified. Legislation is now so complex t hat we cannot be sure that everything in previous legislation that should be changed has in fact been changed. It would be a waste of time to have to introduce primary legislation to correct a minor oversight. However, I believe that the report is absolutely right in saying that there should be a presumption in favour of affirmative procedure when a Henry VIII power is created.
There are, I think, sometimes circumstances in which, even for a Henry VIII power, the negative procedure might be adequate. For example, the Act

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may create for some purpose an express time limit and then give power to extend that limit by statutory instrument. Depending on the circumstances, that may be a case in which the negative procedure would be sufficient. However, I think that there should be something close to an absolute rule that a consequential provisions clause should require the affirmative procedure in so far as it modifies or repeals primary legislation.
Consequential provisions clauses are, of course, limited by their wording. The changes must be generally "consequential" or "incidental"—or whichever adjective is used. If not, then an order made in purported exercise of that power will be ultra vires and can be challenged in a court. However, within the bounds of that wording, the Government are effectively being given something of a blank cheque. By definition, more or less, they do not know why or when that power is going to be used. In those circumstances, I believe that we should not rely on someone checking all statutory instruments which may be adopted under the negative procedure to determine whether it is an order that deserves to be prayed against. There should be actual parliamentary approval of any change to primary legislation made in exercise of a consequential provisions clause, which means that the affirmative procedure should be used more or less as a matter of course.
I also support the proposition that the consequential provisions clause should be exercisable for only a limited time after the power comes into force. A time limit sunset clause concentrates the mind. If anything is truly consequential or incidental it must be capable of being identified in a fairly limited time after the Bill becomes an Act and comes into force. Speaking for myself, I would not dissent from the one-year time limit proposed by my noble friend Lord Dahrendorf, although that is, of course, a matter for debate.
The debate has been useful. I hope that the Government are listening carefully to what is being said. I look forward to the speech of the noble and learned Lord the Leader of the House.
6.11 p.m.
Lord Strathclyde: My Lords, I am grateful for the opportunity to intervene in this short but important debate. I would like to thank the members of the Delegated Powers and Regulatory Reform Committee and, in particular, their chairman, the noble Lord, Lord Dahrendorf. I am told that the noble Lord was recently honoured by the President of Italy. I hope that that is right, because it attests to the wide respect in which he is rightly held in this country and overseas, not least for his observations on constitutional matters.
The problem of how to make incidental changes to primary legislation is not only encountered in the UK. Indeed, to return to Italy for a moment, the legislature there spent a great deal of time, until recent reforms, passing so-called leggine, "little laws", that served to clarify, amend or explain main legislation. There we
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now see greater use of ministerial decree to make such changes. I am not sure that that is the way I would want to go. We should not be under any illusion but that secondary legislation is, in effect, rule by ministerial decree. "Take it or leave it", as my noble friend Lord Dixon-Smith said, but one cannot even give or take a dot or comma. That is why the power is so attractive to departments, and why we should be careful that what masquerades as a convenience should not become a contrivance to avoid scrutiny.
Neither House can amend legislation made under Henry VIII powers, which can have far-reaching effects. The affirmative procedure, while offering some safeguard, does not really address the problem, as any noble Lord who has missed his kidneys and bacon to listen to dinner-time orders can testify. The Wakeham commission wrestled with that problem but its proposed delaying power offered no solution—indeed, it would have stripped Parliament of a power that it does have to threaten rejection.
The rejection power is a nuclear one. It is unwise to threaten to use it or actually to use it too often, but it can serve, as it did in the context of the Greater London Authority Act 1999 when this House successfully vindicated the right of electors to receive a free election address from all candidates. Far greater thought needs to be given to that problem. It is one task for the Joint Committee of both Houses in the next stage of its deliberations on the future of this House.
The number of statutory instruments is now immense. There were 3,264 in 2002 and 4,150 in 2001. Those figures do not include Welsh and Scottish orders that once came before us. That compares with some 2,279 statutory instruments in 1987. The House is examining ways of improving scrutiny of the use of secondary powers, and I welcome that. But today we are considering an aspect of what is, in essence, the front line of defence—namely, the framing of legislation.
Few will doubt that the institution of the Delegated Powers Scrutiny Committee, as it was called when set up by my noble friend Lord Cranborne, was farsighted. Since then, it has carved out a place of great authority, and is being emulated in another place. Despite one or two unfortunate waverings at the Dispatch Box, no government have yet rejected warnings from the committee over attempts to take excessive Henry VIII powers, and I hope that it stays that way. It will when there is again a Conservative government, and no doubt the noble and learned Lord the Leader of the House will give an assurance to cover the short intervening period before that.
