Lords Sitting of 19 March 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 Gloucester.

Investment
Lord Roberts of Conwy Lord Roberts of Conwy asked Her Majesty's Government:
What steps they are taking to raise corporate investment from last year's record low point.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, in 2002 business investment as a proportion of GDP was 12.1 per cent, which is the lowest percentage on a constant price basis since 1996, but higher than the previous six years. The Government will continue to maintain a stable macro-economic environment and a range of micro-economic measures to encourage firms to invest for the long term.
Lord Roberts of Conwy: My Lords, bearing in the mind the sharpness of the fall last year and the continuing weakness of investment intentions, does not that augur badly for future profitability, productivity, competitiveness and growth? Is it not time the Chancellor listened to the CBI and the British Chambers of Commerce and reduced business taxation before his revenue falls further?
Lord Sainsbury of Turville: My Lords, it is right that falls in investment are bad news for the future profitability of business. We are acutely aware of that. But the reasons for the fall—a combination of the slow-down in the world economy and economic uncertainty—are well known. We have already made major changes to corporate taxation but, in the short term, they will not affect the level of investment.
Lord Northbrook: My Lords, does the Minister agree with the conclusions of the CBI and the British Chambers of Commerce in their pre-Budget submissions that the Chancellor has damaged the profits, productivity and investment plans of UK companies through the imposition of £47 billion of extra taxation between 1997 and 2005 and the burden of extra regulation and red tape? If not, why not?
Lord Sainsbury of Turville: My Lords, it makes no sense to attribute the sharp decline in business investment in 2002 to factors that the Opposition and, to a certain extent, the CBI have said have been present throughout the life of this Government. The fall in investment in 2002 is clearly related to the situation in the world economy and to economic uncertainty. investment peaked in the fourth quarter of 2000. Therefore, unless there are factors of which I am
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unaware, clearly what we are now seeing is attributable to the world slow-down in economic growth. which is equally hitting the investment plans of other countries.
Lord Newby: My Lords, the Minister says that the slow-down is commonplace across the world, but will know that since the end of 2000 overall investment in the UK has fallen faster than in America, Japan, France, Germany and Italy. Therefore there must be at least an element of something that this Government are doing that is unique to the United Kingdom. Will the Minister pass on to his colleagues in the Treasury the plea from business that there should be no business tax increases in the forthcoming Budget? Unlike in previous Budgets, far from making business taxation vastly more complicated the Chancellor might usefully seek to introduce a major measure of corporate tax simplification in the Budget this year.
Lord Sainsbury of Turville: My Lords, it is always wrong to start from mistaken assumptions. In 2001, corporate investment in the US fell by 5.2 per cent. and in Germany by 4.5 per cent. In the UK it increased by 0.9 per cent. In 2002 we saw another fall of 5.7 per cent in the US. I agree that there was a substantial fall in the UK of 10 per cent, but if you take the two years together it is not at all clear that British investment is worse.
Lord Higgins: My Lords, the Government sought to justify the Chancellor's £5 billion a year raid on pension funds by changing ACT on the grounds that it would improve investment. Is that still the Government's view now that companies, instead of investing, have to use the moneys to top up their pension funds?
Lord Sainsbury of Turville: My Lords, as the noble Lord will remember, the abolition of dividend tax credits was part of a wider package of corporate tax reforms, which included rate cuts. It is wholly inaccurate to look at one measure in isolation. The Government have reduced corporation tax. The net effect of the reforms since 1997 has been to reduce the corporate tax bill. The Government have cut the main rate of corporation tax by 3 percentage points to its lowest level in UK corporate history.

Doctors: Suspension
2.42 p.m.
Baroness Knight of Collingtree Baroness Knight of Collingtree asked Her Majesty's Government:
What improvements have been made in situations of doctors suspended from the National Health Service since the setting up of the National Clinical Assessment Authority.
Baroness Andrews: My Lords, the National Clinical Assessment Authority has helped the NHS manage concerns about medical performance and has supported doctors in over 500 cases. The Chief Medical Officer has recently reminded NHS employers in

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England to consider asking the NCAA for advice when they have serious concerns about the performance of a doctor which might lead to suspension.
Baroness Knight of Collingtree: My Lords, is the Minister aware that there is strong and growing criticism of the NCAA that its assessments are frequently biased and wrong? Is she also aware that the authority has spent some £9.5 million in two years yet has completed only 16 assessments of the 300 cases referred to it? Does she really think that the NCAA is providing good value for money, as, additionally, all suspended doctors are on full pay and do nothing, sometimes for months and even years, because of delayed judgments?
Baroness Andrews: My Lords, I know how deeply the noble Baroness feels about inappropriate suspension and the distress that that causes doctors. The NCAA was set up to address those concerns. So the number of assessments does not represent in any way the sum total or value of the NCAA's work. There have been 18 assessments but 500 cases have been dealt with; in many instances, they have not gone to assessment and the doctors have not been suspended because the intensive advice presented by caseworkers, often over a period of time, has meant that issues have been resolved on the ground. When the noble Baroness asks me whether I think the NCAA is good value for money, I would say yes. Every doctor who is not suspended and has returned to work, maybe with retraining, represents a gain to the NHS. The feedback that we have had after the first 18 months shows that 80 per cent of the people dealt with have reported positively.
Lord Clement-Jones: My Lords, is it not far from clear whether the NCAA is really doing the job that it was set up to do in reducing the number of long-term suspensions of doctors? I have here an e-mail from a junior doctor who says:
"I have not been told whether I am suspended, on sick leave, study leave or special leave. This can't be right".
Does the NCAA really provide value for money? Should not the National Audit Office look into this matter?
Baroness Andrews: My Lords, this body has been in operation for only 18 months. It has moved fast to address serious concerns and to create a culture in which doctors are more confident in what they do and health authorities are more confident that the procedures are right. We believe that it is working well. In addition, the national project on long-term suspension deals specifically with cases in which doctors have been suspended for longer than six months. Over the last quarter there were 29 such cases; 10 of those doctors have been returned to work and are no longer suspended, and 19 are being actively managed to give them support, retraining, or whatever they need.
Lord McColl of Dulwich: My Lords, is the Minister aware that some doctors are suspended for as long as
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four years, which causes terrible trauma for them and their families? At the end of that time they are very often exonerated. What happens to their false accusers?
Baroness Andrews: My Lords, the noble Lord is absolutely right. The reason for setting up the NCAA in 2001 was because there were some outstanding cases from the late 1990s. Having a body to which health employers can refer instantly when they identify a problem and from which they can obtain appropriate advice so that the problem is nipped in the bud means that we do not have these interminable cases which cause such distress for both doctors and patients.
Lord Campbell-Savours: My Lords, does not the noble Lord, Lord Clement-Jones, have a point? Is there not a possibility that this matter could be referred to the National Audit Office? I am sure that it would produce a very interesting report.
Baroness Andrews: My Lords, it so happens that the National Audit Office is considering the whole range of clinical suspensions and is looking at all health authorities across the range of specialties. We hope that it will report some time in the summer. So, although it is not looking at exactly the same population, we will have more information on which to build good practice.
Lord Chan: My Lords, does the Minister agree that a disproportionately high number of suspended doctors are from ethnic minority groups? Has that been investigated by the NCAA or the Department of Health?
Baroness Andrews: My Lords, the noble Lord has told me something I did not know. There has been no attempt to look at the suspension of ethnic minority doctors separately from that of anyone else, but I will write to the noble Lord and give him whatever information the department holds on that.
Lord Campbell of Alloway: My Lords, is there no procedure for appeal against a suspension, which could take four years? If there is, could the Minister tell the House what it is?
Baroness Andrews: My Lords, as I understand it, there is an appeal procedure for general practitioners who have been suspended and, I believe, for hospital doctors. I will have to write to the noble Lord, as I am not familiar with the details.
Baroness Masham of Ilton: My Lords, how many people have been working as doctors under false pretences, without qualifications?
Baroness Andrews: My Lords, I think that that goes slightly wide of the Question. I take some consolation

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from that, because I am afraid I have no idea. I imagine it is rather difficult to find out. I do not know whether I have helped the noble Baroness at all.
Baroness Gardner of Parkes: My Lords, is the Minister aware that some cases have lasted much longer than the four years that has been quoted today? When I was on a regional health authority, one doctor had been suspended on what I suppose could be called gardening leave for over a decade on full pay. It is wrong that there is no employment procedure. We have heard about the hardship for doctors, but there is also hardship for the National Health Service and for patients if someone cannot be reinstated in that period. There should be some way of terminating the employment.
Baroness Andrews: My Lords, I believe the noble Baroness was referring to a case that was notorious in the mid to late 1990s. The new procedures to manage suspension came in as a result of that. I agree that we must look carefully to ensure that nothing like that happens again.

Transport: Social Exclusion Unit Report
2.50 p.m.
Lord Berkeley Lord Berkeley asked Her Majesty's Government:
How they intend to implement the strategies contained in Making the Connections: Final Report on Transport and Social Exclusion published by the Social Exclusion Unit on 27th February.
Lord McIntosh of Haringey: My Lords, I thank my noble friend Lord Berkeley for the Question, although I hope that he agrees that it is a wildly unsuitable subject for simply a Starred Question. I want to tell the House about all the 37 policies in the Social Exclusion Unit report. All that I have time to say is that the Department for Transport will co-ordinate work on local transport plans to improve accessibility to work and local services. Other departments will contribute work on, among other matters, land use planning issues, school transport, access to healthcare, local food shops and safer streets, especially for the one in three households without a car.
Lord Berkeley: My Lords, I am not sure whether I thank my noble friend for that backhanded compliment, but I am grateful for what he said because I too think it a good report. Children from the lowest socio-economic groups are five times more likely than those from the highest groups to be killed on the roads. The report says that that is dealt with through local transport plans. As my right honourable friend the Deputy Prime Minister recently told the best performing local authorities that they did not need to produce local transport plans in future, how will this serious issue be dealt with by those lucky councils?
Lord McIntosh of Haringey: My Lords, local authorities will still have to tackle the problems that
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the noble Lord rightly recognises. There are more deaths, particularly pedestrian deaths, including those among children, in deprived areas. It is difficult to tease out why that is the case. Part of the reason relates to local illegal activities, such as joyriding. In part it is because of had lighting. Part of it can be dealt with by closed circuit television cameras. Part of it is because transport services have not been planned adequately to go into deprived areas. That will have to be corrected. On top of the £1 billion a year we spend on local bus services, we shall have to ensure that extra money goes into those areas.
Lord Campbell of Croy: My Lords, will the Government take into account all the various categories of disabled people and their disabilities, which make ordinary transport very difficult for some disabled citizens? They should not be a reason for excluding those people.
Lord McIntosh of Haringey: Yes, my Lords, that is why the Social Exclusion Unit is so called. It is not simply about poor families—although it concerns them. It is about those who have disadvantages that make accessibility difficult for them. That includes the whole range of people with disabilities. A considerable part of the Social Exclusion Unit's report is devoted to that. I commend it to the noble Lord, Lord Campbell.
Baroness Whitaker: My Lords, can my nobly friend tell me what account is taken of the opinion of children themselves in making transport plans that are going to affect their safety?
Lord McIntosh of Haringey: My Lords, another significant amount of money—£900 million a year£is spent on specialist transport for schools, hospitals and social services. Again, it is necessary and possible to ensure that, in making plans, local authorities take particular account of people in need who are socially excluded. The noble Baroness, Lady Whitaker, is entirely right.
The Earl of Listowal: My Lords, is the Minister aware that Shelter, the national homelessness charity. estimates that there are 100,000 children homeless in this country? Is further aware that homeless families are often placed in accommodation away from their children's schools and away from their family, friends and community? How does the Government's strategy address their needs? Is consideration being given to reducing bus fares for that group, given the recent rises in those fares?
Lord McIntosh of Haringey: Yes indeed, my Lords. The homelessness directorate, which is concerned with people in bed-and-breakfast accommodation and with rough sleepers, is giving guidance to local authorities to seek to ensure that such families are placed as locally as possible, and certainly within the same borough. There are no legal powers to subsidise or provide concessionary travel for homeless people, but some experiments are being carried out. For example, Blackpool Borough

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council is providing free school transport to ensure that those who have been housed away from their original school can go back to the same school. That is a good example for other parts of the country.
Baroness Scott of Needham Market: My Lords, the report makes clear that the link between land use planning and transport planning is essential if we are to combat social exclusion. In their forthcoming planning legislation, why do the Government propose to separate those powers for county councils? Is this an example of the joined-up thinking we hear so much about?
Lord McIntosh of Haringey: My Lords, the trend of land use for many years has been against people in positions of social exclusion. As car ownership has risen, there have been strong commercial pressures to move to, for example, larger and more remote shopping centres. We have to make strong efforts to ensure that local shops, particularly local food shops, are still available. Under no plans is there going to be any diminution of land use planning. There are differences in the responsibilities between different tiers of local government.
Viscount Simon: My Lords, will my noble friend expand slightly on the original question that my noble friend Lord Berkeley posed about the differences in the number of road deaths among different socioeconomic groups? Does not that highlight the problems of enforcement and of inappropriate speed limits, which could be reduced?
Lord McIntosh of Haringey: My Lords, I am sure that that is one of the issues that can be considered. It would certainly be a responsibility of the Department for Transport. Local authorities have considerable powers to reduce speed limits. Anyone who drives in London will have seen a great proliferation of 20 miles an-hour speed limits. I hope they are doing some good.

Water Forum, Kyoto
2.58 p.m.
Baroness Rawlings Baroness Rawlings asked Her Majesty's Government:
What representation they have made at the Third World Water Forum in Kyoto which started on 16th March.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, at this moment, my colleague Elliot Morley is winging his way to Japan to take part in the forum in Kyoto. He will take the message from the UK Government that Kyoto will be an important opportunity to focus on implementing
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the plans that were agreed for water and sanitation at the World Summit on Sustainable Development held in Johannesburg last year.
Baroness Rawlings: My Lords, I thank the noble Lord for his reply and hope that the conference will deliver real practical results, rather than descending into an expensive talking shop, as the World Summit did last year. Like all Members, I recognise the importance of clean water supplies in preventing the spread of sickness and disease in poor countries. Is the noble Lord aware of the UN estimates that 5 million Iraqis lack access to safe water and sanitation? Does he agree that all conceivable and reasonable steps should be taken to ensure that military action does not disrupt the water and electricity supplies that the civilian population depends on?
Lord Whitty: My Lords, on the first part of the question, Johannesburg has achieved rather more than the noble Baroness gives it credit for. One of its achievements was agreement on the sanitation strategy. As for the situation in Iraq, the military tactics will be decided by the authorities there. However, the question of reconstruction is very central to Her Majesty's Government's concerns. I believe that the House will soon have a chance to debate that issue on a Statement.
Baroness Miller of Chilthorne Domer: My Lords, given that the House is about to see the amount of regulation that a privatised water industry requires to ensure that the less well off in society can afford water, do the UK Government support the inclusion of water in the General Agreement on the Trade in Services currently being considered by the European Union?
Lord Whitty: My Lords, England and Wales are fairly unique in having a fully privatised water and sanitation system. The trade in water services as such—as distinct from the services of water companies, which is slightly different—is dealt with separately in the European context. Nevertheless, in the world context, the role of the private sector in supplying water particularly to the third world has to be mobilised as much as aid and public funds to deliver sanitation and water to many millions of the world's population.

Animal Carcasses: Disposal
3.1 p.m.
Lord Livsey of Talgarth Lord Livsey of Talgarth asked Her Majesty's Government:
Whether they will place a moratorium on the European Union animal by-products regulation relating to the disposal of animal carcasses until such time as adequate collection and disposal facilities are in place and accessible to the farming community.
Lord Whitty: My Lords, the Government will not be seeking a moratorium relating to the disposal of

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animal carcasses. The collection and disposal industries advise that there is already sufficient capacity within the existing infrastructure to deal with the estimated additional quantities of fallen stock arising from the ban on on-farm burial.
Lord Livsey of Talgarth: My Lords, will the Minister acknowledge that dead farm animals have been buried for the past two millennia in Britain? Given the current problems which the farming unions predict will result in chaos after the 1st May deadline, will he take urgent action to provide a free disposal service and a dispensation for burial for remote upland areas in Wales, south-west England and the north of England?
Lord Whitty: My Lords, farm burial has been a feature of farming for longer than I can remember— two millennia is almost certainly correct. However, it presents environmental problems for watercourses and in terms of animal disease, which is why the European legislation was introduced. The animal byproducts regulation will apply from 1st May. As I indicated the other day in response to a different Question, the Government have been trying since last April to discuss the issue with the industry in order to try to establish a system of collection and disposal. The capacity is there, as I said in my initial Answer, but the industry is reluctant to put any of its own resources into providing that disposal system. So any failure to have a fully operational system as from 1st May lies at the door of the industry, not the Government.
Lord Lloyd of Berwick: My Lords, why is it permissible for human beings to be buried but not animals?
Lord Whitty: My Lords, by and large, human beings are buried in coffins and in land that has been limed. That prevents the type of seepage about which we are concerned that occurs when there is a substantial quantity of animal burial. If the same precautions had to be taken for animal burial as for human burial, the cost to farmers would be considerably greater than that required by the directive.
Lord Renton: My Lords, bearing in mind that incineration has proved a respectful and successful way of' disposing of human remains, would it not be one of the best ways of disposing of animal remains?
Lord Whitty: My Lords, incineration is possible under the regulation. What is not possible is on-farm burial.
Lord Tanlaw: My Lords, a number of those who farm the hill and upland areas in places such as Dumfriesshire will be very disappointed by the Minister's Answer. The moratorium would, I believe, be a suitable way of filling in the period between what is available and what is not available. Since the local hunt has been disbanded, we have had no real service to remove fallen stock. I have just come from a meeting at a fish firm on a river in the
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south of England. It has exactly the same problems, with no way of getting rid of fallen fish stock. Can the noble Lord help in this area?
Lord Whitty: My Lords, we have discussed the issue with the various elements of the industry, and both the collection organisations and the disposal organisations have always indicated that there is sufficient capacity to cope with the additional problem. The issue is how it is organised and who pays for it. The Government are prepared to put forward £30 million towards the estimated £50 million cost. But some of that cost has to rest on the farmers themselves. Any failure to have the system fully in place as of 1st May rests very much with the farming organisations.
Lord Monro of Langholm: My Lords, at the end of October, the Minister said that he would urgently examine the issue in the hope of finding a solution. Is he aware that, come 1st May, in practical terms, there will not be the facilities to uplift fallen stock and that farmers will not be allowed to bury the stock on their farms? What answer should he give farmers?
Lord Whitty: My Lords, the answer that I would give to farmers—and I think that it probably needs to be communicated directly to farmers rather than through their organisations at the moment—is that the facilities are there. The way of organising the facilities would also be there were the farming industry to accept some element of the costs. The TSE disposal arrangements would be made available for that duty: that is the £30 million and the small additional sum that the Government would be prepared to provide to set up such a system. However, the farming industry itself, through its representatives, is refusing to have even the minimum levy to ensure an industrial contribution. It is not a question of logistics or of the facilities not being available. It is a question of the industry being prepared to take its responsibilities seriously.
Lord Avebury: My Lords, it may be a requirement that human bodies be buried in coffins in consecrated land and in land belonging to public graveyards, but is the Minister certain that the same rules apply to people buried in private land?
Lord Whitty: My Lords, If am not sure what customs prevail in the area of Avebury. However, in recent years, by and large, private burial has had to be approved by the authorities. I accept that the requirements for such burial may not be exactly the same as those for burial in consecrated land and graveyards, but they are nevertheless considerably more precautionary than those for burying sheep half-way up a hill—where the possibility of seepage into the watercourse is very substantial and is therefore a much higher risk than any form of human burial of which I am aware.
The Duke of Montrose: My Lords, I declare my interest as a livestock farmer. The Minister mentioned the £30 million that DEFRA currently spends. When the

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Minister in another place used that figure, he said that it was for transmissible spongiform encephalopathy monitoring under the over-30-months scheme and for a variety of other reasons. If the ministry is going to pay for the collection of all adult cattle, which falls within the provisions of the transmissible spongiform encephalopathy regulations, how much money will be left over for organising the start-up of collections?
Lord Whitty: My Lords, I will not try to follow the noble Duke in spelling out the regulations. The collection system already exists under the TSE regulations and it applies only to cattle. The point is that, under these regulations, we are extending the same facility to the collection of fallen stock including animals other than cattle. Therefore, the facility will be sufficient, provided that it is topped up by the other £20 million that we are seeking and provided also that a communications system is established. In addition, there is the facility for on-farm incineration.
Lord Mackie of Benshie: My Lords, is the Minister really serious when he says that there is no derogation for hill farms? Is a hill farmer supposed to carry an old ewe down to the farm from a high hill and then spend goodness knows how much on having it collected by lorry when for generations such animals have either been buried or left to lie, and the water in the Highland hills is the purest you can find?
Lord Whitty: My Lords, there is a potential derogation for the remotest areas for obvious reasons. But as regards hill farming generally, it is in precisely those areas where burial is most likely to lead to problems in watercourses. It would therefore be illogical to exempt all hill farms from the regulation.
Baroness Masham of Ilton: My Lords, I, too, declare an interest as I have a farm. Does the Minister agree that hunt kennels do a useful job in this respect, even though it is very expensive if they collect carcasses? They charge about £50 to £70 per animal if they collect. Does he also agree that on-farm burning is not allowed under the regulation?
Lord Whitty: My Lords, on-farm incineration is allowed if it abides by the overall biosecurity rules, although one cannot bring fallen stock on to a farm from elsewhere. Historically, hunt kennels have played a major role in this respect, although that has been more limited in recent years as a result of the TSE regulations. If kennels are to continue to play a role in that regard, from 1st May they will have to comply with what are effectively the same regulations as apply to knackers.
Lord Carter: My Lords, does my noble friend agree that 1p on or off the value of the euro is worth £100 million either way to British agriculture? The euro has strengthened considerably recently. Will farmers be able to cover the £20 million costs as a result of that strengthening of the euro?
Lord Whitty: My Lords, farmers have benefited from the recent appreciation of the euro against the
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pound. However, I believe that if the noble Lord were in a more generous mood vis-à-vis his farming colleagues, would recognise that for many years the value of sterling against the euro moved in the opposite direction. Nevertheless, more money is available in that regard than was the case last year.
Baroness Miller of Chilthorne Domer: My Lords, will the regulation apply to animals which are pets?
Lord Whitty: My Lords, the provisions concerning on-farm burial will apply to all animals on farms.

Sexual Offences Bill [H.L.]
3.12 p.m.
Lord Bassam of Brighton: My Lords, on behalf of my noble and learned friend Lord Falconer of Thoroton, I beg to move the Motion standing in his name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to which the Sexual Offences Bill [HL] has been committed that they consider the Bill in the following order:

Clauses 1 to 75,

Schedule 1,

Clauses 76 to 82,

Schedule 2,

lauses 83 to 103,

Schedule 3,

Clauses 104 to 124,

Schedule 4,

Clause 125,

Schedule 5,

Clauses 126 to 128.—(Lord Bassam of Brighton.)

On Question, Motion agreed to.

Iraq
3.13 p.m.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Baroness Amos): My Lords, with the leave of the House, I should like to repeat the reply that my honourable friend Mike O'Brien gave today in response to an urgent Question in the House of Commons on humanitarian issues in Iraq. The Statement is as follows:
"My right honourable friend the Secretary of State for International Development has asked me to reply to the important Question about the way in which we tackle the crisis in Iraq. The Government strongly welcome the fourth report of the Select Committee on International Development which was presented to the House a week ago. We shall give a detailed response to its various recommendations in due course. However, one of the crucial matters that it raises is the way in which the Government would move forward in the immediate post-conflict situation to try to resolve some of the humanitarian

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issues, and especially whether we would seek a United Nations resolution —or, indeed, more than one—to take the process forward.
"I confirm that we shall seek a further resolution to deal with the humanitarian issues. We shall try to transfer the oil-for-food programme to the United Nations Secretary-General to enable him to keep the process functioning and use UN facilities to do that. We shall also seek a new UN resolution to provide authority for reconstruction and development work and a proper mandate for any interim authority that is likely to operate in the territory of Iraq when Saddam Hussein is removed. We shall also try to ensure the rapid delivery of humanitarian aid to affirm Iraq's territorial integrity and allow for UN sanctions to be lifted, thus enabling food and other necessary items to arrive.
"We shall also enable an international reconstruction programme to facilitate the use of oil revenues for the benefit of the Iraqi people and to endorse a post-conflict administration in Iraq which will lead to a representative government that would uphold human rights and rule of law for all Iraqis".
My Lords, that concludes the reply.
3.15 p.m.
Baroness Rawlings: My Lords, I thank the Minister for repeating the Answer to the urgent Question in another place. We appreciate that the Secretary of State is on her way to the United Nations in New York to seek a fresh Security Council resolution and we wish her every success in her mission.
The overarching question raised by the Select Committee in its very good and comprehensive report is the lack of preparedness of the international community to cope with the humanitarian consequences of war with Iraq. The Secretary of State issued a Written Statement last Thursday which fell far short of addressing the 23 conclusions and recommendations in the Select Committee report. As it states on page 2 of the report, in the first stages of any conflict the military forces will have primary responsibility for the initial delivery of humanitarian assistance. Is the Minister aware of the concern of NGOs about the blurring of responsibility between military action and humanitarian relief? What is being done to improve information sharing with NGOs and to co-ordinate UK and US aid agencies? Who is coordinating work with the military—DfID, the MoD, USAID, the US Department of Defense or the UN?
The noble Baroness mentioned the oil-for-food programme. It is reported that the oil-for-food programme, which provides 60 per cent of the Iraqi population with food aid, has already been suspended. What assessment has DfID made of how to substitute food relief on such a large scale?
Given the early responsibility the military may bear for humanitarian relief. we understand that the Ministry of Defence has been granted an additional £50 million for this purpose. Does that indicate that the MoD will take the lead on the humanitarian side in the early stages?
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The Minister mentioned contributing to the reconstruction. What estimate have the Government made of the total sum required to finance a meaningful post-war reconstruction of Iraq and for how many years do they estimate the programme will run?
In her ministerial statement the Secretary of State concluded that,
"the overall level of preparedness of the international community to cope with the humanitarian challenges which may lie ahead in Iraq is limited and this involves serious risk".
How do the Government intend to manage those risks and encourage other members of the international community to play a more significant role?
In paragraph 26 of the report on internal conflict, we are most concerned that the question to prevent further bloodshed be addressed. That may well be as important as the food aid. Can the noble Baroness assure us that that is being taken into consideration?
The International Development Select Committee concluded that it is as yet not convinced that there is, to use the Prime Minister's words,
"a humanitarian plan that is every hit as viable and well worked out as a military plan".
We wholeheartedly agree with that conclusion.
If the wider war on terrorism is to succeed in the long term, it is crucial that we do not forfeit vital international support by pursuing a war against Saddam Hussein without a comprehensive humanitarian strategy for helping the innocent Iraqi people.
3.19 p.m.
Baroness Northover: My Lords, I should like to thank the opposition spokesperson on international development in another place for putting this Question and the Minister for repeating the reply in this House.
Although Clare Short made a statement on the International Development Select Committee's report, it was brief and raised more questions than it answered. Neither did we get answers on many of these points in last night's debate, although the noble Baroness, Lady Symons, said that she would write to a number of noble Lords on the matter. The very fact that she did not have the answers at her fingertips, which she usually does, shows how far behind we are in responding to the needs outlined in the Select Committee's report. Although in general it might be fair to allow the Government some time to respond to such a paper, this is clearly not such an occasion. It is clear that little systematic planning has occurred for either the immediate consequences of the war or its aftermath. That clearly reflects the way in which the conflict has come about. Unlike in Afghanistan, where there was international agreement on action and planning could occur in the UN among participating countries, NGOs and others, there has been no such consensus this time. Where there is no consensus on moving to war, it is difficult to plan for its aftermath.
There have been many complaints from both sides of the Atlantic about lack of information, coordination and money, and I have a number of questions to put to the Minister. The Government have made it clear—we welcome it—that they wish the

