Lords Sitting of 9 June 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 Newcastle.

Lord Kalms
Sir Harold Stanley Kalms, Knight, having been created Baron Kalms, of Edgware in the London Borough of Barnet, for life—Was, in his robes, introduced between the Lord Harris of Peckham and the Lord Feldman.
Lord Bhattacharyya
Sir Sushantha Kumar Bhattacharyya, Knight, CBE, having been created Baron Bhattacharyya, of Moseley in the County of West Midlands, for life—Was, in his robes, introduced between the Baroness Dean of Thornton-le-Fylde and the Lord Corbett of Castle Vale.

Nigeria
2.49 p.m.
Baroness Cox Baroness Cox asked Her Majesty's Government:
What is their response to reports of escalating violence in Plateau State, Nigeria.
Baroness Crawley: My Lords, we are concerned at the continuing levels of violence in Plateau State, although the number of incidents is falling. British High Commission officials have visited and are in close touch with the federal and state authorities. We welcome the federal government's efforts to restore peace to the affected areas, but have urged that any intervention be carried out with full respect for human rights and the rule of law. We have offered humanitarian support to the Nigerian authorities.
Baroness Cox: My Lords, I thank the Minister for that encouraging reply. Is she aware that, although Christians and Muslims have been involved in the fighting, when we were in the conflict areas there were disturbing reports that very well armed Islamist mercenaries from Chad, Niger and Cameroon had been involved in the fighting, and that Osama bin Laden had declared Nigeria ready for liberation and the Obasanjo government apostate? Will Her Majesty's Government therefore raise with the Nigerian Government concerns that the conflicts are being used and escalated to further the cause of Islamist terrorism?
Baroness Crawley: My Lords, in answering the noble Baroness, I acknowledge the tremendous amount of international work that she undertakes, and assure her that we are well aware of the Osama bin Laden denunciation of Nigeria and other countries as apostate.
256
We agree that the intervention of well armed mercenaries of both religious persuasions is of concern to us and the Nigerian Government. She will know that the Nigerian Government dealt robustly with a previous incident provoked by Islamic extremists in the northern state of Yobe, which was sparked off by a group calling itself Taliban. We have regular exchanges with the Nigerian Government and other interested parties on the issue, and will watch developments very closely.
Lord Avebury: My Lords, have the Government received any request from the sole administrator of Plateau State for help in dealing with the people displaced by the ethnic violence in Yelwa? Does the Minister, although acknowledging that the matters are for President Obasanjo and his government to solve, think that there might be a role for the Commonwealth in defusing the tensions that have caused the rising levels of ethnic and sectarian violence not only in Plateau State, but recently in Kano?
Baroness Crawley: My Lords, the matter is for the Nigerian Government to resolve, and we support very much their efforts to resolve it. We have urged them to ensure that any intervention in that resolution is dealt with through the rule of law. For the moment, that is where we stand.
Lord Alton of Liverpool: My Lords, did the noble Baroness see the reports in the media that, on 11 May in Kano, 3,000 people may well have lost their lives? Has she had chance to study the letter from President Obasanjo in which he makes the welcome statement that he will pursue a policy of zero tolerance against those involved in the atrocities? In pursuing the point made by the noble Lord, Lord Avebury, I should say that President Obasanjo calls for international support to free,
"our nation from the consequences of decades of misrule and structural as well as systemic dislocation".
Will the Government think further about whether we can assist in any practical way in achieving that objective?
Baroness Crawley: My Lords, I want to make it very clear to the noble Lord, Lord Alton, that we are assisting at present. Our aid budget to Nigeria is doubling this year. We have also said, because of the conflicts in the regions, that we will stand ready in terms of humanitarian assistance; I think that the noble Lord, Lord Avebury, was referring to other types of assistance. We are aware of the violence in Kano State. We are extremely concerned about the recent deaths there, and the British High Commissioner has visited Kano recently, where he stressed our concern to both the governor and the emir.
I thank the noble Lord, Lord Alton, for giving me sight of his correspondence with President Obasanjo. We welcome the president's efforts to restore peace to the affected areas. We remain strong supporters of his

257
reform programme and are working closely with his government to address reforms that will benefit all Nigerians.
The Lord Bishop of Manchester: My Lords, is the Minister aware that there are more active Anglicans in Nigeria than in any other country of the Anglican communion? Is the Anglican Church among the interested parties with which the Government are in touch?
Baroness Crawley: My Lords, yes indeed. I was not aware of the information about the number of Anglicans in Nigeria. There is a great and significant Christian community in that country and we are indeed in touch with the Churches. We very much back and give support to the Coventry Cathedral project on reconciliation in the Plateau State.
Baroness Park of Monmouth: My Lords, are representations being made by the EU and ourselves to the African Union to make it do something about the increasing bloodshed and terror—particularly given that a number of the countries concerned, including Chad and others, are producing fighters who are adding to the mayhem rather than helping?
Baroness Crawley: My Lords, we are very aware of the problem regarding the Chad fighters and we have been active in the European Union in getting a statement from it recently. The EU said:
"The Presidency, on behalf of the European Union, expresses its serious concern and distress at the constant incidents of death and destruction that are taking place in Nigeria … The European Union notes the rapid response of the Nigerian Government in despatching additional security forces to the areas concerned".
Lord Howell of Guildford: My Lords, the noble Baroness is right that these matters should concern us deeply, not just because of the human rights, bloodshed and atrocity dimension, but because the stability of Nigeria is crucial to the world's energy and oil supply system, on which this country shall increasingly have to rely in coming years. Has she any information about whether these problems have spread to the Niger Delta area, where the main tensions are arising with the oil companies? Can she give us an updated report on that aspect?
Baroness Crawley: My Lords, we have heard of incidents of problems in the Niger Delta area and we continue to have negotiations with the Nigerian Government, both at federal and state level, about all of those incidents. I very much agree with the noble Lord, Lord Howell of Guildford, that Nigeria is very important to the world community. We are working closely with the president and his government to address the necessary economic reforms that will benefit the whole of Nigeria.

City Academies
2.57 p.m.
Lord Tombs Lord Tombs asked Her Majesty's Government:
What control is exercised by the sponsors of city academies over the design, construction and management of a new school.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, sponsors provide the vision for the academy design and are involved in the appointment of the design team. The academy trust, established by the sponsor, contracts with the construction companies. It is also responsible for running the academy in much the same way as a maintained school's governing body.
Lord Tombs: My Lords, I thank the noble Baroness for that brief but helpful reply. I am concerned that 90 per cent of the capital cost of the schools is state money and all of the running costs are met by the state, but they are outside the local education authority. Will the noble Baroness indicate the powers that her department has to ensure remedial action in the event of financial or academic shortfalls? Will she also be prepared to place a model contract, not a specific one, in the Library of the House?
Baroness Ashton of Upholland: My Lords, sponsors work closely with local education authorities and predecessor schools on any proposals to establish academies. The local education authority is represented on the governing body, so there are strong links. Also, the funding agreement is made between the Secretary of State and the academy itself. If there is a model of the contract I shall certainly look to placing that in the Library of the House.
Lord Shutt of Greetland: My Lords, the issue of design, construction and management is one thing, but what will be the ethos of these city academies? What is it that city academies will bring to education that is not available at the present time, and would these resources not be better employed in seeing that state education is better than it is already?
Baroness Ashton of Upholland: My Lords, I say to the noble Lord, Lord Shutt, that it is not a question of "either/or"; it is "both/and". The basis upon which we develop academies is to look at areas where we have seriously under-performing or failing schools and to be innovative in bringing sponsorship into the design and build of a new school with the kind of flexibilities that enable those children to succeed more easily. Although it is early days, the results are very encouraging.
Lord Blackwell: My Lords, can the Minister confirm that the Government are relatively satisfied with the performance of city academies? Can she confirm that, as the Government see it, a large part of that performance

259
is due to their relative freedom to innovate not only in construction and design but in academic areas, free of state and LEA controls?
Baroness Ashton of Upholland: My Lords, academies follow aspects of the national curriculum and they have to provide a broad and balanced curriculum. Therefore, what they offer to children and young people is more flexible but it comes within the wealth of opportunity provided within the curriculum. As I said, these are early days, and those who have taken GCSEs, for example, have had little more than two terms in the academies. But from the three that are fully up and operational, we have seen significant increases not only in terms of academic attainment but also in areas of pupil behaviour and attendance.
Baroness Seccombe: My Lords, can the Minister tell us how the results of the city academies and the so-called "bog standard" comprehensives compare?
Baroness Ashton of Upholland: My Lords, as I indicated, these are very early days. Pupils sat the 2003 GCSE examinations in three academies. In Bexley, the number of pupils who attained five A* to C results in their GCSEs increased from 7 to 20 per cent; for Greig, the increase went from 25 to 35 per cent, with a value added score that put them in the top 25 per cent of schools in the country; and Unity scored 16 per cent, which is broadly comparable with the results of the two other schools, and it also demonstrated increased attendance by pupils and better behaviour.
Lord Clinton-Davis: My Lords, is my noble friend aware that, in the London Borough of Hackney, the school which was previously known as Hackney Downs School is being redeveloped with the support of countless people? Help is being brought to many poor people, many of whom would have to go out of the borough to seek a worthwhile education.
Baroness Ashton of Upholland: My Lords, I visited Hackney and saw the work that Mike Tomlinson and the team are doing there. There are critical issues surrounding the lack of secondary school facilities within the borough. Therefore, I pay tribute to all that is happening. Hackney made significant gains in GCSE results this year.

Supreme Court and Lords of Appeal
3.2 p.m.
Lord Peyton of Yeovil Lord Peyton of Yeovil asked Her Majesty's Government:
What are their present plans for rehousing the Lords of Appeal.
The Secretary of State for Constitutional Affairs and Lord Chancellor (Lord Falconer of Thoroton): My Lords, following a detailed evaluation exercise, two options remain under active consideration. They are Middlesex Guildhall and the new wing of Somerset
260
House. We shall continue to investigate the relative qualitative and financial merits of those two buildings in consultation with the Law Lords before announcing a final decision in the autumn.
Lord Peyton of Yeovil: My Lords, does the noble and learned Lord agree, or feel in his heart, that what he presented at first as a thoroughly well thought out and complex constitutional reform is now looking a little fly-blown and frayed at the edges? The fact that the Government still have no idea about where they are going to put their Supreme Court, the fact that there has been a lack of consultation and the fact that the Government were totally unaware of the consequences of abolishing the Lord Chancellorship all enhance the impression that there was no forward thinking. In the circumstances, I wonder whether the spectacle of the noble and learned Lord—the holder of the office which, a few months ago, he set out to abolish—sitting contentedly on the Woolsack is not becoming something of a joke.
Lord Falconer of Thoroton: My Lords, I think that I should put aside my personal comfort on the Woolsack in dealing with these important and complex issues. The noble Lord is absolutely right: these are complex issues. As a result of referring the matter to a Select Committee, we have the opportunity to consider the issues in detail in this House and to consult widely. The Government can listen and consider how they can be improved. I do not accept the epithets that the noble Lord gave to our programme—namely, "fly-blown" and "unthought out". I agree that the matter is important and complex. We need to consult and to listen so that the scheme is as detailed and appropriate as possible.
Lord Ackner: My Lords, do the Government intend to implement the provisions which will translate the Law Lords into Supreme Court judges without first obtaining suitable alternative accommodation? If that is the intention, what rights and privileges hitherto enjoyed by the Law Lords, such as the use of your Lordships' Library, the attendance at debates here and catering facilities, can still be enjoyed by the former Law Lords?
Lord Falconer of Thoroton: My Lords, I hope that it will be possible to implement the proposals for the Supreme Court—that is, to make them effective—at the same time as a building is available. I cannot guarantee that that will be the position and therefore I can give no assurance in that respect, but I hope that that would be the position. Once a Supreme Court is established, the current Law Lords will be its first members. We would propose that they lose the right to sit and vote while they remain full-time Supreme Court justices. I believe that their rights in relation to the Library and catering facilities are a matter for this House to decide thereafter.
Lord Goodhart: My Lords, does the noble and learned Lord agree that a room on the Committee Corridor of your Lordships' House is a wholly inappropriate place to house the highest court in the land?
Lord Falconer of Thoroton: My Lords, I do agree with that proposition. I think it is important that the final court of appeal in this country should be available in a building of its own—visible and accessible to all.
Lord Brooke of Alverthorpe: My Lords, when the Government are seeking to persuade 20,000 civil servants in London and the south-east to uproot themselves and move to other parts of the UK, does my noble and learned friend not agree that it is important that we have role models who are prepared to participate constructively in relocating their offices? Perhaps if he agrees with that sentiment, he would be prepared to convey it from this House to the judiciary, and we might seek the opportunity to see them setting an example to others.
Lord Falconer of Thoroton: My Lords, I agree with the principle that relocation all over the United Kingdom is appropriate for very many bodies. But I believe that the appropriate place for the final court of appeal of the United Kingdom is in the capital of the United Kingdom, and I think that that is the best argument for it staying in the capital. That does not mean that the final court of appeal would not be able to sit outside the capital of the United Kingdom as it—the final court of appeal—thought appropriate. But it is for that court, rather than for us, to decide when to sit outside the capital.
Earl Ferrers: My Lords, can the noble and learned Lord the Lord Chancellor say when the Government will stop wrecking parts of the constitution and calling it modernisation?
Lord Falconer of Thoroton: My Lords, we are seeking to improve the constitution and see it evolve with time. That is the debate that we need to have.
Lord Davies of Coity: My Lords, in view of the response from my noble and learned friend the Lord Chancellor regarding the complexity of the problems and the lack of consultation that took place initially, will he now concede that perhaps the matter was originally dealt with a little in haste and that perhaps we have reached the stage when more haste and less speed is required?
Lord Falconer of Thoroton: My Lords, I do not dissent from the proposition that the announcement may have been made hastily to start with. But we have now had, and are taking, the opportunity of consulting as widely as possible on these proposals. Indeed, the
262
noble Lord, Lord Richard, is chairing a Select Committee at which the detail of the proposals is being scrutinised very closely.
Lord Lloyd of Berwick: My Lords, while the House will be glad to hear that the search for a building for the Supreme Court will be complete in August, as I understand it, can the noble and learned Lord the Lord Chancellor inform us when the search started and how much it has cost so far?
Lord Falconer of Thoroton: My Lords, the search started very shortly after 12 June 2003. I am advised that thus far the professional fees are in the region of £200,000. I cannot tell the noble and learned Lord how much one should attribute to the efforts of my department in relation to that, but I shall try to write to him about that. I think that time and money should be spent in looking for an appropriate building for an organisation which is important as the final court of appeal of this country.
Lord Howie of Troon: My Lords, what exactly is wrong with the Middlesex Guildhall? It seems to me to be perfectly adequate because it is a mock Victorian gothic building and very suitable for such an organisation.
Lord Falconer of Thoroton: My Lords, I shall ignore the epithet of mock gothic. As I hope I indicated in my initial Answer, the Middlesex Guildhall is one of the two sites that are under active consideration. The noble and learned Lord, Lord Lloyd, spoke of August as being when the decision will be made, whereas the reply I gave was that the decision will be made in the autumn.
Lord Kingsland: My Lords, the stated motive for the Government's proposals for the Supreme Court was that the public were confused by the role of the final appellate court being in your Lordships' House. As I understand it, the noble and learned Lord is now suggesting that if a building is not ready by the time the Bill is enacted, the final court of appeal will be called "the Supreme Court", but will still sit in your Lordships' House. Will that not create even greater confusion than the alleged confusion that exists at the moment?
Lord Falconer of Thoroton: No, my Lords, I do not think so. It is important to make it clear that the policy is that the final court of appeal should be a separate organisation from Parliament, so that people can see where the courts are and where Parliament is. The noble and learned Lord, Lord Bingham, when giving evidence to the Select Committee, said that after the Pinochet trial, people abroad wondered whether the politicians or the court had reached a decision in relation to the case. It is very important that there is clarity in our constitutional arrangements.
Lord Carlisle of Bucklow: My Lords, in view of the welcome given by the noble and learned Lord the Lord Chancellor to the work of the Select Committee, would he care to remind noble Lords whether he advised the House to vote for the setting up of the Select Committee or whether he advised against the setting up of the Select Committee?
Lord Falconer of Thoroton: My Lords, I advised against it. The deliberations of the committee show how wrong I was.

Fuel Duty
3.12 p.m.
Lord Berkeley Lord Berkeley asked Her Majesty's Government:
Whether they propose to alter the rate of road freight fuel duty to take account of increases in carbon dioxide emissions from road freight and increases in oil prices.
Lord Davies of Oldham: My Lords, decisions on fuel duty take into consideration all relevant environmental, social and economic factors. The Chancellor welcomed OPEC's decision to raise production and the fact that some countries will move production up immediately. That is why, as both the Chancellor and the Prime Minister have said, we will not put the stability of the economy and public finances at risk by taking short-term decisions, but will review progress in August.
Lord Berkeley: My Lords, I am very grateful to my noble friend for that illuminating reply. Is he aware that since 1990 CO2 emissions from road vehicles have risen by 59 per cent? Bearing in mind other comments from my right honourable friend the Prime Minister in the Parliamentary Monitor, where he said,
"Climate change is probably, in the long term, the single most important issue we face as a global community",
will the Government set an example by resisting pressure to reduce duty as a way of encouraging a reduction in consumption?
Lord Davies of Oldham: My Lords, the Government are committed to meeting the Kyoto targets and are using duty differentials to encourage the use of cleaner fuels. That has been part of the policy of duty provision over the past seven years. I hear what my noble friend says about recommending that the Chancellor should increase the duty, but other voices in the House may think differently.
Lord Ezra: My Lords, in the light of the uncertainties of the oil situation, will the Minister indicate whether the Government have in mind an overall strategy for reducing the consumption of petroleum-based fuels in the road transport sector with regularly published, monitored progress reports?
Lord Davies of Oldham: My Lords, these issues are monitored carefully. The noble Lord will recognise that the Government have been concerned to reduce the duty and, therefore, to increase the differential on clean fuels. Of course, we have had areas of real success in these terms. The movement to low sulphur, and as we now confidently predict, to sulphur-free fuels, has been encouraged by the duty provisions in recent Budgets and progress has been made in that area. The noble Lord is right to draw attention to the fact that we cannot hit pollution targets unless we significantly address the issue of transport.
Baroness Noakes: My Lords, does the Minister not understand that individuals and, importantly, businesses need certainty on fuel costs? Is it not about time that the Government got off the fence and said whether or not they will implement fuel duty increases in September?
Lord Davies of Oldham: My Lords, I am not sure which world the noble Baroness inhabits. If she thinks that we can be certain about fuel costs in view of the present position of OPEC and the problems in Saudi Arabia, she is giving to us prophetic capacities that none of us would claim. What is clear is that we need the situation to settle down. We need to be able to analyse what is likely to be the position of the oil price rise, which, after all, is a critical factor for the economy. An oil price rise will affect the whole economy. Fuel for transport affects only transport areas.
Baroness Carnegy of Lour: My Lords, my understanding of what my noble friend asked is whether the Government will get off the fence and say whether they will add to the existing price rise that is planned for September. That is what she wanted to know. She did not want to know whether the noble Lord believed that businesses were unable to read the tealeaves in relation to the future price.
Lord Davies of Oldham: My Lords, the Chancellor's decision is contingent upon the shift in world oil prices, which we all recognise have moved up substantially over the past two weeks, thereby creating a great deal of concern in the transport industry, which is reflected in the questions addressed today. Nevertheless, it would be injudicious on the Chancellor's part if he responded to what may be a temporary situation with a decision that had long-term implications for the transport industry. It is right that we see what is happening to OPEC and oil prices over a period of several months.
Viscount Simon: My Lords, it has been estimated that by the middle of this century, 70 per cent of carbon dioxide emissions will come from aircraft. Are Her Majesty's Government investigating the possibility of taxing aviation fuel?
Lord Davies of Oldham: My Lords, my noble friend will know that the taxation of aviation fuel is very complex indeed. There are over 2,000 bilateral agreements between

265
countries which consolidate the present position. We have indicated that in the light of the necessity of hitting our Kyoto targets and dealing with emissions we would want the European Community to consider changing the stance that it adopts at present. That is not a decision that can be taken unilaterally by the United Kingdom Government. It requires international agreement.
The Duke of Montrose: My Lords, can the Minister tell the House whether the figures for carbon dioxide emissions from road fuel include the enormous lorries that come over from the Continent, tour around the country and leave again without buying a single litre of fuel in this country?
Lord Davies of Oldham: My Lords, they certainly include such lorries. It has already been indicated by Ministers that we intend to look very carefully at the issue of unfair competition when hauliers buy fuel in other countries at a lower price and compete with British hauliers on British roads.
Earl Ferrers: My Lords, can the Minister give an assurance that the Government will not tax aviation fuel? If they did, even more disruption and cost increases would be caused.
Lord Davies of Oldham: My Lords, I indicated the complexity of the issue, and therefore I cannot give a categoric response to the noble Earl. However, he will recognise that in controlling climate change and dealing with the problems of pollution affecting all of us, aviation fuel makes its contribution to the problem. That is why we think that the aviation industry needs to be examined on the general principle that the polluter pays. I am merely indicating that this is not a decision which this Government can take unilaterally.
Lord Newby: My Lords, does the Minister accept that the differential in duty between here and some of our near European competitor economies shows why, if we are to get a sensible approach to reducing air pollution, we need to have a broad level of agreement within the EU? Furthermore, for the UK to exert maximum influence to enable us to do this, do we not need to be at the centre of the EU rather than threatening to withdraw from it?
Lord Davies of Oldham: My Lords, that is a fairly general point derived from this question, but in broad terms it is of course right. If we create a single market and are unable to influence the decisions which can affect that single market against our interests, we are the losers by that. It is quite clear that we need to be at the centre of Europe, because our approach to fuel policy is a significant improvement on that of a number of our European neighbours.

Sudan
3.21 p.m.
Baroness Northover Baroness Northover asked Her Majesty's Government:
What representations they are making to the G8 Summit regarding international action to deal with the situation in Sudan.
The Lord President of the Council (Baroness Amos): My Lords, G8 leaders will discuss the situation in Darfur, western Sudan, in the course of the G8 summit in Sea Island, Georgia, taking place today and tomorrow. My right honourable friend the Prime Minister will take the opportunity to press partners to increase their contributions to the humanitarian response, and to support the African Union-led ceasefire commission. He will also make a Statement on the outcome of the summit in another place on his return.
Baroness Northover: My Lords, I thank the noble Baroness for that Answer. I also thank her and her colleague in the Commons, the Secretary of State for International Development, for their efforts in this crisis. But given that international action is required in this crisis, what proposals are the Government making not only to the G8, but also in the contact that Mr Benn will be having this afternoon with Kofi Annan, in taking international action forward? Furthermore, recognising how important it is that the north/south peace process is kept on track, what can this Government do to put pressure on the Government of Sudan to relieve the crisis in Darfur, rather than to make it worse?
Baroness Amos: My Lords, the noble Baroness, Lady Northover, is quite right. We need to make sure that the north/south peace process is kept on track. One of the things that we hope will happen in relation to that is some form of UN Security Council resolution which will underpin the protocols that have come out of Naivasha. With respect to other proposals, we will continue our dialogue with the UN, with the European Union and with other partners. The most urgent need of the moment is to encourage other donors to contribute to the humanitarian response in Darfur. The noble Baroness will be aware that we are the second largest donor, after the United States. But taking out the United States, ourselves and the European Union, the response from the rest of the world community leaves much to be desired.
Baroness Cox: My Lords, given the Government of Sudan's new and very cynical permission to grant access by aid organisations to, at best, 50 per cent of the 1 million-plus internally displaced people who are suffering and dying in Darfur, what measures are being taken by the international community to ensure delivery of essential medicine and food to all the internally displaced people, especially before the onset of the rainy season, when access will become difficult or impossible, and many more tens of thousands are expected to die?
Baroness Amos: My Lords, I agree with the noble Baroness, Lady Cox, that the situation in Darfur is dire. My right honourable friend the Secretary of State for International Development has just returned and is extremely concerned about the humanitarian situation there. Security remains the biggest concern because that is impeding humanitarian access. The Government of Sudan have made it absolutely clear that they will facilitate visas for those who are going in to assist NGOs, and they are going to speed up the process to enable much-needed humanitarian relief to come into the country. But we also need to get access to the parts of the country where there are internally displaced people, and to work with neighbouring countries like Chad where refugees have been displaced.
The Lord Bishop of Manchester: My Lords, is the Minister aware that there is a link between the diocese of Bradford and this province of the Sudan, and between the diocese of Salisbury and the Sudan? When I served in Salisbury in the 1970s, the country was going through a very bloody civil war. Since those days it has lurched from crisis to crisis, and there has been international appeal after international appeal. Is she able to give any hopeful sign that some international strategic thinking can be done which will enable us to find long-term peace in that country, and avoid these constant crises which are so tragic?
Baroness Amos: My Lords, the right reverend Prelate is right in saying that the situation in Sudan has existed for a long time and is the cause of great concern. I was not aware of the link with respect to Bradford and Salisbury, but I am aware that there are a number of links through the Churches.
The humanitarian crisis is one element, but the ongoing peace process negotiation is another and we must not forget that. We welcome the signing on 26 May of the latest protocols at the peace talks at Naivasha. They cover power-sharing in the two areas and, together with the previously agreed documents, provide the political framework for a comprehensive peace agreement. We must continue to work towards that and we are calling on all parties to work together so that the comprehensive peace agreement can be signed in the next few months.
Baroness Chalker of Wallasey: My Lords, what help and assistance are we getting from the French Government, who could bring a great deal of influence to bear on some of the disruptive elements in the countries neighbouring Sudan?
Baroness Amos: My Lords, of course we are working with our French colleagues in the context of the European Union. I am unable to say today what specific action the French Government are taking in terms of their bilateral relationships with neighbouring countries, but I will write to the noble Baroness if there is more I can say.
Lord Avebury: My Lords, I welcome the contribution of £2 million announced by the Secretary
268
of State for International Development towards the cost of the peacekeepers. However, has any response been received from the Sudanese Government to the Secretary of State's call for urgent and decisive action to curb the militias? If not, will the resolution she mentioned calling the attention of the international community to the Naivasha settlement be broadened to require the Sudanese to take this urgent and decisive action?
Baroness Amos: My Lords, on the discussions that my right honourable friend had with the Sudanese Government, the noble Lord, Lord Avebury, is right in saying that he pressed the need to abide by the ceasefire agreement and to rein in the militias and ensure full humanitarian access. My understanding is that he received a positive response from the Sudanese Government, but we must wait and see what happens on the implementation of that.
We are in discussions on the wider point of Security Council resolutions, but I am unable to say what the scope of any resolution might be when it comes to the point of being passed.

Age-Related Payments Bill
3.29 p.m.
Brought from the Commons endorsed with the certificate of the Speaker that the Bill is a Money Bill, and read a first time

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 debates on the Motions in the names of the Baroness Chalker of Wallasey and the Earl of Northesk set down for today shall each be limited to two and a half hours.—(Baroness Amos.)
On Question, Motion agreed to.

Liaison: Select Committee Report
3.30 p.m.
The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move that the first report from the Liaison Select Committee be agreed to.
In moving the Motion, I should like to say a few words about the timing of the proposed Select Committee on the review of the BBC charter. The Liaison Committee was aware of the need for a timely intervention in the consultation process on the BBC charter renewal, but was also concerned that the committee should not duplicate work undertaken by other bodies. We therefore considered that the best starting point and the basis of the committee's call for evidence should be the Green Paper, which is expected to be published early in 2005.

269
The Liaison Committee was also mindful of the recent expansion in committee activity and the implications of this for both members and staff. That is set out clearly in paragraph 9 of the report. The Liaison Committee therefore also recommended that the committee on the BBC charter renewal should wait until the committee on the Assisted Dying for the Terminally Ill Bill had finished its work and resources had become available.
Moved, That the first report from the Select Committee be agreed to.—(The Chairman of Committees.)
Following is the report referred to:
Proposal for a Select Committee on the review of the BBC Charter
1. The committee has considered a proposal put forward by Baroness Howe of Idlicote that an ad hoc Select Committee be established on the review of the BBC Charter. Papers in support of the proposal are printed at Appendix 1. The Committee also heard Baroness Howe of Idlicote (who was accompanied by Lord Lipsey, Lord McNally and Lord Fowler) in support of her proposal.
2. The purpose of the committee would be to provide a means whereby the expertise existing in the House could be deployed in the discussions surrounding the review process. The committee would be able to have regard to the reports of other review bodies, and to hear the views of other interested parties. The supporters of the proposal would like the committee to be established in October, before publication of the expected Green Paper, with a view to reporting before publication of the White Paper.
3. The committee is sympathetic to this proposal. Many in the House have expertise in broadcasting and communications. Moreover the subject matter is currently important, the proposed committee's remit well defined, and a report would be likely to add value to the debate. So far as concerns timing, we understand that the Green Paper is likely to be published early in 2005. In our view it would not be sensible for a committee on this subject to be appointed before then. We are also reluctant to see further expansion of committee activity at this time and consider it preferable if this committee were not to be established until after the Select Committee on the Assisted Dying for the Terminally Ill Bill [HL] had reported. So far as the proposed committee's remit is concerned, we also express the view that so far as possible it should seek to draw on the work of other review bodies.
4. We therefore recommend that an ad hoc Select Committee be established to consider the review of the BBC Charter early in 2005 after publication of the Green Paper and the conclusion of the work of the Assisted Dying committee; and that the committee should so far as possible draw on the work of other review bodies.
Proposal for a Select Committee on international affairs
5. The committee has considered a proposal put forward by the Earl of Sandwich and Lord Blaker that a sessional Select Committee be established on international affairs. A letter setting out the proposal is printed at Appendix 2. The Committee also heard the Earl of Sandwich and Lord Blaker in support of their proposal.
6. The purpose of such a committee would be to provide a forum in which all aspects of foreign affairs, including aid, could be discussed. In particular, these might include issues which lay outside the remit of the European Union. The House, they consider, contains many Members with expertise in foreign affairs and the field of scrutiny is sufficiently wide to be able to accommodate committees in both Houses without likelihood of overlap. The supporters of the proposal would like the committee to be established sometime after the next general election.
7. The committee has considered the question of whether or not to establish such a committee on two previous occasions, in 1999 and 2000. We then recommended that the committee should not be appointed on the grounds that its remit would overlap with the House of Commons Foreign Affairs Committee. We remain of
270
that view. The work of such a committee would also overlap into the work of the European Union Committee. For these reasons we do not recommend this proposal to the House.
Lists of Members supporting proposals for Select Committees
8. Both proposals for Select Committees came to us with lists of signatories in support—150 in the case of Baroness Howe's proposal and 42 in the case of the Earl of Sandwich's proposal. While it is useful for the Liaison Committee to be aware of cross party support, we do not find that the increasingly common practice of appending long lists of supporters' names helpful and hope very much that the practice will cease.
Expansion of committee activity
9. In the course of our discussions on the proposals for additional Select Committees, we have reflected on the expansion of committee activity in recent years. Thus in 1999–2000 the House had Select Committees on the European Union (with six sub-committees), on Science and Technology (with two sub-committees) and one ad hoc committee. By the current session, the following additional committees had been set up: the Constitutional Affairs Committee, the Economic Affairs Committee and its sub-committee on the Finance Bill, and the additional sub-committee of the European Union Committee. In addition, at any one time one pre-legislative committee is now served by this House. Members of the House also sit on the Joint Committee on Human Rights. A Committee Office of 29 staff in 1999–2000 now has 46 staff. We are also all too aware of the pressure that this expansion has placed on "peer resource". While not wishing to exclude the possibility of establishing additional Select Committees where a compelling case can be made, we are unlikely in the foreseeable future to agree to an increase in overall committee activity.