I strongly support the specific recommendation of the report, which I hope the noble and learned Lord will confirm will be put into operation on all future Bills presented to Parliament. I understand the point made by parliamentary counsel that wording may need to vary from Bill to Bill, but it is a sensible suggestion that Explanatory Notes should lay out in each case why a form of wording has been used. I also agree with a presumption in favour of the affirmative

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procedure, and that government should specifically explain with a Bill why they do not consider that to be necessary when seeking a Henry VIII power. Some say that use of the affirmative procedure might take too much time on the Floor of the House, but impatience about time rarely makes for good law. Would it not fit with the radical nature of the noble and learned Lord's leadership of this House to stage some debates on orders in the Moses Room?
All that said, I confess to the very faintest sense of disappointment with the limited scope of this report— at least, the scope is limited at this stage and in this particular report. I hope that we will see more special reports from the committee, reaching beyond the merely responsive reports that comment on specific Bills. It may be a function of the stretched clerking resources of the House that the report was unable to drive into deeper detail about the examples it cites and the nature of the use made of Henry VIII powers. I agree with the noble Lords, Lord Desai and Lord Goodhart, on that point.
There is a perception that Henry VIII powers are being increasingly sought and increasingly used, but I do not know if that is right, and this report did not set out to answer that question. Perhaps it should, and perhaps Henry VIII powers should be subject to a five-year life; if unused, they would fall. The report does not test the extent to which unamendable legislation is used to change the lives of our citizens and whether it is beyond the extent acceptable in a free society. People affected by primary legislation are able to bring their case to this House and seek change, other than by pleasure of Ministers and their civil servants. We are seeing that exercise in train in the fascinating debates on the Licensing Bill, now in Committee in your Lordships' House. In the case of secondary legislation, that is simply not possible.
Until the parliamentary settlement that will follow the work of the Joint Committee, we should be doubly cautious about allowing a doctrine to grow up that Henry VIII powers enabling unamendable legislation are a given in our constitution, as this report does. The precedent book is a dangerous thing. Something that first time round is highly controversial, the second time round becomes of interest only to constitutional anoraks and the third time round becomes part of the acquis gouvernementaire—if I may use that phrase.
That is the nub of the problem. Is that the seductive road down which we are being tempted to stray? If so, the executive are the winners and a Parliament that has never been weaker is once again the loser. Most noble Lords can recognise when government oversteps the mark, but it is no good crying foul, if one cannot also say "No". from time to time. I hope that the committee will review firmer guidelines to prevent encroachment by executive fiat.
I tentatively suggest two approaches. First, no Bill that is primarily a skeleton Bill should be passed by the House. I recall the deplorable example of a pollution Bill a few years ago, which consisted of a couple of pages of Henry VIII powers that would have given the Secretary of State power to do almost anything. My
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noble friend Lord Dixon-Smith is right on that point. I would like Bills of that kind to be considered in a future report and ground rules laid down which might serve at the pre-legislative stage.
Secondly, when a Bill contains Henry VIII powers, which are claimed on the basis that they cover detailed matters better dealt with in regulation, the House should not agree to proceed with that Bill until final draft guidance on the use of the powers or draft regulations has been published. The current Licensing Bill may be a case in point. Perhaps in a memorandum to the committee the department should explain why it is impossible to publish such draft regulations alongside the Bill.
The whole House owes the noble Lord, Lord Dahrendorf, a debt of gratitude. The report is a useful step forward. There is a major constitutional issue lurking in this undergrowth that we cannot solve tonight. I very much hope that the House, the Joint Committee and the noble Lord's committee will soon return to the matter of the use of secondary powers.
6.20 p.m.
Lord Williams of Mostyn: My Lords, I do not want to introduce any jarring note. I begin by saying what a personal pleasure it is to see my old friend and colleague, the noble Lord, Lord Alexander, in his place and I to pay tribute to the work of the noble Lord, Lord Dahrendorf, and his committee. As I have said on previous occasions, the committee has made its own authority and has therefore become extremely authoritative with all governments. That remains the case.
The indefatigable energies of Mr Daniel Greenberg from the parliamentary counsel office have produced a report that has not yet been mentioned. It is therefore incumbent on me to mention it. The report, from October 1953, contains an extremely good encapsulation of our problems by that radical parliamentarian, Aneurin Bevan, who said:
"There is now general agreement about the necessity for delegated legislation; the real problem is how this legislation can be reconciled with the processes of democratic consultation, scrutiny and control".
One always needs a Welshman to put it economically. I was pleased to hear the noble Lord, Lord Strathclyde, using a European language, but I think we pronounce it differently in Swansea.
The debate has demonstrated a general feeling that our procedures and processes for dealing with legislation are inadequate. I agree with two propositions. First, European legislation is not sufficiently scrutinised. We know that the committee of the noble Lord, Lord Grenfell, is attending to that. Secondly, the vast body of secondary legislation, which may affect the individual citizen more than does the primary legislation, is not properly attended to.