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UN to take the lead. Following what was said by the noble Baroness, Lady Rawlings, I want to ask more about what resolutions will be required for the UN to have a mandate to take action in such areas. When do the Government think that those can be implemented? The Minister in the Commons thought that there could be a resolution for food distribution within days, but was less certain about resolutions on wider humanitarian consequences.
Will the noble Baroness, Lady Amos, explain in more detail? Do the Government expect the resolutions to pass easily? Do they anticipate opposition from any countries, and if so which? How do they propose to overcome the bitterness of the past few weeks and months? How do they counter the arguments of those who feel that we have moved without full international support towards the war, and so the British Government and the Americans should bear the cost of subsequent reconstruction?
Will the Minister tell us to what extent the US shares the British Government's view of the UN's role, given the Americans' current in-house planning? What resources are to be brought to bear on the US to help to fund aid and reconstruction, in the light of the statement by Donald Rumsfeld that Iraq's reconstruction could be funded from its oil wealth so as not to be a drain on the US? What are the Government doing to ensure that the US works through the UN? Or will the Americans feel that it is acceptable to award contracts only to their own companies, funding them through Iraq's oil revenues? Given the possible reluctance of the EU to contribute, as expressed by Chris Patten the other day even though the EU is a leading contributor in Afghanistan, will the Minister say who is attending tomorrow's European Council? Will that issue be on the agenda?
What are the Government doing to ensure that aid is not seen as a further arm of the military? That point has already been mentioned. Who is leading on that issue in the British Government? We also note that the Chancellor has promised only £10 million to DfID, but £50 million to the Ministry of Defence for that task. Extra money is clearly needed, but who administers it is very important. Can the Minister assure us that, unlike in the conflicts in Afghanistan and Kosovo, aid money will not come from the DfID budget, which is meant for the very poor? How will the Secretary of State be in a position to defend her department's budget in her current weakened circumstances?
I note that the Foreign Office Minister answering the question in the Commons spoke of the Government's "intention" not to draw on DfID funds. However, he then added the cryptic statement: "However, we also want to ensure that we deal with our responsibilities to the people of Iraq". Does the noble Baroness agree that that could mean that they intend to draw on DfID's coffers? I hear from the answer in the Commons that there are two staff from DfID advising the military on humanitarian and human rights issues. Does she think that an adequate staff?
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Two thirds of Iraq's population receives food aid, the biggest such programme in the world. Before the UN was told to pull out its workers, what plans were made for food to continue to reach the population? How widespread is that food expected to be, and how soon will it run out? What plans do the Government have for the security, political and judicial vacuums that must surely follow the conflict? Those matters also have to be addressed in the humanitarian context.
I welcome the Prime Minister's statement at Prime Minister's Questions today that, so far as Iraq is concerned, "We have to stay in for the long term". Can the Minister put a likely time on that involvement and a possible cost, and can she assure us that it will not go the same way as the pledge that the Prime Minster made to the people of Afghanistan?
3.25 p.m.
Baroness Amos: My Lords, I would like to thank both noble Baronesses for their responses. Perhaps I should say something about the structure and the amount of money initially, because there is a degree of confusion in the House.
We have committed some £20 million to immediate preparation. That is for planning. Some £of it has gone to the UN agencies to help them to prepare for any possible immediate humanitarian post-conflict situation. The DfID has earmarked a further £60 million for humanitarian operations, which would come from the DfID reserve. In addition, UK forces will have £30 million for humanitarian purposes in the first month. That will be for ensuring sanitation, food and shelter and so on. There is an additional £10 million for quick-impact projects that would come outside humanitarian issues. That would cover, for example, putting roofs on schools or building roads. I hope that that helps to clarify the amounts of money so far allocated.
A number of questions were asked about structure and the number of people involved. The noble Baroness said that only two people from the DfID were currently working on such issues with the MoD. That is not the case. Two people have gone out and are working specifically in Kuwait and Qatar. In addition, we have MoD, FCO and DfID officials working on the issues in the UK and in the region. We have constant contact with our colleagues in the United States, and have discussed the issues over a long period. We are in contact with all the relevant UN agencies and have a weekly meeting with NGOs to brief them on sensitive information so that they are as aware as we are of the context in which they might have to work. A great deal of consultation is going on, which I hope will go some way to alleviate the concern raised in the House.
I shall deal with some of the specific questions raised. The Select Committee on International Development published its report only a week ago. My right honourable friend Clare Short made a lengthy ministerial statement on 13th March, in which she made it absolutely clear that we would respond to each of the conclusions in that report. It is a little unfair to say that we have not taken time to respond to a

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number of very detailed recommendations from a Select Committee that has taken a great deal of time to consider the issues. Noble Lords will know that we work extremely hard in terms of our commitment on humanitarian issues to make sure that we get things right, not only in the UK but with other colleagues. Some of those criticisms are a little unfair.
I shall talk about responsibilities, especially in the immediate aftermath. In the event of conflict and the occupation of Iraqi territory by the UK military, the occupying forces would have humanitarian responsibilities under the Hague and Geneva Conventions. It is likely that, in the first stages of any conflict, UN agencies and NGOs would not be fully operational. If that were the case, military forces would then have the primary responsibility for the initial delivery of humanitarian assistance. They are also likely to play a key role in the longer term in providing a secure environment that would then allow NGOs and humanitarian agencies to operate. That is the scenario for which we are planning. I hope that that answers the question of the noble Baroness, Lady Rawlings.
I also hope that I answered her questions about information sharing with NGOs. We are in constant contact with our colleagues in the United States. My honourable friend Mike O'Brien was there last week and discussed those issues. My right honourable friend Clare Short left today and will talk to Kofi Annan, the IMF, the World Bank and other UN agencies about those issues. However, she will not be in New York negotiating a new resolution. We want new resolutions, but that is not the role of my right honourable friend.
I was asked whether the oil-for-food programme is already suspended. It would be suspended when there were no Iraqi government. That is why we see as a priority the need to secure a Security Council resolution that would enable the programme to continue in the absence of a functioning Iraqi government. We envisage a temporary transfer to some kind of impartial figure, such as the UN Secretary-General, to give it authority to enter into contracts for food and essential humanitarian supplies. The purpose of that would be to use the considerable resources and existing supply networks of the oil-for-food programme in support of the immediate humanitarian needs of the people of Iraq.
We are also discussing with partners and allies the need for a further UN Security Council resolution that would provide an overall UN mandate for transitional arrangements. That might include a UN assistance mission for Iraq. We are considering two separate approaches: oil for food and reconstruction under the aegis of the UN. I cannot tell noble Lords how long it will take to get those resolutions through. As I said, we are in discussions with allies on that.
I was asked about the total sum that would be allocated to any reconstruction effort. It is impossible to tell. We are not now at that point and we will have to consider the matter. I was also asked about timing and the fact that my noble friend Lady Symons was
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unable to go into much detail on those issues last night. I must say that my noble friend spent more than 25 minutes replying to the debate last night. A number of issues were raised, including reconstruction, and it was impossible for her to spend any more time going into those issues. She also undertook to write to noble Lords.
We are engaged in trying to develop a comprehensive humanitarian strategy. That is extraordinarily complicated, as noble Lords will appreciate. My right honourable friend Clare Short made it clear in her Written Statement to the House of Commons on 13th March that we would have liked the planning to have been further advanced. Having said that, we are working as hard as we can to ensure that all our planning is in place.
With respect to the specific question on the European Council, I understand that my right honourable friend the Prime Minister will attend that meeting.
The final question was on USAID and the contracts that it will award. USAID made it clear in discussions with my honourable friend Mike O'Brien that in the initial phases it anticipates that the majority of contracts would go to United States organisations because it already has a relationship with them but it anticipates that a large percentage of subcontracting would go beyond the United States.
3.34 p.m.
Lord Judd: My Lords, I should declare an interest as a member of the Oxfam Association and a former director of Oxfam.
Although I welcome this helpful Statement, does my noble friend agree that, apart from the immediate humanitarian and repair work to be done, if the peace is to be won, massive expenditure will be involved? Can she assure the House that strategic thinking internationally about the amount of money required for that task is taking place? Does she accept that there is a real challenge to be faced in the humanitarian nongovernmental organisations in this country? Their history and record of effectiveness rests on their impartiality and objectivity. It is therefore absolutely essential that there is a UN-led operation in this context so that they are not put in the position of not being able to do anything or being able to operate only by getting alongside people who are the centre—we must face this, whether we like it or not—of a great deal of controversy in the world.
In that context, does my noble friend accept that strong leadership of the UN operation in New York—in terms of inter-agency co-operation—and in the field will be essential? Can she also assure us—there are real anxieties about this—that funds will not be diverted from other essential development and humanitarian tasks elsewhere in the world and that people will not be syphoned off from other commitments elsewhere in the world to work in Iraq? There are indications that that is already happening.
Baroness Amos: My Lords, I have made it absolutely clear that there will be large reconstruction costs. We

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have no idea what those costs will be but the international community will have to work on that. It is important that we in this House remember that despite the differences across the world community about taking action by force to disarm Saddam Hussein, there is a degree of agreement about the importance of ensuring that the Iraqi people do not continue to suffer. Noble Lords can take from that the fact that a wider international coalition, as it were, will come together with respect to these humanitarian issues.
As I have already said, we are working very hard in terms of taking forward two different resolutions under the UN. I refer to the Oil for Food programme and the wider reconstruction efforts. In that regard, I completely agree with my noble friend Lord Judd that strong leadership in the UN and in the field will be important.
Lord Wright of Richmond: My Lords, is the Minister aware that representatives of humanitarian agencies at a meeting last week emphasised not only that military action would lead to the immediate interruption of massive food aid to the Iraqi people but also that, if military action led to the destruction of generators and power plants, the fact that the Iraqis to a very large extent rely on piped water means that considerable supplies of drinking water will be required throughout Iraq? Will the Minister confirm that planning is in hand to take that into account?
Baroness Amos: My Lords, I can confirm that planning is taking both of those issues into account. On the possibility of the interruption to food supplies, DfID has already pre-positioned significant amounts of supplies, as has the World Food Programme, which has also indicated that it may need additional resources to pre-position more food. We indicated that we will contribute resources to that. Water and sanitation are clearly a priority—they are a priority in the immediate aftermath of any conflict.
Lord Jopling: My Lords, bearing in mind the understandable problem experienced last night by the noble Baroness, Lady Symons, in answering all the questions raised, can the noble Baroness, Lady Amos, say whether her attention has been drawn to an article written just over three weeks ago in the New York Times, describing what was said to be the new office of post-war planning? The article stated that the post of director had been refused by David Kay, a former chief nuclear weapons inspector in Iraq, who, it was said, had considered taking up the post in this new body. He was quoted as complaining that promoting democracy had too little priority in the new office and that the mission itself was under-financed and poorly staffed. Can the Minister begin to deny that the approach to this problem has been too little, too late and dilatory?
Baroness Amos: My Lords, I believe that the noble Lord is referring to the Office of Reconstruction and
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Humanitarian Affairs in the US Department of Defense. Is that the reference that the noble Lord is making?
Lord Jopling: My Lords, it is a body quoted as being the Bush Administration's new office of post-war planning, which was set up,
"to assess the government's plans for securing and rebuilding Iraq if Saddam is overthrown".
Baroness Amos: My Lords, that is the department to which I thought the noble Lord was referring. We have secondees there from the Foreign and Commonwealth Office and from the Department for International Development. My honourable friend Mike O'Brien was in New York last week talking through some of the immediate reconstruction and humanitarian issues with the United States Government. As we speak, my right honourable friend Clare Short is on her way to the United States to continue those discussions.
Clearly, in the immediate aftermath of any conflict, reconstruction and humanitarian issues will need a great deal of co-ordination. That is where this department comes in. But, as I have already said in this House, we shall be working hard to bring this issue together under a UN umbrella because we believe it is important that the co-ordination of any reconstruction and humanitarian effort falls under a UN umbrella.
Lord Hannay of Chiswick: My Lords, can the noble Baroness say whether some effort will be made to ensure that co-ordination with the non-governmental organisations is set up at a very early stage so that we avoid the somewhat unseemly wrangling that went on in respect of Afghanistan between the non-governmental organisations and the coalition allies due to a lack of proper co-ordinating machinery? Secondly, is the noble Baroness prepared to say that at the European Council at the end of this week the Government will be working to obtain a firm commitment that the European Union will make a major contribution to humanitarian work and reconstruction in Iraq?
Baroness Amos: My Lords, I entirely agree with the noble Lord, Lord Hannay, that co-ordination at an early stage is important. That is why we have held regular meetings with the NGOs within a UK context and have shared information with them. We should like to see the co-ordination handled through the UN Office for the Co-ordination of Humanitarian Affairs. But clearly we would need an agreed United Nations resolution to enable us to see that process put in place, and we shall be working towards that. I entirely agree with the noble Lord that we shall want as wide a group as possible to contribute to any humanitarian effort post any conflict. In that respect, the role of the European Union will be very important.
Baroness Whitaker: My Lords, while I am sure that the whole House appreciates the systematic and comprehensive approach of the Government to this disaster for the people of Iraq, there must remain some concern about the other calls on the resources of the

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Department for International Development. Can my noble friend reassure me that the cause of sub-Saharan Africa will not be underfunded as a result of plans to help Iraq?
Baroness Amos: My Lords, I believe that the question of my noble friend Lady Whitaker was raised also by my noble friend Lord Judd. As noble Lords know, the DfID budget is set against very clear priorities which have been established over a period of time. We have long-term strategic partnerships with a number of countries. For example, we have a 10-year partnership with Rwanda and are considering a six-year partnership with the Government of Uganda. I can confirm to the House that the priority that we give to a range of development issues will continue.
Lord Turnberg: My Lords, my question for the Minister centres on the need to take advantage of opportunities being developed for humanitarian aid in other countries in the Middle East. Earlier today, I was very encouraged by a meeting that I had with representatives of the Shaare Zedek Hospital in Jerusalem, who described efforts that they were making to work with a major hospital in Amman in Jordan and in Ramallah in the Palestinian territories. They were developing plans jointly to provide humanitarian aid of a medical type in a co-ordinated way for the survivors of conflicts in Iraq and other places in the Middle East. Will it be possible for the UK to work with those organisations to support them and others which are working in a co-ordinated Operation?
Baroness Amos: My Lords, noble Lords will know that we are making a major humanitarian effort in the Middle East region overall. Clearly, a key element in our humanitarian effort here will be support for refugees. I take my noble friend's point, and we shall consider ways in which we can achieve better co-ordination in what we do. I shall certainly take back the specific point about the organisation referred to by my noble friend.
Lord King of Bridgwater: My Lords, is the noble Baroness aware that at the time of the previous Gulf War, practically the entire British effort was paid for by contributions from the countries in the Gulf that most closely neighboured Kuwait and by Kuwait itself? Is the noble Baroness aware that, in addition to seeking maximum contributions from the EU, if Saddam Hussein is overthrown, some of the primary beneficiaries will be those adjoining countries? Although, from the point of view of timing, I do not necessarily expect a definitive answer now, I hope that firm representations will be made to those countries, which are not exactly impoverished by the current level of the oil price.
Baroness Amos: My Lords, I entirely take the point made by the noble Lord, Lord King. I am sure that it is one that has not been missed by my colleagues in government.
The Earl of Sandwich: My Lords, I thank the noble Baroness very warmly for all that she has said today
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and for the Statement made by the Secretary of State last week. I also thank her for the reassurances that she has given to the non-governmental organisations. Can she, together with her colleagues, give an undertaking that we shall have regular and full Statements on the progress of the humanitarian work? Remembering what the Prime Minister said, that may be of almost equal importance to the military aspects of the war. Therefore, it would be helpful to this House and another place to have such Statements.
Of course, the UN resolutions are of the utmost importance and will give much confidence to sections of the public who have not been fully behind the war. Therefore, I hope that the Government will take extremely seriously the question of the UN resolution and that they will be willing to announce any progress on it.
Baroness Amos: My Lords, I thank the noble Earl. Lord Sandwich, for his remarks. Of course, I shall undertake to keep the House fully briefed. I believe that we have a good record of working to ensure that noble Lords are kept aware of all the developments in respect of this situation and we shall continue to do so. Again, I entirely take the point raised by the noble Earl about the importance of UN resolutions, and we shall continue to work to obtain those.

Northern Ireland Assembly Elections Bill
3.49 p.m.
The Lord Privy Seal (Lord Williams of Most yn): My Lords, I beg to move that this Bill be now read a second time. As your Lordships know, the Government were obliged to suspend devolved government on 15th October last year, in the aftermath of concern about continuing paramilitary activity. Obviously there had been a breakdown of trust on both sides of the community which made the effective functioning of devolved government impossible at that time.
Since then both governments have engaged with the parties—more importantly. the parties have engaged with each other—in trying to promote a step forward; that is, the restoration of the devolved Assembly and the implementation of the rest of the Belfast agreement.
At the recent meetings at Hillsborough, we believe that the two governments and the pro-agreement parties arrived at a shared understanding of how we could move forward to a lasting and durable settlement. The key issues are not secret. At their core is an end to paramilitarism and the stability of the institutions. It may be that great—we shall see—even historic progress was made in the Hillsborough talks. The ball is now in the parties' court. They need time to reflect on the issue with their colleagues. Realistically, that period of reflection could not be fruitful if the election date remains at 1st May. That would mean dissolution of the Assembly and the election campaign getting underway in two days' time. We concluded, therefore, that we should postpone the election for a period of 28 days, in order to give time for that further reflection.

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I turn briefly to the provisions of the Bill as it contains only two clauses, the second of which is the Title. It provides for the postponement of the election date for 28 days to 29th May and for dissolution on 28th April. There is therefore a marginal reduction of the formal election timetable from 25 days to 20 days. That will not affect other aspects of the timetable, such as deadlines for applications for absent votes, which will be carefully scrutinised.
The Bill also includes technical provisions to take account of the impact on expenditure limits of moving the election. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Williams of Mostyn.)
3.51 p.m.
Lord Glentoran: My Lords, I thank the noble and learned Lord the Lord Privy Seal for outlining, in his usual brief and succinct manner, the provisions of this two-clause Bill before the House today.
Let me make one thing clear at the outset: we do not like the postponement of elections and we do not approach this measure lightly. Extending deadlines is, as a matter of principle, a bad thing. It devalues the significance or importance of deadlines in the future. It encourages people to believe that all deadlines are negotiable rather than real. That is even more the case when the deadline we are considering is for an election, the date of which is already set out in law. So the Bill before the House today is not something with which we are comfortable—and not for the first time in Northern Ireland affairs.
The Lord Privy Seal outlined the significant amount of progress made in the talks at Hillsborough a fortnight ago. More importantly, the private briefings which I and others of your Lordships have had with the Secretary of State and the Lord Privy Seal—for which I am most grateful—lead me to believe that there is a genuine possibility that a deal can be done and the political institutions at Stormont restored.
It is on the basis of giving any emerging deal a chance, and the fact that the delay is only for four weeks, that the Official Opposition is not opposing the Bill. We are also clear that this will be the only occasion on which we shall accept such a postponement. This must be a one off. We cannot keep on postponing elections indefinitely just because they become an inconvenience. Elections to the Northern Ireland Assembly must take place on 29th May 2003, whatever situation we might be in.
It is worth reminding ourselves why the Bill has become necessary. Just under five years ago on Good Friday, the Belfast agreement was hailed across the world—although I accept not by the DUP and some of the smaller unionist parties—as representing a new beginning for Northern Ireland. It was meant to offer, after 30 years of the most savage and evil terrorist onslaught, a genuine and lasting peace and real political stability. It was regarded as nothing less than
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an historic opportunity to draw a line under the past and provide the basis for a better future for all the people of Northern Ireland.
I can assure her Majesty's Government that the Conservative Party continues to believe that the agreement remains the best vehicle for achieving those objectives. Despite the suspensions and some technical problems, the devolved institutions have generally worked quite well. The principle of consent to any change in the status of Northern Ireland as part of the Union is more widely accepted than ever before. The security situation has improved beyond recognition.
Yet, for all that, confidence in the agreement has steadily declined over the past five years, despite the fact that most people, including unionists, still want it to work. It is not difficult to see why that has happened. At the heart of the agreement, as the noble and learned Lord said, for all the complex drafting and so-called constructive ambiguities, there was a fairly straightforward deal: in return for the establishment of an inclusive government and cross-border institutions, in addition to a series of internal reforms within Northern Ireland, there would be an end to all forms of paramilitary violence. In other words, the war would be over.
Unfortunately, neither peace nor the agreement have been delivered because one party has been in serial breach of its obligations under the agreement. That party is of course Sinn Fein/IRA. We have had the Florida gun-running; Colombia; the Castlereagh break-in; targeting and recruitment; beatings, shootings and murder; the orchestration of street violence; the failure to meet decommissioning deadlines; and the Stormontgate spy ring at the heart of government. Those are all breaches of the ceasefire—although not accepted as such by Her Majesty's Government—and the agreement.
The main responsibility for making progress now rests with those who have so far been responsible for frustrating it. We now need what have become known as "acts of completion" and we need to be clear what those acts arc. There must be certainty beyond doubt that the IRA's war really is over. There must be complete decommissioning of all illegal arms and explosives, verified by General de Chastelain and carried out in a manner designed "to maximise public confidence", as the IRA itself promised as long ago as May 2000. There must be an end to all forms of paramilitary activity. And there must be clear evidence of disbandment as verified by the new monitoring body of the kind that has been mentioned in newspaper reports over the past few days.
To coin a phrase—the IRA really has to go away. Only then can we reasonably expect the Executive and Assembly to be up and running, carrying out its full range of functions. In other words—as the Government must make clear—everything has to be contingent and conditional on what the republican movement actually delivers and not what it promises. There must be no question of the Government reverting to their previous, failed and highly dangerous tactic of offering up unilateral concessions in advance and getting nothing in return. We have consistently urged the Government to

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work towards a comprehensive settlement, with clear linkages and sanctions for those who are in breach of their obligations. Instead they have relied on side deals and what the Prime Minister himself described in Belfast last October as "inch-by-inch" negotiations.
Now, at long last, and after much urging by us, Her Majesty's Government finally appear to have seen sense. The shared understanding that the Prime Minister and Mr Ahern intend to present in a few weeks' time looks as though it is a genuine attempt to secure that comprehensive settlement, leading to the full implementation of the agreement, for which we have been calling. If that is now the Government's approach they will have our full support. However, should Her Majesty's Government revert to their policy of offering up concessions in advance, before the completion of decommissioning and an end to all paramilitary activity, they will forfeit our support.
There has been much discussion of the issue of sanctions, but if parties fulfil their obligations, the sanctions will not be used and the issue becomes irrelevant. According to seemingly well-sourced reports, the Government will replace the suspension power with an independent monitoring body that can make a determination to the Secretary of State, who would then have available to him a range of sanctions, including being able to suspend Ministers or a party from the Executive.
That is a power that the Conservative Party has been urging on the Secretary of State since the summer of 2001. It is more than nine years since the Conservative government, along with the then Irish Government, published the historic Downing Street declaration that in some ways marked the formal launch of what has become known as the peace process; and it is nearly live years since the Belfast agreement held out the prospect of a peaceful, stable and prosperous future for all the people of Northern Ireland. Now is surely the time to make the final moves on the basis for which the people voted in 1998.
A return to the sterile and stale politics of the past is as unthinkable as a return to violence and terror. The days of an armed peace are over. The only way to go is forward. The time has come to take the final steps to implement the agreement. As the only intention behind the Bill is to facilitate that process by delaying the Assembly elections for four weeks, we support the Bill.
4.1 p.m.
Lord Smith of Clifton: My Lords, I, too, thank the noble and learned Lord for his introduction to the Bill. I shall echo what the noble Lord, Lord Glentoran, said at the outset of his speech. I, too, emphasise that we accept the change of date of election to the Assembly with considerable reluctance. It should be a firmly entrenched principle that fixed election dates should be tampered with only in the most extreme cases. In one sense, postponing the date by four weeks is neither there nor there, but it is a most unfortunate precedent, which I trust will not have to be employed again.
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Principle apart, I wonder whether the short delay is prudent. Sticking to 1st May may have concentrated the minds of the parties involved rather more than they have been. After all, there has been more than enough slippage and delay in implementing the Belfast agreement. If a four-week delay in elections facilitates the restoration of a necessary minimum of trust, we will not oppose that change of date, but elections must definitely be held on 29th May next. I was glad that that was confirmed by the Government when the Bill was considered two days ago in another place.
The Government's view is that they will be able to publish a more or less agreed statement on how the peace process can be advanced in early April. It is vital that on that occasion there is no fudging or equivocation on the part of any of the self-proclaimed pro-agreement parties. I share the view of the noble Lord, Lord Glentoran, on that.
That means that the agreed package can be advanced only if the requisite acts of completion have occurred. Will the Government publish the package if they have not? I certainly predict that, without acts of completion, further consideration of the proposed police Bill will be placed in jeopardy.
Further, what precisely is to be done about problems of fugitives, or on-the-runs? What process is likely to be devised to deal with that thorny issue? Separate, but not altogether unrelated, is the problem of those who have been exiled by paramilitaries and forced to move away from Northern Ireland. What plans are afoot to allow those exiles to return and be permitted to live in peace and tranquillity? What guarantees can they be given?
Finally, and equally important in restoring trust, can the noble and learned Lord tell us how the Government propose to deal with the question of community relations? Northern Ireland is a divided society. That was demonstrated again by the violence in north and east Belfast during the weekend. Society in Northern Ireland is perhaps more segregated now than it was before the Good Friday agreement was signed. There is a deep-seated lack of trust, and the continued sectarianism and segregation poses the greatest of threats to the peace process.
What are the Government doing to deal with that fundamental problem'? What are they doing actively to encourage de-segregation and promote integration within all aspects of society?
Although somewhat sceptical about the value of the four-week delay to elections to the Assembly, we on these Benches hope, for the sake of the people of Northern Ireland, that an agreed package will be forthcoming in the next couple of weeks, and that the requisite acts of completion will have taken place. But, if there is no general agreement, we are strongly of the view that elections must be held on 29th May. Let the people of Northern Ireland speak, and let there be a return to devolved government for the region.
4.5 p.m.
Lord Rogan: My Lords, it is unfortunate that we are today debating a Bill that ought not to have been

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necessary. As has been said, its effect will be to delay the forthcoming elections to the Northern Ireland Assembly by four weeks. In theory, that should not have too detrimental an effect on the democratic process in the Province. In reality, that will probably be the case. However, the message and impression that that delay sends out is a bad one for Northern Ireland. It suggests to the world yet again that Northern Ireland is a place apart within the United Kingdom.
On 1st May, when voters in Great Britain go to the polls to cast their ballots in elections to the Scottish Parliament, the Welsh Assembly and local authorities, the people of Northern Ireland will be staying at home. That is a most disheartening state of affairs. I very much hope that such a situation never arises again.
So why is the delay necessary? Because, once again, the political process in Northern Ireland is in a state of paralysis while we wait for Sinn Fein/IRA finally to fulfil its commitments under the Belfast agreement. For almost five years, the republican movement has pontificated, postured and, on many occasions, strayed back to its old habits.
I reiterate what the noble Lord, Lord Glentoran, said: the latest suspension of the Province's devolved government came about following the discovery of the Sinn Fein/IRA-led spy ring at Stormont. Previous to that, we had the IRA break-in at Castlereagh police station; the arrest of three republicans in Colombia suspected of training FARC rebels; and charges of IRA gun-running from Florida. There have also been other incidents, of which many of your Lordships who do not come from Northern Ireland may not even be aware. Does that catalogue of illegality really prove the commitment of Sinn Fein/IRA to purely peaceful and democratic methods? I fear and think not.
Until now, we have had two acts of decommissioning from the IRA. We in the Ulster Unionist Party welcomed both. But still the republican movement could not help but go back to its old ways of murder, maiming and deception. Is it any wonder that the confidence of the unionist population in the Belfast agreement is at an all-time low? For the situation to be rectified and for the agreement itself to be saved, we need—to use our Prime Minster's phrase—final acts of completion from republicans. For unionists, that means an effective end to the IRA and all its evil ways.
It appears that the delay of the date for the Northern Ireland Assembly elections is meant to give Sinn Fein/ IRA an opportunity to prove to its doubters that it is moving towards that goal. Neither noble Lords nor I have any way of knowing whether it is likely to happen. I sincerely hope that it will. But, if it does not, the republican movement will have only itself to blame if the Belfast agreement collapses or, if the SDLP can summon the moral and political courage, the other political parties decide to move on without Sinn Fein.
I assure noble Lords that the Ulster Unionist Party was geared up for an election on 1st May and is very disappointed about the delay. When the elections take place on 29th May, I am sure that the fine array of Ulster Unionist candidates selected will do well for the
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proud party that they, and I, represent. I only hope that, by that time, their wait and that of the voters of Northern Ireland will not have been in vain.
To conclude, although the details of the recent discussions at Hillsborough will not be published until the beginning of next month, we are already aware from media reports that Sinn Fein/IRA's biggest difficulty seems to be with the sanctions that would be imposed on any party found to operate outside the terms of the Belfast agreement. Surely, if Sinn Fein/ IRA is serious about turning its back on its evil ways of the past, it has nothing to fear from sanctions? Indeed, it should welcome them, given that it continues to accuse my party and the British Government of being in breach of our obligations. If the republican movement continues to oppose sanctions, we can only conclude that it believes it will fall foul of them at some point. This scenario does not bode well for the future; nor does it instil much confidence in the Government's decision to bring the Bill before your Lordships' House today.
4.12 p.m.
Lord Fitt: My Lords, most noble Lords with any experience of Northern Ireland would not want to oppose this Bill because they believe that it is an attempt to bring democracy back into Northern Ireland. I am sure that, like myself, many noble Lords have many misgivings about the present state of politics in Northern Ireland. Noble Lords who attended meetings with the Leader of the House will be aware that I have expressed misgivings that we are to have elections now. Talks took place at Hillsborough between the political parties in Northern Ireland, in which the Government of the Republic were involved. We are told that everyone left those talks with "a shared understanding"—no one really knows. Many phrases that emerge from Northern Ireland negotiations leave us as wise as ever.
As I said then, decommissioning is the main issue to be resolved in Northern Ireland. Nobody in Northern Ireland, including the Catholic community, believes that the two acts of decommissioning that took place were in any way effective. Some very funny cartoons appeared in the press at the time. If General John de Chastelain, who lives in Canada, reads a column in the Irish Times saying that "P O'Neill" has issued a statement, he takes a plane to Northern Ireland for talks about decommissioning. That has happened twice.
I wish to know what was decommissioned, as do the people in Northern Ireland: how many guns, how many pounds or tons of Semtex? We do not know. If there is to be decommissioning, it must be visible. The public in Northern Ireland must see it, either through observers or on television. It occurred to me when I came into the House earlier that, now that Hans Blix has been relieved of his responsibilities in Iraq, he might find useful employment in Crossmaglen. We do not know whether the IRA is prepared to engage in decommissioning. That is one big problem that we will have to get over.

