Lords Sitting of 28 April 2004

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

CAP: Single Payment Scheme
Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer asked Her Majesty's Government:
What will be the effect of excluding orchards from the single payment scheme to be introduced under the common agricultural policy reforms from 2005.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, land used for permanent crops, including orchards, cannot be used to claim for the new single payment. This rule applies throughout the European Union. But existing advice from the Commission does allow land in dual use—for example, traditional grazed orchards—to be considered as forage rather than orchard land, subject to certain conditions. We will consider claims for the single payment on their merits. This should help to reduce the apparent incentive to grub up traditional orchards, an incentive which has been seriously exaggerated and is in most cases illusory.
Baroness Miller of Chilthorne Domer: My Lords, in thanking the Minister for that reply, I must declare an interest in that my brother-in-law owns a substantial acreage of orchards. I hear what the Minister says—that the Government intend to look at each claim on a case-by-case basis—but can he assure the House that they will look in a very positive manner at giving every incentive to traditional orchards? Over the years we have encouraged their growth at both local authority and government level, not only for reasons of biodiversity but also in order to eat the excellent fruit they produce. I do not believe that the Minister's reply is yet positive enough and that everything will be done to maintain orchards rather than giving incentives for them to be grubbed up.
Lord Whitty: My Lords, I endorse the noble Baroness's view of the quality of English apples, particularly those from Somerset—and, indeed, her brother-in-law's own apples—and the cider which comes from some of them. Regrettably, there has been a long-term decline in orchards and the return that one can receive from them. But the reports that this new system—which of course has not applied and will not apply to orchards anywhere else—will be a significant incentive for farmers to grub-up over and above what they would otherwise have done are wrong. Most traditional orchards are already under countryside stewardship schemes, which will give them a substantially better return than the incentive under the
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single farm payment, even at the end of eight years. Much of the coverage of this issue and the reaction in the industry has been exaggerated.
Lord King of Bridgwater: My Lords, this is obviously an important issue in Somerset and more widely. As the Minister knows, it has been the intention recently to encourage the establishment of more orchards so that we can meet a growing home demand, particularly for cider production. The noble Lord has not given a categoric answer that there is no economic disincentive now to the establishment of orchards. Can he confirm that if people apply to go into countryside stewardship it is not automatic that they will get it? Can he give a real assurance that if people seek to apply they will be able to get it for orchards?
Lord Whitty: My Lords, two-thirds of traditional orchards, which are the focus of most concern here, are already in countryside stewardship. The new system which will replace countryside stewardship schemes will also have an orchard dimension to it, for which most traditional orchards will be eligible.
Lord Harrison: My Lords, in replies given on 22 April to a series of Written Questions that I put down in the House, my noble friend stated in one Answer that the census data are not collected for traditionally managed orchards; and in a second Answer he stated that the countryside stewardship scheme now provides funding of £600,000 a year for agreements covering two-thirds of the area of traditional orchards. That suggests that the two replies are contradictory. I reiterate the point made by the noble Lord, Lord King. What will happen to the one-third of traditional orchards which are not capable of drawing money and support from the countryside stewardship scheme? Does my noble friend recognise that the scheme itself is competitive and that that means inevitably that some will fall outside of the fence?
Lord Whitty: My Lords, it is competitive, but the fact is that two-thirds of traditional orchards have managed to achieve it. My noble friend is referring to two different issues. Two-thirds of orchards are covered—the volume is more difficult to ascertain—and there is no reason at all why a similar or better percentage should not be covered by the new, higher level agri-environment schemes which will succeed countryside stewardship. Moreover, there will be a few traditional orchards which are already classified as grazing land, as I said in my original Answer. They are therefore almost certainly IACS registered and, in most cases, will be eligible for the single farm payment.
Lord Mayhew of Twysden: My Lords, does the Minister, who came to the National Food Show the other day, recognise that more apples are grown in Kent than were probably ever grown in Somerset? Is not the point that if an orchard is grubbed under the new scheme, no matter how far into the distance and

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no matter what alternative use it is put to, it will not be eligible for any subsidy scheme then applying to that use elsewhere? Will the Government reflect on the possibility of making the national reserve, which I understand to be created under the scheme, available to orchards in those circumstances?
Lord Whitty: My Lords, the noble and learned Lord will recognise that much of the Kentish production of apples would not fall nowadays, perhaps regrettably in some ways, under the definition of traditional orchards. They would be more commercial orchards, for which an incentive of £20 per hectare in the first year and slightly more than £200 in eight years' time is not much compared with the return that would be generated from fully commercial, closely planted orchards. I do not think that many of Kent's most competitive apple producers will be tempted to go down that road in any case.
As to the national reserve, there are circumstances in which we think we may be able to use the national reserve where there is a temporary cultivation to replace existing orchards, which can be taken out. We are in discussion with the National Farmers Union and the European Commission about that. As the noble and learned Lord will know, consultation on the whole issue of the national reserve is taking place at the moment.
Lord Livsey of Talgarth: My Lords, does the Minister accept that the taste of British apples is absolutely superb? Should he not include orchards in the single payment scheme to help to tackle the problem of child obesity? Surely the Government are promoting the consumption of fruit by children in schools. I come from the Welsh border. A lot of apples are grown both there and in Herefordshire. As the Minister has said, he could designate many orchards as grazing land, but he should make a firmer statement and include orchards in the single payment scheme by that method. After all, in many instances, sheep graze the land and produce meat; and children eat the apples, thereby grazing them as well.
Lord Whitty: My Lords, where the orchards are primarily grazing land and are registered under I ACS, it is likely that they would he in the single payment scheme. If the owners think that is desirable, they could be registered under the single payment scheme. In response to the noble Lord's opening remark, I obviously endorse the taste of English and even the odd Welsh apple.
Noble Lords: Oh!
Lord Whitty: Well, my Lords, there are a few that spread just across the border, but not very far. It is important that all of us help the public sector in its own procurement policies. Its Fresh Fruit In Schools programme is helping with that. All of us who ever issue a catering contract should specify apple juice
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rather than orange juice, because then there is at least a 50 per cent chance that the juice will come from an English apple.

South Africa: Poverty and Unemployment Reduction
2.45 p.m.
The Earl of Sandwich The Earl of Sandwich asked Her Majesty's Government:
How they will assist the new South African Government in reducing acute poverty and high unemployment.
The Lord President of the Council (Baroness Amos): My Lords, despite progress since 1994, around 11 per cent of South Africans still live on less than one dollar a day. More than 5 million are infected with HIV and almost 40 per cent are unemployed. The Department for International Development will spend around £30 million this year on programmes to help South Africa to tackle these problems. These include support to improve the quality of education, and help to create secure livelihoods and employment and to tackle HIV/AIDS.
The Earl of Sandwich: My Lords, I am grateful to the noble Baroness. I am sure that she would agree that successful programmes such as the Black Economic Empowerment programme have rightly contributed to the ANC's increased majority in the South African elections. However, when it comes to the rural areas, does she accept that the present policy of land privatisation is doing nothing to help the very poor and the landless—who, as she says, are contributing to the 40 per cent unemployment in urban areas? Cannot our DfID, with all its expertise, give advice which I am sure would be welcome to the ANC on this subject?
Baroness Amos: My Lords, I entirely agree with the noble Earl, Lord Sandwich, that the Black Economic Empowerment programme in South Africa has contributed a great deal. On land privatisation, he will know that the Government of South Africa are committed to a fair, legal and transparent land reform process. Good policies are in place, but progress has been extremely slow. DfID has proposed support for the Department of Land Affairs which includes helping it to resolve some of the longstanding land claims of labour tenants on commercial farms, many of whom are in Kwazulu-Natal. We are at a very early stage of discussion with the South African Government on that issue.
Lord Astor of Hever: My Lords, following the noble Earl's question about land reform, are Her Majesty's Government concerned at the emergence of a pressure group, the Landless People's Movement, which is threatening farm invasions if more progress on land reform is not made quickly?
Baroness Amos: My Lords, the South African Government themselves are concerned about this issue. I understand that many of the claims relating to urban areas have been settled and that the problem relates to rural areas. As I said in my previous answer, good policies are in place, but progress has been extremely slow. We would like to work with the South African Government on this issue, using some of our technical expertise.
Lord Hughes of Woodside: My Lords—
Baroness Northover: My Lords—
Noble Lords: This side!
Lord Grocott: My Lords, I should not really need to adjudicate; there is plenty of time. We have heard neither from the Labour Benches nor from the Liberal Democrat Benches, so we can do it in neat order.
Lord Hughes of Woodside: My Lords, in congratulating the African National Congress on its magnificent election victory, is my noble friend aware of its pledge to redistribute 30 per cent of agricultural land by 2014, combined with comprehensive assistance to emergent farmers? Can she say what discussions will take place between our Government and the South African Government on the technical and practical assistance we can offer to produce this very worthwhile redistribution?
Baroness Amos: My Lords, my noble friend is right. The ANC's original election pledge was to transfer ownership of 30 per cent of agricultural land within 15 years, which would have taken it to 2009. However, the deadline has recently been put back to 2015. We are concerned that, at the current rate of progress, the South African Government are unlikely to meet even that delayed target. That is why we have offered our support on land issues. That support is still at the design stage. We are in discussions with the South African Government, particularly the Department of Land Affairs, about ways in which we can help them to resolve some of those long-standing issues.
Baroness Northover: My Lords, I echo what the veteran campaigner, the noble Lord, Lord Hughes of Woodside, said in welcoming the results of the election. We on these Benches express our congratulations to the South African people on their successful transition from apartheid to democracy. However, does the noble Baroness share my worry—she clearly does—that, over the same decade, the AIDS pandemic has taken hold of South Africa so that the incidence of HIV among young people has increased from I per cent to 20 per cent? Can she tell us more about what DfID is doing to help South Africa in this crisis, what proposals the department favours for
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the support of the increasing numbers of AIDS orphans, and when it will publish its strategy for HIV/AIDS?
Baroness Amos: My Lords, I join the noble Baroness, Lady North over, in congratulating the people of South Africa, particularly on holding peaceful, free and fair elections.
On the issue of HIV/AIDS, last year the Government of South Africa announced a comprehensive plan for the care and treatment of those infected, including access to anti-retroviral therapy. The noble Baroness will know that that was an issue of some controversy within South Africa. We are supporting that programme as part of a £30 million commitment agreed last year to help South Africa to tackle HIV/AIDS. Indeed, I myself visited one of the projects in Johannesburg when I visited South Africa last year.
DfID's own HIV/AIDS strategy has been the subject of consultation and discussion with a number of community organisations. I shall write to the noble Baroness, if I may, when I have a much clearer idea of the publication date.
Lord St John of Bletso: My Lords, will the Minister elaborate on what role Her Majesty's Government are playing with the World Trade Organisation to assist in the removal of trade barriers, in particular the agricultural subsidies that are having such a crippling effect on African exports and obviously have a knock-on effect on poverty and unemployment? When Her Majesty's Government take up the chairmanship of the G8 summit and the presidency of the European Union next year, what role will they play in ensuring that African development issues such as poverty and unemployment are put back on the central stage of the agenda of the industrialised nations?
Baroness Amos: My Lords, on the issue of trade barriers, as the noble Lord will know, we have worked tirelessly within the European Union, and within the WTO more broadly, to ensure that this trade round is a development round. We were not successful at Cancun; for a number of different reasons, those trade talks broke down without agreement. We are back trying to talk with our development partners and our developed countries partners on these issues. My right honourable friend the Secretary of State for Environment, Food and Rural Affairs was recently in Brussels, negotiating further with our European counterparts on some of those issues. Related negotiations on issues such as sugar are ongoing. So we remain committed to removing trade barriers and breaking down agricultural subsidies—although I have to say that it is not easy.
As the noble Lord will know, Africa is one of the priorities that my right honourable friend the Prime Minister has set for our G8 chairmanship. In addition, my right honourable friend has established the Africa Commission.

Queen's Counsel: Appointments
2.54 p.m.
Lord Goodhart Lord Goodhart asked Her Majesty's Government:
When they will announce whether there are to be any further appointments to the rank of Queen's Counsel.
The Secretary of State for Constitutional Affairs and Lord Chancellor (Lord Falconer of Thoroton): My Lords, before I answer the Question, could I declare an interest? I myself was a QC, my wife is a QC and my brother-in-law is a QC.
We hope to make an announcement soon. The consultation did not produce consensus on the way forward. We have been in discussion with professional bodies with a view to providing a sensible way forward which meets the issues raised in the consultation and, crucially, provides a solution in the interests of the public.
Lord Goodhart: My Lords, might I start by being entirely out of order in congratulating the noble Lord, Lord Renton, who has just reached the 50th anniversary of his appointment as a QC?
It is now a year since the noble and learned Lord, Lord Irvine of Lairg, announced the suspension of the 2004 Silk round in order to enable the system to be reviewed. Is the noble and learned Lord the Lord Chancellor aware, as I am sure he is, that the delay has been a matter of considerable concern to the profession as a whole and, in particular, to those who would have applied for an appointment this year, had the Silk round taken place? Can he give us any information as to the direction in which the Government are moving, whether it is towards simple abolition, to the creation of some revised form of public appointment or to inviting the legal profession to award its own kite marks?
Lord Falconer of Thoroton: My Lords, I join the noble Lord, Lord Goodhart, in congratulating the noble Lord, Lord Renton, on 50 years in Silk. I congratulate, too, the noble Lord, Lord Thomas of Gresford, who has had 25 years in silk. They are having a party today in the Lord Chancellor's residence to celebrate 75 years in Silk. I hope that my declaration of interest and that congratulation do not give the impression that this is too incestuous a place with regard to QCs.
Yes, I am aware of the concerns in relation to the prolonged period of consultation and the failure so far to decide what the policy is. It would be wrong at this stage for me to give only half an answer. We should give an answer as quickly as possible but, as I said in my Answer, the answer must be ultimately judged by what is in the interests of the people who use legal services rather than those who provide them.
Lord Renton: My Lords, while thanking the noble and learned Lord and the noble Lord, Lord Goodhart, for their kind references, may I put two serious points—both reasons for retaining Queen's Counsel—to the noble and learned Lord the Lord Chancellor? First, if a barrister becomes a very busy junior with a tremendous amount of paperwork, it is impossible for him to carry on with that way of life within the profession. It is much better that he should become a QC. The other reason—the noble and learned Lord the Lord Chancellor must surely already have discovered this—is that making judicial appointments, from High Court and Crown Court judges right down to minor judicial appointments, is much easier if there is a difference within the profession, and that is done by the presence of Queen's Counsel.
Lord Falconer of Thoroton: My Lords, I hope that at some stage in the course of this debate, somebody who either is not currently a QC or was not once a QC plays some part.
As for the points that the noble Lord has made, yes, those are arguments in favour of retention. However, he will be aware of what the OFT and the Commission for Judicial Appointments said about the inconsistency in the way in which appointments were made and the difficulty of making judgments in relation to the effect on the cost of provision of legal services. In reaching a solution in relation to the role of QC, we need to address those arguments as well as the arguments referred to by the noble Lord, Lord Renton.
Lord Davies of Coity: My Lords, I certainly agree with my noble and learned friend the Lord Chancellor that a decision has to be based on how the users rather than the providers view the situation. To what extent and how widespread is the objection from current users?
Lord Falconer of Thoroton: My Lords, one purpose of the consultation that we put in place was to try to obtain the views of users. There was only a limited response in that regard. People's individual experience of using the law when they have a QC is often extremely favourable, but there are wider questions about the effect on cost and about how we ensure that a mark such as QC preserves quality in the long term.
Lord Mackie of Benshie: My Lords, will the noble and learned Lord tell us what will happen to the present Queen's Counsel if no more are appointed? Will they all he unfrocked?
Lord Falconer of Thoroton: My Lords, in the course of the consultation, that particular issue was raised.

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However, I wonder whether it would be sensible for someone to call himself, for example, the noble Lord, Lord Renton, QC (Ex).
Lord Selsdon: My Lords, will the noble and learned Lord remind us how many QCs there are in this House and in the other place and whether we have enough or too many?
Lord Falconer of Thoroton: My Lords, I think that might be a matter for your Lordships' House. The number in this House is uncountable.

Sudan: Darfur
3 p.m.
Lord Avebury Lord Avebury asked Her Majesty's Government:
Whether, in view of the current situation in Darfur, Sudan, they will consult other members of the United Nations Security Council with a view to agreeing a resolution under Chapter VII of the charter.
The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, on 8 April the Sudanese Government, the Sudan Liberation Movement and the Justice and Equality Movement signed a ceasefire agreement. Our priority now is to encourage the parties to implement that agreement. Given this progress, we do not consider that a resolution under Chapter VII would be appropriate but we remain in close contact with other Security Council members about Darfur.
Lord Avebury: My Lords, does the Minister agree that the ceasefire agreement is not working and that the massacres and destruction of property have continued? Will she say whether the report from the special envoy of the Human Rights Commission, who finally managed to enter Darfur on Saturday, will be published and whether it will be presented to the Security Council? If they are not prepared to take decisive measures, as the Secretary-General suggested more than two weeks ago, would it not be desirable that there should be a coalition of the willing to stop the ethnic cleansing in Darfur and to prevent genocide?
Baroness Symons of Vernham Dean: My Lords, I cannot altogether agree with that analysis. The noble Lord said that the ceasefire is not holding. As I understand it, the situation on the ground is now more stable and there is access for humanitarian agencies, which we hope are now starting operations. However, I agree with him that the situation is enormously fragile and very difficult. We believe the right approach is to prioritise the monitoring of the ceasefire agreement on the ground. That is the priority rather than going back to the United Nations under Chapter VII, which we think might jeopardise the ceasefire agreement.
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I ask the noble Lord to look seriously at the downside of going back on this issue, which could undermine the ceasefire agreement. I understand that the human rights team from the UN is planning to visit Darfur. We shall be very interested in its recommendations and we support the calls of the United States for a special session of the commission on human rights in Darfur, once the UN team has returned.
Baroness Whitaker: My Lords, if the allegations are true that it was the Sudanese Government who manoeuvred the United Nations reports on human rights abuses in Darfur off the agenda of the UN Human Rights Committee, this is a matter of great regret. Can the Minister think of what the UK Government could do to strengthen the United Nations Human Rights Committee?
Baroness Symons of Vernham Dean: My Lords, there have been a lot of different and contradictory views about what happened over the report at the UN. At one point, the EU was criticised by certain NGOs. The EU sponsored a more condemnatory draft resolution but, rather than lose the vote again, as we did last year, as I am sure the noble Baroness recalls, we decided that it was better to vote in the way that we did. In any case, that has delivered a better outcome than last year, when the EU resolution was voted down, which ended the mandate of the special rapporteur on human rights in Sudan. So I think that the position has been strengthened this year.
Lord Astor of Hever: My Lords, will the Government be contributing to the recent appeal of the United Nations for 115 million dollars for the Darfur region?
Baroness Symons of Vernham Dean: My Lords, I am sure that all these appeals will be considered by my colleagues in the Department for International Development. In the expectation of a peace agreement, the UK has allocated some £35 million to Sudan for the year 2004–05. In addition, we have allocated some £3.5 million from the Africa conflict prevention pool.
Lord Hylton: My Lords, the Minister rightly mentioned supervision of the ceasefire. Can she confirm that there are monitors available to go in straightaway and that they have sufficient transport and aircraft to enable them to do a good job?
Baroness Symons of Vernham Dean: My Lords, I cannot confirm that there are people ready and waiting to go. I can say that the top priority of the Government of the United Kingdom is to ensure that the monitoring mechanism is available to us as soon as possible. If I have any more information on the readiness of a monitoring group, I shall write to the noble Lord, Lord Hylton.
Lord Rea: My Lords, my noble friend mentioned the ceasefire. There are on-going negotiations in

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Naivasha, Kenya, on the long-standing conflict between the Sudanese Government and the SPLA. Is it not a tragedy that the conflict has now transferred to the Darfur region? Would it not be logical to link the two conflicts in negotiations to resolve them?
Baroness Symons of Vernham Dean: My Lords, I am bound to say to your Lordships that there was always conflict in Darfur. We discussed this matter in your Lordships' House on 15 and 28 January and on 9 February. At every point we have distinguished between the overall position in Sudan and the particular and very nasty differences in the situation in Darfur. As far as the main peace talks are concerned, they are continuing and we hope that a framework agreement will emerge in the next few weeks. It will then take some time to tie down the details before a comprehensive package can be signed. I say to my noble friend Lord Rea that I do not think it is sensible to try to stop those talks, which are showing some good progress, in order to pull in the Darfur peace talks. We should progress those talks and hope that we can work hard to reinforce the ceasefire in Darfur.

Rainsbrook Secure Training Centre
3.6 p.m.
Lord Elton Lord Elton asked Her Majesty's Government:
What disciplinary steps have been taken following the death in custody at Rainsbrook Secure Training Centre, on Monday 19 April, of 15 year-old Gareth Myatt.
Lord Bassam of Brighton: My Lords, the staff directly involved have been transferred to duties not involving contact with children. It would, in view of the circumstances, be inappropriate to suspend or discipline any staff without prima facie evidence that they had acted in an inappropriate, unprofessional or criminal manner. However, if, following police investigations, further concerns are raised, the physical control in care certificate would be revoked from the staff in question. Staff without a valid certification are not allowed to practise in any childcare establishment.
Lord Elton: My Lords, I thank the noble Lord for that reply. I recognise the constraints under which it was delivered. But whatever the cause of the death of this child of 15, who stood under five feet tall, is it not clear from the police report on the event that it followed his violent resistance to being told to go to bed at nine o'clock in the evening? It followed the application by staff of what the report itself describes as,
"their normal techniques of physical control and care",
during which he lost consciousness, never to recover it. In view of the grotesque disproportion between this child's death and his loss of temper, and the worryingly
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large number of other juveniles injured in other establishments, as well as that one, during the use of those "normal techniques", do not the Government agree that the time has come for a fully independent and thorough review of the training of staff in juvenile establishments, the use of restraints and control and the use of solitary confinement?
Lord Bassam of Brighton: My Lords, I want to record my deepest sympathy at the sad death of Gareth at this establishment. I am sure that that sympathy will be shared by your Lordships' House.
The noble Lord refers to a report that, as far as I am aware, is not yet a public document. Inquiries and investigations are continuing. It would be quite wrong of us in your Lordships' House this afternoon to prejudge not just a police inquiry but inquiries that will properly be carried out by the social services department, and the final inquiries that will be carried out by the Youth Justice Board.
The use of restraint and control methods is very carefully monitored and it must be understood that the physical control in care technique that is used is designed primarily for use in secure training centres. It is based on risk assessment and is non-pain compliant. I understand the concerns that the noble Lord raised about its use elsewhere, perhaps in the rest of the prison estate, but this particular establishment has a very good track record regarding the way in which it deals with and treats young offenders. It deals with them with great care. This is a tragic incident and I do not think that we should prejudge it.
Lord Dholakia: My Lords, the figure of two deaths a week on average in our prisons at the present time is surely unacceptable. Will the Minister confirm that the police investigation is limited to determining whether criminal charges are brought? The coroner's inquest is likely to tell us very little other than the cause of death. Will the Minister consider the suggestion made by the noble Lord, Lord Elton, that a public inquiry based on similar lines to that of the Lawrence inquiry conducted by Sir William Macpherson would be likely to yield much more information on how we fail in our care of people in custody?
Lord Bassam of Brighton: My Lords, in this instance noble Lords should focus on exactly what this centre provides. It is a secure training centre designed particularly for those who are vulnerable. The death that we are discussing was a great tragedy. Three investigations are currently being undertaken. The noble Lord asked that attention should be focused on the control technique that was applied. The Youth Justice Board has commissioned an inquiry to deal specifically with that issue. It is right and proper for that inquiry to be completed. Of course, it is right that the police thoroughly investigate—they are doing so—

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the incident itself. They and the Crown Prosecution Service will form a view on whether or not criminal charges will then follow.
Baroness Stern: My Lordsߞ
Lord Campbell of Alloway: My Lordsߞ
Noble Lords: Cross Bench!
Baroness Stern: My Lords, is the Minister aware that according to the Howard League for Penal Reform these control and restraint procedures were used 3,615 times on children in prison over a 22-month period and that 296 children were injured in those incidents? Now we have this tragic death. Is it not now time to accept the recommendation of the Joint Committee on Human Rights that these children should be moved out of Home Office-controlled prison establishments and into homes run under the care system?
Lord Bassam of Brighton: My Lords, it is very hard for us in your Lordships' House to form such a judgment. I quite understand the concerns that are expressed about this particular control technique. It is designed specifically for use in secure training centres and in those premises that are run by local authorities as secure children's homes. A number of allegations have been made about the high rate of physical injuries but they relate in particular to youth offender institutions within the prison estate. My understanding is that the number of injuries sustained in secure training centres is very low—one or two per establishment. The most recent unpublished report of the Social Services Inspectorate covering Rainsbrook Secure Training Centre states:
"The general trend of incidents of physical restraint was on the decline. In the main young people said, when it occurred, physical restraint was justified and sensitively done".
Physical restraint is necessary not just to protect staff and other children in care but also to protect those involved in the incident. My understanding is that it is only in extremis that this particular technique is used. The principle behind it is to ensure that no pain is inflicted and that restraint is effective so that the situation can be calmed down. The centre that we are discussing and the staff within it have attracted great praise for the way in which it works.
The Lord Bishop of Worcester: My Lords, I express appreciation to the Minister for beginning one of his answers with an expression of condolence for what is first and foremost a terrible human tragedy. If we do not do that, we easily collude with the notion that—although I do not attribute this to any noble Lord who has spoken—people who die in custody or under restraint are in some way not human beings and that their families do not have the same feelings as others.
Behind all of this does there not lie the need for a much more profound investigation of the effect on young persons of finding themselves in a secure
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institution, and whether we need a far more wide-ranging and imaginative investigation of what can be done with children who find ordinary social interaction difficult or impossible? There is a real danger that incarcerating them simply makes their situation worse and leads to the kind of behaviour that provokes the response about which concern has been expressed in the House.
Lord Bassam of Brighton: My Lords, I understand where the right reverend Prelate is coming from. I sympathise with the general thrust of his comments. However, the secure training centres in particular are designed to assist vulnerable young people. From everything that I have read of Gareth's background, he was certainly a very vulnerable young man. Many of those who enter secure training centres come from chaotic family backgrounds and need to be dealt with sensitively. That is why the secure training centres are designed to work in the way in which they do. They are very successful institutions.
Of course, we should exercise imagination. Incarceration should be only a last resort. However, sometimes it is appropriate. When all is said and done, in considering tragic cases such as the one that we are discussing, we should remember that the decision to incarcerate young offenders is not taken lightly and is done for society's and their own good.

Business of the House: Debates this Day
Baroness Amos: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Lord Sheppard of Didgemere set down for today shall be limited to two hours and that in the name of the Lord Brooke of Sutton Mandeville to three hours.—(Baroness Amos.)
On Question, Motion agreed to.

London
3.16 p.m.
Lord Sheppard of Didgemererose to call attention to the governance of London; and to move for Papers.
The noble Lord said: My Lords, I welcome this opportunity to hear a range of views from across the House on London and its governance. Collectively this House has immense experience on just about every facet of life in London.
I am an East-Ender by birth. Over recent years I have, on a voluntary basis, been deeply involved in several initiatives aimed at making London a better place in which to live, work, invest and visit. Accordingly I declare my interests as founder president of London First and as a director of the London Business Board, the East London Business Alliance, the Central London Partnership and other similar bodies. I am also deeply involved in London's

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important higher education sector. I declare my interest as Chancellor of Middlesex University and a governor of the London School of Economics.
My comments this afternoon are personal ones. My question is: what can we do to make the government of London more effective and better value for the public money involved? I am talking about organisational structures and management processes. I am not talking about party politics that seemed to be the main make-up of the debate on London which took place last week in another place.
I am, of course, concerned about why decisions regarding London take so long. This is true of the Labour Government's debate regarding the Mayor of London and the debate about the London Underground which seemed to go on for ever. It is also true, though, of the previous Conservative administration and the present Labour administration. I refer to the 15 years of indecision with regard to Crossrail.
I would like to stress that I am not criticising any individual. London benefits from having many hardworking and able officials as well as dedicated politicians from all parties.
Before I discuss governance, I shall consider London itself. London is, of course, a great economic success. This is vital not only to Londoners but also to the whole of the UK. The problem with being a global leader is that one must keep winning. Any inefficiency or indecision on tackling London's needs would lose London its leading status fairly rapidly over a period of years.
Of course, good governance alone will not give London continued success. It is the actions and attitudes of 7 million Londoners that are critical. However, any inadequacies on education, training, transport and law and order can negate success driven by those individuals, so also can the ongoing failure of all political parties over many decades to achieve inclusiveness in London's inner suburbs. If that continues, it will be a threat to the future of London's economic prosperity.
The overall task is, of course, a considerable one, given the size and complexity of London. The GDP is bigger than that of either Greece or Portugal, to take two examples. The population is bigger than those of Scotland and Wales put together. Public spending in London is only 30 per cent of GDP, compared with 41 per cent for the UK as a whole. London makes a major net contribution to the national Exchequer. Estimates vary, depending on which economist one talks to, between £7 billion and £20 billion per annum net contribution to the rest of the UK. I suspect that the answer is nearer the £20 billion. Whatever it is, either figure is big enough to deal with the present infrastructure shortages that London has.
London's leading international position in financial and professional services, together with its growing strength in creative and knowledge-driven industries, gives London high productivity. In fact, London focuses on the provision of high-value added services,
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both nationally and internationally. A win for London is, however, a win for the UK, be it on inward investment or simply straight prosperity. London's main competitors are not the rest of the UK, but overseas cities around the world.
So far, that has sounded like good news for London, but London is obviously not all good news. We must maintain and improve the quality of life in London. Its success acts as a magnet for people within the country and from overseas. Today, there are half a million more Londoners than there were 15 years ago. That puts great pressure on our schools, housing. hospitals and transport. The answers are not easy ones, whatever political party happens to be in power. We need more housing, for example, but we need to keep our green areas both in and around London and to avoid being overwhelmed by a sea of concrete.
Skills shortages leave many individuals excluded in London. They also leave certain sectors, such as construction and the hospitality industry, short of the staffing that they require. In a decade of national employment growth, London has failed to cure the unemployment problem of its inner-city areas that has been around for decades, perhaps centuries. Skills shortage is not the only problem, and things can get more complicated. If we look at the cost of childcare in London, it is not surprising that the proportion of London's population in employment is lower than that of any UK region, except the north-east.
Let us turn back to the governance issue and the huge task that London has. The abolition of the GLC in the 1980s and the resultant period without regional government brought uncertainty, but also some benefits. The abolition itself demonstrated that London needs a regional government that tackles London issues, not one that tries to compete with the elected national government. The hiatus encouraged boroughs to be more self-reliant, but also to work collectively in smaller groups on subjects such as waste. It very much encouraged business to become involved. I admit that that was partly through desperation, but it became a determination for business and the voluntary sector to become more involved with local government in tackling some issues in London.
The Greater London Authority Act 1999 took forward the governance of London, with a resultant clearer voice for London and an ability to think and act pan-London. However, it left London with a very complex and at times slow-moving governance process, divided between central government, the Mayor and the GLA and the boroughs. It also left London with very complex management processes on many subjects such as, to name but two, policing and the commuter rail services. It was concern about the complexity of London's governance that led London First to undertake an extensive consultation with its members and other parties, looking at how governance could be improved. The result was the publication of Who is Responsible for London, which contains 41 recommendations. Noble Lords will be pleased to know that I shall touch on only a few of them this afternoon.