APPENDIX 1: MEMORANDUM FROM BARONESS HOWE OF IDLICOTE AND OTHERS ON THE CASE FOR A LORDS SELECT COMMITTEE ON BBC CHARTER REVIEW
It is acknowledged that the pre-legislative scrutiny committee chaired by Lord Puttnam on the Communications Bill carried out a thorough and constructive piece of work. That committee was immeasurably strengthened by the expertise and experience which was added to it by peers with wide experience of the communications industries.
The Puttnam Committee always envisaged that BBC Charter Review would be seen as a natural continuation of the re-shaping of communications undertaken by the establishment of Ofcom and the bringing into being of the Communications Act. It was also assumed that a mechanism would be found to continue to make use of the experience and expertise in the Upper House as Charter Review progressed. At the moment there are exercises being conducted on Charter Review by the DCMS Committee of the House of Commons, by Ofcom, and by Lord Burns on behalf of the Secretary of State for Culture, Media and Sport. Various political parties have said they have formed their own study groups.
In the circumstances it is, at the very least, a missed opportunity not to provide the mechanism which an ad hoc Select Committee could provide to make use of expertise existing in the Upper House on broadcasting matters to provide a suitable platform for these and other interested parties to explain their positions and priorities. The Committee could work to a specific time-table to provide maximum assistance to Charter Review. For example, if established before the summer recess it could invite written submissions immediately, start taking oral evidence when the House returns in September and have a report ready by early spring of 2005.
Without such a Lords committee parliamentary scrutiny of the Review process will be heavily weighted to activity in the House of Commons and, in particular, to the work of the DCMS Select Committee. Valuable though that work will be, it will be seen to provide unbalanced scrutiny of the process when compared with that undertaken for the Communications Act. It would seem extraordinary if the Lords were to remain silent on issues where the full range of its experience and objectivity are especially appropriate.
Letter dated 18 March 2004 from Baroness Howe of Idlicote and others to the Chairman of Committees
Thank you for your letter of 27th January concerning the proposed select committee on communications. I have now had the opportunity to discuss your reply with a wide cross-section of peers, and this letter is written on their behalf, with their names and signatures shown below.
A great deal has changed since the Liaison Committee decision, which we believe justifies an early meeting to decide upon a more focused proposal.
It is our view that there is an immediate need for an ad hoc committee to be established to take evidence and report to the House on the issues surrounding the review of the BBC Charter, which as you know must be completed by 2006. Such a timetable makes it especially urgent for such a committee to start its work immediately if it is to make any meaningful input into the charter review. The House of Lords has many members with uniquely wide experience of broadcasting matters and the formation of a special committee of the House would enable this issue of such vital public concern to be investigated thoroughly, adding to the public debate for which the Government has called.
I would be grateful if you could call a meeting of your committee to discuss the specific proposal as a matter of urgency. I should like at that meeting to take advantage of your kind invitation and attend with a small number of like-minded colleagues to state our case.
I look forward to your earliest response.

APPENDIX 2: LETTER FROM THE EARL OF SANDWICH AND LORD BLAKER TO THE CHAIRMAN OF COMMITTEES
Four years ago we, along with about 20 other peers, proposed to the Liaison Committee that we should have an International Affairs Committee of this House. There is a wealth of experience of international affairs in the House which could be channelled more effectively through a new committee sometime in the future without trespassing on the various EU Committees—say after the next election.
New arguments which have come up are:

—We need a forum other than the EU committees in which all aspects of foreign affairs—including development aid—can be debated

—There are longer-term, less obvious topical issues not all of which are being taken up by the Commons or the Lords EU committees. Current examples might be: China, Nepal, security in Afghanistan, islands and smaller states, intervention in failed states/humanitarian catastrophes, conflict resolution in Africa, the UN Security Council and so on.

There is the perspective of non EU-related developing countries which often receive less attention.

—An international affairs committee would undoubtedly enhance the reputation of the House.

The Liaison Committee rejected it last time on the grounds that there would be overlap with the Commons Foreign Affairs Committee, but we don't think this is really good enough. This House in any case is here to look again at government policies and decisions made in another place.
However, as we see it, the new committee would complement and not in any way revise reports of Commons committees and would take care to avoid any overlap.
The attached list of about 40 peers combines those who supported the idea last time with others who have joined since.
We very much hope you will give this idea full consideration at your next meeting on May 10th and we would both be willing to attend to present the arguments and answer questions.
Baroness Howe of Idlicote: My Lords, I am, of course, delighted that the Liaison Committee has agreed to support the proposal for a Select Committee on the review of the BBC charter and very much hope
272
that your Lordships will endorse its recommendation. I thank the noble Lord the Chairman of Committees for what he said.
I particularly want to thank my colleagues who were so important in helping to present to the Liaison Committee what turned out to be a rather more acceptable project than my original suggestion. That, as your Lordships may remember, had been for a more widely based ongoing communications sessional Select Committee, which would have been able to draw more permanently upon the considerable expertise and experience that exists in your Lordships' House.
However, despite what I have heard from the Chairman of Committees—and at the risk of sounding as though I am never satisfied—I venture to mention the remaining concern that the committee apparently has to wait until the beginning of 2005 to start its work. The Green Paper is not due until then but, as we all know, the whole process of charter review is already well under way. At the very least, I should have thought that it would be helpful to everyone if the Select Committee was able sooner than that to invite evidence from those taking part in the existing numerous consultations and thus to alert a wider public to the committee's promised existence.
I hope, therefore, not only that your Lordships will agree to the Liaison Committee's proposal, but that also a way can be found of ensuring that the existence of the Select Committee is well publicised at an early date and that a general invitation is extended to interested organisations to start preparing their evidence.
Lord McNally: My Lords, although I have a specific interest in wanting to see this committee established, I shall make two general points about the report. I urge the committee not to become too structured in its response as it states very clearly that the BBC charter committee cannot start until the committee dealing with assisted dying has finished its work.
We all know that committees can take a long time dying. We are working to a specific timetable in terms of the BBC charter. I was much more encouraged when the Chairman of Committees wrote to me and said that he would be happy to review the situation,
"to ensure that the committee on the BBC Charter has the resources to enable it to make a timely report".
I should like clarification on that. It would be misleading the House if in February or March next year, with the committee on assisted dying still proceeding, we were told, "Well, I am sorry; the House voted last June that you could not start work until this committee had wound up". That is what I mean about being over-prescriptive.
Another suggestion has been made and I made it in my letter. In government there are plenty of precedents for setting up committees. Ofcom is a very good example. When there is a job of work to do, one does the preparatory work of appointing the people, inviting the evidence and so on in advance of the starting gun. That could be easily done without the over-prescriptive suggestion in the Liaison Committee report. We could use the weeks and months before the committee started. I have no quarrel with the committee's starting point

273
being the Green Paper. But I think that the preparatory work could be done now so that the committee can hit the ground running. Otherwise, we may find ourselves in the situation where usual channels are looking for recruits and so on and precious weeks are lost.
The general point I want to make is that this response is over-prescriptive and that the committee could have given a general go ahead. We could then use flexibility and common sense to start up the committee at the right time to do a real job of work. As it is, I think that we have, as it were, blundered into a very good solution. The work of this committee will be able to start after the House of Commons committee, which, under the wise leadership of Mr Gerald Kaufman, is already taking evidence. We will have that report and other evidence in our hands and be able to work.
My other point is on paragraph 8. The committee is most distinguished, but it is not the prefects' committee and it should not behave as such. If noble Lords want to collect signatures and submit them to the committee, I believe that is a matter for noble Lords. It is no business of the committee to say that they do not want to have them. We know what will happen: people will be told that it is just a bee in the bonnet of a single noble Lord. If a noble Lord wants to put an idea and demonstrate that he or she has widespread support in this House, it is a matter for their judgment and not for the committee's.
Lord Fowler: My Lords, I very much support the proposal of the Liaison Committee and I support what the noble Baroness, Lady Howe, and the noble Lord, Lord McNally, have said about the position and timing of the committee. It seems to me that the renewal of a BBC Charter is self-evidently a crucial issue. It is a totally appropriate subject for an ad hoc committee. It is exactly the kind of issue that this House should consider because it is exactly the kind of issue where we could have some influence on the outcome.
Therefore, if the Liaison Committee could do something about the timing of the committee and set it up earlier than currently envisaged, it would be very much to the benefit of the committee and the House. The sooner the committee is set up the better and the more chance and prospect there is of the committee—and ultimately this House—having influence.
Lord Gordon of Strathblane: My Lords, I rise in general support of the remarks made by the noble Baroness, Lady Howe, and the noble Lord, Lord McNally. I think that the issue of looking at the BBC is determined not by how long the committee dealing with the Assisted Dying for the Terminally Ill Bill takes to look at it, but the imminence of the review of the BBC Charter. Therefore, to tie one to the other is illogical.
I recognise the administrative burdens we are placing on staff. I do not know what the timescale is for the review of the Assisted Dying for the Terminally Ill Bill, but if it is not finished by December this year, certainly in my view—and on this I disagree marginally with the noble Lord, Lord McNally—we should not wait for the Green Paper. It is to be hoped
274
that this committee could inform the Green Paper by starting no later than January 2005. So I would seek an amendment. By all means wait for the Assisted Dying for the Terminally Ill Bill review to be finished, but if it is not finished by January 2005, then start the BBC Select Committee anyway.
The Lord Bishop of Manchester: My Lords, it was obvious during the debate that we had in the progress of the Communications Bill that there is an enormous amount of expertise on all sides of this House on this subject. It would be a great shame not to continue to use that expertise in the way that is being proposed. I entirely support the noble Baroness, Lady Howe, in what has been put forward. I have heard the points that have been made, and have rather warmed to the view that the sooner all this gets off the ground the better.
Lord Corbett of Castle Vale: My Lords, the Liaison Committee will be aware of the strong support on all sides of your Lordships' House for this Select Committee, although it looked down its lordly nose at the numbers involved. I agree with the noble Lord, Lord McNally, that perhaps that does not lie in its mouth to say so, because it is important to make clear when these issues have wide and all-party support. However, I acknowledge that the Liaison Committee has rightly focused attention on certain matters; for example, there is no point doing work that other people have done before. When it is published, the Green Paper will be an amalgam of all the consultation processes. To that extent there is no point in treading over that territory again.
I want to underline the points made by noble Lords earlier that, because of the time-scale, we have got to have the preparatory work done before the committee starts. I cannot see that there is any reason why that should not be done. There is a wealth of experience in this House across the broadcasting sector, within which immense changes are taking place. If we are going to do this job—and I am glad that the Liaison Committee has now agreed that we should—we need to do it in the most professional manner possible. That means getting the preparatory work in so that we can make a very clean start early in the New Year.
Viscount Tenby: My Lords, I congratulate the Liaison Committee on its decision, and associate myself with the remarks made from all sides of the House on this. It is important that we do not have slippage here—it is very important indeed, as I think noble Lords have emphasised. I should just like to make one comment on the remark made by the noble Lord, Lord McNally, on the question of collecting names. It may be that that is not done commonly in this House. However, how else is one able to demonstrate the wide appeal of these proposals? I cannot think of any other way of doing it. I commend all the remarks that have been made by other noble Lords this afternoon.
Lord Norton of Louth: My Lords, I have three brief questions for the noble Lord on the report. First, is the noble Lord aware there is a factual error in the report? Paragraph 9 states that the House has established a "Constitutional Affairs Committee". It has not; it has created a Constitution Committee. The House of Commons has created a Constitutional Affairs Committee and it is important that the two are not confused.
Secondly, does the noble Lord agree that the report constitutes something of a lost opportunity? It appears far more concerned with means than with ends. The report concludes by saying that for a committee to be established,
"a compelling case can be made".
What are the criteria that will determine whether a case is compelling?
Thirdly, following the point made by the noble Lord, Lord McNally, I appreciate why Paragraph 8 is included: it deprecates the submission of long lists of Peers in support of establishing a new committee. Would it not be a good idea to make clear that, in future, adding one's name to such a list will demonstrate a willingness to serve on such a committee? Would that not help to solve some of the problems identified in the report?
The Chairman of Committees: My Lords, I am grateful to all noble Lords who have contributed to this debate. I must admit I had thought that most of the House would be grateful that the Liaison Committee had agreed to set up a committee on the BBC Charter. Nevertheless, I know one cannot please a lot of people all the time. On the question of the timing of the committee, it is not just a matter of resources, although the work involved in establishing a committee—issuing a call for evidence and acknowledging written evidence received—should not be under-estimated. The Liaison Committee did consider this extremely carefully and we were keen to ensure that the inquiry was focused and did not duplicate existing work. Therefore, a call for evidence which was issued before the Green Paper was published might not address key areas or might ask for information that was not, in the event, particularly relevant.
The noble Lord, Lord McNally, acknowledged that I have been in correspondence with him. He asked what would happen if the committee on the Assisted Dying for the Terminally Ill Bill went on longer than was predicted at the moment. I did say in my letter that, should it become apparent that that committee would not finish when it was expected to, then the Liaison Committee would indeed revisit the question of resources for the committee on the BBC Charter to enable it to make a timely report. I really do not think that I can go any further at this stage. I would have thought that that would satisfy the House. The noble Lord also referred to Paragraph 9 of the report on the question of new committees, as did the noble Lord, Lord Norton of Louth. The committee did look carefully at this proposal. If one looks at Paragraph 9, one sees the enormous expansion of committee activity that has taken place in only a few years. We had a
276
Committee Office staff of 29 in 2000, and four years later it has almost doubled to 46. That is just an indication of the increase in activity.
I must apologise to the noble Lord, Lord Norton of Louth, in that we have named one of the committees wrongly. Nevertheless, it is a very important committee and involves not only staff but also Peer resources. They are not always easy to find. I am sure everybody who wants a committee would say, "Oh, we can easily find people to serve on these committees," but judging by my discussions with the usual channels I am not sure that it is necessarily always that easy. That was the considered conclusion of the Liaison Committee. The Liaison Committee is set-up by this House to deal with exactly that kind of thing and I hope the House will therefore approve its report.
A criticism was made by the noble Lords, Lord McNally, Lord Norton of Louth—and, I believe somebody else as well—of Paragraph 8 of the report which is a very restrained criticism of the practice of collecting signatures. Of course we cannot stop people collecting signatures—people can go round collecting as many signatures as they like. Personally I tend to sign anything which is put in front of me in order to make people go away. I am sure a lot of noble Lords would do exactly the same.
If people wish to put up a proposal for a Select Committee, what I hope we would achieve on those occasions is a carefully considered letter from the proposer of that committee, signed by perhaps one representative from all sides of the House—perhaps four or five signatures on it in all. Then it would be up to the Liaison Committee to decide whether to agree to this committee. The proponents of the committee would, of course, be invited to come in and make their case before the Liaison Committee. That is, I think, the best way of doing it.
I have never been in the House of Commons, unlike the noble Lords, Lord McNally and Lord Fowler, so I have never taken part in EDMs. However, if one looks at some of the EDMs that take place in the House of Commons, one does slightly question whether we want to go down that particular route. I hope, therefore, that the House will approve the report of this committee.
On Question, Motion agreed to.

Department for International Development
3.47 p.m.
Baroness Chalker of Wallasey Baroness Chalker of Wallasey rose to call attention to international development and the departmental report 2004 of the Department for International Development; and to move for papers.
The noble Baroness said: My Lords, I am grateful that we are holding this debate today on international development and on the 2004 report of the DfID. I am particularly grateful to all noble Lords who have put their names down to speak. I am delighted we can for a few moments focus on these crucial development issues. I welcome the departmental report 2004, and commend it to those seeking to understand the UK's

277
very sound development record over many years—and not just the last seven. For almost eight years, I have battled away to get greater resources for development because I have always believed that developed nations are nations that work at peace with their neighbours and with all their contacts. Today I can congratulate the Secretary of State, Hilary Benn, and the right honourable Gordon Brown, the Chancellor, on the dramatic increase in resources—a 93 per cent improvement from when I left office.
However, with additional resources come additional responsibilities. It is on that aspect that I want to concentrate, rather than picking out parts of the report—which reads well as a whole, but probably less well if I try to paraphrase it.
By 2005–06, we shall have a total UK aid budget of £4.5 billion, of which £833 million will be allocated as our contribution to the European Union Development Programme. That means that more emphasis will be needed to ensure that the EU development budget is better spent and properly accounted for, both in decision making in Brussels and through the offices of the European Union in developing countries. If we are to get the best value for money from every pound available for the developing world, we must look outwards at what our agents are doing with our taxpayers' money.
Inevitably, there are gaps in such a major departmental report. Not everything can be written down. I shall concentrate on what is probably a lack of emphasis—rather than a lack of action—on the co-ordination between donors in the field and on capacity building and institution building in the countries that we seek to assist. They are important aspects of the way in which we spend money to which we do not always give sufficient attention. In other words, we should place more emphasis on the contributions that are made, particularly those that private sector partners can make to development. All those themes are interconnected, and I believe that they are fundamental to successful and sustainable international development.
I shall declare my personal interests. My work for Africa continues through the World Bank and through my company, Africa Matters Ltd, which seeks to bring business and governments together through investment in Africa. In the wider world, my directorships bring me into close contact with developments throughout all continents.
My commitments in business have also allowed me to seek assistance for development through corporate social responsibility programmes and through skill exchanges to improve the delivery of the moneys that are available to the developing world. I am glad that the DfID report focuses, rightly, on the eight millennium development goals, with their 18 targets. It is a small section of the whole, but it is well worth taking to heart. If we could make them work, we would be a long way down the track to bringing peace and stability to the developing world.
I am not sure, however, whether the report addresses how we achieve the millennium development goals. It goes without saying that the developed world must help to reduce the appalling levels of poverty and deal with the lack and inadequacy of education and improve access to safe drinking water and healthcare, but they are also a central mission for every nation. They are not tasks for governments alone; they are responsibilities best delivered by partnership, as the report rightly points out. There is no doubt in my mind that achieving the millennium development goals depends on better donor co-ordination and the pooling of resources through all types of partnership. That is where there is much more work to be done. It is not just a question of spending; it is a question of sharing know-how across the board, if we are to meet the needs of countries in the developing world.
The reality is that, in 2005—the first milestone for the millennium development goals—the vast majority of developing countries will not be on track to achieve those goals. Worse still, a few countries will, effectively, have gone into reverse. That is a situation that we are bound to address. I know that the international finance facility that the UK Government are bringing forward is there to help front-load—to use the jargon—the aid that is available to stimulate governments to work towards meeting the millennium development goals. However, for any real chance of success through the initiative and of further success in debt reduction, we must see faster practical action and better donor co-ordination in-country. Such matters are probably a little small for the G8 nations to address at the present time, but those of us who work in the G8 nations must make sure that such measures are delivered.
The Government's leadership in reducing EU agricultural subsidies and removing trade barriers must also step up a gear, as does training for developing countries in putting their case in the successor Doha round. I hope that the Minister will comment in particular on trade access, the removal of trade barriers and the reduction of subsidies.
International development is best delivered by seizing opportunities for genuine partnerships. It is about capacity building at every level. However, without genuine national and local commitment to the programmes in the developing world and without ownership of the implementation plans, our external assistance will not help as well as it can or should. I know that some in the House may express concern about the size of donor support these days. The amounts given are very important, but the way in which the money is spent and the programmes delivered is even more important. That is why I have always concentrated on trying to give value for money: it is as valuable for the recipient as it is for the donor country.
Too often, the detailed "how" is not well enough understood by those implementing programmes, let alone being agreed with the government concerned. That holds back the maximum value for money. In some countries, we face too much donor competition. That is something that we should tackle together with the recipient countries. Although I welcome the increase in aid from developed to developing nations, I am concerned that the lack of co-ordination is leading to

279
duplication. That does not mean best value for money. Value for money cannot be achieved without thorough capacity building. Budgetary support, which is the way in which we give much of our aid these days, is valid only when it has attached to it the capacity building that means that the money is used efficiently.
A lack of sufficient skilled people in management in government institutions, especially in spending departments, is seriously hindering sustainable growth in many developing countries. One way to tackle that is mentoring. Many private sector companies are prepared to do such mentoring, if only we could get our mind round that sort of partnership. The overseas development fellowship scheme, which has run for over 40 years, gives young postgraduate economists the opportunity to work in the public sector in developing countries in the Commonwealth. The scheme was recently extended to Rwanda, where the Ministry of Finance and Economic Planning benefited greatly from it. There are similar schemes in other countries. Local empowerment can also be helped directly by the private sector. In post-conflict Sierra Leone, de Beers has helped the Government Gold and Diamond Office of the Ministry of Mineral Resources and assisted the Government there generally to raise their ability to assess their exports accurately.
Capacity building is also needed for entrepreneurship, to help to build to a thriving private sector, particularly small micro and medium enterprises, some of which are now getting support from the corporate sector. In Ghana, Unilever has set up the Foundation for Education and Development. That foundation provides business education for local entrepreneurs. To date, 75 small-scale entrepreneurs have benefited from the workshops run by the foundation. Sharing training, particularly training in science and technology, can help to stimulate local industries to become suppliers to main investors. Active investment in a factory or an agricultural production process produces real multipliers. Often, for every person employed, a family of 10 is supported. That money then feeds back into the local economy.
Just as, in the developed world, private sector development leads to the emergence of a professional middle class, that, in turn, brings benefits to society in the developing world and can help to reduce the risks of autocracy. That is why I call on DfID to support real partnerships between recipient government countries and the corporate world, so that the private sector can play its part to strengthen those governments and to become a real engine of growth in the countries concerned.
In South Africa one of my own NGOs, the British Executive Service Overseas, has been instrumental in helping to set up a social impact programme called SIPSA which particularly assists SME development. That is an example of how a well co-ordinated partnership of business and NGOs with government can raise funds from both the public and private sectors, and bring forward the technical skills that are so often missing and the management expertise that can make all the difference.
It is often said of Africa that it is a continent led by personalities. We know leadership is vital, but the structures for a fully functioning and stable democracy need to be put in place too, and people trained to work in them, so that those institutions endure and the country is not at the mercy of those in power at any given time. Only in this way will future generations benefit from socio-economic development. That is why I hope the Government will do more to build sound institutions to help win the many fights faced in the developing world, particularly the fight against corruption, which remains a major constraint to nation-building and business development—there is simply no point in investing in a country where corruption is rife.
Good governance is an absolute must, and I hope DfID will continue to place emphasis on transparency and accountability, but also give more practical training to help governments to make their anti-corruption policies work effectively. In Kenya President Kibaki is going to great lengths to reform their judicial system, and his anti-corruption commission is becoming successful in promoting better governance and removing officials who abuse power. In Ghana President Kufuor has worked significantly to reduce the extent of the corruption that he inherited over three years ago. All these efforts are only the beginning. There is so much more to be done.
I place on record my thanks to all those businesses helping in the fight against HIV/AIDS, malaria and tuberculosis. Their role is vital and cannot be underestimated.
The developing world has a great human and business potential too often overlooked by the developed world. I will not dwell on the size of markets or the great potential for investment—it is all there for anybody to read. Suffice to say that good returns on investment in Africa, as well as in Asia and Latin America, mean that no business should refuse to investigate the growth potential. Investment climates are becoming more stable and secure, even if there are still a few well documented places to hold back on just now. Above all, greater access to the world's markets and to business partnerships will accelerate the positive trend. More governments are showing belief in the developing world, so that it may be enabled to play a greater part in world economic growth. I beg to move for Papers.
4.2 p.m.
Lord Desai: My Lords, it is a pleasure and a privilege to follow the noble Baroness, who has introduced the subject in a remarkably non-partisan fashion. I recall her days as Overseas Development Minister. At one stage when she teased me and asked whether I wanted to get rid of her, I remember making the disloyal remark that as far as I cared she could stay Overseas Development Minister for ever, no matter which party was in power.
Since those days one good thing has happened: the Development Minister now has Cabinet status. As she generously acknowledged, this Government have done remarkably well by way of enhancing the aid we

281
give to developing countries. My right honourable friend Gordon Brown has taken a lead in tackling the problem of financing the solutions for poverty and development around the world, the latest one of which is international financing facilities. One must acknowledge that the UK Government, under both Mr Major and the present Prime Minister, have taken a big lead in tackling the debt problem, which has been a major problem for developing countries.
I welcome the report, but I also want to mention things that are normally not in such reports, and to try to think of a way forward regarding this problem. There is a paradox here. We have been thinking about, and spending money on, the eradication of poverty for 50 years. While there has been much progress, some problems still seem to be persistent and hard to tackle. We have learnt a lot about development—we no longer think of it in terms of capital stock and economic growth, but in terms of clean water, healthcare, literacy, gender empowerment and so on. This revolution in development thinking was welcome, and was part of the UNDP's human development report, which I had a small part in developing.
However, we may have reached the end of that revolution. We have got a stage where development programmes funded by official government aid have begun to require so many conditions that it has almost become an exercise in baroque architecture. We want schemes to have transparency, accountability, good governance, sustainability, gender awareness and participation of the poor, and all those conditions are always put before any project that is financed by official aid. This process ought to be re-examined, because we are losing sight of the principal aim, which is reduction of poverty. It would be nice to have these other what I might call "peripherals", but if poverty can be reduced by some effective means, I feel strongly that we should not reject schemes just because they do not have one or the other boxes ticked off. Looking at what the UNDP did over the 1990s, it was very easy for people sitting in New York to make new conditions. New theories of development had come together. More requirements were being put on field staff, who had a difficult problem to cope with. Is it not time to simplify the requirements for development programmes? I feel the same about the millennium development goals—there are far too many.
We know empirically from observation that some problems are clustered together. Infant mortality, lack of access to clean water or to healthcare and the low position of women are strongly correlated with poverty. If we can reduce poverty, these sorts of things tackle themselves. Whatever we do with millennium development goals, we must get strictly in view that reduction of poverty is our main goal. Everything else will follow from that. One cannot reduce poverty without providing some of the conditions, like clean water, education or good healthcare. I hope that will be our approach.
I have said this to your Lordships before—we have to learn from the success of Asia in tackling poverty. The way Asia, especially in the east and south-east, has reduced poverty over the past 30 years is a remarkable
282
story. More people have come out of poverty in that time than ever have before in the history of the world. The fact that there are still a lot of poor people is neither here nor there. People have come out of poverty because by and large governments—some of which, I am sorry to say, were rather corrupt—were responsive to the needs of their own poor. Through a rapid growth programme, which included the redistribution of assets such as land and a big emphasis on education, they were able to reduce poverty across China, Taiwan, Korea, Indonesia, Malaysia and so on.
I quite agree with the noble Baroness that corruption is bad and that one does not like corrupt governments, but I prefer corrupt governments which are effective to corrupt governments which are not. If I may say so without upsetting him even more than I have in the past, I prefer Dr Mahathir Mohamad to Mr Mugabe because eventually, whatever he is, Dr Mahathir Mohamad ultimately benefited the people that he was supposed to lead. Malaysia has come out of poverty and racial strife because of the determined effort of a government in pursuit of development. We should examine whether or not to categorise governments as those which provide good governance and those which are responsive because, basically, governments are there to cater to the needs of the poorest people in their midst.
A great deal has been said about Africa, where there is to be an African commission, and the need for good governance there. But, again, as I said in the debate in your Lordships' House on political parties, Africa misses out on robust political parties which are involved in robust political dialogue. You do not get good governance without good politics; it is not possible. You need someone inside and outside government to put a check on them and say, "What you are doing is not right" or "You are corrupt" and so on. Unless there is that level of political involvement it will be hard to establish good governance. It cannot be established from above; it has to come from below.
Finally, I wish that our newspapers were more informative and more informed about development problems. I should add, perhaps unfairly, that there was a headline in the Observer over the weekend about clashes in Sierra Leone. When I read further it became clear that the article was referring to the Ivory Coast, not Sierra Leone. The poor editor had not realised that Sierra Leone and the Ivory Coast are not the same country, which is rather sad.
4.12 p.m.
Lord Alderdice: My Lords, I, too, thank the noble Baroness, Lady Chalker of Wallasey, for introducing the debate. As the noble Lord, Lord Desai, said, she is distinguished not only by her remarkable past record in this field but by her continued commitment to it. This is very much valued in your Lordships' House.
Like her, I shall respond very positively to this important and impressive DfID report. It is good that we have such a government department. Indeed, in a report published today, the Washington-based Center