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The other problem is on-the-runs. They say that in Northern Ireland we are very good at creating acronyms for different organisations. The term ODCs was used to describe ordinary decent criminals as distinct from paramilitaries. ODCs were just robbers who did not have guns. On-the-runs will be a big problem. I have just left a meeting in the Moses Room under the very able chairmanship of the noble Baroness, Lady Park, at which many well-intentioned people discussed the problems of exiled people and what we should do with them. But it is legislation that will grapple with the problem, not those well-intentioned people. We cannot divorce the problem of exiles from all the other problems.
Noble Lords will remember the emotional debate that took place in this House about the "Disappeared", who were murdered by the IRA. The IRA undertook to indicate where the bodies could be found but quickly stopped after the first were located. Is there any way of making the IRA live up to the promises that it then made, as a result of which legislation was pushed through the House to absolutely no effect?
I had intended to ask this question at the meeting that I attended earlier, and, I will probably do so later: what do we do about exiles who also happen to be on the run? What about John White, the murderer who, with many of his cohorts, was chased out of Northern Ireland by the faction of the UDA led by Johnny Adair? Allegedly, he now lives in Scotland; but I hear that he is living in London. Is he to be treated as an exile or as an on-the-run chased out of Northern Ireland by a branch of a paramilitary organisation?
It is obvious from the debate in another place on Monday evening that many issues must be resolved before we can ever hope to get the Assembly up and working again. I said then to the Secretary of State that, unless those problems are resolved, it would be useless to bring the Assembly back into operation because all those troubles would be brought hack on to its Floor.
More than all the political parties in Northern Ireland, Sinn Fein desperately wants the Assembly brought back again, because it gives it respectability and two Ministers in government. It wants the Assembly brought back as much as I did in 1974 at the time of the Sunningdale Agreement. Now is the time—perhaps the only time in recent years—when the British Government can tell Sinn Fein/IRA that the Assembly will not be brought back unless it fulfils the obligations that I mentioned. In the 10 years since the emergence of Sinn Fein, Unionists have had to make the concessions; Sinn Fein can make them now. If it wants to engage in politics in Northern Ireland, it should be prepared to make some of the concessions that I mentioned. The debate on Monday evening showed that there is still much work to be done before we can find agreement.
Will the statement by the Irish and British Governments on 29th March or at the beginning of April be the last line in these negotiations? Will it be on a take-it-or-leave-it basis? Will the Irish Government, the British Government and, somewhere on the fringes, the Americans have agreed the outcome of the
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discussions that began in Hillsborough? Unless we find agreement before the elections, all the political parties in Northern Ireland will put forward their own agenda on the hustings. That will do nothing for peace in Northern Ireland. Unless we find a moduos operandi to resolve the problems before there is an election, that election will be worse than useless.
I support the postponement of the election. However, I do so with the proviso that both Governments and all the political parties in Northern Ireland should realise that bringing back that parliament is contingent on finding agreement among themselves.
4.20 p.m.
Baroness Harris of Richmond: My Lords, this is my first debate on the more general issues relating to Northern Ireland, as distinct from the debates on policing issues, for which many of your Lordships will remember me—perhaps not always fondly. I want to express my great affection for Northern Ireland and my commitment to do all that I can to help promote the peace that is so urgently needed.
It is with great reluctance that we on these Benches, like other noble Lords, accept the need for the Bill. As my noble friend Lord Smith of Clifton made clear, we regard any interference with the normal democratic process as a serious matter. The decision to postpone the date of the Assembly elections in Northern Ireland must not be taken lightly. We are disappointed that it has not been possible, since the Assembly was suspended last October, for the parties and the Governments to finalise a package that would have enabled the Assembly to be reinstated.
At the time, we called upon the Government to convene all-party, round-table talks immediately. Perhaps, if more progress had been made earlier, there would have been no need for the Bill before us today. That said, we are reassured by the comments of the honourable Member for Kilmarnock and Loudoun. Des Browne, that it was a short, defined postponement and that there would not be any further changes to the date of the Assembly elections. The Explanatory Notes for the Bill helpfully remind us that the provisions apply to the ordinary general election poll on 29th May and not to any subsequent election. That is helpful. It denotes the fact that these are special circumstances and shows that in no way is it intended to use the postponement as a precedent for the future.
There has been a great deal of discussion, not least in the media, of the content of the package that the two Governments have proposed to the parties in Northern Ireland. My noble friend spoke of some of our concerns, but I must stress again the issue of on-the-runs, to which the noble Lord, Lord Fitt, also referred. A general amnesty for those who are on the run from justice is not acceptable. There must be a judicial element to any proposals to deal with the issue. Release must be on licence; justice must be seen to be done; and the concerns of victims must be properly addressed.

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It has been said here and in another place that the end of paramilitarism and the acts of completion of which the Prime Minister has spoken are fundamental to making progress and to the prospects of the parties accepting the package that the Governments have proposed. That does not just mean decommissioning: it means an end to punishment attacks and intimidation and the lifting of the threat to those who have been exiled from their home by the paramilitaries. That is the over-arching context in which we must take the peace process forward. It is vital that we now see an end to all paramilitary activity in Northern Ireland.
The people of Northern Ireland deserve better than an imperfect peace. I sincerely hope that, in the near future, we shall see real peace. It is long overdue. This short Bill deals with complex issues, but we fervently hope that the delay of four weeks will bring the big prize. If it does, it will have been worth it.
4.24 p.m.
Lord Williams of Mostyn: My Lords, I thank all noble Lords who participated in the debate. It is a short Bill, as we have all recognised, but we all know that what is proposed has many ramifications. The noble Lord, Lord Glentoran, first identified and expressed a principle that was assented to by all who spoke subsequently and with which I agree entirely. He said that no one wished as a matter of principle that the elections should be postponed. In a sense, as the noble Lord rightly said, the point is not the period of 28 days but postponement as a principle. I agree with all of your Lordships, all of whom concurred with that.
The noble Lord, Lord Glentoran, spoke with his usual generosity of the benefit of private briefings. This Secretary of State and, before him, Dr Reid have always been willing to attend regular meetings at which there are, I think that it is fair to say, full and candid exchanges of views. I hope that, as the Secretary of State said, we can arrange another one in the next week or two. All noble Lords who spoke attend those briefings, and they are not a one-way street. The Secretary of State and I find the diversity of views expressed extremely helpful. The noble Lord also said that his party's view remained that the Belfast agreement, fully implemented, was the best hope for the future of Northern Ireland. I agree with that.
I shall not return to the question of postponement, as all of your Lordships are in agreement on it. However, the noble Lord, Lord Smith of Clifton, asked specific questions about on-the-runs and fugitives. The noble Lord, Lord Fitt, asked whether a particular individual, John White, would be an on-the-run or an enforced exile. That would depend on his circumstances. My recollection is that he has already been convicted, served his sentence and been allowed out, so he would not qualify as an on-the-run for that offence, although he might, in some circumstances, I suppose, qualify as an enforced exile. Life's irony being limitless, it seems to have been his own disenchanted colleagues who invited him to take up residence in Scotland, rather than remain in Belfast.
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The question of the on-the-runs is important. The noble Baroness, Lady Harris of Richmond, spoke of it. There will have to be a formal process, but it would be more appropriate if I did not go into possible details at this stage. As all noble Lords who spoke reminded us, the Prime Minister and the Secretary of State said that they hoped to publish the package in early April, which is very close now.
The noble Lord, Lord Smith of Clifton. asked some pointed questions about the future more generally, to which I am happy to respond. Last Friday, I had the great benefit and privilege of visiting the Community Foundation for Northern Ireland. The director, Avila Kilmurray—an extremely impressive woman, if I may say so—spoke of work falling into the categories that the noble Lord identified. Almost at random, I can list the following: work with marginalised young people—that is critically important—and with victims of the Troubles; neighbourhood regeneration in disadvantaged urban communities; work with women; work on the reintegration of politically motivated former prisoners—the point raised by the noble Lord, Lord Fitt; rural development, which, as the noble Lords, Lord Glentoran and Lord Rogan, have reminded us many times in Grand Committee, should not be overlooked; peace building through community arts and culture; development work in areas of weak infrastructure; social justice and human rights work; and investing in health in disadvantaged communities. That is just a sample of a wide spectrum. If all those programmes are successful—even in part—it will offer some comfort for the future.
I take the point made by my noble friend Lord Fitt that decommissioning is of critical importance. None of the parties is in the slightest doubt about that.
In conclusion, I revert to what the noble Lord, Lord Glentoran, said at the outset; it certainly chimed in my mind. He said that he thought that there was a genuine possibility. For myself, I must say that never, in the many years in which I have had a connection with Northern Ireland affairs, have I been in such a cautiously optimistic mood. I think that the time when the tide will turn is now.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Racism in Performing Arts
4.30 p.m.
Baroness Rendell of Baberghrose to call attention to racism in the performing arts in the United Kingdom; and to move for Papers.
The noble Baroness said: My Lords, noble Lords will recall that it has not been long since an Unstarred Question on racism in the theatre was debated in this House. The subject of our debate today spans a wider area: the performing arts in general, including film, television, radio, music, opera and dance. Dominic Gray of Opera North has told me that he believes that "cultural diversity" in this branch of the arts might be a better way of putting it, being something positive and hopeful to embrace, rather than racism, as something to shun.

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For decades there has been no real policy in this area. Indifference has prevailed and a pretence kept up that no problem exists. Objections have been habitually raised to black and Asian actors cast in roles which for years and sometimes for centuries, and for no good reason, have been traditionally white. But I believe that an optimistic attitude is now, on the whole, justified. Things have a long way to go and they are far from ideal, but it appears that, overall and with certain exceptions, companies, boards and managements are seriously addressing what they are beginning to recognise as a major problem throughout society.
Arts Council England has designated this year as the Year of Cultural Diversity—a project that will involve performances, seminars and publications. I have already mentioned Opera North. At present the company is working on a new production of Mozart's "The Magic Flute" with a multi-cultural company of principal singers and rehearsing towards main-stage performances in April, May and June of this year.
Opera North has commissioned a touring exhibition of visual art inspired by Verdi's "Requiem". One of the six pieces is by Farhad Ahrnia, an Iranian photographic artist. "Operaville", a work commissioned by Opera North for the Millennium Festival in 2000, tells the story of seven real-life families from Bradford, including Dominican, Indian, Ukrainian and Polish families. It has a multi-cultural orchestra and singers from diverse races performing the opera. Currently it is touring as a set of songs to venues in the North. A large-scale education programme is working on "The Magic Flute" with culturally diverse schools in Leeds, Oldham and Manchester.
Enormous issues affect the development of singers and musicians from some cultural backgrounds. For instance, for reasons of religion some groups are discouraged from performing in and attending live performances or from attending performances in the evening. I doubt whether any noble Lord would argue against the need to respect other people's religious integrity. Opportunities are problematic for many people, and they may start as early as primary school. In 2001, Opera North, which describes itself as "colour blind". worked with 50 children in Dewsbury in a project focused on Puccini's "Madam Butterfly", bringing together Asian classical musicians and singers; the children and artists together producing their own version of the story. One hundred children were invited from local schools to rehearsals and then to the opening night of the opera. Fortunately those kinds of projects are now becoming almost commonplace, and not only for Opera North.
Yet there is still a sense that opera is a white European art form, supported by the composition of audiences and the still relatively low numbers of black principal artists seen on our stages. Why is that? A change for the worse has been the decline in instrumental teaching at low level, says Opera North. It is now available only to children whose parents are willing to pay for it. That has led to a sharp decrease in the numbers of non-white children taking up the violin, cello, harp and other musical instruments. The number of ethnic minority children who came into
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the system as long ago as the 1980s had started to change the profile of orchestras. But according to Opera North, over recent years that influx has dried up. This points to a flaw in the system to which Her Majesty's Government might pay attention in the interests of a better balance between white and ethnic minority musicians.
It is now common to hear music from a variety of countries and cultures, even on the traditional radio station of Radio 3, where classical music from the West once predominated. This has tended to be advantageous to classical music as it has removed the stigma attaching to it in the minds of some listeners by putting it into a context with the music of other cultures.
Another distinguished opera company, the English National Opera, is committed to a policy of equal opportunities in its employment practices and to ensuring that no job applicant or employee receives less favourable treatment on the grounds of race or ethnic origin. However, a major reason for the low numbers of people from some ethnic groups in opera is under-representation in music colleges and a general lack of candidates from the black community. The ENO orchestra welcomes applicants from any racial background, but the fact remains that it has only two black members. In the area of dance, the company's current cast for "Orpheus" has four black chorus dancers. The orchestra of the English National Opera has only one black conductor, Henry Lewis. Singers are cast entirely on their ability and with no regard to ethnic origin. For example, Willard White, probably the world's most famous black singer was cast as Boris Ismailov in "Lady Macbeth of the Mtsensk District", Sandra Browne as Octavian in "Der Rosenkavalier", David Arnold as Escamillo in "Carmen", and Thomas Randle in the forthcoming production of "The Magic Flute". Those examples look encouraging until we consider how many hundreds of names would figure in a list of white performers.
That black would-be performers should be encouraged to pursue a career in music is obvious, for they are often outstanding. This judgment makes a refreshing change from the exclusive remark so commonly repeated, that black people make wonderful dancers; rather, it seems to be that when opportunity and encouragement are there, Afro-Caribbeans and Asians make wonderful musicians.
The Royal Opera House acknowledges what must be evident: that the art forms of opera and ballet are in the Caucasian and North European tradition. At the same time, it recognises that that must change if audiences, including a large percentage of non-whites, are to be attracted to performances. Audiences naturally want to see their own people on the stage in productions written and directed by their own people. With that end in view, the Royal Opera House runs an education project called Chance to Dance, spread across 50 schools in several south London boroughs, to include all ethnic groups, for children from the age of seven upwards, with a scholarship for full ballet training. The Laban Centre in Deptford, opened last month, has 13 studios and offers training to students from all over the world in classical dance.

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BRIT is an Arts Council key strategic development which works to integrate black and Asian practitioners into mainstream theatre and thus to support a more equitable theatre. It is not only among actors that ethnic representation has been small. According to the Eclipse report, the result of a conference held in the summer of 2001, out of just over 2,000 staff employed in English theatre, only 80—some 4 per cent—were of Afro-Caribbean or Asian origin. Out of 463 board members of English theatres, only 16—3.5 per cent—were Afro-Caribbean or Asian. Still, there is reason to believe that since then things have slowly improved. Among many other groups and companies to which the Arts Council has been allocating funds is the Leicester Haymarket Theatre, where there is a hub of training with two directors and an administrator. The theatre is currently amassing programmes which include projects using solely Afro-Caribbean and Asian performers. In Kully Thiarai, it has one of the very few artistic directors originating from these communities in the United Kingdom.
The Arts Council has inaugurated the South Asian Dance Alliance, a nation-wide agency to maximise opportunities locally and nationally, and the London Dance House consortium for African peoples. The Department for Education and Skills is seeking to target new audiences through specialist art and sports schools. An example is the funding of Elmhurst School in Tring to relocate to Birmingham, providing vocational training for what will eventually become a majority ethnic population.
The Asian Gurinder Chadha has achieved phenomenal success as the director of the film "Bend It Like Beckham"—though through her own efforts rather than from external support. The film featured the Afro-Caribbean actress Shaznay Lewis and made a star of Parminder Nagra as the football-obsessed teenager.
Research into multi-cultural broadcasting carried out by the Independent Television Commission, the Radio Authority and the Broadcasting Standards Commission resulted in the discovery that although significant progress has been made in the past five years, better representation of minorities is still needed on-screen and off-screen in decision-making positions. Channel 4, BBC1, BBC2, Choice FM, and Kiss 100 FM were commended on broadcasting minority interest programmes. Audiences felt that better representation would help towards creating a greater sense of belonging in British society, fostering a wider understanding of different cultures and allowing children to see themselves positively.
Concern was raised among Asian audiences of the way that arranged marriages were presented on television and they called for a fairer portrayal. Many African-Caribbeans, with good reason, dislike seeing their young men portrayed as irresponsibly fathering children with several different women. Participants from other ethnic groups took the view that their country of origin was either not represented at all on television or was shown in an unfavourable light. Leading black actors also feel that television companies patronise people from ethnic minorities
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and take the view that approaches have to be made to them with "cap in hand" and that it is the writer or actor who must compromise—never the other way around.
Britain is contrasted to the achievements of African-American actors at last year's Oscars when Halle Berry made history as the first black woman to win the "Best Actress" award and Denzil Washington was the first black actor to win the "Best Actor" award since Sidney Poitier in 1963. British black independent producers in the United Kingdom felt that they were in the same position as women producers 20 years ago and were "ghettoised" away from main programme-making.
As of January this year, the BBC seems to be—I quote Greg Dyke's notorious phrase—"less hideously white" than it was, with 8.6 per cent of those on permanent or long-term contracts being black or Asian. It seems that its target percentage of 10 per cent will be met by the end of this year. Channel 4 has a target of 11 per cent by the end of 2003. But senior production remains predominantly white and it has been said that black and Asian entrants to newsrooms are quickly being persuaded on-screen as reporters.
I end by pointing out that people from ethnic minorities still feel that exclusion from mainstream society can be an ever-present reality. They are still acutely sensitive to tokenism, which implies condescension and a patronising attitude. Wary of the role that racial stereotyping in the performing arts can play in the perception of a white society, they want, not to be singled out and presented as "different" or "interesting" or "fascinating", hut as real, ordinary people, accepted and integrated. My Lords, I beg to move for Papers.
4.44 p.m.
Lord Chan: My Lords, I congratulate the noble Baroness, Lady Rendell of Babergh, on securing this debate on racism in the performing arts. I was privileged to speak at the last debate that she initiated in October on racism in the theatre.
Mainstream organisations are becoming more inclusive of ethnic minority performers. The Arts Council, the BBC and Equity have taken steps to provide opportunities and support for black and Asian people during the past two years, as identified by the noble Baroness. Those changes have taken place even beyond London.
Part of that progress must be due to the Commission for Racial Equality's Race in the Media Awards that began in 1993 when my noble friend Lord Ouseley was chairman of the CRE, and I was a commissioner. Awards were given to newspapers, magazines, radio and television. The eleventh annual awards of the CRE Race in the Media will take place on 11th April at the Savoy Hotel.
When the Race in the Media Awards began, the awards were considered to be of less value than other awards given to white performers by large mainstream organisations. However, the people identified by the

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CRE Race in the Media awards have now become famous and are celebrities in our national spectrum of talented performers.
Only in the past two years have a variety of culturally diverse organisations received funds from the Arts Council to support dance companies—£2 million through regular funding and £1 million through the National Touring Programme. Similar amounts of support have also been provided for several black and South Asian music groups. Both management skills and standards of performance are being addressed. Those recommendations were identified in the Eclipse report on developing strategies to combat racism in the theatre.
The BBC Radio Drama Company is offering a new BBC fellowship to black and Asian actors—the Norman Beaton Fellowship. Norman Beaton, a famous black actor, died in 1994. He was well known for his role in Channel 4's comedy, "Desmonds". BBC Radio Drama productions have featured famous ethnic minority actors such as Cathy Tyson, Marianne Jean-Baptiste, Adrian Lester, Adjoah Andoh, David Harewood, Lenny Henry, Meera Syal, Nina Wadia, Ben Onwukwe and David Yip.
While those developments indicate progress, unhelpful stereotypes of ethnic minority performers continue. Successful and high profile performers such as Cathy Tyson, interviewed last Sunday in the Independent on Sunday, complain that roles offered to black actresses are limited by stereotypes. She said:
"All we ever arc is prostitutes or princesses from Africa".
I had the pleasure of meeting Cathy Tyson, who was born in Liverpool, in June 2002 at the Windrush Achievement Awards, a ceremony to celebrate the achievements of people from diverse backgrounds. Cathy Tyson, of course, has now developed a wide repertoire of roles on stage and on television, both in Hollywood and the UK.
In the area of performing arts, I must admit that best practice in racial equality is clearly more common in the United States than in this country. Opportunities offered to talented people from diverse ethnic and cultural backgrounds in Hollywood and on American television should serve to inspire and challenge our practices in the performing arts in Britain. Our ethnic minority performers want to compete with the best talent to achieve recognition. During the debate last October, I questioned why the role of Madam Butterfly is usually taken by a European singer. I am pleased to observe that the English National Opera currently has a Japanese singer playing Madam Butterfly in London.
Our British-horn black, Asian and Chinese people are becoming scriptwriters, composers of music and performers of high quality in mainstream arts. In the past, opportunities for ethnic minority people to appear on stage, television and in films were limited to a small number of performers who had become celebrities. Many more talented performers will emerge soon. The performing arts, particularly television, should nurture and value new talent not only for commercial gain but in order that they might serve as role models for young people.
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A survey on multicultural broadcasting published in November 2002, reported audience attitudes on the level of representation of ethnic minorities. I quote some important findings of a report supported by the BBC, the Broadcasting Standards Commission, the Independent Television Commission and the Radio Authority. It states that,
"participants from minority ethnic groups agreed that there had been an increase in the levels of representation of ethnic minorities within mainstream broadcasting over recent years. Nevertheless, they still saw the need for greater representation, both of their own communities as well as other minority groups.
"Participants said it was important to be represented in mainstream broadcasts, be they radio or television, because they were considered to be the most influential of the media. Specialist services"—
in other words, radio programmes in ethnic minority languages—
"while important to the communities they served, could not address this general need to be 'seen'.
"The reasons for wanting increased and better representation in mainstream broadcasting included: demonstrating a sense of belonging within British society; fostering a better understanding of ethnic cultures among other communities, including the White population; and allowing their children to identify with positive representations of people from their communities ….
"In summary, broadcasting was seen to have a role to play in breaking down certain barriers by offering: positive role models. such as figures of respect and authority, especially to younger people; different and positive images of the countries from which participants originated; ethnic groups a sense of inclusion within British society, especially when portrayed within mainstream broadcasting; some access to material in the language of a participant's country of origin".
I hope that this debate will stimulate as much interest in broadcasting as that in October last year. And I hope that Her Majesty's Government will recognise the changes that need to take place to ensure that the participating arts genuinely represent a diverse United Kingdom.
4.53 p.m.
Baroness Howells of St Davids: My Lords, I rise to support my noble friend Lady Rendell in bringing the vexed question of racism in the performing arts to the attention of this House. My noble friend has given a pictorial précis of the current situation within the British performing arts, with her usual care and precision.
I want to take the issue of cultural diversity and equal opportunity into a realism as experienced by the black community as I understand it. In her historic speech at the Academy Awards last year, already mentioned, Halle Berry, who became the first African American woman performer to win the award for best actress in a leading role, told the audience,
"This moment is so much bigger than me—this moment is for those who came before, for those who stand beside me and for those who have only begun to dream of making it in Hollywood".
Those words were blurred by tears of anguish. To date. no black actress could utter those or similar words in the UK because theatreland is not in the business of equal rights or equal opportunities.