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As we all know from our own experience, be it in business, local government or wherever, it is often more difficult to improve success than to turn round failures. The newspaper headlines are about people turning round failures, but the really difficult thing is to take a success and make certain that it continues. Whatever we do in changing our governance in London, we must not lose the will that Londoners have to succeed—the drive for both their individual and collective success.
As I am talking from the Opposition's side of the House, albeit from the very back of the Back Benches, noble Lords may not be surprised that I believe overall that one answer is to have less government. That will give Londoners the opportunity to use their personal initiative and help to build London's success. Of course, side by side with that, there has to be a real drive for equality of opportunity in London. We cannot continue to have major exclusion.
Whatever government activity is essential—clearly, there are some essential government activities—it should be as close as possible to the people. The electorate must understand the government processes and actually contribute and try to add value to them. Central government, whatever their colour, should therefore accordingly devolve all tasks in London to the lowest level commensurate with effective operation. If the Government believe in devolution, they should practise it. That means that, to take one example, the programme delivery function of the Government Office for London should be transferred to within London. That will enable the office and its highly talented and knowledgeable team to focus on strategy and not to get lost in the detail.
That need to concentrate on strategy and delegate the detail in London is also required by the Government themselves. The Government and their officials need to understand fully the case for London. They do not have to do everything themselves, which they have to understand. To achieve that, I suggest that the Government go back to what was practised in the previous Conservative governments, which was to have a senior Minister acting as a voice for London within the Cabinet. The post should be at Cabinet level. The reality of London must also be recognised within each department, especially the spending departments and, above all, the Treasury. From my experience, that is not always true at present.
The case for a Cabinet champion is well illustrated by the saga of Crossrail. Business has been asking for more than a year for serious dialogue on funding and even willingness to make a contribution. We have spoken to the Prime Minister, the Treasury, the spending departments and so on, but are still waiting. The independent review of the project, led by Adrian Montague, was of a high standard, I think. I have not been allowed to see it yet, but I have heard so much about it, and he is certainly of a high standard. It was completed in February. When will the Montague report be published? When will the Secretary of State for Transport make a definitive statement about Crossrail?
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I shall step back from that. On most issues in London, more value for money would be achieved on future spending if strategic priorities were set centrally but specific projects were built from the bottom up. Probably the best examples of that are the huge amounts of money spent on economic regeneration and training. Greater reliance, together with tough targeting, should be based on the London Development Agency. The agency was set up under the GLA Act, so why do we not get it to earn its living? Doubtless the Minister will tell us that government projects are joined up and built from the bottom up. All I can say is that it does not quite look like that, out on the field.
On all public spending or subsidy, I recommend that the various appropriate levels of local government in London be much more involved, to make public accountability more obvious and ensure flexibility and more relevant application to local needs. That applies whether the budget is held by a spending department, an agency, a quango or whatever. Incidentally, a better understanding of London's needs by regulators would also be a big advantage, because of their importance.
I shall move on from the subject of central government versus London local government to look within London. Should we tackle the issue of the number of boroughs that exist? I would suggest that that is not a high priority. We would do much better to concentrate on particular issues. A good example is the Traffic Management Bill, currently in Grand Committee, where the definition of a "local" versus a "strategic" road would take us forward and define those roles within London. Of course, whenever one makes a decision on that one gets into difficulties, as there are many excellent boroughs carrying out good work on roads, including the Corporation of London in its role as a borough, and to that extent we must he careful that we do not lose those advantages.
The Association of London Government and the GLA should encourage the exchange of best practice between boroughs. We have some excellent boroughs and some terrible boroughs in terms of efficiency. We should also encourage the boroughs to work together in local groupings and that is particularly true in subjects such as planning—where there is a chronic shortage of good planners—and education.
We should also encourage business to work with all levels of government, including local authorities in the London area. Progress on business improvement districts has taken a long time, but is at least now under way and will be good news.
Finally, turning to the important subject of funding, currently 90 per cent of London's revenues are raised by the Treasury. I have two thoughts on that subject— which come from the business community in the London First report and not from our Mayor.
First, should business rates in London go directly to the GLA with a corresponding cut in Treasury grants to London? That would force a real dialogue between the boroughs and the GLA, which would not he a bad thing. That would make the uses and importance of business rates more obvious, both to the public and to

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the business community. Certainly, I have described in various business meetings that paying business rates is rather like throwing money over the wall in the dark—one does not know exactly where it is going or where it is ending up, but one does know that one is parting with money.
Secondly, should London command a predictable share of national government revenues? That is a much more complex issue. May be it is a pity that the noble Lord, Lord Barnett, is not in his seat, because he could have advised us on having a Barnett formula. I will talk privately to him.
In conclusion, London is a great success but its governance can be improved. The guiding principles should be subsidiarity with all functions being undertaken at the lowest tier of government capable of effectively exercising that task. The No. 10 Strategy Unit has now, I believe, finalised the recommendation part of its recent study on London for the Prime Minister. It will be interesting to see what that report has to say on governance, if anything. Will the Minister tell us what the status is of that report? Will it be published and, if so, when? The House of Lords All-Party London Group recently proposed a select committee to look at the working of the GLA Act. I know that happened only recently, but we are talking about one of the UK's greatest successes, so we cannot play for time. Let us hope that at some time in the not too distant future, despite all of the time pressures upon us, we have a chance to look at that again. Meanwhile, I look forward to the contributions of other speakers on this major subject. I beg to move for Papers.
3.33 p.m.
Lord Clement-Jones: My Lords, I welcome the opportunity to follow the noble Lord, Lord Sheppard, in this debate. I have a great admiration for the noble Lord, as he knows, particularly in his role as chairman of London First and the work that it has been responsible for, particularly in some of the thoughtful contributions that it has made to the debate within London.
I am afraid that I may well disappoint the noble Lord. As the chairman of the campaign of my honourable friend Simon Hughes for Mayor, I may allow politics to intrude on my speech. The election has already well and truly started and my honourable friend published his manifesto on Monday. I am sure that the House will forgive me if my speech is not totally devoid of some political comment. However, I share many of the points that the noble Lord made on governance issues. I speak as a Londoner by adoption. I have lived here for over 30 years and I would not dream of living anywhere else or, indeed, supporting either a football team or a rugby team other than Chelsea or Wasps. So, by acquisition, my London credentials are not too bad.
All the candidates and parties in the election will be arguing that they uniquely are best placed to realise the massive potential of London and to make it a better
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place in which to live. We are talking about potential. London has by no means reached its full potential and that is what our candidate will be talking about. I hope the election this June will not be a foregone conclusion—we certainly do not believe that it is—and the election system that the Government adopted for this purpose makes it a fairer and more open competition. That is quite right, too, considering that the election is one of the major direct elections in Europe.
There have been some positive aspects of the current Mayor's term of office. We believe that congestion charging was one of them. There have been improvements in transport services such as buses and there have been some increases in police numbers. If one is looking at the balance sheet—and the noble Lord, Lord Sheppard, was dispassionate in saying so—the history of underfunding is one for which the Conservative Party, when it was in government, should accept some significant responsibility. All of that adds up to the fact that London certainly has problems.
The Cabinet Office produced its report on London last July and stated that London,
"has high numbers of jobless people and substantial deprivation … has a housing market which is under strain and which will come under increasing pressure … has a transport infrastructure that has not kept step with the city's developing needs in the last 50 years … has public services that face substantial challenges as a result of the city's unique characteristics … has a complex system of governance"
There the noble Lord, Lord Sheppard, has scored a bullseye, as it was set up by the Greater London Authority Act. The report adds that the system of governance,
"does not easily enable the city to focus on its strategic needs".
Of course that is a long roll of issues with which we are all familiar. What are the main concerns of Londoners? Do they mirror the concerns set out by the Cabinet Office? When the cross-party Association of London Government surveyed Londoners last autumn, it asked them about their biggest concerns. Crime was at the top, council tax was second, the health service was third, traffic was fourth and education was fifth. Most of us would agree that those are the issues that concern us as Londoners.
The issue of the level of council tax is also a matter of governance. The increase over the past four years under the current Mayor has been huge—greater than in any other authority in England. It is in the order of a 100 per cent increase, for which the Mayor must take responsibility. I have no doubt that the other parties who are competing against the current Mayor will be making their own proposals for saving on some of the council tax expenditure. When the current Mayor of London has a press office larger than that of the Prime Minister, one begins to wonder about the levels of expenditure that are taking place.
But one of the key issues is the balance of expenditure and the contribution to the UK economy made by the London economy. Currently it is some £17 billion, to which the noble Lord, Lord Sheppard, referred. Many of us believe that there should be much

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more informed debate about the balance between Londoners' contributions to the national economy and what it is right for London to take into its own economy. After all, as the Cabinet Office report makes clear, we have our own considerable problems in London, with many areas of deprivation, which should benefit from higher expenditure.
Crime and security are important to Londoners and, no doubt, the parties will be putting their proposals, as we have, in that extremely important area. Security, not just crime, is of great importance in the current climate. Violent crime, which we have seen rise by 4 per cent over the past year and by 20 per cent since 2000, is a matter of considerable concern.
On transport, there is disagreement about the future of the congestion charge. We on these Benches believe strongly that it should not be extended westwards. Instead, we would ameliorate it, even within the existing zone, by allowing people to pay in advance and allowing payment the following day so that people are not hit with a £40 fine when they forget to pay during the course of the day. We would also terminate the charge at five o'clock, which would allow some businesses, such as theatres, restaurants and cinemas, to benefit from people coming into the city without being hit by the charge.
Of course, Tube services will inevitably be a matter of considerable concern. There are ways in which one can improve on Tube services through planned maintenance during holiday periods, which would massively reduce the inconvenience caused to passengers by maintenance schedules. We would also extend the hours of the Tube to 2 a.m. at weekends.
Obviously a great deal of detail will be involved, but one key issue of governance is how the business community relates to the Mayor's office. We on these Benches want to create a Greater London business council to assist the Mayor and Assembly in considering the economic challenges facing London. We feel that there is not nearly enough connection between the business community, which we would like to see operate much as do organisations such as the Chamber of Commerce and London First. We believe that London is an absolutely key business centre and that it should be recognised as such by the Mayor's office.
If we had the opportunity—this is a matter on which the noble Lord, Lord Sheppard, was extremely cogent—we would abolish the Government Office for London, and we shall be lobbying seriously for that. It seems to us completely illogical that the Government Office for London should survive into the era of the Mayor's office. It creates confusion in terms of accountability and responsibility, and we see no reason why that should continue.
We also wish to see far better co-operation between the boroughs. One issue that has bedevilled the Mayor's current regime has been the lack of cooperation between the boroughs, the city council and the Mayor. We consider that to be a serious weakness in the current governance situation. However, to some degree, it is curable by the office of the Mayor. It is
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rather counter-productive for the Mayor to suggest that the borough councils should be abolished and the power taken in by the Mayor. That is not a particularly good way to ensure co-operation with the borough councils.
Therefore, after 10 June, we confidently expect that there will be a new Assembly and a new Mayor who gives value for money and considers some of the governance issues. Basically, we want a city which is capable, which has the right kind of governance structure and which can win the Olympic hid next year—a city in which we can meet some of our targets of housing the homeless, accommodating the badly housed, reducing unemployment and increasing skills, education and prosperity. Such a system of governance would make us proud of London not only some of the time but all of the time, and it would enhance London with its great mix of people, enterprise, history, culture and diversity.
3.43 p.m.
The Lord Bishop of London: My Lords, I, too, am very grateful to the noble Lord, Lord Sheppard, for initiating this debate. I join many other Members of the House in being an admirer of the noble Lord's work for London First.
Like the noble Lord, Lord Clement-Jones, I am also a Londoner, by adoption and grace, and I was on the heat this weekend in Hanwell in west London. I fell into conversation there with the Sikh mayor, a Hindu councillor and the Roman Catholic local MP. I can assure noble Lords that this is not the prelude to a grisly joke. We were discussing governance and especially the challenge posed by declining participation in elections and the political process generally.
Together, we—that disparate crew—were celebrating the 1,400th anniversary of the arrival in London of my predecessor, St Mellitus, in 604, when the Church in London was re-established after a pagan interlude and the first St Paul's was built. Together, we agreed that it would have been fascinating to witness the first encounter between the shaven crowned monk from Rome and the Euro-sceptic East Saxons.
The Sikh mayor was a little late, as he had been involved in the affairs of his gurdwara in Southall. The MP described the flourishing state of his local Roman Catholic Church, and the Hindu councillor painted a similarly upbeat picture of life around the temple in Neasden. As a former Bishop of Stepney, I know very well what a huge contribution to social cohesion and the accumulation of social capital is made by the mosques throughout London. I also see all around me, and depend on, the good will and generosity of the London Jewish community.
In places where, in living memory, political parties and unions had a prominent social role and where once they were able to bring Londoners together face-to-face in public and in a regular way for a range of good causes, now, and especially in non-plutocratic London, virtually only the faith communities are able to assemble citizens in any numbers for regular face-to-face encounter.

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The Christian Churches alone organise in London 6,500 social action projects in every borough. We do not operate as a special interest group; we are players and partners. Week after week, 600,000 Londoners, drawn from every borough, age and racial group, participate in worship. The recent census revealed that 75 per cent of Londoners declared a religious faith and three-quarters of them said that they were Christians.
The majority of Christian churches in London, in contrast to much of the rest of the country, have grown over the past 10 years. In my diocese, the Korean Anglican congregation is one of the fastest-growing. No wonder that Mayor Livingstone has remarked that two things about London are obvious to him on his various visits. As the noble Lord, Lord Sheppard, has already said, London's population is increasing—that is the first thing—and, secondly, the Mayor says that it is an increasingly religious city. Whether that gives him as much satisfaction is less clear.
We are concerned about participation in working for London's future. We all note the prevalence of single-issue politics and the development of what we might describe as the "plaintiff's" voice. We all know that we need to encourage, by contrast, a civic voice which is concerned with the flourishing of the whole community and not only sectional interests.
It was in that spirit that the Evangelical Alliance and the leadership of all the London Churches, representing those 600,000 and the many beyond them—the cardinal, the bishop and the Free Church leaders—published last week our contribution to the mayoral election debate. It is entitled Faith, Work and City and, because we are thoroughly up-to-date, one can download it from our website www.votelondon.org.uk.
Of course, I am sorry to say that the publication does not endorse any particular candidate for the mayoralty, but it is a sane reflection provided by Christian practitioners in the various fields of London life. In the document is an appreciation of the significance for us all of the continued prosperity of the City of London. There is also the view of those who work alongside the homeless in London. The points made in that contribution will be followed up at a hustings meeting, which we are organising on Sunday, 9 May, at Methodist Central Hall for all the candidates. See you there!
The mystery is that the concern that we all share about participation does not seem to translate very easily into seriousness about engaging with London's faith communities or recognising their role, even in such obvious areas as the cultural strategy for the capital or in policing at borough level. London, as a city with a global constituency, is open as is practically no other British city to the increased significance of religious institutions and religious convictions in the rest of the world.
The post-9/11 situation points to a real urgency about engaging with those who have a civic vision in the faith communities beyond their own confessional
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concerns. But so often the response is, "We are multi-faith. We do not deal with particular religious bodies", and therefore "multi-faith" becomes shorthand for trying to edit out the contribution of faith communities from the life of our city. That response reflects the thinking of the day before yesterday.
The object of any system of governance is to build a city in which people assemble in a way that promotes human flourishing. The cohesion and energising of any city that really does promote human flourishing depends on three things: common objects of love; an equitable spread of economic benefits and protection; and a shared vision of what we want to build. In this debate we have talked a great deal, quite rightly, about benefits and protection, but obviously we should not neglect developing a shared vision or those common objects of love. It would be bizarre if, in this task, the opportunities offered by my friends in Hanwell, the mosques, the synagogues, the temples, the gurdwaras and the churches, were to be overlooked.
3.50 p.m.
Lord Harris of Haringey: My Lords, I too should declare an interest. In my case I was born in London and have lived here all my life. I am also an elected Member of the London Assembly and chair the Metropolitan Police Authority. I also had the pleasure of being co-chair of the London Pride Partnership with the noble Lord, Lord Sheppard of Didgemere. Coming as we did from slightly different political perspectives and slightly different outlooks on life and life experiences, it was interesting that we very rapidly realised that there was an enormous community of interest and community of agenda which we and all the other partners in that organisation wanted to follow on behalf of London and Londoners. So I am particularly grateful to him for initiating today's debate in your Lordships' House.
It is also interesting to note in the discussion we have had that no one is suggesting that the clock should be turned back and that we should cease to have the Greater London Authority, the Mayor and the London Assembly. It is abundantly apparent that in the past four years the Mayor and the GLA have filled a void in terms of the strategic elected governance for this great city.
There have been substantial successes in that four-year period. Mention has been made of the introduction of the congestion charge. I suspect that the congestion charge for London is something that Sir Humphrey Appleby, had he been consulted, would have said was a courageous decision to have taken. But that decision was taken and pushed through. It has resulted in congestion which is 30 per cent less in the central London zone, the lowest since the mid-1980s. There are 65,000 fewer cars, and 50 to 60 per cent of people from those cars have transferred to public transport.
I am particularly grateful to the Members of your Lordships' House who have stopped me from time to time in the past year or so and given me considerable

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details of how the precise arrangements for payment and non-payment are working in their own personal experience. It is always helpful to have such insights.
Another area of enormous progress has been the bus system. There are 1,000 new buses, and improved services on virtually every route where the contracts have been renegotiated. That has led to a 30 per cent increase in bus usage. Bus occupancy is now twice the level of any of the other English metropolitan areas. Then there are the plans for the new river crossings in the East End which will transform the economic development prospects of many areas there.
Obviously, I should like to refer to the progress that has been made on policing. There are 4,500 extra police. so that we now have over 30,000 police officers in London, the highest level ever. The 1,400 police community support officers who were recruited spend all their time on uniformed patrols in every London borough leading to a situation in which street crime is down by 20 per cent in two years; burglary is at its lowest level for 29 years and, despite the concerns of the noble Lord, Lord Clement-Jones, violent crime per head of population is lower in London than in any other part of England with the exception of the west country. If the noble Lord, Lord Clement-Jones, wants to know why there has been an increase in the precept, he need only look at the policing budget. Virtually all of the extra resources that have been raised in the precept have gone on policing, something which, as far as one can tell, the people of London think was a sensible decision.
My contention would be that those successes, that progress, would not have happened without the Mayor and the GLA. But could more have been done? That is the substance of the challenge that the noble Lord, Lord, Sheppard of Didgemere, puts before us. Certainly, the report published by London First a few months ago, entitled, Who is responsible for London?, which argued that the present division of responsibilities in London is inefficient and ineffective, clearly indicates that more can and should be done.
That report argued that central government should devolve tasks to the London level unless there is a real need for it to be held centrally, and that most of the programme delivery functions of the Government Office for London should be transferred. I find it extraordinary that there are now more civil servants in the Government Office for London than there were prior to the creation of the Greater London Authority. That makes one wonder what precisely were the issues that were devolved as part of that progress.
The report from London First specifically argued for the Mayor of London to be given more power over housing, neighbourhood renewal and skills training. That has also been picked up by my colleagues on the London Assembly, who have recommended that the GLA should take control of housing investment and housing strategy and that the Mayor should chair the London Housing Board.
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The noble Lord, Lord Heseltine, who is not in his place, recently stated that London's future success,
"requires a significant increase in the powers of London's directly elected Mayor".
He went on to say,
"Today, no one is in charge",
so, that might have been a lapse into the party political as opposed to the strategic overview that he was giving. But the point that there needs to be a significant increase in powers is important.
The interim report of the Strategy Unit at No. 10 on the London project concluded,
"If London's economy is to continue to prosper and deprivation to he reduced, real strategic focus needs to he brought to London's challenges in the realms of housing and transport, and to the management and funding of its public institutions".
Then we have the Barker Review of Housing Supply, which recommended that regional housing boards and regional planning bodies should be merged. That would imply that in London, the Mayor should take over the functions of the London Housing Board.
As we all know in this House, there will be referenda later this year in the North West, North East and Yorkshire and Humberside on whether elected regional assemblies should be set up. I find it extraordinary that if the people in those regions vote in favour of the creation of those regional assemblies, those assemblies will have more powers than the GLA over housing, waste, European Union structural funds, arts spending and sports spending. That does not seem to be a sensible distribution of responsibility.
The Government have argued in relation to elected regional assemblies that the people who have responsibility for such important issues should be democratically elected by and accountable to the people who are affected by their decisions. If that is the view in the other regions of the United Kingdom, why should that not be the same argument in London too for those particular issues? London has unique problems, which only London and its resources can resolve.
My view is that the GLA has demonstrated competence in the past four years and it should not have to wait for perhaps another five or 10 years to be given powers in relation to housing, culture and sport or, indeed, training and skills, until other untried or untested organisations assume responsibilities in other parts of the country.
I want to say a few words about the London Assembly. I believe that the greatest successes of the London Assembly in terms of making a contribution to London have been the outward looking scrutinies that its members have carried out; those involved, for example, in respect of smoking in public places; affordable housing, or the task of dealing with graffiti in London. I believe that those scrutiny exercises—I can say this because I was not part of any of those three exercises—set the terms of debate in London. That is precisely the role of Members of the London Assembly; that is, to set the terms of those debates.

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I think that we have been less effective or useful when we have been inward looking. But perhaps when we were inward looking we would have been more effective had we perhaps had powers in relation to the Mayor's strategies. The Mayor's budget can be amended by the Assembly uniting in a two-thirds vote. That has yet to happen, but it concentrates the mind wonderfully as far as both the Mayor and the Assembly are concerned. Perhaps it would be sensible if there were a similar power to enable the Assembly not just to comment on mayoral strategies but to amend them in line-by-line specific circumstances where a two-thirds majority of Assembly Members propose such a change.
Of course, London assembly members have a role to play by sitting on the Metropolitan Police Authority and the London Fire and Emergency Planning Authority, and some sit on the London Development Agency. That is where many of us play our biggest role in London life.
We should also be clear that there are very many challenges for the future. London is the fastest growing city in Western Europe. Its population is projected to rise by 800,000 by 2016. That will lead to enormous pressures on public services, especially housing—all the more reason for housing investment and strategy to be included in the GLA powers.
Transport capacity must increase for sustainable growth. The noble Lord, Lord Sheppard, referred to the need for Crossrail. I add my voice to his about how important that decision is and getting it made firmly and clearly. I trust also—if I can be slightly partisan—that Crossrail will go through west London as well as simply down to Heathrow and Richmond.
We need to look at how we resource policing and the other emergency services. When we have been successful in securing the Olympic Games for London there will be the major matter of delivering a world-beating Olympic Games in 2012.
At present, London contributes between £9 billion and £15 billion a year more to the UK economy than it recoups from public spending. If the rest of the UK is to continue to get this benefit, London's infrastructure must be modern and efficient. There is, therefore, a need for investment in the capital's assets and its people to ensure that London remains a world-class city and a powerful driver of the rest of the UK economy.
4.1 p.m.
Lord Brooke of Sutton Mandeville: My Lords, it is a pleasure to follow the noble Lord, Lord Harris of Haringey. Like him, my elective offices both at council and parliamentary levels have always been in north London. It is also a pleasure to follow one place back my former constituent, the right reverend Prelate the Bishop of London, whose contribution was as characteristic as it was relevant. I declare my own interest as pro-chancellor of the University of London.
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The whole of your Lordships' House is in debt to my noble friend Lord Sheppard of Didgemere for initiating this debate on the governance of London when, as he said, the Cabinet Office Strategy Unit has been conducting a review of this issue. The review is not only in incidental anticipation of the second mayoral elections, but also just under seven years after a similar parliamentary debate with exactly the same title. That was carried out in government time in the other place in the first week of June 1997, a little over a month after the Government's general election victory. At that stage, the Government were resting on their manifesto commitment to reintroduce a strategic element into London's governance without resurrecting the GLC. As to the detail, their response was not dissimilar to Alec Douglas Home's answer in the 1964 general election. When asked what the Conservative plans for VAT were, he replied:
"A lot of clever chaps are working on that at this moment".
If we are in my noble friend Lord Sheppard's debt for initiating this debate, we are further in the debt of London First, of which he is now president. Its recent inquiry, which he described, and to which the noble Lord, Lord Harris, referred, is entitled, Who is responsible for London? Running a world city. For myself, and allowing for my necessary ignorance of many of the underlying factors, I found myself in agreement with 28—or around two-thirds—of the 41 recommendations; I found 12 of the remainder arguable without full personal knowledge of the arguments; and only outright mentally rejected one of them.
London First was not so indelicate as to say that the great Frank Pick would have had difficulty in drawing a schematic map of the London governance system analogous to his legendary map of the London Underground in the mid-1930s.
These remarks will necessarily be as much a commentary of the London First report as a critique of the Government's stance and the irony that, seven years after the Government's London strategy was unveiled, that same government should be revisiting it. Seven years ago the mayoralty was taken as a given, though Mr Livingstone himself expressed misgivings about the concept in the June 1997 debate, to which I referred. No one in government ever even tried to rebut the Economist's famous leader in an August edition of the early 1990s, that the then London should be taken as a model for 21st century city government and effectively added,
"Mexico City newspapers, please copy".
The subsequent legislative gestation through the Commons Committee stage was a delight, with 27 of the 29-Committee members representing London constituencies. Your Lordships' House took great credit for amendments, but in fact many of them had been run as amendments in the Commons. Often they were on subjects new or unfamiliar to officials, who advised Ministers to reject them in the lower House, but then to adopt them in the upper House.
Achilles' heels should logically be unique, but on the London Bill its Achilles' heel was a commonplace, that the legislation was festooned with anti-Livingstone

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safeguards. It was a case of that familiar metaphor from rugby football of playing the man and not the ball. It will be for historians to calibrate the consequences, especially now that he is back in the larger scrum.
The Bill's persistent accretion of Christmas tree ornaments, so that the number of clauses rose 50 per cent during the gestation, was evidence of the famous observation that if you do not know precisely where you are trying to get to, any road will get you there. In parallel, Private Members' Bills, intended to eliminate the delays inherent in incoherent road works have been rejected in the interim in a vivid illustration of the principle that the best is the enemy of the good. We must hope that the best, which the delays embraced, will turn out in the current Traffic Management Bill to have been worth the wait.
Not so much in parallel as end to end, the equally delayed success of getting health authorities' boundaries and police boundaries to coincide with local government ones has now been overtaken by the discovery that learning and skills council boundaries are not quite so convergent. So, no doubt, metaphorically speaking, the road will have to be taken up again.
As to education, the abolition of ILEA, which survived the creation of the larger and wider area GLC, was the fruit of Back-Bench guerrilla tactics by that interesting political coupling of my noble friends Lord Heseltine and Lord Tebbit and not of premeditated government action. The arguments in the 1980s that the weaker boroughs needed the support of the ILEA structure have been sustained by the continuing low performance of the weaker brethren; and the speed of inner London's educational fleet is still crippled by the slower municipal ships.
I think it would be fair to conclude from the text of the report, that London First is somewhat "agin the boroughs". Its report says at the start of page 13 that the London boroughs lobbied for the creation of the GLA—but that is only up to a point, Lord Copper, to cite a legendary non-Member of your Lordships' House. The ALG or either of its constituent predecessors may collectively have been in favour, but some absolutely key boroughs among the best-managed ones were implacably opposed. I understand London First's implicit view that the boroughs are untidy, but that is because London is ultimately a higgledy-piggledy collection of villages. Le Baron Hausmann of Paris was unmistakably not an Anglo-Saxon, especially not the night we went to Birmingham by way of Beachy Head.
For Londoners, Notting Hill was enough for our fictional Napoleon. In my former constituency of the "Two Cities", what the mistaken calculations of Brussels about central London called the richest area in the European Union marched admirably side by side with also being the 48th poorest constituency in the country. The boroughs may he untidy, but their democratic link is much more tightly bound than the hybrid electoral arrangements of the Greater London Assembly.
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London First's desire to have a say in the expenditure plans of the boroughs is double counted special pleading. A decade and a half ago the CBI argued for taking the non-domestic rates arrangements away from the boroughs on account of seismic rate rises when control of boroughs changed hands.
Another irony occurred in the second half of the 1980s. The GLC may have gone, but the strategic explosion, the Big Bang in the City, transformed for the good the economic growth rate of the whole of London. It invalidated the judgment of the social historian Sir Roy Porter in his Carlton Lecture, shortly before his tragic death in a cycling accident, which called for the restoration of the GLC and intoned that London was a city in decline. When in Question Time afterwards I asked him whether the new wave of refugees on top of the existing waves of creative energy and of new technology did not cause him to wonder about his pessimism, he said he did not know enough about technology to comment.
Nor am I entirely easy about London First's desire to integrate or divert agencies such as the Arts Council or English Heritage into the maw of London government. I know that the Mayor is personally opposed to the concept of heritage where it may significantly obstruct employment, but with his tourism responsibilities, he may be forgetting the richness and individuality of London's charm, and in his housing and population extrapolations, he may be forgetting the sheer pleasure of living in London as it is.
For the past 25 years, the City of London, two millennia in the making, may have been the liveliest archaeological site in Europe; the great squares of London were the product of a leasehold system largely unknown outside these islands; and first Bath and then London reinvented the crescent as an architectural concept, which had disappeared since the time of the Romans. Indeed, we must regret that the nerve of the great Lord Camden, an erstwhile Member of your Lordships' House, did not hold to execute the plans for an S-shaped double crescent in his eponymous Camden Town, which he had commissioned. The semi-detached house first appeared as an advertisement in St John's Wood in 1784.
Lest I seem carping about some of London First's jeux d'ésprit, let me say that its putting into practice Emerson's great dictum that action begets thought is a massive improvement on Glenda Jackson's wild gallimaufry of sectoral strategy piled on sectoral strategy in the Bill, now enacted. When asked what would happen if the strategies were in conflict, she replied that that was impossible because the Bill would not allow it. Happily, London is not a playwright's script, but a creature of energy and imagination whose very strength lies in its running riot.
I have two questions for the Minister. As the Government have endorsed the Mayor's strategic plan, can he explain why the Government believe that there will be a planning gain of 50 per cent affordable housing in Greater London when the boroughs told