283
for Global Development recommends that the United States Government should establish a not dissimilar agency. That report underlines the same main themes as those which underpin the challenges outlined in the 2004 report of the Department for International Development.
These are not subsidiary to our main foreign policy interests; they are not a kind of charitable addendum to the main business. They are key foreign policy challenges—terrorism, transnational crime, global poverty, humanitarian crises of hunger, plague and disaster, whether human or natural. The CGD report states that these challenges originate in, spread to and disproportionately affect developing countries, especially those which we would describe as failing states. These are countries in which governments fail to provide security, fail to provide political legitimacy and fail to meet the basic needs of their citizens. These include some countries where DfID is trying to make a difference for the better.
I am very positive about much of the general and, indeed, detailed work of DfID outlined in this very full report. In a sense, it is a part of the conscience of our country that we involve ourselves in the wider world in this fashion.
However, I wish to refer to a few problems that I see in our general approach. I am sure that others may well have observed the inconsistencies that there sometimes are in our policy as a whole, where we destroy the infrastructure of a country and then spend the limited resources that we have in trying to build it up again. Others may comment that that particular anomaly is characterised in Iraq and, perhaps notoriously, in Israel's operations in the territory of the Palestinian Authority.
But this kind of paradoxical behaviour goes much wider. I remember a number of years ago expressing concerns about the support that our Government were giving to President Fujimori in Peru because they were terribly impressed by the way in which he was tackling the war against terrorism, as it would now be described. After a couple of visits to the country, I was very concerned that the whole approach he was taking was destroying the political party infrastructure of Peru and that, whatever the short-term effects on the terrorist camp, the long-term effects would be very serious.
I am very glad to see on page 78 of the report that we are funding Transparencia, an organisation which, along with IDEA, is trying to build up the political parties. But that this is happening now, with relatively limited resources, is because of the degree of political support that was given to the destruction of these parties a number of years ago.
I notice that, as far as I can understand it, the budget for Latin America outlined on page 171 will slip by two-thirds, from £32 million in 2001–02 to £11 million in 2005–06. One must assume from those figures that, in countries like Peru, which are included in the budget, we are cutting back at a time when we should be strengthening the infrastructures. We know very
284
well that the situation in that country is not improving at the moment; indeed, it is becoming increasingly unsteady and unstable.
So it is not only a question of being consistent—do not go in and wreck something and then have to build it up at great expense subsequently—but, when you do get involved with something, of sticking with it over the long term. One of the problems with many peace processes and nation-building exercises is that the international community becomes involved for a short time and then, just when you are beginning to turn the corner, the international community rushes off to the next emergency. Then what has been put in place, but is still unstable and brittle, begins to fall to pieces. It is perhaps less glorious to stick with the work of building up, but in the long run it is much for the better.
The anomaly of trying to build and at the same time, in another sense, taking to pieces manifests itself in other ways. There is a serious moral question about the fact that we are trying to build up healthcare staff in many developing countries. We are not achieving all of our millennium goals in Asia and Africa—for instance, we are not meeting the targets for the provision of specialist healthcare staff for the delivery of babies—and yet some of our National Health Service trusts are going to developing countries and actively trying to persuade trained staff to leave there and to come here to work.
I am absolutely for people having the freedom to travel and work wherever they choose in the world, but that is not the same thing as spending money on targeting countries that already do not have enough trained staff in order to fulfil the inadequacies of our own system. That is the kind of paradoxical behaviour which is certainly not characteristic of real joined-up government.
When I refer to DfID being part of the conscience of governance and of our country, I mean not only conscience by way of giving charitable aid but conscience by way of bringing to the attention of other components of government the untoward and paradoxical effects of other policies, whether in healthcare, defence or the other aspects of foreign policy that I have mentioned.
I am also delighted to see the attention that has been given to addressing conflict, particularly in chapter five, because conflict is one of the things that destroys development. But I am not sure how much we are learning from the experience of relatively successful work in conflict resolution. As I look at the situation as it develops in South Africa or my own part of the United Kingdom and then consider what our Government and others have done in addressing the Middle East it seems that we have not learnt and applied the important lessons. We have taken rules of thumb but not reflective thought when we come to those difficult circumstances.
There is much more that we could do in thinking about it. For example, it has become clear in recent years that the doctrine of national sovereignty cannot be allowed to run unless there is a reasonable degree of benevolence and competence on the part of the

285
Governments of countries. Martin Woolf from the Financial Times describes some regimes as "gangsters with flags".
That does not mean that the attitude of developed countries should be to march in whether or not the United Nations is behind them and irrespective of whether the action confirms with international law. It may mean that we have to consider how to develop the international institutions and law to a new order that does not place a sacramental stamp on national sovereignty but on the other hand does not ride roughshod over the freedom of others to conduct their business with our assistance and co-operation.
This is an important report and I am glad to see it being debated, but I hope that some of the inadequacies of our approach will also receive consideration.
Lord Patel: My Lords—
The Lord Bishop of Newcastle: My Lords—
Lord Evans of Temple Guiting: My Lords, we were expecting to hear from the right reverend Prelate the Bishop of Newcastle.
4.21 p.m.
The Lord Bishop of Newcastle: My Lords, I too am grateful to the noble Baroness, Lady Chalker, for introducing the debate. I also express my gratitude for the immense contribution to international development she has made for so many years and is still making. I want to confine my comments to one theme: the level of international aid.
As long ago as 1970 the United Nations established a target of 0.7 per cent of GNP for countries such as ours. We have been committed to reaching this target for more than 30 years and we have never made it. The closest we got was 25 years ago when our aid level reached 0.51 per cent of GNP. The Government plan to reach 0.4 per cent in 2005–06. Welcome though that increase is, we are still nowhere near meeting the original commitment.
But every once in a while there comes a moment when we signal a refusal to accept the status quo and we realise that a significant difference can be made. The Jubilee 2000 campaign to drop world debt was one such moment. The Churches were at the heartbeat of that movement. Its twin strengths were its size and its diversity. Old and young, rich and poor, rock stars and members of the Mothers' Union—I am a great fan of the Mothers' Union—joined forces in a coalition that ultimately could not be ignored.
I wonder whether your Lordships remember that when he looked out at the crowds of peaceful debt campaigners who greeted world leaders in Birmingham in 1998, President Clinton remarked, "I know a big tent when I see one". The big tent was responsible for the cancellation of much debt. Debt relief has allowed a number of African countries to introduce full and
286
universal primary education. The job is not finished; only one-third of the debt has been dealt with, but it shows what can be achieved.
Next year we have the possibility of another breakthrough moment. There is a coming together of a number of events that offer great opportunities. Next year our Government will chair G8 and hold the European Union presidency. Next year will be the twentieth anniversary of Live Aid; and the Prime Minister's Africa Commission should be in full flow. So next year has the possibility of being another pivotal moment to tackle global poverty; a real opportunity to be grasped, if only we will.
Such a breakthrough delivered by the actions of Governments around the world will also do a great deal to make the world a more peaceful and less divided place. We all know that tackling poverty is never straightforward. The noble Baroness, Lady Chalker, has given us some examples of the difficulties that have to be overcome. But I venture to suggest that one—perhaps the critical—indicator of the success of the Africa Commission, the G8 and the UK's EU presidency will be the level of additional resources they deliver to the poorest countries in the world.
I understand that in the next few days as part of the Government's spending review decisions are being taken about the aid budget for the next three years. Those decisions will be crucial, not just for the sake of the millions of people around our world, but also because it will be difficult for our Government to convince other countries to increase their efforts to tackle world poverty if we are not doing so ourselves.
We can take some pride in the significant increases in aid provided by our Government since 1997, for which I am grateful. We can also take some pride that the UK's aid is among the most effective in the world. Yet we are still performing relatively poorly in comparison with others. Five countries have already met and exceeded the target of 0.7 per cent of GNP. Five more countries have set a date when they will reach the target; Britain is not one of them.
We cannot be among world leaders in tackling world poverty until our aid levels reach their target. As a nation we are becoming richer and richer year by year. The richer we are, the more we have to give. The notion of giving a proportion of one's wealth to the less fortunate is a non-negotiable Christian principle.
While I recognise with gratitude the substantial increases in aid that the Government have made, I also recognise that more than 100 million children still do not go to school in our world; more than 6,000 people die every day because of HIV/AIDS; and this year alone half a million mothers will die during childbirth in poor countries.
So I want to make a plea to the Government to agree a timetable to increase our development aid and by 2008 finally to reach that target to which we committed ourselves way back in 1970.
4.28 p.m.
Lord Patel: My Lords, I apologise to the right reverend Prelate for jumping the gun. I suppose it was to try to get it over with.
I too would like to congratulate and thank the noble Baroness, Lady Chalker, for securing this important debate; but more importantly for her continued support and commitment. It will not be a surprise to the House that I shall concentrate mainly on that part of the millennium development goals and the DfID report pertaining to reproductive health and rights and the government strategy on achieving the targets.
Of course I accept what the noble Lord, Lord Desai, and the right reverend Prelate had to say: eliminating poverty is the key to achieving all the millennium goals. I am a doctor, and therefore I worry about the suffering that exists.
This year is the tenth anniversary of the international conference on population and development; a halfway stage to the goal set for universal access to reproductive healthcare by 2015. There have been some gains, mainly the renewed commitment to sexual health and rights and the focus on women's needs, but not much in the way of tangible results over the past decade. On the contrary, a dramatic reduction in funding for reproductive health from some of the richer countries and donors has threatened to reverse what little gain there has been in the areas of contraception, safe sex to combat HIV/AIDS, safer abortion and family size. The UK needs to work harder to persuade nations and donors to restore their funding for reproductive health. Can the noble Baroness say what plans DfID has to engage in dialogue with countries, particularly the United States, with regard to supporting reproductive health and rights more actively?
Improvements in reproductive healthcare and reproductive health will save lives, reduce the incidence of HIV/AIDS and other sexually transmitted diseases, reduce population size, improve economies and help reduce poverty and hunger.
The current figure of 40 million people with diseases such as HIV/AIDS is appalling. Three quarters of people in sub-Saharan Africa live with HIV/AIDS, with the younger ones most at risk. As has already been mentioned, 6,000 youths between the ages of 16 and 24 are infected every day. Some 13 million children under the age of 15 have lost both parents. Nearly 350 million new cases of sexually transmitted diseases occur every year—the women and the poorest of the country are the most vulnerable.
I turn now to reproductive health as it relates to pregnancy and childbirth, which is the main focus of my speech. Each year, as the right reverend Prelate said, 250 million women become pregnant, of whom 600,000 die every year. That is equivalent to four jumbo jets full of 350 people each crashing every day, and all the occupants dying. Nearly 10 million of those women experience life-threatening complications which leave them either dead or living with lifelong disability and ill health. Nearly 50 million pregnancies are terminated each year, many using unsafe practices, resulting in nearly 70,000 to 80,000 deaths of mostly young women. In parts of sub-Saharan Africa, a
288
woman has a lifetime risk of dying in childbirth of one in 16, compared with one in 2,800 in the developed world.
Despite much work over the last decade, there has been little success in reducing these numbers. The goal of halving maternal deaths by 2015 will not be met. The global maternal mortality ratio has changed little. What is required is a new strategy for action on the maternal health development goals. I would be interested to know if the noble Baroness can say what plans DfID has in this field.
We have in the United Kingdom organisations with experience of working in this area in the developing world—organisations that can work with DfID to develop models of care that will produce tangible benefits and achieve millennium development goals.
Death in childbirth is the ultimate tragedy. Tragic, too, are the conditions that leave women with lifelong disability and ill health as a result of injuries sustained during childbirth. Very little, if anything, is done to help these women, who suffer from lifelong disability such as obstetric fistula. I shall describe what that is, because some of your Lordships may not be familiar with the term.
Let me describe the fate of a beautiful 13 year-old girl living in the mountains of Ethiopia, given into marriage by her family, often to an older man. At the age of 14 she gets pregnant and, despite the hard life away from home, she looks forward to the birth of a healthy child. When the time comes, she labours; she is frightened and is supported by one or two women from the village. Her labour lasts a long time—three to four days. By this time she is exhausted, dehydrated and frightened—frightened for herself and for her baby. Finally, she delivers—she delivers a dead baby. She is in utter despair, but too tired to think. She falls asleep.
A few days later, weak and still exhausted, she realises that she is leaking urine all the time. She does not know why. There is no one to help. Because she smells of urine, she is discarded by the community and left to lie in a hut far away. If she is lucky, somebody will hear of where she can be taken where facilities are available to cure her or her horrible condition. But for 2 million women in Africa alone, no such facilities are available.
There are very few facilities in Africa. They are mostly provided by people such as Catherine Hamlin, aged 78, who is still working in Addis Ababa in Ethiopia, and Sister Anne Ward, who is still working in parts of Nigeria. There are very few facilities and very few trained doctors and nurses.
UNFPA has recently carried out a needs assessment exercise in most African countries that tabulates the facilities that are available. If training can be provided, more of these women could be cared for.
I hope that the millennium development goals can include help for these women. There are many from this country who are prepared to work and train doctors in Africa. There are hospitals which, if the capacity was increased and the doctors were trained, could cope with treating these women.

289
Prevention of maternal mortality can also prevent occurrences of obstetric fistula. While we wait for that to happen, millions of women will have to be cared for. I hope that the Government will do something about this.
4.37 p.m.
Baroness Flather: My Lords, I would like to say how delighted I was to see my noble friend Lady Chalker opening this debate. Many a time in the past we have enjoyed listening to her, and we have supported her in her work. Some people in the House may not remember her policy—children by choice. That encapsulates so much. What else is there to say? People should not be forced to have children, but at the same time they should have the opportunity to have children. The noble Lord, Lord Patel, drew attention to the hundreds of thousands of girls with fistula, young girls especially, who wander the streets in Nigeria because nobody will let them come near. This abuse of human rights is just unbelievable.
I was going to start by talking about a very large group of people who often seem to be forgotten, but now that the noble Lord, Lord Patel, has drawn attention to those women's issues, I intend to confine my remarks to the situation of women in developing countries. They have no recognisable access to any kind of human rights. Women in India and Africa do most of the work but there is no respect for them and no financial return.
I do not know whether noble Lords saw a documentary about a woman in Africa suffering from AIDS. Her husband had died, she had five children of her own—two girls and three boys—and had taken on two nephews. It was the 12 year-old girl-child who did all the work while the five louts—if I dare to use the word—did nothing but play football outside. If we allow that kind of thing to go on, under the title of "culture", we are totally failing in our duty to help the most oppressed people.
I should declare an interest. I am the director of Marie Stopes International, but, more importantly, I am a woman whose origins lie in a developing country. I have seen what happens to women in India.
Let us look at the peer group pressures on men and women. Men with a group of men will want to show off. They will drink; they will fight; they will gamble; and maybe they will womanise. What do women do? They try to save whatever little money they have for their homes and their children. In every Marie Stopes clinic and in every area I have visited, I have heard the women talk about their children's education. They say that they do not want their children to live lives like them and that they want them to have better lives. I have never heard the men say anything like that. It is important to see how the pressures work on the men and women.
There are fine success stories where the women have been the target of aid. The Gramin Bank in Bangladesh was started not for women, but when the bank found
290
that it was the women who repaid the loans—the micro-credit—it stopped giving loans to men. It has a success rate of 98 per cent returns and it has become so rich that it has now set up a mobile phone company. Hundreds of thousands of women have benefited from those micro-credit schemes. Micro-credit is a great way to help women in rural economies.
I know of a charity that is working mainly on water, but it also helps women with some embroidery, some sewing et cetera. I have met those women. I have gone Rajasthan and spent an afternoon with them. I do not need an interpreter; I can talk to them directly. The amount of self-respect and empowerment that has come from the minute amount of money that they earn is just remarkable. They have compelled the local council to give them a place to bathe and a place to wash their clothes. One might think, "Well, what the hell is that?", but they did not have it and they have it now. We should collect examples of good practice, put them together and see how they can be multiplied, because if we are going to see any change in the developing countries, I strongly believe that it will come through the women.
We have never focused on them enough. In presentations about work, women are seen as an adjunct. Sometimes, they are not mentioned at all. When one asks "What about the women?", those giving the presentation reply, "Oh, yes. We're doing lots for women", but they do not talk about it. They do not see them as part of the mainstream and that is very disappointing.
I have spoken to some of the delegates from the UN Economic Commission for Africa. The male representative from Uganda told me, "We have to be very careful, you know. We mustn't upset the men. If we are going to do anything for the women, we must do it in such a way that the men think it's their idea". Those attitudes are not pleasant.
We all know that women are suffering from HIV. A huge group of women in India is HIV positive, but they are not allowed to go to a clinic because it would bring shame on the family. They are monogamous women. They are not the ones who go out; it is their men who infect them. President Bush says, "Ah, yes, but they should abstain". Who is supposed to abstain? Is it the men? Have the men ever abstained? If the women are to abstain, they would dearly like to. Have they the power to abstain? No, they do not. Have they the power to make the men wear condoms? No, they do not. That culture moves quite a way up to the lower levels of the middle classes. Women do not have the power to control their men's sexuality. It is extremely important that they are given ways of looking after themselves in that respect.
President Bush feels that he should not support UNFPA because it supposedly endorses China's one-child policy. No, UNFPA does not. It does not tell any country what policy it should have. I have seen its work in China. It is trying to introduce choice for the women over contraception. It is trying to help young people understand what is available and what is not, yet President Bush says that UNFPA is not an organisation to be supported.

291
As I am running out of time, I shall be brief. I am not asking for "equality" as we understand it in the West. I am not asking for "equal opportunity" as we understand it the West. I am asking merely for a freedom for women from fear of physical abuse. I am asking that they have access to family planning and to minimal health advice; that they learn ways of protecting themselves from the men who infect them with HIV. I am asking that they should be able to earn a little money for themselves to empower them and to give them some self-respect, as well as to be able to help their children.
Women are the key to poverty alleviation. By no means has enough been done in that respect.
4.47 p.m.
Lord Hannay of Chiswick: My Lords, it is some time since the House has had the opportunity to debate international development issues. The noble Baroness, Lady Chalker of Wallasey, is therefore to be congratulated on providing this occasion, all the more so because of her distinguished record in office and the practical contribution that she made then, and still makes, to the development agenda.
I shall focus on three issues in this wide field: the interface between international development and peace and security; the EU's development policy; and the plight of children in Brazil. It has long been a truism to point out that without peace and security, developing countries are not going to be able to claw their way up the development ladder, to attract foreign direct investment, to grow their economies, to provide their people with jobs, education and healthcare. The list of countries where peace and security have broken down and, with them, virtually any external economic input other than basic humanitarian assistance is a long and sad one.
Perhaps slightly less well understood is the reverse proposition; namely, that where development has successfully got under way and where a country has been able to raise its GNP per capita significantly, the vulnerability to threats to its stability and security reduces. A considerable body of academic research indicates that, beyond a certain level of GNP per capita, the risk to a country of a breakdown in its peace and security sharply reduces.
What that demonstrates, I would suggest, is that we are not, as governments and multilateral institutions were for far too long too prone to assume, dealing with two completely separate agenda items, one involving economic development, the other involving peace and security, each with its own specificities and remedies. Rather, we are dealing with a closely linked set of problems which interrelate and impact on each other, either for the good or for the bad. However, even if that is now intellectually better understood than it used to be, it cannot be said that many governments and many international organisations have taken effective steps to address the interlinked aspects of the agenda in a coherent way. In that respect Her Majesty's Government are to be congratulated on setting up the conflict prevention pools for Africa and
292
the rest of the world, which, I understand, are jointly managed by DfID, the Foreign and Commonwealth Office and the MoD. The European Union is to be congratulated on earmarking 260 million euros to back up the African Union's efforts at conflict prevention.
However, does the UN Security Council with its primary responsibility for peace and security concert its actions with the IMF and the World Bank, which have much bigger resources? Do even the different parts of the United Nations family—the United Nations Development Programme, the World Health Organisation, UNICEF and others—invariably pull in the same direction? Do the financial institutions and those who manage the world's debt problems fully appreciate that the exercise of rigorous conditionality on a country which is already slipping towards state failure may only accelerate its progress towards that destination? I do not think that a convincingly affirmative answer can be given to any of those questions.
The UN High Level Panel on Threats, Challenges and Change, on which I have the honour to serve, is looking at all these matters and will, I hope, come up with some useful and sensible suggestions. If and when we do, towards the end of this year, I hope that we shall be able to look to the Government for support in getting—dare I call it this?—a more joined-up approach to handling the crucial interface between peace and security and economic development.
The European Union's development policies have few friends in this country and the leading opposition party now seems to want to do away with them altogether. I agree that the negative effect of the European Union's trade distorting export subsidies for agricultural products does grievous damage and that these subsidies need to be phased out as quickly as possible. It is good that the Commission, which negotiates on our behalf in this field, is now prepared to commit itself to doing that within a pre-established timetable. I hope that the G8 summit meeting, which is under way today, will firmly nail its colours to that target.
I also agree that the administration of the European Union's aid budget leaves a good deal to be desired, even if Commissioner Patten has instituted genuinely valuable reforms which now need to be applied more widely. However, I would suggest that the remedy of repatriating our share of this expenditure, which is now being advocated, would be a clear case of the cure being worse than the disease. It seems to ignore the fact that more than half the members of the European Union have no bilateral aid budgets worthy of the name, and probably very little will to allocate funds to such bilateral budgets. So if we break up the European Union's aid effort, the quantum of aid going to developing countries from Europe is likely to drop sharply. Is that what we want? And is it what many developing countries with which we have close and beneficial ties would thank us for bringing about? I doubt it.

293
The whole subject surely needs a good deal more thought. Would we not be better advised to focus on reforming the EU's aid policies rather than destroying them? I know there is great frustration at the fact that any increase in the European Union's aid budget, which we do not control absolutely, results in a reduction in our bilateral aid. However, that is not a policy which is made in Brussels; it is imposed by an organisation whose headquarters is a few hundred yards from here—Her Majesty's Treasury. When I used to tell my friends in Brussels about the negative effect of any increase in the EU aid budget on our bilateral aid, they used to smile in wonderment. None of their governments followed that practice. I suspect that they thought it was another example of British masochism run wild.
In raising the problems of Brazilian children I must declare an interest as I have a son who works with street children in São Paulo, Brazil. I fear there is some risk that our policy of concentrating on poverty eradication and shifting the balance of our aid programmes away from middle income countries—a policy for which, in general, I have considerable understanding—will have a negative impact on the excellent work that DfID has done in recent years to improve the plight of Brazilian children, about which my noble friend Lord Alton spoke so movingly when he reported back in March after a visit to Brazil.
Brazil is certainly a middle income country, but it is also one that has some of the greatest inequalities in the developing world. When the International Development Bill came before this House in 2001, the noble Baroness who is now the Leader of the House gave the noble Lord, Lord Brennan, and others such as myself who raised the issue of the priority to be given to programmes for children the most categoric assurances about DfID's intentions in that respect. Therefore, I hope that the Minister in replying to this debate will be able to respond positively to the concerns that I have expressed.
4.55 p.m.
Lord Bowness: My Lords, like other noble Lords, I thank my noble friend Lady Chalker for introducing this debate. She has a very distinguished record in this field. The debate is particularly welcome as it enables me as chairman of the relevant subcommittee to run a trailer for the European Union Select Committee report, EU Development Aid in Transition, that was published at the end of April. The committee looks forward to the Government's response and to debating that report on the Floor of the House, at which time I shall, of course, acknowledge the assistance that my committee received from many people in the preparation of that report.
This afternoon is not the occasion to discuss that EU report in detail, but it is relevant to this debate. European Union development aid features in the DfID report which is the subject of my noble friend's Motion, and the noble Lord, Lord Hannay of Chiswick, referred to European Union aid.
294
European Union development aid, together with member state aid, provides more than 50 per cent of official development aid worldwide, and so it is extremely important that it is both efficient and effective. Whatever criticisms have been levelled in the past, the committee found that both the quality and the speed of delivery of European Union development aid had seen very considerable improvement in recent years. We particularly noted the very frank statements from officials whom we met in Brussels acknowledging the problems of the past.
The reforms that were put in place have now produced a significant improvement in aid delivery, principally due to the establishment of EuropeAid in 2001, the introduction of country strategy papers focusing on governance and human rights, the deconcentration of EU tasks to European Union overseas delegations coupled with an improvement in accounting and monitoring procedures. That is not to say that further reforms and efforts are not necessary to complete the process. Indeed, there needs to be greater coherence between European Union development policy and the European Union's other policies on trade and agriculture.
It is fair to say that while EU development aid together with that of the member states represents more than 50 per cent of official development aid worldwide, the geographical scope of European Union aid remains controversial. The percentage focused on low income countries is only 42 per cent. The committee suggested that in the medium term the European Union should work towards developing an objective set of global criteria to help assess the need for aid rather than the present regional basis for allocations. This does not mean that countries within the African, Caribbean and Pacific grouping (ACP) would receive less aid than at present; some, indeed, might receive more. However, we believe that at present European Union aid is skewed in favour of the ACP grouping to the detriment of other low income areas such as Asia. In that respect there are advantages to the European Development Fund being brought into the principal European Union budget lines—something which I note from the report we are discussing the Government do not favour and have rejected.
We were disappointed that the draft constitution did not have a stronger focus on development aid. It is hoped that there will not be a reduction of development interests in the name of the European Union's common foreign and security policy. It is important that the next European Commission retains an independent development commissioner and puts both aid policy and aid programming functions into a single directorate-general, retaining for implementation purposes EuropeAid.
As the noble Lord, Lord Hannay, said—I hope that the committee's report will encourage him—the committee found the suggestion that European Union aid should be repatriated likely to be both counterproductive and politically unfeasible. European Union aid as opposed to bilateral aid, as the report makes clear, has a number of advantages. This afternoon is not the occasion to go through those in detail, but I shall cite a few. The European Union, acting on behalf of all member states, is in a good position to argue the case for good performance

295
on governance and human rights. It should certainly be possible to secure greater coherence between aid and other instruments in which the European Union has competence, particularly in trade and agriculture.
Of course, there are advantages for the recipient countries in dealing with a co-ordinated group of donors. For the donors, there is value in having their aid co-ordinated in a single strategy. The picture of European Union aid is therefore considerably more favourable than is frequently painted. I hope that the Minister will be able to enlighten the House on the reasons for opposing budgetisation of the European Development Fund, but perhaps she cannot do so in advance of the response to the committee's report. I also hope that she will take note of the committee's support for the non-repatriation of EU development aid.
5.2 p.m.
The Earl of Sandwich: My Lords, I add my warm thanks to the noble Baroness for giving us another opportunity to debate international development. In an election week, it seems appropriate to start with a little polemic on the Government's record on aid spending, which had shown so much promise. Perhaps the noble Baroness was a little too kind in her opening remarks. She and others will remember the bullish aid manifesto of 1997. We are now in the eighth year of this Government and, as the right reverend Prelate says, the target of 0.7 per cent still seems as far off as ever.
I do not doubt the commitment of the Chancellor and the new Secretary of State, but NGOs are beginning to campaign seriously on the issue. Without the international finance facility and a much greater initiative from the G8 than we are getting this week, they wonder how the millennium development goals will ever be reached. The Government have certainly moved forward with additional spending and political commitment to Africa, with greater aid harmonisation through the Development Assistance Committee. The new research into the role of middle-income countries is also welcome. However, DAC figures show that in spite of all the trumpeting our ODA is still only 0.34 per cent, which is just behind the European average. It will creep up to 0.4 per cent by 2006, which is again below the forecast EU average of 0.43 per cent. That implies an ambitious annual growth rate of 8 per cent, and I hope that the Minister can explain how that can be achieved.
Are the international development department's public service agreements too closely linked to the millennium development goals? Those goals are ambitious, as already mentioned. The education targets in Africa—they are marked green in the annual report—still seem attainable, but most of the other boxes are red or amber. My noble friend Lord Patel has given us a poignant illustration on health. When it comes to target 4 on trade barriers, one large red box indicates that the post-Cancun talks are still stalled. Perhaps the Minister will give us a more positive picture, remembering that the UK began to influence the European Union on the Singapore issues.
296
There was some good news on trade last week, when the WTO ruled against the US cotton producers. That means that countries such as Mali should now be able to fetch a more reasonable price for their goods. However, some argue that west African cotton farmers should also be compensated. In 2002, Mali received 37 million dollars in aid, but lost 43 million dollars simply as a result of lower export earnings due to US subsidies, according to the International Cotton Advisory Committee. Without such compensation, cotton farmers in west Africa will never be on an equal footing.
Much now depends on the new economic partnership agreements and how they can build on the valuable relationships with the ACP countries. They will have to raise their sights towards strategic and regional partnerships, while the EU takes more care with vulnerable LDCs and revives the concept of "special and differential treatment". Most people now accept that the international trading system is potentially the most valuable vehicle for poverty reduction. The question is whether the WTO, with the decision on cotton, is genuinely moving forward to equitable trade integration. Japan and the US, in particular, still need to respond positively.
Much can be achieved through the real participation of civil society in both trade and aid. For instance, a recent Christian Aid report shows how local communities in Ghana—farmers, traders and consumers directly affected by trade and especially the dumping of agricultural exports—can influence national decisions. Similar work has been done on debt relief elsewhere in Africa. However, I wonder whether governments are serious about the involvement of civil society in the poverty reduction strategy process. Sometimes one suspects that it is part of the mantra of good governance, which disguises official inability to achieve a proper process of consultation.
A lot of respected NGOs, such as the Overseas Development Institute, the Bretton Woods Project and the International Institute for Environment and Development, are questioning the adequacy of the PRSP framework. For instance, a senior researcher at the ODI has commented:
"In most African countries there is a tendency for PRSPs to be seen as technical planning processes".
The Bretton Woods Project stated:
"Participation is being invoked for legitimation rather than a fundamental shift in policy making".
Will the Minister therefore confirm that the DfID is doing its best, alongside the IMF and the World Bank, to monitor the effectiveness of PRSPs, which are critical? The DfID has increased its support for UK civil society, which I of course welcome, as I do the success of the partnership programme agreements.
The section on the EC in the annual report is quite candid about the European Union's failure to direct more assistance to the low-income countries, and to continue with the reform of its external assistance programmes in line with the European Development Fund. That may not surface in tomorrow's elections, but as we approach the UK presidency there will be more calls on Her Majesty's Government to speed up the