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"It is in the business of making money",
were the words of Professor Todd Boyd at the University of California, whose specialism is critical studies, when asked whether Halle Berry's Oscar would mean more opportunities being made available to other black actresses. Noble Lords may be interested to know that in 2003 Miss Berry was the first black woman to be awarded an Oscar for best actress. That tells its own story.
That anecdote just related by me is true also of London's West End. The West End is not in the business of equal opportunity and cultural diversity. It is a commercial business of audience appeal, known in the profession as "bums on seats". There are no prospective Halle Berrys in the West End of London.
The London West End, as we know, thrives because of the enormous support the English system of subsidy has provided in the development of theatre over the centuries. Our subsidised theatre has been the envy of many countries in the world because by offering the space for experiment and exploration within the sector as a sort of engine room for the future classics, the West End is able to have seasoned actors and playwrights whose work it is able to market both nationally and internationally.
The majority of people interested in theatre see London's West End and its environment as the place where real theatre, English theatre, takes place. However, I suggest that that myopic view might be viewed with some understanding as often there is nothing else on offer. There is no work from the perspective of Britain's black community. Yes, we are sometimes able to see some black performers, as a token to equal opportunities, in the "Lion King", dressed so very fetchingly in their animal costumes, singing and dancing with great aplomb. I ask: should this be the only offering available from the black community?
Less stereotypical, less predictable work from the black sector is unlikely ever to be seen as viable because the under-investment in black-run, black-led theatre in Britain has meant that there is so little opportunity to hone their skills. I have said previously in this House that there is not a single theatre in this country which is dedicated to the exploration and experiment in the art forms of black British theatre. There are a multitude of such well-funded establishments which support some black theatre practitioners, but none for black people themselves to manage and grow. I believe that that is sad and a glaring loss. There is a glaring need and an unfair disadvantage.
The black community has identified one such theatre, but the powers that be have set a glass wall that cannot be broken without much more help than is now on offer. This could result in a missed opportunity to enrich the fabric of British theatre. So long as black British theatre practitioners continue to have to make a case with those who hold the keys, the only work which will get through the door, and possibly—only possibly—get on the stage, is work approved by the
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gatekeepers. We see on our televisions football stars and those who have been good boxers owning their own programmes, but not our trained actors and actresses. The pound sign must be seen on their foreheads before they are given the opportunity. The power lies solely in the hands of white people, who can see things only through white eyes, however sympathetic. There is, I repeat, no black presence in the high places of cultural discussion and decision making.
This situation will remain the same if some change is not engineered, no matter how many equal opportunity documents are drawn up. Change must be engineered if it is to become a reality. The self-determination which would result from black culture having a home of its own, in which it would be free to break the cycle of preconception and prejudgment—sometimes called "prejudice"—is an issue which must be addressed. Such prejudice dogs the art of those whose influences are not wholly white European. Authentic judgment and application, through experiment and exploration in a safe place, is needed. New art forms lead to the excitement and exhilaration which reflect today's changed social scene.
Your Lordships may have noticed that I have not mentioned the word "racism". This is because I have come to understand that it is an emotive word and is not to be used lightly. It is often counter-productive as shutters go up and the way forward is effectively barred. But I remind the House that it exists, sometimes in so careless and casual a manner that it is not recognised for what it is.
I discussed the debate with Ms Yvonne Brewster, a producer and actress, who asked why it is that black people are found in the canteens, in the cloakrooms and behind the brooms, but so rarely on the stage, which reflects a reality they recognise. Sombre thoughts.
In February 2002, the Cabinet Office Minister, Barbara Roche, accepted that there were significant differentials between ethnic minorities and their white counterparts in unemployment, wages and promotion. She said, "Putting this right requires dedication and imagination". I believe that the arts, especially the performing arts, have the power to heal, to allow lateral thinking, but too often it is the last place one looks for solutions. I hope that in responding to the debate the Minister will give support to a theatre that is black-led and black-owned.
5.2 p.m.
Baroness Prashar: My Lords, the development of a cultural identity is a basic human need, and the arts are crucial to this development. The arts help individuals, communities and society to be more creative in ways that go well beyond the arts. Those who are denied opportunities to either participate in the arts or to create art are indeed deprived. As a society we must make every effort to ensure that no one is denied such opportunities. It is not only socially and morally important but also, since the passing of the Race Relations (Amendment) Act, legally important. I

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therefore welcome the debate. I commend the commitment of the noble Baroness, Lady Rendell, in pursuing this topic with such tenacity and I congratulate her on introducing it so constructively.
I have a particular interest in the arts and diversity. I declare an interest in that, since 1999, I have been a patron of Tara Arts, a national drama group based in south London; and from the mid-1990s to the late 1990s I chaired the Cultural Diversity Committee of the Arts Council.
During this period the Arts Council published an action plan entitled The Landscape of Fact which was directed towards a policy for cultural diversity. The title was taken from a line in Brian Friel's work, Translations. The complete sentence states:
"It can happen that a civilisation can be imprisoned in a linguistic contour which no longer matches the landscape of fact".
The plan recommended concerted action in four areas: understanding and promoting the concept of diversity; access; advocacy and development; combating racism and promoting equality of opportunity.
The plan has recently ended its five-year period of operation, culminating in another report, this time entitled Towards Greater Diversity. The title itself suggests that progress has been made, as we have heard, and the report gives an encouraging account of what has been achieved.
We know that more money is going to black, Asian and Chinese arts and, much more importantly, cultural diversity is now accepted as a generic mainstream issue. Furthermore, as other noble Lords have said, there have been initiatives such as the fellowship schemes by the Arts Council; the activities generated following the Eclipse report of regional training days for senior management and boards of theatre companies; the networks set up by the Black Regional Initiative in Theatre to develop black and Asian work and audiences; and the radical schemes such as Arts for Everyone, among many others. These initiatives have started to change the landscape and make a difference. Lottery money has also made a difference because it has given the Arts Council and other arts organisations leeway for movement.
But significant issues still exist. The arts are not isolated from the pressures, prejudices and inequalities of a wider society. There still remains a need for continuing and concerted action if the playing field is to be levelled.
What is the key to eradicating racism? Now is the opportunity to build on the progress to date and to go beyond examples and single initiatives to a more sustained, coherent and concerted strategy. We must ask ourselves what should be our vision of a society without racism in the arts. I would single out three issues.
First, I believe that in the longer term the category "cultural diversity" within arts organisations would become redundant. Inclusiveness, cohesion, respect and exploration would become the main drivers for change. Secondly, it would be a society with shared spaces and public open arenas accessible to a range of cultures and voices, where a coherent society could
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come for a chance to meet, interact and evolve. Thirdly, it would be a society where institutions with changed attitudes would be aware of and reflect diversity.
The question is how we can achieve this. First, it will require a long-term commitment to development. know that development takes time and is hard to achieve, but it is something to which we need to pay attention. Secondly, we will need representative structures. The arts institutions must become diverse and reflect diversity.
We will need a strong infrastructure of buildings for performance, experimentation and innovation, and support for the development of skills and training for black, Asian and Chinese groups and for administrators and promoters who are uncertain about dealing with diversity. Above all, we need clear leadership from government, the Arts Council and other arts organisations.
Finally, I commend the Arts Council document Towards Greater Diversity because it provides a cogent and admirably tough analysis of what still needs to be done. I have been greatly impressed by the formula arrived at in the work of the Arts Council's excellent Diversity Unit, particularly the work of its senior head, Naseem Khan, who left last week after seven years of impressive work.
The formula identifies two complementary actions. It argues that the Arts Council and other arts organisations should balance two different thrusts: first, increased opportunities for tackling resistance and racism in the mainstream arts; secondly, the building of capacity at grass roots level. It suggests that if we were to do one or the other predominantly, then the result would be counter-productive. If we concentrate on making sure that opportunities exist more than they do at present, we will run the danger of helping to make jobs for a group that does not exist in sufficient numbers or with the experience at the appropriate level. The result would be scepticism among the mainstream organisations about the need for positive action at all. The "we advertised and no one suitable applied" syndrome would continue.
If the formula concentrated just on enhancing capacity for black and Asian arts administrators, artists, curators and promoters, without making sure that wider opportunities were available, alienation would increase and black artists would consistently say that they were being trained but not employed. We would not see much progress.
Balancing the two by building capacity and providing opportunity is the way forward. That would increase choice and allow artists and managers to choose where they want to operate and how. Choice is what we should be working towards—that is, choosing one's identity and lifestyle—which is why this debate is of such importance. It would be helpful to hear from the Minister whether the Government and the Arts Council will be moving towards a coherent approach and supporting it with adequate resources.
5.10 p.m.
Lord Ahmed: My Lords, I thank the noble Baroness, Lady Rendell, for introducing this debate in your Lordships' House. The noble Baroness has a unique experience and expertise in the arts, particularly on this subject. I will therefore be brief, as I am not an expert in the performing arts. However, as someone who enjoys theatre, concerts, music, TV and radio, I have a few observations to make.
We are all proud of our multi-cultural society and there are many ways in which we can celebrate this diversity, one of which is through the performing arts. As in many other institutions, there is racism within the performing arts in the United Kingdom, particularly against the Muslim community. I will return to that later.
I believe that as a multi-cultural society, our theatres, TV and radio should reflect this cultural diversity in staffing, board appointments, artistic programmes, education activities and audience. The noble Baroness has already given percentages of board appointments and staffing which do not reflect our society. I believe that reflecting our cultural diversity will foster a better understanding of ethnic cultures among other communities, including the white population. As mentioned by the noble Lord, Lord Chan, equality in the performing arts will demonstrate a sense of belonging in British society for all the ethnic minority communities. It will allow their children to identify with positive representations of people from their communities.
Unfortunately, there is too much negative stereotyping and very little of the real British society is being represented. I believe that through the performing arts many positive achievements can be easily reached. Figures of respect and authority who appeal especially to younger people can be positive role models. There needs to be a sense of inclusion, as well as positive images of cultures, religions and places of origin.
Although the Arts Council of England has many good initiatives for inclusion—I particularly welcome the increased support of black and Asian theatre, which was agreed as a national priority—I am yet to be convinced that enough is done to include the Muslim community within the arts. I am aware of a few thousand grant allocations for cultural programmes here and there, and a few musical events being sponsored, but how many women with hijab—women wearing scarves—are seen in the theatre or on our screens?
I recently came across a Muslim woman stand-up comedian, who was excellent. She is a British-born young lady brought up in the UK in a conservative environment. In fact, she has been to perform Ummrah—a visit to Mecca—which shows how religious her family background is. Yet she was extremely talented in her field and is very popular in all sections of the community.
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There are many other talented young people like her. This brings down a lot of misunderstandings and barriers. The test for any institution is in practice rather than policy documents that collect dust.
I draw your Lordships' attention to the BBC, ITV and other institutions. Do we see many Muslim recipients of, or participants in, national awards?
I end with the hope that one day we will make equality a reality in all aspects of our life, including in the performing arts.
5.15 p.m.
Viscount Falkland: My Lords, as I said in an earlier debate on racism in the theatre, we on these Benches are, without exception, dedicated to a multi-racial society. To that extent, we share some of the frustration which has been apparent in some of the speeches made today. I can understand that frustration, but I will have to examine the detail more closely.
The speech of the noble Baroness, Lady Howells, was extremely interesting; I shall read it in detail in Hansard. It would be unlikely if we were in France, let us say, for an eminent member of the Afro-Caribbean community, like the noble Baroness, to have made such a speech. Why should that be? France is no less racist. fundamentally, than any other community. All European countries have racism to a certain degree. France has been a colonial country, like us. We could be more critical of many aspects of French colonialism; it penetrated much more deeply into the areas of Africa where the French were in evidence than was the case in British Africa. There was an education system and a system of fonctionnaires, or administrators, which went down to a very low level. African independence from the French yoke was as greatly wished for as in British, Belgian or German areas.
I go to France quite often, which is probably surprising to hear nowadays. On television you see evidence of a multi-racial society in the performing arts that you do not see here. I am particularly fond of music, modern as well as classical, and Latin American, Caribbean, African and North African music is widely played on French television. Every variety programme has a multi-racial mix in the presentation that we do not see here. The reason is purely the cultural aspect of our particular colonialism. We talked about that in the previous debate on the theatre; I do not want to repeat the speech I made then, which was over-long, and I do not want to be over-long this evening. There has been slow progress, from a very poor start, particularly as far as Afro-Caribbeans are concerned. I mentioned this in October too.
To hasten the process of having greater representation of ethnic minorities in the performing arts is a slow business. To that extent, I do not think I agree with the noble Baroness, Lady Howells. I understood her to say that we must make efforts to accelerate this change at all costs. I think that it will happen anyway, although I understand her frustration.

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She talks about Halle Berry in America. Many black artists in America have fought through tremendous difficulties to reach great eminence in their profession. Lena Horne, for example, had a terrifyingly oppressive and difficult childhood. I am old enough to remember being very impressed as a child when she starred in the film "Stormy Weather". I still think she was one of the most brilliant black performers I have seen in the cinema. There is a wide range of black artists in America today who are accepted generally. I suppose that there are still pockets in the deep south where there is resistance to accepting that these people can be as good and as talented as they are. One of my three favourite film actors in the world is Samuel L Jackson. Halle Berry is obviously another extremely talented star.
Why do we not have these people here? The simple answer is that we do not have a film industry to speak of. We struggle to maintain a niche industry, with a distribution system that is entirely geared to first-release American films, sometimes with ethnic actors and sometimes not. There is very little opportunity for British films to be distributed and shown. I was interested to read today that the Film Council has at East put some money into distribution to fund more prints of films, so that British films generally, whether they have ethnic actors or not, have a greater chance of being shown. Until British films have a greater chance of being shown, it is extremely unlikely that white British actors are going to be seen, let alone black or Asian ones. I look forward to the time when that will happen.
British ethnic minority cinema actors will be seen more often when more of those communities start to write film scripts. In my experience, a lot of the ethnic minorities here come from cultures that are very visual in their tradition. The British are not a visual nation in their tradition. They have a literary tradition that goes right through their theatre, broadcasting and television. It is very difficult to break that culture, but it is possible. both in the theatre and in film—more quickly in film and television, I suggest, than in traditional, legitimate theatre.
These are all debates for another day. I did not expect to say much today because I thought that everything had been said on the last occasion. I give credit to the noble Baroness, Lady Rendell, for introducing the debate and stretching further into the performing arts.
On the face of it, one would think that there was less racism—I do not like that word any more than does the noble Baroness, Lady Howells—in the performing arts than in other areas of British life. After all, there are talented dancers, musicians and singers from all the ethnic minorities—just as many as there are in boxing and other areas that the noble Baroness mentioned. Boxers get to the top through their talent, dedication, training, skill and ability to beat their opponents. Black actors will get there in British theatre and film by being better than their white colleagues. Many of them have the capacity to do that, but how will they get to that point?
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The first issue is education. We have to get more black and Asian people into drama schools, for a start. Before drama school, we have to make sure that their talents are quickly recognised and developed at primary and secondary schools so that they go into the arts.
I imagine that racism in the performing arts covers more than just performers. I do not think there is any problem with the ethnic minorities as performers. I have seen many great performers. They are not often seen here for the cultural reason I have mentioned. Apart from cinema writers, we need to get more people into theatre management or production.
I rang up Equity to find out its views on the debate. I did not get much information, but I was told that the Independent Theatre Council is now running an expanded fast track scheme, supported by the Association of London Government and various other bodies, including the Arts Council England. to target people towards arts management. That is an important programme and I am glad it is happening. The scheme targets the current under-representation of Afro-Caribbean and Asian people in arts management and offers graduates or people with proven transferable management skills the opportunity to discover that there are great opportunities for them in that area of life, which requires multi-skilled and talented people. A 15-week full-time placement is provided in a performing arts organisation, with a bursary of £140 a week, together with day release for 12 Independent Theatre Council one-day management training courses throughout the placement, plus travel and accommodation allowances to attend the courses. That is a start on that important area. I commend Equity for bringing that to my attention. However, it will be a slow business and I do not think we can hurry it along.
Going back to performing, casting is a difficult and important area. People like to see their community represented on television, in the theatre or in films. If they do not, they are less likely to want to partake in those various areas of the performing arts. I do not think there is any particular difficulty in dance or singing, but there are obviously constraints on people unless there is more exposure.
Fulfilling the objective of getting more people being cast, sometimes by taking risks, relies on people's awareness, sensitivity and forethought. We cannot legislate for that any more than we can legislate for people's behaviour in the streets after the Licensing Bill, which is still preying on my mind.
Having worked in the theatre and knowing how important the issue is, I am glad that Equity is also working with Spotlight to create a new directory of Equity's African, Caribbean, oriental and Asian members. The directory of faces from which casting directors make their decision is important. It will be published at no cost to Equity or to members and will be available as a supplement to the Spotlight directory.
All these developments are under way. We shall have to debate progress again at some stage. Perhaps I shall not be here then, but others younger then me will be. Things are getting better, but I understand the

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particular frustrations of the noble Baroness, Lady Howells. I hope that we shall have further debates on this subject. Perhaps we can pick something out of the speech of the noble Baroness, Lady Howells, because she made some challenging points. I do not agree with her that all Afro-Caribbean actresses play either prostitutes or African princesses. That is hyperbole, although I get her point. I hope it is not the case. I look forward to further discussions on this interesting subject.
5.29 p.m.
Lord Luke: My Lords, I congratulate the noble Baroness, Lady Rendell, on again introducing this important matter. As noble Lords will be aware, like the noble Lord, Lord Ahmed, I was not involved in the recent debate on this subject, when my noble friend Lady Buscombe spoke on behalf of these Benches. I do not believe that the situation has changed materially since then and I do not propose to detain your Lordships for long.
We are very grateful to the Arts Council of England—the noble Baroness, Lady Prashar, made this point more effectively than I could—for its very helpful approach in emphasising the need for the theatre to engage with audiences and artistes emanating from a broader, more diverse range of backgrounds. There is a need for the theatre to reflect real life more accurately. It is important that the theatre reflect the diversity of culture in the 21st century.
There are funding issues, as several speakers have said, that must be addressed. As the noble Viscount, Lord Falkland, said, we cannot underestimate the importance of effective training and education. The overall aim must be to ensure multiracial representation at all levels in the performing arts. At the same time, however, theatres have to be practical and measure supply and demand if they are to survive at all in these difficult times.
There are many examples of breaking down barriers from which those in the world of theatre may take heart. I refer to the world's pop, television and film. There are plenty of role models—previous speakers have mentioned so many that I find it difficult to think of some who have not been listed—who are surely the key to setting the pace for change. I cite but a few, such as Otis Redding and Jennifer Lopez. Halle Berry has rightly been mentioned by nearly every speaker. She has carried a torch and most worthily won an Oscar last year. I should also like to mention one who has not yet been mentioned and is perhaps more from my time than from that of some noble Lords—the late great Paul Robeson. Who will ever forget his "Ole Man River"? The trouble was that, in his time, the only roles available to a black actor such as himself were as either the noble savage or the escaping slave. It is a great shame. If he were alive now, my goodness would we not get some marvellous operatic performances?
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I conclude by agreeing with Peter Hewitt, chief executive of the Arts Council. He said:
"There is a need to change the mind-set and artistic practice of the theatre to reflect the diverse society of Britain in the 21st century".
It is to be hoped most fervently that there is the necessary commitment, the necessary finance and the necessary courage to meet those aspirations. I look forward, as always, to the Minister's reply.
5.33 p.m.
Lord Davies of Oldham: My Lords, I also thank my noble friend Lady Rendell of Babergh for initiating this debate. Although we enjoyed debating these issues last October, that debate left many ends untied. I am therefore sure that we have all enjoyed the opportunity to participate in this debate.
I recognise the strength of the case presented by my noble friend Lady Howells, who reminded us that there are aspects of racism in the arts, the performing arts and the theatre which we need to combat. However, I have also found myself very much drawn to those who have emphasised that we should perhaps look to the positive objective that we should seek to realize—the promotion of cultural diversity. I am particularly grateful to the noble Baroness, Lady Prashar, for outlining a series of points and criteria that we could usefully adopt to measure our progress towards those achievements. This debate has no doubt greatly advanced that cause.
Way back in 1948, T S Eliot wrote that,
"the cultures of different people affect each other: in the world of the future it looks as if every part of the world would affect every other part".
By heavens, how right he was. Today, following the two momentous debates in this House and in another place about how the wider world is breaking in on our world and our response to it, we are all too well aware that we need both international understanding and, within our own communities, understanding, trust, mutual faith and the promotion of equal regard, which is the basis on which the good modern society is founded. The Government are committed to making Britain a successful multi-cultural society. We are determined to build a society where each of us, regardless of race or religion, has equal rights, equal opportunities and equal responsibilities.
As the noble Viscount, Lord Falkland, said, racism is unacceptable anywhere in society. In that context, I was interested in his reference to the achievements of French society. Although we would not want to be overconfident about our own position in any way, I think that he also paid due regard to certain aspects of racism in France that are manifested in rather more malign forms than perhaps we have seen in the United Kingdom. I recognise his point about certain aspects of the media where greater diversity is demonstrated. I hope to establish that the Government are also seeking to take concrete action to increase opportunities.

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Bonnie Greer, artist, broadcaster and hoard member of the Royal Opera House, said:
"A cultural diversity policy should put art and artists first. Only in the hands of artists, can art grow and flourish. Culture, on the other hand, can be made and encouraged by the state. This is what the state should do, create a new culture that recognises the contribution of all of its citizens on an equal basis".
That is a noble objective—one to which I think we have all in our various ways sought to subscribe. Promotion of equality of opportunity and an understanding among employers in the performing arts of the total unacceptability of racism are vital in ensuring the participation of diverse communities in the arts and cultural industries.
The battle to combat racism in the performing arts is being fought on many fronts. Last year's Eclipse and updated Glass ceilings reports, the Fast Track 2003 programme for Black and Asian people in arts management, the Black Regional Initiative for Theatre, the Theatrical Managers Association Eclipse Award and the Arts Council of England's Decibel programme are just a few of the fronts on which these issues are being fought. These projects are working to create change, working to make the performing arts more culturally inclusive and working to tackle the perceived problems of a culture of racism.
The noble Baroness, Lady Prashar, emphasised the role of the Arts Council, to which she has shown significant commitment. I assure her that diversity is a key corporate objective for the council, which is working to ensure that in all open application programmes there is a diverse range of artists and companies receiving funding. She also asked about evidence of real resources for the Decibel project. The Arts Council is providing a significant sum—£5 million—for the project. Black, Asian and Chinese arts were given a significant boost from the council's capital programme. Of the £90 million allocated to 60 projects, £29 million went to black, Asian and Chinese arts organisations, which is real proof of the direction in which the council is working. Some £2.1 million has been reserved for the development of a new Chinese arts centre in Manchester and £1.5 million has been earmarked to relocate Kala Sangham, the Academy of South Asian Performing Arts, to west Yorkshire. As the noble Baroness rightly said, fine words are one thing but resources to back them and to achieve objectives are another. Those projects are tangible proof that the matter we are discussing is being taken seriously.
But how can we increase the involvement of people from different ethnic communities in the arts? First, we must support more culturally diverse performing arts companies to work in their own communities and beyond. Secondly, we must ensure that people and artists from our ethnically diverse communities have the opportunity to enjoy and work in mainstream arts organisations. As was said. this matter does not concern only performers but also administration and those who make the crucial decisions about what is presented and performed.
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Since last October, the Eclipse report has continued to influence the work that is being done to develop strategies to make our theatre more culturally diverse and in the process tackle racism. Progress is slower than many of us would like, and more time is needed, but many of the recommendations are being addressed through the Arts Council and its regional offices. For example, seminars on positive action and equality of opportunity have now taken place in every region, apart from London which has seminars planned for April.
In the North East, partnerships are being formed between community organisations and the theatres in the region to raise awareness of the issues in the Eclipse report and to create connections between community organisations and the performing arts. In the North West, three new young black and minority ethnic companies have recently been awarded fixed term funding—Black Arts Development Project, Rasa and Peshkar. In the East Midlands a new diversity plan has been formulated for theatre in consultation with artists from the region.
I pick up the point made about the West End theatre. We all recognise that the West End theatre has commercial objectives which it needs to achieve. It does not receive state subsidy and therefore its productions are very much influenced by the audience it seeks to attract. Our regional theatres point the way in this regard. The theatres are producing three major pieces of black theatre, the first of which is a production of Errol John's classic play "Moon on a Rainbow Shawl" which is currently on tour. Rather disparaging comments were made of the "Lion King" production at the Dominion Theatre. Sonic noble Lords criticised the "Lion King" as being too stereotypical. I point out that the Young Vic's production of -Simply Heavenly" has just opened. We hope that that will attract significant audiences. As we all recognise, the West End has a significant role to play as regards role models. That point was also raised with regard to broadcasting.
We are all well aware of the need to provide opportunities in both broadcasting and film to reflect: the diversity of talent in our nation. There is no doubt at all that broadcasting, in particular television, is a most powerful medium and has an important role to play in helping to break down stereotypes. Broadcasters should certainly reflect and celebrate our culturally diverse communities and provide programmes that appeal to a wide range of tastes and interests, as well as to people of different ages and backgrounds. The scope of new programming services increases in a digital environment, and we want to see the opportunities created being fully exploited.
Both the noble Lords, Lord Chan and Lord Ahmed, emphasised the matter of role models for young Asians and young black people in our communities. I totally endorse the points that they made. The television broadcasters' Cultural Diversity Network was set up three years ago in response to concerns raised by Chris Smith, the then Secretary of State at DCMS, and others about the adequacy of the representation of our multi-cultural society on and behind the screen.

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The network is involved in a number of schemes and events to promote ethnic minority employment in broadcasting, including special training schemes and networking events. It has also established an online database of ethnic minority talent.
The Communications Bill, which will shortly come before your Lordships' House, has a role to play in the matter we are discussing. It will address the issue that more needs to be done for broadcasting fully to reflect our multi-cultural society in terms of programme content and employment. The provisions in our draft Communications Bill are intended to require Ofcom to ensure that broadcasters include sufficient programmes that reflect the lives and concerns of different communities and cultural interests and traditions in the UK, both locally and nationally. Channel 4 will have a specific remit to satisfy the tastes and interests of a diverse society. The noble Baroness, Lady Rendell, emphasised the role that Channel 4 plays in that respect at the present time. That role will be enhanced under new proposals.
The draft Bill also includes specific provisions about equality of opportunity in broadcast employment. That emphasises the fact that it is not just a question of seeking diversity among the people who appear on the screen or behind the microphone but also diversity as regards the crucial decisions that are taken behind the scenes.
In addition, all licensed television and radio broadcasters who meet threshold conditions set out in the Bill will be required to make arrangements for the promotion of equality of opportunity between men and women, people of different racial groups and between disabled people and non-disabled people in terms of employment. They will also be required to publish the arrangements, review them from time to time and comment on them annually. Increasing diversity in this way behind the screen will, I am in no doubt, lead to on screen programming that better meets the needs of the UK's many different communities and cultural interests.
Although I am not at this moment extending an invitation to noble Lords to participate in the Broadcasting Bill, I can forecast with some confidence that the Bill will receive intensive scrutiny in this House. The matter we are discussing will form an important part of that scrutiny.
The Film Council, the Government's strategic lead body for film, is also working on various initiatives to encourage and deliver a more diverse film workforce across the UK by actively engaging with traditionally under-represented groups and the wider industry. Our film industry has an important role to play here. We should recognise when easy comparisons are made with Hollywood and the American film industry that we are measuring a minnow against the whale in terms of resources, significance and control of the British market, as I believe the noble Viscount, Lord Falkland, said. Nevertheless, our industry certainly needs to make its contribution to cultural diversity.
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I think that I have shown that there is much work, thinking and planning being done across the arts and broadcasting to promote cultural diversity and, in doing so, to combat racism. There is no doubt that we have a long way to go and we must continue to strive to eliminate racism from all our services and institutions through our policy making and funding systems.
What I particularly enjoyed today is that, from the first speaker in the debate, my noble friend Lady Rendell, to the speaker before me, the noble Lord, Lord Luke, all noble Lords addressed themselves to the same objectives that we need to realise in our broadcasting and arts media, in terms of promoting a better reflection of our diverse society. It is on that basis that we can all derive the encouragement from this debate to go forward with constructive policies.
The dancer Shobana Jeyasingh said:
"Policies that are led by the principles of multiculturalism and cultural diversity are there to encourage a more equitable distribution of resources and promote a greater awareness of the work everyone, regardless of colour, has to do to achieve a stable and just society".
That excellent sentiment sums up the theme behind the debate. Once again, I am grateful to my noble friend for having introduced it. We have learnt a great deal together and made considerable progress. I hope that I have given the assurance that the Government concur with the objectives expressed by everyone in the debate, and are concerned to use real resources and proper strategies to achieve them.
5.51 p.m.
Baroness Rendell of Babergh: My Lords, I would like to congratulate all noble Lords who have taken part in the debate. The noble Lord, Lord Chan, made interesting points on the views and perceptions of ethnic minority artists, questioning why the part of Madam Butterfly is traditionally taken by a white, instead of a Japanese or Chinese, singer. My noble friend Lady Howells spoke movingly about theatres in London's West End failing in their efforts to attain cultural diversity.
In her perceptive observations, the noble Baroness, Lady Prashar, spoke of a more equitable society as now becoming a mainstream issue, and of the desirability of clear leadership from Her Majesty's Government and the Arts Council. My noble friend Lord Ahmed spoke of his pride in a multicultural society, but also of his regret that the Muslim community was not yet well represented in the performing arts.
I am grateful to everyone who has contributed to the debate. My Lords, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Northern Ireland Assembly Elections Bill
5.53 p.m.
Standing Order 47 having been dispensed with (pursuant to Resolution of 18th March):
Lord Williams of Mostyn: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Williams of Mostyn.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Carter) in the Chair.]
Title postponed.
Clauses 1 and 2 agreed to.
Title agreed to.
House resumed: Bill reported without amendment: Report received.
Bill read a third time.
Lord Williams of Mostyn: My Lords, I beg to move that this Bill do now pass.
Before inviting my noble friend in the Chair to put that Motion to the House, I want to say what a pleasure it is to appear before him in his role as Chairman for the first time.
Moved, That the Bill do now pass.—(Lord Williams of Mostyn.)
On Question, Bill passed.