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the former director of Shelter's inquiry on the matter on behalf of the Mayor that the target figures could not he achieved? Secondly, without ascribing blame, but in one of London's growth areas, why have houses been built in parts of the flood plain of the Thames Gateway, that great opportunity for regeneration, which the Association of British Insurers says that it is not prepared to insure?
Finally, whatever the Cabinet Office review shows, London will continue to be held back as long as the key positions in the Cabinet are held by Ministers from out of London: the Prime Minister from Sedgefield, the Home Secretary from Sheffield, the Foreign Secretary from Blackburn, the Deputy Prime Minister from Hull, the Education Secretary from Norwich, the Defra Secretary from Derby, the Secretary of State for Trade and Industry from Leicester, the Leader of the House from Neath and the Chancellor of the Exchequer, Health Secretary and Transport Secretary from Scotland. Against that critical mass, the only London MPs to serve in Cabinet since 1997 have been Mr Dobson, who was seduced from office to fight Mr Livingstone, the two Secretaries of State for Culture, Media and Sport and the present Chief Secretary to the Treasury.
In 1763, General Braddock's dying words, after ambush by the Iroquois, were, "We shall know better how to deal with them next time". I hope that this debate will have some of the same effect.
4.13 p.m.
Lord Chalfont: My Lords, in the course of my long life I have lived in most of the great capital cities of the world: Paris, Berlin, Vienna, Beijing and, of course, New York, which is a capital city in all but name. But for the past 40 years I have lived in the centre of London and I have a strong impression—this is entirely anecdotal, because I have not studied the matter closely in any of the other cities—that the administration, or governance, of London is still the most fragmented and incomprehensible of them all. Involved in the administration of London, in more or less degree, are central government, the Mayor and the Greater London Authority, the Lord Mayor and Corporation in the City, 33 separate boroughs, not to mention the Royal Parks, the Highways Authority and even the Arts Council. That is, of course, a recipe for chaos and, to some extent, chaos is what has emerged.
As London First, whose distinguished president, the noble Lord, Lord Sheppard, so authoritatively introduced this debate—I congratulate him not only on introducing the debate but on his leadership of London First—stated in its report, Who is responsible for London?, the main threat to London's status as a great world capital comes from within. It cites:
"failing public services, unaffordable housing and overcrowded and unreliable transport".
Some of that is obvious to anyone who walks, as I do, to the Palace of Westminster every day and sees uncollected rubbish, the litter left by street sleepers,
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overflowing storm drains and, of course, the unmistakable signature of contemporary culture—chewing-gum on the streets.
It is true that some of that is already being tackled. Although I am not by nature a devolutionist—in fact, I think that we have already gone much too far in that direction in the United Kingdom— a great deal has been achieved, or at least promised, in the first years of an elected Mayor and a London-wide authority. Yet there is still a great deal to be done.
To be brief, I intend to concentrate on the effect of fragmented governance on the transport system in London. Much of that is being addressed in the Moses Room as the Transport Management Bill goes through Grand Committee. It is clear from the debate there that to cope with its unique transport problems, London needs a simpler, clearer and more effective governance.
It is true that, as the noble Lord, Lord Harris, said, the existing congestion charging system has had its impact on the volume of traffic in central London. But that is only in central London. Elsewhere in the capital, congestion has been increasing and journey times lengthening. Much of the solution to all that is in the hands of Transport for London and its commissioner, Robert Kiley. A short while ago, together with other noble Lords, I visited the control centre of Transport for London, not far from here. From that centre, TfL controls much of London's traffic, including the 4,800 sets of traffic lights in the capital.
The current performance of TfL is undoubtedly impressive, as are its plans for the future of London's transport. Yet it is worth remembering that TfL itself forecasts that by 2016, the population of London will have increased by 800,000—the size of another large city. In the past four years, the share of travel by public transport has increased by 4 per cent. But 800,000 more people means an additional 2 million passenger journeys a day. The figures just do not add up.
The Government, it is true, have shown signs of recognising the importance of investment in London's transport system, but neither investment alone nor transfer—that is, the move from private to public transport—will resolve the problem on their own. The present division of responsibility among central government, the mayor and the boroughs is just not capable of delivering the transport system essential to a great, world-class capital—especially the greatest capital in the world.
Where else would you find a situation in which the decision, for obvious environmental reasons, to ban the use of heavy goods vehicles at night is the subject of discussion in a committee of 33 boroughs? Where else would a situation be allowed to arise in which a major road—in this case, the A2—through a capital, collapses and its repair is delayed because the boroughs on the two sides of the highway cannot agree on the working hours for the repair gang? That is not an imaginary scenario; it has actually happened in London.

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I do not know the answers to those problems, but they must be solved, especially if there is any prospect of London accommodating with any success the Olympic Games in 2012. Many well-meaning people are proposing incremental solutions, such as the excellent idea of the creation of a London commuter rail service that would integrate suburban rail services with the bus network and the underground railway. Some would increase the power of the Mayor of London; others say, "Over my dead body".
This is not a local problem; it is a national one—in some ways, international. Our capital city, despite its shortcomings, is in some ways the financial and cultural capital of the world. If it is to retain that status, it needs consistency in administration, not only in transport, on which I have concentrated, but in such areas as education of the workforce, public services, policing and forward planning. That is a matter for central government; as the noble Lord, Lord Sheppard, said, it is not a party matter. The Government began the process of devolution in London; now they must make it work.
4.21 p.m.
Lord Beaumont of Whitley: My Lords, I join the other speakers in this debate in thanking the noble Lord, Lord Sheppard, for giving us the opportunity to speak on this subject. I have seized the opportunity for two reasons. First, I was born in London and have lived here for the past 40 years, largely due to the urgings and preferences of a metropolitan-minded wife. I have, I hope, learnt some things about this great city in which we live. The second reason is that in London my party, the Green Party, has been successful and is having a serious influence on what is happening. We have three members in the rather small Greater London Assembly and a Member of the European Parliament. All those members take the governance of London very seriously.
We are all interested in the forthcoming mayoral election. Most of us probably have mixed feelings; I certainly do. Although I fully support Darren Johnson, our member in London who is standing for election, I am nevertheless thankful to the present Mayor of London for the job that he has done. In particular, the congestion charge was a very brave and useful piece of social engineering. If I had to choose someone who I thought would be the best possible mayor in a personal capacity it might be my old friend Simon Hughes, the Liberal Democrat candidate.
The main thing that I have learnt from living in London is the need to bring governance as near to the people as possible. I thought at the time—and nothing has made me change my opinion—that the move towards the present large boroughs was a disaster and went far towards destroying the real touch of the ordinary Londoner in governance. The present Mayor's theory that he would like even smaller and fewer boroughs is along the wrong lines, too.
During my time in London I have lived in three villages; I have not lived in a particular borough, although from time to time I have been involved in
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borough affairs. I have lived in Hampstead village. I have also lived in the village of Kew, where I was a vicar of two parishes. I was accepted by the Diocese of Southwark as a clergyman when the Diocese of London thought that to ordain a maverick like me—who was at the same time a colonial clergyman—was probably a mistake. They were probably right. Nevertheless, I had two parishes, and that was another village in which I lived, I now live in the village of Clapham. In each case, it is that village that I live in rather than the borough in which, theoretically, I am a member and a voter—I go to the polls, being as a Peer able to exercise my rights in that election.
My party would either break up the London boroughs to create smaller councils that reflect London's historic communities, such as those before the great reform, or keep the London boroughs and create urban parish or community councils so that different neighbourhoods had their own directly elected voice, which they do not have at the moment. I am delighted to know that there is a London Governance Review Commission, which can make recommendations on such matters.
We want to see the creation of urban parish or community councils, as London is the only part of the United Kingdom legally prevented from having them. We want boroughs to be broken up to create separate smaller councils. We want to see proportional representation for local government, not just for selfish reasons, but because it would produce much greater representation of different opinions, a good thing in itself. We have some hope that we may actually get that. When I first became a Member of your Lordships' House, there was merely a solitary, rather pathetic bleat from the Liberal Front Benches in favour of proportional representation. It is now widely accepted that proportional representation has a very important part to play in local government. We would like more power to be transferred to the Greater London Authority from central government and quangos such as the Port of London Authority and the Housing Corporation.
We live in the greatest city in the world, certainly the greatest pleasant city—I am afraid that I do not count New York as a pleasant city. It would be very nice if the future of the city were such that all its citizens could feel in touch with their government at different levels, right up to the Mayor and the Greater London Authority. It is very important for the future of democracy that voters should feel in touch with their immediate representatives. Unfortunately, that does not happen sufficiently at present, and we need reform in that direction.
4.29 p.m.
Baroness Hamwee: My Lords, I, too, thank the noble Lord, Lord Sheppard. Before the debate, the noble Lord, Lord Bowness, reminded me that he was an honourable exception in his party, in seeking to form, and forming, a cross-London group which included local government. Many of us were grateful for that. I was a member of the original board. I remember the different approaches of business and

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local government. When somebody made a good proposal, business would say, "That is very good, let's do it" and local government would say, "That is very interesting, let's consult". I think that we have moved together a bit since then.
I read the report of London First with interest. I was informed and probably prejudiced by my interests, which I must declare, as a Member of the Greater London Assembly, which I currently chair; as a candidate in the forthcoming elections; and as co-president of the Association of London Government.
Descriptions of the Greater London Authority often include the term "dysfunctional". Certainly, the GLA, which is not the whole of London's governance, as we have heard, is disarticulated, a term that I have picked up. It is true to say that the quango spirit has survived, despite governmental changes. I was taken by the idea that the GLA was a holding company. Perhaps, that again shows the difference between commercial and political backgrounds. Thinking about it, I realise that it is not necessary—or even a good thing—to seek a single, rigid organisation. I say that not only because we would probably never agree on one but because I prefer—I hope that it does not sound too "Mother pie", to elide the terms—to regard the elements of London government as a family.
However we regard the matter, we are all still concerned with outcomes. We judge the efficiency and effectiveness of members of the family on that basis, including their effectiveness in securing the engagement and trust of citizens. Both the bishop and the vicar, if I may call the noble Lord that, referred to that point. It is difficult to be engaged, if one is unclear with whom one is engaged. It is difficult to trust, if the responsibility for a given service is fractured—or appears to be—and each element points at somebody else for not doing the business. The sheer number and complexity of responsibilities and, sometimes, the lack of logic in their division, is an issue.
I am a firm believer in strategic government and in government at the right level, which is as local as possible. I am sorry that there are no parish or community councils in London. When we created the executive Mayor, we talked as if New York was the model. However, New York is different. New York has a so-called strong mayor. It has a council that is, as its website says,
"an equal partner with the Mayor in the governing of New York City",
with sole responsibility for approving the budget and making land use decisions. That is very different from the situation in London, where the Mayor is, in formal terms, weak. In part, that is because of the continued existence and, indeed, growth of the Government Office for London, which has been referred to several times. The office has been described as extending its tentacles and having more funding responsibilities than before 2000. The mantra used by the noble Lord, Lord Rooker—"No new powers and no new money"—applied to regional assemblies, but it did not apply to the Government Office for London. We all know that almost everyone has what might be
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described as empire-building tendencies or, more benignly, a wish for powers to achieve what one knows to be right. However, I say simply that GOL could make a lot of friends by deciding quietly to divest itself of functions—or for the Government to do so—and retire from the scene.
Other relations in the family—the boroughs—would want to be clear about the demarcation of certain issues. The noble Lord, Lord Harris of Haringey, referred to housing, and it is one such issue. I agree with what the noble Lord said about waste and other functions. The boroughs' relationship with the Mayor is still settling down, if I can put it that way. Recently, I was at an occasion at which a representative of an outer London borough complained that the Mayor had been able to spend only 25 minutes in his borough in the past four years and that 15 of those were spent trying to find the way out and into the neighbouring borough. A representative of an inner London borough said. "Thank your lucky stars that he ignores you". Well, relationships between family members are not necessarily always straightforward.
The boroughs share the problem of boroughs throughout the country: they carry the can for the discredited council tax, while struggling to explain gearing and so on. That point is relevant to matters of trust, responsibility and understanding. My theme of wholehearted devolution to the lowest possible level applies there.
Even when presented with new opportunities, central government seem to shy away from joining up government. Otherwise, why was central government so determined, for instance, to have learning and skills councils that were separate and whose boundaries did not really replicate any other groupings? It is a serious point. Economic regeneration and skills are serious issues for London and, by extension, for the whole nation. I hope that that approach is being relaxed. I heard that recently, when the case for a London regional rail authority was launched by Transport for London, it was done at the request of the Department for Transport. However, I also heard that the Secretary of State for Transport would not have any of it. I hope that the Minister will take the opportunity this afternoon to clarify the Government's attitude. After all, a fully integrated public transport system for London is impossible without a rail authority that is as directly democratically responsible as possible.
Holding to account is a large part of the job of the Assembly, as the noble Lord, Lord Harris of Haringey, said. I must also say a word about what he called the more inward-looking task or skill of scrutiny. It is still quite new, and we are learning it. The Greater London Authority is not the same as local government, where councils are responsible for policy making and budgets and have powers to call in decisions. We heard about the two thirds veto on the budget. It may be a veto, but it is certainly a mechanism to force political groups to find common ground. Too often, finding common ground in any situation is finding the lowest common denominator. It is difficult to apply that when there are different

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philosophical approaches to taxation and the provision of services. I agree with what the noble Lord, Lord Harris of Haringey, said about considering a veto over policies and strategies. We do not have that, but I think that it would work well.
We do not all agree on what scrutiny involves. Should it be done in arrears only? I think not. I know that Select Committees in another place complain that the executive's responses to their reports are not always very good or very useful. However, the executive is required to respond, and it would be helpful if London's executive Mayor were required to respond to the scrutiny recommendations of the London Assembly. I am not sure that there has been a battle over funding for scrutiny anywhere, but it could be a battleground. The executive allocates resources to scrutiny. If we were to have a shrinking violet of a mayor, that mayor could use that as a tool to constrain scrutiny. One learns that being scrutinised can be unpleasant, but it would be useful if those who are scrutinised could understand that questions are sometimes asked in order to give the questioner ammunition to support a proposition, not attack it. I am acutely aware that it is impossible to cover all the issues today. My time is up. We cannot even cover the major question of what the London that we want to have governed is.
The current Government may not naturally turn to Gladstone for advice, but his reflection applies to devolution in London as well as to his comments at the time. He reflected that liberals have trust in the people qualified by prudence and that the other lot—not this Government, of course, but the government at that time —showed mistrust of the people qualified by fear. As I said, that applies to devolution now. I think that it applies to devolution from central government to London's fledgling—I hope that it will be supported and successful—strategic government.
4.40 p.m.
Baroness Hanham: My Lords, it is beginning to feel a bit like old times here today. Some of us have a long history in London local government that goes back a long way. I have worked as leader of the Royal Borough of Kensington and Chelsea council, on which I still sit. I have had many an interesting clash with the noble Lord, Lord Harris. I have known the noble Baroness, Lady Hamwee, in a similar capacity for the same amount of time as I have known the noble Lord, Lord Harris. I was a member of the board of London First when my noble friend Lord Sheppard first set it up, where we all worked together. The noble Lord, Lord Brooke, was a very respected Member of Parliament in the City of Westminster. Of course, we worked very closely with the City of Westminster on local government affairs. As I say, today is really like coming home.
I, too, thank my noble friend Lord Sheppard for generating this debate, which has come at a very interesting time. The campaign, if not actually opened with the publication of Simon Hughes' manifesto, is certainly on its way to being opened within the next
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few days. Certainly, in the next three or four weeks, there will be a great deal of discussion on London and London governance by the candidates.
The debate is therefore timely. Interestingly, practically no one has covered the same ground. Everyone has brought his own experience and interests; for example, transport and general governance or London. The noble Lord, Lord Sheppard, has come from the unique position of his business role. He has played a major role in London and the work that has been done to bring business and the boroughs together to ensure that business has a hand in London's governance. I am not sure that I agree with him that the business rates should be taken up by the Mayor and the GLA: I think that we would part company on that almost immediately since the business rates form at least part of the council's grants at the present time.
I have listened to the debate with great interest. I have already declared my interest as a member of a London local authority. As a member or as leader, I was never in favour of the creation of the Greater London Authority or particularly impressed by the repeated calls for a voice for London. Today, I waited to hear whether there was evidence of that view being wrong. I am bound to say that my personal experience is that it is not. Not much that has been said today has encouraged me to change my view about a voice for London.
The embodiment of the voice for London in the person of the Mayor has provided us with some marginal amusement, but many of his actions have not. I carefully seek not to be too personal about that, but one cannot allow the past four years to pass untouched. As everyone has agreed, London is a complex city to run. However, the prime responsibility still lies with the 33 London boroughs which, by and large—whether they are very good London boroughs as is mine or not quite so good as some others—provide a coherent and co-ordinated service for their residents. Increasingly, they are looking to work together, as in the past, where rational combination for services is justified.
Since the demise of the Greater London Council, the boroughs have all come together in a voluntary capacity within the Association of London Government, which existed before the demise of the GLC. As has been said, currently, there is a review of the balance of responsibilities between them and the Greater London Assembly, and the role of the Government Office for London. The noble Lord, Lord Harris, and the noble Baroness, Lady Hamwee, said something about that. I think that it is fair to say that there is a uniformity of view that the Government Office of London is too overweening in terms of London's affairs and needs to be reviewed. The current review will probably make recommendations on that, but I very much hope that it will trim its sails. Originally, it was reported that the review was set up to advise on a reduction in the number of boroughs. If that was its original intention, fortunately, wiser counsels have prevailed.

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The demise of the Greater London Council was due to two main reasons: that is, first, the increasing burden of costs which were falling on the ratepayers, as they were then; and, secondly, the overlapping responsibilities and the increasing interference by the Greater London Council in the boroughs' affairs. The memory of that alone was enough to ensure that when the decision was taken to impose a Greater London Authority on the boroughs, there was resistance to it having anything but the most limited powers. However, there was strong agreement that if there was to be a Mayor and a Greater London Assembly, the assembly should have some teeth. Unfortunately, despite efforts in the other place and in this House, that did not happen. I think that at some stage there should be a review of whether the Greater London Assembly should have more control over the Mayor's decisions.
The cost to Londoners to run City Hall is beginning to bring into focus again the possibility that the Greater London Authority will be expensive. As has already been said, the cost has risen by more than 100 per cent within the three-and-a-half years of the authority's existence. The number of staff has accelerated. It seems likely that they will have to move beyond the glass house at Tower Bridge into other quarters as well. That does not augur well for other regional government that may result if electors are beguiled into voting for it because it would follow on the experience of devolved government.
There are increasingly areas in which mayoral policies are beginning to impact on individual boroughs. Let us take, for example, the desire by Transport for London to become increasingly involved in the boroughs' roads that are not strategic routes. That matter is in the Traffic Management Bill and was referred to by other noble Lords. We could also take the mismatch between the London Plan and the boroughs' local plans; the Mayor's enthusiasm for high-rise buildings, which is lacked by many boroughs; the Mayor's pronouncement on a 50 per cent proportion of affordable housing being required in any development—a size not practical or achievable by many boroughs; and, above all, the work undertaken by Transport for London.
I now begin to make a special plea. Nowhere has the effect been felt more than with the introduction of the central London congestion charge. There are many views about the success or otherwise of that initiative, which was given the go ahead under the Greater London Authority Act as a means for the Mayor to raise additional funding to support other transport costs; in particular, to improve the Tube. The congestion charge has raised such a modest revenue that little, if any, contribution has been made to London Underground. Indeed, the income for the contractors has already had to be covered by council tax contributions.
Traffic has reduced in central London, whether by the 70,000 vehicles claimed by Transport for London or not. Despite what it says, the down sides to that reduction are already being felt by business. A study by Imperial College has demonstrated conclusively that
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that is the situation. What is more, the effect is felt more widely than in the central zone because people are completely unclear about where the zone starts and finishes. Whether or not that reduction is a long-term phenomenon has yet to be explored. But it is certainly something to which one would have thought that more attention would have been paid before any decision to extend the zone was taken. But apparently not. The Mayor has recently announced that he intends to include my borough, the Royal Borough of Kensington and Chelsea, if he is re-elected in June, despite the fact that the council, residents and local businesses are all implacably opposed to the scheme.
His decision has not been helped by the consultation document, which has been sent to over 3 million residents in Greater London, when only 150,000 residents will be affected. This has caused enormous irritation and great concern that the decision is to be taken by people who will not be affected by the congestion charge extension.
Elections are due in the next few weeks and no doubt many of these matters will be discussed over that period. There have been positive outcomes from the Greater London Authority. It is right to say that the Thames crossings are one of those. However, if there are at any stage proposals to transfer more powers to the Mayor, particularly in the areas of housing investment and planning, there will be more than a little concern in London, which feels that it is being governed well enough by its boroughs. It does not need too much incursion by the Mayor.
4.51 p.m.
The Minister of State, Office of the Deputy Prime Minister (Lord Rooker): My Lords, I congratulate the noble Lord, Lord Sheppard of Didgemere, on introducing the debate so well. I should point out that after three years in this House, this is my first Wednesday debate and, like the proverbial bus, I now have three on the trot. Everyone knows that I am not a Londoner, but it is clear that the noble Lord made a powerful case by speaking directly on the issue of the governance of London, which is what he said he would do. He stuck quite rigidly to that aim. I shall do my best to respond to the points that were made, but first I have some preliminary remarks that I want to place on the record.
This has been a stimulating debate and certainly different from the one held in the other place. It demonstrated again the quality of this House—and is a credit to it—by taking a more dispassionate look at the facts of the situation rather than the role necessarily played by the elected House. The Houses have two different roles and we should not complain that a debate on London is treated in different ways. However, while a small degree of passion was evident in some of the remarks, it is no surprise that the tone of the debate about how this great city should be governed was not the same as that in another place.
The Government strongly support and are deeply committed to London's economic, social and cultural success, and to doing what we can to enhance further

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its status as a world-class city. We all have reason to be proud of London's world-class culture, sporting resources, universities and business community. There is no question that it is the key engine of economic growth in this country. We do not have to apologise for that; we can state it as a fact. London is renowned for its innovation, diversity and entrepreneurship. Some 300 languages are spoken; there are over 200 theatres and 395 public libraries—that is a precise figure which I hope is accurate; it is what I have in front of me—and 125 dance companies. It is a centre of incredible social and cultural diversity that draws in workers from all over the world.
I shall deal with issues related to the economy when I answer some of the individual comments made during the debate. However, as the noble Lord, Lord Brooke, observed, London's huge economic dynamism means that inner London is by far the richest region of the European Union with a gross domestic product per head at 260 per cent of the EU average. Ten years ago the per capita GDP of London was under £12,000; now it is over £19,000. In 1992, unemployment in London stood at over 789,000; today, it is down to 450,000. Since 1997, unemployment has fallen by over 40 per cent.
However, I accept the view expressed—it is absolutely true—that in even the wealthiest regions, however the boundaries are drawn, there will always be pockets that are not as wealthy as the rest. That, too, was a point touched on by the noble Lord, Lord Brooke, when referring to his own constituency. Through the establishment of the Mayor of London and the Greater London Assembly, the Government gave back to London and Londoners a strong voice. We restored democratic city-wide government and strategic leadership of the capital. I know that major debates were held at the time. I did not take part in them, but I understand that at the time London was the only major capital in the world without a city-wide arrangement in the form of an elected body for dealing with strategic issues.
The Mayor and the Greater London Assembly have achieved much, although it is early days. It is under four years since the bodies were set up and the fourth anniversary is imminent. This arrangement is an attempt to work with Londoners and develop strategies to improve London's environment and cultural facilities, and to promote the city for business and tourism.
I shall deal with some of the excellent points made by noble Lords over the past couple of hours. The noble Lord, Lord Sheppard, referred to the net contribution London makes to the economy. I understand that the gap—the amount by which London subsidises the rest of the country—is estimated to be something between £7.25 billion and £17.4 billion. To be honest, I do not think that that is a fair way of putting it. However, a prosperous and successful London is essential for the United Kingdom as a whole. I make no bones about that. No one in their right mind would seek to diminish London as an
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economic generator as an excuse for building up the rest of the country. Along with the south-east and east of the United Kingdom, London is a net contributor.
However, London is not taxed more heavily than elsewhere in the UK. It is important to put that on the record; Londoners must not feel that they are unfairly taxed because the city is a net contributor to the economy. It is rather a consequence of an amalgam of the nation's progressive tax systems. One could argue that income tax is not all that progressive, but it is modestly so and the system ensures that the wealthy contribute proportionately more than the poor.
At the same time, given London's needs, public spending in the capital stands at 1.2 times the UK average, while public spending on transport is almost three times the UK average. That represents a 27 per cent real-terms increase over the past five years, since 1998–99, which is a financial increase of over £10 billion. London also has the highest per capita expenditure of any region at £6,522, followed by the north-east, at £6,463. So, while London is a net contributor, there are reasons for it.
Several noble Lords asked about the announcement on Crossrail. I regret to say that I have no further information about when the announcement is going to be made. It is a matter for the Secretary of State for Transport. But, in answering for the Government, I must tell noble Lords that we have no idea when the announcement will be made. We are studying further the findings of Adrian Montague's report, and we will publish those findings in due course. I regret that I do not have a date because it is not helpful, but that is the latest position.
I am pleased to say that between 2000 and 2005, almost £1.5 billion will have been made available to the London Development Agency. Its excellent work has enabled the creation of tens of thousands of jobs, learning opportunities and new businesses. The noble Lord, Lord Clement-Jones, who was electioneering from the first to the last minute of his speech and made no apology for doing so—I do not think he needed to, but that is what he did—raised, among other matters, the issue of council tax rises caused by the Mayor. Let us get this matter clear, although I think that my noble friend Lord Harris already did that in his speech.
The precept increase is being used to fund improvements in frontline public services. Some 85 per cent of the increase since 2000–01 has been used for policing. That is a fact and it is why there are now 4,500 extra police on the streets of London. A further 4 per cent has been used for London Resilience, thus accounting for 89 per cent of the increase.
The issue of abolishing the Government Office for London was also raised, and seems to be the one point of common consensus around the House. At one point it appeared that everyone wanted it, but I have to say that that does not include me, and it certainly does not include the Government. The Government Office for London and the other regional government offices, set up by the previous administration, play a key role in delivering Whitehall departmental policies and programmes, so they have a different function from