297
reform process, of which we must all be ashamed, although the noble Lord, Lord Bowness, says that there have been improvements. On the positive side, the EU and DfID have both given solid support to communities such as the Palestinians in their sincere if desperate efforts to improve their fragile administration and stay in the negotiating process.
The debate takes place against the curious background of the Sea Island Summit, in which the interests of poor countries—especially trade and debt relief—are again overshadowed and subjected to a parade of western aspirations for the Middle East, as reflected in the latest UN resolution. I agreed with much said by the noble Lord, Lord Alderdice. It is evident that aid-giving itself has entered a dangerous new phase since 9/11, and I am sorry that the Government have been associated with experiments in democracy and world security at the expense of true development in the Middle East, and that that is reflected in their holistic anti-terrorist programme.
Brutal attacks on the United Nations in Congo and aid workers in Afghanistan during the past week have again highlighted the perils of helping overseas. They send a chilling signal, not least to young people, that it is no longer enough to go abroad and do good if you are likely to attract attention from terrorists or bandits with murderous intent.
There was disturbing news in Afghanistan when five Médecins Sans Frontières aid workers were killed. MSF has been working in Afghanistan for nearly 35 years and it is tragic that it has had to suspend all its operations there. Christian Aid and others have also had to suspend their projects.
The Select Committee on Foreign Affairs is due to report soon on the policies required to protect humanitarian work in areas still affected by the Taliban. The EU's Commissioner for Development, Poul Neilson, has already complained about the role of the US-led coalition and the blurring of military and humanitarian aid. Several of us have constantly mentioned this. We do not want soldiers doing aid work, we want them to protect aid workers. The Government have put up an astonishing smoke screen, claiming that security is under control when US-led forces are doing their own thing and NATO still has no unified command.
DfID and others have made an enormous investment in several regions of Afghanistan, including valuable support for local Afghan NGOs; and it is up to DfID to demand more protection from the MoD and our US allies. I hope that the Minister can assure us that she will go back and propose to her colleagues a new initiative that will take proper account of security for aid programmes in Afghanistan and elsewhere.
5.11 p.m.
Lord Brooke of Sutton Mandeville: My Lords, your Lordships' House is fortunate indeed that it has been possible for my noble friend Lady Chalker of Wallasey, with her wide experience and even wider reputation, to secure and to open this debate so pertinently. I am myself
298
fortunate, especially as a tyro in these matters, to follow the noble Earl, Lord Sandwich, whose authority on the same matters is very considerable. At the general level, I concur with my noble friend that help should always be defined by the receiver rather than by the giver. Perhaps I should preface my remarks by saying that I have been a personal friend of Mr James Wolfenson, the President of the World Bank, for nearly 50 years since we were at the Harvard Business School together, and I admire him considerably.
The thoroughly worthwhile DfID report runs to more than 200 pages and in the perhaps unnecessarily constrained minutes the Leader of your Lordships' House has vouchsafed each of us in this debate, notably in comparison with the other debate, I propose to make one provocative reference to a recent exchange at starred questions; to make one observation about substance as it affects style; to give a synopsis of one germane case history; and, arising out of the latter, to ask one question of the Minister, of which I have at her constructive invitation, given her notice. Incidentally, I join the noble Lord, Lord Alderdice, in expressing surprise that Clare Short should have gone along with the recruitment of NHS staff from emerging and developing countries; and I was much moved by the speech of the noble Lord, Lord Patel, about the implications of that at the opposite end of the transaction.
First, regarding the recent exchange at Starred Questions—the Question related to the way in which economies are measured statistically in the context of climate change; in short, the argument about using current exchange rates or purchasing power parities. Some in your Lordships' House will have thought the noble Baroness, Lady Farrington, who I am delighted to see in her place, "courageous" in Sir Humphrey Appleby's phrase, in telling my noble friend Lord Lawson of Blaby that he was just wrong in his advocacy of PPP, but she was patently speaking for Her Majesty's Government.
In terms of collective responsibility, I do not expect the Minister replying today to demonstrate a scintilla of dissent from the noble Baroness's position, but since the noble Baroness's asseveration, the Economist returned to the subject twice in its 29 May edition during the Recess, which concluded that measurement by current exchange rates underestimated the growth rates in emerging economies. I could not help noticing the DfID report's comments on some growth rates in Africa against the overall continental need. As the IMF uses PPPs and the world uses the IMF in its debt reduction considerations, I should be delighted if the Minister told me that DfID were to use PPP, but after the recent defence of Government practice by the noble Baroness, Lady Farrington, I shall not hold my breath.
Secondly, regarding substance's effect on style—I have a close relative who has been holding positions of considerable responsibility for her age in an NGO in several central African countries. She is generally full of praise for the way that DfID handles NGOs and, particularly, for the quality of questions that they ask. She praises, too, their good methodological procedures. She felt, however, that they might sometimes—profitably for both sides—be more proactive in handling

299
NGOs, while acknowledging that that might be a function of the amount of previous operational experience a DfID official in the field had. She thought in general that NGOs' productivity might be greater if their relations with DfID were more institutionalised.
I put to my close relative the analogous case within the UK of the concerns of voluntary sector organisations such as the Red Cross, the Salvation Army, St John's Ambulance and the WRVS at being omitted from statutory reference in the Civil Contingencies Bill. She assented immediately, citing Oxfam's recent experience of being involved in domestic poverty alleviation programmes here in the UK, where it has apparently been found that, ironically, the standard policies and procedures are inferior to some of Oxfam's practical experience in developing countries. I have no emotional capital tied up in that observation, but I pass it on in constructive mode.
Thirdly, the germane case history. Perhaps suitably for a case history, my interest is historical rather than either financial or current. For two decades I chaired a trust, although I am no longer involved, which set out originally to do archaeological research at 7,000 feet in the Peruvian Andes. After about five years it elided into rural development. In the first decade 80 per cent of the work was archaeological and 20 per cent was rural development. In the second decade the proportions were more than reversed, with 90 per cent being rural development and 10 per cent archaeological. In so far as there was a watershed—that word is not inapposite—that changed the flow. A BBC "Horizon" film showed how, after five or six years of archaeological activity, a valley that sustained 1,800 people in the days of the Incas was sustaining less than a quarter of that number by the 1970s. The key to those comparative numbers had been the Inca irrigation canals which, as the film showed, our project had opened up again.
Our project at Cusichaca is now the first site those travelling on the Inca trail see after they leave Cuzco; and it has both patiently and patently uncovered or rediscovered the entire Inca infrastructure. In the second decade, the trust moved into the next great valley; and its constituency in the third decade are two basins with four districts in each and 18,000 people within them overall. The mission is rural development by example, covering reforestation, horticulture, lots of training, demonstration centres and organic agriculture.
The trust helped create a museum and cultural centre to cover the whole constituency, both for purposes of education and tourism. There is one ongoing canal project, again, to show what can be done. As the standard manuals would approve, there is the recent creation of a local NGO with a staff of 20 Peruvians, led by a British zoologist, who was with the trust for seven years and is now married to a Peruvian girl. Similarly, a Dutch soil scientist, trained at Reading University, who was involved in the trust's second decade/second valley study, is now a consultant to the EU, but comes back to the trust's area of operations, both to visit and to train. The trust's founder, the redoubtable Dr Ann Kendall, whose
300
doctorate is in archaeology, continues to spend four months each year in Peru, in two stretches of two months each.
The current funding comes from the EU and our own Community Fund. DfID funding, to which the noble Lord, Lord Alderdice, alluded, has fallen arising from the switch of funding from middle income countries to poorer countries in general and to Iraq in particular, although anyone who knows Peru, whither I first went 40 years ago, will know that even if the population on the coast is middle income, the Andes themselves remain poor beyond description. It is the same case that the noble Lord, Lord Hannay, cited in Sao Paulo, whence both my late first wife and Dr Ann Kendall came. Moreover, although the Community Fund funding is British, the fund has been criticised for going abroad and it is further enveloped in the uncertainties that surround the reorganisation of the New Opportunities Fund. So, British funding to an organisation which has been run largely on a shoestring, but has earned a substantial reputation for this country, may not remain constant.
The trust is now carrying out environmental research, mapping whole areas for their natural resources and coexistence, so as to give the local communities a handle on their opportunities. This community involvement was what made the Inca civilisation so impressive, even if it was not proof against Spanish gunfire. My question, to which I alluded at the beginning, is whether the Darwin Initiative, which is funding research into biodiversity globally and supporting environmental and biodiversity research, will also be diverted away from Peru on middle income and Iraqi grounds. If it is, it will be a classic case of policy confusion, but a clear answer from the Minister would be welcome.
5.20 p.m.
Lord Chan: My Lords, I add my thanks to the noble Baroness, Lady Chalker, for securing this debate on international development—an area of concern in which she has a distinguished reputation. It was during her time as Minister for Overseas Development that I had the opportunity, together with colleagues from the Liverpool School of Tropical Medicine, to work in Orissa and the five northern states of India over a period of 10 years. Therefore, I am grateful to the noble Baroness for that.
I welcome the DfID report of 2004 with its analysis of policies to help the poorest countries to achieve the millennium development goals. Aid for developing countries continues to be as necessary today as it has been over the past four decades. Of course, mistakes were made in the past when donors expected the recipient countries to repay debts with interest. Thankfully, Her Majesty's Government have been at the forefront in cancelling the debts of poorer countries.
Much has been said about the millennium development goals, which include the eradication of extreme poverty and hunger and the achievement of universal primary education. Those require infrastructure, good governance, a lack of corruption and other issues that seem to be rather difficult to achieve.

301
Other MDGs—particularly those relating to health—are more likely to be achieved in local communities. They are dependent on the promotion of gender equality and the empowerment of women, and they include reduced child mortality, improved maternal health, combating HIV/AIDS, malaria and other infections, and ensuring environmental stability and partnerships for development.
I shall focus on the "how to" in three areas: first, the empowerment of women; secondly, the need for a reliable supply of medicines and equipment; and, thirdly, partnership learning and working among developing countries, particularly among health workers.
The empowerment of women is essential in achieving those MDGs. Such empowerment is surprisingly not difficult to achieve in local communities. In most traditional societies, women decide on what families eat, which includes the growing of food, and how children are nurtured. Therefore, the use of micro-credit has been very helpful and productive. The missing ingredient to enable women in developing countries to influence the health of their families is the opportunity to receive information and support on how to improve health and well-being.
Examples abound in poor communities of the positive contribution that women make when they are supported by community development teams. I have seen groups of illiterate women in urban slums and villages in India who sing songs about the care of babies, about weaning foods and also about how to make oral rehydration fluids using salt and sugar for treating their babies with diarrhoea. As a result, babies and young children in those communities gain weight and remain healthy, and their mothers use health services appropriately.
Success in those settings depends upon partnerships between trained and motivated health workers and local women, who are given the opportunity to take control to improve their lives and the well-being of their families. Basic information on local food which is nutritious for infants and children, the availability of vaccinations against serious childhood infections, such as tuberculosis, and the protection of children against endemic malaria are important.
Co-operation and partnerships between, for example, the UK non-governmental organisations and local communities through capacity-building are very important and productive. The NGO of which I am chairman—the Malaria Consortium—has been engaged in capacity-building with people in Uganda and Ghana, where we have offices with more employees than we have in London.
Where women are literate, as in the southern Indian state of Kerala, substantial improvements are made in maternal health, child survival and, with appropriate services, the control of diarrhoea and respiratory infections in children. All those improvements have been achieved in spite of Kerala being one of the economically poorer states of India. Similar results have been achieved in Sri Lanka—again, one of the poorer countries in south Asia.
302
Urban slum improvement projects in other parts of India have also led to local success with improvements in the health of children and mothers. I had the privilege of taking a group of Indian health service leaders and workers from urban slums to Thailand to meet their Thai counterparts to discuss how to run public health schemes and manage HIV/AIDS. My Indian colleagues were encouraged to see progress being achieved in other Asian settings which they could adapt for their communities. And that visit was made 10 years ago.
When replying, perhaps the Minister will inform your Lordships of efforts that are being made by DfID to encourage governments of developing countries to learn from the examples of best practice in other communities in their own or neighbouring countries through visits and working partnerships.
A regular supply of effective medicines in local communities is essential for the treatment and maintenance of health. What proportion of DfID's budget is allocated to this essential service? Training of health and community workers is another essential if countries are to achieve the MDGs. Partnerships with other developing countries that have achieved success in local communities is important. As many achievements in local communities are led by non-governmental organisations, to which other noble Lords have alluded, to what extent does DfID support their work in developing countries?
Finally, DfTD could also influence better donor co-operation so that health services in communities in poor countries could be more joined up. For example, condoms provided for HIV prevention should also be distributed by reproductive health workers. Concern for death rates in children under the age of five should be better focused on infants—that is, children in the first year of life. That should encompass the healthcare of women, including contraception, so as to ensure a birth interval between one pregnancy and another of about 18 months. We can do more to improve the healthcare of mothers and babies in order to fulfil the MDGs.
5.28 p.m.
Baroness Northover: My Lords, I thank the noble Baroness, Lady Chalker, for introducing this very important debate. As others have pointed out, she does indeed have a formidable record in this field. The debate is extremely timely, given the backdrop of the G8 meeting in Georgia this week. It is good to hear that at last the UK seems to be prevailing on our US allies in terms of negotiating debt relief for heavily indebted poor countries. I hope that the noble Baroness can fill us in on the progress of those talks.
But we are discussing this issue against a wider backdrop. Countries in the developed world have been at odds with each other over the Middle East and, in particular, over Iraq. Achieving the millennium development goals seems as remote as ever, with the possibility—in fact, as we have heard, the probability—of many of the poorest countries going backwards by 2015, largely because of the AIDS pandemic.

303
Of course, with a more local backdrop, we have the European and local elections tomorrow. In these elections international issues have been on the agenda far more than is often the case. Europe and Iraq have been key issues, but little attention has been given to the plight of those suffering from AIDS in Africa, or even to those being starved, raped and murdered in Sudan.
There is a strong interest in international development in the UK, but so often it is eclipsed by concerns closer to home. As the right reverend Prelate the Bishop of Newcastle has pointed out, it was in 1970, almost 35 years ago, that the UN set the target for countries to reach official development assistance of 0.7 per cent of GNP. By 1975, the UK had reached about 0.5 per cent, but by 1997, that had slipped to below 0.3 per cent. As other noble Lords have said, the Government are to be credited with bringing up that level currently to 0.34 per cent, but it is still a long way short of the 0.7 per cent target.
In the next four weeks the Government will determine their overall spending plans for the next three years. Can the Minister tell me whether she believes that the Government will have a timetable for reaching 0.7 per cent in the spending review? Other countries have reached that point, including Denmark, the Netherlands, Norway and Sweden and others have a timetable for doing so, including France, Spain and Ireland. One of the planks of the Irish presidency of the EU was to agree the timetable. Until the UK has pledged 0.7 per cent on aid, some countries have said that they are reluctant to support the International Finance Facility, which has yet to get off the ground.
So much for the size of DfID's budget, but what about how it is spent? In the very full report, DfID emphasises that it is,
"committed to spending 90 per cent of our budget in the world's poorest countries by 2005–06".
Surely it has been little short of disastrous that so much effort and money over the past year or so has been spent on Iraq. We read that the UK aid budget is set to increase to £4.5 billion by 2005–06, which is welcome. But how can it be justified that £544 million has been pledged by the UK Government to Iraq up to March 2006? Whatever the rights and wrongs of overthrowing the regime, doing so without true international support, and thereby bringing on ourselves the responsibility, with the Americans and few others, for reconstructing Iraq has surely completely distorted DfID's budget and its direction.
Why is it that the reconstruction forced on us by the UK's actions comes out of the DfID budget which is supposed to help the poorest in the world? Can the Minister tell me which countries are, therefore, suffering cutbacks as a result of this policy, this distortion in the budget?
My noble friend Lord Alderdice and the noble Lord, Lord Brooke, have pointed to the serious reduction in aid to Latin America. I note DfID's almost complete withdrawal from the Pacific. Obviously, the UK cannot be involved everywhere, but when areas that were supported by the UK are suddenly dropped, while
304
expenditure on Iraq hugely increases, surely the Government should be held to account. No expenditure at all is to be allowed in the Pacific after 1 April 2004. That is an area which includes one failed state—the Solomon Islands—which until recently was a UK responsibility. Fiji is also politically unstable. It is not likely that the EU will take up responsibility here, given that it has no long-term interest in the area. Can the Minister tell me what future she sees for the poorest areas in the Pacific? Have any agreements been made with others to ensure that the poorest in those areas do not lose out?
Can she also tell me how the department weighs up the relative merits of expenditure on Iraq and Afghanistan, a country with great poverty, but which, as is also claimed of Iraq, has significance for instability far wider than the country itself? As the noble Lord, Lord Hannay, has pointed out, if a country reaches a certain point in development, it is more likely to be stable. These things are indeed interlinked. What intercessions has DfID made to other government departments and to international organisations about the need for security in Afghanistan so that reconstruction can take place, so that the poppy harvests can decline, in the way that the Chancellor has promised, and so that stable government can thrive?
When Lakhdar Brahimi left Afghanistan he impressed on the world how important it was that security was provided there. He noted with some irony how readily troops were provided for Iraq while Afghanistan was neglected. As my noble friend Lord Alderdice has said, we have to see policies through if stability is to be achieved.
The MDGs place particular stress on the need to improve the position of women and girls. I support what the noble Lords, Lord Patel and Lord Chan, and the noble Baroness, Lady Flather, have said on that. I note with some interest that the vast majority of the photos in DfID's annual report are of women and girls. It was quite difficult to find boys featured among them. I trust that in many ways that reflects the nature of what DfID is doing.
At this point I turn to the gravest crisis facing the poorest nations and that is the HIV/AIDS pandemic, which of course afflicts women and girls even more desperately than men and boys. As the All-Party Group on Africa stated in its report published on Monday,
"the AIDS epidemic is an exceptional threat to African societies and states as well as to millions of African people. It requires an exceptional response".
It has the potential,
"to tear apart social fabric, destroy developmental gains and plunge some regions into decades of stagnation and insecurity".
The urgency of this crisis, I must say, does not shine out of the DfID annual report. There is a page of text on AIDS compared, for example, with three and a half pages of text on Iraq. Yet the threat to world order, political stability, economic growth and the future, not only of Africa but surely far wider, as the disease spreads and as its after-effects are felt, is far more significant. Can the Minister tell me how many members of staff serve in

305
DfID, how many work full time on Iraq, and how many work full time on HIV/AIDS? To what extent is the problem concentrated within a unit, and to what extent is it tackled in every department and at every level? Can she also say when DfID will produce its comprehensive plan on AIDS? What proposals might that bring forward to help AIDS orphans?
I believe that my noble friend Lord Alderdice is right. He describes as paradoxical the effects of some policies that work against the effects of others. Surely allowing the AIDS pandemic to spread, while we are theoretically trying to achieve the MDGs, is at the least paradoxical.
Nevertheless, the Government are to be applauded for putting international development higher on the agenda. But it seems to me that there is a long way to go and it is very clear that Iraq has been a major diversion from the needs of the very poor. We must all hope that, with the passage of the latest UN resolution, the time will rapidly come when Iraq properly governs and secures itself so that attention can once more be effectively addressed to the needs of the poorest in the world.
It is surely the case that we have a moral responsibility, as others have said, to the poorest in the world, but we also have, as the noble Lord, Lord Hannay, pointed out, a self-interest in the greater stability that economic development produces.
5.40 p.m.
Baroness Rawlings: My Lords, I, too, thank my noble friend Lady Chalker for initiating this afternoon's debate and for introducing it with such wisdom. I echo the comments of other noble Lords in recognising the long and ongoing commitment my noble friend shows to the field of international development.
Today's debate presents us with an invaluable opportunity to examine the very important contribution the Department for International Development has made over the past year. As is so frequently the case in your Lordships' House, we have heard this afternoon many knowledgeable, moving and enlightened contributions. I welcome the noble Baroness, Lady Crawley, to the Dispatch Box for this debate, but I cannot disguise my disappointment that a debate on something as fundamental as the international development annual report, covering such a vital subject, is not being replied to by the noble Baroness, Lady Amos, who has such long experience in the field.
In speaking to the report, I would like to address several of the key geographical zones in turn before finally turning to the more holistic role that DfID plays in supporting some of the world's poorest societies.
As we have heard many times, 1.1 billion people live on less than a dollar a day. Of these, 70 per cent live in rural areas, working in agriculture. We have heard, too, that the current combination of agricultural subsidies in developed countries and trade barriers to protect their own products continues to contribute to ongoing poverty.
306
I start with the situation in Africa, where the vast majority of the poorest countries are situated. We note that DfID spends almost 50 per cent of its bilateral assistance in this region. Tragically, for too long their progress has been held back by conflict, on which I want to concentrate.
Only today, in a Statement in the other place, we heard yet again that the Janjaweed militia is responsible for massive violence, that a climate of impunity prevails in Darfur, and that the Government of Sudan permit the Janjaweed to exercise a reign of terror over the Darfurians. As the Secretary of State said, we have a responsibility to do all we can so that Darfur does not descend into genocide.
Conflict, as we see in Darfur, is a major contributor to world poverty. Indeed, page 107 of the report points out that of the 40 poorest countries in the world, 24 are either in the midst of or have recently emerged from conflict. It is also important to recognise the important contribution that peace-keeping operations can have in reducing poverty. We welcome the fine report, A Case for Change, by Nicola Dahrendorf, produced by King's College, London, that DfID commissioned to address this issue, and I declare an interest as chairman of its council.
We also welcome the progress that has been made in providing improved access to healthcare and education. However, not all the progress in Africa has been as good. The ongoing scourge of HIV/AIDS continues to blight the continent, as the noble Baroness, Lady Northover, mentioned. It is spreading though a mix of cultural traditions, lack of education or, in the case of Zimbabwe, ill-thought-through land reform. There, the displacement of thousands of farm labourers has led to the spread of the disease. I fully agree with the stirring speech of my noble friend Lady Flather on the plight of women in developing countries.
Good governance and national responsibility have a major role to play in those countries where health education has been pushed to the fore. There have been significant reductions in new cases of the virus, and I pay tribute to the work of the Government of Uganda. Moreover, a global strategy coupled with good governance might help curb the spread of HIV/AIDS. We would like to see the Global Fund for health ring-fenced to promote pharmaceutical research into an affordable cure for HIV/AIDS, and not have its efficacy reduced to a general pot of money, as publicly advocated by the former Secretary of State for International Development.
In Asia, there has also been progress. In Afghanistan, no longer at war—despite some of the reports we have heard from the noble Earl, Lord Sandwich—economic growth is up 30 per cent, and 4 million children have returned to school. We acknowledge the work that DfID has done in Burma, where there has been considerable progress since the communist regime, where the UK is the largest co-financier of the fund for HIV/AIDS.
We do however note with interest the statement that DfID is involved in a 100 million dollar loan to provide schooling for 2.4 million children in China. Perhaps

307
the Minister could enlighten the House on the reasoning behind a loan to support education in one of the fastest-growing economies in the world.
I turn to the situation in Europe and the Middle East. Particular progress has been made in Iraq, and we pay tribute to the work DfID has done in supporting this. In particular, we welcome the £0.5 billion the Government have pledged up to 2006 for reconstruction projects and humanitarian assistance. The funding will go far in improving the lives of Iraqi people in their unfolding democracy.
We note the additional funding for the Palestinian negotiation support unit which provides advice to the Palestinian Authority on how best to approach negotiations with Israel. It has been suggested, however, that this organisation has, since the collapse of the Camp David negotiations, been involved in spreading anti-Israeli propaganda. Obviously, with any funding it is important that the Government can trace the use to which it is put and I ask the Minister what checks are in place to ensure examples such as this do not become the norm.
I turn to the global situation and I agree with many noble Lords who have rightly mentioned Latin America that the lack of support for those countries is quite shameful. We welcome the clear progress that the Government have made in the area of debt relief, mentioned by the noble Lord, Lord Desai, where 100 per cent of the debt owed by most heavily indebted poor countries has been written off. However, current procedures in debt relief—namely, HIPC—are bureaucratic and slow and are failing the people they were designed to help. If further progress is to be made in relieving poverty in developing countries, urgent reform of debt relief and HIPC in particular is required. What guarantees may be provided to support those countries that have not yet achieved decision point or completion point?
Finally, I turn to the important roles of aid and trade. Noble Lords who have read the report will have seen that in the opening pages Her Majesty's Government set out the important role that aid has to play. Indeed, successive governments have all realised that aid is crucial in moving some of the world's poorest countries away from the millstone of poverty. However, we must not underestimate the importance of trade in establishing robust and sustainable free market economies. I fully endorse the support of my noble friend Lady Chalker for private sector contribution.
With regard to the department's fourth target of reducing trade barriers between developing countries by 2005 and the Doha development agenda, I find it difficult to see how this target will be met in the light of the collapse of the Cancun meetings in September last year. We welcome the Doha development round and the subsequent meetings because we view free trade as more effective and sustainable than aid in isolation. While we recognise the need for aid, our priority is to liberalise markets and thus have free trade as the key propagator for global wealth development.
Following on from this, we could establish an advocacy fund for developing nations that would be paid for by the richer countries of the world. The
308
advocacy fund would in turn allow poorer nations to pay for the necessary expertise and legal advice in order to hold their own throughout future world trade talks. We support a rapid return to the Doha development round in order to pursue free trade as the most effective remedy in curing world poverty.
I am sure all noble Lords will agree that aid should always add value and help countries to help themselves. We are grateful to my noble friend for reminding us of the importance of European Union aid. Yet, as my honourable friend the Shadow Secretary of State for International Development, John Bercow MP, recently said in a speech to the International Institute for Strategic Studies,
"there is a chronic contradiction between aid policy and trade policy … For every dollar western taxpayers give to poor countries, those countries lose two dollars through barriers to their exports to the developed world".
All too often it seems what the UK Government give in overseas aid is more than outweighed by what we take away through trade subsidies or sanctions.
Truly effective aid requires fair trade. As we have heard from the right reverend Prelate the Bishop of Newcastle during the debate, even if countries meet the UN target of 0.7 per cent of GDP for government aid, the sum remains insignificant when compared to the potential of trade. When faced with a choice between giving people money and enabling them to earn money, the latter is surely preferable.
In this encouraging report we read of aid, debt relief, development of affordable medicines and more trade with many of these countries. These are all laudable aims, but which will have little effect on a country being torn apart by constant conflict. It is easy to forget when talking about war that each figure represents the death of an individual—someone's father, mother or child. In Darfur alone it is estimated that 2 million have died. With this one example it is easy to see how conflict is the fundamental contributor to world poverty.
It would be churlish of me not to recognise the importance and significance of last week's celebrations of 60 years of peace and prosperity in Europe after centuries of bloody battles. This peace is due principally to the European Union and the NATO alliance, but also to the democratic freedom and good governance of individual countries. This can only emphasise how important it is that everyone who has the privilege to vote, in whatever election, does so.
5.52 p.m.
Baroness Crawley: My Lords, I too thank the noble Baroness, Lady Chalker, for securing this debate and in doing so I acknowledge her most impressive record and experience in this field. I thank all noble Lords who have participated in this excellent debate for their very constructive and often challenging remarks, and for their positive comments on the Government's policy towards international development.
As 2005 approaches, we are reaching a critical time for global political commitment and UK leadership in the field of international development. The 2004 DfID

309
departmental report—I thank all noble Lords who have made encouraging noises on the report—sets out the work that DfID undertakes through bilateral and multilateral channels in more than 125 countries around the world and aims to give a balanced picture of UK success stories and areas where much more needs to be done and how we intend to achieve that.
Progress towards the internationally agreed millennium development goals is mixed, as many noble Lords have said. On current trends it is unlikely that more than two goals will be met by 2015: the goals relating to income poverty and improved access to safe water. Globally, 104 million children still do not go to primary school; 10 million children die each year before their fifth birthdays from largely preventable diseases; and 1.1 billion people are still living on less than one dollar a day.
Each UK government department has to measure progress against a set of objectives that make up its public service agreement; a mechanism first implemented in 1999 that provides a coherent and dynamic focus for the department's work. As the noble Earl, Lord Sandwich, said, DfID's 2003–06 public service agreement is linked directly to the millennium development goals.
The millennium development goals have been referred to by many noble Lords. The department is on track to meet 17 of the 28 indicators linked to the objectives. There has been a significant reduction in the proportion of people living on one dollar a day. The ratio of girls to boys enrolled in primary schools has increased. The effectiveness of the international development system has been enhanced. However, enormous challenges remain, as we have heard today from many noble Lords, particularly those relating to under-fives and maternal mortality rates, tuberculosis detection rates, the poverty focus of the EC and the stalled World Trade Organisation talks.
The constraints to progress against the millennium development goals and the public service agreement vary considerably between geographical regions. They include particularly the impact of HIV/AIDS and barriers to trade, in addition to ongoing conflict, poor governance, inequality and exclusion, and human rights abuses. The scale of the HIV/AIDS epidemic is staggering, as the noble Baroness, Lady Northover, said, with nine new infections occurring globally every minute. That is quite simply killing development in many countries. Life expectancy is dropping and deaths among skilled workers and young people are undermining prospects for future economic growth. The social consequences for women and children in particular—a matter raised by the noble Lord, Lord Patel, and the noble Baronesses, Lady Flather and Lady Northover—are devastating. In Botswana it is estimated that life expectancy will drop from 65 years in the early 1990s to 27 years by 2010.
The UK Government's call for action on HIV/AIDS is the start of a process that will take us beyond our 2005 presidency and focus on stronger political direction and improved funding. On donor co-ordination and HIV/ AIDS programmes, we are fully supportive of the UN and
310
World Health Organisation efforts to secure HIV treatment for 3 million people in the developing world by the end of 2005, including 2 million in sub-Saharan Africa.
The stalled world trade talks at Cancun were a major disappointment and the UK Government are absolutely committed to an early resumption of multilateral trade negotiations. The stakes are high, as the noble Baroness, Lady Chalker, has implied. Estimates suggest that a 50 per cent reduction in trade protection measures by both developing and developed countries could result in a welfare gain for developing countries of around 150 billion dollars per year. As noble Lords will know, that is three times what they receive in aid. This could lift 300 million people out of poverty by 2015, as the noble Baroness said.
Noble Lords have stressed that the international community must now move on to deliver on the Doha commitments to improve market access, to reduce and agree a date for ending all forms of export subsidies and to reduce trade distorting domestic support.
The challenge to the millennium development goals is particularly daunting in sub-Saharan Africa where poverty levels are the highest in the world. Less than 1 per cent of global foreign direct investment goes to the region. Africa's share of world trade is also less than 1 per cent and 29 million Africans are infected with the HIV virus.
The UK Government are committed to tackling the challenges faced by sub-Saharan Africa. The Commission for Africa set up this year provides an opportunity to take a fresh look at the problems facing Africa, both past and present, and to recommend a new way forward. This is not a UK commission. More than half the commissioners are African and it aims to draw on the expertise of as many African organisations as possible, in particular the African Union and the New Partnership for Africa's Development. The commission has agreed six principal themes to be considered over the next six months: investment in people; conflict and peace-building; the environment; governance; the economy; culture and participation. Its recommendations may mean difficult choices for the international community and Africa, but new solutions must be identified if the Millennium Development Goals are to be relevant for the majority of Africans.
The United Nations millennium development goals stock-take next year will provide a harsh reality-check. It is currently estimated that sub-Saharan Africa will reach neither the poverty goal nor the child mortality goal until 2150—some 150 years beyond 2015. It will be imperative that we use this stock-take to gain renewed commitment from the international community as a whole to meeting the millennium development goals within the agreed timescale. As the right reverend Prelate the Bishop of Newcastle has rightly said, 2005 will offer an important opportunity for the UK Government to increase the international political focus on development as they take on the presidencies of the G8 and the expanded European Union. The way forward is clear—we must ensure that sufficient financial resources are provided, and that these are used to optimum effect if real progress is to be made. Again, the right reverend Prelate underlined this issue in his contribution.