University Funding
5.55 p.m.
Baroness Howe of Idlicoterose to call attention to the relationship between arrangements for the funding of students and student choice in British universities; and to move for Papers.
The noble Baroness said: My Lords, I rise to speak with some hesitation, and admit to not only being surprised by my success in the ballot, but somewhat daunted by the prospect. That is not only because of the expertise and experience of those who will follow me in the debate, but also because it is the third debate on the subject in less than four months. However, all that, and the lively debate in the press on the higher education White Paper, has certainly helped to establish the background, and I suspect much common ground, for the debate.
I intend to focus very largely on methods of funding and in particular, on the link in that respect between university institutions and their clients or customers—their student body, actual or potential. I shall have nothing to say about, for example, the allocation (as between different institutions) of research funding, important though that is, nor about the quite lamentable level of academic salaries, which was the
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subject of the recent debate led by the noble Lord, Lord Lamont. I look forward, of course, to what others may have to say on those and other topics. but I shall concentrate today on arrangements for the funding of students.
The details of those arrangements have huge importance, because of the effect that they can have on two fundamental matters: the independence, and therefore the quality, of universities, and the extent to which those crucial, nation-building institutions are accessible, as they should be, to all those who can benefit from them in all sections of the community.
Having stressed the importance of access, perhaps I may start with my one major criticism of the Government's strategy, as set out in the recent White Paper. Even without targeting of the kind proposed by HEFCE last week—it was nevertheless pretty effectively dismissed—the Government are heading in the wrong direction with the proposed appointment of a so-called "access regulator". That does not mean that I am content with the present patterns of access. Of course we should be concerned at the small proportion of non-middle-class children reaching university. Certainly some able children who could and should benefit from university education are not getting the chance.
It is important to understand why. It is not because universities, consciously or unconsciously, are biased against those children. The reason is essentially because our "early years" support, although well under way, and particularly our schooling system is letting them down—much more, it has to be said, than used to be the case in the heyday of the grammar schools. In the 1960s, before the grammar schools started to disappear, more than 60 per cent of university students came from state schools. Today there is a struggle to get the figure above 50 per cent.
The point is expressly acknowledged in the White Paper, which states:
"The single, most important, cause of the social class division in higher education participation is differential attainment in schools and colleges".
Certainly that problem requires proactive responses, and not just in schools. Good examples are already being set by many universities, as the White Paper again makes clear, with initiatives like "Excellence Challenge" and "Partnerships for Progression" now to be merged into "Aim Higher".
However, I do not believe that the problem calls for more bureaucratic, central control of the "access regulator" kind. Indeed, the last thing that our universities need is any increase in central planning, regulation or control.
I am very glad to be able to say that that message at last seems to be getting through and is beginning to spread more widely. It was presented in last autumn's higher education debate in this House by a number of distinguished university leaders. On that occasion, if I may risk causing offence by making a choice, the case was perhaps put most compactly and comprehensively

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by the noble Lord, Lord Desai. He made very clear, above all, the lessons that we should be ready to learn from the United States.
What is even more encouraging is that that type of case is now being put with increasing clarity by our universities, not least by some of the newer vice-chancellors, who bring with them important fresh thinking from distinct and different backgrounds. One such example is that of Sir Richard Sykes at Imperial College, who came straight from his challenging experience at the competitive heights of a global pharmaceutical industry. Another—possibly less controversial but certainly equally relevant—example is the new vice-chancellor of Brunel University, Professor Steven Schwartz. He is a New Yorker who has spent the past six years as vice-chancellor of Murdoch University in Western Australia.
Encouraged by their wisdom, I now turn to the numerous aspects of the White Paper which I warmly welcome, not just for themselves but for what they imply—for what I certainly hope they imply—for the further development of policy, and not least for the enlargement of student choice.
I begin with the first plus point about the White Paper. Most striking and most welcome is the substantial commitment of extra resources: 6 per cent in real terms for the next three years. I emphasise that that figure must be maintained. That is needed to help to reverse the serious and long-running decline over the past 15 years: a fall in the annual funding per student of about 40 per cent. Of course I—and, I am sure, most if not all noble Lords—have considerable sympathy with students who complain about increased fees and their consequences. Our generation, after all, had most of our higher education paid for by the state. However, we live in very different times and there is no justification—if ever there was—for those who will earn considerably more as a result of their university experience being paid for by those with a lower lifetime income.
So, the second plus point is the decisive move in the direction of variable fees. We should note, incidentally, that the "cap" of £3,000 per annum is criticised by Richard Sykes of Imperial College and others for being set too low. Nevertheless, it is a substantial move towards freedom for universities to set their own prices—variable and diverse.
Both of those words are important for three reasons. The first is because it will give universities an important, and potentially growing, source of' independent income. The best already enjoy that to a significant extent, operating as they do in effect as entrepreneurial businesses. LSE, for example, now generates some 80 per cent of its own income—only 20 per cent comes from public funds.
Secondly, those words are important because it will be an incentive to higher education institutions of all kinds to compete with each other not just in terms of cost but in terms of character, quality, length of courses and so on. On that point, I dare say that some of your Lordships will have seen, in last week's
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Independent on Sunday, the report that some universities are already now thinking of following Buckingham University's example, by offering two-year degree courses, not least because they will be specifically attractive to mature students. The market is already beginning to respond. The OU, of course, has for many years been awarding high quality degrees that are spread over a longer part-time period of study. Again, that meets a market need.
Thirdly, the words are important because, as this system develops, it will shift the balance of power decisively away from central planners and producers to consumers: students and employers. It will enlarge choice. There will be real benefits for universities, students and society as a whole.
The third major plus point of the White Paper is the rejection of a crudely comprehensive graduate tax in favour of personalised, income-contingent loans.
The fourth (and last) major plus point relates to the far-reaching improvement proposed in the income-contingent loan system that was introduced by this Government in 1998.
Taken together and further developed—the loans must be sufficient for a student to live on, although there has been criticism about that—these last two features will have the properly balanced effect of shifting resources in the direction in which they should be shifted. At the outset, they will be shifted from those who can afford to pay more. and who will lose some of their subsidies, to those who are less well off. They will benefit from the waiver of tuition fees and from the restoration of maintenance grants.
In the next stage, resources will be shifted from those who can afford to repay loans to those who cannot. That is because the repayment, in due course, of contingent loans will be strictly related to the income of the borrower. That is much fairer and more efficient than a general graduate tax.
So what should follow from all that? I was delighted—rather belatedly, in fact—to come across reports of the speech that the Minister responsible for higher education, Margaret Hodge, made at the Aberystwyth annual conference of Universities UK on 11th September last year. There I found my central argument foreshadowed: "Universities", the Minister said,
"are not all the same. and should stop pretending they are … [they] will need to find their unique selling point, as they begin to operate in more of a free market, … driven … by … student … demand".
That, in my view, defines exactly what we should be aiming at; it is the logical next step. It would, of course, be the antithesis of increasing central control.
That should, in my view, lead to three conclusions. I look forward to hearing the Minister's comments on them. First, once people have got used to the notion of paying fees, financed through an income-contingent loan system, the ceiling on those fees should be progressively raised. Eventually, we should have a wide range of differential prices, set by universities themselves to reflect the nature, complexity and length of courses. That has been well explained by

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Professor Nicholas Barr in his impressive evidence to the Education and Skills Select Committee in another place.
That would effectively involve creating a genuine market, increasingly responsive to student choice and consumer demand: with diversity of supply, financed by differential fees, and an end to price control. However, as Professor Barr has crucially warned, that change would have to happen in stages over a period and most certainly not in a "big bang". That is why, in his view, a similar proposal ran into political trouble in New Zealand. Complementary measures will also be necessary; for example, the need to build up a considerable bank of student bursaries. Some suggestions were made about that in a previous debate by the noble Lord, Lord Baker. Here, both individuals and businesses will need not only encouragement but also substantial tax breaks.
My second conclusion—and probably the most important innovation—is that we need an end to the quota system. By that I mean the system whereby HEFCE in effect both limits and effectively guarantees the numbers of students who may attend each British university. So long as university numbers are centrally controlled in the present fashion—with a cap on expansion for the successful and a guaranteed stock of students for the mediocre—then, as Professor Schwartz rather sharply pointed out in a valuable discussion in Prospect in January 2003:
"There is no incentive for universities to compete, because each will get its students, no matter how lousy their outcomes or their research".
All of that would change. With quotas removed, with fees no longer capped and with loan-financed, income-contingent funding that followed a student's choice, we should have created a dynamic market that was responsive, as it should be, not to bureaucrats or producers but above all to student choice.
Finally, my third—and possibly most important—conclusion is that it will be essential to accompany the changes with repeated emphasis that, far from being regressive, a system that is structured and financed in that way will work to the benefit of people from poorer families. I quote Professor Schwartz for the last time:
"In Australia, the introduction of fees paid through graduate taxes has not reduced the number of people from poor families. In fact, quite the contrary. It made more places available and more people from all parts of the spectrum have come in. So fees are the solution. But without deregulation, without making university tees student driven, we might make matters worse. Universities are one of the last nationalised industries in Britain".
It is high time that we set our universities and our students free. My Lords, I beg to move for Papers.
6.10 p.m.
Baroness Lockwood: My Lords, I thank the noble Baroness, Lady Howe, for the very wide-ranging way in which she introduced the debate. I agree with much, but not all, of what she said. The debate is timely but the subject is not new. It goes back over the past two decades when the rapid rise in student numbers began, together with the accompanying erosion of university funding. The signposts were as follows.
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The first was the beginning of the phasing-out of the student maintenance grant and the introduction of a student loan system in 1988. The second was the Dearing report in 1997, with its recommendation of a student contribution to fees—widely accepted at the time—coupled with a retention of the maintenance grant. The third was a student contribution to fees. That was quickly accepted by the new government in 1997 but accompanied by the final phasing-out of maintenance grants. To cushion that change, a more benign loan repayment system was introduced. The fourth was the January 2003 White Paper.
The proposals of the White Paper which are relevant to this debate are: first, the abolition of the up-front payment of fees, making investment in one's future clearer; secondly, repayment on an ability-to-pay system after graduation with a £10,000 income threshold; and, thirdly, that students from lower income groups should receive a new maintenance grant. All those seem to indicate a more equitable and cohesive system and one less likely to be a deterrent. But accompanying them are proposals to permit universities to introduce a top-up fee of £3,000 and the establishment of an access regulator to ensure that universities which accept the top-up fee accompany it with a genuine access programme.
The last two proposals are the most controversial. I n January, I wrote to the Secretary of State expressing my opposition to top-up fees. I believe that if anything will act as a deterrent to students, it is the top-up fie. Even now, I hope that the Government will have second thoughts on it.
Then there is a fear that the regulator could lead to some kind of quota system. Like the Government, I am opposed to quotas, but I believe that some serious questions need to be asked about qualifications for university entrance. Are A-levels, or their equivalent, the only answer to the need for a transparent, across-the-board qualification? Surely not. Already almost 40 per cent of students enter university on other than A-levels. My own university of Bradford. which is largely technology and science-based and has a research profile, is nevertheless strong on widening access and has a wide-ranging strategy in place.
A recent meeting of the All-Party University Group discussed the topic: "A-levels—is there a future?". The discussion was led by the very experienced head of a private school and a senior officer concerned with access from the "university industry". The synergy between the two was quite remarkable. Both agreed the need for an academic route and a parallel route based on basic skills and potential.
Clearly, a good deal of deep thought is being given to the contents of the two routes, and we need to begin to draw upon it and on the experience already in the field to establish a transparent and equivalent system which is acceptable all round. Such a system would extend student choice for many but would lessen the ability of others to obtain the university course of their choice. We need to ask ourselves which provides the greater amount of student choice and which is more in keeping with the needs of the 21st century.

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I am critical of some aspects of the recent White Paper but, overall, I believe that it advances both the opportunities of today's young people and the opportunities of our universities, whose success is so vital to the success of our country.
6.16 p.m.
Baroness Carnegy of Lour: My Lords, I note that the noble Baroness, who is eminent in the land in talking about universities and eminent in her party, is against top-up fees. I wish the Secretary of State well.
I want to widen the debate a little. The Motion is about students in the United Kingdom as a whole. I want to point out to the House that at present there is considerable anxiety among academics in Scotland, Wales and Northern Ireland about how the Government's proposals for England will impact on their universities and on United Kingdom student choice.
Many, indeed, are wondering whether, in developing these plans, the Department for Education and Skills gave any consideration at all to the predicament that it was creating for the rest of the United Kingdom's higher education systems. Perhaps I may illustrate that with the predicament in Scotland. Apart from money coming from the research councils and from sources outside the public sector, Scottish higher education is funded by the Scots Parliament. Historically, the cost has been much higher than in England. That, as your Lordships know, is because of the four-year degree, the higher participation rate and the greater number of institutions in Scotland per head of population.
Since devolution, the Scottish Executive has widened the spending gap further. Scots students contribute a third less than do those in England for longer courses. As a result, the Scottish Executive, via its funding council, pays its universities far more per student to replace what students are not paying themselves.
At the same time, the Scottish Executive's spending has moved ahead of England in other areas. There has been a big increase in school teachers' salaries, free personal care for old people and, of course, the Parliament building with its running costs, to mention but a few. All that comes from a finite budget which. under the Barnett formula, is increased only as England's spending is increased, less a £200 million squeeze each year.
Therefore, what will happen to Scottish universities if the proposals for England are implemented? Will the Scottish Executive be able to find the extra 6 per cent per year promised to England? Will the Scots Parliament's aversion to top-up fees and to the development of some universities which are much better funded than others be sustainable?
We must realise that all United Kingdom universities operate in a United Kingdom market—indeed, in an international market. If, as a result of top-up fees and other White Paper proposals, some universities in England become higher spending,
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research-rich institutions and they and others become teacher-rich, then, with the status quo in Scotland, the best researchers and teachers will be tempted south, as will the most academically able students. To a certain extent, students from south of the Border, particularly those most averse to borrowing and with lower academic aspirations, will come north to Scotland because of the lower fees.
That would be bad for Scotland. Our population is falling, particularly our population of well-qualified people. We need to do everything we can to bring in and hold able students and academic staff; people who may stay and work or may return later.
Our economy needs its research-led universities to stay on top. The vice-chancellor of the University of Dundee—and I see the chancellor of another university sitting in his place—estimates that his university will be £15 million per year poorer than its English counterparts if the White Paper is implemented in England. It seems that in Scotland, the much-vaunted status quo will not be an option. Some universities will need top-up fees; some top teachers will have to be rewarded; and a greater concentration of research and of high-quality teaching may be needed.
The system in Scotland does not have to be identical to that in England. For example, I regard the idea of bullying and blackmailing universities about access, by means of an access regulator, as contrary to the tradition of academic freedom in Scotland. But the system will not be able to be all that different.
I hope that Westminster, and particularly the Treasury, as well as the Scots Parliament are now taking these facts on board. The devolved matters in the White Paper are not, as the Government claim, only about England.
6.22 p.m.
The Lord Bishop of Chester: My Lords, I too welcome this debate. I declare an interest as chairman of the governing body of Chester College of Higher Education, which is a popular college within the Church college set-up, with 7,000 students and growing. With the other Church colleges and universities we make an important contribution to fair and widening access. According to the HEFCE figures across our sector the numbers of undergraduate entrants from state schools, social classes III. IV and V and also from low participation neighbourhoods exceed national averages.
That is due as much to the strong sense of community in the Church colleges as to specific initiatives, because the more vulnerable students find us attractive. It is also worth pointing out that the new Church schools which are currently being founded are often in areas of comparative deprivation, one of which is in the diocese of Chester. There have been about 25 new secondary schools in recent years. We welcome the challenges brought by the social setting of these schools.
The White Paper has a good deal to say about freedom and choice in higher education, and understandably so. However, one intrinsic problem is

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that societies which emphasise freedom and choice to the neglect of mutual and communal values usually end up generating an overemphasis upon winners and losers. That has been the story in our schools. The publishing of relatively unrefined league tables, for example, has tended to brand certain schools as losers. It is then easy for a vicious cycle of low expectations to develop, with the consequence that the statistics for widening access to higher education remain stubbornly low from areas served by schools which are lower down the league tables.
We need generally to work for a higher sense of dignity and honour in all aspects of education. The White Paper, in dealing with higher education, concentrates in a rather unbalanced way upon the economic aspects of higher education in relation both to the individual and to society. It rather downplays the wider cultural importance of our universities and colleges in the setting of education in general. But the prospect of a greater earning potential should be only one, and perhaps not the most important motive, for entering higher education.
I turn to the impact of freedom and deregulation in higher education. The move towards deregulation of the higher education sector has much to be said for it, although many in the sector will believe it when they see it. If the Government are to achieve their targets for higher education they need the broad spectrum of existing institutions to flourish, and not some at the expense of others. Recent deregulation of entry quotas, for example, seems to have led to a great rise in admission numbers to certain large civic universities at the expense of some of the newer and smaller institutions—the very institutions which actually have a better record on widening access.
The balance between regulation and untrammelled freedom for institutions to develop is a sensitive balance to strike. It is all too easy to find that choices inadvertently narrow. The prospect of variable top-up fees may seem at first sight to offer the prospect of an increased choice for students, but the reality may turn out to be that most institutions will seek eventually—sooner or later—to charge the maximum fee for most courses. The sheer economics of higher education point to that scenario.
Will that deter the very students whom the Government would most like to see enter higher education? The reintroduction of a maintenance grant for some students is welcome in itself but could be more than swallowed up by the additional fees that are likely to emerge. The average student debt is likely to grow sharply. The increase in the threshold to £15,000 for repayments is welcome, but surely it is still rather on the low side. For low-paid workers outside certain favoured areas of public sector employment, repayment will be a major blow. perhaps at a time when they are struggling with a mortgage and a young family. In saying that, I do not doubt that the principle of students making a contribution to the cost of higher education is right, but only within the limits which serve the good of society as a whole.
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The additional money cannot simply conic from government. The White Paper rightly calls attention to the generally poor endowments of British universities. The comparisons with North America are striking. Outside Oxford and Cambridge the endowments are small: the 10th best endowed of our universities equates to the 300th best endowed north American institution. The White Paper says that the Government will support institutions to build endowments in a range of ways. It will be good to hear more detail from the Minister on that point. For example, do we not need to work harder for a major change in our society towards charitable donations in general? We have nothing approaching the North American culture in that regard. The assumption is still widely there that at the end of the day— usually the Government—will be expected to pay.
The Government have made some creative changes to the taxation of charitable giving in order to encourage such a change of culture, including a continuation of the 10 per cent premium on the Give As You Earn scheme beyond the tax reclaimed as such. But, frankly, the message has yet to get across. With the general tax reforms of the past 20 years, the better off in our society are better off than ever, but a culture of charitable giving has yet properly to emerge.
There is a real challenge here. Actually the universities will benefit, partly because of the link between higher earnings and education and the loyalty of students to their former universities. I hope that in this and in other ways the initiatives in the White Paper will be developed and complemented.
6.28 p.m.
Lord Palmer: My Lords, ever since the Robbins report, it seems to have been taken for granted that pushing as many 18 year-olds as possible into university is a good thing.
Many school leavers now feel that they do not have a choice concerning university. Some feel unable to incur a huge student debt at the end of their course and these are lost to the system. Others feel pressured into going to university—pressured by their schools. which want to look good in the league tables; pressured by the false promise that the possession of a degree will automatically enable them to get a good job; and pressured by society's belittling of jobs that do not require a degree, though they may require a high level of skill, intelligence and training.
Many students do not want to be at university. All they want is the piece of paper they are given at the degree ceremony. A surprising number are so uninterested that they will settle for almost any course that is perceived by them—however mistakenly—as easy. Some may not be up to the demands of a university course, having reached their peak at A-level. Enormous pressure is put on students prior to higher education, resulting in some peaking too early. Sadly. many of us have seen that relatively modern phenomenon among our young people.
Unfortunately, with the funding of universities now being based on student numbers, those institutions are desperate to fill their courses, and the consideration of

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whether a university degree is really the best choice for any one individual does not seem to have the attention that it once had.
University courses go on too long. The funding problem would not be so acute if students were able to put more hours into their daily study, so that courses could be dramatically condensed. I recently asked a student how many lectures she had a week. I was told, "Only one, at nine o'clock on Monday". Not surprisingly, she did not turn up that often. To me, that is a scandal and a waste of human and financial resources.
Most students now feel constrained to find a job—not just during holidays but during term time—to try to keep their student debt under control. Often, those jobs keep them up late at night. Sometimes they are day jobs, which mean that they cannot attend classes. All jobs eat into their study time. That affects even the ablest students; for the weaker ones it can be detrimental to the quality of their student work.
Those factors, together with the universal move to examination by course work, have led to an explosion in cheating. There are numerous websites from which it is possible to download essays on almost any university topic and there are many individuals who openly advertise their services as writers of course work in exchange for a fee.
Universities should be the nucleus of our academic talent and potential in their ever-challenging role of competing in a global community of excellence. I do not believe that one can be considered a success in life only if one studies for a degree. There are better ways in which we can provide for the future of our young people. Going to university is not like a superior form of youth training, nor, to quote Professor Zellick, is it a,
"thoughtless way of getting people off the streets".
I am neither an academic nor an educationist and am probably the only member of my generation in your Lordships' House without an A-level. I did not excel in any way during my schooldays and, as a practical solution to my scholastic lack of achievement, I embarked on a three-year apprenticeship in a well-known biscuit company. I was given the opportunity to work at every job in the company, with the perpetual challenge of doing each to the best of my ability. That apprenticeship changed my life and taught me valuable lessons. When I changed career at the age of 25, I went to university and completed a three-year course crammed into one.
If universities are taking in students in increased numbers who are not suited to academic study, they must lower standards or else suffer high rates of failure. It is now considerably easier to get a degree than it was 20 years ago. That is an unpalatable fact to which academics admit in private. Employers certainly know it. Only in yesterday's Evening Standard a survey revealed that 90 per cent of graduates are turned down for jobs because their applications are full of spelling mistakes.
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Many big employers used to go round universities on recruiting drives but are now boycotting those universities because they consider them below standard. Graduates have a rude awakening when they find that their business or media studies degree is one of thousands and they cannot get a job—even one remotely close to what they were encouraged to expect. Ironically, they also find that many jobs are closed to them because they are "over-qualified". Universities claim that 80 per cent of their graduates find jobs within a year, but, sadly, many of those are dead-end jobs.
Meanwhile, the country is suffering from a shortage of people qualified in practical skills. Fifty per cent of the UK's middle-ranking companies are suffering from shortages in such skills, which are all so vital to our modern society. Why do we belittle such valuable skills? It is not because they do not pay. A plumber can earn more than a solicitor. I recently got a plumber to fix two washers in my tiny apartment round the corner. I knew that it would be expensive. I received a bill for £120. I related that story to a noble and learned Lord later that day. He told me that he had had exactly the same experience and had said to the plumber, "Gosh, you are more expensive than a lawyer". To which the plumber replied, "I know, because I used to be a lawyer".
We should surely all encourage a really good system of apprenticeships, such as that which exists in Germany, for those of a practical turn of mind, allowing youngsters to start from the age of 15. Rather than pressuring young people into universities for which they are not suited, and producing a surplus of graduates that we do not need, we should balance the educational system and produce people with the skills that the country so desperately needs and requires.
6.34 p.m.
Baroness Prashar: My Lords. I, too, congratulate the noble Baroness, Lady Howe of Idlicote, on securing this important debate on funding and student choice. As other noble Lords have said, the issue has been debated several times, but the implications of the White Paper on funding must be debated and aired.
The intention in the White Paper to deal with student finance for the long term to open up access to universities is welcome. There is much in it to be commended. As the noble Baroness, Lady Howe, said, the understanding that universities are different and need to pursue different missions is indeed encouraging. It is recognised that higher education is under-funded, and that considerably enhanced investment is needed if we are to give students the choice that they deserve.
The White Paper also identifies the real additional costs associated with recruiting and retaining students from disadvantaged backgrounds. Also welcome is the continued support for working partnerships with schools and colleges to enhance the aspirations of all our young people.
Although the lifting of the cap on fees presents some concerns, the fact that there will be no up-front payments for any student entering higher education, and that the repayment mechanism is equitable, is

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helpful. Furthermore, the introduction of a modest maintenance grant is a first step towards assisting some of the most needy students.
However. I have some concerns. They are based on my experience as Chancellor of De Montfort University in Leicester and Bedford. We have been innovative and successful in widening participation. The students whom we recruit are talented young people from all backgrounds and ethnic origins. but they are often burdened with financial problems. The vast majority of them hold jobs and work long hours to pay for their studies.
It is therefore essential that the proposed changes do not deter students from poorer backgrounds, place intolerable burdens on them or diminish the quality of education that they receive. We all know that students from poor backgrounds tend to be more debt-averse. The Universities UK report, Attitudes to Debt, states that those most averse to debt are from lower socioeconomic classes, lone parents and black and other ethnic minorities.
I am not sure whether the post-graduate repayment scheme will reassure those groups. Moreover, the proposed maintenance grant is insufficient to support those in real financial need. Young people from disadvantaged families will form a minority of recipients of the full grant. The question is whether the maximum payment of £1,000 will be enough incentive to change the attitudes of those who are debt averse.
I turn to the intention in the White Paper to create a differentiated fee structure. Such a fee structure is, again, likely to disadvantage those who are most vulnerable. It would surely be wrong for students whose choice of institution may be limited—perhaps because of the need to study at home, or because of early educational disadvantage—to receive poor higher education experience because the only institutions to which they can apply are themselves poorly funded.
Making the necessary changes to the funding of higher education for the future should not lead to the creation of an under-class of institutions that all but the most vulnerable can afford. Neither opportunity nor student choice will be enhanced if a limited number of high-demand institutions, which draw their students from the best-prepared cohorts, are the only universities with adequate funding for teaching and teaching support. The proposed increase in funding for teaching is modest. I doubt, therefore, whether universities will be able to invest significantly in teaching quality and to increase fees introduced in 2006.
Differential fees carry their own dangers. They create an ever-increasing funding gap between institutions, which will be reflected in the facilities and staff-student ratios. It will be unacceptable if disadvantaged students not only have financial pressures but must also accept a second-class version of higher education driven by a false market of fees.
Similarly, greater focus on research is welcome. But all universities should carry out research, and excellence should be rewarded wherever it is found. All
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students should have the opportunity to be exposed to scholars and research of high calibre. At De Montfort University, we have successfully developed a strong research culture that supports our academic strengths. Without a commitment to research, it would be difficult to recruit and retain the high-quality staff that we have. That has benefited students. Erosion of funding will damage valuable research and weaken the overall research base. Much more importantly, it will significantly worsen the university experience of many students.
As I said at the outset, there is much to be welcomed in the White Paper and the aspirations that underpin it. But, if we want the experience of higher education to be extended to the talented and the best from all backgrounds, other concerns need to be addressed. I look forward to the Minister's response.
6.41 p.m.
Lord Judd: My Lords, I declare an interest as a governor of the London School of Economics and a member of the court of Lancaster University. I also do some professional work—indeed, with de Montfort University.
Returning to first principles, I wish to ask what we are trying to do and what is our vision of society. It seems that, as we go into the 21st century, a decent United Kingdom is one in which our objective is to ensure that no child born into society goes prematurely to the grave having failed to fulfil his or her potential. Our education system should be there to ensure that. It should enable all youngsters to develop themselves fully, not only professionally but creatively.
Of course society must function, and we need people who will enable it to do so. The noble Lord, Lord Palmer, spoke convincingly about that. But we must also remember another aspect of the vision for education: in a decent, civilised society, there is merit in education in its own right as an end in itself. The process and enjoyment of learning is part of living fully. We therefore must be careful when talking about specific dimensions of our education system—it is not either/or. Of course, some people will be creatively fulfilled in craftsmanship or technology; but we must be careful not to limit people to a functional educational experience if they have the potential also to enjoy further education. Therefore, flexibility and interplay between the systems is extremely important.
I wish to make a further point about the basic objectives and vision. We have moved into an age in which we are told that we cannot afford to pay for a convincing, full system of higher education from general taxation. I realise that it may be a forlorn battle at present, but there is a difference between not being able to afford and choosing as a society not to afford. I hope that we will not allow the argument about the emphasis on general taxation to go by default. Education has a crucial role in ensuring the cohesion of society. It is an opportunity for those who enjoy it, but it is an indispensable strength and guarantee for the future effectiveness of society. Because of that, society as a whole should feel a responsibility for ensuring that it is available and that no potential is wasted.