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that which might be envisaged. However, I stress that the Government Office for London is a regional office representing one of the nine major regions of this country.
It is true that a significant number of Government Office for London staff transferred to the Greater London Authority on its formation. However, that has led to an increasing focus on regional delivery and to an increase in the size of the Government Office for London. It is too early to review the London government arrangements in fewer than four years.
The speech made by my noble friend Lord Harris was quite brilliant because he explained issues I do not have time to go into. However, on the Government Office for London and its staff, I want to put it on record that it is untrue that the number of staff has risen since the formation of the Greater London Authority. The number has gone up and down. In April 2000, there was a staff of 375 and at present it is 325. It is true that the number has been as low as 240, but that is because of the way in which the functions of central government are being moved to be delivered on a regional basis.
We debated at length the Greater London Authority having the same powers as regional assemblies when the Bill went through the House, but the package of powers and functions for the English regional assemblies will reflect the needs and circumstances of the English regions. There will be similarities between the powers of those bodies and the Greater London Authority—but London is different. It is a single conurbation and a capital city, and the responsibilities of elected regional assemblies need not necessarily be the same. In some cases, elected regional assemblies will have greater powers than the Greater London Authority—for example, in housing—while in other areas—for example, powers over the police—they will have fewer.
The noble Lord, Lord Brooke, mentioned building on the flood plain in the Thames Gateway, among the many other important issues he raised. Let us get it clear—I have said it previously in this House—that most of the development in the Thames Gateway will be in what we would generally call the traditional urban areas on brownfield land. I reject the assertion that we can never build on the flood plain in the Thames Gateway. If Members of the House of Commons, as opposed to Members of Parliament, can spend £500 million on a new office block in the flood plain, clearly it is technically possible to build in the area in a way that does not cause damage. True, it costs a lot more to do, hence the cost of that office block. However, previously used land in the Gateway is subject to some of the most robust flood defences in the country, giving a risk of one in 1,000 years; that is 0.01 per cent taking us up to 2037. The Thames Gateway strategic partnership has been working closely with the Environment Agency on the issue for the past 18 months, and they are carrying out a longer-term flood management strategy to address the issues post 2031.
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As regards the Office of the Deputy Prime Minister, the delivery vehicles we will put together to generate the growth in the Gateway and the projects we are funding are required to produce appropriate flood-risk assessments. So we are working on the issue. The idea that we are ignoring the flooding has always been a nonsense, but it got into the cuttings and keeps reappearing.
The noble Lord, Lord Chalfont, made an important speech but I shall reply only to one aspect of it. He concentrated on transport and spoke of the decision-making of the boroughs in repairing roads. We recognise the problem. It is exactly the kind of issue that the Traffic Management Bill, currently making its way through the House, is designed to address. It will put new duties on the boroughs to work with others for the benefit of the wider network.
The noble Baroness, Lady Hamwee, mentioned the regional rail authority. I can say only that the forthcoming rail review will identify the changes needed to enable the network to operate more efficiently for its customers and establish clear lines of responsibility. I understand that the Mayor has submitted proposals for a London regional rail authority which will integrate rail and other transport modes in the capital. These are important issues—no one can gainsay that—given the fact that it is a capital city.
I am watching the clock and I regret that I have not had an opportunity to comment on some important issues. It would be banal of me to comment on the important speech made by the right reverend Prelate the Bishop of London because the governance issues he raised transcended the political debate. He made it quite clear that the only bodies which can assemble groups of citizens to talk about London issues relating to themselves and their neighbours are the varied and massive numbers of faith communities in this capital city. A plea was made that they had been overlooked, but I certainly hope that that is not the case in the wider discussions in London.
Constant reference was made to the congestion charge. Occasionally, I forget to pay it on a Monday and I have had a reminder put on my little card. I never know when I am leaving and you cannot pay in advance. And I pay by telephone because the machine in this place never works properly. But the fact is that it has cut down congestion. Of course, it may be the case that it has cut it down so much that it has not raised as much money as originally planned, but there is no doubt that you can get around central London much more easily.
The powers were given to make the charge and it was a brave decision to take. Clearly, central government was not going to take it and it was left to the Mayor to decide to do so. With all the caveats, it has worked incredibly well. As regards the future and its extension, that is for Londoners to vote on. That is why we have a democratically elected mayor for this capital city.
5.6 p.m.
Lord Sheppard of Didgemere: My Lords, we have had a high-quality debate and we shall improve London's productivity by finishing ahead of the two hours—provided I do not talk for too long.
I cannot resist making a couple of points. I want to repeat and make clear that I believe that the governance should be as close to the electorate as possible. Sometimes that will be community groups; at others it will be boroughs; and sometimes it will be pan-London/the GLA. Rarely, however, other than on strategic issues, should it be the national government. If I came across as anti-borough, that was not intended; there was probably some confusion. I believe that central government should step back and that we should have a proper debate on how to organise government within London. That debate should be with the boroughs, the GLA and so forth.
Having told all speakers that they should not get into party politics, they did much better than Members of the other place. But everyone got into it anyway. I am tempted to ask whether a progressive tax on the individual is fair when there are high living costs in London. Living in London, one is automatically more highly taxed, but I will not get into that.
On Crossrail, the Government should realise that the business community is angry about the issue. We have gone through the feelings of despair and so forth and we are now angry. I can name—not here but outside the debate—at least two inward investors we lost last week in East London because they did not believe the Government were serious about transport.
As regards the Government Office for London, people think that being a businessman I should be analytical and logical. I can be accused of a lot of things, but never of being analytical or logical. Therefore, I am a strange combination of brain and heart—perhaps I should say brain and soul, but I am not sure I have reached that high level. I try.
In many instances, we must get the issues nearer to the electorate. They feel very frustrated, like those in the business community. About 350 people are involved, but it is no criticism of them. They are excellent people and, goodness knows, we could do with them in other areas of the Civil Service and so forth. However, we should get implementation right into the heart of London.
I am in danger of wrecking the productivity of the debate, so I shall conclude. I thank all noble Lords who have participated in an excellent and varied debate and I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Northern Ireland
5.10 p.m.
Lord Brooke of Sutton Mandevillerose to call attention to the situation in Northern Ireland; and to move for Papers.
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The noble Lord said: My Lords, your Lordships' House often dilates on Northern Ireland but generally on primary and secondary legislation. Those who take part know each other fairly well. It is rare for us to have a more general debate. I remark neutrally that we are not taking this opportunity today in government time, but I also note the symbolism that this is the day on which the Government are due to bring in the measure that relates to the block financial assistance to political parties on which the IMC has recommended action. It is also a real pleasure that the right reverend Prelate the Bishop of Southwell, who is taking part in the debate, should himself be an Ulsterman.
It was therefore good of the Secretary of State, in the context of today's debate, to make himself available to some of your Lordships at lunchtime today. I have apologised to the Leader of the House for my absence then. Let me now make amends of courtesy to the Secretary of State. I have attended every plenary session of the British-Irish Interparliamentary Body since 1997. These occur alternately in Great Britain and in the Republic, and the relevant host Minister speaks to the session and answers questions. There is no doubt in my mind that the present Secretary of State has given the best addresses and answered questions in the most productive way of all the four Secretaries of State in the past seven years.
I hope that he continues in office and in this vein, not least because, as we learnt recently in a sport that we share with Ireland, it is stayers that have been round the course before that most often win the Grand National. In the 32 years since 1972, my party was in office for 20 years with eight Secretaries of State, and the present governing party has been in office for 12 years with six Secretaries of State. The average Conservative Secretary of State therefore served 25 per cent longer than his comparable Labour opposite number. This relative longevity enables us to play the candid friend. We are allied to each other across the floor on the broad strategy; both sides remain entitled to make tactical observations on the practical performance of opponents.
This speech will dwell on some of the salient features of the current Northern Ireland landscape. The ceasefires, narrowly defined, have enhanced the economic prosperity of the Province. If there has been a fly in the ointment it has been that we have not seen a similar growing interaction between the economies of the Republic and the Province that the logic of the original Single European Act might have foreshadowed in a single island off the continental land mass. Some part of this can be attributed to the euro-pound interface but, more disturbingly, the principal arena in which cross-border trade has increased since the Good Friday agreement has been in the cross-border smuggling of fuel, a subject on which the Northern Ireland Select Committee in another place expressed itself in the previous Parliament but which has felt itself obliged to revisit in this Parliament as well.
All in the Chamber today are familiar with the reasons for the present stand-off and impasse in relation to the continuing suspension of the Assembly,

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although I must make allusion to the rumours that have circulated in Belfast that in September last year the Government assured Sinn Fein that the eventual elections before Christmas would take place. I personally find such rumours hard to credit because they attribute to the Government a combination of both inherent crassness and excessive risk. It would be helpful if the Leader of the House could deny those rumours categorically when she winds up the debate.
In the mean time, though the provisional, as so often, endures, both Governments—not least as the signatories to the Belfast agreement—must be aware of where the logic of their responsibilities could lie unless there is a breakthrough. The DUP has surprised some—although not myself—by its businesslike attitude to negotiations. In west Cork last week, at the British-lrish Interparliamentary Body, the Sinn Fein protagonists from the Dail expressed the interesting paradox that although it was not Sinn Fein's responsibility to deliver the IRA, it was its responsibility to deliver the DUP.
I shall not visit the Corrie reports. The Lord President and I have disagreed about these before and, because she had time then only to engage in asseveration rather than precise relevant detail about the way the Government's duty of care was executed, I should be interested if she chose to expand on the Government's acceptance of Judge Corrie's provisional findings when, as we understand it, some senior British officers had not themselves been interviewed by the judge.
The IMC report is necessarily a different and more distinct matter and I shall be surprised if it does not attract further attention in the debate. It covers a subject which both the Official Opposition and the Liberal Democrats have returned to again and again, not least through the relentless hammer blows of my noble friend Lady Park of Monmouth. While we all welcome the Secretary of State's article last Sunday in the Sunday Independent, some of us wonder why he could not have written it months ago instead of the mixture of hand-wringing, amounting almost to denial, which represented the Government's position on paramilitary activity over recent years on both sides of the community.
Truth and reconciliation have resurfaced over the past month. I have never found them a convincing read across to the Province from South Africa, not least because, in general, Africans make up well after conflict. Where the read across from South Africa is more ominous is in the ascent of crime. Far more white farmers have been murdered in South Africa than in Zimbabwe. In the Province, the Commons Select Committee—admittedly constrained to subjects from the reserved powers, as and when the Assembly has been sitting—has returned to crime in its various manifestations again and again for its inquiries. I have mentioned fuel smuggling already, but the Committee made the running on the financing of terrorism and its antidotes, on the drugs trade and on the separation of paramilitary prisoners at Her Majesty's Prison Maghaberry, to the latter of which I shall return.
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When you combine these with the IMC findings and the detailed Northern Ireland statistics in the 2002–03 report of the independent reviewer of the Terrorism Act 2000, the noble Lord, Lord Carlile of Berriew, you can understand the black humour of one target of terrorism who said in Belfast that it was not the bullet that had his name on it that worried him but the one that was marked "To whom it may concern".
If I may change gear momentarily, but on the same track, the Government have seemingly accepted that they could not have got through your Lordships' House the rehabilitation into the Province of the "on the runs" currently in exile as long as others were sent into exile by the paramilitaries within the Province, in travesties of judicial procedure for which the phrase "kangaroo courts" would have been overcomplimentary, and not allowed to return.
However much I recognise that these exiles might upon return be at risk from families that they may earlier have injured, I still find distasteful the Sinn Fein plea in defence that it was not in its power to go against the views of the communities to which these exiles would be returning. If the peace process means anything it means the exercise of leadership in such cases.
It remains a puzzle that in the West Park agreement concerning the republican OTRs, the Government should ever have imagined that their unilateral concession would wash with British public opinion, which generally errs on the side of balance and fairness. It has been one of the weaknesses of this Administration that, ever since 1997, apart from the occasional forays of the Deputy Prime Minister into industrial relations cruces, the Prime Minister himself has had to be on contact standby, like a nominated infantry battalion, as the Government's sole permanent reserve.
It was this uniqueness which underlay the Prime Minister's unsubstantiated and undeliverable pledge to the unionists about decommissioning during the post-Good Friday referendum. It reasserted itself in that bizarre occasion when the unionists were set a deadline of 15 July, three days after 12 July, the unreality of which I could only attribute to officials without in-depth experience on the ground in Northern Ireland.
We all know that the Department of Foreign Affairs in Dublin would rather treat with the Cabinet Office in Downing Street than with the Northern Ireland Office at Stormont Castle but, from the point of view of this debate, there are too many cases where the stark facts of the matter imply that No. 10 has overruled the NIO for larger reasons of state. When I think back to the way in which deeply courageous Inland Revenue officials took on the same mantle against IRA racketeering as had clothed Internal Revenue Service officials in the United States against Al Capone, I cannot find it in myself to believe that Belfast based officials would have dreamt up the unique concession to Sinn Fein on its US sources of income within the UK-wide laws on electoral expenditure. Nor can I

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believe, after all the experiences of the Troubles, that Belfast would have gone along with the revival of separation of paramilitary prisoners at Maghaberry.
When the Prime Minister came to the Liaison Committee to give evidence on 3 February this year, the right honourable Michael Mates, MP, as chairman of the Commons Select Committee, in question 78, described the decision in the summer of 2003 to give prisoners in Northern Ireland separate recognition as paramilitaries, and to separate them, as having been against the advice of the governor of the prisons, against the advice of Prison Service headquarters and against the consensus that was reached within the Northern Ireland Office.
Despite that serial opposition, the decision went through. In reply to Mr Mates, the Prime Minister said that he could not honestly recall exactly what No. 10's input had been, but that he would find out and write to Mr Mates about it. As I understand it, although I have not seen the text of the subsequent letter from the Prime Minister, responsibility for the decision was transferred back to the Northern Ireland Office. I presume that meant the Secretary of State, because a decision of that moment, rich with sonorous echoes down the decades, would have been above the pay grade of junior Ministers.
Of course, we on these Benches understand the Prime Minister's involvement in matters as significant as the peace process. Of course, we recognise that, during the war in Iraq, the Prime Minister might have been unsighted on a matter of detail as to who precisely took the decision about Maghaberry. However, we can perhaps also be entitled to conclude that optimal decision-making on matters of that sensitivity might be more likely if ministerial supervision of Cabinet Office interventions did not rely so completely on the Cabinet's one strategic reserve in the form of the Prime Minister. One's memory can play one false, but mine seems to tell me that Mr Jonathan Powell was at one stage embarrassed by the revelation of the contents of a wire-tap of one of his conversations with Mr Gerry Adams or Mr Martin McGuinness. If we are only occasionally to debate Northern Ireland, bluntness may sometimes have to overcome the gentler instincts of diplomacy. The peace between our islands is too important to be relegated to the margins of the Prime Minister's consciousness.
Let me end on an optimistic note. The late and still lamented Lord Williams of Mostyn had many fine moments in relation to Northern Ireland in your Lordships' House, but the finest in my view was the way he lit up Winston's dreary steeples of Fermanagh and Tyrone—counties where electoral mayhem had occurred in the general election of 2001. Lord Williams rewrote the recent Northern Ireland electoral reform Bill as it passed through your Lordships' House. Such an opportunity has not yet arisen for the Minister, but I am sure that your Lordships' House is confident that when it does, she will rise to the occasion in the same way as the late Lord Williams so memorably did a little before his death. That potential resource of the noble Baroness is the more important because of the loss that the
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Northern Ireland Office has sustained in the recent past, to solve government personnel problems in Great Britain, of junior Ministers of such outstanding quality as Jane Kennedy and Desmond Browne. It has been a privilege to open the debate. My Lords, I beg to move for Papers.
5.23 p.m.
Lord Shutt of Greetland: My Lords, I congratulate the noble Lord, Lord Brooke of Sutton Mandeville, on initiating our debate. I apologise to the Minister for the fact that neither my colleagues nor I were able to be present at the meeting with the Secretary of State this lunchtime. It might have been a more congenial affair as a result. I do not know. However, we have been to those meetings on many occasions, and we are grateful that the Secretary of State is able to share his thoughts with us. I also welcome the right reverend Prelate the Bishop of Southwell to our debates on Northern Ireland.
The Motion in the name of the noble Lord, Lord Brooke, is to,
"call attention to the situation in Northern Ireland; and to move for Papers".
As far as Northern Ireland is concerned, I am not short of papers. I do not complain that I am inundated with them. It is useful to receive the various documents that arrive daily from Northern Ireland informing us of what is going on there, as well as various documents that will ultimately need the approval of this House.
Of course, that is a result of the non-functioning of the devolved parliament. That is why we are recipients of those papers. I shall return to that matter shortly, but I shall refer briefly to another paper that your Lordships will have received. Through the good offices of the noble Lord, Lord Rogan, we have received a splendid picture book, Excellence Northern Ireland. It is more than 200 pages long. It is large, in colour and well presented. In it, the landscape, the peoples and the achievements of Northern Ireland are described. It is a very positive book, particularly in the way it portrays the landscape and elements of a vibrant economy. The Troubles have a place in the script only to tell a positive story. There are one or two instances where the book states that,
"arising out of the Good Friday Agreement",
certain things are now happening.
The reality is that there is another Northern Ireland. Most recently, we have heard of the Northern Ireland as reported by the Independent Monitoring Commission. I am delighted that my noble friend Lord Alderdice is able to speak in the debate later on. As I said at the time of its publication, the IMC document speaks about fewer deaths but more damage. Page 20 features bar charts of the numbers of paramilitary-style shootings and assaults in four-year periods. In three of those four-year periods, those numbers have gone upwards. During the 14 months of the study, those numbers remain highly significant.
We learn in that document of the linkages between the paramilitaries and two of the political parties and we learn of the sanctions. Noble Lords may have

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received documents or e-mails from Sinn Fein, in which it almost yells at the IMC report. It is almost a case of "no fair play here". The reality is that the shootings and assaults took place. I worry about whether the sanctions could get in the way of future progress, particularly bearing in mind that several people are exempt from them.
One other feature of the situation in Northern Ireland is that an election took place only last November. Under the PR system in Northern Ireland, 25.7 per cent of the electorate voted for the DUP; 23.5 per cent voted for Sinn Fein; and 22.7 per cent voted for the Ulster Unionist Party. Nearly a quarter of those who chose to vote voted for Sinn Fein. It is inconceivable that Sinn Fein is only a part of the problem because of its link with the IRA. It must be part of the solution.
In this House, despite those percentages, contributions from Northern Ireland are predominantly from a political party that is now third in the province. One cannot conceive of Sinn Fein being here. That fact shows the imbalance of our debates. It is important for there to be balance in proceedings.
Had my colleagues and I been at the meeting, we might have heard more about the prospect of talks. If the Minister is able to give us any more information, that would be welcome. However, if there is to be no success, some of us are now wondering where do we go from here. Of course, one can imagine all sorts of other ways in which to try to make a break-through. But I want to come back to all those papers. The scrutiny of what is happening in Northern Ireland in terms of public policy is clearly not a real possibility. My noble friend Lord Smith and I would have to take on an army of 10 people to help us to get through all the documents. We are not able to do the work properly. If we are not going to go forward and make another leap in terms of the governance of Northern Ireland, we shall have to study the scrutiny issue further. Otherwise, Northern Ireland will become even more of a paradise for civil servants and quangos.
5.30 p.m.
The Lord Bishop of Southwell: My Lords, we are indeed in debt to the noble Lord, Lord Brooke, for the timeliness of his nomination of this debate on the situation in Northern Ireland. There is a public perception, in some quarters certainly, that the problems of Northern Ireland are a thing of the past: there are fewer bombs, fewer murders and fewer assassinations. It is now nearly 10 years since the ceasefires were called in the autumn of 1994. However, the events and issues in the IMC report remind us that peace, reconciliation and normalisation of civic society are not to be achieved overnight. Peace is a very fragile thing, as we know.
I should like to make a small contribution to this debate to help to enlarge the picture of the situation in Northern Ireland by referring to some of the public efforts of the Christian communities, the para-Church organisations and the ecumenical bodies.
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My good friend the noble and most reverend Lord, Lord Eames, has asked me to apologise for his absence from this debate due to the pressure of Anglican business—let the hearer understand. He encouraged me to remind the House that the role of Churches in reconciliation has not always been recognised. The good news is that regular meetings of Protestant and Roman Catholic priests at grassroots level are increasingly common. Four of the main Church leaders—of the Church of Ireland and the Roman Catholic, Presbyterian and Methodist Churches—now meet regularly and stand in public solidarity for reconciliation.
The problems may have had a religious identity but they are now recognised much more as political and social. However, although politics is an important fact in the scene, it is only part of the peace process. Ordinary attitudes need to be addressed as well. That is where I believe that faith communities have an important role to play.
We live in a world in which faith is increasingly in danger of being privatised. Belief in God is often a matter of personal conviction that has little relevance to our behaviour beyond individual piety. There is no doubt that in Northern Ireland, as in many places, Christians have sometimes held faith as if they did not belong to a wider, troubled community—or else, amid the clashing cultural, political and sectarian identities, Christians have sometimes been hard to distinguish as people of faith. It is most encouraging that many are now striving to develop a spirituality of social engagement—striving to see how that spirituality and the wisdom and disciplines of the different faith traditions can inform their commitment to peace, justice and reconciliation. I believe that those engaged need to be given every possible encouragement.
Many in the Churches in Northern Ireland continue to show the resilience and commitment to peace born out of the deep spiritual insights of their Christian faith. It sustained them through the worst days of the troubles, inspired their peace making and now, in the hard work of peace building, it is their basis for hope and transformation towards normal society.
In that regard, it is worthy of regard that the new Moderator of the Presbyterian Church in Ireland is the Reverend Ken Newell. Mr Newell, as reported by David McKittrick in the Independent on Monday, is one of the key group of Protestant clergy who contributed to dialogue with Sinn Fein in the dark days before the IRA ceasefire in 1994. Out of their good relations with Roman Catholic colleagues and because they are prepared to take risks for their people, those men and women continue to provide points of challenge and opportunity for change to those who genuinely search for a peaceful and better future for all the people of Northern Ireland.
Whether working alongside or within local community development groups, mediating on interface disputes, encouraging victim support groups or even continuing to sit and challenge those connected with paramilitaries, churchmen and churchwomen engage with realities for making the

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future of Northern Ireland better for all. Their faith and experience tells them that it will not be easy; they know that transformation and change for both individuals and communities is a long, long road. Such change is harder in terms of moral courage than the certitudes of past conflicts. Church leaders, such as those from the Protestant Churches who sit with the Loyalist Commission, which was an initiative of the Church of Ireland, know more than most that it is necessary to deal with the criminality and brutal control of paramilitaries, which has no place in normal society. But they also know that we must do so in such a way that continues to offer hope and does not close down the possibility and opportunity for change by those who have in the past been part of the paramilitary structures.
The call by the IMC for statutory commercial and community organisations to sever such links puts those Church people who take faith-inspired risks in the commitment to conflict transformation at odds with that recommendation. That my colleagues in the Christian Churches are willing to persevere in their dialogue with those looking for a way out of paramilitarism is more than just a pragmatic necessity. It arises from an engagement that understands sectarianism, not simply as a disease of paramilitaries or the prerogative on the interfaces but as the deep malaise in the hearts and minds of many in Northern Ireland society. Making some sections of society the scapegoat is not the answer. To heal the wounds of conflict requires not only those who cause them but those who nurture them to take responsibility. There are many who may not have pulled the trigger but have pointed their hearts in bitterness and enmity towards their neighbour.
The noble and most reverend Lord, Lord Eames, has impressed on me continually the need to see political progress for devolution and the dangerous vacuum through the continuing failure of the IRA and loyalist groups to disarm. I believe that the way ahead is incarnational, through human contact and relationship. That is something that communities and organisations such as the Corrymeela community, the Evangelical contribution in Northern Ireland, and other ecumenical trans-denominational bodies have striven to facilitate. I am also sure that the recent meeting between the most reverend Primate the Archbishop of Canterbury and the President of the Republic of Ireland is yet another one of those small but encouraging steps in the growing development of a spirituality of social engagement for reconciliation—something that I believe that each one of us can play a part in through our own personal engagement.
5.38 p.m.
Baroness Park of Monmouth: My Lords, I, too, am grateful to the noble Lord, Lord Brooke, for enabling us to have this debate and for his graceful reference to me, of which I feel very proud.
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The Cory collusion inquiry and the first report of the Independent Monitoring Commission have both been recently published. So has the spring 2004 news sheet of the Organised Crime Task Force, following the assessment of the threat from serious organised crime in Northern Ireland. In the collusion inquiry, Judge Cory says that,
"during the Weston Park negotiations, which were an integral part of the implementation of the Good Friday Accord, six cases wore selected to be reviewed to determine whether a Public Enquiry should be held".
The cases were to be reviewed to establish whether evidence of collusion by the security services, the army and the police existed, and Judge Cory claims to have found collusion. He believes that any failure to hold immediate public inquiries would be a denial of the Belfast agreement and are,
"essential if public confidence in the police, the Government and the administration of justice is to be restored".
He has evidently not noticed that the police force has been radically changed and that it does enjoy widespread confidence—as, indeed, it always did. He says that a failure to have these inquiries would be seen as a cynical breach of faith which could have unfortunate consequences for the peace accord.
I have read two of the four reports; I will say only that they show a quite amazing lack of understanding of the workload of the hard-pressed police in particular when the country was actually in a state of war. Good judgment and fairness do not strike me as notable features of these reports. This is a political exercise which will produce a series of Bloody Sunday inquiries at considerable cost, while no such inquiries can be made into murders by the IRA and the loyalists; for instance, into the "disappeared".
It is a pleasure to turn to the robust first report of the monitoring commission which, while dealing evenhandedly with IRA and loyalist paramilitaries, states bluntly that:
"PIRA is engaged in the use of serious violence which we believe is under the control of its most senior leadership, whose members must therefore bear responsibly for it".
It makes the salient point that while the commission recognises that without Sinn Fein there might not have been a PIRA ceasefire in the first place, by the same token Sinn Fein must bear its responsibility for the continuation by PIRA of illegal paramilitary activity and must recognise the implications of being in this position.
Later the report identifies a vital aspect of paramilitary violence: the intention to maintain control of the population and to present PIRA as an alternative criminal justice system. While this continues, the IRA will continue to do all it can to destroy the police and the organs of justice. The commission points out that there was already a decision by the leaders to restrict attacks on the people during the Assembly election period, as there had been earlier, during President Clinton's visit, when they were actually planning the Canary Wharf bomb.

823
The report also notes the attacks by the Real IRA—in my view, a useful unacknowledged part of the Provisional IRA—on the district policing partnerships. The commission recognises that:
"The level of paramilitary violence has been and continues to be considerably higher than before the Belfast Agreement",
and makes the point with which I warmly agree that the debate should move on,
"from one about ceasefires and breaches of ceasefires to one about the totality of illegal paramilitary activities".
Not least it says:
"The people of Northern Ireland should not have to suffer violence which in equivalent terms would cause outrage elsewhere in the UK and in Ireland".
The report, in its conclusion, urges a high priority for combating organised crime and resourcing the agencies engaged in doing so. It requires paramilitary groups, and that includes the bullyboys on the streets, to decommission all illegally held weapons and to cease all criminal activity.
So it is an admirable report until we come to Annex III and the pitifully small sanctions which the commission is free to recommend. These are sanctions aimed at, in the case of the IRA, the richest party in Ireland, north or south. It is largely funded by crime, is intent on destroying the police and is fully under the control of a political group that must surely be beginning to be a serious threat to the whole of Ireland. It is vital to destroy the paramilitaries by exposing their political masters to relentless publicity, especially in the United States.
What is needed is to build up the very effective campaign being carried out by the admirably organised taskforce, which is saving the Exchequer £1.5 billion in one field of crime alone and £600 million in another. To achieve this the police, Customs and a wide range of citizens are working together. The taskforce threat assessment says that extortion is a cornerstone of fundraising by paramilitary organisations and that 65 per cent of cases could not be pursued by the police because the complainant asked for no police action. The paramilitaries are making money from drugs, cash in transit robberies, fraud and high-tech crime, including theft of intellectual property. They would destroy the economy—they control over two-thirds of organised crime in Northern Ireland—as well as the people but for this admirable taskforce.
The monitoring commission has recognised its importance and value for, in attacking crime, it will destroy the paramilitaries and their power over the people and it will expose for the world to see the political figures who benefit from these crimes and condone them. The commission believes that those in a position of leadership in the various paramilitary groups should be held personally and publicly to account. The taskforce says that:
"Publicity is a very important element of all law enforcement work",
and their excellent newssheet, "Response", reports that Professor Goldstock, a distinguished American with wide experience, believes that the influence of
824
paramilitary organisations needs to be eliminated and that part of that could be achieved by removing their murals and symbols.
The Sinn Fein/IRA leaders need to be denounced publicly. Resources should be made available for this, such as money to take out advertisements in the United States, as Sinn Fein did, and in the EU setting out what the paramilitaries do to the community in terms of crime and violence and the cost to the country in economic and human terms. What politician could defend that? It would also be a means of demonstrating what the police are doing and would give comfort to victims. Not least, young voters both north and south need to have their often romantic view of the IRA as a brave resistance movement corrected. Let them see the IRA for the criminal organisation that it is and the police for the decent, hardworking professionals they are.
We should at least ensure that the cases of the IRA penetration of Stormont and the break-in at the special branch are brought to the courts without further delay. This would do much to demonstrate to the public that Sinn Fein/IRA is not above the law and that the police, overworked as they are, have delivered what is need for judicial action in the courts. Why must the process take so long?
I warmly welcome the Secretary of State's article of 25 April. For the first time in years, the Government are recognising unequivocally that in Sinn Fein/IRA they are not dealing with normal political representatives of a particular group in society, but with men who knowingly allow and actually encourage, as they certainly control, the armed and brutal psychopaths, the so-called paramilitaries, to carry out daily, not only a wide range of crimes which cost the country billions, but the brutal oppression of their own community, which is left without hope of redress.
The Government have allowed the Bloody Sunday inquiry to cost the country £120 million so far and will now, no doubt, spend as much again on the Cory inquiries. Although, in fairness, I must say that we were told today by the Secretary of State that there would be a mechanism of some kind that will restrain the cost of those inquiries: I hope that the Leader of the House will correct me if I am wrong. Nevertheless, there must be costs.
What we must now do is to spend serious money on, first, cutting off the source of Sinn Fein/IRA's funds. This the Government are already trying to do. Next they must end the power of Sinn Fein/IRA to set up a so-called alternative system of justice, which not only does not deliver justice but attempts to replace and discredit the police and the forces of law and order. Last, but by no means least, every time that the paramilitaries of both persuasions beat not only men, but also children, half to death, the blame must be publicly laid at the feet of the political leaders involved.
Gerry Adams and Martin McGuinness refused to intervene to allow witnesses to the Omagh bomb to testify, despite the fact that they claim that it was not

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the Provisional IRA but the Real IRA that was responsible, because they said that they did not recognise British courts or British justice and now they kill new Catholic entrants to the police force because they will be satisfied only with their own people's police; where have we heard that phrase before? Each time an incident occurs, they should be required to comment publicly and be reminded that they are the leaders in whose names children are brutally destroyed and young men commit suicide in despair, to say nothing of the suffering of whole families who dare not go to the police and who are often exiled.
I shall begin to believe in the human rights commission when it speaks out daily about all this; I have not heard it doing so. What is it doing in the US and what are the Government doing to tell those who fund the IRA what is being done in their names? Public shaming by naming, not only the perpetrators, but the leaders who condone the act is the best weapon we have and I am glad that the Government are going down that path. It is high time, if we are not to have a generation of stunted, terrified human beings, the victims of unrestrained criminality and cruelty in this, our country. It is our children who are having to live in this hell.
5.49 p.m.
Lord Alderdice: My Lords, I join other noble Lords in thanking the noble Lord, Lord Brooke of Sutton Mandeville, for enabling this debate to take place. The excellence of his timing is matched only by the characteristic elegance of his presentation.
I reflect back to the time when he was Secretary of State for Northern Ireland, as, indeed, he did. It was he who introduced the notion, which I very much approved of then and still do, that communicating with those who were involved in violence and encouraging them to think about what they were doing was an essential component of moves towards any long-term peace. A number of the things that he said and did in the form of a long-range or slightly more than arm's length communication stimulated people to think. However, in the talks process in which he, I and many others were involved, we ran into a problem because those talks were based on a notion that had been present for many years—that the future was to be found in bringing together a successful devolution based on power sharing across what one might describe as a broad centre, and that this, if it were successful, would win the vast majority of people away from those on the extremes with sympathies for paramilitary organisations.
But the noble Lord will recall that at the time the leader of the SDLP, John Hume, was beginning to explore another idea with which he became very much identified and committed to, which was that of an inclusive process, by which he meant that everyone, including those outside the normal run of politics, should be included. I must confess that I had considerable reservations about that approach. I felt that there was a danger that such a process could lead to greater polarisation of the community and diminish the broad centre, by which I meant the Ulster
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Unionists and the SDLP as much as the Alliance Party. I was also of the view that if, in the end, Sinn Fein and loyalist representatives were not prepared to split from those who I believed were irrevocably committed within their organisations and irrevocably committed to the use of violence for political and other means, we would simply have an enormous problem. We would not solve the difficulties.
In the end, however, it became clear that without the SDLP there could not be any power sharing. Therefore, we had to proceed with such a process until it was either successful or exhausted, and so we embarked on what became known as the peace process. The essence of that was that there would be a suspension of the normal rules of law and politics in order to enable a transition to an all-inclusive peaceful, stable, reconciled community. From the start I advised Her Majesty's Government that any negotiation with republicans on the issue of peace ought to be with those who wielded the weapons—that is, with the Provisional IRA directly. It seemed to me that the choice of Sinn Fein as interlocutor was fraught with difficulty because the very creative ambiguity that would be necessary in order to establish the process would inevitably become the Achilles' heel of the whole process as people began to believe that there was no division but at the same time a separation.
It is not necessary to recount the whole of the subsequent process. However, it is important to point out that it was based on assumptions that the leaders of Sinn Fein were not only intent on an honourable peaceful settlement but were also able and willing to deliver the Provisional IRA—a view confirmed to some by their ability to deliver the 1994 ceasefires followed, of course, by the loyalist ceasefire. But there was also an assumption that after a reasonable period of transition Northern Ireland and the three sets of relationships within the Province—within Ireland north and south and within these islands—would be characterised by peace, stability and reconciliation, and that that prize would be sufficient to persuade the leaders of loyalism and republicanism to set aside those who were involved in violence. But the years up to 1998 were taken up with the achievement of the agreement, which was necessary, and since 1998 with the attempt to implement the agreement.
Ten years on from the ceasefire and six years on from the agreement, that agreement is not fully implemented. I think that is one of the few things on which there is no disagreement within Northern Ireland. That demonstrates to me that the agreement does not have within itself the necessary mechanisms to ensure its own implementation. That is why an International Monitoring Commission and other mechanisms have been necessary; that is, because the agreement on its own, on anyone's terms, has not been able to ensure its own implementation. The IMC was established to address the issue of paramilitary activity, security normalisation and, in the context of devolution, the lack of political trust which was endemic.