311
First, the volume of aid must be increased. The 2002 Monterrey Financing for Development Consensus committed international donors to providing significant additional aid by 2006. We now need to live up to these commitments. The UK Government are gradually moving towards the United Nations target of 0.7 per cent of our gross national income being allocated to official development assistance. We aim to reach 0.4 per cent in 2005–06. I take note of several noble Lords' criticisms on the speed of that development. We are also strongly supporting the proposed International Finance Facility which aims to more that double the total aid provided globally to more than 100 billion dollars a year.
Secondly, in addition to providing more funds, as the noble Baroness, Lady Chalker, has highlighted, the effectiveness of that aid must be improved. In the last year for which we have figures, donors started 35,000 activities with an average size of 1.5 million dollars. It is almost impossible for developing countries to keep track of these initiatives, and to draw maximum benefit from them. DfID has worked closely with others to implement the principles established in the OECD Rome Declaration on Harmonisation in 2003, which aim to encourage a more integrated approach from international donors. DfID has reduced its number of projects and focused more on poverty reduction budget support and sector strategies intended to support partner governments' own poverty reduction agendas. Thirdly, well-informed, evidence-based policy is critical to good decision-making on both aid allocations and intervention. DfID is working to improve its policies through greater research and improved analytical methodology, and has reorganised its policy division this year to provide more focused analysis, advice and expertise.
Given sufficient political will, progress is possible. There are already success stories to be told. Ongoing conflicts in sub-Saharan Africa have fallen from 19 to two over the past four years. The heavily indebted poor countries initiative has released 1.7 billion dollars since 2001 for social expenditure and poverty reduction in 27 countries. Over the past four years, DfID has helped India to increase primary school enrolment to 90 per cent. In conjunction with other agencies, DfID has helped to save 1,000 lives in the immediate aftermath of the Barn earthquake in Iran. It is estimated that DfID's aid lifts 2 million people permanently out of poverty each year.
I will do my best to answer as many of your Lordships' questions as possible, and those that I do not reach I will follow-up in correspondence. The noble Baroness, Lady Chalker, asked about DfID and private companies, and what action we are taking to develop these partnerships. DfID is working on a number of fronts to promote greater corporate responsibility and greater partnership with the private sector. Successful examples include the extractive industries transparency initiative launched by the Prime Minister in September 2002 to promote full transparency of payments and revenues in the oil, gas and mining sectors in developing countries. There is also the support for the ethical trading initiative, an alliance of businesses,
312
non-governmental organisations and trade unions designed to improve working conditions in global supply chains. The noble Baroness also asked whether the poverty reduction budget support is given in conjunction with help for capacity-building. Capacity-building is provided in conjunction with the budget support, often within the area of public financial management systems among others. An important indicator of whether budget support will result in poverty reduction is whether the recipient government's public financial management systems are effective.
The noble Baroness, Lady Chalker, and the noble Lord, Lord Hannay of Chiswick, asked what DfID is doing to improve access to trade and reduce trade barriers. They will know that the Government acknowledge the damaging effect that dumping and trade-supporting subsidies have on developing countries' agricultural sectors. Commodity dependency—and the associated vulnerability to high volatility prices—also remains a major development problem. Our priorities for the round are getting agreement on the issues that matter most to developing countries: agriculture; nonagricultural market access; and special and differential treatment to help poorer countries adjust to open markets.
The noble Baroness raised the issue of corruption as did my noble friend Lord Desai. She asked whether we are training for reducing corruption. We are not training specifically, but DfID provides a wide range of support for developing countries to tackle corruption—through strong enforcement action against corruption and money laundering such as effective anti-corruption agencies and financial intelligence units, and through necessary preventive measures such as improved public sector financial management and better parliamentary oversight.
The right reverend Prelate the Bishop of Newcastle and the noble Baroness, Lady Northover, raised very strongly the issue of the 0.7 per cent target. I have covered that to some extent. They also asked me directly about a timetable, as did other noble Lords. I will no doubt disappoint them by saying that the UK Government have not as yet committed to a timetable for reaching the 0.7 per cent target. However, I am sure that the strong appeal of the right reverend Prelate and other noble Lords will be noted.
The noble Lord, Lord Patel, asked in his very moving contribution what plans DfID has in developing a new strategy for meeting millennium development goals for reducing maternal deaths. A new strategy on maternal health will be launched by the department in the coming weeks. As the noble Lord knows, DfID is committed to reducing the appalling toll of deaths of mothers and new-born babies. We are focused on building better health systems able to meet the challenges of delivering quality care in the resource-starved settings that are often found systems able to provide access to quality reproductive health services, prevent and safely manage unwanted pregnancies, and provide skilled attendance for every birth backed by ready access to emergency obstetric care.

313
The noble Lord also raised the question of how DfID is promoting programmes for treating women with obstetric fistula. I am sure that the department will be very willing to discuss this most important area of women's and girls' health with him at his convenience.
The noble Lord, Lord Patel, and the noble Baroness, Lady Flather, spoke about the USA with regard to contraception and reproduction programmes. They asked what plans DfID had to engage in dialogue with countries such as the USA to promote reproductive health and rights more actively by restoring their funding schemes. They will know that DfID has a long-standing commitment to support reproductive health and rights. We are a leading donor to UNIFEM. DfID engages with international partners in strengthening global leadership and raising the profile of maternal health on national and international agendas. Although we agree to disagree with the United States on those policies, such as those on condoms and abortion, that does not preclude us from working closely with the United States on sexual and reproductive health in a number of countries.
The noble Baroness, Lady Flather, the noble Lords, Lord Patel and Lord Chan, and others emphasised the empowerment of women. We agree that gender equality and the empowerment of women are essential prerequisites for the eradication of world poverty and the upholding of human rights.
I was asked a specific question by the noble Lord, Lord Hannay of Chiswick, about street children in Brazil and the consequences of DfID's policy on middle-income countries. I can say to the noble Lord—I hope that it is good news—that the Government's reprioritisation of funding to middle-income countries will not affect the work being done with street children in Brazil, which is supported by DfID. United Kingdom NGOs will continue to have access to funding through DfID's Civil Society Challenge Fund and through their partnership programme agreements with DfID for such projects. DfID currently supports one such project through the Civil Society Challenge Fund scheme.
The noble Lords, Lord Hannay of Chiswick and Lord Bowness, asked about EU aid policy and our response to it. We are, of course, in favour of turning the European Union into an effective player in aid policy. It is the third-largest aid agency in the world. Recent EU reforms are starting to push things in the right direction, and we are looking to build on those positive developments. That will not give noble Lords the complete answer, but, no doubt, we will get that in the coming weeks and months.
The noble Lord, Lord Brooke of Sutton Mandeville, asked a specific question about the Darwin Initiative—a biodiversity initiative. Last year, the Department for Environment, Food and Rural Affairs contributed £4 million to the Darwin Initiative, which is a small grants programme that draws on British expertise in biodiversity to promote conservation and the sustainable use of resources in less-developed countries. Since its launch in 1992, the Darwin Initiative has committed over £35 million to more than 300 projects in over 100 countries. Defra's contribution to the initiative will rise to £7 million in 2006–07.
314
I have run out of time and will not be able to answer other questions from noble Lords now. Noble Lords can rest assured that I will answer in writing.
The next 10 years are crucial, if we are to demonstrate our political commitment to tackling poverty, injustice and inequality. In 2005, we must seize the opportunity to demonstrate international leadership and ensure that political commitments translate into reinvigorated efforts to reduce global poverty.
6.14 p.m.
Baroness Chalker of Wallasey: My Lords, I thank the Minister and the 12 other noble Lords who spoke in the debate. We will inevitably sympathise with the Minister, in trying to sum up such a wide debate. I remember the situation well.
I beg the Minister and the department to consider again how we can achieve better co-ordination and collaboration, not only with other donors but also with governments. I ask DfID not to be cowed by Finance Ministers, who always want to direct everything. That is why I made particular play in my comments on capacity building of extending capacity building in foreign countries to the spending departments, not just to financial management. However good the IFMIS systems are, support will be of value in lifting people out of poverty only if the spending departments get it right, not just the Finance Ministers. I know that the Minister and the department will put special emphasis on trying to get easier trade relations between the developing world and the developed world, but training in those countries to enable growth in their export industry is vital.
It would be wrong to go over the debate, and it is impossible to sum it up in 20 minutes or in two. I take to heart what the noble Baroness, Lady Northover, said about the health issues. Unless we get the health issues right, we undermine so many of the other things that we do. For many years, my companies have trained two people aged 20, in order to have one active and working at 40. That is the scale of the problem. It is not just HIV/AIDS; it is malaria and TB, about which we can take far more preventive action than we, as donors, encourage countries to do.
I thank everyone who has been involved. It has been a good debate. We probably do not have them often enough. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Personal Debt
6.17 p.m.
The Earl of Northesk The Earl of Northesk rose to call attention to levels of personal debt, including mortgage debt; and to move for Papers.
The noble Earl said: My Lords, your Lordships will recall the heady days of the last few years of the previous century. The Prime Minister proclaimed a new political order based on new Labour's "Third Way". The Chancellor of the Exchequer, on the back of his

315
immediate decision to transfer the setting of interest rates to the Bank of England, claimed the equivalent of economic sainthood. His comments in a Statement on the Government's economic and fiscal strategy in June 1998 give a flavour of the rhetoric that prevailed at the time:
"The spending plans that we set must ensure sustainable finances over the whole economic cycle—rigorous financial discipline that, together with monetary stability, ends once and for all the boom and bust that for 30 years has undermined stability, hindered long-term investment in our public services and prevented this country from achieving its potential".—[Official Report, Commons, 11/6/98; col. 1195.]
That claim of fiscal alchemy—the banishment of boom and bust—dripped from the lips of Treasury Ministers like so much honey.
In terms, the situation that prevails at the moment is one of booms in house prices and consumer spending, both fuelled substantially by debt. Perhaps we should not be surprised that the Treasury has become more circumspect about claiming that boom and bust has been banished. Even the Chancellor's affection for prudence—formerly so strong—seems to have cooled.
Nevertheless, we should give credit where credit is due. Noble Lords on these Benches might wish that the Government had been a little more generous in acknowledging their golden economic inheritance. Despite that, it would be churlish not to admit that the economy has performed tolerably well in recent years. However, although, outwardly, some of the headline trends continue to seem adequately robust, clouds are gathering. We cannot tell how dark they may be or what economic hailstorms they may carry, but of one thing we can be certain: they are gathering. Not least among them are current levels of personal debt.
It is as well to put the matter in context. According to the most recent figures from the Bank of England, net lending to individuals stands at £985 billion. Personal debt is currently rising at the rate of £1 million every four minutes, with the breach of the £1 trillion mark imminent. In common with my right honourable friend Oliver Letwin, I do not suggest that this,
"will lead to an economic meltdown, but it is a timely wake-up call".
Unsecured personal debt has grown by more than 50 per cent since 1997, twice as fast as incomes, and now stands at £5,330 per person. Total unsecured personal debt stands at £172 billion and is growing at over 10 per cent a year. Credit card lending grew by £963 million in March, the largest increase in two years. As to mortgage lending, this grew by £9.34 billion in March, the highest amount for five months.
Here, worrying signals are beginning to emerge. At what the Government might call the affordable end of the market, many people with limited experience of the rental sector are entering the buy-to-let market. This is fanning the flames of house price inflation. However, as revealed in last week's Sunday Times, there is growing evidence that people's expectations of the return on their investment are pitched too high. In such circumstances the effect of even a relatively modest increase in interest rates could be profound. As Shelter has observed:
316
"If buy-to-let investors cut and run this could be the catalyst for a severe slowdown".
Shelter's research provides us with an insight into the standing of the unaffordable end of the market by showing that buying a first home is now 33 per cent less affordable than it was 10 years ago, and that first-time buyers accounted for just 29 per cent of all buyers last year—a fall from 50 per cent in 2001. In addition, 55 per cent of all mortgage lending is to homeowners borrowing against the value of their existing homes and, incredibly, that 50 per cent accounts for 50 per cent of the rise in consumer spending. From this we can infer that a sizeable proportion of mortgage debt is being used to fund either day-to-day living expenses or lifestyle choices.
The reverse side of the debt coin, saving, exhibits similar properties. The savings ratio has halved under the current administration. According to the Family Resources Survey, 27 per cent of households have next to no savings at all, and a further 23 per cent have savings of less than £1,500. Charles Bean, the Bank of England's chief economist, has noted that one-third of British households have virtually no liquid assets to draw on if the need arises. In the six years from 1998 to 2003, the household saving ratio has never been higher than 6.7 per cent; in the previous six years to 1997 it was never lower than 9.3 per cent.
By all available measures people are saving less and borrowing more than when the Government came into office, which, as reflected in the statistics, is causing increasing problems. Some 1.5 million new consumer debt problems were brought to Citizens Advice Bureaux during 2001–02, a 50 per cent rise on 2000–01. Inquiries to CAB about consumer credit and debt have gone up 46 per cent during the past five years. Twenty-six per cent of people struggle with debt repayments from time to time, and 11 per cent have more serious problems. Over 3 million households now rely on the services of moneylenders. Individual bankruptcies are at their highest level since late 1993, with those going bankrupt during the past year rising by nearly a third.
What is more, debt is impacting disproportionately on the most disadvantaged. The debt to income ratio is highest for the poorest households, where it has also risen faster than in any other group, doubling between 1995 and 2000. Households earning less than £15,000 are twice as likely to be in arrears than more affluent households.
Despite the commitment of the Chancellor at the 2003 Labour Party conference,
"to abolish pensioner poverty in this generation",
the proportion of pensioners living in households below 60 per cent median income before housing costs in 2001–02 remains relatively unchanged from 1994–95 levels. A MORI survey, published earlier this year, has found that student debt has risen by 74 per cent over the past four years, with students now graduating with average debts of £8,031, as compared with, according to the Government's own figures, £840 in 1995–96, £2,530 in 1998–99 and £3,210 in 1999–2000.
All in all, this is a curious, not to say surprising, legacy of the Government's protestations of "prosperity not for the few, but for the many". It is not as if the Government

317
have been suddenly blindsided by personal debt as a specific feature of the economy. As long ago as October 2000, the DTI convened a meeting with various financial institutions, prompted by research from the Citizens Advice Bureaux showing unprecedented demand for debt counselling, to discuss ways of stemming the growth in unaffordable debt. At the time Dr Kim Howells commented: "It's"—that is, personal debt—
"become a major concern to almost everyone, not just the people who are out there trying to give advice".
And yet, judging from subsequent responses, the Government have become ever more reticent, not to say blasé, about the matter. In March of last year, the Treasury Minister Ruth Kelly held out consumer debt as a badge of honour for, and almost a source of pride in, the Government's economic policy, stating:
"Growth in household debt reflects strong fundamentals with a robust labour market, low interest rates and strong gains in housing wealth".—[Official Report, Commons, 10/3/03; col. 21W.]
The noble Lord, Lord Sainsbury, reiterated this sentiment in his response to an Unstarred Question from my noble friend Lady Wilcox:
"Our stable macro-economic framework has delivered sustainable economic growth, with the growth in borrowing reflecting the strong fundamentals of the UK economy".
He added, for good measure:
"The economic success is to some extent fuelling the issue of consumer debt".
To be fair, the noble Lord did qualify his comments by stating that,
"this is an issue which the Government take very seriously. We are working to address the problem".—[Official Report, 21/10/03; col. 1582 col. 1582.]
In November of last year the noble Lord, Lord McIntosh, sought to offer a similar reassurance, when he said:
"The Government are alert to the risks"—
well that is all right, then—
"but debt at present remains affordable".—[Official Report, 11/1/03; col. 1209.]
Despite the way in which the figures for debt have surged in the intervening period, he added:
"I deny the inexorable rise of household debt".—[Official Report, 11/11/03; col. 1211]
Even the Minister has got in on the act. Last December he offered this analysis of the totality of the debt problem saying that,
"the ratio of debts to assets in the economy is still very healthy among households. The reason why people feel that they can push the boat out with regard to credit cards is because they feel wealthier … People feel wealthier because, objectively, they are wealthier".—[Official Report, 2/12/03; col. 184.]
Most, if not all, of these pronouncements share an odd feature. Paraphrasing Gordon Gekko in the film "Wall Street", they say, "Debt is good". They translate as exhortations to borrow. In truth, this should not surprise us unduly. As my noble friend Lord Saatchi observed in a similar debate some eight months ago,
"the Government have a vested interest in the continuation of the present build up of debt".—[Official Report, 21/10/03; col. 1580]
Paradoxically, the current booms in consumer spending and house prices are propping up the performance of the economy, and on the basis of the evidence this week from the CBI and the Halifax, neither is showing any signs of slowing. With that in mind, it is perhaps worth contemplating how Government policy interacts with the issue of debt.
I accept that the Government are not in the business of telling people how to run their own finances. Nevertheless, policy has a role to play in establishing the economic climate and sentiment in which they live their lives. Over the past seven years the Chancellor has conspired to introduce a whole range of measures—the removal of advanced dividend tax credit, the introduction of means-testing via the convoluted tax credit system, and so on—which act as disincentives to saving. In conjunction with this, the Government are throwing huge sums of public money at public services.
The Chancellor, far from continuing to ally himself with prudence, is funding today's spending from debt in the expectation of jam tomorrow. Irrespective of current affordability, there is a sense in which the psychology of public policy has shifted from thrift to profligacy. Perhaps we should not be surprised if, learning from the example, the public exhibits the same sort of attitudes towards saving and debt as the Government.
Moreover, if, as seems to be the case, the broad sweep of public policy is predicated on the concept that debt is good, there is scope for suspicion that this is motivated as much by requirements of political expediency as a wish to sustain the economy in robust and vigorous health. We are in a significant electoral period and there are those, not least the Item Club, who suggest that the Chancellor has deliberately engineered the current debt-funded pre-election boom.
The Minister will no doubt insist that Bank of England independence pre-empts this. As we all know, the Monetary Policy Committee is statutorily required to consider interest rate policy within the limits of the symmetrical inflation target. It cannot deviate outside these bounds other than in exceptional circumstances. Accordingly, it is in a somewhat anomalous position: because it is tied to measuring inflation with CPI rather than RPIX, it is obliged to ignore council tax and all other housing costs. House price inflation is, of necessity, a closed book to it.
George Trefgarne, writing in the Daily Telegraph last month, is particularly robust in his criticism. He said:
"Of all the scandals involving this Government and its manipulation of numbers and targets, the fiddling of the inflation target is quite the most reprehensible … It is precisely because of this fiddle that the house price and credit spiral has suddenly become so political".
In a subtle and roundabout way, the independence of the committee to set interest rates according to the prevailing circumstances of the economy has been compromised with potentially damaging consequences.
By way of comfort to the Minister, I accept that some of the headlines and media reporting of personal debt in recent weeks have been overblown. Indeed, I have taken

319
due note of MORI's report last week on credit card debt. Certainly it is premature to assume that current levels of personal debt presage an impending crisis. Nor do I envy the Government their task. Consumer confidence as a major plank of the economy is a fragile and fickle phenomenon at the best of times. Nevertheless, there does seem to be growing evidence that current levels of both debt and house prices are unsustainable. As Ken Rogoff, the International Monetary Fund's chief economist, has said:
"Forty per cent of all housing booms are followed by busts, with housing price drops that typically average 25–30 per cent".
Nor should we be immune to his explicit warning that,
"the long boom in house prices—up 28 per cent in the US since 1996, and 70 per cent in the UK since 1994, adjusted for inflation—put them in danger territory".
As we all know, other eminent commentators have issued similar warnings, not least Sir Andrew Large, the Deputy Governor of the Bank of England. It would be irresponsible to ignore them. To do so would be to run the risk of engineering the "bust" to the current "boom". How hollow the Chancellor's words would sound then.
My time is up. That being so, I very much look forward to the contributions of other noble Lords during of debate. I have no doubt that they will elaborate on some of the themes—and, doubtless, others—that I have outlined with much more eloquence and expertise than I can muster. I beg to move for Papers.
6.33 p.m.
Lord Campbell of Alloway: My Lords, the problem is the build-up of debt and the shift from thrift to profligacy. But the main object of this speech is to clarify the approach to the retention of control of our financial and budgetary affairs—a matter of national interest affecting the state of our economy—which already has become a sharp political issue.
As a subsidiary matter in context with the levels of personal debt and mortgage debt, recently the question has arisen of whether the Government's proposal to amend the Consumer Protection Act 1974 to clarify APR—or, in ordinary English, the total cost of credit—would have little effect other than to confuse and increase the cost to consumers. On this, it is not proposed to comment.
To revert to the main object, the introduction of my noble friend Lord Northesk rightly affirmed that fiscal and monetary control is unitary in the sense that measures to adjust the level of household and government debt not only interact but have an effect on taxation, on inflation, to which my noble friend referred, and on the economy, to which he also referred.
Albeit that no noble Lord with former practical experience as Chancellor of the Exchequer is to speak, at least we are to have the benefit of the expertise of the noble Lord, Lord Skidelsky, and the other noble Lords whose names are down to speak. My noble friend Lady Noakes speaks from the Front Bench on Treasury affairs, which are totally within the remit of the object of this speech.
320
The hope is that the timely introduction of my noble friend, for which we should all express gratitude, will herald a fully fledged, prime-time debate on the draft EU constitution, but before the conclusion of the negotiations. The question arises whether the unitary fiscal and budgetary control is to be retained or surrendered. The draft EU constitution—and this is no time to go into detail—broadly speaking, is a federal structure which appears to afford no veto in the national interest and leaves wide open the crucial aspect of conferral of competence, to which the noble and learned Lord, Lord Scott of Foscote, referred the other day.
Already some of the red lines that we read about—we have to say "read about" because no one knows what they are—have been erased. In this context, an assurance is respectfully sought that the Government shall retain budgetary and fiscal control unfettered by EU objection, imposition or sanction. If no such assurance can be given—and that may well be the case—what is the Government's approach to this retention of control? Perhaps, if he is able, the noble Lord, Lord Davies of Oldham, will inform the House. If he is not able to do so, it would be no cause for surprise.
But until the Government approach is known, it simply is not possible to formulate constructive opposition—certainly for those who, as at present advised, are not inclined to support the UKIP, which would take us to the brink without having seen the books. Albeit an issue of cardinal importance, there are always objections to a one-issue party.
Household debt, which is only one aspect of the problem of debt, is now about £100 billion. It is increasing, as my noble friend said, by £1 million every four minutes. In addition to the bank figures, there was £9.8 million mortgage debt in April and as yet no figures for May.
Your Lordships may think that the only way in which to put on the brake—and a brake must be put on—is to raise bank rates to over 5 per cent; perhaps further if need be, but initially by at least a step towards 5 per cent. That is a balancing act on the tightrope of bankruptcy, which has now topped the high watermark recorded 10 years ago. A vast area of imponderables has to be taken into account, including the extra burden on those who have borrowed at other than fixed rates. It is no easy exercise and I do not pretend that it is.
The Government handed over bank rates in a most curious way to the MPC of the Bank of England to control inflation without a remit to control household debt. That was the most dotty exercise that anyone could have conceived. They are now about to start to redress the situation by what we hope the MPC will do tomorrow. The main long-term beneficiaries of the situation appear to be the financial institutions.
Government debt has risen to £13 billion, notwithstanding 66 stealth taxes since 1997. It is not known what action should be taken other than to increase taxation or whether the Government intend to take such or any action. Can we continue to borrow and spend much more and avoid an increase in

321
taxation—the theory proposed by Maynard Keynes—and what will the City take in terms of government debt beyond the current figure?
Has the frail thread of confidence been stretched too far? I can ask those questions but I am unable to answer them. I do not have the expertise. Fortunately, I am in a position to defer to the opinion of the noble Lord, Lord Skidelsky, and my noble friends who are due to speak and who have the requisite expertise in the area.
Retention of fiscal and budgetary control is not only requisite for the reasons already given, but also for the protection of the realm from those who believe it to be the will of God to destroy themselves if in the process they can destroy us.
There has to be an immediate long-term continuing massive financial commitment, which the Budget has to bear and take into account, not only for the defence, intelligence and emergency services, but for the British Council, diplomacy, the World Service and aid for the rehabilitation of those deprived of their homes and human dignity assailed by deadly high-tech weaponry that they do not possess.
6.45 p.m.
Lord Skidelsky: My Lords, I am grateful to the noble Earl, Lord Northesk, for introducing the debate and giving us a chance to discuss a topic that I know arouses strong moral feelings. My wife cannot be the only person in the world who believes that an overdraft is the first step on the road to ruin—a view seemingly backed up by today's sad story of the young father who hanged himself because he could not pay back the £70,000 debts he had accumulated on 19 separate credit accounts.
The story reminds one of the marvellous Victorian moral tale Eric, or Little by Little, that I read as a child. The speeches of the noble Earl, Lord Northesk, and the noble Lord, Lord Campbell of Alloway, seemed to have a little of the same flavour: little by little on the road to ruin.
What are the facts of the case? The annual growth of total lending to individuals runs at 14 per cent compared to average annual earnings growth of 4 per cent. The rate at which households are incurring debt is rising three times as fast as their incomes. That is the central fact for those who claim that the current rate of growth of debt is unsustainable. I know that there are other figures with which we can be dazzled, but those seem to be the crucial ones.
The rate of household borrowing is strongly associated with house price inflation. The majority of personal debt is mortgage debt. Since personal disposable incomes are rising at less than half the rate of house prices, this suggests, in the words of the Monetary Policy Committee,
"that household income gearing [is] likely to rise over the next few years towards levels last seen in the early 1990s".
That could increase the vulnerability of the bottom end of the household sector to any rises in interest rates or unforeseen shocks.
322
Such facts are used by those who claim that levels of personal debt are rapidly becoming unaffordable or—in the jargon—unsustainable and that a rise in interest rates is needed to curtail them. I hope that I am not a Pangloss. I agree that there is meaning in talking about unsustainable levels of debt, but the fact that debt is expanding faster than incomes does not mean that it is becoming unsustainable. It may simply mean that the sustainable level of debt has been rising. That is largely what has been happening.
What grounds do I have for saying so? First, Britain has enjoyed unprecedented macroeconomic stability for the past seven years; not just high and stable levels of employment, but stable growth of earnings. There are two main reasons. The first is the macroeconomic framework established by the Chancellor of the Exchequer, by which I mean giving responsibility for setting interest rates to the Bank of England and establishing credible fiscal rules.
That was a bold, even revolutionary step at the time, and it has paid off by making policy much more predictable. One of the advantages of being on the Cross Benches is that it is much easier to give credit where credit is due.
Secondly, the British labour market has become much more flexible. For that the Thatcher labour market reforms must take most of the credit, although the decline of manufacturing has also played a part by dampening certain cycles that made our economy less stable. The proof is that since 1997, the British economy has survived a threefold increase in oil prices as well as a substantial rise in the sterling-euro exchange rate with scarcely a blip. Contrast this with the experience of the 1970s when a fourfold rise in the price of oil produced a massive stagflation. The contrast is overwhelming.
The result has been that we have enjoyed not just greater security of income but also more predictable growth of incomes. That is the background against which a higher sustainable rate of debt creation has emerged.
There are other factors: the banks have become more expert at assessing the creditworthiness of potential borrowers. That has made it safer not only for people to borrow but for banks to lend. It is not just that the demand for credit has been growing—the supply of credit has been growing as well.
Thirdly, there have been important changes in the way in which the consumer market works today. The essential one is that you can now spread payments over a longer period, making a purchase more affordable. For example, before, you would have to put down a large deposit to buy a car and pay off the borrowing during the lifetime of the car. Now you can make a constant stream of payments for a succession of cars—in effect, a leasehold system. You own the car but pay only for the cost of its use, which means that the sustainable amount of borrowing for any level of income has gone up.