I hope we shall soon start with the sifting committee. That is a very important step forward for this place. In some ways it is easier to do that here, because we do not have the partisan politics that I am told there are in the other part of the Palace—although I have been

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fortunate enough never to be an ignoble denizen of that end—and the Whips have far less power here. I think we are capable of doing that work well. Having listened carefully to all the contributions that your Lordships have made and re-read the committee's report, it is interesting how little difference there is between those who have spoken, from whatever side. I take the point made by the noble Lord, Lord Dixon-Smith. I understand the difficulty in trying to deal in a legislative context with what he described as a skeleton Bill, giving the example of the Waste and Emissions Trading Bill. The Delegated Powers and Regulatory Committee looked at that Bill with some care and said:
"We appreciate that the highly unusual structure of the bill was to some extent dictated by the different legislative procedures under the devolution arrangements".
The noble Lord touched on that point.
In many ways, this is our opportunity, as the noble Lord, Lord Strathclyde, said. The Joint Committee ought to return further not simply to composition, but to precisely how we use the powers and functions that we already have. We do not do the work sufficiently well.
Without undue complacency, I think that the Nationality, Immigration and Asylum Act 2002 showed that our procedure is capable of working. In his masterly exposition, at the outset of his speech, after the historical review, the noble Lord, Lord Dahrendorf, pointed out that the Government were made to think again. An amendment was brought forward and the Bill was improved. To that extent, it worked well. If I may be absolutely candid, on the basis that this is not being recorded, the real mischief there was that the matter was brought forward too late. A number of your Lordships have referred to that. This is a legitimately proud House. It does not wish material to be brought forward late. That lesson may be capable of being well learnt.
We have sunset clauses quite often. The noble Lord, Lord Shutt, and I were looking at one the other day in the Grand Committee on the Police (Northern Ireland) Bill about 50:50 recruitment in the post-Patten proposals. That is quite a useful scheme, providing for statutory review not more than every three years and a requirement for renewal not more than every three years. That is a device. I cannot be quite as nuclear as the noble Lord, Lord Dahrendorf, because the sunset clause would become, by and large, eclipse legislation and we would spend a disproportionate amount of time every year looking at sunset clauses.
Some specific questions have been put. The noble Lord, Lord Roper, dealt with the sifting committee. That is an extremely important way in which we could do work well without clashing with the entrenched privilege and superiority of the Commons.
The report posed three questions. First, is there a case for using Henry VIII powers to make incidental, consequential and similar provisions? I do not think that anyone has dissented from that. The real approach, with which I join, is that we must be
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proportionate in the use made, we must be meticulous about the occasions and we must always consider scrutiny. The noble Lord, Lord Goodhart, said that he would not be surprised if I were not able to give all the material to him. It will take some little research, but I shall undertake to have that done. That ought to inform our discussions. Are these Henry VIII powers properly sought on a particular occasion? If so, how well do they work and should there be any further scrutiny? I do not regard this as a party political or partisan matter.
Secondly, should there be a presumption that the same form of words should be used in every case? Proper tribute was paid to the thoughtful letter from chief parliamentary counsel. I do not think that the case is made that we ought to have a standard form of wording in every case. That would be disproportionate and we ought to be much more selective.
A number of your Lordships made the extremely important point that we now have an opportunity to use pre-legislative scrutiny in a way that it has not been used at the other end of the Palace. The package that your Lordships have approved says that eventually virtually all significant government Bills should have pre-legislative scrutiny. I think that is an accurate paraphrase. That is a significant way forward. I have no doubt that that general approach could be accommodated on appropriate occasions to deal with the sort of matter that we are looking at at the moment. There would be an opportunity at a much earlier stage—that is crucial—to identify the areas of concern, sometimes profound concern, about the nature of prospective legislation. If that is done and we are then able to use Grand Committee and carry-over, that would be a way of doing our work better. The noble Lord, Lord Strathclyde, said that some of these orders might usefully be debated in the Moses Room. I know that his deputy leader does not really like the Moses Room, but a committee, which might not be called Moses, is certainly a possibility.
The third question was about the appropriate level of parliamentary scrutiny. I agree with those who have said that one size will not fit all. There are aspects that do not require the heavy artillery brought out. It is better to go forward case by case, not because that is a particularly English approach, but because it is a pragmatic approach that has proved of virtue and value under the chairmanship of both noble Lords who are here present.
This has been a short debate.
Lord Maclennan of Rogart: My Lords, before the noble and learned Lord leaves that point, the committee made a clear recommendation on the level of scrutiny. It said that there should be a presumption in favour of affirmative legislation. In saying that it should be on a case by case basis, is the noble and learned Lord rejecting the argument in favour of that presumption?
Lord Williams of Mostyn: My Lords, it is better to rely on the committee, which has the expertise and is non-partisan. Our experience has been rather

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successful. Rather than having an overall presumption, I suggest that it is better to rely on the specific, distinct expertise of the committee in any particular case. We are certainly more than happy to follow that line. As I have said in the past, in my experience since 1997, I do not believe that we have ever gone against a recommendation from the committee of the noble Lord, Lord Alexander, and now that of the noble Lord, Lord Dahrendorf. We should move forward in that way.