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What is clear is that there has been a change in paramilitary activity by the Provisional IRA, the UVF and the UDA. There are far fewer attacks on security forces, although one should not, as often happens, forget the very substantial number of attacks on members of the Prison Service that have occurred over the past year or so. However, dissident republicans continue to attempt to attack the security forces. The Provisional IRA, the UVF, the UDA and other loyalists have turned their attention to controlling their own communities. They have not, in the words of the Taoiseach, "retired", but they have followed very much what occurred when political and, subsequently, paramilitary efforts to deal with the issue of the Bourbons in Sicily led to the outcome of the Mafia. We should take that outcome very seriously. It is one that happened not only there but in other places and is, it seems to me, a very serious threat to the people of Northern Ireland and to their stability in the long term.
The IMC's responsibility is to follow the evidence wherever it takes it and to report it as it is. It is for others to address the political, security and other consequences, but it is for us to shine a spotlight, particularly on those who operate in the shadows. Our purpose is not, in the words of the press, to "name and shame", as in my view humiliating people rarely solves a problem and it often creates many, but is to hold people personally and publicly to account for the things in which they involve themselves. We are all familiar with the fact that in your Lordships' House we are able to be held to account not necessarily by electors but by having to account for the various responsibilities that we have and the involvements that we have outside your Lordships' House by way of publicly notified lists.
However, it is not the case that all of those involved in activities in Northern Ireland are quite so prepared publicly to own up to all of the things in which they are involved. One of the responsibilities of the IMC is to proceed on that course, but to proceed with due process, not to damage but to help, and to recognise the human rights of all concerned. That is why we shall communicate in the very near future with many of those who we have reason to believe are in authority in paramilitary organisations.
The right reverend Prelate referred to the need for dialogue. Of course, he is absolutely right. But he will also recall that there is a biblical injunction to be as wise as serpents as well as harmless as doves. It seems to me that there is a need to recognise that there are those who do not want to give up the possibility of using violence because it has all sorts of secondary gain, both personally and potentially politically. To have "politics plus" in any circumstance may wreak an advantage over your political opponents. "Politics plus" in the Northern Ireland context does not mean merely money and the use of the press and the media, it also means the threat of the use of violence.
We must ensure that the boundaries of proper acceptable behaviour are the price of peace. We must be clear about that. It is not possible to have peace,
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stability and reconciliation unless everyone abides by the same reasonable and proper rules. A period of transition is appropriate, but we are 10 years on from ceasefires and we are six years on from the agreement. We must recognise a degree of hesitancy in certain quarters about confronting this last gnarled and difficult question.
At this point when faith in the agreement is at a lower point than it was even some years ago in many sections of the community in Northern Ireland, we may either be at a rather dark and difficult hour before a dawn, or we may just be at a dark and difficult hour. It is the IMC's commitment to try to move towards that dawn. I know that in that we have the support of Her Majesty's Government, the Government of the Republic of Ireland and all in your Lordships' House.
6 p.m.
Lord Fitt: My Lords, I am delighted to be able to follow the noble Lord, Lord Alderdice, because of the position that he still holds on the IMC. I only wish that someone had spoken who had a position in the de Chastelain commission, which gives its opinion periodically on IRA disarmament. We never hear what those people's opinions are or what has been said. If one takes the noble Lord's remarks into their proper context, we can be quite certain that he is representing the views of Northern Ireland, this House and the other House to a full extent on the IMC.
There are three people present whom I want to congratulate. One is the noble Lord, Lord Alderdice, and another is the noble Lord who initiated the debate. The third, also speaking in the debate, is a former Secretary of State, the noble and learned Lord, Lord Mayhew of Twysden.
It was said earlier by one of the Liberal Democrat Peers that there were two Northern Irelands at the moment. I certainly agree that the book that all of us in your Lordships' House and the Commons have received through the courtesy of the noble Lord, Lord Rogan, points out that, in Northern Ireland, there is a very optimistic future if we only want it. When one looks at the contribution made by Northern Ireland throughout the long years of history before partition, one can see that it has made a very great contribution to all sorts of subjects—industry, literature, the arts—throughout the United Kingdom. Therefore, I welcome the publication of that book, because it will let many noble Lords know that all is not doom and gloom in Northern Ireland.
On the other side of that is the ongoing existence of the criminal conspiracy by paramilitary organisations in Northern Ireland and, it appears, the support that they elicit from the electorate there. It has been said repeatedly over many months and years that Sinn Fein is the richest political party not only in Northern Ireland, but in these islands. Much of its finance comes from criminal activities—smuggling, robbing and many other activities that would not be acceptable in this part of the United Kingdom.
The Government put through legislation to allow Northern Ireland political parties five years to get subscriptions and financial contributions from outside

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the United Kingdom. Other political parties in these islands were not granted that five-year extension. I remember advising against that legislation in this House, because I could see very clearly that giving the extension to Sinn Fein would make sure that it continued to reap in hundreds of thousands, if not millions, of dollars from the United States of America. People there are still contributing and it is by their contributions, allied to the criminal activities of the paramilitaries, that Sinn Fein has been put into a position whereby it can fight elections, with money and finances no difficulty to it. That has led to it now being one of the largest parties in the Northern Ireland Assembly.
The noble Lord, Lord Alderdice, will be aware—he was personally involved at the time—of the position of the SDLP. I was a member of the SDLP; in fact, I formed it. It was a constitutional nationalist party. Its long-term aspiration was a united Ireland. However, in no way could it be associated with paramilitary activities. Certainly when I was the leader of the SDLP, there was never any danger of that. As the noble Lord said, John Hume, my successor as leader of the party, decided to bring about an all-inclusive set of politics in Northern Ireland and began negotiations with Sinn Fein/IRA through Gerry Adams. The position now is that if we ever to get an Assembly back in Northern Ireland with power sharing, which is far the best solution that we have ever had, the SDLP will have to dissociate itself from Sinn Fein. Sinn Fein depends on the SDLP being a nationalist party—therefore, with the same aspiration of a united Ireland—to keep it in its strong electoral position.
We are at the end of that process whereby the SDLP, as I have said before in this House, tried to drag Sinn Fein out of the political gutter and into legitimate politics in Northern Ireland. We are at the end of that road. Even though the SDLP will criticise Sinn Fein when it has commissioned some atrocity or seems not to agree with the police force in Northern Ireland, at the end of the day Sinn Fein knows that the SDLP will not desert it. There are no circumstances that I can see in which the SDLP will desert Sinn Fein.
Given that that is the reality of the present position, if we are to have inclusive government of the four main parties—the DUP, the UUP, Sinn Fein and the SDLP—we will never see a return of a power-sharing executive in Northern Ireland. Under the agreement on setting up the Assembly, there were, I think, 10 departments and enough MLAs in them to look after the everyday occurrences and the needs of the people in Northern Ireland. The noble Lord, Lord Shutt, referred to that. The noble Lord, Lord Alderdice, was the Speaker of that Assembly, and he will know that there was quite a lot that could be done by those people acting on the ground.
Here, however, every day I go to my post box and get lots of paper. I lifted one paper up this morning that had been sent for us to give a decision. It is the Dunnabraggy Road, Moneymore (Abandonment) Order (Northern Ireland). I am quite certain that that will not keep anyone in this House up all night. We are too far removed from that. However, the MLA in
830
Stormont would have known where the Dunnabraggy Road was, and someone would probably have made representations to him about it. That shows how far removed noble Lords are. The same thing is happening in the Commons, which is just as far removed from Northern Ireland activity. Under the direct-rule system, I am not too sure whether everyone in the House gets the load of bumf from Northern Ireland. If they do, I can see them lifting it up and putting it in the wastepaper basket in the Attendants' Office. Northern Ireland needs an Assembly.
As I said to one of my noble friends today, I go to Belfast every weekend and to County Antrim in particular. I go round various parts of Northern Ireland and talk to different people. By the way, there are certain parts of Northern Ireland where I cannot go. There are certain parts of my west Belfast constituency in which I am unable to set a foot, because of the danger of an attack from the Provisional IRA, which is still in existence. There are still many no-go areas in Northern Ireland, where the police and the Army cannot go. I go to places where it is reasonably safe. This is after the ceasefire, after the Assembly has been put into motion and we have had a long, drawn-out process.
But in talking to ordinary people every weekend, I find that the electors who actually voted in the recent elections do not give a damn whether or not the Assembly comes back. They have given up on it. As one fellow said to me recently, "I don't care if the Assembly never comes back as long as I get my giro every week". That is the note of despondency that exists among the ordinary electors in Northern Ireland. They do not care whether the Assembly comes back.
So are the Government intent on stymieing or refusing to fall into line with the demands that have been set by the IRA before it makes a return to Parliament? We are now in a complete stalemate. But the Government should not make any further concessions to the IRA in an attempt to get it back into Stormont. I believe that the Government should stick rigidly by the speech made by the Prime Minister in the Custom House in Belfast, when he said that there could be no return to democratic politics in Northern Ireland without paragraph 13 of the Joint Declaration. That meant that all those who were using arms to force their will on the people of Northern Ireland would have to give them up.
6.11 p.m.
Lord Mayhew of Twysden: My Lords, I am always diffident in following the noble Lord, Lord Fitt, who has always stood by his principles with such courage in a lifetime in Northern Ireland. My diffidence is increased tonight, because I think that I am the only speaker not to have received that great book about Northern Ireland from the noble Lord, Lord Rogan. I hope that that may be put right before too long.
In the first report of the Independent Monitoring Commission we have a mercilessly honest portrayal of an appalling scene. And yet, paradox though it may

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seem, it is possible to read the report with a sense of real relief. It is a privilege to be able to say that in the presence of one of its authors, the noble Lord, Lord Alderdice, who has spoken so valuably.
That is because its stark and unambiguous language seems worlds away from the smudge and fudge to which we have become accustomed in the successive liturgies of the peace process in the past few years. I take as an example of the latter, the so-called "acts of completion" that are ritually demanded by those who themselves refrain from any act of commencement.
In the words of Mr Barry White, the veteran columnist in the Belfast Telegraph on 24 April, the IMC is,
"a body independent of government but wise in the ways of the world which is prepared to say out loud what we all knew: that some of the politicians who act as apologists for the paramilitaries are closer to the action than they have ever admitted".
I share the gratitude that has already been expressed to my noble friend Lord Brooke for having given us the opportunity to discuss and examine the scene in Northern Ireland and fortuitously to do so in the light of the IMC's most welcome illumination—the spotlight to which the noble Lord, Lord Alderdice, referred.
Personally, I have been greatly in my noble friend's debt since in 1992. Twelve years ago, I inherited the invaluable fruits of at least 12 months of brilliant work by him in securing an agreed basis for what came to be called the "talks about talks". I am inclined to believe that those talks helped to prepare the tortuous way for much of the undoubted progress that has since been made. It is of great pleasure to me to see the noble Lord, Lord Molyneaux of Killead, in his place, because his courage and vision in taking his party's negotiators—or some of them at least—down to Dublin was just one of the mould-breaking "firsts" that were able to be achieved during those talks. Irish Ministers, no less than four of them, used to come to negotiate with, among others, the DUP and Mr Paisley. The sky did not fall in, although there was a good deal of thunder. That was the beginning of a process which I believe secured real advances in the subsequent years.
I return to the report. What the commissioners demand is, first, that reality be faced—and by everyone. They are utterly even-handed, as we all must be, in their denunciation of criminal violence and intimidation by whomsoever they are committed. These crimes, they report, are giving the paramilitaries on both sides an "increasing stranglehold" over some communities. The UVF and their political henchmen in the PUP are no less ruthless or vicious than the PIRA—and are killing and maiming almost twice as many victims.
The commissioners say:
"The people of Northern Ireland should not have to suffer violence which in equivalent terms would cause outrage elsewhere in the UK and in Ireland".
The noble Baroness, Lady Park, mentioned that. The figures for the murders, shootings and assaults which they extrapolate from Northern Ireland to the whole
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of the UK since 1 January 2003 horrifyingly make their point. They can be found on page 25 of the report. This is a picture which, I am afraid, the Government, six years after the Belfast agreement and seven into their stewardship, will not expect to be greeted with congratulation.
The commissioners are not sparing of criticism of many in Northern Ireland who, with no connection with any such organisation, or any political party connected with them, display what they describe as a certain tolerance towards those organisations. In what I find an especially perceptive passage, the commissioners speak of paramilitary control being the greater,
"because of a degree of tolerance in circumstances in which that is not justified and not imposed … We think that this tolerance may be widespread but we find it entirely inappropriate. It is an issue which affects society as a whole, including statutory agencies".
They say that they plan to return to that matter. I hope that they will. I have often experienced from some surprising people, after their ritual disclaimer of any support for violence, a distant look, a certain smile and the words: "But I can see where they are coming from".
I want now to turn from the general to the particular. The commissioners say:
"But PIRA nevertheless remains active and in a high state of readiness. It has been undertaking training in the early part of this year. It maintains a capability on intelligence, both on political events and on potential targets, and on weaponry. This provides ample evidence of an organisation maintaining its capacity to undertake acts of violence or to participate in a terrorist campaign if that seemed necessary to it".
The PIRA is, they say,
"highly active in paramilitary shootings short of murder".
It has been responsible for eight such attacks this year. It is engaged, they say, in the use of serious violence, which,
"we believe is under the control of its most senior members".
This is the gang of which the commissioners find that some senior members of Sinn Fein are members, including, in their words,
"senior members".
So intimate is their involvement that the commissioners say:
"We … want to make clear that had the Assembly been functioning we would have recommended in respect of Sinn Fein and the PUP measures up to and possibly including exclusion from office".
The response by Messrs Adams and McGuinness to that perception has been revealing. It has been to reject the report and to impugn the independence of the commissioners. Apparently, they are poodles of the British intelligence services. That response speaks for itself. It has about it the degree of effrontery that they have made their specialism. They have, in some quarters, so often seemed to get away with that. But not this time, I suggest; not in the face of—to cite Mr White's words—this body independent of government but wise in the ways of the world.
On 24 April, the Irish Times described as "incredible" Mr Adams's denial in recent public exchanges with the Taoiseach and the Minister for Justice. The report, it said, had brought Sinn Fein and

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the IRA to the point of no return. They had to decommission their army if they wished to participate in devolved government.
What will the Government do now? We all look forward to the speech of the noble Baroness who will reply to the debate. So long as Sinn Fein and the PIRA continue in their course, the Government will surely continue the suspension of the Assembly. We must all hope that Ministers, together with us all, will draw lessons from the recent past.
The Belfast agreement was a bold act of hope, and no doubt also of faith, which put Sinn Fein and others to the test. It was right to take that step. I thought so at the time; I think so now. I am sure that the Government hoped—did we not all?—that the successive "acts of completion", each unilaterally made, would in time be requited. At the forefront of those, we must surely place the continued release of the convicted paramilitary prisoners, even though their associates were maintaining, and stepping up, their campaigns of violence and intimidation at the same time. That was a key decision.
Decommissioning remains a mirage more than a reality, yet that precious lever was unfortunately thrown away in unblushing breach of the Prime Minister's hand-written assurance. I suggest that this sequence of unilateral acts of completion must now come to an end. It is a mistake to reward betrayal, and the Government have been betrayed. The Government must surely now prosecute the war against terrorism consistently. As a sign of that, I suggest they should state that the on-the-runs—the OTRs—will face the full process of the criminal justice system if they return. They must not be shuffled back into the midst of their communities, as one understands was promised, with a minimum of criminal process.
I suggest that the Government must give their fullest support to the PSNI—support which Sinn Fein continues to withhold. Let them heed also the Chief Constable when he says that his job is to police the present and that, if he has to police the past, he cannot do his job. Let them, above all, heed the findings of the Independent Monitoring Commission and its future reports, and stand firm against all the assaults which will surely be made upon it and upon its stalwart members.
6.23 p.m.
Viscount Brookeborough: My Lords, I, too, thank my noble kinsman for bringing forward this debate today. I also welcome the right reverend Prelate the Bishop of Southwell to one of our Northern Ireland debates.
The noble and learned Lord, Lord Mayhew, mentioned, in relation to the report, the readiness of the IRA to take up action again. I add only that nowhere is that more evident than where I live in County Fermanagh and our neighbouring county, County Tyrone. Four times the amount of military patrolling takes place there than in any other single area in Northern Ireland. It is due totally to what was brought out by the report.
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I wish to concentrate on a major concern relating to the situation, which is the lack of a working Assembly and the lack of an Executive. The broad reason for that is the continued involvement of paramilitaries and their connections to some political parties in the Province.
I also congratulate the Independent Monitoring Commission on its first report. I believe that it surprised many with its blunt findings and the fact that it was not afraid to put them into print. I do not wish to go through everything that is in the report; it is all there for anyone who wishes to read it. It was put together by people of high reputation, and they are independent.
The report has also been supported in recent months by others in the Governments of the US, this country and the Irish Republic. Inasmuch as Sinn Fein would try to ridicule it, it remains the first accurate summary to be produced in such a way. It is an extremely valuable document and I believe that it changes our approach to the whole subject.
I shall concentrate on the organised crime aspect but, before doing so, I must declare an interest, first, as a member of the Policing Board and, secondly, by saying that my brother-in-law is in charge of moving large sums of cash around Northern Ireland for Securicor, and he comes to the attention of the paramilitaries all too often. However, I want to mention one topic in the commission's report which comes outside that area.
In paragraph 6.9, the commission refers to the imposition of local discipline, and I entirely support its view of the unacceptability of that. The beatings and shootings are well known, but less well known is the setting up of groups using the normally well respected title of "Restorative Justice". Elsewhere in the world, as in this country, such schemes involve the judicial and police departments. However, in Northern Ireland, such republican groups have no connection at all with anyone else—least of all the authorities. Can the Minister tell the House what the Government's policy is on such groups and whether their activities are legal, illegal or criminal? If they are the latter, are the Government prepared to act against them?
In paragraph 6.1, the commission states that it will come back to the subject of non-terrorist crime, funding and local control, which, due to the short timescale of the report, was difficult for it to do. In the context of the fight against organised crime, I want to say, first—at no time am I speaking for the whole Policing Board but as an individual—that we in Northern Ireland are very sorry that Jane Kennedy has left the NIO. As Minister of State and chairman of the Organised Crime Task Force, she was well respected and highly thought of. Her enthusiasm and approachability has made a tremendous difference since that force has come into being. We shall miss her.
Excise fraud and smuggling are the most lucrative form of organised crime in Northern Ireland. I am sorry but I want to add some figures to the report so that one sees what is really going on. In 2002, such fraud was estimated to amount to about £340 million.

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Although the report has not yet been published, I understand that in 2003 there will be a rise in that figure of 7 per cent. In 2002, up to 20 per cent of all tobacco sold was smuggled. Estimates are that that percentage will rise to about 30 per cent over the next three to four years because tobacco presents such a difficult problem to counter. Last year, the seizures were down slightly at 31.5 million cigarettes, of which half were also counterfeited.
The counterfeiting of alcohol—especially vodka—is rife. Neat alcohol is imported in plastic sacks that normally go into the middle of wine boxes. It is also brought in disguised in creosote boxes. Stolen empty bottles are used and filled with watered-down smuggled counterfeit alcohol. The bottles are properly sealed—this is not a "round the corner" job—by a machine imported into the country, and they are fitted with new, counterfeit labels and sold as vodka.
Such fraud and smuggling funds paramilitaries on both sides, although perhaps the loyalists to a slightly lesser degree. As we have already heard, and as has been well documented in many places, the republicans are involved in the massive practice of fuel smuggling and fuel laundering, of which all noble Lords will have heard. Inland Revenue fraud is a target for paramilitaries in two areas—particularly the construction industry and in avoiding the tax on illicitly earned gains.
The paramilitaries are heavily involved with money laundering in order to reuse the money which they have made illegally. The Money Laundering Regulations 2001 have made it much more difficult but, as can be seen, organised crime has found ways in which to continue to launder as much, if not more, money than ever. They then invest it in legal businesses, and it becomes much harder to find. Although I shall not talk about it, the Assets Recovery Agency is key to this problem.
Another area is drugs, in which mainly loyalists are involved. Very large amounts of money are involved for small quantities of drugs. However, although the republican paramilitaries are not directly involved, some nationalists are, and the terrorist groupings on that side take their cut. It does not go on without their knowledge—nothing does.
Paramilitaries from both sides are using extortion as a cornerstone of fund-raising. The figure in paragraph 6.4 is but a small example. It is a day-to-day crime and the costs tend to be already built into contract bids from the start.
Intellectual property crime is estimated to be 7 per cent of all world trade, and in 2002, seizures by police of goods in Northern Ireland exceeded those by police in all other areas of the United Kingdom put together. That is just over 50 per cent. Last year, it totalled £6.77 million. That included some surprising items, such as clothing at £1.5 million, video games at £1.3 million and DVDs at £1.27 million. Even power tools are included; they are sold at markets, and are highly dangerous into the bargain because of the electronics. However, the 2003 figure is about
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£7.6 million, so it has gone up 10 per cent or thereabouts. I am not knocking the ability of the police—I support them absolutely, and not only as a member of the Policing Board. But these are the facts, and this is how difficult it is. That figure is accepted as 5 per cent of the market—more than £150 million. So it is a colossal sum.
Bank and cash in transit robberies are down by 38 per cent, which is a great success for the working relationship between these businesses, the robbery squad and the Organised Crime Task Force in particular. In 2002, the figure was 219 attacks. In 2003 it was well down at 136—in 92 of those cases, firearms were used. This is still a great deal of hard cash—a total of £1.5 million.
In general, the paramilitaries have been said not to be heavily involved. However, in one recent incident, which I shall not highlight here, it is quite clear that they were. Therefore, they may be more involved than we are aware of and recent reports have stated. At any rate, they still take a cut of up to 50 per cent, even when they are not involved.
The police service and many other bodies are doing their best to make Northern Ireland a safer place, but examples of a lack of joined-up communication repeatedly put their aims at risk. For instance, on 27 November 2003, Michael Nolan was given eight years for armed robbery. On 22 February 2004, he was given compassionate parole from the prison. He broke the conditions of his parole, and eventually came back. On 8 March, he was again given compassionate parole. There was no escort and he disappeared. What is more, the robbery squad was not told until 23 March. I know that the police service is not involved with the Organised Crime Task Force, but if that sort of thing is going on, there has to be something wrong.
Perhaps the last major form of organised crime is counterfeiting currency. Seizures peaked in 2002 at £750,000, but one particularly big incident distorted the figures. Last year, the figure returned to about £400,000. The paramilitaries are reaping an easy harvest. They were the first people in Newtownabbey to counterfeit euro notes, which they dispatched throughout the EU.
I have tried to explain that paramilitaries are even more active than one might suppose by reading this initial report.
I commented recently during the short debate on the Statement on the report that I took mild issue with the statement on page 19 about the situation being better as far as deaths were concerned. In 1995 there were eight deaths during the ceasefire, in 1996 there were 16 and in 1997 there were 22. Therefore, the figure of 13 this year is not the vast improvement that we might have hoped for, but it shows that the terrorists switch it on and off at will.
I would like to ask the Lord President of the Council, whether it is possible, even with the wildest stretch of the imagination, to believe that the paramilitaries could ever extricate themselves from their present level of involvement in illegal activities before the next report. What happens if they do not?

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Even if they do, how many clear reports do they require before they are admitted back into the fold? In farming terms, if a cow goes down with TB and you have what is called a reactor, it is no good having one clear result—before you can trade again, you need two or three. Will this apply to the paramilitaries?
Due to time constraints, I have not commented on the Assets Recovery Agency, but I congratulate the Government on forming it and the manner in which it is carrying out its tasks.
6.35 p.m.
Lord Stewartby: My Lords, I rise to speak in this debate with considerable trepidation, because I have not in recent years been in a position to keep as much in touch with affairs in Northern Ireland as I would have wished. But when my noble friend Lord Brooke drew my attention to this debate on the Order Paper and, with great charm, suggested that I might participate, I began to read some of the things which I ought to have known long ago. That persuaded me that it might be of some use to your Lordships if someone who had some background as far the subject was concerned but nevertheless had not been closely involved in it in the recent past gave some impressions of how the current situation struck him. Whether it would be of value to your Lordships, I will leave you to judge.
The establishment of the Independent Monitoring Commission and its process of reviewing and reporting is a major development which gives me some grounds for hope. In other respects, I feel rather pessimistic, particularly regarding the prospects for a power-sharing Assembly being re-established in a way which will endure. I do not think one can have an organisation of that kind set up and running, then suspended, after which direct rule comes in, then set up and suspended again. There is a limit to the number of times that that sort of process can happen.
Therefore, there is a difficulty in terms of time. Most of what needs to be done in Northern Ireland requires a longer time scale than people have normally been ready to admit. I do not mean that they have deceived themselves, but the natural hope and expectation leads one to think that these things can be done within a time scale which is probably shorter than actual events will require.
Will the noble Baroness the Lord President of the Council, say something about the review which was set up at the beginning of the year but suspended in February as a result of a particular incident which created a furore and is now, I gather, about to continue? When the legislation was originally introduced, it surely was not anticipated that the review would take place at a time when the Assembly was suspended. In order to review the process and suggest possible amendments and improvements, the Assembly would have to be in working order at the time to be able to make relevant proposals. I hope that the noble Baroness can say something about how that is being worked out.
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Clearly it is an advantage, quite apart from the immediate political gain, to have an operating devolved system of government. Dealing with paramilitaries and the problem of crime, to which the noble Viscount has just referred, is easier if there is a stable and ongoing political base within Northern Ireland. If there is a political vacuum, which is what so easily happens, clearly, that can encourage illegal organisations to try their arm, and many other such things to develop.
Everyone realises that we need a complete end to paramilitary activity before we can get the whole political structure in Northern Ireland back on an even keel, but that is very much easier said than done. The reason that I welcome the IMC report and look forward to future ones is that it is very substantially more pragmatic than anything we have seen for a long time.
Over the years I have gained the feeling that there is too much blind eye and not enough hard nose in the way that we approach these problem areas. It seems to me that the report suggests that the commission—which, with one or two obvious exceptions, has generally been very strongly welcomed—is right to draw attention to the hard facts of the situation. So often in the past one has felt that there has been a reluctance to face up to the seriousness of the reality. If we do not face up to the reality, we cannot deal with it. The report, with its many important practical suggestions, offers some hope of a proper way forward.
It will be very difficult to get the broader political scene back in order until the underlying problem of paramilitaries and the related crime is dealt with. But facing the truth is at least an important first step and one which, obviously, we should like to have seen a long time ago. In some respects the report makes grim reading, but it is better to know what we are faced with, otherwise the right sort of responses cannot be made.
So, how do we deal with these unbiddable groups? We do so partly by police and other security measures. However, it seems to me that they will not want to give up this way of life. As the noble Lord, Lord Alderdice, said, they may be attached to this way of life—that is often what happens with underground and illicit organisations and those who participate in them—and they will not give it up just because of lectures from Parliament or well-intentioned public initiatives by Ministers. As well as the practical measures proposed in the IMC report, there will have to be serious pressure from mainstream groups who sign up in full to the democratic commitment. If we could get that in conjunction with the practical measures, I think we could hope that decent progress could be made.
What I do not think we should do is think that we have a quick solution to problems that have been with us for a very long time. It has been the case that whatever part we have played in these matters, because of our natural wish to see things improved, we have all tended to assume that things can be achieved faster than they really can. We will have a continuation of two steps forward and one-and-a-half steps back. But