323
Finally, a large number of people have assets other than income out of which to pay service charges on loans. More than 60 per cent of householders are now house-owners. If you have wealth, small changes in your income do not matter so much for your consumption. Technically, possession of wealth makes borrowing more sensitive to income changes. When your income falls, you do not reduce your consumption but you can borrow more. If wealth is rising, consumption can rise too, regardless of income, which basically means that you can borrow more.
Last month's minutes of the Monetary Policy Committee implicitly accepted the main proposition I am advancing—that the sustainable level of borrowing has gone up—when it said:
"Bank contacts with the major lenders … suggested that most borrowers could service their loans at a significantly higher repo rate, provided that unemployment did not rise materially".
There is another interesting feature of today's loan market, which needs to be teased out from a rather paradoxical set of statistics. Studies show that the level of household debt is closely associated with the level of household incomes. How does this square with the fact that debt has been rising faster than earnings or incomes? It is partly due to the fact, as I suggested, that the sustainable ratio of debt to income has been rising. But I suspect that it reflects something else as well, which is that some groups are increasing their earnings far faster than the national average, while the earnings of other groups are increasing less than the national average. In other words, the distribution of income is becoming more unequal. That would partly explain the growing gap between the rise of debt and the rise of incomes. I think that the relationship is extremely interesting and deserves further exploration.
The conclusion of my argument is that we ought not to be too gloomy about the growth of household debt. It does not reflect the collapse of prudence or the decay of civilisation or, more mundanely, even relentless advertising by credit card companies, but merely the fact that with greater security of income, more stable income growth and a wider distribution of home ownership, people can afford to borrow more.
Our public rhetoric, however, continues to emphasise the evils and dangers of falling into debt. Indeed, there has been some evidence of that in this debate. This rhetoric obviously reflects deep-seated moral attitudes. However, the contradiction between our rhetoric and the reality makes it very difficult to have a coherent debate on such topics as top-up fees for universities, for example. The noble Earl, Lord Northesk, mentioned student debt, but the very people who worry about the burden of student debt would not think twice about borrowing much larger sums for other purposes.
The point about borrowing is that it enables you to anticipate your future income. As long as the anticipation is correct, it makes sense to borrow against it. In today's world, increased borrowing is a sign of success, not of failure.
6.55 p.m.
Lord Selsdon: My Lords, it is always a great pleasure
324
to follow the noble Lord, Lord Skidelsky, as I have done from time to time. I shall probably sing off the same hymn sheet as him. When I first went to school, somebody hit middle C and said, "Sing it". I could not get it and they said "You just can't sing".
I really would rather be singing from the Labour Benches. I remind the noble Lord, Lord Davies of Oldham, that land prices in Oldham have been rising faster than almost anywhere in the country. He seems very lonely on his Bench. Since Wednesday debates are usually for Back-Benchers, I would like to make a point that I have made before. We might have a word with the various Whips to encourage people to speak from the Back Benches. I had asked if I could speak from the Minister's Bench today. I was told that under the rules of the House, I could sit there, but it would be deemed rather frivolous if I were to speak. So. I shall probably now make a frivolous speech.
Are we so indebted that we need to be worried? Are we on our way to Carey Street, which, as your Lordships will remember, is somewhere near the Old Bailey? We seem to go to the Old Bailey more and more for other reasons. From there, of course, we go to the Clink—Clink being the liberty that could be granted by the Bishop of Winchester. I went to school in Winchester so I have a moderate knowledge about this.
If we are in that position, the Government should have told us. Alexander Hamilton said that national debt, if not excessive, is to us a national blessing. Sometimes, to encourage or have growth, you need to have debt—you need to borrow and to beat the banks. For years and years, interest rates were way below the rate of inflation and the only way you gained was by buying fixed assets so that you beat the banks. We had no industrial growth and limited real growth in our economy.
My noble friend Lord Northesk, who is sitting behind me, staring down my neck, will realise that, being an ancient banker, my brief is dated noon today. Last month, the level of mortgage borrowing was £16 billion but there has been a fall this month. It is coming down, the new demands are lower, and mortgage debt is not as worrying as people feel. I shall try to explain why.
We are a house-owning nation, unlike much of continental Europe, which consists of lease-owning or renting nations. Throughout continental Europe, when people reached retirement age—I made this point in the Second Reading debate on the Housing Bill so I ask noble Lords to forgive me for repeating myself—people would put their savings into property which they would rent out, knowing that they were in control of their income and would have a regular income which would not go up and down according to interest rates. Noble Lords will remember the time when, in Switzerland, one had to pay 1 per cent for one's money on deposit. We were never used to having low interest rates, and we thought that savings would be safe in a bank. But you cannot live off your savings.
I had a very good friend, a wise old man, who said to me, "Malcolm, I have a worry about your government. When you Conservatives first came in, having sold my

325
business, I could live on the interest on the interest. The Conservatives managed to reduce inflation and bring interest rates down and, having paid for houses for my family, I found I couldn't live on the interest itself. So I had to invest".
This is what seems to have happened. Most of us realise that you cannot keep up with inflation when inflation is above interest rates—the returns from the bank are negligible. So where does the money go? Some of it went on the stock markets, but they have not performed that well, and a large amount went into asset-earning investments, particularly property. In parallel, one has seen an enormous growth in what is called the venture capital market. That is private money that says it can do better by going into private ventures than by going into a stock market.
That has distorted our attitude to debt and assets. Average unsecured debt is more than covered by financial assets in the case of a large chunk of the population. However, we have moved from being the cash society of maybe 25 years ago, when only a third of people had bank accounts, to a form of paper-transaction society where few people are paid cash wage packets each week and where 91 per cent of the population has bank accounts. That percentage has tripled in a short period.
One used to worry that banks took on people without following the historic rules that one must have good references. When I was sitting on the Committee of London Clearing Banks, I would complain that we should not allow people to open accounts unless the references were taken up. The banks would say that the references were not worth taking up. Noble Lords should look at the change. Now one cannot even open a bank account without one's application going to some security man in the United States and exposing everything. One's banking secrecy has disappeared. Almost any teller in any branch can look at what is in one's account and one feels slightly insecure. I am not saying that money is going back under the mattress, because it is not.
The distortion arises not just from the movement in payment to banks. People do not use banks in the way that they once did; they use plastic or cards. There are 125 million to 150 million cards in issue which go into a machine, which can withdraw money or which one can use for credit. In general, those are what we would call credit cards. Their holders fall into a number of groups. Most of them, surprisingly, pay off their debt each month automatically by direct debit. They know that they are inefficient and they do not want to pay the extra charges that would be incurred. Another group of credit card holders will use them to manage their affairs. When they are going on holiday, they will draw money out of the facility that they have. Almost everyone has a gold card now; platinum has run its course. I do not know what comes next. Those credit card holders will use their card to manage their affairs, sometimes quite efficiently, sometimes not so.
Then there is another little group which banks and credit card companies do not like. They switch credit cards every month according to when they get a free
326
deal and believe that they can make some money on arbitrage. The remainder of card holders, which make up only a relatively small number, often get into debt. That is where the biggest social worry lies. People who have never had a bank account before are now being sold credit on a vast scale. Twenty-five million store cards are now in circulation, where one is encouraged to open an account in the belief that free credit is on offer, but one does not necessarily pay it off. That is a cause for worry.
Noble Lords have already referred to people who are not used to the whole concept of borrowing and its consequences. I shall give just one of many examples that have been presented to me. A young man in his early 30s, with learning difficulties, decides that he does not want to have a bank account any more. He is unable to maintain a full-time job and is maybe earning the minimum wage. Within six months, because he has learned how to use a computer, he manages to open eight different accounts and obtain a borrowing facility of more than £12,000, of which £10,000 is drawn down with no way of repaying it. He sees another advertisement on the television from an organisation that claims that it will spread out his debt with no charge. He feels that he is secure, but all he is doing is paying a fee each month to that credit agency, which is extending the life of the loan and he is not aware of it. Then, when he finds that he cannot borrow any more money to live on and needs more money, he goes into a bank and asks it to help him become a song-writer. The bank tells him that he can have a business loan. Without interviewing him, it gives him a £5,000 business loan. When I followed the matter back with the many of the agencies and the people concerned, I found that such stories are common. I also found that many people who are granted such facilities are required to pay an extra amount for insurance. The lending agency, if I may call it that, is not necessarily totally exposed; it has cover and it does not have to worry too much.
My concern, therefore, is for the lower sector of those who are given credit. Some people are being sold credit. I am not suggesting that the Government should legislate, but I wish that people would look at all the advertisements that are being made. One sees 0 per cent on balance transfers being offered to people who are not aware of what APR is. In his reply, the Minister will no doubt tell me about the DTI's new study on APR. I gather that such a study is being organised, but I have almost forgotten what it involves. However, it would be nice if every offer of credit came with as big a health warning as does a packet of cigarettes. It should be wrong for organisations to be able to sell credit by direct mail, to gain access to mailing lists, or even to advertise it. That is radical, but such credit promotion is increasing levels of personal expenditure.
However, the ratio of household debt to expenditure is only 23 per cent, which is not desperately high. Our worries are greater than they need to be. My worry is not so much the level of consumer debt, but the level of hidden government debt or off-balance sheet debt. I am not a proponent of PPP or PFI, but when it defers any liability on government balance sheets, I start to worry. When I see that the Government are going to

327
build nine hospitals this year and 11 the year after, at vast expense, and when I see the expenditure that has to go on the railways, on the roads and on education, I am worried. The level of indebtedness there can rise.
I have no panacea, but I am just beginning to feel that we have a secure economy. The older generation is recognising that it cannot survive on savings alone, which is why we are seeing remortgaging or equity release. One is realising that as one's house rises in value, it takes one past £250,000 limit that can be handed on to one's heirs and successors under current inheritance tax rules. One says to oneself that it may pay in some way to take out a loan that will release equity and help one's children to buy their own houses or pay student fees. It is a round robin of debt.
I am not worried about it. I am just worried about the Government. I am worried about the consumer only in respect of the store credit cards. In general, I do not think that we shall all end up in the Clink. There are easier ways of doing that. As Kipling said:
"I am here in the Clink for a thundering drink and blacking the Corporal's eye".
The Government should realise that people historically got into debt on account of drink, and that governments got into debt on account of war. We have had an expensive war that is going to hurt the Government. The drinks scene worries me and an awful lot of people's eyes are being blacked. The Government should concentrate on what they were put in power to do, and not on surreptitiously increasing the level of taxation and expenditure. I am worried more about the Government than about the house-owner.
7.8 p.m.
Lord Northbrook: My Lords, I begin by declaring an interest as an investment fund manager. I thank my noble friend Lord Northesk for initiating this important debate. I slightly disagree with the rosy picture painted by the noble Lord, Lord Skidelsky, in his interesting speech.
My only disappointment is that the noble Lord, Lord McIntosh of Haringey, is not responding for the Government on such a major economic issue and that no Labour Back-Benchers have spoken or are in the Chamber. I had hoped that the noble Lord, Lord McIntosh, would be here, but I wish him well on his trip to an unpronounceable organisation in Paris.
This is a timely debate. It comes a week after April UK consumer borrowing figures revealed, as many noble Lords have said, that total secured and unsecured lending is now approaching the staggering figure of £1 trillion. That milestone is expected to be reached later in the summer. Other noble Lords have said that secured lending has shown the highest-ever percentage monthly increase, rising by £9.8 billion or 1.2 per cent in April. That total now stands at £810 billion, which, according to Bank of England statistics, is 82 per cent of the total lending outstanding to individuals. The not insignificant figure of £174 billion—the noble Lord, Lord Skidelsky, should take note—or 18 per cent, is categorised as consumer credit. Therefore, the figures show that the secured debt is more than four times the unsecured, but the unsecured is still a significant figure.
328
The difficult questions to answer are: first, do either the proportion or the actual levels matter? Secondly, should the lenders themselves be alarmed by this? Thirdly, should the Government do anything about the situation in regulation or legislation? I shall deal with each of those in order.
First, I turn to whether the actual level or proportion of debt matters. If the housing market continues to rise at the current rate, the secured loans will have a satisfactory level of cover. Even if the rate of growth of the housing market is less, at half the current rate of 20 per cent, there will not necessarily be a problem. However, in my view the real difficulties start when there is a sustained fall in property values. In the past this has occurred when interest rates have increased very sharply. At this time I have to say that that situation does not appear so likely, but there are some straws in the wind which could cause interest rates to be raised much more than expected. A sustained increase in the oil price would be one. It should be noted that this was the major cause of our inflationary problems in the 1970s. The inflationary impact of this now is much less than it would have been then as manufacturing plays a much less important role in our economy now and the share of goods in the CPI has fallen from 70 per cent to just over 50 per cent.
The next straw is the general increase in consumer spending. The Bank of England is focusing heavily on this, which is being financed to an extent by a mixture of mortgage equity withdrawal and consumer credit. I do not think that enough speakers have focused on the problem of mortgage equity withdrawal which, according to the Bank of England, is now running at about 8 per cent of household disposable income—up from nil per cent in 1997—that is, borrowing secured on property which is often used for consumer spending.
The other straw is the increase in average earnings, which is particularly evident in the private sector in the past six months. The public sector increases of 2002 and 2003 have reversed somewhat although this could still be a problem in the longer term. The combination of these factors, if they continue to increase at the current rate, could mean that we may well get higher interest rates than expected, thereby jeopardising individuals' ability to repay their debt.
So in reply to the question whether the proportion or the actual amount of debt matters, it is clear that if interest rates rise by an unexpectedly high level, house owners or consumers in debt may be caught out. The area in which they may be particularly caught out, as my noble friend Lord Northesk stated, is the buy-to-let market. Here there has been a huge expansion in the past few years as investors have borrowed at, say, 4½ per cent—which will be rising now—and have been able to let out the properties at, say, a 6 per cent yield while also enjoying a rise in the capital value of their properties. However, as more and more people have seen this opportunity, the net yields on property are declining. According to some commentators in central London they are now at the level of 4½ per cent. This

329
makes the mathematics much more difficult for the buy-to-let investor and there is a danger that this could be the first part of the housing market to collapse.
My second question is whether the lenders should be alarmed by the potential scenario that I have just mentioned. If they have lent sensibly on a cautious percentage of the value of the property—say, 60 to 70 per cent—there should not be cause for concern. However, anecdotal evidence suggests that the bad habits of the late 1980s are reappearing, and that even 100 per cent mortgages are being awarded by some lenders. According to the latest Bank of England inflation report, the ratio of house prices as a multiple of earnings stands at 5.7 times—well in excess of the historical average since 1952 of about 3.7 times. Again, as in the 1980s, this can lead to trouble if there is a major hike in interest rates.
The third aspect is whether the Government should be doing anything about the situation by way of regulation or legislation. While I do not believe that it is correct to interfere in the operation of the housing market, I think it is reasonable that the Bank of England should keep an eye on lending institutions and discourage the granting of 100 per cent mortgages. A publicity campaign could also be initiated on the dangers of borrowing a multiple of more than, say, four times salary. However, in my view, there is no need for legislation.
In my opinion this is not the case in the area of consumer credit. The debate in April in the other place on the Treasury Committee report on credit card charges contains much of interest on this topic. The honourable Member John McFall reminded the committee that it was 30 years since the passing of the original Consumer Credit Act 1974, and that they were still waiting for a review of it. The problems that he concluded needed to be addressed were several. The honourable Member said:
"First, important information is buried in the small print and written in technical jargon, which makes it extremely difficult to compare cards".
Can the Minister give the House any assurance that the use of larger print will become a regulatory requirement?
Then there is the problem of the annual percentage rate charged, or the APR as it is known. Providers are at present allowed to calculate the annual percentage rate—the figure most commonly used to compare credit cards—in more than one way. The honourable Member continued:
"The true cost to the consumer of different cards is concealed behind complex interest rate calculation methods, not taking account of the APR, and seemingly unreasonable charges are levied which are sometimes not specified in advance".—[Official Report, Commons, 22/4/04; col. 143 WH]
With store cards in particular he found a serious problem of lack of transparency. Will the noble Lord, Lord Davies of Oldham, confirm the promise made by the Minister in the other place to the honourable Member John McFall that a single method of APR calculation will be introduced by October 2004? There has been an announcement today but I have not had time to digest it. Several Members of the Treasury Committee
330
stated how at present it is calculated in different ways by different companies. The Consumers' Association, for instance, identified 10 different methods of interest rate calculation currently in use in the UK credit market.
Credit card company marketing practices also gave the committee cause for concern. Among these are the receipt of unsolicited credit application forms, some of which offered misleading credit terms. For instance, Barclaycard offered a,
"0 per cent for ever offer",
which the OFT chairman, John Vickers, concluded was completely misleading, and the promotion of it was stopped.
As the committee reveals, the amount of inquiries received by citizens advice bureaux about consumer debt has increased by 46 per cent in the past three years. I welcome the Government's establishment of the over-indebtedness advisory group and a cross-ministerial advisory group to look at the issues. I also welcome our own party's commission set up under the chairmanship of my noble friend Lord Griffiths of Fforestfach to study the whole issue of household debt.
Other major issues raised in the debate on the Treasury Select Committee report back in April were: clarifying the consequence of making the minimum payment, unsolicited increases in credit limits, not stating the rate of interest and credit card cheques. Of all these the last seems to be the most serious. Apparently, according to the committee, credit card cheques are sent to about 16 per cent of households—5 million in total—and almost every dispatch is unsolicited. If you are unwise enough to bank one of these, debit interest starts accruing immediately even before you start spending the money.
The main venom of the committee was reserved for store cards, which on average, according to the honourable James Plaskitt MP, charge as much as 30 per cent per annum, despite historically low levels of interest rates. For instance, the lending institution GE Capital has not cut its interest rates since 1999.
I want to ask the Minister about the relationship between today's announcement of a credit industry shake-up and the White Paper that the DTI has produced, which looks forward to a consumer credit market appropriate to the 21st century. The White Paper suggests that a lot of problems that the Treasury Committee has unearthed can be addressed through secondary legislation. What will change as a result? I hope that the Minister will answer that. Also, what definition of "responsible lending" will be used in implementing the White Paper's proposals? Does the Minister agree that the issuing of credit card cheques is not responsible lending?
Today's announcement—the standardisation of APR—is to be implemented through secondary legislation. I welcome proposals for the clarification and presentation of different interest rates, or a standard way of calculating interest rates on credit cards. However, consumer groups are worried that the changes are not enough. Doug Taylor, the Consumers' Association spokesman, said that it was concerned

331
that there would still be loopholes, particularly within the advertising regulations, which may be open to misinterpretation.
Although the Government are not positively encouraging debt, they are certainly discouraging savings by the withdrawal of ACT and the cutting back of the PEP and ISA limits. The scenario that I have painted is much less rosy than that sketched out by the noble Lord, Lord Skidelsky, and there are serious warning signs on the horizon of things that could come to pass if interest rates were to rise sharply.
7.22 p.m.
Lord Newby: My Lords, I too thank the noble Earl, Lord Northesk, for bringing forward the debate at this time. As a number of noble Lords have pointed out, we either have passed or are about to pass the point at which household debt reaches £1 trillion. Although that is an unimaginable figure in many ways and has no particular practical consequence, it may be an appropriate time to give some thought to whether it matters. The debate has demonstrated that there is no common view at all about whether it matters. We have two groups—the worriers and the optimists.
The worriers, who include the chairman of the FSA, point to record levels of household debt in relation to post-tax income—now 120 per cent, as opposed to 40 per cent in 1980. As several noble Lords have pointed out, four-fifths of that is secured against depreciating house prices, which, in relation to income, are at levels comparable to those just before the house-price crashes between 1973 to 1975 and 1990 to 1992. There is also growing evidence of debt distress in the form of record personal bankruptcies. The Bank of England's own analysis suggests that 10 per cent of debtors regard debt as a heavy burden, and that 20 per cent of those with unsecured debt are borrowing to service the loans. On that side of the balance, recent FSA figures show that 6.9 million families are having difficulties with their borrowing commitments—an increase from 6.1 million families the same time the previous year.
The optimists, of whom the noble Lord, Lord Skidelsky, is in the van among your Lordships this evening, argue that there has been a shift in the sustainable levels of debt for a number of reasons, which he enumerated. They argue that the debt-to-income ratio of debt holders is not deteriorating, that the debt-servicing ratios of households are at historically low levels, and that the relationships between secured debt and assets and between unsecured debt and financial wealth cannot depart far from historic averages. For their part, the banks claim to have learnt the lessons of the late 1980s and early 1990s, and to be very careful to assess their customers' ability to pay before making loans.
In a number of respects, both sides of the argument are right. The difference is about not current facts, but expectations of the future. The worriers emphasise that consumers are taking on debt on the assumption that employment will remain at recent high levels, interest rates will remain relatively low, income growth will remain strong and house prices will remain high. The optimists argue that those fears are misplaced.
332
There is also confusion in the debate, in that there are two distinct debt problems, both of which have been discussed. First, there are the minority of borrowers, mainly in low-income households, who are in severe difficulty with debt. Analysis shows that the most serious problems relate to unsecured debt and families in social housing. That is a very different problem from that of the home- buyer borrowing over the odds to get a foothold on the home-ownership ladder. Debt as a manifestation of poverty is a real issue.
The other debt problem is potential rather than actual. Continuation of comfortable balance sheets of households with big mortgages depends on the absence of a serious crash in house prices, plunging substantial numbers of people into negative equity. The optimists believe that house prices are being driven up by real and enduring scarcity in the housing market, caused by more and more people and households chasing seriously constrained increases in the housing stock. That was one of the main conclusions of the Barker report. They also believe that, barring some major unforeseen shock, policies designed to ensure financial stability will ensure low interest rates, low inflation and steady growth without a destabilising housing boom and bust.
The worriers take a different view—that, although Gordon Brown's estimable commitments to financial stability may work in aggregate, there can still be boom and bust in asset markets, of which in Britain housing is by far the most important. Just as stock markets see irrational exuberance, so do property markets. On the lending side of the market, a few aggressive lenders are undoubtedly pushing loan-to-value ratios and income multiples into hitherto uncharted territory, leaving their more conservative competitors lagging behind and faced with the dilemma of either following suit or losing market share.
Whatever the larger banks say about their assessment of potential borrowers, anyone who gets the flood of direct mail that I do, from all kinds of banks of which one has never heard and about which it is difficult to discover very much, cannot believe that they are acting with the degree of responsibility that the British Bankers' Association might wish. With such lenders about, there are undoubtedly ingredients for a potentially unstable asset bubble. It will be clear only with hindsight whether the worriers or the optimists are right.
It seems to the Liberal Democrats that the fact that we do not have the benefit of hindsight should not mean that we sit on our hands. A problem with the current situation is that the Bank of England worries about a potential house price bubble, but claims that it cannot take action to deal with it because its single policy tool—interest rates—is quite rightly focused on a much broader set of variables than simply house prices. The FSA, the Treasury, the DTI and the OFT all have responsibilities in the area, but there is a danger that primary responsibility is often not desperately clear. In

333
that is the danger that some measures that could be taken are left untaken, because everyone looks at everyone else to take it.
Therefore, I would like to make a number of suggestions that, whichever view one takes of the overall borrowing situation, could usefully be implemented. I have two suggestions regarding high and rising debt, as far as individuals, in particular those on relatively low incomes, are concerned.
The first relates to advice. A number of speakers have mentioned the increasing role that the citizens advice bureaux play in giving financial advice. But they are tightly constrained in what they can say and I believe that there is a need to establish a framework for providing independent, low-cost financial advice supported by the credit providers and the investment industry. The banks and the investment industry are already looking at that area and are doing something, but they are not doing very much and they are not doing it with any great urgency—and they could do more.
Secondly, it would be sensible to widen the remit of the social fund to permit an emergency short-term lending fund for low-income families in financial crisis. That would be a failsafe measure which, it is hoped, would not be needed in the vast majority of cases. However, as the case mentioned by one noble Lord about a man who committed suicide demonstrated, we are talking about issues that have fundamental impacts on the ability of households to live normal lives.
The second raft of changes that are needed relate to the way in which the banks operate. First, I agree with the suggestion of the noble Lord, Lord Selsdon, that there should be a credit health warning on the tidal wave of unsolicited credit promotion that we are all bombarded with. I am not sure what the research evidence is on the health warnings on cigarettes, but I cannot believe that it has no impact whatever. Secondly, regarding low-income households in particular, there needs to be a crackdown on exploitative loan sharks. It is an area that is very much within the remit and focus of the review of consumer credit, but as we have debated previously in your Lordships' House, the pace at which that review is being undertaken leaves much to be desired. It would be sensible if the often hidden penalties for the early redemption of debt were ended, because that would encourage people when they are in a position to reduce their debt to do so without incurring financial penalty.
There needs to be stronger enforcement of OFT rules to prevent abuse associated with misleading advertising by debt management and advice services and excessive interest rates on store and credit cards undoubtedly need to be more rigorously policed by the competition and trading authorities. There has been some debate about the proposals on simplifying APR and making that clearer. That is a sensible step, but I doubt whether it goes far enough. I hope that it would be possible one day to produce with every financial product sold the equivalent of the sheet that one receives when one obtains a medicine, to which the drug companies devote enormous effort. It describes what the drug is, what its ingredients are, what it might
334
do to you and what the side effects are. One does not have the equivalent of 20 pages of minute print in a packet of aspirin, but something that describes the key features of that drug. That kind of document is almost entirely lacking in financial services products—not least, because, while the drug companies have to go though immensely rigorous procedures to make sure that the information on that piece of paper is correct, that piece of paper is sadly missing in many financial services products.
Finally, there is the question of, as it were, macro management of credit, where we have three suggestions. First, we believe the Government should publish and monitor, along with the Bank of England and the FSA, measures of sustainable household debt along the lines of the Government's fiscal rules. The Government have clear rules about what should be happening to taxes. They should have equally clear views on what are sensible measures of sustainable household debt.
Secondly, there should be guidance to banks on safe loan-to-value ratios and income multiples for mortgage borrowers based on independent assessments of asset values by a group operating in a similar manner to the Bank's Monetary Policy Committee.
Finally, there is scope for the active use of reserve deposits to reduce destabilising boom and bust in mortgage lending. I realise that this last point is extremely controversial within the banking fraternity—indeed the Bank of England claims that in the multinational world in which we operate and in global liberalised capital markets it is virtually impossible to do that. But frankly, given that there is a raft of regulations of which the rules about solvency ratios are but one, it is worth looking at the option of adjusting ratios to reflect the state of asset markets and, therefore, the risk of loans.
There are a raft of proposals that we believe make sense, whether one is an optimist or a pessimist about prospects for household debt. I hope that the Government might adopt them.
7.36 p.m.
Baroness Noakes: My Lords, the timing of my noble friend Lord Northesk is immaculate. He has allowed us to debate the increase in personal debt at the very time that the debt is hurtling towards the £1 trillion mark—and many noble Lords have referred to that. It is not, as the noble Lord, Lord Newby, said important in its own right, but breaching such a major hurdle has a totemic significance.
I believe that this debate is important because the rising level of personal debt creates dangers for the economy in the short term, dangers for long term savings and it has particular dangers for individuals. The bottom line is that the financial well-being of our country is under threat. I am not too gloomy, but I am considerably more circumspect than the noble Lord, Lord Skidelsky, and I am an unashamed "worrier", to use the terminology of the noble Lord, Lord Newby.