I was about to say that this has been quite a short debate, but surprisingly and hearteningly well attended—a double first!
6.30 p.m.
Lord Dahrendorf: My Lords, it remains for me to thank all noble Lords who took part in this short but well-attended debate, including those who are members of the committee, who were members of the committee, and those who may one day advance from their present Front Bench positions to membership of the Delegated Powers and Regulatory Reform Committee. I do not want to miss out my old friend—by the customs of the House I cannot call him my noble friend—the noble Lord, Lord Wedderburn, a colleague from LSE days who may not fall into any of those categories.
I am naturally particularly pleased by the friendly comment by the noble Lord, Lord Strathclyde. I hope if I say that I agree with his comments on Italian legislative practice, as I do, that will not lead to the withdrawal of the honour recently bestowed on me by the President of Italy.
I am sure that I am right in saying that the committee will on the whole feel encouraged by the debate. It is also clear that there is more work of a specialised kind to do. Like others, I am delighted to see my predecessor the noble Lord, Lord Alexander, here. I know that he agrees with me that every now and again the Delegated Powers Committee should produce special reports for debates of this kind. I therefore take the point made by the noble Lord, Lord Strathclyde, and the question left open by the latest exchange in the Chamber as an encouragement to look further at what is really behind the extraordinary process over the past decades by which what we call Henry VIII powers have become almost an automatic part of legislation.
Before I moved the Motion for this discussion I was told to avoid one thing above all, which was to end by saying, "I beg leave to withdraw the Motion standing in my name". That is quite often said at the end of such debates, but I will do exactly the opposite. I beg leave to move that the House takes note; in many ways it should do more than take note—it should act on the report from the Delegated Powers and Regulatory Reform Committee.
On Question, Motion agreed to.

National Endowment for Science, Technology and the Arts (increase of Endowment) Order 2003
6.33 p.m.
Lord Davies of Oldham Lord Davies of Oldham rose to move, That the draft order laid before the House on 11th December 2002 be approved [5th Report from the Joint Committee]
The noble Lord said: My Lords, I speak on behalf of my noble friend Lady Blackstone. The order increases the endowment of the National Endowment for Science, Technology and the Arts under powers conferred on the Secretary of State for Culture, Media and Sport by certain sections of the 1993 and1998 national lottery Acts. I am satisfied that the draft order before the House is compatible with convention rights.
We propose to increase NESTA's endowment by £95 million out of money held in the National Lottery Distribution Fund for expenditure on health, education and the environment. The increase will serve two purposes. There will be an addition of £50 million to the existing £200 million endowment to enhance NESTA's income, which has fallen considerably since its inception, and a further £45 million will be used over the next three years to launch a range of new initiatives.
NESTA was established under the National Lottery Act 1998 in recognition of the need to enhance the UK's capacity to develop and commercialise ideas. Its overarching objective is to support and promote talent, innovation and creativity in the fields of science, technology and the arts. The initial endowment of £200 million from the lottery was granted in 1998 and was expected to generate annual income of around £12 million. With that income, NESTA funds three programmes: invention and innovation; fellowships; and education. It also runs projects, such as Science Year.
NESTA has already achieved much, but it is still relatively young and its success will be seen more clearly in the long term. Under the strong and determined leadership of NESTA's chairman, my noble friend Lord Puttnam, significant progress has been made. Since the first awards in 2000, NESTA has awarded more than £34 million to cover 270 people across its three core programmes. More than 30 new patents have been filed, 25 new companies have been registered and the first royalty cheque has been received. Some of NESTA's fellows have already produced significant bodies of work. Funding of more than 75 education projects has led to the development of national models of excellence.
NESTA has also attracted significant support from government departments. It won the contract to deliver the Government's Science Year in 2001–02, since extended to the current academic year. With substantial support from the DfES and the DTI, it has established the NESTA FutureLab, a research and development facility bringing together the academic community and cutting-edge creative industries to develop educational software. NESTA has won awards for the way it conducts its business, and has

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received increasingly positive and widespread recognition from the business and investment communities and the media
NESTA was set up to take risks and that means we should expect some failures. What is important is that it learns from experience as it evolves. NESTA is doing just that and it has carried out initial evaluations of its programmes. Those have led to improvements in application processes; an increase in the diversity and range of its fellows; improved communications with applicants; and a redesign of its website. It is also taking positive steps to raise its profile and increase applications in Scotland, Wales and Northern Ireland and in regions such as the North West and the East Midlands.
That is encouraging, but as the recent report by the Select Committee on Science and Technology on NESTA's achievements made clear, there are a number of areas where NESTA could and should do better. The Government have responded to that report, and we expect that response to be published very shortly. However, noble Lords will wish to be aware that, although we support a number of the committee's recommendations, we do not accept the committee's view that it is premature for NESTA to receive an increase in its endowment.