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at least if we can keep making the half step forward, we shall, over time, make progress. However, it is important to realise that the timeframe may be much longer than we all want.
I conclude by thanking my noble friend Lord Brooke for giving us an opportunity to discuss these matters at a particularly important and sensitive time.
6.44 p.m.
Lord Dubs: My Lords, I too pay tribute to the noble Lord, Lord Brooke, for giving us the opportunity to have this debate and for his contribution in opening. His contributions to debates on Northern Ireland are always important whether they are in this House or on the British-Irish Interparliamentary Body, of which I am also a Member and where again, I enjoy listening to what he has to say.
Before the IMC was set up, I had a conversation with a former paramilitary in Northern Ireland. It took place not long after there had been a particularly newsworthy paramilitary event in Northern Ireland, one which did not attract sums of money but which had a political significance. I said, "I find it hard to understand why they do these things. There are no political benefits in it for them. Can you explain?". He proceeded to tell me a story with which many Members of this House will be familiar.
It was about a scorpion that wanted to cross a deep river. The scorpion could not swim and said to a dog, "Will you help me across the river? I very much want to get over to the other side. It would be helpful to me and an enormous favour". The dog said, "All right, get on my back and I'll take you over". So, the dog swam across the river and got to the other side, at which point the scorpion stung the dog with his venom. As the dog lay dying it said, "Why did you do that?" and the scorpion said, "Because that's what I do". The former paramilitary to whom I was talking said, "That is what they do". That is no excuse and it is not even much of an explanation.
I turn to the report of the IMC. Despite criticism from some of the elements in Northern Ireland, I have not seen a serious challenge to the accuracy of the report in terms of describing the situation. It has not been fundamentally challenged and it seems to me that it puts over very clearly and alarmingly something which most of us knew existed but perhaps the report puts in starker terms.
To my mind, the facts have not been challenged. The motives of the Government in setting up the IMC have been challenged. Sinn Fein has put out press releases and so forth to that effect and the conclusions have been challenged. Nevertheless, I think that it is a very important report, and one which everyone has looked at with interest and concern. It states clearly that for the past two or three years there has been a much higher level of loyalist than republican paramilitary activity. But whatever the amounts that can be attributed to either side, loyalists or republicans, the fact is that this is an activity which is criminal, involves
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smuggling, extortion, drugs, intimidation and attempts to undermine the political process. As such, there can be no doubt that such paramilitary activity has to cease if we are to have a law-abiding democratic society in Northern Ireland.
Indeed, I would argue that paramilitary activity is a more serious threat to the peace process as an issue than decommissioning. Paramilitary activity threatens the lives and wellbeing of many individuals in Northern Ireland whereas if the arms that ought to be decommissioned are not being used, decommissioning is not as serious an issue, important though it is. I do not minimise its importance but I think that paramilitary activity is more serious.
I fully understand that in the light of this report the Secretary of State had to impose some sanctions or penalties. Had he not done so, it would have undermined the strength of the report. On the other hand, I think we all agree that the suggested remedy of fining certain individuals, while perhaps necessary is really a poor punishment or penalty for the activities that are going on. I am not entirely sure whether people like David Irvine are not trying to bring sense into the situation. In a way, penalising him is penalising the one person on that side who is making the most positive contribution. But that may be a matter of judgment with which everyone may not agree.
Indeed, it is also a matter of judgment whether Gerry Adams and Martin McGuiness are doing their best to persuade the IRA to drop paramilitary activity, or whether they are failing to do so. That again is a matter of judgment. I think that they are probably trying to do so and do not have the power to do more. I fully accept that some noble Lords will disagree with that as a matter of judgment.
If fines on these people are not adequate, it is difficult to see what else the Secretary of State could have done. The real question is whether people who are active in the paramilitary organisations, or senior people in the political bodies that are linked to the paramilitary organisations, have the power to stop this activity, or whether they are not sufficiently strong within the organisation to do so.
I am not entirely sure what the answer is. What I do know is that the situation in Northern Ireland is more serious than it was when the Good Friday Agreement was first agreed.
The next report of the IMC in six months' time will be even more serious and crucial than the current one. This report has given notice to the paramilitaries of the situation, and the Secretary of State has endeavoured to take some action. I wish that I could feel optimistic that those indicted in this report will take action in the next six months to do something about it.
The noble Viscount, Lord Brookeborough, in his interesting speech referred to the cost of some of this paramilitary activity in terms of the money that the paramilitaries were siphoning away from ordinary people in Northern Ireland. Perhaps my noble friend will give some idea of the financial burden of this

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activity. Certainly, I fear it is enormous in terms of hospitals and schools not built and public services not supported. But we will have to see.
The Assets Recovery Agency appears to be working well. Has that agency enough resources to do its job as well as it might? I have a very high regard for the Chief Constable Hugh Orde. I have met him on a number of occasions. What he is seeking to do is very impressive. Does he have sufficient resources to tackle this paramilitary activity? I hope that there are no "no-go areas" for policing in Northern Ireland. Somebody said that there were. I hope that is not true, but I would like to feel that the police have the resources to deal with these particular activities.
Nevertheless, I still believe—and I am not making light of the paramilitary activities—that the people of Northern Ireland have still had a better and a more peaceful life since the Good Friday agreement. That is no comfort to victims of paramilitary activity, but I hope that it will be seen in the context of an important improvement while we have still a long way to go.
Let me turn very briefly to two other issues. I am appalled at the outbreak of racism with violence that has taken place in Northern Ireland, particularly in parts of Belfast. I think this has been a real stain on Northern Ireland. It is utterly depressing that, after years of the Troubles, we have moved into a position where people who have had nothing to do with the Troubles are being victimised and intimidated out of their homes in a way which would be utterly unacceptable in Britain. I hope that all the resources of the police and the various agencies dealing with race relations and so on will be brought to bear to tackle what is an absolute blot on Northern Ireland. It has become a lot worse recently.
My last point concerns something dear to my heart, which is integrated education. I believe that if children are educated separately—that is, children of one community are educated separately from children of another community—and never meet each other, they demonise the other community. They demonise children they have never met because they are Catholics or Protestants, from whichever point of view that is put.
I am not saying that there should he integrated education and no other model. I am chairman of an All-Party Parliamentary Group on Integrated Education in Northern Ireland. I should like to feel that all parents in Northern Ireland would have the choice of whether to send their children to an integrated school or to a school that attracts children from one denomination only. I would like to feel that choice would be there. Of course there should be full opportunity for religious teaching of whatever faith the child wants in an integrated school. I should like the Government to make a little more progress in moving towards integrated education. Some progress has been made. I understand the economic difficulty of setting up schools if there are not enough children to go to them, although I am bound to say that most of the integrated schools I have visited were heavily
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oversubscribed. Parents, therefore, are voting for integrated schools when choosing schools for their children, where they have that choice.
Finally, direct rule in Northern Ireland should end as soon as possible. I believe that it is damaging to democracy in Northern Ireland. It is damaging to the rights of the people in Northern Ireland that their own local politicians should not make decisions over a whole range of matters that affect their day-to-day lives, Therefore, I am depressed that we are having a debate with this particular mood. We are being realistic to have this mood, but I am depressed that that is the situation in Northern Ireland. I hope very much that before too long devolution will be resumed and that the people of Northern Ireland can have their own local politicians making decisions that affect their day-to-day lives.
6.56 p.m.
Lord Molyneaux of Killead: My Lords, the noble Lord, Lord Brooke of Sutton Mandeville, could not have selected a more relevant timing and subject for this debate His family background and ministerial experience combine to equip the noble Lord with sound judgment and understanding of what will work and what will fail. That is a very important qualification. Sound judgment is essential at this crucial stage in our part of the United Kingdom. I know we have benefited greatly from the contribution of the noble and learned Lord, Lord Mayhew of Twysden. He, too, served along with the noble Lord. Lord King. Earlier today we had present another Secretary of State, the noble Lord, Lord Mason, who had to leave for another engagement.
I hope that the right reverend Prelate will take some comfort from the knowledge that in Northern Ireland, which he knows very well, there is growing co-operation between the various main Churches. Without boasting, I can reassure him on that. This month I attended two services where the clergy of the four main Churches participated—they were not spectators. At one of them, I sat at the feet of his colleague the Bishop of Connor.
I have said that sound judgment is crucial at the present time. I do not think that anyone will quarrel with that. It has been repeated on several occasions. The situation is now different, because behind us is the distraction of urban terrorism because the world has moved on to, what one might call, "undeclared wars between states". Gone are the days when the IRA could rely on fellow terrorists such as the Basque fringes, murder groupings in the Middle East, not to mention Libya, which supplied four very large consignments of arms to southern Ireland, only one of which was intercepted by the Royal Navy. I understand that the Blair/Gadaffi conference paved the way for tracking down the other three consignments, now hidden in remote areas of southern Ireland. That will be of help.
These and other weapons are now of limited use. Because the IRA has been so successfully penetrated by our security forces, suspicion and distrust has led it

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to such a level of casualties that many planned murders had to be cancelled by IRA commanders. I pay tribute to the Army and the Royal Ulster Constabulary, which fought the battle at that crucial time. That meant that the Belfast agreement was in a sense unnecessary. Regrettably, however, the British, Irish and American governments made the mistake of continuing to reward evil men who gambled and lost. That blunder encouraged terrorists to threaten and to gain more concessions. Six years on, concessions continue, mostly at the expense of those who supported and voted for the Belfast agreement, which they now see as a disastrous experiment. Hardly any of its original sponsors, supporters or voters now survives.
When I was elevated to your Lordships' House six years ago, I did my best to warn of the dangers for democracy. Some present on that occasion—I do not hold it against them—accused me of being negative, pessimistic and sending the wrong signals, whatever they were. Those same accusers now complain about the growing loss of confidence that stems from the basic features and failures of the Belfast agreement, and that providing for joint British/Irish rule over our part of the United Kingdom was an offence and a great mistake. Unfortunately, the public now treats with derision assurances that such joint governance is merely co-operation similar to that within the European Union.
The agreement will probably never recover from its dramatic collapse after six years. The truth of that collapse will probably never be known. Mystery surrounds what happened on the November evening when everything fell apart. I doubt whether we will ever know exactly what happened. The press was lined up; cameras were focused; we were all sitting on the edge of our chairs; and suddenly everything went wrong. Nobody has ever explained why it went wrong, which makes the situation even more baffling and leaves one even more pessimistic.
The people of Northern Ireland deserve progress. The Thatcher government in 1979 had workable proposals, which were wrecked by the forerunners of the Belfast agreement on the grounds that the Thatcher plan was "not enough". Of course it was not enough for those who wanted to blackmail one government after another, and who landed us, largely by deceit, in the current situation.
On a more optimistic note, I accept that, 25 years on, adjustments may be necessary to the Thatcher plan. But the basic principle remains: start with a modest elected council, with a place for all elected representatives and parties; give it administrative powers as a beginning and then add to those powers until the end product would match, for example, those enjoyed by Wales.
I have been greatly encouraged by some of the successes, of which I shall give two examples. In the past it was thought that Sinn Fein would never co-operate and could never be trusted. Yet recently one of its well-known members served very well as Lord Mayor of Belfast. The current mayor, a successor
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to the noble Lord, Lord Fitt, is a prominent member of the SDLP. In addition, my own experience in local government persuades me that mutual trust could be ours for generations if we tried to he realistic.
7.15 p.m.
Lord Smith of Clifton: My Lords, we are all grateful to the noble Lord, Lord Brooke of Sutton Mandeville, for introducing this debate. It is one of those rare opportunities for us to have a general review of the situation in Northern Ireland.
By way of context, I should like to begin by stressing three points. First, as I have said before in your Lordships' House, as divided societies go, levels of violence apart at the moment, there is nothing particularly unique about Northern Ireland. The difference is that, unlike Sri Lanka, Cyprus, the Middle East and Kashmir, both sides of the divide purport to worship the same God. It is welcome to hear from the right reverend Prelate the Bishop of Southwell that great efforts are being made in interfaith co-operation. Like the other societies that I have mentioned, Northern Ireland politics are effectively stalled at present.
Secondly, Northern Ireland is now blessed with an increasingly prosperous economy. It is now well off the bottom of the UK regional economic league, where it had languished for decades. There is still too much reliance on state subsidies for economic development, but there are signs that such dependency will be reduced. Growth has undoubtedly been greatly assisted by the presence of a well-educated and relatively stable workforce. It is to be hoped that that increased prosperity will act as a major solvent to Northern Ireland's problems over the years, but that will necessarily take time.
Thirdly, the outcome of the Assembly elections last November meant, at the very least, that a false political equilibrium would no longer be sustained. That was an increasing consequence of the suspension of the Assembly after October 2002. Mandates have now been renewed, and the ancien regime has given way to a new albeit much more polarised situation. Sinn Fein and the DUP are now the big political players. That must be accepted as the new reality. Nostalgia has no role to play now.
It is perhaps not easy to come to terms with that in your Lordships' House. As my noble friend Lord Shutt of Greetland observed, neither the DUP nor Sinn Fein has a voice here. The UUP has representation, but it is now a minority voice. It has shared the same fate as the SDLP, and however much we may regret the demise of what passes for the middle ground in Northern Ireland politics, that must not blind us to the new reality of the dominance of the DUP at one end of the political spectrum and Sinn Fein at the other. The choices and challenges are starker than before, and we hope that that may concentrate minds on both sides. So much is by way of context.
As everyone will agree, the present situation is critical for the restoration of a devolved administration. Lack of progress to this end has

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created a political vacuum, as the noble Lord, Lord Stewartby, has observed. That has undoubtedly contributed to the increases in paramilitary atrocities. Both sides are increasingly active, with loyalist outrages outnumbering republican ones by a ratio of 2:1. Another contributing factor, as other noble Lords have mentioned, is that the PSNI is unduly constrained in its operations by the lack of wholehearted political support across the community, as vividly illustrated by the noble Baroness, Lady Park of Monmouth.
Much of the blame for increasing paramilitarism can be laid at the door of both political unionism and political republicanism. The former has no control and precious little influence over the actions of the loyalist paramilitaries. That is largely because, politically, unionist leaders have abdicated from their responsibilities in this regard. They retreated and then effectively abandoned the difficult areas in north and west Belfast. That allowed extremists and paramilitaries a free reign to move in and cause mayhem at will. By that neglect, unionist leaders are to be criticised for that act of omission.
On the republican side, as is commonly recognised, there has been a symbiotic relationship between its political and armed wings. There was a considerable overlap between Sinn Fein and the IRA, and there still is, as the first report of the Independent Monitoring Commission so recently demonstrated. By the standards of democracy, therefore, republican political leadership is clearly to be criticised for the continuation of the Sinn Fein/IRA relationship. What is clearly needed now is for the DUP, for its part, to address seriously the issue of loyalist paramilitarism. It is not enough to condemn such paramilitarism rhetorically; the DUP must now tackle it head-on, not least because it is the greatest source of paramilitary outrages.
Sinn Fein is at a critical historical moment, which is why it is coming under so much pressure from London, Dublin, Washington and elsewhere. The future of the peace process and the question of whether devolution is restored soon is squarely in Sinn Fein's hands. The initiative lies with Sinn Fein. It must unequivocally renounce any involvement with paramilitarism and fully embrace democratic principles. It should then take its place on the Policing Board. That is the only key to opening up a restoration of the Assembly and the Executive.
I turn to the immediate future. In October 2002, I predicted—accurately, as it turned out—that the suspension of Stormont would be a long one. I now have a strong feeling that, if devolution is not restored by next November—a year after the last elections—it will not he restored for another generation. I fervently hope that that will not happen and that there will be a quick restoration of devolution. In that regard, I share the sentiments of the noble Lord, Lord Dubs, although the forebodings of my noble friend Lord Alderdice and the observations of the noble Lords, Lord Fitt and Lord Molyneaux of Killead, are not encouraging.
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Were there not to be a restoration, the pattern of Northern Ireland government would be that which now obtains. There will be Civil Service rule, run in collaboration with a plethora of non-governmental organisations in the voluntary sector and overseen by direct rule from London, in a very close collaborative partnership with Dublin. It will be a condominium in all but name. That intergovernmental partnership will foster an extensive network of cross-border agencies, something that, in itself, I would not object to.
Some may be content with that outcome, if it is all that can realistically be achieved. It may come to that. However, the price to be paid will be a much less direct, less publicly accountable system and little effective input from the citizens of Northern Ireland on how they are governed or, more accurately, administered. To avoid that state of affairs, new ideas and innovations are needed. On 6 April, when we discussed the Northern Ireland Act 2000 (Modification) Order 2004, I suggested that we should convene the Assembly and have it act as an agent for pre-legislative scrutiny. Its deliberations would be more thorough and informed than those at Westminster could ever be. That would give enormous assistance to both Houses of Parliament, who are formally responsible for Northern Ireland legislation for as long as direct rule obtains. It would give the MLAs a proper function and a proper job of work, and they would, in part, be earning their salary.
When I made that suggestion at the plenary meeting of the British-Irish Interparliamentary Body in west Cork just over a week ago, it received a large measure of general support, until it was pointed out that such a move could not be made without a change in legislation. That is a great pity. I suppose that it would be impossible to jump out of the strict constructionist mindset that so bedevils Northern Ireland political discourse and contrive a way of having some measure of pre-legislative scrutiny.
As it is, the proposed reforms of the Irish Senate, leaked today in the Irish Independent, will give it a particular responsibility for overseeing North/South cross-border bodies. That will mean that the Republic of Ireland will have a more enhanced capacity for public accountability than Westminster. That is all the more reason for restoring devolution in the North. What are the Government going to do now?
7.13 p.m.
Lord Glentoran: My Lords, I thank my noble friend Lord Brooke of Sutton Mandeville for introducing this timely debate on Northern Ireland affairs. He does so with the authority of having served as Secretary of State for Northern Ireland, as did my noble and learned friend Lord Mayhew of Twysden.
Despite our hi-partisan approach to Northern Ireland affairs, Her Majesty's Government are, ultimately, the Government, and we are the Official Opposition. I believe that it is our job to criticise the Government when we think that they are failing. I hope that the Government will realise, after what they have heard from this side of the House this afternoon,

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that we are by no means satisfied with their stewardship since the Belfast agreement. If they pay particular attention to the points made by my noble friend Lord Brooke of Sutton Mandeville, my noble and learned friend Lord Mayhew of Twysden and my noble friend Lady Park of Monmouth, they will find some valuable advice and some serious criticism from which, I hope, they will learn.
What has characterised today's debate is the fact that every contribution has been made from a position of deep knowledge and understanding of the problems facing the political process in Northern Ireland. The only conclusion that one can draw is that the situation right now is bleak. There seems to be little chance of any progress towards restoring the political institutions that were suspended by the previous Secretary of State in October 2002. As the noble Lord, Lord Smith of Clifton, said, it has been a long suspension, and I am afraid that it may be much longer. There seems to be little immediate prospect of so-called acts of completion by the paramilitaries, and there seem to be few ideas coming out of London or Dublin on how we can move things forward. Put bluntly, we appear to be in a position of complete paralysis. Certainly, we are a long way from the scenario envisaged in the Belfast agreement that was signed, amidst so much optimism, just over six years ago.
Before the noble Baroness the Lord President of the Council accuses me of being the prophet of doom, I shall say this: I readily accept that, for a great many people, life in Northern Ireland today is infinitely better than it was a decade or so ago, when my noble friend Lord Brooke of Sutton Mandeville and my noble and learned friend Lord Mayhew of Twysden were working so painstakingly to begin the process that led to the Belfast agreement. Generally speaking, people go about their daily life and business in a manner that would not have been possible 10 years ago. Security checks and routine army patrols are a thing of the past. People are not being killed in anything like the same numbers as before, although the statistics presented this afternoon by the noble Viscount, Lord Brookeborough, are pretty chilling. Bombs are no longer ripping the commercial heart out of Ulster's cities and towns.
All of that is reflected in a new sense of economic confidence in Belfast, Londonderry and elsewhere. One need only look at the number of new restaurants, bars and hotels that seem to open every other week to see evidence of that. Wearing another hat, I have had some involvement over the years in the redevelopment of the area around the old Belfast docks through the Millennium projects and through an organisation called Positively Belfast. It has led to a welcome increase in tourism that, we hope, will continue to grow.
Those successes, however, only put into sharper focus the other side of life in Northern Ireland, so vividly illustrated in the Independent Monitoring Commission report published last week. It is good to see the noble Lord, Lord Alderdice, in his place today
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taking part in the debate. He and his fellow commissioners deserve our congratulations and our thanks for facing up to reality and having the courage to lay reality face-up on the table before us all. I refer, of course, to the paramilitary activity that continues to blight people's lives and to disfigure society in Northern Ireland.
Many people were persuaded to support the Belfast agreement on the basis that it would lead not just to the decommissioning of illegal weapons but to an end to all paramilitary activities. What a forlorn hope that has become. The opposite has happened. The main paramilitary organisations—loyalist and republican—remain armed, capable and ready. They participate in all the activities set out in paragraph 13 of last year's British-Irish Joint Declaration. In the words of the Independent Monitoring Commission's report:
"the level of … paramilitary violence has been and continues to be considerably higher than before the Belfast Agreement".
There have been no acts of completion. Entire neighbourhoods are held in the grip of thugs who dispense their own perverted form of justice with the bullet and the baseball bat.
I wish that years ago the Government had faced up to the intransigence of paramilitaries, both Sinn Fein and Loyalists, and that they had not failed the Unionist population and lost their confidence, although I have signs that the present Secretary of State is starting to do so. It is sick, barbaric and totally unacceptable, and it is happening on a daily basis on the streets of the United Kingdom.
The Independent Monitoring Commission and the noble Lord, Lord Alderdice, are clear that the leadership of paramilitary organisations, rather than seeking to prevent such activities, is directing it. In respect of Sinn Fein, it confirms what we all know; namely, that senior figures in that party, as other noble Lords have pointed out today, are also senior figures in the IRA.
The Taoiseach in the Irish Republic says that until that link is broken, Sinn Fein cannot be considered as a fit partner in any coalition government in Dublin. My party believes that the same rules that apply in Dublin must apply in respect of any Executive in Belfast. We have been pressing the Secretary of State today and every day to come to that conclusion himself.
Sinn Fein has been given ample opportunity—six years—to complete the transition to what the agreement describes as,
"exclusively democratic and peaceful means".
It has been taken on trust and allowed to enter the Executive three times and has then gone on to abuse that trust. I suggest that that cannot go on.
So we support the Government in imposing the sanctions recommended by the IMC against Sinn Fein and the PUP, which remain linked, respectively, with the IRA and the UVF. But we feel strongly that there are at least two areas where the Government could have gone further. It is quite unacceptable that if those parties are to be punished financially at Stormont, Sinn Fein should continue to be allowed access to

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offices and allowances at Westminster. That does not make any logical sense. I put that to the Lord President when she read the Statement in this House a few days ago. I know that my right honourable friend David Lidington did the same in the other place. Furthermore, both the Provisional IRA and the UVF should be placed on the list of "specified", as well as illegal, organisations.
In addition, they should be looking at how the law might be strengthened against paramilitary organisations to ensure that there are more convictions. In July 2002, the previous Secretary of State, John Reid, said that he would be asking the noble and learned Lord the Attorney-General to do that. Unfortunately, that seems to be the last word we heard on the matter. It would be helpful if the noble Baroness the Lord President could tell us where we are on the matter of strengthening the legislation in Northern Ireland to allow more convictions of paramilitaries, as offered by the former Secretary of State, John Reid, in July 2002.
It is because of paramilitary activity that the political institutions were suspended in 2002. It is because of paramilitary activities—so graphically illustrated in the IMC report to which we have all referred—that they remain suspended. Without an end to paramilitary activity, and a dramatic move by Sinn Fein and the IRA, it is difficult to see how the 1998 model of devolution can be revived and how direct rule can be ended—at least, this side of a general election.
Against that background, it is puzzling that the Government have not used the IMC report to put more pressure on the paramilitaries and, rather than seeking a way forward, cancelled the discussions that were due to take place this week because they were not adequately prepared. It would also be helpful for the Government to confirm that, had the Assembly been sitting and had the IMC recommended exclusion from office, as the report indeed says, they would have acted to do just that. I know that we are not supposed to ask questions of the Government that could be termed hypothetical, but this is hardly hypothetical.
As this debate has shown, the political process in Northern Ireland is stalled and there is no obvious way forward. The actions of paramilitaries are depriving the people of Northern Ireland of the devolved government that the overwhelming majority of the people want. We on this side—like all other noble Lords in your Lordships' House—believe that devolved government is the right road for Northern Ireland to go down. But for that to work, everybody-I repeat, everybody—must play by the same democratic rules. If certain parties cannot bring themselves to do that, we shall have to consider how politics can move ahead without them. I have also, perhaps sideways, asked the Secretary of State to consider that. We cannot tolerate for ever a situation in which the innocent continue to be punished in equal measure with the guilty.
7.25 p.m.
Baroness Amos: My Lords, perhaps I may begin by thanking the noble Lord, Lord Brooke of Sutton Mandeville, for opening this important debate. His speech ranged over many issues, reflecting his wide experience and knowledge of Northern Ireland matters. I should also like to thank him for his tribute to my right honourable friend the Secretary of State and for his confidence in my ability to follow in the footsteps of the late Lord Williams of Mostyn. I should also like to thank other noble Lords who have spoken in the debate, bringing all the weight of their experience, knowledge and insight into the situation in Northern Ireland.
A number of noble Lords, including the noble Lords, Lord Fitt and Lord Shutt, raised the question of how the Government now intend to secure the restoration of devolved government in Northern Ireland on a stable and inclusive basis. Indeed, the noble Lord, Lord Smith of Clifton, raised concerns that restoration may take a long time.
The Government are clear that what is required is the culmination of the process—that is, an end to all paramilitary activity and a commitment on all sides to operate the institutions of devolved government in good faith. Last week's report by the Independent Monitoring Commission starkly underlines what steps need to be taken if we are genuinely to move forward to stable and inclusive devolved government. I shall return to some of the detail of the report.
I must say that I cannot agree with the noble Lord, Lord Glentoran, when he says that we have failed the unionist population. The Government remain convinced that the way to advance along the path of inclusive, devolved government is through dialogue. It is in that way that we have made progress in the 10 years since the IRA ceasefire and in the six years since the Good Friday agreement. The noble and learned Lord, Lord Mayhew, called it a bold act of hope.
My right honourable friends the Prime Minister and the Secretary of State will continue to meet all the parties in Northern Ireland to explore how we can achieve the basis for a restoration of the devolved institutions. I agree with the noble Lord, Lord Brooke, that the peace process requires the exercise of leadership. In that context, the noble Lord, Lord Shutt, is right that Sinn Fein needs to play a role. In a powerful speech, the noble Lord, Lord Alderdice—a member of the IMC, intimately connected with the processes mentioned—talked about the importance of shining a spotlight on those who operate in the shadows and the need to hold people to account personally and publicly. I think that all noble Lords would agree with that.
In terms of the way forward, the noble Lords, Lord Shutt, Lord Stewartby and Lord Smith of Clifton, and the noble and learned Lord, Lord Mayhew, all stressed the next steps, particularly with respect to the review. We will continue discussions on the review of the operation of the agreement. The Secretary of State and Irish Government Ministers met yesterday to discuss with the parties the proposals

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that they have made on the operation of strands 2 and 3. Those discussions will continue next week. There will be of course a pause for the European elections, but we hope to begin intensive talks soon on delivering a return to power sharing under the agreement on the basis of a complete transition to peaceful and democratic means and on an inclusive and stable basis.
The noble Lord, Lord Brooke, asked specifically about Sinn Fein and the Assembly elections. He queried the exchanges with Sinn Fein last year over an election date for the Northern Ireland Assembly. I understand that discussions with Sinn Fein during the second half of last year covered wide ground and certainly addressed its concerns about the postponement of elections earlier in the year. Those concerns, I recall, were widely shared in this House.
I turn to the Independent Monitoring Commission mentioned by the majority of noble Lords, including the noble Lords, Lord Brooke, Lord Stewartby, Lord Alderdice and Lord Smith of Clifton, the noble Baroness, Lady Park, my noble friend Lord Dubs, the noble Viscount, Lord Brookeborough, and the noble and learned Lord, Lord Mayhew. The specific finding of the commission's report is that although it believes that the situation it is now addressing is much better than it was in past years—a view endorsed by the noble Lord, Lord Alderdice, while drawing our attention to the other part of what the IMC said—paramilitary activity remains at a disturbingly high level on the part of both republican and loyalist groups. During the debate on the Statement referring to the IMC, it was clear that there was a feeling that the report reflected what people on the ground in Northern Ireland know. The noble and learned Lord, Lord Mayhew, agreed with that view in quite robust terms.
Both the British and Irish Governments endorse the conclusions and recommendations in the commission's report. It is not acceptable that parties with aspirations to participate in government should have links with paramilitary groups, nor that senior politicians should be in a position to exercise significant influence over the activities of such groups. To that end, we agree wholeheartedly with the steps that the commission has recommended.
The noble Lord, Lord Glentoran, expressed his support for the sanctions. My noble friend Lord Dubs commented that the measures announced last week by the Secretary of State that he intended to impose on Sinn Fein and the PUP in the light of the commission's report perhaps do not go far enough, while the noble Lord, Lord Shutt, pointed out that sanctions may get in the way of future progress. I understand the strength of feeling on this. However, the commission's report specifically states that in the absence of a sitting assembly, the Secretary of State,
"should consider taking action in respect of the salary of Assembly members and/or the funding of Assembly parties, so as to impose an appropriate financial measure in respect of Sinn Fein and the PUP".
That is what we have done.
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The noble Lord, Lord Glentoran, asked specifically about removing parliamentary facilities for Sinn Fein. I understand the point made by the noble Lord, but we are trying to encourage republicanism to make the final transition to peaceful and democratic means. The Government are not persuaded that, at this point, driving republicans away from democratic institutions would serve that purpose. That said, it is clear that we need to keep the situation under review in the light of progress.
The noble Viscount, Lord Brookeborough, asked about the next IMC report and in particular whether it would be possible to give the Provisional IRA a clean bill of health. The next regular report of the commission is due in October and we all hope that the Provisional IRA, along with all paramilitary groups, will make rapid progress towards the acts of completion we have called for. It would not be right for me to guess at the contents of the commission's next report, or to try to anticipate the context in which it will be published. However, naturally the Government will be extremely disappointed if there is no substantial progress.
The noble Baroness, Lady Park, and the noble Viscount, Lord Brookeborough, also raised the question of organised crime. There is no doubt that a range of individuals with paramilitary links, both loyalist and republican, are involved in organised crime. Any involvement in such criminal activity is completely unacceptable and the Government are determined to tackle it wherever it surfaces, including through the work of the Organised Crime Task Force and the Assets Recovery Agency. Some successes have already been achieved, including the dismantling of 60 of the top-level organised crime groups.
I turn to the issue of the financial burden of paramilitary activity imposed on public services, a matter raised by my noble friend Lord Dubs. There is no global figure, but clearly the burden on public services is considerable and the cost not only in financial terms, but also in terms of human misery, is great.
The issue of the Government's stance on community restorative justice schemes was raised by the noble Viscount, Lord Brookeborough. This was considered as part of the criminal justice review, which concluded that such schemes could have a valid role to play, but only if they operate within the context of the criminal justice system and only if they are based on respect for the human rights of all those concerned.
On the general question of policing, a matter raised by the noble and learned Lord, Lord Mayhew, the noble Baroness, Lady Park—who was concerned about the attempts of Sinn Fein to undermine policing in Northern Ireland—and mentioned by the noble Viscount, Lord Brookeborough, I am pleased to have this opportunity to pay tribute to the work of the Police Service of Northern Ireland under the clear leadership of the Chief Constable, Hugh Orde. Much