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Sometimes our agonies about whether or not to have top-up fees are brought upon ourselves because we have run away from the challenge of asking what society needs and should be, and how we will finance that. I do not want to make cheap points, but it seems a poignant moment, when no money is too much to win the war that is coming in Iraq, to wonder why we find so much difficulty in generating the resources to win the battle for humanity at home.
If there is to be a variety of approaches, if there is to be access, and, if everyone with potential is to have the opportunity to develop it, we will need many institutions. In an otherwise commendable and encouraging White Paper, one approach disturbs me: the developing concept of a two-tier university system. Some universities are to be centres of excellence, and others are to teach the masses who want to go to university. That is a disastrous concept.
First, we need very good teachers to bring out the best in people who have not had the opportunity to develop their own self-starting capabilities. We must remember that that is costly, probably more so than teaching self-starters. Secondly, in any lively higher education institution, some research needs to take place, because it feeds, encourages and creates interplay with teachers and ensures quality of work. It is difficult to over-estimate the adverse impact on the morale of any higher education institution told that it is not good enough to involve itself in research and has no part to play in that field. It is a disastrous concept about which we ought to be wary.
To conclude, we are all deeply grateful to the noble Baroness, Lady Howe, for introducing the debate. I have had many opportunities to hear her at work in higher education, which I have found enjoyable and stimulating. But I was concerned by her market preoccupations. Her anxieties about regulation are understandable on one level, but we have an immense challenge in society. At present, 48 per cent of pupils in the top three social classes go to university, and only 18 per cent in the bottom three social classes do. Is that answering the challenge of human potential, or does it begin to do so? Unless we introduce instruments to ensure that universities do what they should be doing, I am anxious about the extent to which it will really happen.
In my county of Cumbria, on the west coast, we have some of the most deprived communities in the nation. Of course, the problem will not be rectified by universities alone. The problem there is a lack of horizons and a lack of thought that university has any relevance to life. We also have much work to do in the secondary education system. We must include that in our discussion this evening.
6.50 p.m.
Lord Butler of Brockwell: My Lords, I warmly agree with what the noble Lord, Lord Judd, said about the purposes of higher education. However, as he implied, we must be realistic about the extent to which any government will provide the support that we need
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from taxpayers' funds. For a generation, finance from taxpayers per student has declined steadily, and there is no prospect, I am sad to say, that that trend will reverse. I congratulate the noble Baroness, Lady Howe of Idlicote, on securing the debate, and I agree with her conclusions.
I shall start by talking about the good things in the White Paper. Like the noble Baroness, Lady Howe of Idlicote, and other speakers, I applaud the recognition in the White Paper of the diversity of the higher education sector. It is a diversity not just of institutions—the balance between teaching and research, for example—but, essentially, of students and their requirements. My main criticism of the White Paper is that it does not go nearly far enough to recognise that diversity.
The increase in the student's contribution to tuition fees from £1,1000 a year to £3,000 a year—I predict that the great majority of universities will have to adopt it, so that there will not, in effect, be variable fees—will create increased student debt. That level of debt will deter some of the poorer students whom the Government rightly want to bring into higher education.
There is another downside. For our major research universities, the increase will not begin to scratch the surface of the current financial problem. Before I illustrate that with reference to the University of Oxford, I declare an interest as Master of University College. For Oxford, raising the student contribution to £3,000 will bring in extra revenue of £20 million a year when it is in full effect. But, as it can apply only to each new generation of students from 2006 onwards, it comes in over three years—an extra £7 million, say, in each year in the three years from 2006 to 2008. That represents just over 1 per cent of the university's budget—that is, about half the rate of inflation in each year. So if we had to rely on the £3,000, we would go backwards, not forwards.
The Government have fallen squarely between two stools. I say that with some sadness. They have introduced a charge that must be a deterrent to poorer students, while, for a university such as Oxford, the increase has not begun to tackle existing and prospective financial problems. I may be told that it is a first step and that the Government have been courageous in taking it. However, I remind your Lordships that it is a first step that does not even come into effect until 2006 and is then frozen until 2011. It is too small and timid a step.
The only way to ensure that the funding of students does not limit student choice is, as the noble Baroness, Lady Howe of Idlicote, said, to ensure that students are admitted to the university most suitable for them on a needs-blind basis. If students need not face the prospect of debt and can go to the university of their choice, there will be no interference with their choice. We need not despair of achieving that. In my university, we could provide the bursaries necessary from three sources. First, we have our endowments. Secondly, there is what wealthy families could afford to pay by way of fees, for it is absurd that those who

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have paid up to £20,000 a year in boarding school fees need pay no more than £3,000 a year towards tuition fees at a first-class university. Thirdly, there is alumni support. In my experience, there is no more potent target of appeal to alumni than that of helping today's and tomorrow's students have the benefits that they enjoyed.
It may be objected that, although that would be all right for Oxbridge and some of our great research universities, the younger universities, on which poorer students also depend, could not afford bursaries on that scale. My answer is that the Government should concentrate their help on those universities, enabling them to provide the bursaries that their endowments and alumni support could not provide alone. It may be said that that would prompt some of our research universities to take the Ivy League route. Given what we see across the Atlantic, need we be afraid of that?
It is not only desirable but necessary that the Government be bolder and show more urgency in this matter.
6.55 p.m.
Lord Wilson of Tillyorn: My Lords, I thank my noble friend Lady Howe of Idlicote for launching the debate and declare two interests: one as a relatively recently appointed Master of a Cambridge college—more recent than my noble friend Lord Butler of Brockwell at Oxford—and the other as Chancellor of a Scottish university.
Like other noble Lords, I thought that there was much in the White Paper to be commended. It was courageous of the Government to grasp the nettle of increasing fees; and to say that there were different types of university and I hat people went to university looking for different things. It may seem ironic that people such as myself, who went to university entirely funded by the state, should say to the present generation that they should pay more for the same privilege, but it is only realistic. As other noble Lords have pointed out, the universities—rather like the railways and some other great British institutions—are chronically underfunded, and university teachers are chronically underpaid. Although I understand what the noble Lord, Lord Judd, said about the desirability of funding from general taxation, I cannot see it happening in practice. Increasing fees seems more realistic, although that may not be a pleasant message for the students of tomorrow.
I suspect that the increase will mean that more students will choose to stay nearer home. That is a pity, for part of education at that level is to get away from home—but there it is. It would be worse, however, if students of talent were deterred from going to university by increased fees. That is the point on which we should focus. There is, as other noble Lords have said, a need for a vastly increased system of bursaries, so that those who want to go to university and have the talent will not be deterred by the increased fees.
It is encouraging to see that, in the White Paper, the Government say that private endowment of universities should be encouraged. It is depressing to see the contrast
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between universities here and those in the United States. I saw in the Times Higher Education Supplement that the Sutton Trust had provided a list of the sort of endowments that places such as Harvard had—about £11 billion—compared with Oxford and Cambridge, with approximately £2 billion, Edinburgh, with £160 million, and the other British universities, with much lower figures. That is the area on which we should concentrate.
We can see the effect of some of the bursary schemes in small ways. Recently, I met a group of Aberdeen University students, who have what are called Prince of Wales Scholarships, funded by the Royal Bank of Scotland. Over 75 per cent of those students were from families that had no tradition of going to university. Because of the system of bursaries or scholarships, they were able to go, fitting into that long and wonderful Scottish tradition of the lad, or lass. o' pairts, who is given the chance to go to university and will make a tremendous contribution to the future life of the country as a result.
It is worth pointing out that it is just over 100 years since Andrew Carnegie gave 10 million dollars—then, a king's ransom—to fund a trust that would enable any young person of talent in Scotland to get to a Scottish university—then, there were only the four ancient universities—even if they could not pay the fees. It is that scale of generosity that I believe we should be looking for, and I hope that my noble friend Lord Butler is correct to say that there are places where one can look for it. I suggest, however, that included in that must be further encouragement from the Government to do exactly what they state in the White Paper that they want to see. It would be helpful if the Minister, when she winds up the debate, could tell us a little more about how the Government intend to promote that kind of encouragement.
The other choice is the one that is the other way round: it is the university choosing its students. As one who has only recently re-entered the English higher education scene and who has read so much —including a good deal of criticism—about the system of choice, in particular at Oxford and Cambridge, I have to say that my experience in Cambridge is one of a tremendous effort being put into trying to attract students of talent from a far wider catchment area. That catchment covers the whole country and embraces all kinds of schools. The university is painstaking in its efforts aimed at trying to choose the right people: those who have talent, have built a good record and who have potential. The university is able to select partly by interview. Some universities cannot do this. A huge effort is put into the process, although of course there is no room for complacency and much more needs to be done. Nevertheless, an immense effort is being made.
I do not believe that the curate's egg part of the White Paper, if I may put it that way, regarding the Access Regulator is the right way to go about it. Rather than that kind of control, universities need encouragement—and help with the dispelling of myths—in order to widen access.

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Finally, perhaps I may put on my Scottish mortar board and follow the noble Baroness, Lady Carnegy of Lour, in asking the Minister what consideration has been given to the Scottish dimension. As the noble Baroness pointed out, as a result of the proposals in the White Paper we shall see a tremendous play-across from what is done in England and Wales to what happens to universities in Scotland. It would be interesting to learn from the Minister what discussions took place with the Scottish Executive and what consideration was given to the effects across the Border of the White Paper here.
7.2 p.m.
Lord Oxburgh: My Lords, I, too, should like to thank my noble friend Lady Howe for initiating the debate. The recent White Paper merits careful attention and extends thinking on higher education with some important new ideas. I should declare an interest as someone who has worked in universities in various capacities for most of my working life. Perhaps what is most relevant to what I have to say is that for more than a decade I worked as an Oxford admissions tutor.
I wish to address those parts of the White Paper that are concerned with access. It states that:
"We must do everything that can be done to make sure that everyone who has the potential to benefit from a university education has the opportunity to do so".
That is a sentiment which everyone, both inside and outside the university world, would wholeheartedly endorse.
The White Paper points out that young people from the three lower socio-economic groups in the UK are significantly less likely to go to university than their counterparts from other groups. However, and most significantly, it notes that among students who have achieved good A-levels, there is no difference between the groups. The success gap therefore largely reflects disparities in our schools. The White Paper recognises that.
However, the White Paper goes on to conclude that universities should first identify and admit poorly prepared but able students and then, by providing special help, make up for inadequate schooling. Many universities have been doing that for years where they thought it would work, but in many cases it simply will not work. Furthermore, those universities that wish to charge an additional fee are singled out for special attention. They can charge such a fee if, and only if, their admissions arrangements are approved by a new admissions regulator.
The most difficult aspect of the admission of students from deprived backgrounds is actually getting them to apply. If they do not apply, then they cannot be admitted. I can say categorically that every institution in which I have worked, both in this country and overseas, has tried hard to attract the most able students, whatever their background—and that is not a new phenomenon. Some 30 years ago, my noble friend Lady Warnock and I were despatched to
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the north of England by the Oxford Colleges' Admissions Office in a small and nasty hired car. We were to visit schools that had little tradition of sending their pupils to Oxford, tell them more about the university and encourage them to apply. I have to confess that I recall casting an aspersion on my noble friend's map reading. It was a mistake.
What influences young people's thinking about university? The main influences are teachers, friends and family culture. Families with weak educational roots tend not to favour higher education, but that varies significantly between different ethnic groups. Affordability and the very idea of a student grant, by comparison with the relative affluence of friends who are enjoying their first wages, can weigh heavy. To be frank, if anybody can do anything about those influences, it is the school, which knows the circumstances and potential of each of its pupils.
When it comes to choosing a university, the same influences apply, but now prospectuses, campus visits, websites and a plethora of guides—both official and unofficial—all come into play. In my experience, however, students from first-time university families often contemplate the prospect with some trepidation. The attraction of going to university near home is strong. They may know people who are there already, they can keep up with friends who are not going to university and, if things do not work out, they feel that they can slip back into normal life without too much disruption or loss of face.
Universities can and do encourage such students to take the larger step of moving away from home. I believe, however, that this must be done with great caution. Removing students from the security of their home environment, with the confidence and support that that may bring, and making them face new social challenges at a time when they are also taking on tough new academic challenges, is not an obvious recipe for success.
I would ask the Government to approach this matter with a light touch so that perverse incentives do not make a situation which is already difficult even worse. I ask also that institutions such as Imperial College, my former institution, should not be distracted from its long-term strenuous efforts to attract more women into science and engineering. If there are real concerns, by all means conduct an inquiry into university admissions procedures to establish what is going on. However, I believe that the Government will be surprised at the time and trouble those who are doing the job I did some 30 years ago take to encourage applicants from non-traditional backgrounds, and the efforts they make to allow for the deficiencies in their preparation. But please think very hard before adding the bureaucratic burden of another regulator to an already over-regulated sector of our society.
7.8 p.m.
Lord Sewel: My Lords, first I should declare an interest as the Senior Vice-Principal of the University of Aberdeen. But I should make it clear that in no way do I

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speak for the university in this debate. However, I speak with some trepidation this evening, sandwiched as I am between my Chancellor, the noble Lord, Lord Wilson of Tillyorn, and the most distinguished graduate of my university, the noble Lord. Lord Sutherland of Houndwood.
I also wish to congratulate the noble Baroness, Lady Howe, on her very deft drafting of the title of the debate because it raises the issue of whether there is a British higher education system. I believe that there is, and of course that issue has some resonance for those noble Lords who participated in the endless debates conducted on the Scotland Bill. In saying that, I look across to my friend but opponent, the noble Baroness, Lady Carnegy of Lour.
The paradox is that higher education is devolved. It is the responsibility of the Scottish Parliament. In passing, it might be worth pointing out that in the 1979 proposals higher education was a reserved matter. However, that it is devolved does not necessarily mean that it is prudent to develop major divergences in policy north and south of the Border. I think that that is especially the case in higher education, because in terms of staff appointments it is quite simply a single market and increasingly in terms of student choice it is becoming much more a single market.
If there were to be major policy divergences, the inevitable consequence would be a destructive destabilisation in the system as a whole. One worrying divergence which will eventually have an impact on student choice is the issue of the funding of research. There have been criticisms of how research will be funded in England. However, I believe that the Government have addressed that issue seriously. They have tried to find a solution, the objective of which will be that a funding system will be put in place which will enable high quality research to be supported at an adequate level. Perhaps I might add that I wish that the Government had gone along the route of the graduate tax rather than top-up fees.
The worry is that in Scotland perhaps other elements of the higher education agenda have dominated and the securing of high quality research has slipped lower down the list of priorities in Scotland than is the case in England. Indeed, there is the disaster scenario that in the not too distant future we shall be faced with the prospect of the coach containing prospective students travelling north from England seeking cheaper degrees in Scotland colliding with the coach travelling south from Scotland containing our highly qualified and best academics seeking better paid and better supported jobs in England. That would be a disaster.
In the whole of this debate on the future of higher education there has been a worrying conflation of two concepts. One is that it has been equating intellectual elitism with social elitism. That is a fundamental mistake. One is good and one is bad. We must ensure that we do not have a system built around—or which makes worse—social elitism. Ultimately, to a significant extent, higher education must be about intellectual elitism. It is through that that we make progress as a society.
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I seek from the Minister an assurance, not in policy terms but in relation to the machinery of government. When significant policies are being developed, either in England or in the devolved administrations, hard work should be done to ensure that both administrations are aware of the implications of their policy on the other administration. In my brief experience of government, that is asking quite a lot. However, it is something that needs to be done and work needs to be done on it. If it is not, we shall slip almost in an unnoticed way to a situation where we shall have that dangerous destabilisation which will not be to the benefit of either system and will be a major disbenefit to the whole of British higher education.
7.14 p.m.
Baroness Warnock: My Lords, I am grateful to my noble friend Lady Howe for introducing this debate. I want to make some rather simple points. My first is that universities are very different from schools. That is obvious. One way in which they are different is that university is not compulsory and school is. I had great sympathy with my noble friend Lord Palmer when he said that probably too many people go to university who do not really want to and who do not benefit from it. Another difference is that in the background, from the undergraduate's point of view of university, there should be the ongoing stimulation and the knowledge that there is proper, original research—not just in the sciences but in the arts too. However. just as important is another difference, which is that universities. unlike schools, do not have a common curriculum or common examinations. Therefore, it matters crucially to a potential undergraduate which university or she actually aspires to attend.
Whatever we may say about the defects of the schools system in this country, there still are emerging from the sixth forms of maintained schools and independent schools extraordinarily clever, dedicated and enthusiastic students who know what they want to do and know which university they want to attend.
I must declare an interest. I know that there are these students because I set and examine a yearly inter-school essay prize offered by the Girls Day School Trust. The competition is open only to scholars of the trust schools, many of whom are in receipt both of scholarships and of bursaries and whose parents would never be able to afford to send them to an independent school without that support. The degree of academic ambition and precise knowledge of how those students want to pursue their studies shines through these essays and never fails, year after year. to move me.
If students—perhaps especially girls, who are, on the whole, sensitive to their own financial problems and those of their family—feel compelled to attend their local university so that they may live at home and perhaps continue with a part-time job that they worked at while they were at school, the crucial factor of choice of university to which they aspire to go is in danger of being removed.

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One of the good points about the White Paper—and many noble Lords have noticed it—is that it is now officially, and without shame, acknowledged that all universities are not the same. All are not equally academically inspirational. Therefore, there are students whose aim is not to go to just any university and get just any degree, but to go specifically to Imperial College or Warwick or Cambridge or Oxford to follow courses which are not exactly to be found elsewhere.
I think that to bring it about that this choice is no longer realistically available to students will starve the academic world of probably the most original minds. The students will not get what they deserve and will not get what they are capable of achieving and the country as a whole will thus be impoverished immeasurably. Above all, what we need—again, this point has been made by many noble Lords—is a way of supporting, through government funding and through new endowments, not just those students who are poor but those who are poor and properly are already to be considered members of the intellectual elite. The distinction between the intellectual and the social elite seems to me to be of the greatest possible importance in this debate about how students may be admitted to the universities that they really want to go to.
7.19 p.m.
Baroness O'Neill of Bengarve: My Lords, I, too, congratulate the noble Baroness, Lady Howe, on securing the debate on this important topic, which has been of so much public concern since the publication of the White Paper on The Future of Higher Education The links between student funding and student choice are issues which concern all of us but perhaps, above all, parents whose children may go to university in the next few years.
Unfortunately, I believe that so far media discussion of these links has served us poorly by over-emphasising an over-simplified relationship between choice and funding. Much discussion has centred on a scenario in which Russell Group universities raise fees to £3,000 a year, but others do not, and there are no bursaries or fee rebates. That scenario is supposed to lead to the famous "two tier" system. I have no idea why people think that it would lead to two tiers, but it is meant to be a scenario in which students from poorer homes cannot go to certain universities.
There has been extraordinarily little consideration, so far, of the factors that might influence universities in setting fees. It is simply assumed that Russell Group universities will set the higher fees. But let me note that those who compete for the very small pool of very keen and able young scientists are highly unlikely to set a fee that deters those people from attending their universities. Let me note also that in the US much of the most prestigious undergraduate education is provided by institutions which concentrate on teaching. We can take nothing for granted about who will set which level of fee.
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Thinking about worst-case scenarios produces shock-horror copy, but I am sure that it hides many of the real issues. I believe that the White Paper deserves more serious attention. Like other noble Lords, I, too, welcome that individuals will pay only after graduation and then on an income contingent basis, ensuring that those who choose walks of life and vocations where their pay is low never repay the loan.
Secondly, the White paper does not propose fee levels. It permits variation within a capped fee structure. We have had serious arguments that possibly the cap is set too low. But let us note that at present no variation is permitted. The richest students receive nearly as much subsidy as the poorest: where parental income is below £20,000 per annum, students receive a tuition contribution from public funds of £1,100 a year and the right to borrow a bit more. Under the new proposals, those with parental income below £10,000 per annum would receive an additional £1,000 a year. Therefore, the debts for the very poorest students at universities charging the maximum fee would rise by £900 per annum, or £2,700 for a three-year degree course. For others, it would rise by £1,900 per annum, or £5,700 for a three-year degree course.
The proposed threshold for the new subsidy is unrealistically low, the cut-off being fixed by a joint parental income of £10,000. I understand that there have been further conversations and I wonder whether the Minister will tell the House what consideration is being given to setting a more realistic income threshold for this payment to students from poorer families.
The White Paper also mentions student bursaries and states that universities will be permitted, indeed encouraged, to established a charging structure and then to provide bursaries for those least able to pay. At present, many universities do not have the funds to do so. Charging a fee of £3,000 might enable them to divert some of that money to fund some bursaries for the poorest. Bursaries are the most concrete and effective action that universities can take to improve access and I declare an interest and some experience as the head of a Cambridge college where almost one third of home undergraduates currently receive a bursary under the intercollegiate Newton Bursary Scheme. I am glad to say that the University of Cambridge has already made a commitment to needs blind admissions.
The White Paper has encouraging things to say about endowment raising and its importance to university autonomy. Endowment is vital for building bursary schemes and I wonder whether the Minister would agree that those of us who were at university before 1995, largely or wholly at public expense, ought to help to fund bursaries? Would she be able to comment on how the Government will promote or incentivise endowment building for bursaries?
Let us also remember that students choose; they choose courses and universities. It used to be said that they wanted to go about 100 miles from home— allowing for home visits but not for parents dropping in. The picture has changed. Many students, particularly mature students, prefer a local over a

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residential university. Others prefer urban or rural, a large or a small institution, or a university towns with low rents. Those choices belong to students. But if they are to be left to students, admissions must be a matter of fair process and not of social quotas. Rural and small town universities cannot attract students who seek big city life; city universities cannot attract those for whom sport and country activities are important. Does the Minister accept that respect for student choice means that we must welcome and accept diversity in the social composition of students in different universities?
Some will say that an access regulator is needed even so. I believe it is not. Admissions tutors and officers are not stupid people. In my experience at Essex and at Cambridge. they try to admit those who show promise, taking account of all evidence, including evidence of less-effective schooling. It is insulting and implausible to imagine that they are covertly working to discriminate unfairly— their colleagues would hardly thank them for admitting students of lower potential. Yet at present they are condemned if they rely solely on A-level evidence and condemned if they do not.
The serious debate that we must have is about providing the evidence for admissions tutors. We are not providing it at present. Noble Lords may know that head teachers' reports are sometimes blandly uninformative for fear, apparently, of disclosure and litigation. Personal statements have a boiler-plated feel to them. Universities have got into that position on the assumption that if they are allowed adequate evidence, they will use it unfairly. Meanwhile, most universities are not staffed to interview. Critics who urge exclusive reliance on A-levels have nothing to propose where A-levels do not discriminate. Critics who urge switching to new tests have not established their educational effect, their "coachability", or their predictive value. Does the Minister agree that a serious debate about university admissions criteria cannot begin until we set aside the fantasy that universities are neglecting or misusing evidence available to them?
7.26 p.m.
Lord Sutherland of Houndwood: My Lords, I thank my noble friend Lady Howe for introducing the debate with such clarity and insight. I want also at the outset to endorse the remarks of the noble Baroness, Lady Carnegy of Lour, about the impact of what happens here on other parts of the United Kingdom—and I deliberately put it in that way.
If your Lordships will indulge me, I would like to be facetious for a moment— just for a moment. If you were to go down to the Department for Education and Skills and search carefully in the building, I suspect that you would find somewhere a playroom. A new game has been devised for playing in the playroom and the three players are the Secretary of State, the Minister for higher education and the Higher Education Funding Council. The game is called "Quota Hokey-cokey". You put your quota in; you take your quota out; you put your quota in; and you shake it all about. Your Lordships know how the words go.
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I am not being facetious just because it is late in the evening or because I enjoy it. I want to highlight the fact that at this stage in the debate, after the publication of a White Paper in January to which I paid tribute, three of the major players in the arena seem still to be undecided about the role of quotas. I hope—and I am sure that we will find reassurance today—that quotas are off the Government's agenda. It would be reassuring to know that they are off the agenda of the funding council, too. Such public disagreements are symptoms of something deeper: first, a significant degree of uncertainty about where to go; and, secondly, a wish none the less, a conviction, that something must be done and done quickly.
In the White Paper—its many positive points have been well-catalogued today—there is a major flaw. The major flaw is that two separate issues have been confused. One is the funding of universities—and good things are said about that—and the other is the need for access and opportunity for all our young people—and good things are said about that. But they are tied together in unhealthy ways. The difficulty is that there is a danger of a degree of tunnel vision.
In tunnel vision, one focuses on one aspect of one problem while perhaps out of the corner of one's eye seeing the reflection of another problem. I shall concentrate not on funding—others have covered it well—but on the issue of access.
As has been mentioned, university recruitment and admission systems are becoming increasingly sophisticated. It is not in the interests of universities to ignore students with huge potential, and they know it. But we face a common problem that certain areas of the country and certain parts of society are hiding individual talent. I warm to the vision of the noble Lord, Lord Judd, that access must be widely available to students with real potential.
However, the Government White Paper assumes that the way to deal with the issue is by a mixture of bribing and bullying universities and by putting in place yet more regulation through the access regulator. If there are no quotas, what criteria will the access regulator use when he assesses whether or not universities will be allowed to charge top-up fees? As I say, there is a danger of tunnel vision.
Let me give an example. I shall not name the local authority involved but the situation will have arisen many times throughout the country. One local authority has a failure of standards among 14 year-olds in the capacity to write. The standard required of these 14 year-olds is minimum, but 35 per cent of them fail to reach it. It is a minimum standard reached by many children before they leave primary school. So it is a real problem.
It is not a matter of universities trying a little harder and pulling in a few more of such students, the problem has to be tackled further down the system at a much earlier starting point. If in that authority 35 per cent fail a particular criterion, what about the next 35 per cent? Presumably we are meant to recruit those. Remedial help is available in universities—it has been

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for years—but it will not solve a problem of that dimension. It is a problem that has to be tackled in different ways.
If you look at the league tables of educational attainment you will find that certain areas of the country which contain a high proportion of people in social groups C2, D and E are at the bottom of those tables. Fine—but let us not restrict ourselves to that. If you look at other league tables for the same parts of the country and for the same groups, you will find that they are at the bottom of the league tables for health, diet, employment and housing. These matters are not irrelevant to the issue of education and a lack of aspiration.
If that is so, what is my message? I have one more minute so I cannot give the whole story, but I would strongly recommend, as did my noble friend Lord Oxburgh, that resources should be targeted further down the system. There should be projects and task forces—for example, I commend the work of the Sutton Trust and Peter Lampl who funds that trust—that enter into the community. Instead of saying to the universities, "You must deal with this problem", which is probably the worst thing to do, we should go to the schools and deal with the good head teachers— the ones who are achieving results in these areas—and ask them what resources they would find helpful. If we are to face up to the problem, targeting resources to schools would be a much more creative way of dealing with the problem than simply threatening the university system.
7.33 p.m.
Lord Harris of High Cross: My Lords, I join other noble Lords in thanking my noble friend Lady Howe for initiating the debate. I much admired her bold opening speech.
In place of a declaration of interest, I acknowledge my good fortune almost 60 years ago, as a working-class lad, in winning a free place from Tottenham Grammar School to Queens' College Cambridge, of which my noble friend Lord Oxburgh had the even better good fortune to become president some 20 years ago. He accepts no responsibility for my speech.
As experience among my family, acquaintances and friends demonstrates, there are many youngsters and many callings for which other forms of education, training or qualification offer a better preparation than a conventional degree. Many prosper—even becoming Prime Ministers or, better still, entrepreneurs—who would have been frustrated by a formal, protracted university course of the kind many of us have enjoyed.
My opposition to new Labour's dream of coralling half of all school-leavers into academic institutions has been confirmed by the rise in drop-out rates in some institutions to 30 to 40 per cent. I am not attracted by the lofty condescension of politicians, especially those from public schools, that youngsters who miss higher education are somehow doomed to fail in life. The noble Lord, Lord Palmer, put paid to that particular delusion.
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The failure of many working-class school leavers to win a good university place surely owes something to old Labour's earlier dream of transforming education by abolishing grammar schools and imposing a comprehensive doctrine of non-selection, non-streaming, non-learning-by-rote, non-facing-the-front-of-the-class and other progressive nonsense preached by "professors of education".
It is now well over a century since our Victorian forebears invented universal, compulsory. free state education as a panacea for the elevation of their masters. One of its prophets, Professor Nassau Senior from Oxford, wrote in 1861:
"We may look forward to the time when the labouring population may be safely entrusted with the education of their own children".
He continued:
"The assistance and superintendence of the Government [is] only a means of preparing the labouring classes for a better but remote state of things—in the latter part of the 20th century—when that assistance and superintendence shall no longer be necessary".
It seems to me that Professor Senior's forecast and his confidence in our abilities have not been fulfilled.
Fortunately, you do not have to be an economist to grasp that, even at Christmas, free gifts come at the expense of free choice. The plain truth, in my view, is that only a customer who pays directly has the freedom to take his money to an alternative supplier if he is not satisfied. However, since the state enjoys a monopoly of so-called "public services", it can supply them inefficiently and make us pay for them through taxes, so depriving all but the well-off of the cash to pay privately.
The effect is that consumers are conscripted on a "like it or lump it basis" to these institutions where, if they are not satisfied. they can only lobby for more to be spent on free services. As we have heard, the state will never have enough money to supply free services in the quantity or quality consumers would choose for themselves. As universities are at last discovering, when the state pays the bill the party politicians call the tune.
It was a fear of a further constriction on the prized independence of universities that drove the late Lord Beloff and a group of bolder academic spirits to establish the private University of Buckingham in 1976, a matter to which my noble friend Lady Howe referred.
But the success of that institution has not weaned other dons from the comfortable enjoyment of their port and perks, to cut the umbilical cord and ascend the path to independence. No wonder Margaret Hodge thought that she could now get away with tightening the screw by imposing quotas for working-class places, to be filled by lowering entry standards. As it happens, Charles Clarke. as Secretary of State, has for the time being issued a soothing disclaimer, apparently on the instructions of the Prime Minister, whose civilising and moderating influence may not always be able to save us.
I conclude with two questions. First, why cannot the better universities see the writing on the wall before their backs are pressed further up against it?