We believe that that recommendation arose from difficulties in interpreting NESTA's financial information, which led the committee to conclude that NESTA did not have a sufficient grip on its finances. I can give an assurance that that is not the case and that we are satisfied that the financial information contained in NESTA's reports is accurate and reliable. However, we agree with the committee that NESTA must take steps to ensure that in future it presents financial information in the clearest possible manner and that its running costs are limited. We have given a clear and unequivocal assurance that we will work with NESTA to address those key issues identified in the committee's report over the next few months.
I turn to the reasons for proposing the increase. When NESTA was established, provision was made in the National Lottery Act for the endowment to be increased by order of the Secretary of State. That provision recognised that the initial endowment alone might not be sufficient in the longer term for NESTA to achieve its ambitious and challenging objectives.
In 2001, NESTA submitted a proposal for an increase in its endowment of around £300 million. That increase would have provided income to extend significantly its three core programmes, to launch a number of new initiatives and to counter the effects of prolonged low interest rates. We have considered this proposal and believe that it is too soon to approve such a significant increase in the endowment. NESTA must clearly show that it can walk before it runs, and we do not believe that the time is right for such a radical change.
However, NESTA's annual income has fallen significantly from £12 million to £8 million because of low interest rates, and its reserves are being used to
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sustain current levels of programme expenditure. We believe that that is unsustainable and that it is vital that NESTA is able to maintain its core programmes at an effective level. Any reduction in the level of awards would send out a very negative message about our support for developing the nation's talent. Therefore, in this order we propose to increase the endowment by £50 million to provide a return which restores annual income to around £10 million to £12 million and to provide a cushion against future fluctuations in interest rates.
We would also like NESTA to be in a position to move forward and to have the capacity for modest growth in the short to medium term. We are keen for NESTA to develop and launch a number of new initiatives over the next three years, particularly those which support our objectives for children and young people, education, social inclusion, sustainable development and the economy. We therefore propose to increase the endowment by a further £45 million and to allow NESTA to draw down up to £15 million a year of that over the next three years in order to fund a range of new projects. Those include: a scheme to support the best talent emerging from art and design colleges; a fellowship scheme for young people; promoting entrepreneurial talent in schoolchildren; and broadening the scope of existing programmes.
Longer-term decisions on NESTA's funding will be made in the light of a full evaluation of programmes which NESTA is undertaking and further independent reviews which are scheduled to take place over the next few years.
We propose to fund the £95 million increase by a one-off transfer of uncommitted funds from the New Opportunities Fund. The transfer will not affect existing NOF programmes and is not intended to alter the balance of funding between lottery distributors. The Government have given a commitment to maintain the percentage share that goes to the original good causes, and that commitment will not be affected by these proposals.
It is also important to note that the transfer is in no way meant to denigrate the invaluable contribution made by the New Opportunities Fund to thousands of health, education and environment projects around the country. The Government remain committed to ensuring that those important areas continue to benefit from lottery funding.
Finally, we do not propose to present NESTA with a blank cheque. The Secretary of State has sought firm undertakings from NESTA that it will address issues of cost-effectiveness, demonstrate how it might contribute further to our social inclusion and sustainable development agendas and take steps to ensure a balanced distribution of funds across the whole United Kingdom. She has also sought an undertaking that all the issues raised by the Science and Technology Committee report have been properly addressed.
The Secretary of State has consulted her Cabinet colleagues and the devolved administrations on this proposal. They are broadly content, but the devolved

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administrations have asked that we ensure that there is a more even distribution of funding across the UK. As required by the National Lottery Act 1998, we have consulted the New Opportunities Fund and the other lottery distributors and they are content with the proposed transfer of funds.
In conclusion, we believe there is a sound case for providing NESTA with an increase in its endowment to help to restore its income and to enable it to take forward new initiatives. We believe that that is best effected by a transfer of £95 million from unallocated funds in the National Lottery Distribution Fund. Accordingly, I commend the order to the House. I beg to move.
Moved, That the draft order laid before the House on 11th December 2002 be approved [5th Report from the Joint Committee].—(Lord Davies of Oldham.)
6.45 p.m.
Baroness Buscombe: My Lords, I thank the Minister for introducing the debate on this important order. We have devoted some time to it because, in our heart of hearts, we want to be supportive of NESTA. In some ways, it would have been nice if we had simply been able to stand up and say, "We support it unequivocally", and then to have sat down. But that is not possible.
We have questions about some aspects of the funding; there are some areas where, to be brutal, the figures do not seem to add up; and we are concerned about some of the issues raised in the House of Lords Science and Technology Committee's report, National Endowment for Science, Technology and the Arts: A follow-up (6th Report of Session 2001–02). I believe that those issues should be aired, as, indeed, they were last week in another place in a debate about this order. In a moment, I shall come to some of the issues raised in that debate which, I suspect, will make the Government feel a little uncomfortable. Some of it was quite amusing.