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progress has been made, which was acknowledged by the Oversight Commissioner in his report published only yesterday. He said:
"I remain impressed by the pace of change, by the policing institutions themselves and by their demonstrated willingness and effort to bring about the new beginning envisaged by both the independent Commission and the Belfast Agreement, particularly on the part of the Police Service itself".
The question of resources was raised by my noble friend Lord Dubs. The Chief Constable has made it clear that he has sufficient resources for the tasks in front of him, and from April 2003 to March 2006, a total of £2.1 billion has been allocated to policing in Northern Ireland. On the funding of the Assets Recovery Agency, the Government have increased the overall budget from £13 million last year to £15.5 million in 2004–05, a 19.2 per cent increase. I understand that within that total, the budget for the Northern Ireland branch of the agency has increased from £2 million last year to £3 million in 2004–05, a 50 per cent increase.
I turn now to the Corrie report, raised by the noble Lord, Lord Brooke, and the noble Baroness, Lady Park, who was very critical of it. The Government are determined that, where there are allegations of collusion, the truth should emerge. In response to the report, my right honourable friend the Secretary of State has announced that inquiries are to begin as soon as possible into the cases of Hamil, Wright and Nelson. We shall shortly begin the search for tribunal members. On the issue of the cost and length of these inquiries, we are determined that these should not escalate, and my right honourable friend will have control under the terms of the police and prison Acts in Northern Ireland. I shall be happy to write in more detail to the noble Baroness on that point.
The noble Lord, Lord Brooke, expressed concern about who was interviewed and, in particular, at the outcome of the Corrie report. Lord Justice Corrie's terms of reference allowed him to consult widely, and it was for him to determine who he should interview in the course of his investigations. Noble Lords will know that in the foreword to the report, Lord Justice Corrie said:
"My task was not to make final determinations of fact or attributions of responsibility. My findings are provisional only and cannot be taken to be the final determination of any matter".
That foreword was added at the Government's request, because we were mindful of our responsibility of ensuring fairness to individuals.
The noble Lord, Lord Brooke, and the noble and learned Lord, Lord Mayhew, again raised the issue of the "on the runs". At Weston Park, the British and Irish Governments recognised that the issue of terrorists on the run needed to be addressed and they undertook steps to do so. We are still considering the alternatives for delivering that undertaking. But as my right honourable friend the Prime Minister made clear, the Government will contemplate steps on difficult issues such as OTRs only in the context of acts of completion. I am happy to repeat that assurance.
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The noble Baroness, Lady Park, and the noble Lord, Lord Fitt, spoke about the funding of Sinn Fein. Let me be absolutely clear that all political parties must draw their funding exclusively from legitimate sources. The full rigour of the law will be brought to bear where there is any evidence to suggest otherwise.
My noble friend Lord Dubs mentioned the racist attacks in south Belfast. Ministers are determined on a proportionate yet fair response to recent race attacks in south Belfast and other incidents. I join my noble friend in expressing concern about those attacks. The criminal justice response is obviously the key. The police have reported a decrease in the ferocity and frequency of the incidents, but are continuing to monitor the situation closely.
On the issue of integrated education, also raised by my noble friend, the Government respect the rights of parents to have their children educated in accordance with their wishes, balanced of course with the acknowledged need to provide an effective education and to avoid disproportionate cost. As my noble friend said, the integrated education movement continues to grow in response to parental demand. I am confident that my honourable friend the Minister for Education in Northern Ireland will continue to respond positively to viable proposals for new schools in line with the responsibility of his department to encourage and facilitate integrated education.
The noble Lord, Lord Smith of Clifton, raised the administration of Northern Ireland business in the context of his concerns about the length of time it may take to restore devolution. We agree that the Order in Council process is not ideal and, of course, not as satisfactory as scrutiny by the Assembly. We have to work, as successive Governments have done, on the basis of Orders in Council. But I have heard the points made by the noble Lord and his ideas on pre-legislative scrutiny by the Assembly and I am sure that these points will be taken on board by my right honourable friend the Secretary of State.
I turn to the progress of prosecutions relating to Stormont, raised by the noble Baroness, Lady Park. Three people are charged with serious offences under the Terrorism Act arising out of searches on 4 October 2002. I can assure the noble Baroness that the accused will be brought to trial in due course.
The noble Lord, Lord Glentoran, pressed me on specification. A decision to specify sends a strong message about the status of the paramilitary organisation and enables prisoners to be recalled if they have supported or are likely to support a specified organisation. But these are case-by-case decisions. Specifying the Provisional IRA or the UVF would not result in the automatic recall of prisoners. Specification is not a panacea for the problems identified in the IMC's report and the IMC has not suggested that the Secretary of State should consider specification.
On further legislation, Section 108 of the Terrorism Act was introduced after the Omagh atrocity. It enables a superintendent's opinion on membership to be admitted in membership prosecutions. This was

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introduced to assist prosecutions for membership of specified organisations. Section 108 could be amended to apply to all proscribed groups and the Secretary of State has not entirely discounted the possibility of doing so at some point in the future. But the IMC has not recommended this and we continue to take the view that the balance lies in the careful targeting of such a provision against specified organisations.
I want to conclude by referring to the important speech of the right reverend Prelate the Bishop of Southwell. He is right in saying that we need a commitment to peace, justice and reconciliation in Northern Ireland. The role of the Churches is obviously central to this. As the right reverend Prelate said in a powerful speech, this is about human contact and relationships.
The noble Lords, Lord Smith of Clifton and Lord Glentoran, spoke of Northern Ireland's thriving economy. The people of Northern Ireland want peace, which will enable them to draw the full benefits of that prosperity. The noble Lord, Lord Alderdice, spoke of the importance of delivering peace, stability and reconciliation. The noble Lord, Lord Molyneaux, whose long experience is valued in this House, said that the people of Northern Ireland deserve progress. It is up to us to work together to deliver this.
7.46 p.m.
Lord Brooke of Sutton Mandeville: My Lords, there are debates and debates in your Lordships' House. However, today's debate will be remembered longer than many others by those who from all corners of the House took part and by those, too, who generously and honourably, in numbers that often matched those taking part, have stayed on into the evening to listen to our deliberations.
Some may have wondered, when I tabled the Motion before Easter, whether it was worth the candle. Thanks both to a series of outstanding and cogent speeches, allied to the timeliness of the event, I think the endeavour and the patience and diligence which have accompanied and sustained it, have made the candle more than worthwhile. I was grateful to those who thanked me for my modest action in initiating it, but I am far more grateful to everyone—each and every noble Lord, speakers and audience—who gave the debate its compelling quality.
I thank the Minister for her comprehensive response and I hope she will have appreciated that the underlying motivation of those who took part genuinely is to improve the prospects of peace without resiling from what that arduous task continues to require. That latter phrase, of course, includes the action of the two governments in setting up the IMC.
Finally, I share the curiosity that the noble Lord, Lord Shutt, expressed about the Papers. But I shall deny my curiosity and beg leave to withdraw my Motion for them.
Motion for Papers, by leave, withdrawn.

European Parliamentary Elections (Northern Ireland) Regulations 2004
7 48 p.m.
Baroness Amosrose to move, That the draft regulations laid before the House on 18 March be approved [15th Report from the Joint Committee].
The noble Baroness said: My Lords, these regulations make general provision for the conduct of the European parliamentary elections due to be held on 10 June and revoke and replace the previous regulations, the European Parliamentary Elections (Northern Ireland) Regulations 1986. They also allow citizens of the 10 new member states to vote at and stand as a candidate at European parliamentary elections.
These regulations are compatible with the European Convention on Human Rights. They are generally being made in exercise of the powers conferred by Sections 5, 6 and 7 of the European Parliamentary Elections Act 2002. The measures relating to the rights of citizens of the European Union to vote at and stand as a candidate at European parliamentary elections, however, are being made in exercise of the powers conferred by Section 2(2) of the European Communities Act 1972.
The regulations, which were laid on 18 March and taken through Standing Committee in another place on 22 April, are the first full revision of European parliamentary elections regulations since 1986 and effectively incorporate and consolidate the major changes to electoral legislation since then. The regulations will codify certain provisions from the Representation of the People Act 2000, the European Parliamentary Elections Act 2002, the Electoral Fraud Act 2002 and associated subordinate legislation. The regulations also modify legislation to take account of citizens of those states joining the European Union on 1 May 2004, the accession states. The regulations are broadly in line with those that are now in place for Great Britain.
This is a technical piece of legislation and I do not intend to go into the detail of each individual part of it. However, two points caused a degree of confusion in the debate in another place. First, there was the issue of postal voting. The debate in another place referred to a three-week period for a postal vote. This, I think, stems from the fact that an application for a postal vote must be returned before 20 May, three weeks before polling day. The actual postal vote, however, must be returned by 10 p.m. on 10 June, which is of course polling day.
The second point of confusion related to the details that need to be included on the election publications with which Part 2 of these regulations deal. On billboards, placards and other literature the name and address of the printer, the promoter and the candidate must be included. However, it is not necessary to include details of the publisher if he or she is different from the printer. I hope that that clarifies matters. I beg to move.

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Moved, That the draft regulations laid before the House on 18 March be approved [15th Report from the Joint Committee].—(Baroness Amos.)
On Question, Motion agreed to.

Non-Domestic Rating (Chargeable Amounts) (Amendment) (England) Regulations 2004
7.52 p.m.
Lord Bassam of Brightonrose to move, That the draft regulations laid before the House on 22 March be approved [13th Report from the Joint Committee].
The noble Lord said: My Lords, the draft Non-Domestic Rating (Chargeable Amounts) (Amendment) (England) Regulations 2004 amend certain rules governing the operation of the transition schemes established to phase in the effects of the 1995 and 2000 revaluations.
Under the Local Government Finance Act 1988, revaluations must be carried out every live years, with the rateable values of all properties being updated in line with changes in their market rental values. The purpose of a revaluation is not to increase the amount of rates paid nationally. In fact, the legislation expressly prevents this from being done. The purpose of a revaluation is to adjust individual bills in line with relative movements in the property market. That means that at a revaluation many ratepayers benefit, with their rate bills being reduced. However, others see their bills increase.
The transition scheme phasing in the effects of the last revaluation, that of 2000, is estimated to have benefited more than 600,000 properties in England; that is, 40 per cent of the total. To pay for the phasing in of increases, other rate bills that were decreasing as a result of the revaluation had to have their decreases phased in to avoid a loss in rate income for local government.
The regulations governing the 1995 and 2000 schemes are lengthy, nearly four dozen pages each. They therefore need to be kept under review to ensure that they continue to work fairly. It is as a result of both discussions with representatives of the rating professionals and the impact of new rating legislation that we have decided on amendments to some provisions in the regulations. The Explanatory Memorandum provided with these draft regulations explains their purpose and effect.
First, there is a move to a standard one year in which ratepayers can appeal against the value of a certificate issued by a valuation officer for the calculation of a transition bill. As mentioned in the memorandum, when a new property, such as a suite of offices, is created from merging adjoining offices on the first day of a new rating list, to calculate the transition bill for the new office suite it is necessary to have values for the old offices on the assumption that they have survived until the first day of the new list. These values are certified by the valuation officer.
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All ratepayers will now be guaranteed a minimum time in which to lodge an appeal against the certified values. If, following the making of an appeal the ratepayer and valuation officer cannot agree on the value, the matter is transferred to an independent valuation tribunal for decision. This move to standardisation in the time allowed to make an appeal will not adversely affect any ratepayer: all those on whom it will impact will benefit from more time in which to appeal.
Secondly, and happily, under Section 64 of the Local Government Act 2003, community amateur sports clubs which are registered under the Finance Act 2002 are now entitled to 80 per cent mandatory rate relief—that is, rate relief on a par with the relief that charities receive. This reflects the fact that these clubs play a valuable and influential role in promoting the health, welfare and cohesion of their local communities.
These amending regulations will ensure that the transition scheme will interact with this new rate relief for sports clubs in the same way in which it interacts with charity relief. First, the effects of transition on the rate bill will be taken account of, and then the resulting bill will be reduced by 80 per cent.
Finally, we will be holding a public consultation exercise later this year on the transition scheme to accompany the 2005 revaluation. The new scheme will of course take full account of the experience gained in the working of the current and past schemes, experience reflected in these new regulations. For those reasons, I commend the regulations to the House.
Moved, That the draft regulations laid before the House on 22 March be approved [13th Report from the Joint Committee].—(Lord Bassam of Brighton.)
Baroness Hanham: My Lords, I thank the Minister for that explanation. Anything to do with raising appeals is something most of us would avoid like the plague if we possibly could, but because of their complexity, not their desirability.
The regulations are now greatly overdue; they were originally promised in 2002. Indeed, some of the sister regulations which were promised in March were introduced in April. Can the Minister say at the outset why two years have passed before the regulations have come to light? They are not very controversial. Indeed, they are extremely desirable because anything that lengthens the time, first for the certification and then for the appeal, from six months to a year is bound to be welcome.
The Minister also mentioned that there will be consultation on the 2005 regulations; presumably they will cover the new rating system for 2005–10. We are, of course, almost at the end of the 2000–05 period. Are there any proposals for consolidation of the regulations? This was suggested in the Green Paper, Modernising Local Government Finance, in 2002 but so far there has been complete silence on the subject. Perhaps the Minister will give me a clear view on that

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as well. We do not oppose the regulations. They are entirely sensible but require a little explanation on the matters I have raised.
Finally, we welcome the appearance of the mandatory relief for amateur sports clubs. The matter was introduced into the House by my noble friend Lord Moynihan. Unfortunately, he cannot be in his place today, but I know that he will be dancing up and down with glee because his initiative has seen the light of day.
Baroness Hamwee: My Lords, we, too, welcome the regulations, although it has taken a little while for me to work out that I do. The noble Baroness referred to their complexity. When I looked at the regulations I thought, "This is a surveyor's heaven really". I was not surprised, nor did I castigate myself too much, when I discovered that this is the thousandth regulation since the Local Government Finance Act 1988. Perhaps it is no wonder that we are running out of things to say on this subject.
I shall not repeat the questions asked by the noble Baroness. I was very relieved to see paragraph 14 of the Explanatory Note, which states,
"These regulations will ensure that the 1995 and 2000 schemes will apply relief as intended".
That is extremely reassuring.
I welcome the provisions for community amateur sports clubs. The noble Lords, Lord Moynihan and Lord Phillips of Sudbury, and another noble Lord whose name I am ashamed I cannot remember, formed a very active group of Peers which pushed the matter during primary legislation. I am sure that the clubs will be delighted that their pressure is now bearing fruit.
Lord Bassam of Brighton: My Lords, I thank both noble Baronesses for their praise for the regulations. I hope that by saying a few further words I may have sufficient time to read the note that has been presented to me on some of the questions that were raised.
The noble Baroness, Lady Hanham, asked about delay. I understand that we have been consulting on the regulations with various rating professional bodies. As the noble Baroness said, these are complex matters—it is the 1000th regulation—and that consultation took somewhat longer than expected. However, most of the substance of the changes was embodied in negative regulations many months ago. We have now put those aspects together, one of which is fairly recent following the Local Government Finance Act 2003. In a sense, we have used the opportunity created by the delay usefully to bring in that aspect via this regulation.
I hope that there will be a degree of consolidation. I cannot be certain on that point, but it seems to be highly desirable. We are all grateful and glad that my noble friend Lord Woolmer and the noble Lords, Lord Moynihan and Lord Phillips of Sudbury, were so active and persuasive on mandatory rate relief. It would be remiss of me if I did not thank also my noble
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friend Lord Pendry, who reminded us of the Northern Ireland example. He showed us that if it could be done there, it could be done here too.
On Question, Motion agreed to.

Preparatory Commission for the Comprehensive Nuclear-Test-Ban Treaty Organization (Immunities and Privileges) Order 2004
8.2 p.m.
Baroness Symons of Vernham Deanrose to move. That the draft order laid before the House on 19 April be approved [15th Report from the Joint Committee].
The noble Baroness said: My Lords, the order was laid before the House on 19 April 2004, together with an explanatory memorandum, which is now required for all affirmative statutory instruments. The purpose of the order is to enable the Government to implement their obligations in the appendix to the agreement signed in 1999 between the United Kingdom and the preparatory commission for the comprehensive test ban treaty organisation (CTBTO) on the conduct of activities, including post-certification activities relating to international monitoring facilities for the comprehensive test ban treaty. The UK ratified that treaty in 1998. The CTBT provides for the establishment of the CTBTO. The appendix confers legal capacity on the preparatory commission. It confers privileges and immunities on the preparatory commission, its representatives, representatives of its members, its officials and its experts. Those privileges and immunities are comparable to those accorded to similar international organisations.
The agreement facilitates the activities of the provisional technical secretariat of the preparatory commission of the CTBTO in conducting in the UK and other member states the following: an inventory of existing monitoring facilities; a site survey; the upgrading or establishment of monitoring facilities; and the certification of facilities to international monitoring systems standards. It does so with the goal of facilitating the continued testing, provisional operation as necessary and maintenance of the international monitoring system in pursuit of an effective comprehensive test ban treaty. That work has to be carried out to ensure that the effective monitoring arrangements can really be put into place.
I am satisfied that the order is compatible with the European Convention on Human Rights. I commend it to the House. I beg to move.
Lord Astor of Hever: My Lords, I thank the Minister for explaining the order. We shall not oppose it. It is right and proper that officials of the provisional technical secretariat of the preparatory commission of the CTBTO have the status, the diplomatic immunity and the appropriate privileges for which Appendix 1 to the agreement provides. I have a couple of questions for the Minister.

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I understand that the PTS started its work in Vienna in 1997. Are Her Majesty's Government satisfied that it is working effectively and positively? Does the agreement extend to the overseas territories?
Baroness Symons of Vernham Dean: My Lords, I thank the noble Lord—
Lord Redesdale: My Lords, I also plan to be brief, but perhaps not as brief as the Minister thought. We on these Benches also support the order, but I have three questions for the Minister.
First, what influence do the Government plan to exert on America to think about joining the treaty organisation, although it seems unlikely that it will do so at the moment? Secondly, the Government have recently provided £2 million to equip the Atomic Weapons Establishment at Aldermaston with the means to design and build a new generation of tactical nuclear weapons. Under the terms of the treaty, how will the new tactical weapons, or "bunker-busters", that I believe the establishment is looking at be tested? They obviously cannot be tested in the real world. Are they to be tested just under simulation, or are they to be tested as part of the Americans' programme if the Americans do not sign up to the treaty and start testing again? Thirdly, is the policy set out by the Secretary of State for Defence in March 2002, that first strike with nuclear weapons is to be considered as a British option, still to be adhered to? This seems to be rather a strange attitude to take. On the one hand, we are talking about signing up to a Comprehensive Nuclear Test Ban Treaty; on the other hand, we are talking about using the nuclear arsenal which, under the obligations we have at the moment, we should be considering dismantling rather than using. We are looking at that nuclear arsenal as a means of intimidation as regards the rest of the world.
Baroness Symons of Vernham Dean: My Lords, that welcome intervention from the noble Lord. Lord Redesdale, has allowed time for the Box to send me all sorts of interesting answers to your Lordships' questions. I thank both noble Lords for the support that they have given. The noble Lord, Lord Astor, is quite right in saying that we should confer the legal capacity on the preparatory commission for the comprehensive nuclear test ban treaty. We should ensure that it is in the same position as similar other international bodies.
The noble Lord, Lord Astor, asked me how the preparatory commission has been working. It has been working well. It is, of course, the Civil Service element of the CTBT and assists the preparatory commission in making the preparations come into force. As we all know, its duties include the supervising and co-ordinating of the operation of the international monitoring system. Once the treaty has entered into force, the Comprehensive Nuclear Test Ban Treaty Organisation will take over from the preparatory commission, as I am sure the noble Lord has noted.
The noble Lord also asked about the position of the overseas territories. The agreement does not apply to the overseas territories; a separate appendix or
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appendices will be concluded, setting out that the agreement applies to them. That will be done by having an exchange of notes with the appendix or appendices annexed. There will be a further stage to go through with regard to the overseas territories.
The noble Lord, Lord Redesdale, asked about the United States. I so often have to stand at this Dispatch Box and persuade the opposition parties—particularly, if I may say so, the Liberal Democrats—that there really are differences between the United Kingdom and the United States on a whole range of policy issues. It is really no secret that the UK and the US have different views over the value of this treaty. The United States is well aware of our views; we agree on the importance of supporting the international monitoring system, for which the United States continues to provide funding. The United States reduced its funding to the CTBTO in 2002, but the reduction was small compared to its overall financial contribution. I have spent quite some time trying to persuade our friends in the United States that our view on these and similar matters is the right view to take. I am not deterred by my lack of success and shall continue to try so to do.
The noble Lord, Lord Redesdale, asked me a rather technical question about the way in which the testing would be carried out and contrasted the system in this country with that of the United States. My understanding is that the system that will be used will be that of the United Kingdom. Unless I find that I have committed a faux pas in giving that assurance to your Lordships, we shall leave it at that. If I have made a mistake, I shall write to the noble Lords, Lord Redesdale and Lord Astor, to correct it.
Lastly, the noble Lord, Lord Redesdale, asked me about the whole question of first strike. The fact is that the United Kingdom is not going to give up the option. We all know that it would be used in extraordinarily extreme circumstances. The noble Lord is experienced enough to know that it is highly unlikely that a Minister at the House of Lords Dispatch Box at 12 minutes past eight on a Wednesday evening would turn over what the Secretary of State for Defence had said. I am bound to tell the noble Lord that I have no change in policy to announce on that particular issue.
On Question, Motion agreed to.

Competition Act 1998 (Determination of Turnover for Penalties) (Amendment) Order 2004
8.12 p.m.
Lord Triesmanrose to move, That the draft order laid before the House on 31 March be approved [15th Report from the Joint Committee].
The noble Lord said: My Lords, this legislation represents the first major change in this area for 42 years—since February 1962. It is appropriate that after such a period of time a major overhaul should take place.

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I hope that it will be helpful if I open this debate on this important issue by setting out the context in which the Government have decided to introduce these statutory instruments. Their purpose is to amend certain aspects of United Kingdom law governing competition rules and how they are enforced. Primarily, they introduce certain changes to the Competition Act 1998. Those changes are being made mainly because equivalent changes have now been made in the corresponding European Community law. In November 2002, the European Council of Ministers approved the text of a new EC regulation that substantially overhauls the framework of European competition law. The regulation it replaces established the Commission's powers, procedures and penalties for enforcing the EC Treaty Articles 81 and 82 on competition. This new regulation comes into force on 1 May 2004 and will be directly applicable in all EU member states from that date.
These statutory instruments introduce certain changes that are required as a result of the new EC regulation. In addition, they introduce a number of legislative changes not expressly required by the new regulation but which the Government none the less believe are necessary or desirable to ensure that the United Kingdom's competition regime is properly harmonised with the Community competition regime and up to date.
The changes being made to the relevant Community and domestic legislation are accompanied by relevant changes being made in respect of the associated regulatory regime. The Commission is issuing new procedural regulations and notices on the interpretation of community law. In the United Kingdom, the Department for Constitutional Affairs is introducing a number of related changes to court rules and the Office of Fair Trading is modifying its guidance on competition rules and how the regulatory regime works.
By way of background, I will briefly outline the purpose of Articles 81 and 82 in the context of this evening's debate. Article 81 is concerned with anti-competitive agreements, decisions and arrangements. Article 81(1) generally prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between member states and which have as their object or effect the prevention, restriction or distortion of competition within the single market. However, an agreement between undertakings of the kind that I have just described, which falls within Article 81(1), is not necessarily automatically void. Article 81(3) provides that the prohibitions in Article 81(1) may be declared inapplicable where such agreements, decisions or practices have a countervailing benefit. Article 82 is concerned with the behaviour of "dominant" undertakings: monopolies and other businesses with market power. It prohibits any abuse of its dominant position by such an undertaking.
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The modernisation of EC competition law is intended to improve substantially the enforcement of these prohibitions and, with it, the operation of the single market, while reducing regulatory burdens for most businesses. It comes into force on 1 May 2004 in order to coincide with the enlargement of the EU.
The new EC regulation has four main effects. First, it abolishes the current system of notifications under which businesses have been required to notify the Commission of agreements that would be prohibited under Article 81(1) in order to confirm that they qualify for individual exemptions provided for under Article 81(3). This has led to the Commission devoting considerable enforcement resources to examining largely innocuous agreements; inevitably that reduces effectiveness, resources and focus on rooting out the worst kinds of competition law infringements. Moreover, undertakings have faced significant delays in obtaining clearance for their agreements and the Commission has resorted to dealing with many notifications by offering comfort letters, which have no binding legal quality.
The new EC regulation replaces the notifications system with what is known as a legal exception regime, which will enable businesses to self-assess their own agreements for compatibility with the terms of Article 81. In practice, many businesses have been doing this for some considerable time, evaluating their proposed commercial transactions in the light of Article 81 on the basis of existing case law and practice before deciding whether to notify.
Secondly, the new EC regulation sets minimum standards of competition enforcement, thereby providing for a consistent approach to the competition scrutiny of commercial agreements across Europe. It achieves this in a number of ways. First, national competition authorities and national courts in member states will in future be able to apply the treaty articles on competition in their entirety. In addition, national competition authorities will have to apply Articles 81 and 82 in parallel with domestic competition legislation in respect of agreements or conduct that might have an effect on inter-state trade. Decisions under national competition law in relation to anti-competitive agreements must not reach a different outcome from the decision which would be reached under European competition law.
Thirdly, the new EC regulation requires that member states co-operate closely in enforcing competition law. It provides for exchange of information and for investigations on each other's behalf. To facilitate this process, a European competition network is being established.
Lastly, it strengthens and clarifies the Commission's powers of investigation, widens the range of available remedies and provides tougher sanctions for procedural infringements.
Those changes should enable the Commission to focus on rooting out the most damaging types of competition law infringement such as secret cartels.

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As I said earlier, the changes we are making to the Competition Act fall into two categories: those necessary to give effect to the new EC regulation for which we are using powers in Section 2 of the European Communities Act 1972; and those that we are choosing to make in order to realign the domestic competition regime with the new EC competition regime. For this purpose we are using powers in Section 209 of the Enterprise Act.
First, the Government are required to designate UK national competition authorities for the purposes of the new EC regulation. These national competition authorities will be the Office of Fair Trading and the sectoral regulators to the extent that they have concurrent powers under the Competition Act. When I refer to the OFT, it should be taken as read that I mean the sectoral regulators as well.
Secondly, we are required to lay down the procedures to be followed by the OFT when investigating and enforcing Articles 81 and 82 and specify what penalties are applicable. Thirdly, we must provide for appeals against decisions of the OFT under Articles 81 and 82.
There is also a requirement to make provision for the OFT to have the power to assist with Commission investigations in cases involving inspections of undertakings located in the United Kingdom; and discretion to assist with investigations by competition authorities of other member states in cases involving inspections of undertakings in the United Kingdom. While the former position is largely unchanged, the latter is new.
The Competition Act 1998 was drafted so as to mirror as far as possible the system applied in European competition law. The Government continue to believe that it is desirable for the United Kingdom system to continue to mirror EC competition law, ensuring business is not faced with having to comply with two completely separate systems. Accordingly, we need to change the Act to avoid any misalignment between the United Kingdom system and the revised European system.
I will now outline a couple of examples of the changes we are making to the Competition Act 1998 in the interests of such realignment. The first concerns the legal exception regime. The new EC regulation does not require the United Kingdom to abolish the domestic notification system which provides for individual exemptions from the prohibitions in the Competition Act. But to retain a UK notification system when the Commission is abolishing its own notification system inevitably risks increasing the number of notifications received by the OFT. For instance, there is a risk that undertakings may seek to notify to the OFT under the domestic regime as they know that the OFT generally applies a consistent approach to corresponding questions arising under both the Competition Act 1998 and under Articles 81 and 82.
There is also a risk that the OFT might find itself dealing with notifications from across the EU from undertakings seeking a degree of comfort through a
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decision under the Chapter I or II prohibitions, particularly in cases where there is some effect on United Kingdom trade. To ease any concerns that business may have as a result of the switch to a legal exception regime, the OFT will be introducing an extra-statutory system of written opinions in cases which raise genuine uncertainty because they present novel or unresolved questions of law under either the Competition Act or Articles 81 or 82.
The second example is to do with the harmonisation of maximum penalties for infringements of Chapters I and II and Articles 81 and 82. At present, the Commission may fine undertakings up to 10 per cent of their total worldwide turnover in the preceding business year for infringement of the prohibitions in Articles 81 and 82. That limit on maximum penalties imposed by the Commission will not change under the new EC regulations. A number of member states have already given their national competition authorities power to apply Articles 81 and 82, and have adopted maximum penalties equivalent to those of the Commission.
Under domestic law, the OFT can impose on undertakings financial penalties of up to 10 per cent of turnover for breaches of the Chapter I and II prohibitions. Turnover during the period of the infringement up to a maximum period of three years can be considered when determining the penalty. The OFT may impose a penalty on an undertaking only if it is satisfied that an infringement has been committed intentionally or negligently by the undertaking. The maximum penalties provided for in UK national law are therefore different from those currently applicable by the Commission and by some other member states for breaches of Articles 81 and 82.
The Government have consulted in detail on whether we should align the maximum penalties that may be imposed by the OFT for infringements of EC competition rules with those of the Commission or those provided for infringement of domestic competition law. There are a number of arguments in favour of alignment with the Commission's maximum penalties. It is possible that, in applying current national maximum penalties to breaches of Articles 81 or 82, the United. Kingdom could find itself out of step with the fines that would be imposed by the Commission or other member states for the same anti-competitive behaviour.
For instance, an undertaking may be found by the OFT to have infringed EC competition rules that has a large European or global turnover but a comparatively small UK turnover. That might increase the potential for "forum shopping" where the maximum penalties available in each member state relevant to the infringement, influence where a complainant chooses to lodge their complaint. It might also make it more difficult for the OFT to be able to fine for effects in other member states in suitable cases where the relevant other member state consents. A lack of alignment of maximum penalties may also exacerbate the risk of dispute over whether the correct legal framework is being applied.