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Secondly, why should not Cambridge—my university—give a lead in reclaiming independence by urging a mixed system of loans, bursaries, tax allowances and education vouchers? The aim should be to enable all qualified students to meet the fees and thereby enjoy equal choice, which can be guaranteed only by direct payment.
7.40 p.m.
Baroness Sharp of Guildford: My Lords, I, too, join others in thanking the noble Baroness, Lady Howe, for initiating this debate. It has proved to be wider ranging than I thought—I had assumed that we would concentrate on student finance. It fact, the debate has ranged across the whole of the White Paper. Like others, I find the White Paper something of a curate's egg. Some parts I welcome, particularly the emphasis on the importance of research, on extra funding to universities and on teaching.
Like others, I, too, welcome the recognition that, when we are moving towards a system of mass higher education, there is a diversity of institutions and of students to fit into those institutions and that we need this diversity of institutions to meet the students' wide range of needs. That said, I am slightly surprised that what I see as the central paradox of the White Paper has not received more attention. The central paradox is that the two main objectives seem to contradict each other. How is it possible to reconcile encouraging more young people, especially from low-income homes, to go into higher education, while at the same time seeking to fund the expansion in higher education and other needs in the sector by effectively imposing a tax on those same students?
Ever since the Government produced their post-Dearing report on the concept of tuition fees, we on these Benches have been warning them that they cannot have their cake and eat it too. They cannot simultaneously raise the price of higher education and expect demand to increase, particularly demand from lower-income participants.
Research recently published by the Centre for the Economics of Education at the department shows that during the 1990s, while participation in higher education increased rapidly, it was the middle classes who benefited. Professor Machin, who undertook the research, is quoted in The Times Higher Education Supplement as saying:
"As income gaps have widened, any positive link between education and family income will disproportionately benefit children from richer families and disadvantage children from poorer families".
For all their efforts to increase the participation of lower-income groups in higher education, the figures for 2002–03 are little better than those for 1997–98. In Scotland, however, where no tuition fees have been introduced, there have been notable improvements.
We thought the Government had learned their lesson. Their manifesto at the 2001 election stated:
"We will not introduce 'top-up' fees and have legislated to prevent them".
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After a bruising election campaign in which he discovered how unpopular was the Government's regime of tuition fees and loans but no grants, the Prime Minister promised reform. The loans, in particular, have proved difficult for students.
Margaret Hodge, the Minister responsible for higher education, said in the House of Commons as recently as January this year:
"We accept that both large up-front payments and fear of debt are factors that inhibit some young people from lower-income backgrounds from attending university".—[Official Report, Commons, 9/1/03; col. 307.]
Fear of debt is the big issue here. Then what do the Government do? They introduce top-up fees up to £3,000, with the extra £1,900 on top of the basic £1,100 not means tested but added to student loans, with grants of a maximum of £1,000 a year, but only for those whose parents' incomes are less than £10,000. That applies only to some 7 per cent of students. Why are the Government introducing grants which are less than the educational maintenance allowance that they are paying to further education and sixth-form students?
Needless to say, this has proved a doubly unpopular package for students. The £3,000 top-up fee, which it is clear from what many of your Lordships were saying most universities intend to charge, means that the average student loan debt on graduation will rise from the present £12,000 or so to about £21,000. Many students have overdrafts as well. While the repayment threshold rises from £10,000 to £15,000, which we are very pleased about, it is still below the average graduate starting pay of £18,000 and takes, at that level, a swingeing 9 per cent from earnings. That means that a young graduate starting work at £18,000, say, will be paying an effective marginal rate of tax higher than anyone else. As the Daily Mail remarked on the day following the White Paper's publication, why are we expecting our young graduates to pay a marginal rate of tax which is higher than we are charging millionaires?
Even at that rate, those on low earnings in occupations such as charities, nursing, teaching, and women who work part time while bringing up children will find that the process of debt repayment is a continuing commitment over their lifetime. Effectively, it will hang round their necks. These young people are, here in the South-East, looking at an average house price of £200,000 and are seeking mortgages often close to that sum. It is no wonder that we have so much trouble recruiting for occupations such as radiographers and physiotherapists, let alone nurses, teachers and, of course, university teachers. The Government talk about golden hellos for the public sector, but I wonder how far they will be prepared to write off this amount of debt.
Even more extraordinary is that, while acknowledging that fear of debt is real for lower-income students, the Government introduce a package which increases debts for students and simultaneously announce that access— the term that has become the euphemism for increasing the proportion of students from low-income homes—is a key objective.

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Universities are to be set tough targets, to be monitored by an "access regulator" and punished, if they do not succeed, by not being allowed to charge top-up fees. So much for the independence of our universities. The Government are saying that they need foundation hospitals because a centralised NHS cannot run everything, but they cannot keep their fingers out of the education pie.
If ever there were a mad and bad idea, it is this. It is unnecessary, because the HEFCE already monitors access and brings pressure to bear through present funding procedures. It is offensive because it interferes with the rights of universities to set their own admissions procedures and leads to the sort of silly rows we are seeing over Bristol. A-level, by itself, has never been and will never be an adequate measure of ability. Universities have always considered school references and the student's account of his or her wider interests and activities alongside A-level results when considering academic potential—which is what they are looking for. They want high quality students, and if we are to have a high quality university sector, it is vital that we trust them to make their own judgments and to be measured by results.
The Government's package has pleased neither students nor universities. Indeed, increasingly, the whole package shows all the signs of a compromise which is all too easily becoming unstitched. Universities wanted freedom to raise extra money. Some knew they could raise that by charging top-up fees, and they got the £3,000 cap, which now looks like being accepted by everyone. The Chancellor was worried about the disincentive effect of the extra loans and argued for a graduate tax, but compromised on the access tsar, a post which is universally unpopular.
Only today we hear the Russell Group arguing that it will not raise sufficient money for their needs. In a radio broadcast soon after the publication of the White Paper, the Secretary of State admitted that by the time the additional costs of mounting loans had been taken into account, top-up fees will bring in only an extra £400 to £500 million for the sector—far short of the £1.5 billion a year needed by the universities.
That brings me to the core issue that lies behind the exercise. As we rehearsed in the debate in early February, universities have been starved of funds for 25 years. That point was made by the noble Lord, Lord Wilson. During that time, student numbers have doubled and so has the number of students to each member of staff, but salaries and infrastructure have not kept pace. A huge backlog of maintenance and renewal is needed for the physical infrastructure. The permanent workforce in the sector is ageing and failing to renew itself. Increasingly, the sector is relying for both teaching and research on non-permanent contract staff. As the Prime Minister said in the House of Commons in December:
"In the long run it is going to be difficult to maintain a really strong university sector … unless we are sure that we are able to attract and recruit people on decent salaries".
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That is the root of it. We need more money in the sector to renew the physical and human infrastructure. The money is not forthcoming from the Government. The HEFCE settlement is bringing in new money. The 6 per cent a year sounds splendid, but by the time we allow for the money going to research and other special initiatives—I am very pleased to see money going to research—there is very little for salaries and very little increase in the unit funding per student if the science budget is taken out. The new money is still three years away. It is still jam tomorrow, not jam today.
Since 1981, the proportion of GDP going to higher education has fallen from 1.33 per cent to 1.1 per cent. It is time we restored that proportion.
7.51 p.m.
Baroness Blatch: My Lords, I, too, thank the noble Baroness, Lady Howe of Idlicote, for introducing the debate. It was clear when the White Paper was produced on 22nd January that there was an air of real frustration around the Chamber, some of which has been displayed today. However, the noble Baroness has created this opportunity for further discussion on higher education, for which we thank her most warmly. We also congratulate her on the powerful support she has secured from her Benches in the debate.
Sir Colin Lucas, the Vice-Chancellor of Oxford, wrote in his foreword to the university's annual report for the past year:
"Much has been said, by many people, about the difficulties that this country's universities face. These are fundamentally twofold: first, the uncertainties about the Government policy and second, the issues of funding".
He ended:
"We look forward to the White Paper with the greatest of interest".
We now have the White Paper and there remains much confusion—some of it, I am afraid, created by Ministers making statements and counter-statements about aspects of the policy set out in the White Paper. For example, referring to widening access to achieve the 50 per cent target, Mrs Hodge, the Minister for Higher Education, said. not in the most elegant language:
"I am going to do a target on closing the gap. I'm actually going to set a target where we want to get to by 2010".
She went on:
"It would probably take two or three months to decide exactly what form a target would take".
However, we understand that the Secretary of State, Mr Clarke, moved swiftly, by forcing Mrs Hodge to perform a U-turn. Within a very short time she was quoted as saying:
"setting a target would be inappropriate and therefore there are no plans to introduce one".
However, I must ask the Minister whether anyone has told HEFCE about this. Its press release issued on 14th March states:
"all institutions will be expected to contribute to achieving national objectives in this area",

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the area in question being the widening of access. That has been interpreted as setting targets. We all know that such judgments on whether institutions are meeting national participation objectives will be linked to additional funding or, worse, financial penalties. Where is the academic freedom in that approach? Does it not breach the Further and Higher Education Act 1992?
Then there is the growing evidence of bias against talented and academically able students who just happen to live in a socially desirable postcode area, or whose parents just happen to have attended university. Private schools, and even the best performing state schools, also suffer from the same prejudice.
I am not arguing against widening access or against seeking ways of testing for potential in addition to taking into account A-levels. David Thomas, wrote in the Sunday Telegraph on 26th January:
"There is to be a new access regulator, as if access needed regulating by anything other than the results of an honest examination system".
Further on, he wrote:
"Last week's policy announcements belong to the same ignoble tradition. They are profoundly condescending to working class students, since they imply that they cannot succeed on their merits alone".
At Question Time in another place on 26th February, the Prime Minister did not follow the policy of the Secretary of State for Education when my honourable friend Chris Grayling, MP, asked him:
"There are increasing reports of pupils of high ability and achievement being turned down by universities because of their social background. How would the Prime Minister justify that to the people who are losing out?"
The Prime Minister replied:
"The simple point is that I would not. If universities are doing that. they are wrong. What is more, people should go to university based on their merit, whatever their class background. That is what should happen".—[Official Report, Commons, 26/2/03; cols. 256–57.]
I agree with the Prime Minister.
Will the M mister tell the House why parental income, parental address, parental educational qualifications or the type of school should be a factor in determining access? There is no point in denying that it is happening, because the evidence is mounting. Instead of social gerrymandering, improving secondary education and exploring ways of engaging and monitoring young people to consider higher education should be pursued. Distorting entry qualifications by lowering standards for students from low-income and non-traditional families is patronising and smacks of the worst kind of social engineering. As the Prime Minister agreed, higher education should be available to the most talented and academically able students, irrespective of colour, creed, background or postcode area, or their parents' income and education.
All this is to be overseen by an access tsar. We do not know what criteria will be used, what the legal basis of such a post will be or to what extent the 1992 Act will protect institutions from the activities of an access tsar.
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In an Answer to an Oral Question recently in this House, the Minister said that the tsar will have powers to levy fines on universities. What does that mean?
Under the proposals in the White Paper it appears that the application of a university that wishes to charge top-up fees will be judged not on the need to meet the costs of expensive courses, but on whether it is providing sufficient places for students from disadvantaged postcode areas or low income families. That puzzles me. Can the Minister clarify what criteria will be used to allow top-up fees to be charged" I very much agree with everything that the noble Baroness, Lady O'Neill, said about the different ways in which universities will react to the policy.
Funding for universities and support for students cannot be divorced from the 50 per cent target set by the Government. There are to be an additional 35,000 students each year until 2010, plus the thousands of additional lecturers who will be required to meet that expansion. What is the real-terms increase in unit funding per student expected to be by 2006? Where will the additional buildings and equipment come from? As the noble Baroness, Lady Sharp, pointed out, the additional expenditure so far announced will be more than absorbed by this expansion programme.
Addressing pay and conditions in higher education properly will make serious inroads into the so-called extra funding. How much funding is being taken from the higher education budget to fund the University for Industry, access arrangements and any other activity outside university core funding? It would also be helpful to know how the considerable gap in funding for universities between the ending of the up-front fees paid by the students and the coming on stream of loan repayments will be made good. What guarantees will the Minister give the House that fee income will truly be additional money to the universities'? For the record, although the original tuition fees were paid directly to universities, their introduction did not result in a commensurate increase in overall funding. In fact, the unit funding per student remained static.
I am attracted to much of what was said by the noble Baroness, Lady Howe, the noble Lord, Lord Butler, and others, especially about the aim of more independence for universities. However, under the White Paper proposals, the prospect of a massive increase in post-university debt—apart from acting as a deterrent to many students—must be considered alongside higher national insurance, ever increasing property prices, higher council taxes, much higher pension contributions and congestion charges, all at a time when students are setting out on a career and perhaps even marriage. Therefore, a system of endowments and alumni-giving controlled by the universities must be developed.
It is still an irony that a Labour government introduced a system of student support that left those from the poorest families with the greatest level of debt. I remain of the view that, over the long term, the distortion of university access and the introduction of an access tzar will affect the standing of our universities. Thirty five years ago, a higher percentage

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of students from state schools went to our universities than do now. Why? It was not because university admissions were rigged but because there were greater opportunities for bright children from poorer homes. Direct grants, grammar schools and selection on the grounds of academic ability were all part of the system. Such opportunities have almost disappeared. In fact, such is the Government's hatred of selection on the grounds of academic ability that they have banished it by law. That has been an act of political malice.
My noble friend Lady Carnegy mentioned the Scottish dimension. I wonder whether the Minister can tell us what it was that the Scottish Parliament said in the discussions.
The way forward would be to replace the rungs in the ladder of opportunity for bright children from disadvantaged backgrounds; provide more choice post-16 by increasing the provision of high-quality vocational education; improve education in our schools; provide a fairer system of student support; to ask Ministers at the department to be more open-minded to the ideas expressed in our debates in this place on student funding; abandon the appointment of an access tsar; abolish the 50 per cent target; encourage universities to publish their admissions criteria; rule out social engineering in access procedures; and, finally, remove central control and bureaucracy and reduce ministerial and departmental interference in our institutions.
8.2 p.m.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, I, too, am grateful to the noble Baroness, Lady Howe, for raising this important issue. I pay to tribute to her in the many guises in which I have had the good fortune to know her over the years. I keenly note that she was the only Member of your Lordships' House to mention the relevance of early years education. As the responsible Minister, I was particularly delighted by that. I was, however, a bit concerned that she described us as central planners; that is not traditionally a role in which I see myself.
I am grateful to all noble Lords who contributed to this far-reaching debate. I shall endeavour to answer as many of the questions raised as possible within the allotted time. I say now, however, that the noble Lord, Lord Sutherland, has perhaps given me a new song to sing as I go into the department tomorrow. How well it will received by my colleagues, I do not know.
The Government believe that education must be a force for opportunity and social justice. We must ensure that the opportunities that higher education brings are available to all those who have the potential to benefit from them, regardless of their background. That is why, as noble Lords from all parties have said, it is important to focus on raising the aspirations of schools and young people, encouraging universities to work with schools and communities to encourage young people to take up higher education opportunities, and investing in initiatives to widen participation.
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At the same time, we have the responsibility to ensure that our higher education institutions continue to deliver world-class teaching and research. To deliver that, we believe that we must make changes and improvements to the sector, including the way in which it is funded. We believe that the higher education White Paper sets out a fair balance of funding between the taxpayer, the higher education sector and students and their families. It also sets out the levels of funding provided by the taxpayer to the higher education sector for the next three years.
I agree wholeheartedly with the right reverend Prelate the Bishop of Chester on the role of endowments within the sector. We shall ensure that the sector is less dependent on a single source of funding. We will be setting up a task force to encourage higher education institutions and potential donors to promote existing incentives for donation. The task force will include corporate donors and financial and fundraising experts in the public, private and voluntary sectors and in the higher education sector itself. We believe that that will enable us to take forward some of the very interesting ideas that were raised also by the noble Lord, Lord Wilson. I am pleased, too, that the noble Baroness, Lady Sharp, likes part, if not all, of our funding.
I deal immediately with the unit funding issues raised by the noble Baronesses, Lady Howe and Lady Blatch. I shall also give a couple of comparisons so that the points are very clear and on the record. For 2005–06, unit funding will be £5,390. That is an increase on the 2002–03 figure of £5,050 and on the 2000–01 figure of £4,980. Unit funding is moving in the right direction. I cannot give the noble Baroness the figure for 2006; as she will appreciate, it will be in the next spending review. When I have those figures, I shall of course bring them to the House.
I should like to focus for a moment or two on the arrangements for the funding of full-time and of part-time students so that we can be clear about them. We have a means-tested grant to cover the contribution of full-time students to tuition costs. More than 40 per cent of students receive a grant to cover the whole cost. As noble Lords will know, there is a loan to help with living costs—his year it is worth up to £4,700 per year; a grant to help to cover the costs of looking after children, such as the childcare grant which covers up to 85 per cent of the costs of formal childcare; and grants to cover the additional costs of taking a course for those with disabilities.
I know that the noble Baroness, Lady Howe, as vice-chair of the Open University, takes a keen interest in creating opportunities and incentives for people to take up part-time study. I am proud to say that the Labour Government were the first to provide any financial support to part-time students, including those studying through the Open University. Part-time students on low incomes can be eligible for grants to meet tuition costs, loans to help with the cost of taking a higher education course, and financial support from hardship funds towards living costs.

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However, we recognise that those funds are not always easy to access. For that reason, we set out in the White Paper our intention to introduce a new grant for full-time students from low-income families, worth up to £1,000; to simplify and improve the way in which we provide additional finance to both full-time and part-time students; and to provide guaranteed fee support to part-time students on low incomes, along with a new grant of £250 to meet the cost of books, travel and other course expenditure to replace the existing fee remission and loans system.
The noble Baroness, Lady O'Neill, raised the issue of the £10.000 threshold, and other matters which she felt were important. Since we gave that indication in the White Paper, we have had more up-to-date data which indicate that we may be able to raise the threshold within the 30 per cent of students to be supported. The revised data are currently being checked. I shall, of course, come your Lordships' House when I have further information, but I wanted to give that information now to the noble Baroness and to other noble Lords who are interested. I hope that I will be able to bring good news on that.
I say to the noble Baroness, Lady Prashar, that in order to help ease the immediate financial costs for students and parents from 2006 no student will have to pay fees up front. I believe—I think that the noble Baroness, Lady O'Neill, welcomed this—that that is a critical factor in ensuring that students from disadvantaged backgrounds are able to go to university. Students will, of course, pay back the money through the graduate contribution scheme, with repayments set to commence when a student begins to earn £15,000.
I say to the noble Lord, Lord Butler, that I have made a note on my brief to be bolder. I take on board what he said. I believe that in setting out our proposals on tuition fees we have indeed gone some way towards being bolder. It was not easy to work out how best to configure the way in which we support our higher education sector. I am pleased that the noble Baroness, Lady Howe. welcomed our proposal for higher education funding. I believe that it will constitute a significant contribution. But I also believe that it is a very necessary element. I say to my noble friend Lady Lockwood that we have to look at a combination of funding. We believe that although the bulk of funding will continue to be provided by government—it will reach almost £10 billion a year by 2005–06—it is important to have other funding sources and to recognise the contribution that those who benefit from universities should make.
We want to ensure that the change does not deter potential students from going to university. I believe that the deferred payment will make a substantial contribution to that aim. The noble Baroness, Lady Carnegy, the noble Lords, Lord Wilson and Lord Sewel, and other noble Lords referred to the devolved administrations. I cannot give the precise details of the relevant conversations as I do not have them. The noble Lord, Lord Sewel, was concerned that the hard work should go on. It has gone on and will continue. Discussions took place during the
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deliberations on the White Paper and continue. At present there is no evidence of any buses crashing anywhere. We are mindful of the need to work closely with the devolved administrations to ensure that we have in place what devolution gives us; namely, differences in policies, but ways of working together to ensure that we are conscious of the effects of those policy differences. I assure noble Lords that that has occurred.
We do not believe that debt is a deterrent for the great majority of students.The Student Living Report 2003 reveals that students continue to find their time at university worth while. Nearly nine out of 10 students consider that the money they are spending is a good investment. I say to the noble Lord, Lord Palmer, that students now accept that working part-time is the norm. Indeed, it can have great advantages.
The right reverend Prelate the Bishop of Chester and the noble Baroness, Lady Prashar, were concerned about graduate repayments. I repeat that those earning less than £15,000 pay nothing. The latest figures I have seen—today—show that many graduates begin work on a salary of about £14,000. A graduate earning £18,000 would pay £270 per year, which is £22.50 per month. It is important to put the repayments in that context. It is not like any form of commercial repayment arrangement. That is an important point.
Noble Lords focused on student choice and the issue of widening participation. If we are to get the most from the pool of talent that we have, it is essential that the opportunities offered by higher education are available to all those with the potential to benefit from them. We shall encourage universities to offer more flexible routes into and through higher education to help those for whom a more traditional route would be impossible, as well as creating better benchmarks to help institutions to judge their progress, and reform the access premium.
We are helping to ensure that those opportunities are offered to all students through the unification of the programme now called the National Aim Higher Programme. It seeks to raise aspirations, to raise the attainment of young people, and to build better links between schools, universities and colleges.
I say to the noble Lord, Lord Palmer, that we have introduced a foundation degree designed to appeal to people of all ages who perhaps would not have considered entering higher education, by reducing the practical barriers to learning with delivery arrangements through work, through local further education colleges, and web-based learning. These courses are designed to appeal to people already in work and to provide specialist technical knowledge, employability skills and broader understanding. Noble Lords will remember that I mentioned in your Lordships' House that I launched the foundation degree for those involved in childcare and was delighted to see people involved in childcare coming forward to take that next step in their education.
The noble Lord, Lord Palmer, made the important point that we need to ensure that for our young people there is a breadth of opportunity. We want to make

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sure that by 2004 about a quarter of our young people enter a modern apprenticeship scheme. We now have a group led by the chief executive of Centrica who will ensure that our modern apprenticeships take account of the views of employers. We believe that that is extremely important.
We state specifically in the White Paper that we are not choosing between more plumbers and more graduates. As noble Lords have said on many occasions, we need both. Evidence, though, shows that education increases productivity and that higher education is most important for economic growth in developed countries. We believe that it is important that we offer the opportunity of higher education if we are to operate in a competitive world and to make sure that we offer those opportunities to all young people capable of taking them up. That should be within the context of recognising that skills gained in other ways are as appropriate for some young people as a university education is for others.
I was interested that the noble Baroness, Lady Howe, raised the excellent contribution of Nicholas Barr. I read the summary of the evidence that he gave to the Select Committee, which is very interesting. Of course we are looking in terms of raising the cap, and at the context between raising fees and ensuring that we do not make courses so expensive that students can no longer apply or take part in them. Those are really important issues for the future and will be looked at by my right honourable friend the Secretary of State and my honourable friend the Minister with responsibility for higher education in their further deliberations.
Every noble Lord who spoke rightly referred to the issue of access, and I want to spend some time trying to deal with the specific points raised. I recognise the commitment of universities and colleges to fair access for students from all backgrounds. We are certain that schools are committed to encouraging our students to aim higher and to go into higher education. However, 30 years ago, students from middle-class backgrounds were three times more likely to go to university than those from poorer backgrounds. The numbers going to university have more than trebled, but the gulf remains the same. At present, only 28 per cent of graduates come from disadvantaged backgrounds. We believe that there is work to do.
The new access regulator, who is a regulator and not a tsar, will ensure that universities that want to raise their fees make plans to safeguard and promote widening access through bursaries—those have been mentioned by a number of noble Lords, especially the noble Baroness, Lady O'Neill—other financial support, and by direct work with schools and colleges to promote the aspiration to a university education.
The noble Baroness, Lady Blatch, pointed out that the access regulator could, as a last resort, withdraw the power of universities to charge those extra fees if they were not upholding their access agreement. I am well aware that she mentioned fines. In the next two or three weeks we will publish the paper setting out in more detail the proposals on how the access regulator
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will work. I will ensure that the issue is covered fully, and that the noble Baroness has the detail of it. I say to all noble Lords, but to the noble Baroness in particular because she raised the subject, that I believe that my colleagues listen carefully to all issues raised by such eminent individuals in this House, who bring huge experience and knowledge to them.
The noble Lords, Lord Sutherland and Lord Oxburgh, and the right reverend Prelate the Bishop of Chester talked about raising standards in schools. The "Excellence Challenge", which of course involves our schools, higher education institutions and FE colleges, is an important and complementary part of our commitment to do that. I agree that schools have an important part to play. We must make sure that our schools offer every young person the opportunity to reach their highest possible attainment. I accept that, but that is not the end of the story: it is important that students also get the opportunity to talk to universities, particularly those students for whom a university education is not part of their social or cultural background, so that they begin to understand it. All noble Lords would accept that that is very important.
I want to pick up on something that was said, I think, by the noble Lord, Lord Oxburgh, about universities and the part that they are striving to play. I accept that, but we still have a gap. I shall take Oxford as an example without any criticism, because I know what good work it does. Some 53 per cent of entrants to Oxford are from the state sector, but the benchmark is 68 per cent. We need to work carefully to ensure that students are able, and want, to apply to Oxford, Cambridge and other universities. As I say, I have no criticism of the fantastic work that is going on within such universities, but I recognise that we all need to engage in that process. I am delighted at the work going on to achieve that.
A number of noble Lords, particularly my noble friend Lord Judd and the noble Baronesses, Lady Warnock and Lady Prashar, talked about the two-tier system on research. Not all universities want to focus on research. In the White Paper, we have set out the three areas that we think are of great importance. Noble Lords will know that they are research, teaching, and knowledge transfer. We need to create more opportunities for recognition and excellence in all three of those areas.
It is also true to say that 75 per cent of funding under the RAE from HEFCE goes to the top 25 institutions anyway, so we already have a concentration on research. That is why I am pleased that we now have the funds to enable us to focus on emerging research in non-research-led universities, if I might call them that.
Noble Lords, especially the noble Lord, Lord Palmer, talked about the opportunity for collaboration between universities, so that students get the experiences appropriately described by noble Lords in terms of research capacity. I argue that we can do that in more creative ways.
The noble Baroness, Lady Howe, discussed quotas and the amount of funding provided by HEFCE to institutions. She will know that in 2002 we removed