When I first became Shadow Minister for Culture, Media and Sport for Her Majesty's Opposition, one of the first pieces of information—if it can be called that—that I received was from NESTA. I did not understand it or have a clue what it was about. That matter was raised by the Select Committee and I notice that Members in another place have referred to it.
There is no doubt that the objectives of NESTA are extremely worth while and worth repeating: to support and promote talent, innovation and creativity in the field of science, technology and the arts. The objectives were set out in the enabling legislation of the National Lottery Act 1998. The core goals to be achieved by NESTA were: to be a helping hand to talented individuals or groups in the field of science, technology and the arts; to help individuals and groups to realise their potential; to help to turn inventions into ideas in those fields and into products and services which can be effectively exploited and the rights to which can be effectively protected; and, by contributing to public knowledge, to promote an appreciation of science, technology and the arts.
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Those are all good goals but they do not seem entirely to marry with the order, which talks about the need for additional funds for expenditure on or connected with health, education and the environment. When the Minister comes to reply, I should like him to reassure your Lordships' House and me that there is not some skew or hidden agenda here. Why does the order not make it absolutely clear that this is additional funding required for the core objectives relating to science, technology and the arts? Why are we suddenly looking at wording connected with health, education or the environment? Is that to pacify all the other worthy groups which feel hard done by because they believe that they should have received this type of funding? Do they feel that because, as a Member in another place said, NESTA is rather trendy, it is more likely to receive this substantial funding so early in its life, whereas village halls and other community projects are losing oat? I believe that, for the sake of clarity and for the benefit of NESTA, it would be a good idea if we were all to be clear that the funds are straightforwardly for science, technology and the arts.
I said at the outset that I was unsure as to the meaning of "NESTA". Therefore, I asked a researcher to look up some information about it on the website so that I could fully understand what it is all about. Some of the journals—I have one here entitled, NESTA Journal Issue 02—are incredibly glossy. I should love to know from the Minister the amount of expenditure on that kind of material. I assume it was free, which is probably quite right. At whom is it aimed? Who, in addition to privileged individuals like myself, is able to receive this kind of literature? It is well set out but—NESTA may not like me saying this—frankly it lacks clarity in terms of its goals, achievements and objectives.
People want to know how their money is being spent. The money comes from lottery tickets that people cherish. When people spend their money on the lottery they want to be sure that the money goes to good causes. In October we looked on the website of NESTA. It read well:
"Moving forward, our programmes went live in December 1999 and since then we have made steady progress supporting over 225 awards worth £15 million".
In May of last year—I jump further back—we received a NESTA briefing that stated that NESTA has made 248 awards at a total commitment of £17.7 million. So in May there were 248 awards worth £17.7 million; in October on the website there were 225 awards worth £15 million; and now the Minister reports to the House that NESTA has made 273 awards worth £34 million. That shows a huge discrepancy or jump in the figures.
Talking of a huge jump in the figures, we found it remarkable to learn from our inquiries that NESTA had been so bold as to ask for an additional £300 million only 18 months into its lifetime. I accept that the Government turned down that request, but that leads us to question whether it is fair to give NESTA £200 million partly on the basis—I put it as simply as that—of the problem with lower interest

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rates. That is a problem that all businesses have to confront, but unlike NESTA other businesses have to re-jig the management of their money accordingly.
I read the debate in the Commons. There were a number of stinging references to the achievements of NESTA that I do not feel were answered properly in another place. I believe that it is worth asking the Minister whether we could have some salient examples of the achievement of NESTA during its short life to indicate that it seriously deserves such an increase in funding.
As I have already said, there was reference to NESTA being seen, in the eyes of the Government, as more deserving because it is trendy. It was suggested that,
"Carol Vorderman is on the board on NESTA, so how could it be anything but trendy?".—[Official Report, Commons First Standing Committee on Delegated Legislation; 9/1/03; col. 13.]
I think that is a rather unfair reference, but the Minister may like the opportunity to respond to it. Later in the debate at col. 15 there was this comment:
"The point was that much of the money appears to be heaped on the Islington dinner party set and not enough on causes to inspire the people who buy a lottery ticket on a Saturday morning".
Quite understandably, there were also references to the expenditure by NESTA on a wonderful building and on the style of reports that it produces—not just the glossy magazine that I have shown today, but also its annual report. I read many annual reports but I have never seen one in hardback before. It is stylish but the Sixth Report of Session 2001–02 said, quite rightly, that,
"Annual reports should not read"—
this is the important point—
"like the production notes in a theatre programme. Creativity should not be at the expense of clarity. We recommend that NESTA in future provide Annual Reports which contain clear and full information on expenditure, including awards made; the targets; and expenditure plans".
I heard what the Minister said, that the Government do not accept that there was a lack of clarity, but I believe, as I have said before, that it is important for NESTA to ensure that its credibility is sustained and enhanced by listening and responding to the criticisms contained in the Sixth Report of Session 2001–02.