335
I was slightly alarmed by my noble friend Lord Selsdon's introduction with his desire not merely to join the noble Lord, Lord Skidelsky, on the Cross Benches, but to cross the Floor completely and sit with the noble Lord, Lord Davies of Oldham.
Lord Selsdon: My Lords, that was only because I thought that he was lonely.
Baroness Noakes: My Lords, indeed. That was a kind thought of my noble friend, but I will say that when his speech was developed I was not quite so alarmed. That is not to say that I agree with all that he said, as he will find out as I continue my speech, but I agree with him about the build up of debt among those who are relatively illiterate in financial terms, which was also mentioned by the noble Lord, Lord Newby.
Secured lending has been growing at an annual rate which topped 15 per cent at the end of last year. That has contributed to house price inflation, which has been running at well over 20 per cent. The ratio of house prices to average annual earnings is now its highest in 50 years and shows no sign of letting up. Does that matter? I am sure that it matters to individuals. First time buyers find it increasingly difficult to afford house ownership, particularly in high cost areas such as the south-east—and we heard some of the problems that the buy-to-let market is causing in the housing market.
But as well as the impact on individuals it also matters to the economy overall, because the personal finances of those individuals are becoming more exposed to the cost of debt servicing. It has often been argued, as it has this evening, that the interest burden as a proportion of household income is at low levels and is considerably lower than in the early 1990s when house prices peaked. That is true, but the forward projection of total debt servicing costs, including principal repayments, prepared by the Bank of England, shows that with current interest rate expectations the ratio will rise and will possibly even exceed that experienced at the previous peak.
At that level, we could see a major house price correction. I do not say that it is inevitable that we shall have a house price bubble with the serious consequences that we experienced on the previous occasion. I agree with my noble friend Lord Northbrook on that. However, I do say that it is a plausible outcome and one about which I hope the Government have done some serious thinking.
The proportion of income which has to be diverted to service debt has an impact not only on house prices but also on the amount available for consumption. Since 1997, household consumption has been an increasing proportion of GDP, rising from 61 to 65 per cent in 2003, and that increase has shown no sign of abating. We can see a strong correlation between the growth in household consumption and the growth in secured borrowing and, in particular, in the levels of mortgage equity withdrawal.
The Chancellor's latest projections for GDP growth show that increasing private consumption will continue to be the biggest single element of GDP
336
growth. Let us suppose, just for the sake of argument, that householders thought that, with rising debt service costs, they had to borrow less and spend less. Even the Chancellor in the previous Budget conceded that the biggest downside risk in the UK was consumer spending. I suggest that it is quite plausible that fairly soon householders will hit a point at which they will check back on their spending and, therefore, potentially impact the consumption element of GDP.
The latest Budget arithmetic shows that the Chancellor's golden rule has a headroom of 0.1 per cent. If consumers spend less and if growth falls away, will the golden rule be breached; or, perhaps even more likely, will the golden rule be met but with further tax rises to meet the gap?
When the Minister responds this evening, I hope that he will say what levers the Government have to deal with rising debt. The Government have placed the most powerful lever—the interest rate—in the care of the Bank of England. The Bank of England remit, as we have heard, is to achieve a particular inflation figure, which the Government have perversely constructed using the index of consumer prices so that the impact of house prices is ignored, as my noble friend Lord Northesk has already pointed out.
The Bank of England is required by Section 11 of the Bank of England Act to support the Government's economic policy, as well as to achieve monetary stability. The Government are entitled, under Section 12 of the Act, to tell the Bank of England what their economic policy is. To date, the Government have chosen only to tell the Bank to achieve,
"high and stable levels of growth and employment by raising the sustainable growth rate and creating economic and employment opportunities for all".
Will the Minister say whether the Government continue to regard that as an adequate instruction to the Bank? Do the Government have no policy towards personal debt or asset prices to which they believe the Bank should have regard? My noble friend Lord Campbell of Alloway alluded to that problem. He also pointed out the extra problems that we would have if we yielded further control to Brussels, as the draft constitution currently permits. Perhaps I may be permitted a small digression along with that of my noble friend Lord Campbell of Alloway. That is, of course, another very good reason to say "no" to the euro. But let us return to the matter of personal lending.
I have dealt with the subject of secured lending, but the position on unsecured lending is much the same and it is also a real problem in the making. It is clear that unsecured lending growth has contributed to consumption, quite possibly at levels that are not sustainable. But my concerns about unsecured lending, which is a much smaller proportion of the total, have far more to do with the impact on individuals than the impact on the economy overall.
We know that the debt to disposable income ratios have been rising strongly and are now at 130 per cent or more—way above the previous peak a decade or so ago. I do not believe that that can simply be explained

337
by distribution, as the noble Lord, Lord Skidelsky, attempted to argue earlier. The increase is very much more significant than distribution would probably allow for, but I think that it is worth looking at in more detail.
However, the real problem is that the ratio is far higher for the poorest households, and it is those households that are most likely to be in arrears. They are the ones that are much more likely to be paying the high interest rates on credit cards and store cards. My noble friend Lord Northbrook spoke eloquently about many problems in this regard. Around 3 million households—an astonishing number—rely on the services of money lenders, who of course are not known for their bargain rates of interest.
As we heard from my noble friend Lord Northesk and others, the National Association of Citizens Advice Bureaux has been reporting a rising level of inquiries relating to consumer debt, and the statistics on arrears and problem debts are on a rising trend. Behind those statistics are human tragedies. The poor, in particular, find it easy to slip into debt levels which they cannot sustain. We were reminded of that recently when an 84 year-old pensioner managed to run up a £30,000 credit card debt, despite the fact that her pension was less than £80 a week.
I know that there are no easy answers on this. The response of my party has been to set up a Debt Commission, chaired by my noble friend Lord Griffiths of Fforestfach. The commission has only just started its work, and it is too soon to say what its findings will be. But I believe that the existence of the commission, which draws together both the commercial and voluntary sectors, is a constructive response.
The obverse of rising debt is low levels of savings. The Government have presided over a debt boom and a savings crash. The savings ratio is at about half the level of the one that the Government inherited. In the six years to 1997, the ratio was never lower than 9.3 per cent, but in the following six years it has never risen above 6.7 per cent and is now considerably lower.
The Government not only have no effective savings policies; they have also systematically set about undermining the savings culture that they inherited. We have the infamous £5 billion annual raid on pension funds, which is one of the major causes of today's pensions crisis, and that, in turn, has led to a loss of confidence in savings for pensions. The Government abolished the popular PEPs and TESSAs and replaced them with ISAs. But they worried about those becoming too popular and so they have now set upon a policy of squeezing them out of existence. The latest statistics show that they are, indeed, being successful in doing that.
I say to the Government that a set of policies that encourages personal debt while discouraging savings is the worst kind of short-termism. The Government might well get their GDP figures shored up in the short term but the problems that they are storing up for the future are considerable. They are, in my view, unbalanced and fundamentally unsustainable policies, and they are not policies that a Conservative government would pursue.
338
I cannot finish without reflecting on the role of the Government's economic management in setting the climate for personal financial decisions. The Government have embarked upon a debt-supported spending spree. We have seen the amount that the Government expected to borrow last year rise from the £10 billion forecast before the last election to £37.5 billion, as set out in the previous Budget Statement. The Chancellor expects to borrow another £157 billion over the next five years. That is without counting the off-balance sheet debt of which my noble friend Lord Selsdon reminded us. My right honourable friend Oliver Letwin has rightly described the Chancellor as the "credit card Chancellor". His Budgets are "spend now, pay later" Budgets. It is hardly surprising if the electorate follows suit.
Seven years of Labour Government have been characterised by economic prosperity, brought about in large measure by the strong economy that they inherited in 1997. But, in my view, that is under threat. If personal debt levels continue to rise, it will not take much to push our economy out of its comfortable trajectory. That will be bad for the economy and a tragedy for some individuals. Those are the dangers of which these Benches have been warning. To date, in reply we have had complacency from the Benches opposite. I hope that this evening the Minister will give a more convincing response.
7.50 p.m.
Lord Davies of Oldham: My Lords, the whole House is grateful to the noble Earl, Lord Northesk, for introducing this debate, which has provoked some interesting contributions. The division that has been identified between the gloom-mongers and those who are more optimistic is a fair analysis. My joy this evening is that what has always been defined as the gloomy science of economics has had the most optimistic and constructive perspective put on it from the outstanding economist present in the House, the noble Lord, Lord Skidelsky. At one stage I thought that he was going to render my response to the debate otiose. He covered so much of the ground.
In response to one point made by the noble Lord, Lord Skidelsky, on whether the distribution of income and resources has been skewed, and whether some are getting more rapidly better off and others poorer, I thought he might give us some credit for the numbers of children who have been taken out of poverty, which has been the result of constructive policies by the Government. We need to address ourselves to what has been recognised on all sides as certain extreme aspects of the economy about which we need to be concerned.
First, it is clear that low-income families are more vulnerable to loan sharks and to the high cost of credit than others. In a moment, I shall turn in more detail to the measures that have been announced today, and which were the subject of the contribution from the noble Lord, Lord Selsdon. I want to reassure him on that front. Secondly, I shall refer to the wider reaches of the lending industry and the necessity of reigning in some of that by making consumers more aware of their rights and providing clarity of information. I want to

339
comment on that in a little more detail. I believe that we are on common ground on those two points. Measures need to be taken and I emphasise that that is what the Government believe too.
On the more general issues, it would not be surprising to the House if I did not place myself firmly among, not the optimists but, the realists who recognise that this is a secure economy which has a base, as the noble Lord, Lord Skidelsky, identified, that changes the terms of some of these arguments. The noble Baroness, Lady Noakes, emphasised the problems of the decline in the savings ratio. Of course, there has been a decline. People feel more secure.
The reason why they borrowed under the previous administration was that they had to guard against the shocks and difficulties of an insecure economy, not least of which were the levels of unemployment at that time that could strip away a household's income. The fact that the people today are prepared to reduce their savings ratios is a reflection of the fact that they have faith in the Government's handling of the economy. They have the experience of certain aspects of the economy working very much to their advantage, not least, of course, the fact that we have the highest numbers of people in work that this country has ever known.
Although the contribution by the noble Earl, Lord Northesk, was on the more pessimistic fringe, he was very fair about certain aspects of debt—certainly on credit card debt. We should recognise that the vast majority of people who incur credit card debt, and who add to the total, meet their monthly commitments. They borrow at a negligible rate of interest—I am sure that this is a position shared by all in this House—and they borrow in an entirely responsible manner. They take out three to four weeks' credit and meet their obligations at the end of that time. That accounts for the majority of our fellow citizens. Although that may lead the noble Baroness to be dreadfully concerned about the overall levels of debt reaching proportions that we have not known before, that may be a reflection of the fact that people have security about the economy as a result of direct experience, and that enables them to take on such obligations without fear.
The noble Earl, Lord Northesk, also excoriated the Government—I cannot repeat his phrase with total accuracy—for shifting the inflation targets. The Government gave the Bank of England the new inflation targets—CPI at 2 per cent—to improve the quality of the targets and to help to ensure that inflation expectations in the UK remain in line with those in the euro area. CPI is a more comparable measure of inflation internationally. It represents international best practice. Adoption of the CPI enables a more direct comparison between inflation rates in the UK and the euro area. I do not believe that the Government have anything for which to apologise. It is not a matter of fiddling with the inflation rates at all, but choosing a more accurate, an effective and an appropriate measure.
340
The noble Earl also suggested that the Government were selling pensioners short. I have already mentioned that children have been taken out of poverty. Over 400,000 pensioners between 1997 and 2001 have been taken out of relatively low income, after housing costs. Pensioners are, on average, £13.50 a week better off with pension credit and other measures—than if the earnings link had been in place since 1997. The poorest third of pensioners are around £26 a week better off. So I refute the charge that the Government have not responded to the needs of pensioners. I can assure the noble Lord that the Government are certainly committed to ensuring that all pensioners are able to share in rising national prosperity.
Finally he suggested that the reason why individuals were getting into debt was because they were aping a profligate Chancellor. I can assure the House that the Chancellor is not profligate, but is following extremely realistic perspectives. Tomorrow various elections are taking place and there may be a number of shocks for established parties, as is being reflected in the press—I notice the anxiety on the other side. But what is it about our present political culture that is often commented upon? It is that individuals do not have the highest possible regard for their political leaders and leadership. Suddenly to suggest that the whole country is pursuing particular strategies with regard to household incomes because they are out to ape the Chancellor, is a very odd concept indeed. They would be acting with some probity if they followed him, but I doubt whether we are in a position to claim that particular form of emulation.
The noble Lord, Lord Campbell, put these issues into the context of the European Community. I was grateful for that. I am not in a position to deal with that in a debate that is so limited—we shall need another debate before we address ourselves to the fundamental questions of European membership to which he referred. Suffice it to say that, as far as the Government are concerned, our membership of the European Community is certainly showing us in a very strong economic light, often to the envy of our European colleagues.
We do not underestimate the fact that there are challenges ahead, but it is scarcely for me in this debate to respond to the issues of the European constitution. This was ground that the noble Baroness, Lady Noakes, was keen to drag me onto, but I feel I cannot do justice to that aspect of the debate given so many other issues directly related to the main topic before us.
The noble Lord, Lord Selsdon, was kind enough to suggest that I might be lonely on the Government Benches: who could be lonely when accompanied by the noble Lord, Lord Evans, as a helpmeet in these circumstances? I also heard what the noble Earl, Lord Northbrook said. We all miss my noble friend Lord McIntosh who normally responds to these debates, but he is unable to be here today. He cannot fulfil every conceivable obligation in government, so from time to time the House will have to put up with a rather doubtful substitute.

341
What I did appreciate about the contribution of noble Earl, Lord Northbrook, was his suggestion that there were limits to what the Government could do with regard to lending. He is right in those terms and it would ill-behove members of the Opposition to suggest that their position, having put their thinking-caps on, is that the only way we can extricate ourselves from what they define as a crisis, because of the level of our household debt—but which the Government of course deny is in those terms at all—is through a significant government action.
Baroness Noakes: My Lords, I thank the Minister for giving way. Can he remind me which noble Lord referred to this as a crisis?
Lord Davies of Oldham: My Lords, perhaps I have exaggerated by using "crisis", and I withdraw that particular word. I bring again as evidence into this debate the prospect the noble Lord, Lord Skidelsky, indicated he had already heard; namely, a certain amount of pessimism. All of that emanated, as I saw it, from the Opposition Benches. I do not think the noble Baroness did anything to lighten the gloom when we were able to have her contribution on that perspective.
I want to assure the noble Earl, Lord Northbrook, and also the noble Lords, Lord Newby and Lord Selsdon, that we have been concerned today to make announcements on the question of consumer credit. We certainly are taking steps to ensure that there is one measure of APR. I do not know how big the print will be that justifies this; but I do recognise the importance of the small print problem when people are not aware of the nature of the contract that they have signed.
Our announcement today is concerned with producing the first move in a set of regulations in the Government's shake-up of the consumer credit market. It is only a first move and does not implement the whole of the White Paper. I was asked on one occasion in the House whether legislation would follow the White Paper: well, it may do, but we can do a certain amount of constructive good based upon the propositions in the White Paper through regulation. That is the aspect we have introduced today.
The new requirements will tighten up credit advertising so that consumers will be better able to compare products; and it will also introduce a standard way of calculating the APR, which will mean that when an APR appears in an advertisement it must always be more prominent than all the other financial information. The most basic facts will, therefore, be clear to the consumer.
I do not pretend that the latter will solve all the problems of consumer lending. We know there are the vulnerable and we also know that we could all become vulnerable to certain seductive literature submitted through the post. However, today we are introducing a clear approach to cardinal issues which are critical to the consumer. I give way.
Lord Campbell of Alloway: My Lords, I am grateful to the Minister for giving way and I shall not take long. Neither my noble friend Lady Noakes, nor anyone else, was suggesting—I certainly was not—that we are in a position of crisis. We were suggesting that unless something is done about the extent of debt, and done fairly soon, it will not be tolerable for the economy in the future.
Lord Davies of Oldham: My Lords, I am grateful to the noble Lord. He will have recognised that under the promptings of the noble Baroness I withdrew that term. Nevertheless, the noble Lord contributed to certain elements of gloom about the present position, which I want to refute. I want to refute another area of significant concern which was mentioned today; that is, the housing market.
There are problems with certain aspects of the housing market. Borrowing against an asset which is being enhanced does not appear to me to be a major problem in the economy, but we must certainly have regard to first-time buyers. That is why we commissioned the Barker review and from that have developed a whole series of proposals which will be brought to fruition to meet the mismatch between the demand for and the supply of housing.
We all recognise why it is difficult to generate a rapid response in terms of supply with regard to housing, but we also recognise that with the increase in the number of households—an important factor in regard to housing demand—we need to think more seriously about extending house building and house building opportunities. That is the burden of the Barker review and it is the basis on which the Government intend to act in order to relieve some of the pressure upon the housing market.
Against the background of a strong economy, judicious action to look after the most vulnerable and our concern as regards fundamental issues such as the housing market, I emphasise my view that the Government should not be complacent about personal debt. That is why action has been taken today in the way I have described. There is a whole range of other fundamental actions being taken by government. We are in the position which was summed up so much more accurately than I can by the noble Lord, Lord Skidelsky; namely, that, because of changes in the structure of the economy and legitimate changes among our people regarding expectation, what 15 or 20 years ago might have been looked upon as potential for very serious problems as regards the economy will not manifest in those terms. Far from it; what we have are aspects.
Let me give one obvious illustration. The proportion of homes repossessed by lenders is at a historically low level. The current position does not represent a very stark contrast with the position which I think the Official Opposition this evening were prone to describe. That was the position of 15 or 20 years ago with the appalling consequences of the housing crash.

343
I maintain that the strength of our economy is such that no such crash will be repeated this time. The Government are acting judiciously and are in control of the situation. We recognise that there is no room for complacency, and that action needs to be taken in certain crucial areas.
Nevertheless, we are also appreciative of the fact that alarm and gloom should not be spread against a background of a rising economy—one in which there has been considerable prosperity in recent years—where the majority of people take judicious decisions on the handling of their household incomes and wealth.
Lord Selsdon: My Lords, before the noble Lord sits down, I wonder whether he could help me—not necessarily today at this moment. I have been asked if I could produce a comparison between government borrowing and consumer borrowing on a like-for-like basis. Perhaps the Minister can send me a short letter stating, for example, that the level of consumer borrowing today is "this" and that the level of government borrowing is "that". It would be a sort of simple comparison, because both sides have a right to know.
Lord Davies of Oldham: My Lords, I am happy to give that assurance. I shall write to the noble Lord and make sure that all other contributors to the debate receive the same letter.
8.11 p.m.
The Earl of Northesk: My Lords, I am hugely grateful to all my noble friends—I still prefer to include the noble Lord, Lord Skidelsky, among their number—for their contributions to the debate.
It has been a delight to listen to everyone's comments. In fact, in contrasting the speeches of the Minister and the noble Lord, Lord Newby, and other contributions, albeit to varying degrees and from varying directions, I detected a degree of consensus. It strikes me that we are all agreed that of itself personal debt does not constitute an immediate threat to the economy. We are all much more concerned about its current impact in individual cases. Importantly, there are concerns as to what the potential outcomes of the current trends in the statistics, if sustained, might be.
To that extent the delineation of the noble Lord, Lord Newby, between the worriers and optimists was accurate. In so far as concerns gloom, it centres around anxieties as to whether the Government are properly focused on these trends.
Having articulated both sides of this coin to the benefit of the Government and the Treasury, tonight's proceedings have, I believe, been extremely useful. Of course, now is not the time to rehearse the debate in its entirety. Once again, I am hugely grateful to all noble friends who have spoken. It only remains for me to beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Human Fertilisation and Embryology Authority (Disclosure of Donor Information) Regulations 2004
8.13 p.m.
Baroness Andrewsrose to move, That the draft regulations laid before the House on 4 May be approved [18th Report from the Joint Committee and 8th Report from the Merits Committee].
The noble Baroness said: My Lords, we believe these regulations recognise changing times and changing expectations. They also deal with issues that are by definition sensitive and controversial and to which the Government have sought, after long and hard reflection, to do justice.
In 1990 this House agreed the current provisions for the information which the Human Fertilisation and Embryology Authority can give to donor-conceived adults. The provisions were right for their time. The 1990 Act enabled the HFEA to construct a register and provide the following limited information, if asked by a donor-conceived adult: whether the person might be related to someone they intend to marry; and, at age 18 or over, whether the HFEA's register showed them to be donor conceived.
Those were entirely sensible provisions in their day. But over the past 13 years it has become apparent that in adulthood some donor-conceived people find those provisions inadequate and insufficient. Some have said, for example, very poignantly that not being able to find out about their origins has left them with a gap in the way they see themselves, a gap in their identity, in their ability to tell their own story—and we are, after all, story-telling animals—and an inability to make complete sense of their lives.
By 2010, about 40,000 donor-conceived children will have been born—and by 2023, about 60,000 such children. This is an issue for the House today because in agreeing the provisions in 1990, Parliament anticipated the possibility that, as time passed, more information might be sought and might need to be given. The Act had a regulation-making power in Section 31 to enable us to do this, and for the past three years we have been considering and consulting how best to do so. We feel it is now time to end the uncertainty, to make good that anticipation and, in particular, to reflect the paramount rights of the child in these provisions as we are seeking to do consistently in many other aspects of law and practice.
There are two aspects to the regulations—nonidentifying and identifying. Under the regulations before us today, a donor-conceived person aged 18 or older will be able to obtain a list of non-identifying information about their donor from the HFEA if they ask for that information and if that information is on the HFEA's register—which began in 1991. Given the lapse of time, the first 18 year-olds will be eligible to ask for this information in 2010. By that time, the information on the register might be slightly limiting, depending on what the donor was asked to provide at the time of donation. In respect of donors who register with a clinic on or after 1 July of this year, a comprehensive set of non-identifying information will be collected from fertility

345
clinics by the HFEA. This is listed at Regulation 2(2)(a) to (h), and for example includes physical features, ethnic group, religion, occupational interest, and a pen portrait of the donor.
The second element in the regulations enables donor-conceived people born from gametes or embryos donated on or after 1 April 2005 to obtain identifying information about their donor from the HFEA when they reach age 18 or later. That is set out in paragraph 3, and includes the name, date of birth and last known postal address. We fully recognise that this is a highly sensitive issue. There is an ethical as well as a practical need to balance the rights of the child with the rights of the donors who make such an invaluable gift of life. We have concluded after an extensive public exercise and consultation that it is right that in the future donor-assisted young people should have these new rights. We have every expectation that they will grow up in loving and happy families. However, just as some other countries have concluded, we also feel that they should have the right to access information about their origins which will help them, if they so choose, to complete their life history.
Among the bodies which support the decision are the Ethical Committee of the BMA and many children's organisations. This means that the first 18 year-olds to benefit from that information will do so from late 2023. Let me emphasise that the commitment to past donors has been that they will not be identified retrospectively. We respect and will uphold that commitment.
What has changed since 1990 to make this provision seem so necessary? One thing is that there are some 25,000 donor-conceived children—2,000 are born a year—and we welcome that. Another important cultural change—partly because of the 1990 Act—is that the secrecy and even stigma surrounding assisted conception has faded. Many more people talk much more openly about assisted conception, including donor conception. We celebrate that, and recognise and share the distress that infertility causes. Assisted conception and infertility is no longer so much of a matter to keep hidden, though of course it remains a painful matter, very deeply felt. I also believe that public attitudes towards information and rights to information have changed dramatically. Information now is much more readily accessible than it was in 1991. Information about donors is held on a national database, the register of the HFEA. It is largely collected and stored by the HFEA, but donor-conceived people have no access to it. In a century where access to information is regarded as a personal and political right, this does not seem any longer to be appropriate. It has already proved to be a bone of contention—the Government are very likely to be challenged about the provision of information to donor-conceived people, as the Department of Health has already been in an application brought by Liberty. That application related to the provision of non-identifying information.
I say again, we have not taken this step without long and serious public consideration. We held a consultation exercise on non-identifying information between December 2001 and July 2002. That process revealed that there needed to be a wider debate on identifying information. These regulations reflect the outcome of this whole process. The responses to the public consultation showed that there was significant support for the non-identifying regulations. There is also considerable, but not universal, support for a move to identifiable donors.
Let me focus on identifying information since that is what I know noble Lords will want to address. Of the 237 responses received to the public consultation in 2002, 132 were in favour of removing donor anonymity; 70 were against; and 23 were undecided. However, we found that there were relatively few responses from clinics or donors. So, we carried out further work to assess the response of clinics. Forty-five clinics and 140 donors replied. Most, not all, of the clinics did not favour removing donor anonymity. I will come to the reasons for that in a while. However, a third of them made positive suggestions for recruiting identifiable donors in the future—more advertising, with a higher profile, and more and better information. One or two clinics were extremely positive.
In the light of that, I shall address some of the dilemmas that, I am sure, noble Lords will want to raise. First, will the change to identifying donors lead to a loss of donors, longer waiting lists and more pain for potential families? We recognise the importance of donor sperm or eggs for 7,000 or 8,000 patients each year. We know that clinics will need to recruit at least 200 identifiable sperm donors each year, perhaps double that. They will also have to recruit 1.100 identifiable egg donors. Of the 140 donors who responded, half said that they would be willing to donate again as identifiable donors, if they were able to. We know, of course, that many of them will not be able to, for a range of reasons, but it is a significant and encouraging response, as they were recruited on the firm understanding that they would be anonymous.
Secondly, although we recognise that there is likely to be a dip in donor numbers—certainly in the short term—evidence from other countries suggests that donor levels will rise again. After Sweden removed donor anonymity in 1985, there was a decline, but research indicates that the decline was later reversed. In Victoria, Australia, identifying information for all donors was required from 1998. A decline was reported, but now donor recruitment is at a level that meets the need. In New Zealand, there has been a voluntary system for identifying donors for some time, and new legislation has recently been introduced to remove anonymity. We are told that the consensus is that the legislation is highly likely to succeed.
The third reason why we believe that the recruitment of identifiable donors is achievable is that we are doing things differently. We are not aware of any other country that has removed donor anonymity alongside a campaign to raise public awareness and improve the

347
service. That step forward will put the recruitment and support of donors on a more systematic and reliable basis, which the clinics have wanted.
Since 1990, the National Gamete Donation Trust has become a central point of contact for people wanting information about becoming a donor, and we have funded it for several years. Additional funding has recently been made available for the appointment of a donor recruitment manager. That is a big step forward. She will work with clinics, with the HFEA and with organisations representing patients to improve services for donors and encourage recruitment. The manager is now in post, and we shall make further funding available.
We will accompany the transition to donor identifiability with a positive, proactive campaign for public awareness of the value of donation, so that we can help clinics to recruit identifiable donors. We are working closely with the British Fertility Society and the National Gamete Donation Trust. We are already discussing ways of using the media to reach potential new donors. Ultimately, we want to see a change in the culture around donation. We want a better service, which not only emphasises the value of the gift made but encourages a different profile of donors and provides additional support and status for donors and donor families. I am reminded of the great book by Richard Titmuss, published some time ago, on the gift relationship. He was talking about blood donation, but this is a gift relationship of a different sort, and we should value it.
We are taking steps to support clinics and their work. We realise that clinics cannot change from using anonymous donors to identifiable donors overnight. We have given advance notice to clinics of a transitional period from 1 April 2005 to 31 March 2006, in which clinics will be able to use sperm or eggs donated anonymously before 1 April 2005. From 1 April 2006, when the transitional period will have ended, donations will have to be used on an identifiable basis. There will be exceptions for gametes reserved for the creation of siblings for children already born, which will not be destroyed until the end of their storage period, and embryos created before 1 April 2006 from sperm or eggs donated anonymously before 1 April 2005.
One of the fears that has been raised is that parents might be deterred from telling their children that they are donor-conceived, but I understand that research soon to be published by Susan Golombok, Director of the Family and Child Research Centre at City University, indicates that more parents are planning to tell their child about donor conception—about 50 per cent intend to do so. The research points out that if parents act on this intention, obviously it is likely that some children, when adults, will want to have information about their donor. Some may wish to have direct contact.
The fear is that such willingness to be open will be compromised if families are afraid of a much-loved child breaking away to initiate a new and possibly destructive relationship, leading to distress and trauma to the original family. The evidence from
348
Susan Golombok's research is that there is greater emotional involvement between both parents and the child conceived by gamete donation than other children. It is a well researched piece of work and, I believe, extremely significant. That evidence seems to militate against such a general possibility.
At another level, I do not believe, at a time when there seems to be more openness towards relationships, that that trend will be reversed. We are living through a cultural change. We have seen such openness work successfully in recent years in relation to adoption. Research in Sweden, where donor anonymity was removed in 1985, showed that more parents told their children about their origins in the period 1992–97 than in the period 1986–92, and that about 50 per cent have told, or intend to do so.
A third source of reassurance comes from the fact that families will not be left to fend for themselves as they consider telling their child. There is a great deal more support available for families to assist them through the process, and there will be more in the future from organisations such as the Donor Conception Network who will put families in touch with each other and, I am sure, will be able to develop the services and support they offer, in terms of information, workshops and so on, in response to the challenge that will be placed upon them.
The fear that parents may be deterred from telling is related to another: whether donors will be deterred by what has been rather dramatically described as the threat of a knock on their door in 18 years' time. We are giving careful thought to what counselling services might be accessible to donors if a donor-conceived adult expressed an interest in contact. We would expect arrangements for being in contact to adopt the same values and principles as those we are developing through the adoption changes. Those changes were much more radical because they were retrospective, which the contact arrangements are not. There are many details to be worked out for the process to be put in place in 18 years' time. We have time to get it right, and I can pass on an invitation from my right honourable friend the Minister in another place to noble Lords to give their responses, experience and advice on these issues.
There are two points I want to make clear. First, donor-assisted children who want to seek out the donor will not be able to make any claims on them. The donor will have no legal, social or financial responsibilities. The second is a more intuitive comment. These children are, by definition, much-loved and much-wanted, and in those circumstances it is unlikely that they would seek wilfully to disrupt the donor's family life. There is some positive evidence: several donor-conceived children in the UK and abroad have traced genetic links through DNA testing. They have not acted, or been met, with hostility. In fact, I understand that much happiness has resulted. Over the past 12 to 15 years in New Zealand, donors have been accepted only if they were prepared to be identified to offspring in the future. In recent years the Sperm Bank of California has

349
provided the identity of its first donors to donate under its identity release scheme. We are not aware of any negative consequences that have followed from that.
We will take stringent steps in the regulations to ensure that donors and donor-assisted people have the fullest possible information and support in whatever decision they take. A donor-conceived adult wishing to ask for information from the HFEA might, for example, be given an initial leaflet for consideration or be offered appropriate counselling. Another possibility is that they might be offered non-identifying information first, before taking the decision to ask for identifying information. They do not have to ask for all the information, but it would be accessible to them.
As I have said, donors will be offered extensive counselling before signing up with a clinic to being identifiable. If a donor decides to proceed, his or her information will be passed to the HFEA for storing on its register.
I believe that these regulations are timely. Given that the issues are so difficult, they are appropriate, right and consistent with other aspects of the policy for children. With a strong effort by fertility clinics, sperm banks and support organisations, and with a campaign for public awareness, a better service and a more positive, open culture, I believe that we can steadily attract donors to meet patients' needs and protect the rights of children growing up in a future world where questions of identity are likely to be even more urgent than they are today. I commend the regulations to the House.
Moved, That the draft regulations laid before the House on 4 May be approved [18th Report from the Joint Committee and 8th Report from the Merits Committee].—(Baroness Andrews.)
8.30 p.m.
Earl Howe: My Lords, I thank the noble Baroness for introducing the regulations with her customary clarity and for the sensitivity with which she has addressed what are by common consent quite complicated ethical issues.
What gives rise to these regulations, however, is not at all complicated but very simple: it is the general principle that openness and access to information is a desirable thing. I think it is certainly true—and here I agree with the noble Baroness—that the climate of the times in which we live favours greater access to information, all other things being equal, than was the case 14 years ago when the HFE Act was passed by Parliament.
In tune with that thought, I am entirely sympathetic to the idea that no person who has been adopted should be denied access to his or her genetic identity or the information that goes with it where such information is readily available. It is a perfectly natural human impulse to want to find out about one's origins where for any reason these have been concealed. As a result, I have no difficulty with the proposition that donor-conceived individuals should
350
have access to non-identifying information about the person who donated the sperm or egg which brought them into being. Indeed, I have not heard anyone raise an objection to this idea.
It will probably be quite surprising to many people that there is no provision for this to happen already when the first donor-conceived individuals on the HFEA register reach the age of 18 in 2010. I, myself, did not previously realise, for example, that but for this order there would have been no provision for anyone to be given details of a donor's medical history or that of his family. That was a surprise to me. Indeed, there could be circumstances in which such information was relevant and important to a child before he or she reached the age of 18, and I am not at all clear why, if the need arose, these details should not be made available to him or his parents at any time. Perhaps the Minister could comment on that point.
The more difficult aspect of the order relates, of course, to identifying information. The main fear expressed about this, to which the noble Baroness referred, is that it will lead to a serious fall in the number of donors. The work that has been done by the Department of Health indicates that half of all donors—that is to say, existing anonymous donors—would have been willing to donate sperm or eggs if their anonymity were removed. That, so far as it goes, is mildly encouraging in that it indicates that there are at least some people who do not mind the idea of being identified even though they have volunteered anonymously. However, I would not have thought that it was enough to enable us to be confident about the supply of donations into the future.
This is a very important issue. About 2,000 couples a year depend on donors in order to conceive. I am aware of how deeply distressing it is for such couples not to be able to have children. If we are to continue to address their needs—as I believe we should try to do—we have a duty to make sure that we do not do anything which would seriously jeopardise the supply of donors.
The Minister mentioned that the Government intend to mount a campaign to boost the numbers of identifiable donors. It would have been more reassuring if they had carried out some proper market research on that score. I am not aware that they have carried out any beyond the straw poll that I mentioned, which cannot really be said to constitute research.
There is still a great deal that we do not know. At present, the recommended maximum number of live births per sperm donor is 10. We may find that identifiable donors are not willing to allow their sperm to be used for as many as 10 live births. Bearing in mind that the regulations will potentially allow all their adult genetic offspring to make contact at the age of 18, there could well be a limit to the number of people that they want to find knocking at their front door, as the Minister put it, in 18 years' time or later. That would be a perfectly understandable stance to take.