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controls on the maximum number of students. Institutions can now bid for more funding under the additional student numbers scheme. Flexibility is there, but it may not be all that the noble Baroness wishes.
The noble Baroness, Lady Prashar, discussed poor students going only to poor universities. We want all students to go to the universities that best suit their needs and potential. That is why it is important that through access agreements we encourage the use of bursaries and other forms of financial support and ensure that best practice is spread to give opportunities to young people.
I have discussed the access regulator and the fact that we will come forward with details on that. We look forward to discussing it in your Lordships' House. I wholeheartedly agree with everyone—the noble Baronesses, Lady Sharp and Lady Blatch, in particular—who said that admissions must be on the basis of merit. I state categorically that admissions are the responsibility of universities. I believe that that will be reflected in the views of the noble Baroness and others of the proposals that we will produce.
In conclusion, it is important that universities have the opportunity to select the candidates who will make the best success of their university careers. Universities of course look to A-levels but they also look to other measures, particularly those universities—many of them are represented here —that are oversubscribed. We are interested in ensuring that we spread the best practice of that basket of measures, if I may call it that, to ensure that we have students with both the greatest achievements and the greatest potential to go forward to university. The university sector has risen to that challenge and will continue to do so.
We have a higher education sector of which we should be truly proud. The Government are responsible for ensuring that it meets the long-term challenge to maintain and improve high standards, to expand and widen access, to strengthen links with business and to compete at an international level in today's global economy. Those are challenging objectives and I believe that the reforms that we have announced in terms of student funding and institutional funding will help us, with the education institutions, to make our ambitions a reality.
8.22 p.m.
Baroness Howe of Idlicote: My Lords, I thank the Minister for the usual comprehensive way in which she answered so many of the points raised in this debate. As always, one will have to read an awful lot of what has been said because much information was presented. There is still some doubt, shall we say, about the access regulator but we look forward to reading those remarks.
I also thank in particular the noble Baronesses, Lady Sharp and Lady Blatch. Theirs is the responsibility from the Opposition Front Benches, and it can sometimes be "yet another day", so I extend particular thanks to them.
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I also thank all noble Lords who participated in the debate and echo the comments of the noble Baroness, Lady Blatch. I am particularly grateful that so many of my noble friends took part in this debate. I found it a fascinating two-and-a-half hours. I need not have worried about it being the third such debate in four months. Clearly, we could do with many more debates on the subject. I am sure that that will happen. In the mean time, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Airlines: Regulation
8.24p.m.
Lord Rodgers of Quarry Bankrose to ask Her Majesty's Government whether they are satisfied with the performance of the Civil Aviation Authority in regulating low-cost airlines.
The noble Lord said: My Lords, the rapid growth of low-cost, no-frills budget airlines has been a phenomenon in Britain and Ireland over the past six or seven years. Low-cost airlines first became commonplace in the United States in the 1980s as a result of the liberalisation of the civil aviation market, and Europe followed in the mid-1990s.
The two most prominent and largest low-cost airlines are Ryanair, which is based mainly at Stansted, as well as Dublin, and easyJet, which is based at Luton. Ryanair has about 50 aircraft in scheduled flights but plans to buy 150 more within the next few years. EasyJet now seems to have about 60 aircraft but, like Ryanair, plans to buy 150 new aircraft.
These two airlines are highly competitive in the market, especially with each other. They are aggressive in their language and are not above knocking copy and black propaganda. Michael O'Leary, chief executive of Ryanair, and Stelios Haji-Ioannou, the boss of easyGroup, are happy to personalise these rivalries. For example, in a sharp exchange of correspondence in the Financial Times in June last year, Mr Haji-loannou was critical about Ryanair for using fully depreciated aircraft "about 23 years old", and, as he put it. on a,
"few landing strips in the middle of nowhere".
In reply, Mr O'Leary accused the chairman of easyGroup of "nonsense" and writing "whingeing letters". I hope that they have sufficient time to run their companies while swapping such rhetorical flourishes.
Both companies are also rich in publishing press releases, and it is hard to keep track of their bewildering claims. On 8th February, easyJet reported a surge in passenger numbers for January, and its shares rose to 225 pence. But, on 26th February—less than three weeks later—easyJet was warning about the need to cut fares to fill its aircraft, and its shares fell to 213 pence. I assume that Ryanair and easyJet are financially sound, but it is difficult to ascertain their underlying current performance.

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A year ago, there were two other well regarded airlines—Go and Buzz. I had flown with both of them. But Go has gone, absorbed into easyJet, and Buzz has been bought by Ryanair, which announced this week that it was retaining only a limited number of routes and aircraft and sacking three-quarters of its Stansted staff. Given the fate of buzz, the passengers are being refunded, or so it seems, but the workforce, including the pilots, may still be in dispute.
Among other low-cost airlines, there is the newish subsidiary of the long-standing company, British Midland, whose ownership is 30 per cent Lufthansa and 20 per cent Scandinavian Airlines. The new low-cost company is called bmibaby and is based at the East Midlands airport and at Cardiff and Manchester. Other low-cost and small airlines have been launched, but some will be here today and gone tomorrow.
The characteristics of low-cost airlines, with variations, are usually as follows. First, and most obviously, they offer cheap fares—sometimes at rock-bottom prices—especially in the winter, and no discounts for children. Secondly, they offer no frills and, most plainly, no in-flight meals or additional services, and often no allocated seats, with queuing for a place. Then, booking is on-line or by credit card, with no ticket in advance and only a boarding card at the check-in. Low-cost airlines are often launched with a handful of second-hand aircraft. But established airlines are now buying new aircraft and settling for a single type in their fleet—a version of the Boeing 737.
I welcome the growth of low-cost airlines because traditional airlines have had their own way for far too long. That has widened the opportunity to travel for leisure, including for those of limited means. Passengers now often have a choice of airline or a flight from a regional airport. There is a wide range of destinations with a variety of fares from day to day and at different times of the day. I hope that the low-cost revolution is here to stay. My concern is mainly about consumer protection and safety.
Many years ago, in the late 1960s, I was Minister of Trade, looking after civil aviation at the Board of Trade. I endorsed the Edwards report into civil air transport of 1969 and I argued strongly within the department in favour of a civil aviation authority, which was turned into legislation by a successor government in 1972. I also read accident reports and followed the history of short-lived, sometimes buccaneering independent airlines which seemed to steer close to the wind.
That is the background of my Unstarred Question, which puts together the role of the Civil Aviation Authority and the low-cost revolution. If I am raising questions, mainly in an agnostic spirit, it is because there is no reference to low-cost airlines in the chairman's statement in the 2002 annual review, none in the report and accounts, and no reference either in what is described as "30 years of the CAA 1972–2002", a short history of the CAA, in the review.
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The CAA review and the report list the board of directors, which includes a group director, consumer protection. There is a passing reference to low-cost airlines in the appropriate section. But consumer protection seems to be mainly concerned with tour operators and the travel industry, not directly with the public.
The review mentions,
"an airline's Voluntary Passenger Service Commitment, which sets a range of passenger service standards",
that has resulted from an initiative by the European Commission. The Department for Transport has asked the CAA to monitor compliance and the CAA gave a report at the beginning of the year 2002. The report was prepared by "a small team" and "research" consisted of,
"at least one visit to each airline's office to explain the requirements to obtain evidence of compliance".
It was a pretty thin, half-hearted attempt to push ahead the project. But in any case, none of the low-cost airlines was a formal signatory and there had been no "research" in relation to what was then Go. EasyJet volunteered to comply on most counts "in principle"—whatever that means.
The second report of compliance was published in November 2002. It was also disappointing. It conceded that the report was not complete because there was insufficient information about the airlines. Only nine UK carriers were included and none were low cost.
I hope that the Minister will say whether he is happy about the quality of the reports. More importantly, is he satisfied that the CAA is making serious progress on the passenger service commitments?
Ryanair and easyJet have declared their intention to resist European legislation that would require the payment of compensation when passengers suffer from delayed and cancelled flights. And according to Which? magazine, the idea of a charter of airline passengers has been described as "meaningless nonsense".
The Advertising Standards Authority, of which I was chairman for six years, has received justified complaints about Ryanair, easyJet and the late Go and Buzz. That includes misleading fares and destinations. The CAA's consumer protection group has had an interest in such advertising. In general, is the Department for Transport satisfied with the CAA's performance on consumer protection and content with its consumer protection terms of reference?
The CAA's annual report refers to safety as "the first priority", "the top priority" and the "primary objective"—and quite right too. It states that the United Kingdom has one of the best aviation safety records in the world. I am ready to endorse that—as, I am sure, is the Minister. However, it would be reassuring if the CAA was to state explicitly that low-cost airlines are not under unreasonable strains and pressures, given some disturbing anecdotal remarks.
Air crew are now often turned around within 20 minutes on an international flight. Some pilots are said to be flying to the limits of maximum hours. All

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men and women—doctors, lawyers, engineers and architects—are aware of a bottom 5 per cent of their profession which has significant shortcomings, to put it delicately. I remember a fatal accident that arose from incompetence on the part of one member of an air crew who had squeezed through his examinations only on his fourth attempt.
It would be helpful if the CAA could confirm that the quality of flight and cabin crew is as high as ever, given the projected number required by low-cost airlines. Can the Minister explain how the CAA maintains its standards?
Months ago, I read Feedback, a bulletin published by a charity funded by the CAA for the purpose of aviation safety. One contributor wrote about a growing tendency,
"primarily with some of the low-cost airline operators, of flight crew reacting inappropriately to traffic control clearance".
I cite the rather clumsy language, but hope that the point is clear. That correspondent described what he called "overly-aggressive behaviour", adding
"I would not wish to give the impression that anarchy has broken out…However…in my judgment (it) is due in part to the aggressive commercial ethos that exists within some airline companies and which probably translates into extreme pressure on the flight deck".
I cannot say whether that is a minority or a representative view of the problem, but the CAA must be alert about such hazards. The human factor remains critical in aviation. If air crew are unsettled, tired or preoccupied about their jobs and security, they may be distracted from their professional task.
Finally. I turn to aircraft. I understand that low-cost airlines generally utilise their aircraft for up to 13 hours a day, compared with eight or nine hours for traditional airlines. Given that some second-hand, elderly aircraft will continue to be used, I assume that the CAA is monitoring risks and watching for any cutting of corners.
In the course of my remarks, I have inevitably referred to Ryanair and taken for granted that the CAA's writ runs over any airline based in the United Kingdom. However, given that Ryanair is an Irish airline, the CAA may have limited powers. Perhaps the Minister will explain the position and tell us whether there are any reciprocal arrangements with the Irish aviation authority.
I repeat: I greatly welcome the low-cost revolution of civil aviation, but I hope that the Minister can reassure the public and me that the Civil Aviation Authority is fully alert to any shortcomings in that important, fast-moving sector. He might encourage the Civil Aviation Authority to be more forthcoming about low-cost airlines in its next annual report and review.
8.40 p.m.
Lord Clinton-Davis: My Lords, I declare an interest as president of the British Airline Pilots Association. I congratulate the noble Lord, Lord Rodgers, who is an old friend of mine, on his choice of subject for this debate, which could hardly have been more timely.
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I know that the noble Lord will forgive me if I focus entirely on the proposed takeover of Buzz by Ryanair. He mentioned other highly important matters, to which I hope the Minister will reply More importantly, I hope that what he has echoed will be important in practice.
The noble Lord declared an interest as a former Minister of Aviation—I am, too. Never in his or my time as Minister was there a problem of' this kind. It is most important that it is not ignored. It must be tackled, not only by the Government, but by all the agencies concerned with the consumer and airlines.
I have long been a believer in sensible debate about such issues and the role of the Civil Aviation Authority and other bodies concerned with airline regulation and the rights of the air-travelling public. We are talking about jobs and the future of airlines. We are addressing matters of profound importance to the Government, their aviation policy and how it impinges on European law. It involves the interests of the OFT and those likely to use the aircraft; namely, the consumers, as the noble Lord, Lord Rodgers, pointed out.
So much depends on the relationship permitted to be forged between the British Airline Pilots Association and Ryanair, in particular, at this time. The auguries are not good. Although I am president of the British Airline Pilots Association, I point out that it is regarded by most airlines, the travelling public and Members of both Houses of Parliament as a responsible body. Only one person—the chief executive of Ryanair—has chosen otherwise.
I wish that I could be more optimistic. Unfortunately, the intransigence of Michael O'Leary has collided with this. He threatened staff, telling them to take the contract or he would close the airline down. He said:
"Hard times require hard messages. If the PR has caused some people to be upset, then tough. Such is life".
That is not the sort of language that ought to be used by a chief executive concerned about consumers and about his relationship with a body involved with aviation. It is not the language of a chief executive who has—or ought to have—a day-to-day relationship with the Government. To Mr O'Leary I say that life is not always like that.
Fortunately, the British Airline Pilots Association enjoys different and, for the most part, happier relations with other airlines, but Mr O'Leary prefers the language of duress. He has accompanied his threats by saying that he may yet walk away if his terms are not accepted, leaving all 600 employees of Buzz without jobs. He has actually threatened that. It defies the imagination, but that is what he said. It may be, as Jim McAuslan, the general secretary of BALPA, suggested, that Ryanair never had any intention of running Buzzaway and wanted to close Buzz down to get rid of the competition. The Office of Fair Trading will have to consider that matter.
When it comes to employment issues, should not the Civil Aviation Authority and the Office of Fair Trading look more widely at these than so far has been depicted? If there may be an infringement of competition law and of merger control provisions,

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should not the wider public interest issues be regarded? Should not the possibility of a major infringement of European law be considered? All those matters are highly germane, and, with others, they must all be examined. If Mr O'Leary will not talk sensibly about all the issues, the union and others may have to try to compel him to do so.
So far, Mr O'Leary's tactics have been to menace and misrepresent. It may be true that Buzz is, as he says, losing £30 million a year, but is it not equally true that other relevant areas—for example, marketing—would now be assumed by Ryanair and would save the company about the same amount every year? Is it not true, therefore, that the company could survive without any change to the pilots' contracts? To Mr O'Leary, I say that there is a lot to talk about. Is he prepared to listen and come forward with some rational arguments? After all, we are talking about people's jobs, about the right to fly and about a host of important issues. There is plenty to talk about.
I want the new airline to be successful, but the BALPA pilots also must be able to enjoy their employment rights. I want them to have trade union recognition, as has been the case for many years. Those aims are by no means incompatible, and I hope that the CAA and the other bodies to which I have referred will shoulder their respective responsibilities, because a great deal is at stake.
8.50 p.m.
Lord Newby: My Lords, I too should like to congratulate my noble friend Lord Rodgers on the timing of his debate because this week the financial press has been full of stories about low-cost airlines taking over each other—or not, as the case may be.
I have been surprised at the success of low-cost airlines in achieving an extraordinarily large market share in a very short space of time. Last year over 40 per cent of domestic passengers flew with low-cost airlines, with over 30 per cent of passengers flying to continental Europe. Low-cost airlines have brought considerable benefits to consumers, the most obvious being that of expanding consumer choice. Indeed, the extent to which the low-cost airlines have been successful at creating markets which previously did not exist was brought home to me when returning late last year from a family holiday in Italy. We caught a late night flight from Ancona to Stansted. I expected the incoming flight from London to be largely empty. Instead, it was completely full. To achieve a full flight at the beginning of September into Ancona late on a Monday evening was a considerable marketing achievement. Of course that has been replicated with flights to many other destinations.
Another successful innovation from the low-cost airlines, one that has been grudgingly accepted by the traditional operators, has been their introduction of new technology, not least in ticketing arrangements. The purchase of tickets is now so much easier.
In his remarks my noble friend Lord Rodgers identified the two key risks faced by low-cost airlines, which are arguably more serious for them than for their
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traditional rivals. The first, which possibly may be the lesser risk although it is extremely important, relates to safety. In 2002 a whole string of allegations were made about safety problems on both Ryanair and easyJet. The complaints were many and varied. It was argued that pilots were working excessive hours. A row erupted between the Irish Aviation Authority and Ryanair over the method of calculating pilot hours for the purposes of determining whether those hours were in fact excessive. Further arguments were fought over the ageing fleet; over whether pilots were breaking speed limits and becoming aggressive with air traffic controllers because they had to meet extremely tight timetables; and whether aircraft had been flying too low. The chief executive of easyjet became so worried about the stories concerning flight safety that last summer he wrote to all the national newspaper editors upbraiding them for their stories about the airline.
In terms of air crashes, the safety record of the low-cost airlines has been extremely good. However, in a sense there can be no smoke without fire—if that is not an inappropriate pun—in terms of safety. As my noble friend Lord Rodgers pointed out, genuine concerns have been expressed that corners may be cut when economic pressures are great. Here the CAA and its Irish equivalent need to be particularly vigilant.
The greater risk facing low-cost airlines and therefore the passengers flying with them is an economic one. As I mentioned earlier, the airlines have expanded very quickly and they are planning to grow even more.
I turn first to Ryanair. At one point last year, I heard Michael O'Leary self-confidently predicting that in a relatively short period of time it would have overtaken BA in terms of the size of its company. That is a kind of hubris coming from a relative newcomer to a sector, which would certainly get any shareholder extremely worried.
Secondly, as regards Ryanair, the Buzz purchase, referred to by the noble Lord, Lord Clinton-Davis, brings with it a number of significant risks. The noble Lord, Lord Clinton-Davis, is worried about the situation faced by pilots and the possible heavy-handed negotiating tactics of Ryanair. My concern is slightly different. Buzz was losing 1 million euros per week. Whatever is done to cut its marketing costs, if Ryanair can turn around that kind of loss, certainly in the short term, it is doing extremely well. It is to be hoped that it has deep enough pockets to turn around a very significant weekly loss and bring Buzz back into profitability.
In order to fill its airlines at virtually any cost. Ryanair has announced recently that it is to make 1 million seats available from upwards of £10 per seat. Clearly, it will be suffering a marginal loss per passenger even though it is desperate to maintain the number of flights and fill the airline. Indeed, fares at Ryanair are some 8 per cent lower now than for an equivalent flight at an equivalent time last year.
As regards easyJet, many of the same features apply. It has firm or optional orders on a staggering 240 aircraft. It has recently acquired Go and yesterday

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pulled out—at significant cost— of the purchase of Deutsche BA. It, too, has seen a fall in air fares of some 8–9 per cent over the previous year.
The situation facing those airlines, after a period of considerable growth, is one of tightness in terms of revenues and of desperate attempts to fill their seats. One of the almost certainly predictable consequences of the current international situation is that passenger volumes in the short term will fall, as they did after September 11th. Again, one hopes that those two airlines have the financial resources to deal with any such shortfall.
These potential problems of over-expansion are ones which the CAA cannot resolve adequately. Essentially, they are matters for the market. The point at which the CAA may become involved is if consumers find that the airlines are unable to maintain their obligations and compensation needs to be paid.
My question for the Minister, which is under the jurisdiction of the Government, relates to one element of the economics of the low-cost airlines—namely, the issue of air passenger duty. Obviously, air passenger duty is particularly significant for no-frills airlines because taxes constitute a higher proportion of their costs than they do to the carriers charging a higher fare per passenger. I know that the Minister will not tell me what the Chancellor will be announcing in the Budget, but I should be grateful if he would pass on to his right honourable friend in the Treasury the fact that, at this stage in the economic cycle, a rise in air passenger duty could be particularly damaging to the low-cost airlines.
8.59 p.m.
Viscount Astor: My Lords, low cost airlines are a success in this country. They represent approximately 41 per cent of domestic airline travel and 32 per cent of continental airline travel. I shall be brief, but not out of any disrespect to the noble Lord, Lord Rodgers. The questions that he asked are more for the Minister and of a more technical nature, rather than the policy of the airline industry. I am grateful to the noble Lord, Lord Rodgers, for giving me an opportunity to ask the Minister three simple questions.
First, there have been concerns about safety, as mentioned by the noble Lord, Lord Newby. Specifically, there have been concerns in the press about pilot hours. Are the Government satisfied that the CAA is doing all it can? Indeed, is the CAA satisfied with the safety of low-cost airlines.
Secondly, I want to ask about consumer protection. The Minister's colleague in another place, Mr Jamieson, announced that political agreement was reached at the European Transport Council in December last year,
on a proposal for a regulation establishing common rules on compensation and assistance to air passengers in the event of denied boarding and of cancellation or long delays of flights".—[Official Report, Commons, 11/2/03; col. 625W.]
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I understand that a regulation, which will apply to all airlines operating within the European Union, will ensure a higher level of protection for passengers in cases of denied boarding, cancellation or delay. A ministerial letter detailing the outcome of the EU Transport Council was sent to the Parliamentary Scrutiny Committee on 10th December last year. Can the Minister tell us anything about those regulations and their date of introduction?
Finally, in the light of the current crisis in the Middle East, which will affect airlines, is the Minister aware of airlines being unable to obtain insurance cover? Have they made representations to the Government? If so, will the Government do what they did in similar circumstances two years ago; that is, arrange for additional cover so that airlines can continue to fly?
9.1 p.m.
Lord McIntosh of Haringey: My Lords. I am grateful to the noble Lord, Lord Rodgers of Quarry Bank, for introducing the subject. Clearly, it touches the personal experience of all of us. When the noble Lord, Lord Newby, was returning from Ancona and was surprised that the incoming flight was full, I was probably on one of them. My wife and son went to Ancona for £2.99, plus taxes, each way. That was rather good value.
I do not want to concentrate entirely on the cost. In economic terms, we should not be talking about low-cost airlines but about no-frills airlines. Not only is the cost different from the mainstream airlines, but the product is different. It is not just a matter of meals, free drinks and so forth; the no-frills airlines have discovered that some things which in other airlines are offered as a basis, people are willing to forgo for the sake of lower prices. That applies to meals, drinks, methods of ticketing, pre-booked individual seats and so forth. That is a marketing change; the airlines are selling a different product.
I believe that we should welcome such airlines. Anyone who opens up a new market in this way is performing a service for consumers. As the noble Lord, Lord Rodgers, said, it happened because of the introduction of the single aviation market in Europe in the early 1990s and, as he and other noble Lords have said, it is now hugely significant. More than one-quarter of the number of international passengers from the United Kingdom are on the no-frills airlines. Those airlines have opened up new routes from different places in Britain, which is most important. but also to different destinations in many parts of Europe. They have genuinely created a new market.
From that, the noble Lord, Lord Rodgers, went on to remark on the lack of reference to no-frills airlines in the CAA annual report and review. There is a good reason for that: the CAA—I shall deal with the Irish Aviation Authority later—does not recognise a difference between no-frills airlines and others. It is enormously important that it does not distinguish on the basis of cost. That is important from the point: of view of safety, from the point of view of the responsibility of the consumer protection group for

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commercial fitness and from the point of view of the responsibility of the group for the protection of consumers' interests.
As to safety, based on the air navigation order—the most recent one of 2000—the CAA safety regulation group issues air operator certificates to all airlines that fly from this country. There is no distinction between no-frills airlines and any other airline. The same audits and the same flight inspections are carried out. Until I came to look at this subject, I did not realise that CAA pilots fly with all of these airlines as main pilots, copilots and in the jump seat to observe compliance. It is the same for Ryanair. The Irish aviation authority adopts the same practice. Clearly that is an important protection.
Allegations and accusations have been made which have been referred to by the noble Lords, Lord Newby and Lord Rodgers. It is alleged that something is going wrong; that corners are being cut; that pilots have been disobeying air traffic control instructions. I am not saying that the noble Lords are making those allegations but they are reporting that they have been made. The noble Lord, Lord Newby, went so far as to say that there is no smoke without fire. He would not like that being said about financial institutions in the City of London.
All of these allegations have been investigated by the Civil Aviation Authority and found to be unjustified. For example, every time allegations about noncompliance with proper flight schedules have been investigated, the schedules have been found to be in accordance with European standards.
Any airline—whether high-cost or low-cost—cutting safety corners would run the risk of being charged with collective manslaughter. It would be commercial suicide to cut corners on safety.
Turning to the issue of commercial fitness, people ask why it was that Buzz continued to trade although it was losing 1 million euros a week. It was not criticised by the CAA consumer protection group for doing so because it had behind it a much larger organization—KLM—and, unless there is evidence to the contrary, it must be assumed that the parent company will take responsibility for it.
The consumer protection group concerns itself with commercial fitness; with the financial resources available; with the corporate structure; and with the probity of airline management. Again, no distinction is made between no-frills airlines and other airlines.
The decision of Ryanair to buy Buzz and the decision of Buzz to allow itself to be bought by Ryanair are commercial considerations. They cannot be considerations for the regulator, the Civil Aviation Authority. I understand that Buzz is now being reconstituted as Buzzaway and that it will be applying for an operator licence and an operator certificate. That will of course be under regulatory control.
Before I leave Buzz and Ryanair, I must refer to the speech of the noble Lord, Lord Clinton-Davis. He referred with some feeling to the bad employment relations between Mr. O'Leary and the pilots and
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presumably, other employees of Buzz and Ryanair. Again, these are not regulatory issues, but matters of employment relations. They are not matters in which the Government can intervene on an individual basis.
In so far as competition is concerned, that, of course, is a matter for Her Majesty's Government. The Office of Fair Trading has called for comments from interested parties. The Department for Transport and the Civil Aviation Authority have responded to that call. The OFT mergers panel will decide whether there are competition concerns and whether the matter should be referred to the Competition Commission. These are proper considerations of the Government and those responsibilities are being taken seriously.
I understand the dismay at the redundancies, especially the dismay of those who expected to take particular flights from particular places in the United Kingdom to particular places in Europe and found that they no longer existed. These are commercial considerations, however, rather than matters of regulation.
The consumer protection group of the CAA runs ATOL. It is a historic fact that under the EC package travel directive, ATOL applies only to bookings made on packages. If, for example, bookings are made for car hire and hotels on the Internet by somebody following a link between the airline and the car hire company, that does not count as a package and cannot be covered by ATOL. There is no prospect of the protection provided by ATOL being extended. That would have to be done by insurance.
I want to reinforce what I said about Ryanair. It is entirely properly regulated by the Irish Aviation Authority because its registered office and its business management—and, therefore, its principal place of business—is in Dublin, although it operates largely from Stansted. Ireland and the United Kingdom are both signatories to the Chicago convention and are both subject to the ICAO, which carried out a thorough audit of the Irish Aviation Authority in 2001 and awarded it a clean bill of health. I can therefore give the assurance that all the protections that exist for passengers of UK airlines from the Civil Aviation Authority also exist for passengers on Irish airlines under the Irish aviation authority. They work to the same European standards as we do.
I was asked about whether air passenger duty is damaging for low-cost airlines. I do not think that I can seriously be expected to comment on air passenger duty in the weeks running up to the Budget—or on any decisions that the Chancellor might make.
The noble Lord, Lord Rodgers, asked about the compliance reports on the voluntary commitment to airline service standards. They are carried out on a relatively voluntary basis because they are about voluntary commitments. However, the Government are satisfied that the CAA reports covered all the relevant facts and were a fair reflection of the progress made by the airlines.
The noble Viscount, Lord Astor, asked about two particular matters. The first was denied boarding compensation. As he said, the proposal to improve

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compensation was agreed at the Transport Council in December. The next step is for the proposal to be returned to the European Parliament for second reading. It is unlikely to become law before the end of the year, but when it does we shall have to transpose it into national law, including designating an enforcement body.
The noble Viscount also asked about terrorism insurance. As he knows, the market for commercial war risk insurance has been revived after the
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withdrawal of cover following September 11th There is no clear evidence on whether the conflict in Iraq will affect that, but the Government are monitoring the position daily.
I hope that I have dealt with the issues that were raised in this short but valuable debate. I thank all noble Lords who have taken part.
House adjourned at sixteen minutes past nine o'clock.