We are sure that many good works are under way. We welcome NESTA. We want to give it support into the future, but we ask that the Government continue to scrutinise closely the spending by NESTA on projects and that NESTA does not feel obliged to respond too closely to the wishes and the will of the Government, thereby compromising or diffusing its core objects in any way. That is probably our priority. We want to be sure that the additional funding really will be spent on the core objectives because it is those objectives that we applauded at the outset and that we want to support.
6.57 p.m.
Viscount Falkland: My Lords, the Minister explained clearly, for which we are grateful, what the order is about. We accept the order; it would be pointless to do otherwise. It appears to be a simple proposition. I do not intend to go much further than to welcome it and to make one or two comments about NESTA, but the noble Baroness, Lady Buscombe, has taken the debate into other interesting areas so perhaps I may go further than I had originally intended. I believe that most of us would find much of what she said appropriate and would agree with her.
I declare that I opposed the extension of the good causes to health education and the environment, and I still do. I say that personally because I am unsure that I carry all my colleagues on these Benches with me. However, NESTA appeared to me to be the one area that had an interesting prospectus. As the noble Baroness has pointed out, at that stage there was a certain lack of clarity about what it intended to do in science, technology and the arts. There is a certain lack of clarity in the explanation of the purpose which was there originally.
When faced with the order I asked my researcher to ring NESTA and ask some simple questions that may help me in my response. I asked what was NESTA's level of satisfaction with the current operation of the funds that were allotted to it. It replied that it was very satisfied with the operation of the current funds. It revealed that its endowment was invested in government stocks in order to maximise the safety of the investment. Safe it may be, but it certainly has not resulted in a happy situation. It did not show much financial foresight because the return on its investment was linked to interest rates. Interest rates have been low, as has been explained so ably by the Minister, to such an extent that this increase in the endowment is to counterbalance that loss of previous endowments. The return has been less than anticipated.
NESTA says that of the £95 million, which is the sum mentioned in the order, £50 million will be used to redress the loss of those investments. I do not blame it for that. Why should NESTA be an investment expert? It chose what it thought was the safest form of investment in order to protect its money and it has not been particularly beneficial.
I then asked what in particular the funds resulting from the order would be spent on; that is the remaining £45 million. NESTA explained that that sum would be drawn down at up to £15 million a year over the next three years, which would allow it to expand its work and to begin to meet its statutory role in new ways. That is very strange and is not clear. Noble Lords will forgive me and the noble Baroness for talking about clarity, but we have been involved in legislation passing through this House which is singularly lacking in clarity. We have that matter very much on our minds. We are looking all the time for clarity.
NESTA says that it will specifically be starting work on a programme of entrepreneurship education for young people. That sounds very worthy and interesting. I wonder exactly what it means. I have

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spent much of my working life dealing with entrepreneurs and few of the best ones have been educated. It also mentioned a programme of support for new graduates. Perhaps the Minister will tell me what that means. It is undoubtedly very worthy. The last programme is an extension of its existing fellowship programme to provide support for younger people. What does that mean? I wish explanations were given about matters that concern public funds. We will argue in the House that lottery funds are public Funds. The public has a right to know what is happening to these funds.
The falling sales of lottery tickets is an important debate for another day. I look forward to that debate. I have, and I daresay the noble Baroness has, very strong views about why the sales of lottery tickets are falling so dramatically. I do not agree that those moneys set out to support those areas of our life cannot be taken from direct taxation proceeds. The original good causes were, after all, the reason why the National Lottery Act originally passed through this House with little opposition. The case was well made that the arts, charities, sport and so on were deserving causes for such moneys.
One would have been extremely naive not to expect a government sooner or later to put their hand in the till and try to improve their image by spreading the money further. People who buy lottery tickets do not mind that at all. Most of them think that the operator Camelot distributes the funds. Their knowledge of how the mechanics work is slender. It is clear that people are now beginning to be concerned about where money from lottery sales ends up. It may be a kind of—without maligning taxi drivers—taxi drivers' view, but they do not like money to be given to causes relating to immigrants and asylum seekers, and they do not like grand projects, such as the Dome, because they have seen what happens. There has been an enormous wastage of lottery money since the inception of the dispersal of these funds. My particular hates are money given for film production and the Wembley Stadium project, among a few others.
NESTA seems to be a deserving area if only the situation could be made clear. I agree with the noble Baroness that a lot of glossy material is sent out, such as impressive letters and invitations signed by my noble friend Lord Puttnam. Even now we are still fairly much in the dark about what is happening with NESTA. Having said that, I hope the money is put to good use. It would be helpful if the noble Lord, Lord Davies, could enlighten me as to his view of the purposes of the NESTA projects. It will then be on the record. People may pick it up and read about it, and when we next talk about the matter we shall be better informed.
7.7 p.m.