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In the light of the fact that the Commission's maximum penalties are clearly effective, dissuasive and proportionate for infringements of the EC competition rules, the Government have consulted on whether they should be applied to infringements for domestic competition rules. The decision to harmonise maximum financial penalties for infringement of both EC and domestic competition rules with those of the Commission was made in the light of the responses to that consultation.
I would also like to address briefly a matter that has caused some interest; namely, the repeal of certain exemptions and exclusions from the Competition Act. In particular, I shall deal with the domestic exclusion from the Chapter I prohibition for most vertical agreements. Ministers stated in 1999, on the consultation on the draft exclusion order, that they intended to review the verticals exclusion when a new system had settled in place. That review has now been carried out and, having consulted extensively, the Government do not think the retention of that exclusion desirable for a number of reasons.
First, the original reasons for the exclusion's introduction no longer subsist. It was originally intended in part to alleviate the effects of the introduction of a notification system; there was a fear that, without it, the OFT might be swamped with notifications on commencement of the Competition Act. Clearly, that is no longer an issue. In addition, since it was introduced, the EC Block Exemption Regulation for Vertical Agreements has come into force. This block exemption has a parallel effect under the Competition Act and so provides a safe harbour for most vertical agreements from the Chapter I prohibition as well as Article 81.
Secondly, the verticals exclusion no longer accurately reflects current economic thinking on the treatment of vertical agreements between member states. Vertical agreements are now generally considered benign except where they are accompanied by market power or have network effects.
Finally, the vertical exclusions do not provide as much legal certainty for vertical agreements as has been perceived. The OFT can withdraw the benefit of an exclusion where it considers that an agreement would infringe Chapter I and that it would be unlikely to be granted individual exemption. So, the value of the vertical exclusions after modernisation will also be limited by the OFT's obligations to apply Article 81 to the same agreement where there is an effect on inter-state trade. The result in the eyes of the business community was that there would be a good deal of confusion to the competition law framework.
Here again, we have consulted widely and few concerns have been expressed. The one area where there has been unease—and that is why I have spelt the matter out at what I hope noble Lords will not feel is at unreasonable length—has been that of the newspaper and magazine distribution world, where publishers and wholesalers have been concerned at the potential
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result in terms of the application of the Competition Act to their distribution agreements. We have considered all their concerns carefully.
Our conclusion is that the exclusion has outlived its usefulness. We believe that the framework established by the EC block exemption and the provisions of Section 9 of the Competition Act, allowing countervailing benefits to be taken into account in considering the lawfulness of restrictions in vertical agreements, should be sufficient to enable any concerns to be met. However, to ensure that businesses have time to adjust and, if necessary, seek advice from OFT on the implications for any particular agreements where they have concern, we do not propose that the repeal should come into force for a year.
I should like to stress to the House that the changes made by these regulations have been the subject of a lengthy public consultation process. The new EC regulation itself was of course long in the gestation and was consulted upon extensively. In April 2003, we published a consultation document that clearly explained how we intended to give effect to the new EC regulation and discussed the subsequent changes needed to the UK competition regime. The treatment of exemptions and exclusions was the subject of a second consultation document published in June 2003. In addition to those written consultations officials have hosted a number of workshops and meetings on various aspects of the regulations, where lawyers and business representatives were able to air their views and discuss the issues.
However, I would like to highlight to the House at this point that we recognise that it is unfortunate that the draft regulations were not ready sooner. This has been essentially the result of the tightness of the timetable for implementation which was driven by the need to have the new EC regulation in place in time for the accession of the new EC member states. There was also a need to get absolutely right the detailed harmonisation of the UK and EC regimes. I draw a little comfort—but I do not in any way resile from my point that it is unfortunate—from the fact that the statutory instruments will contain no surprises for business—in particular, the main change, the abolition of the legal exception regime, has been long trailed and very widely discussed. The one other change—repeal of the verticals exclusion—will not take immediate effect. The lack of adverse comments from business and stakeholders suggests that the steps we have taken to engage with them effectively have gone a long way towards ameliorating any problems caused by the timetable.
In conclusion, I believe that the measures contained in these statutory instruments giving effect to the new EC regulation and re-aligning the domestic and European competition regimes should help us towards our goal of having one of the best competition regimes in the world. The overall effect of these changes will be deregulatory in impact and they will enable both businesses and regulators to operate in a domestic competition regime that is as consistent as is practical with the EC competition regime. In my view, greater deregulation and improvements in the competition

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environment are good news for this country. I hope that gaining greater domestic control over regulation will commend itself to those on all sides of the House.
I am sorry that the regulations are so complex, but at least I have tried to deal with all three at once, which I hope—in the long term, at least—will have saved a little time. I commend the regulations and orders to the House.
Moved, That the draft order laid before the House on 31 March be approved [15th Report from the Joint Committee].—(Lord Triesman.)
8.30 p.m.
Lord Hodgson of Astley Abbotts: My Lords, I begin by thanking the Minister for, in 22 minutes, giving us a run through these very complex orders. As he pointed out, and as we appreciate, they will have a significant impact on British business. They are—to the uninitiated reader, at least—fairly technical and dense, and therefore his explanations were most helpful.
In general terms, we on these Benches support the proposals for three main reasons. First, in our view, effective competition increases innovation and improves efficiency and productivity within the single market, and it reduces prices to consumers. It is good to know that a Labour Government and the Labour Party are equally convinced of the virtues of the free market. Long may that continue.
Secondly, the proposal to align our domestic and EU competition legislation, as paragraph 3.25 of the regulatory impact assessment points out,
"enhances coherence, creating greater clarity for business, their legal advisers and enforcers alike".
As the Minister pointed out, that will mean a reduction in the regulatory burden, which is also much to be welcomed. I express the hope that the Government will consider spreading this deregulatory approach to other areas of their activity.
Thirdly, the package recognises the fact that levels of cross-border activity within the EU are continuing to rise and that, in due course—perhaps already—the present system of competition law will cease to function effectively. In that context, it is perhaps a shame that the Government have not devoted similar energy to ensuring the passage of an EU takeover directive, which represents the other great spur to the proper allocation of resources and appropriate economic activity. I accept that that is perhaps outwith the remit of tonight's debate, but any updates that the Minister can give us would be gratefully received.
I wish to make a number of detailed points about the individual regulations but, before doing so, I want to raise some general questions that apply to them all. First is the question of speed of response and/or decision by the competition authorities. The Minister, quite rightly in my view, laid stress on the importance of aligning domestic and EU competition law. One provision of the Enterprise Act 2002—as the Minister pointed out, the regulations are being introduced under Section 209 of that Act—was to lay down timetables specifying the maximum time within which
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UK competition authorities had to make responses or decisions. I am not clear whether this particularly useful provision is matched in EU law.
This is far from an academic issue. If I speak with some vehemence on the matter, it is because I was formerly a director of a Stock Exchange-listed company which was the subject of an unwelcome "dawn raid"—a process by which a predator company bought a 29 per cent stake through the stock market in the company of which I was a director. That was totally unwelcome. At that time, the purchasers anticipated no problem with the competition authorities but, to their surprise, further purchases were then prohibited, pending a competition review, which took months. Noble Lords can imagine the difficulty of maintaining morale within the company during that period when its future was so uncertain. Therefore, a few words from the Minister on timetabling and deadlines would be very welcome.
Secondly is the issue of the speed with which this process is being concluded. I accept the Minister's expression that this is "unfortunate". I read very carefully the remarks by Mr Gerry Sutcliffe in the debate on the regulations in another place, where a lengthy discussion took place. But, notwithstanding the fact that the Government have ensured widespread consultation, which I accept is inevitably time-consuming, the reality is that these regulations flow from the EC competition regulations agreed on 16 December 2002. Surely it should have been possible to have produced these regulations in January or February of this year at the latest, not 72 hours before they are due to come into force.
In this context, is the Minister aware of the knock-on effect this delay has had on the OFT consultation period on best-regulation guidelines? As I understand it, the normal OFT consultation period is 12 weeks, but because of the late arrival of these orders, the OFT has reduced the period to six weeks. That is inherently unsatisfactory in an area as complex and far-reaching as this one. Perhaps the Minister can confirm or deny the accuracy of what I have been told.
Thirdly, can the Minister explain the comparative position in the rest of Europe, particularly among our major industrial competitors? It has been put to me that, once again, the UK stands on the 1 May start line, uniform pressed, shoes shined, with every "i" dotted and "t" crossed, and well resourced authorities enforcing a competition regime as tough as any in Europe. How many other EU countries will be standing on the start line with us, in a similar position, with every piece of EU law ready and in place for enforcement at one minute past midnight on Saturday morning next? All too often, the UK's keenness to implement is not matched elsewhere.
Finally, I would like to raise the position of professional privilege under these codes. Professional privilege has been an important part of the UK legal scene for many years, enabling the provision of independent legal advice on a confidential basis. It would be helpful if the Minister could explain the general position of professional privilege under these

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rules. May I press him on a rather more specific aspect? Many of these competition regulations will be of particular significance to larger companies. Many larger companies will have in-house legal departments to address these issues. What is there position as regards professional privilege under these regulations?
It has been suggested to me that under UK law, in-house legal advice can be provided on a privileged basis. This is not true under European law, where in-house legal advice is not covered by professional privilege. Can the Minister confirm or deny what I have been told and, if my information is correct, what are the Government going to do about it?
Let me go one stage further to try and explain how complicated the matter could become. Paragraph 1.4 of the regulatory impact assessment points out how one of the purposes of the regulations is to,
"bring enforcement of EC law closer to the markets concerned by expanding the role of national courts and authorities".
Indeed, the Minister made some play of this in his remarks.
Mr Sutcliffe elaborated on that in another place when he said on Monday:
"The hon. Gentleman asked about the European competition network. It is being established to allow the Commission and the national competition authorities of the 25 member states to co-ordinate the application of EC competition law. A legal basis will be created to allow the Commission and the national competition authorities to exchange and use in evidence any matter of fact or of law, including confidential information, in order to apply EC competition law".—[Official Report, Commons First Standing Committee on Delegated Legislation, 26/4/04; col. 14–15.]
The EU competition authorities could request the UK competition authorities to investigate on their behalf. What, then, is the position of in-house legal advice—privileged, because it has been obtained by UK authorities, or not privileged, because it has been obtained under EU law?
This is an important issue. The Minister has not had the benefit of participating in the Committee stage of the Companies (Audit, Investigations and Community Enterprise) Bill, but we have been tramping through the foothills of this topic with his colleague, the noble Lord, Lord Sainsbury of Turville. I think the Government are under no illusions—indeed, I think they agree—that the maintenance of professional privilege is important. But no less importantly, the Government have laid great stress on the harmonisation aspect of these regulations. If my belief is correct, this clearly does not represent harmonisation.
So much for the broad issues. I turn now to some specific points. The Competition Act 1998 (Determination of Turnover for Penalties) (Amendment) order was covered by the Minister in some detail. In the debate in the other place, my colleague, Mr Henry Bellingham, raised the issue of the multinational with only a small part of its businesses in Europe. He said:
"The Minister talked about turnover. Will he tell us what happens when a multinational trades predominantly in the Americas or the far east but also trades in Europe—will it be the
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worldwide or the European turnover that is relevant?".—[Official Report, Commons First Standing Committee on Delegated Legislation, 26/4/04; col. 12.]
Mr Sutcliffe's reply at col. 15 was that the penalties will be calculated under a five-step approach in which,
"The fifth step is an adjustment if the maximum penalty of 10 per cent applies to the world wide turnover".—[Official Report, Commons First Standing Committee on Delegated Legislation, 26/4/04; col. 15.]
That was not a clear reply. It would be helpful to know what is meant by that.
I turn to the land agreements exclusion and revocation order. As the Minister said, the debate on the desirability of this seems to focus very much on the single issue of distribution of newspapers and magazines. The report by Professor Paul Dobson entitled, The Impact of Proposed National Distribution Developments on the UK Regional Press Industry argues that there will be a widespread loss of newspaper/magazine distribution services, particularly to country areas. It is clear from the paperwork that the Government do not accept Professor Dobson's arguments.
I have no idea who is right. Events must take their course. My question is what will happen if Professor Dobson does prove to be correct and the system for newspaper/magazine distribution collapses. Can the legal situation be reversed or are we on a one-way street? If it can be reversed, do the Government believe that the status quo ante bellum can be restored?
I turn to the third and final set of regulations, the other enactment amendment regulations, which appear to be concerned primarily with enforcement and about which worries have been expressed. First, the general power to investigate appears to he very imprecisely and broadly drawn. Nowhere do the words "company" or "industry" appear. That in turn gives rise to concerns about fishing expeditions.
The regulator sets out with only very generalised objectives in the hope that he will stumble across more specific information about some activity or other en route. What safeguards exist to prevent such an approach? Secondly, what restrictions exist on the onward transmission of information so gathered? Can it be passed by the regulator, for example, to the Inland Revenue or to the Health and Safety Executive, and what use could they make of information so gained?
Thirdly, I refer to the nature and scope of interviews taken under these regulations. Presumably, they do not fall within the provisions of the Police and Criminal Evidence Act and associated codes. So, what safeguards exist for the naïve, inexperienced or unwary interviewee? I note that paragraph 16 on page 13 of the Explanatory Memorandum refers to protection against self-incrimination. Perhaps the Minister could explain a little further what safeguards there are and how they will operate.
Finally, could he explain the judicial hierarchy by which warrants are issued? For example, on page 25, paragraph 38 inserts a new section 62A (power to enter non-business premises under a warrant). That requires the assent of a judge of the High Court for the issue of

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a warrant. By contrast, page 29 paragraph 44, Section 65H (power to enter domestic premises under a warrant), requires only the assent of a judge. It could be argued that entering domestic premises should be subject to higher safeguards than non-business premises. Perhaps the Minister could enlighten us.
There is one small administrative issue which I would ask the Minister to take up with his officials. In all three of these statutory instruments there is a reference to the regulatory impact assessment, which has been prepared. Indeed, the statutory instrument numbers 1077 and 1078 provide Internet links to the DTI consultations page which claims to hold a copy of this RIA. I can tell the Minister that the link will take him to a vast page containing 30 or so RIAs in which the relevant link can be found only after sifting through 15 other consultations and their attachments. The third attachment of consultation number 16 is entitled Public Consultation on the Government's Proposals for Exclusions and Exemptions from the Competition Act 1998 in the light of regulation 1203EC Hallelujah! Here is the RIA that we have been looking for, but I see no reason why this title is not included in the Explanatory Notes of the instruments and the absence of a direct link seems equally unhelpful. A technically complicated area such as this hardly needs the added confusion of imprecise and protracted referencing.
I end as I began, by saying that we on these Benches give a broad welcome to these provisions. However, they raise questions, issues and concerns on which enlightenment and clarification would be helpful. I look forward to hearing the Minister's reply.
Lord Razzall: My Lords, I share the general acceptance of the noble Lord, Lord Hodgson, of these regulations. I want to confine my comments to one point, which I regard as pretty fundamental. When the Minister opened the discussion he said that he was opening a debate. We have debates on Second Reading speeches, in Committee, on Report and at Third Reading. With regulations the Minister says, "These are the regulations that we, the Government, think we should have". The Opposition go through what I can perhaps call the charade of asking a number of questions about the regulations. Our only remedy as Opposition Members is to propose that the regulations should not be passed.
I speak as one who in an earlier life spent a lot of time dealing with competition law and the practice of it. The Minister and the noble Lord, Lord Hodgson, do not need me to tell them that these regulations provide fundamental alterations to competition law in practice. The fundamental point for the House is whether this is the right way to implement these sorts of provisions.
I understand that the Government have a timetable problem. The attendance of noble Lords in this House is currently limited to six, if we include the noble Lord leaning with attentive interest behind me. That does not demonstrate the importance of the laws we are about to pass. These measures have significant implications for matters such as entry to people's
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business premises and personal residences under warrant. I can almost hear my noble friend Lord Lester behind me questioning the human rights aspects. Yet, here we are at 8.50 p.m. dealing with this item because of the way in which the Government have brought it forward.
I have no complaint, nor has the noble Lord, Lord Hodgson, about the thrust of what the Government are trying to achieve. The point that I wanted to make in a gentle way is whether this is the right way to deal with fundamental changes to competition law. Dare I say it—the reason why the Government can deal with the matter in this way is that very few noble Lords in this House are particularly interested in this area. They leave it to the noble Lords, Lord Triesman and Lord Hodgson, or to me. That does not mean that it is the right way to make these alterations.
The Minister spoke for 22 minutes on introducing a regulation. The length of time he spoke indicated the importance of this regulation to law in our country. The noble Lord, Lord Hodgson, asked him a number of significant questions. However, there is no point in his answering the noble Lord because the noble Lord cannot do anything about it. The Minister may be able to clarify matters, but all the noble Lord, Lord Hodgson, can say if he does not like the answer is, "Well, I have to accept the regulation because I cannot amend it".
I put in a plea to the Government. It is not the fault of the noble Lord, Lord Triesman; he does not decide the Government's programme. In these technical areas which fundamentally change British law our body politic has to think carefully about whether the right way to make the changes is by regulation of this nature.
Having made that general point, of course I shall support the regulation. I agree with the thrust of what is happening. However, I am sure that if the matter had come to the House in primary legislation, the noble Lord, Lord Hodgson, and myself would be bringing forward amendments that the Government would be likely to accept. That is the friendly and amicable way in which the noble Lord, Lord Triesman, always deals with these matters.
The Earl of Erroll: My Lords, I rise briefly to echo and concur entirely with what the noble Lord, Lord Razzall, has just said. I came upon the orders by accident and listened with interest to the exposition of exactly why the EC should be allowed to amend our primary legislation without our debating it. I can see all sorts of good reasons for it being amended, but I am not at all sure that I am happy with the method by which it is done.
I was intrigued by a couple of things that the Minister said. At the end, he said that this gives us domestic control of the regulation. But I think that I heard him say at the beginning that EC legislation must run in parallel with our domestic law, and, in fact, will overrule it when there is a conflict. So I do not

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see how we have any domestic control over it at all, or why we bother to keep domestic law, although I do not necessarily need a detailed answer on that.
The Minister went on to say that it will be the best competition law. But if it complies with EC competition law, I do not see how ours will be better than anybody else's—or are we gold-plating again? In that case, we should carefully consider the gold-plating elements. This sort of thing should be done through proper parliamentary scrutiny and debate, not in the form of statutory instruments which we cannot amend. I was concerned when I heard about the powers that are being given to enter domestic premises, and so on. That is the sort of thing that Parliament should debate, because I am sure that that is not in the EC competition regulation.
My last point relates to something that I find irritating about many government measures. The Government produce incredibly complicated regulations and then, to be helpful, they produce something like this thick tome, which starts with a note that states:
"has been prepared for illustrative purposes only, in order to aid Parliamentary consideration of the Regulations. It has no formal status and should not be relied upon for any other purpose".
All I can say is that if the Government cannot get it right, how is anyone else expected to? Let us say that I had a smallish business and could not afford expensive lawyers. I might want to rely on a document such as that, but I am told that I cannot. It is ridiculous that the Government should be allowed disclaimers of that nature. If they cannot get it right, I cannot see how they can expect anyone else to. That does not mean that such documents should not be issued—they should be—but they should not include a disclaimer such as that.
9 p.m.
Lord Triesman: My Lords, first, I thank noble Lords for raising one or two interesting issues for me to try to address. Given the lateness of the hour, I shall try to do so rapidly. If I do not cover all of them, I hope that noble Lords will accept that we will go through the record carefully and ensure that we write to them to explain anything that I inadvertently miss.
I start with the large-scale questions about the process in which we are engaged. That is obviously a matter of fundamental importance. Both the noble Lord, Lord Razzall, and the noble Earl, Lord Erroll, raised those questions. First, I accept what I took to be a mild rebuke that this is not a debate in the sense in which most people would use the word. It is certainly true that a considerable volume of statutory instruments enter your Lordships' House, which we deal with whatever the hour of the day or night as best we can schedule them. In a way, I make no apology for that, because I suspect that the alternatives would be worse.
None the less, that does mean that on occasion, we will be faced with what are very significant changes. I accept that—I think that I said that I saw them as that: they are
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the first really big changes in this area for about 42 years. We will face big changes and this is a limited debate in that sense. I can only say to the noble Lord, Lord Razzall, that, having heard what he and other noble Lords said, we may be a small group but, goodness knows, it is a highly erudite one, from what I have just heard, and one that has obviously looked at the matter in some detail. It may be an issue that the Joint Committee on Statutory Instruments should look at. I should go no further than that today. No doubt, people will wish to consider the impact of the points made.
Further to the comments of the noble Earl, Lord Erroll, when I referred to greater domestic control, I meant that I was pleased to see, as the statutory instruments were developed, that the requirement to designate UK national competition authorities to deal with EU regulation brought back some extremely important powers rather than leaving them with EU regulation authorities. I would rather they were dealt with by the Office of Fair Trading, the sectoral regulators and the others that I mentioned than elsewhere. The repatriation of some of those powers is good domestically.
Nothing said today indicates gold plating. In many ways it indicates that, in a very complex area, a successful attempt is being made to simplify as much as possible a good deal of complex material. Once it is simplified, either in explanations or statutory instruments, we are bound to make the obvious point that the law is the law. Illustrative statements about the law, and remarks about it in this House or elsewhere, are important explanations, but inevitably everyone will have to rely on ensuring that the law itself is obeyed and that we do not introduce ambiguity inadvertently.
The noble Lord, Lord Hodgson, raised a sequence of important questions. Like all speakers in this debate, I am grateful that we all seek the same enhancement of competition—the operation of the free market in vigorous circumstances—and that we all recognise that it is valuable for the United Kingdom. I was disappointed to hear that the website was quite so obscure. I am in a lifelong search for great websites, but I shall now conduct the experiment that the noble Lord, Lord Hodgson, has carried out, not because I disbelieve him in any respect but because I would like to feel that it could be got right.
The noble Lord's first question was about timetables. The timetable has been tight from the start, given the scale of the changes needed to give effect to the regulations and, in reviewing the domestic regime, considering the changes necessary to ensure that the EU and United Kingdom regimes were not so divergent as to cause considerable difficulties for those that the regime would cover—the overwhelming proportion of business. It is a very significant issue. It is true that the process has taken months. I do not want to depart significantly from the remarks of my honourable friend Gerry Sutcliffe in another place. He explained why the process had taken so long, and have expressed as fairly and as clearly as I can my regrets about the legislation's late arrival in this House. One of the things that I take comfort from is

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the extent of the consultation carried out. Sometimes consultation can take time, but it is nevertheless worth getting right.
I understand the point made about the OFT timescale and the consultation period of six weeks. The consultation period will close on 4 June. Incidentally, responses will be made public, unless anybody has specified that confidentiality is required. The OFT hopes to publish final versions of the competition law guidelines and related guidelines by 1 August 2004, so that the procedural rules can come into operation on the same date. I hope that that will mean that that short time will, at least, be used to the optimum effect. I know that it is desirable to have the maximum time and not rush matters in consultation on any regulation. That is one of the guiding features of the work of the Better Regulation Task Force, for example. None the less, there is an intensive but sensible and well designed programme on the part of the OFT. There is every reason to think that it will be workable.
I was asked how many member states were ready to roll with the proposals on 1 May. We know that member states are in various states of preparedness for 1 May. Some will catch the train on the same date as we do, but a great deal depends, in all member states, on the structure of their domestic competition law and the timetables required for making amendments to that law. Obviously, we have little influence on that, just as they would have little influence on our position. All are co-operating fully within the European competition network, and the regulation will have direct effect from that point. Generally speaking, the legislative processes are moving rapidly, even if not all the states will be ready on 1 May, for the reasons that I gave.
I turn to the vexed issue of legal professional privilege. I think that the essence of the questions that I have been asked is whether the regulations weaken the protection of legal professional privilege. They do not. When the OFT investigates suspected infringements of EC competition law in the UK on its own behalf or on behalf of other national competition authorities, the UK rules on legal professional privilege will apply. It is not necessary or desirable to elaborate greatly on that statement. It is a clear statement, and the position is best expressed in clear terms.
I do not think that there is a difference to the protections that exist for in-house lawyers in a company. The point that has been made is straightforward: the OFT may receive communications from in-house lawyers from a national competition authority in a member state where the circumstances of communication for the in-house lawyer are not privileged. In those circumstances, the OFT may use the documentation received from other competition authorities in its investigation. The position in the UK does not change.
The decision on whether it is necessary to act on a request from another member state for an investigation is discretionary. I hope that there will be widespread co-operation; the system will not work
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without it, and there would be little point in it. Having said that, I feel that the discretionary element is of some importance. We would not want to find ourselves dragged through widespread fishing expeditions of any kind, for example. That is an important factor.
The amount of any penalty imposed will be determined by the OFT and calculated in accordance with published guidance. The draft guidance on the issue is the subject of separate consultations by the OFT. The closing date of the OFT consultations is 4 June. Once again, all the responses will be published on 1 August.
A point was made about the fifth factor—the adjustment to ensure that the maximum turnover figure was not exceeded and that fines could not be more that 10 per cent of the undertaking's world-wide turnover in the previous business year. I mentioned it in the initial statement. That is the description, and, if further detail is required, I shall be happy to write to any noble Lord who wishes to have it. However, that is the fundamental position.
I was asked about the position of the verticals, in particular as regards the newspaper and magazine distribution world. Perhaps I may say to the noble Lord, Lord Hodgson, that there is no expectation that that element of business will collapse. We do not believe that it will. Indeed, we would be considerably alarmed if we thought that it would. Generally, I do not think that the businesses involved think that it will collapse either. No one would want to take irremediable steps, in the circumstance that there may be problems.
The general arguments for the repeal of the verticals exclusion apply to newspaper and magazine industry businesses as they do for other industries. Anticompetitive agreements should all be subject to competition scrutiny. I do not think that we would want to see any stand outside it unless there was an overwhelming reason to do so. The Competition Act allows for anti-competitive effects of an agreement to be balanced against the consumer benefits that it provides. Obviously, if widespread loss of delivery of newspapers and magazines occurred, that would be disbeneficial of a quite major kind to the affected communities. As I say, we do not anticipate that that will happen.
I undertake to go back over the responses that have been received from that industry in order to ensure that no loopholes as regards the loss of benefits will be found. I do not believe that they will be found, but it is worth checking.
With regard to evidence that can be used in possible prosecutions, when the OFT is investigating suspected infringements of EC competition law in the UK on its own behalf or on behalf of another national competition authority, under Section 30 or Section 65J of the Competition Act, those are the provisions that would apply. Investigations will be conducted by the commission on As own behalf. When OFT officials assist the commission in its inspections Article 12 of the EC regulations will apply.

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I make those points because that provision should stop the kinds of fishing expedition that would, quite rightly, cause considerable concern. From having discussed this matter in some detail with officials and others, my understanding is that it is not really expected that those will be the sources from which OFT investigations will lift off. I think that it is fair to say that the bulk of the possible investigations are much more likely to arise from complaints by injured parties, by complaints from whistleblowers—now becoming something of a factor—and by evidence that is coming from the European Competition Network that has been specifically established in order to assist in that area.
I should touch on self-incrimination. I do not think that there are any fundamental changes in the provisions in United Kingdom law on self-incrimination, but I shall make certain that I am right and I will write to noble Lords for clarity. At the moment, I am not aware of any fundamental point on that.
As regards the judicial hierarchy, Sections 62A and 65H both require an application to a High Court judge for a warrant. Court is defined in Part II as meaning the High Court. Therefore, there should not be the sort of problem that, quite rightly, I have been asked to deal with.
In the midst of all the issues that have been raised—I close with this and again apologise for the length of my response—the fundamental point is that this is a big change. It needed a degree of elaboration and I hope that noble Lords will forgive me for the extent to which I have done that. Modernisation of business regulation can be lost in the fine detail, but it is extremely important to the well-being of the United Kingdom economy. Indeed, all noble Lords have remarked in the course of our discussion that that is the objective of us all: good competition makes for sound business, which in turn increases the prosperity of the country and its people. That is the core message I have taken from the contributions to the debate.
When we introduced the Competition Act 1998, we recognised the desirability of aligning regulatory systems for the EC and the UK to bring them
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substantially into parallel and to minimise uncertainty for business. Pursuing good and sound business practice and looking for the benefits of that—I am happy that we are all on the same side—does not remove from us the responsibility for ensuring that the businesses we are talking about are not embroiled in uncertainty, which is the purpose of what we have done.
I have tried to respond to all the points as satisfactorily as possible. If I have not done so, no doubt noble Lords will let me know and I will come back to them in due course.
On Question, Motion agreed to.

Competition Act 1998 and Other Enactments (Amendment) Regulations 2004
Lord Triesman: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the draft regulations laid before the House on 31 March be approved [15th Report from the Joint Committee]—(Lord Triesman.)
On Question, Motion agreed to.

Competition Act 1998 (Land Agreements Exclusion and Revocation) Order 2004
Lord Triesman: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the draft order laid before the House on 19 April be approved [15th Report from the Joint Committee].—(Lord Triesman.)
On Question, Motion agreed to.

University of Manchester Bill [H.L.]
Bill reported from the Unopposed Bill Committee with amendments.
House adjourned at sixteen minutes past nine o'clock.