Lord Davies of Oldham: My Lords, I am grateful to both Front Benches for their contributions. While asking proper questions about issues that need to be probed, they have been broadly supportive of the objectives of NESTA and of the work it has done.
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I begin by reassuring the noble Baroness, Lady Buscombe, that of course the allocation of increased money to NESTA is for it to fulfil the objectives laid down; namely, to support and promote talent, innovation and creativity in the fields of science, technology and the arts.
As to the reference to the broader issues of health, education and the environment, the unallocated National Opportunities Fund money is governed by those categories. But the money allocated to NESTA will be directed to the objectives. The noble Baroness required proper reassurance about that.
I suppose that I had a little difficulty in accepting the challenges made about the glossiness of the publications of NESTA. I do not think that there has ever been an organisation asking for more money that has not attracted criticism if people receive from it an artefact, a leaflet or a report which looks as if there has been a substantial investment of money in it. But I think one probably recognises that if one has portrayed oneself as a significant contributor to the improvement of, in particular, design and education in this country and at the edge of creativity, to produce documents which fall far short of desirable standards in that respect would be to do a disservice to the cause. So, I accept on behalf of NESTA that element of criticism that the annual report may have looked a little overweight. I certainly agree with the noble Baroness that it far surpasses a number of annual reports I have received from a number of worthy organisations. However, I am sure that the criticism would have been much more intensive if the noble Baroness and other significant figures had received a report that looked tatty and fell below standard, but purported to come from a body concerned to improve design in this country. That is a proper justification.
Where the noble Baroness is on stronger ground is in pointing to the discrepancy in the figures on the website. I can say only that the reason why the figures have changed is that the Government rightly recognised what the Select Committee in another place pointed out: that NESTA's accounts left something to be desired in their clarity and accuracy. Earlier reports refer to accounts that are not on the same basis as that which we now demand of NESTA. The changes effected are designed to apportion the full costs of supporting and promoting awardees to each programme, so that we know what each programme actually costs.
Previously, those were shown as central administrative costs. The House will recognise the problem with that: first, it inflated administrative costs to what appeared to be an unacceptably high level; secondly, it did not give us accurate information about the costs of individual programmes, which are the very costs that we want to scrutinise. That is the reason for those changes. The discrepancies are to be deplored, but now that we have accounts on a proper basis, we shall have figures that are directly comparable year on year—dare I say it, even month on month.
The noble Baroness also referred to something that she called the Islington factor. I shall not take that criticism as being too sharply intended. Suffice it to say

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that we—and NESTA—are cognisant of the fact that there is enormous concern that the scheme should be fair across our country, across the United Kingdom as a whole. NESTA is therefore under an obligation to ensure that Scotland, Wales, the regions of England and Northern Ireland receive their proper share of its initiatives. I can only state that that is our intention. When we come to debate these issues next year—not necessarily on an increase of endowment order, but perhaps on the broader issues of the lottery—we may see improvement on that.
I agree with the noble Viscount, Lord Falkland, that people want value for money, but people do not buy lottery tickets on the basis of an accurate identification of exactly where the money is going. In my experience, the average lottery buyer—there may be a few of us present in the House—approves of the good causes concept behind the lottery. Of course we do. We all expect good causes to benefit and want our favourite good causes to benefit, but one cannot suggest that the decline in lottery sales is because people think that money is going in the wrong direction. First, we are discussing fractional amounts, in terms of the lottery.
Viscount Falkland: My Lords, I was not suggesting that. I tried to suggest that falling lottery sales were for reasons that we must discuss at a later date. I did not want to give the impression that I was linking the falling lottery takings to the view of ticket buyers about the good causes.
Lord Davies of Oldham: My Lords, I am extremely grateful for that intervention. If I slightly
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misinterpreted what the noble Viscount said earlier, I apologise. I merely sought to emphasise that we have a real anxiety about falling lottery sales—that goes without saying, because it means that the good causes that we hold dear will receive less as time goes by. That affects all the good causes, but, as we shall have the opportunity more appropriately to debate, that is not the root cause of the lottery's present problems. In any case, we hope that sales may pick up again in due course.
I reiterate that there are proper criticisms to advance about this relatively new, young body, which itself is involved in promoting initiatives. The noble Baroness, Lady Buscombe, will recognise my difficulty in discussing its achievements. It is a relatively new organisation that is pump-priming to get initiatives and new, creative ideas off the ground. To expect it to achieve a return on its capital in the limited time involved is asking a great deal. There are successes among its initiatives, but the real successes will show themselves over a rather longer time span than we have thus far had.
Suffice it to say that we now have an accounting procedure and a recognition of how NESTA's reports should be presented that will guarantee that we can effectively monitor the use of the additional money that I hope will be agreed for it to further its objectives, which are shared in all parts of the House. Accordingly, I commend the order to the House.
On Question, Motion agreed to.
House adjourned at seventeen minutes past seven o'clock.