351
The trouble is that we have no idea whether, first, we can recruit the same number of donors that we have previously, or secondly, there is likely to be on average a smaller number of live births emanating from each of them. If, for the sake of argument, the average number of live births per donor fell from 10 to five, the recruitment of donors would need to double from present numbers. How achievable is that? I suspect that that was the reason why so many licensed clinics opposed the removal of anonymity.
Efforts will also need to be made to recruit more egg donors. A high number of eggs donated—although not more than a third of the total—come from what are termed egg-sharing arrangements; that is to say, where women in receipt of fertility treatment allow some of their eggs to be used to benefit infertile couples. We simply do not know how many women will be prepared to egg-share on an identifiable basis.
One consideration that may deter women from sharing eggs is that their entire medical history, including the fact that they were in receipt of IVF treatment, could become known to others at some future date. For many women, receiving IVF treatment is still a private and sensitive matter. Many may balk at donating eggs for that reason. If they do, their feelings should be respected.
The trouble is that if there is a shortage of egg donors, as there may be, some women will find themselves pressurised into agreeing to egg-sharing arrangements and may even do so contrary to their better judgment. I am concerned about whether that would be ethical and I hope that the Minister will tell me that it will be strongly discouraged in GMC guidance.
If there turns out to be a shortage of either sperm or egg donors, infertile couples will either have to wait longer or else they will go to where they do not have to wait. We could find some couples going abroad to purchase donor-assisted conception; perhaps to countries with less stringent regulation than we have here. I await to hear from the noble Lord, Lord Turnberg, if he is planning to speak—which I hope he is—whether he thinks that that is a possibility. If it is, we should be concerned.
We need to ask ourselves whether the gain to be derived from discarding anonymity is worth the pain that may ensue. I say "discarding anonymity", but of course it is not clear how many donor-conceived individuals will be in a position to exercise their right to discover the identity of their genetic parent. The exercise of that right presupposes that such individuals will be informed that they are donor-conceived.
The Minister spoke of recent research, which was extremely interesting, but a recent study showed that a high proportion of children conceived by donor are never at any stage told that that is how they came into being. We have no idea whether the regulations will have the effect of increasing secrecy or whether they
352
will make no difference. They may possibly do the former if parents are resistant to the idea that one day the child may seek out his or her genetic parent. It would have been useful to have some credible market research on that issue, alongside the other questions that I have raised, but we do not have any. We have only what one might call expressions of blind optimism, if that does sound too unkind. I do not think that that is an adequate basis on which to pass laws, especially laws of this nature.
The Minister spoke about the rights of the child being paramount. It is worth making the point that a child has no absolute right to be told about his origins. He cannot have, otherwise the regulations would have contained a provision to ensure that every relevant child was given this information at the appropriate time. So we are not talking of rectifying the absence of a right that is unconditional but about something that is desirable. Given that, I have to question whether it is wise to allow access to identifying information at this stage. Would it not have been much better to do so only when we were a little more certain what the consequences were likely to be? That would have been the responsible course. However, the Government have closed off that option, and I think that that is a mistake.
Lord Clement-Jones: My Lords, I, too, thank the Minister for a very thoughtful and persuasive introduction to the debate. If we were to vote on the regulations, it would be a free vote on these Benches. In a sense, I speak as an individual rather than on behalf of my colleagues, although I hope that I represent the views of a considerable number of them.
There is no doubt that we are debating an issue of considerable importance. Lifting anonymity for sperm, egg and embryo donors after 1 April next year is not something to be undertaken lightly. There was a very interesting debate in the other place. The noble Earl, Lord Howe, set the case against the Government's proposal and emphasised that a very serious debate needs to take place.
Effectively, we are setting considerations of the rights of the donor-conceived child, or certain principles relating to those rights, against concerns about the future supply of sperm and eggs for couples who wish to undergo fertility treatment. The bottom line is that I believe that, following the Government's consultation, the case has been made for lifting anonymity. As the noble Earl, Lord Howe, said, there is nothing between anyone, on any side of the House, on the non-identifying information. This debate is all about the identifying information.
Knowing who one's biological parents are is part of one's identity, and it is important to have that information, if it is available. I do not think it is relevant only on medical grounds so it is not adequate to have only the non-identifying information available.
A sense of identity is extremely important in these circumstances. To some degree, we can debate these matters rationally and scientifically. Having read a

353
great deal about the subject over the past few days, I feel that a sense of identity is at its core. It is difficult to explain precisely why that should be, but that is where I feel a lot of the argument lies. It is not necessarily a scientific thing to know where you came from, it is partly emotional. It has been said that roots are overstated but I believe that they are very important. There is a sense of loss and frustration when those are not known. It has been recognised, as the noble Earl, said, for adoption purposes. We made great strides with the recent adoption legislation, and I believe that the information should be available for those who are conceived as a result of the donation of eggs and sperm.
I was very much taken with a recent article on the Donor Conception Network website; the noble Baroness referred to the organisation. It adds up to the fact that people need to consider and recognise the long-term implications of their decision on donation. The Minister spoke about a gift relationship. It is of course a gift relationship, but it is a responsible one. That is the cultural issue at stake.
I was much taken by Walter Merricks's article, blandly entitled "Ethical Issues—Anonymity". He asked whether donors who cannot cope with the consequences should be donating. If potential donors do not want to accept the long-term consequences of their donation, is that because they are currently encouraged to think that their act is a simple, uncomplicated and unconnected one, with no consequences and so on? Of course not. We should be encouraging responsible donation. Ultimately, there should be no great conflict in that area. It is fair to remove anonymity, provided that it is not done retrospectively.
The noble Earl, Lord Howe, made a valid point about market research and the impact of similar changes in other countries. We need to know about that. Did the level of donation in Sweden return to former levels shortly after 1985? I do not know the answer to that question—I am sure that the Department of Health's research resources are far greater than mine in terms of the comparisons it can make—but I hope that that was the case.
The real effect for donor-conceived children will not be seen until 2023, but the effect on couples who may be faced with inability to undergo treatment could be seen much earlier. That needs to be set against the fact that we are speaking about some 220 sperm donors in any single year. Therefore, one of the big questions to ask is what would be the impact of the kind of promotional campaign about which the Minister has spoken. Surely it cannot be beyond the wit of the Department of Health or others involved to increase the number of donors beyond 220 in any one year.
There are other valid questions to which we do not know the answer. The noble Earl, Lord Howe, raised the issue of the recommended number of live births from each donor, which is currently set at 10. What will be the impact on that figure when the donations are no longer anonymous? How can we look into the
354
crystal ball on that? I suggest that we have to do our very best in promoting discussion and a change in culture in the way that the Minister described.
Of course I understand the reservations of the British Fertility Society and of several clinicians, not least of the noble Lord, Lord Winston, who is not here today. He has gone on record as being against the regulations. Those reservations need to be carefully weighed up, but if the Government are prepared to weigh in with a major campaign to persuade donors to come forward, that would go a long way towards satisfying the pragmatic objections.
We need a change in the nature of the culture of donation and indeed of parents. I have great respect for the researcher, Susan Golombok, in other contexts. I have not seen the research to which the Minister referred, but I hope that any campaign addresses not just the issue of donors and their willingness to donate, but also that of parents sharing that crucial information with their children at some future date.
There are a number of other questions to be asked. For example, what would be the budget for such a campaign? We have heard about the principle of the campaign, but what the advertising people call "share a voice" is hugely affected not only by the messages of the campaign, but also by the amount of money spent on it. It does need to be a powerful campaign.
Although the Minister was setting aside the counselling problem slightly for the future, we need reassurance on how that service would work and would be set up.
The transition to the new regime will be extremely important. It is also very important that if we make this change in the regulations today, we say that it operates from a certain date. There should be no resiling from the current anonymity of those who have donated on the understanding that it was going to be on an anonymous basis. That is very important as there is a great danger that once one set of rights is given, that situation could change in the future.
Having weighed up very closely—it is an extremely difficult area of ethics—whether the issue regarding future donors is outweighed by the principle that donor offspring should, where they choose, have knowledge of their genetic origins, I come firmly down in favour of the latter.
Baroness Warnock: My Lords, I greatly welcome the regulations. One of the declared aims of government is to provide equity between children who have been born by donor and those who have been adopted. As has been said, this has become increasingly important now that society as a whole is much more conscious of the importance to an individual of being able to see himself in a wide genealogical and genetic context than was the case 20 years ago. Then, the overriding consideration against supplying identifying information was the fear that the supply of donors would dwindle.

355
However, I believe that in any case, even if the supply dwindles temporarily, we need, as the Minister said, a culture change in our attitude to donation. This can be brought about by changing the view taken of infertility, male and female, and of the motives of those who donate, particularly perhaps those who donate sperm.
There is no doubt that in the past there was something surreptitious and slightly comic about sperm donors who tended to be medical students who needed money for a pint or something. There was something faintly funny about going off and masturbating and producing sperm and no one really liked to acknowledge that that was done.
However, as has been said, I think that a new kind of donor may well arise who quite definitely makes a donation altruistically. I say anecdotally that I have met three or four men in their forties with children of their own who have decided quite deliberately to become donors because they are filled with sorrow at the thought of what people suffer who really want children and who are infertile.
It seems to me that one should not be too horrified by the thought that five or even 10 people might turn up on the doorstep. Of course, they will not. If they want to find out who their father is in the case of artificial insemination by donor, they will take pains to find that out, and they may or may not want to make contact with that person. However, even if they do, it seems to me that often making contact with your genetic parents when you are an adopted child is far more controversial, and often far more difficult, than making contact with a donor, whether of eggs or sperm, because, after all, the child who is adopted had already been born, and was already given away by the genetic parents. The parents may well have other children and may want to forget all about the child. They may even have concealed its existence from everyone. There may be many cases where an adopted child making contact with his or her genetic parents is very traumatic and does not turn out well at all, whereas I think there is something much less traumatic about the very fact that you are a child of donation—you had not been born when you were, as it were, given away. You never were given away.
The most important thing is in general to overcome the aura of secrecy, which ought by now to have gone away entirely. If, as I believe, providing information about the genetic parent makes it less easy for parents to conceal from their child the circumstances of their birth, that must be nothing but good. If the child has a right to know, the parent who refuses to tell the child that he was born by a donation is really committing an offence. Therefore, the child ought to be accorded the right to know, just as adopted children are.
Secrecy about adoption has almost died—hardly any adopted children do not know that they are adopted—whereas there still are a very large number
356
of families who try to conceal from their children that they were born by donation. As the noble Earl, Lord Howe, said, that is partly to do with the still-remaining shame about infertility. Surely we have got over that since 1991. The Act did a great deal to bring the issues into the common domain. I am not sure that so very many people are ashamed to have received IVF; many of them, such as the original IVF people, are intensely proud that they did so. The same is true of male infertility, which is far more acceptable as a concept than it was 20 years ago when it was confused with impotence and people thought it shameful.
There can be no moral justification whatever in deceiving a child about the circumstances of his birth. It is a very awkward doctrine to enunciate, considering the number of children born by adulterous relationships. Nevertheless, it is deeply morally wrong to pretend that a child is the son or daughter of a father or mother who is not his or her real biological parent. To insist on pretending shows self-interest on the part of the parents—that they are interested in their own status, not that of the child. It may be deeply traumatic for the child, because children nearly always guess that there is something a bit funny about their birth if it has taken place by donation or they were adopted. To treat a child as though it were a toy or a pet—to suggest that it does not particularly matter where it came from because it is your child—is genuinely immoral.
The whole opening-up of the issue will encourage parents to realise that they must not conceal from their children the true facts of their origin. We all know that there may turn out to be medical factors that make it quite essential that they know. For instance, if the social father develops Huntington's Chorea, the child must be told that he is at no risk. Quite apart from those considerations, not to tell the child is simply to use it as a means to the parent's satisfaction—to refuse to allow him to see himself as the individual whom he is. On the grounds that that will be less easy in the new open atmosphere, I greatly welcome the regulations.
9 p.m.
Lord Alton of Liverpool: My Lords, it is well known in your Lordships' House that my noble friend Lady Warnock and I fundamentally disagree on the issue of the moral status of the human embryo, but on this occasion I am happy to stand four square with her in supporting these regulations, as far as they go. I shall return to that point in due course.
In 1990, when I served in another place, I argued that donor-conceived children should have the right to establish the identity of their biological parents in the same way as adopted children have the right to find out the identity of their birth parents. Of course, I regret that it has taken Parliament so long to recognise that the rights of a child conceived through artificial insemination and such technologies should he paramount, but I am glad that we have got there in the end. I do not think that such issues could be reduced

357
to a matter of market research, as the noble Earl, Lord Howe, argued earlier. The evidence is pretty clear—there was a report only this morning from the Netherlands which said:
"A new law that requires sperm donors to be identifiable has come into force in the Netherlands, resulting in a dramatic drop in the number of men coming forward to donate".
So we do not need market research to tell us what the consequences may be. The report continued:
"Women wanting to obtain sperm from Dutch sperm banks are now apparently facing up to two years on a waiting list, since even before the new rules took effect on 1 June.
The law, which was passed after 10 years of deliberation, says that Dutch fertility centres can no longer take anonymously-donated sperm samples, and stipulates that all donor-conceived children will be able to find out the identity of their biological father at the age of 16. One Dutch clinic, in Barendrecht, says that the number of sperm donors on its books has fallen, in anticipation of the new law, from 135 to only 15. Dr Jan Karbaat, from the Bijdorp clinic, said, 'I have just placed an advertisement for donors, but got zero reactions', adding that his clinic is considering offering payments for donations.
According to reports, a number of Dutch women who want to use donated sperm in order to have a child are crossing the border to Belgium, where donation can still take place anonymously".
So the evidence is quite clear. What we are doing tonight does not require market research. Nevertheless, what the Government are doing is right for the kind of reasons that the noble Lord, Lord Clement-Jones, has outlined. Although he knows that I fundamentally disagree with his party's decision to support as a matter of policy motions on issues such as abortion, embryo experimentation, therapeutic cloning and euthanasia, I greatly respect the position that he personally took in your Lordships' House this evening and I agree with everything that he said.
Section 13(5) of the Human Fertilisation and Embryology Act 1990 provides that infertility treatment should not be provided to a woman,
"unless account has been taken of the welfare of any child who may be born as a result of the treatment".
The noble Baroness, Lady Andrews, used the phrase the "paramount rights of the child". However, we have put ourselves into a pretty muddled and confused position over the 14 years since the legislation was first passed.
Recent cases reported in the British press—for example, a man who changed his sex, then entered a same-sex relationship, then had in vitro fertilisation, then decided that they would go to America to be able to screen out the baby in case it might be a boy and would allow the baby to be born only if it was female—illustrate precisely where we have reached as a result of the legislation that was passed 14 years ago and which we did not think through properly at the time.
The Minister in another place, Melanie Johnson MP, recently acknowledged that in the Standing Committee, when she said:
"The interests of the child come first".—[Official Report, Commons First Standing Committee on Delegated Legislation, 18/5/04; col. 5.]
358
Why is it then that these regulations do not operate retrospectively? If there is a principle here, then it is a principle and it should not just be about what happens to those who are born in the future. What about those who have been born in the 14 years that have elapsed? Why is it that a child born using gametes or embryos donated before 1 April 2005 will not be able to know the identity of his or her biological parents, whereas a child born using gametes or embryos donated after 1 April 2005 will be able to find out? That strikes me as inherently unfair and the noble Baroness, Lady Andrews, was right to remind us of the retrospectivity that is operated in the case of adoption. Why should the same principle not operate here? We cannot have it both ways. It is fundamentally illogical in what we are agreeing tonight. We do not need market research to tell us about the implications of this and we need to face these matters four square.
We shall create two classes of donor-conceived children. Surely it will be only a matter of time before a child born using gametes or embryos donated before 1 April 2005 brings a successful legal challenge under human rights legislation. If his or her interests truly are paramount, as the Human Fertilisation and Embryology Act 1990 provides, how can we deny the child the right to know who his or her parents are?
In their authoritative 2002 guide to the Human Fertilisation and Embryology Act, entitled Human Fertilisation and Embryology: Regulating the Reproductive Revolution, Robert Lee and Derek Morgan comment that the withholding of identifying information,
"may prove to be as unsustainable in practice as it is in all conscience. The present stance in terms of anonymity does little to encourage openness within the new family units that the legislation facilitates".
I wholeheartedly endorse those comments.
While reading the Standing Committee debate from another place, I was struck by how much time was spent on discussing the effects of these regulations on the donors, patients and fertility clinics, which of course have a deep interest in all this. But, important as those considerations are, one could not help but think: what about the children?
Many of the arguments against full and retrospective disclosure of identifying information fail to demonstrate sufficient regard for the child's welfare, as set out in Section 13(5) of the Human Fertilisation and Embryology Act 1990. They are more concerned with protecting the personal relationships and feelings of the biological and legal parents. Such issues should be resolved prior to couples seeking infertility treatments and prior to individuals agreeing to donate gametes and embryos. We must face this issue squarely in advance of people having such treatments.
During the Standing Committee debate in another place, concern was expressed about the potential impact that donor identification might have on donor recruitment—a point reflected in our debate tonight.

359
That must be a secondary consideration to the child's paramount interest in knowing who his or her biological parents are. I argued in 1990 that we risked creating multiple cases of identity crisis by denying answers to the fundamental questions: "Who am I?" and "From where do I spring?" Those are answers that every person is entitled to receive.
When potential donors are finally made aware that identifying information will be made available, that may help to impress upon them the enormity of what they are about to undertake. This is not, as my noble friend indicated a few moments ago, a matter of going along and donating sperm or even of being paid for doing so. We are all well aware—I raised it in the 1990 debate—of the cases of medical students who added a sum to their student grants by taking part in this activity without any thought of what they were entering into.
Either this is a moral and ethical debate or it is not. If, as my noble friend said, we reduce it simply to a question of materialism and consumerism and consider it to be on a par with going to the supermarket, I do not think that we shall do anyone any great favours.
I am extremely concerned to learn that the Government intend to mount a public awareness campaign. The Minister indicated that early next year we are to start telling the public about the need for, and importance of, gamete and embryo donation in an attempt to maintain current levels of donor eggs, sperm and embryos as a way of dealing with the concerns that the noble Earl, Lord Howe, mentioned during his remarks. I should be grateful if the Minister could confirm how much public money will be ploughed into that initiative. When she replies, perhaps she would also indicate what will be said in that advertising campaign about the duties and responsibilities that go with bringing a child into the world.
Egg donors, in particular, will be exposed to considerable medical risk, which can, as the Minister well knows, be life-threatening. I hope that she will confirm whether the Department of Health will be responsible for any deaths which may occur as a result of these treatments. What assessment has been made of the risks, and will that be alluded to in the advertising campaign? I consider it to be irresponsible for the Government to promote egg donation when it carries such serious medical risks. Those have not been referred to during our debate thus far.
A line of argument is being promoted—the noble Baroness, Lady Andrews, rather entrenched it this evening—that gamete and embryo donation are in the same league as blood donation. That is palpably untrue. With the latter there is minimal risk and the altruistic act helps to sustain and to save lives. The former, on the other hand, can involve serious medical risk and involves the creation of a human life which will in all likelihood never see the light of day, and which will be frozen or manipulated and then discarded in the course of destructive embryo experimentation.
360
Perhaps the Minister can confirm—the figures were given in an Answer in the other place a few months ago, so I am sure she will be able to confirm this—that more than 1 million human embryos have been destroyed or experimented upon during the past decade since this legislation was passed. However, only 4 per cent of all the embryos produced during that period have ever seen the light of day.
Therefore, I am deeply suspicious about the role of the HFEA and the clinics in the Government's proposed public awareness campaign. They are conflating the role of the watchdog and the burglar. Can the Minister confirm whether all the gametes and embryos donated will be used in fertility treatments? Members of your Lordships' House will have seen over the past few weeks that applications have already been lodged, so will they be used for yet more experiments to develop reproductive techniques that have nothing at all to do with even the therapeutic cloning to which your Lordships agreed two years ago?
I would like to know from the Minister whether those embryos will be used in research projects, particularly those involving embryonic stem cell research. I am sure that she will want to give the House the percentage figures that will be involved. The research industry has a vocal lobbyist in the HFEA and it desperately needs to get hold of gametes and embryos if its dreams for embryonic stem cell research are to be realised.
In this context the Government's public awareness campaign can, of course, be seen as timely. Of course, the use of adult stem cells carries none of the ethical implications referred to in the debate about embryonic stem cells. I welcome that and I believe that in that context good science, good medical practice and good ethics march hand in hand. Therefore, public money would be better spent on appropriate national health schemes such as education and research programmes which deal with the primary causes of growing infertility in this country, in particular the exponential rise in sexually transmitted diseases.
I would like to see the public funds allocated to natural fertility programmes that seek to work closely with couples to overcome the root causes of infertility rather than bypass those through recourse to donated gametes and embryos. The problem with donor recruitment that is envisaged when identifying information is made available should provide greater impetus for the promotion of natural fertility programmes. After all, according to the live birth rate for IVF programmes, it is still appallingly low at around 20 per cent. For the 80 per cent for whom years of treatment in futile IVF is in vitro failure, surely we can find an alternative. How much better it would be if some of the 600 babies who are daily aborted in this country—184,000 every year, some 6 million in the past 30 years and one in five since the legislation was introduced 30 years ago—could be given up for adoption, enabling 100 per cent—not 20 per cent—to parent a child. This country has been in denial about the efficacy and the cost of IVF and its implications.

361
Finally, I ask the Minister to clarify, if she can, the future of the Human Fertilisation and Embryology Authority. These regulations bear the name of that authority, but only last month the Secretary of State for Health, Dr John Reid, announced that in an effort to cut Whitehall bureaucracy there would be a 50 per cent reduction in the number of arm's length bodies such as the HFEA. Is the HFEA to be abolished or merged? We certainly need an answer to that question before we pass regulations of this kind.
While the regulations are welcome as far as they go, I do not believe that they go far enough. I do not believe that they address the far more important and deep issues that we have been denying for so long. Although the Government are doing the right thing, I believe that they are doing it for a lot of muddled reasons.
9.15 p.m.
Lord Turnberg: My Lords, like many other noble Lords, I too am strongly in favour of the regulations that give children the right of access to non-identifying information about their biological parents. Even more than that, I believe that it is essential that they can do that for a whole range of reasons set out in the explanatory memorandum and in the regulations. I support the question of the noble Earl, Lord Howe, about why children must wait until the age of 18 before they are allowed access to such information.
I would have thought it not unreasonable for them to have this sort of information much earlier. I also very much agree with the noble Baroness, Lady Warnock, about the need for children born in this way to have the information that they were indeed conceived in this way.
As regards paragraph 3 of the regulations, I am sorry to have to say that, despite the eloquence and persuasiveness of my noble friend Lady Andrews, I am much less persuaded of the validity of a right to identify a biological parent, where that parent no longer wishes to be identified 18 years downstream. There is a balance to be struck here between one individual's right to know and another's right to anonymity: it is not all one way. In other medical matters, we betray confidences and get round anonymity with great difficulty. We put up all sorts of barriers to prevent medical information, and information about oneself, getting out into another domain.
Let me give a couple of examples. Imagine the case of a young man, often a medical student—and here I rush to the defence of medical students—who, perhaps because he has seen the distress of infertile couples, decides to become a sperm donor. Perhaps, under the new regulations, he agrees now to give up his anonymity to any offspring of the donation. Then 18 years later when he is likely to be married, with a couple of children conceived with his wife, he is faced
362
with a biological child—or perhaps five, or 10—who he probably did not know existed. Having agreed originally, he may now feel quite differently about a new-found child, as indeed may his wife, and his children born to her. Some embarrassment, certainly, but much more importantly, a considerable stress may be put on the marriage. We know that nowadays 50 per cent of marriages are shaky anyway.
Then there is the sense of responsibility suddenly acquired. Currently no legal responsibility is envisaged, but who knows what may follow in 18 years' time? In any case, a feeling of some responsibility cannot be denied and financial responsibility may follow, all of which will add to the stress on his own family.
My noble friend Lord Winston, who unfortunately cannot be here today, has given me an example of the woman who donates her eggs to another infertile woman. Often the donor women are going through an IVF programme and the spare eggs are given altruistically to others. But many such women fail themselves to conceive with IVF and they then face the unhappy prospect of meeting a child 18 years later who is genetically half theirs but who they had never known existed. Again, that is a further stress on a childless couple who are likely already to feel deprived. Of course it is possible that some may be pleased with the news, but I fear that more will be most distressed.
It was said that potential donors will be counselled before being asked to agree to being identified 18 years later and then again later, but I believe that the young men will either run a mile or go ahead and live to regret it. Who of us, when we were undergraduates, could have predicted how we would feel in 18 years' time? It therefore seems likely that we will see a fall in the number of sperm donors in the immediate aftermath of the regulations.
Although the experience of Sweden and elsewhere suggests that the numbers bounce back, I suspect that those who come forward will be older and more mature. We would then be losing out on the healthier—I fear that it is the healthier—sperm which comes from younger men than middle-aged men. And all because it is said that children born after donation feel dispossessed. My noble friend Lord Winston tells me that the evidence from his clinics shows that those who feel this way are likely to be in a small minority. Yet the potential damage this change in the law may inflict on others has barely been examined.
Clearly, today is not the day to try to remove these regulations, but I believe that we need much more evidence and more research into the full impact on all participants, not just the children and the parents rearing the child. I hope that I can persuade the Government, at the very least, to support more research into the impact on donors and their families of the loss of anonymity and to reconsider this whole issue in the light of that research when the 1990 Human Fertilisation and Embryology Act is revisited, as I hope it will be.
Lord Patel: My Lords, I did not intend to speak, but hearing lots of my colleagues speak this evening has provoked me to do so. First, let me say that I support the Government on this Motion. I am also persuaded that the rights of children are paramount over the rights of infertile couples, or any other couple.
Bringing the law into line with that on adopted children is also correct, as my noble friend Lady Warnock said. I agree with all that the noble Lord, Lord Clement-Jones, said except that this is an ethical issue. To me this is beyond an ethical issue, it is a rights issue. It is about the right of children to know their biological identity.
I accept the arguments put forward very powerfully by the noble Lord, Lord Turnberg, about identifiable information being available. I have heard the arguments both from the British Fertility Society and my own college about how this change may create a problem, particularly with the falling numbers of sperm donors. The arguments and the examples produced by the noble Lord highlight that. I support the idea that more research should be carried out and that we should address the results of that research when we debate the matter further in due course.
However, today, all the briefs I have received from fostering, adoption and other agencies, the HFEA, the British Fertility Society and the college do not persuade me that this order should not be supported; and I support it.
Lord Mackay of Clashfern: My Lords, this is a particularly significant debate for me because I, along with my noble friend Lady Hooper, had the responsibility of presenting the Bill which became the 1990 Act to this House following the report of the noble Baroness, Lady Warnock, and her committee.
I recall that this particular matter—the identification of the donor—required a good deal of thought at the time. My recollection is that the main reason for adopting the stance taken in the Bill on this point was the belief that unless anonymity was afforded to the donors, the likelihood was that the system would never get off the ground.
It is now 14 years since that happened, but I think that there must still be a question about exactly what effect the change will have on the willingness of donors to come forward, particularly, as the noble Lord, Lord Turnberg, said, donors in the age bracket when their donations are likely to be the most valuable.
It is a difficult question. I entirely accept, and have always accepted, the importance and the paramountcy of the interests of the children. But unless a donor comes forward in a particular case, no child will emerge in that instance. So, in a sense, this is anterior to the question of the entitlement of the child because if there are no donors, no children will arise. That was the issue. At the moment I must say that I find it a little difficult to know the exact basis on which the Government are optimistic that this change will not seriously damage the programme in this respect.
364
The very fact they seem to be proposing a fairly extensive advertising programme suggests at least a fear that that this may have a contrary effect. The other point I think is worth mentioning—I think the noble Lord, Lord Turnberg, also referred to this—is the question of ultimate responsibility. In her very clear introduction of these regulations, the noble Baroness mentioned the fact that any legal liability is excluded, but of course such legal liability is excluded only by the terms of the Act. This regulation shows that the terms of the Act are not by any means like the laws of the Medes and Persians. Therefore, some degree of liability should arise.
I am entirely in favour of non-identifiable information being allowed and I agree with those who asked why wait until 18. It may well be very important in connection with some illness in the child much earlier than that. We have seen a good deal of development in relation to the genetics of illness, and the precise situation in that respect might be extremely important. I am not sufficiently technically aware of the situation to know to what extent non-identifiable information can produce sufficient detail to enable a clinician to deal with this particular matter, but in so far as it is necessary for a clinician to be able to deal with the health of the child, I would hope that the necessary information would be available.
At present, I think that the general view of those who have spoken is that these regulations will not be opposed, but I think it is right to express some concern about their impact. The fact that such a distinguished practitioner in the area as the noble Lord, Lord Winston, has concerns about the issue certainly makes me—as by no means a practitioner—rather concerned.
Baroness Andrews: My Lords, it has been a very distinguished debate and I am particularly glad that the noble and learned Lord, Lord Mackay, was here to take us back to the origins of these regulations. As we expect in this House, the dilemmas which are represented by the professions and people outside are well represented here. Although it is unusual for me to find myself not in agreement with my noble friends Lord Turnberg and Lord Winston—the latter could not be in his place—we do of course listen very closely to their views, as we listen to those of all who have spoken in this debate. It has been extremely thoughtful indeed.
I do not want to reiterate any of the detail, but will try to address the issues that have been raised. They have ranged fairly far and wide, but it seems that one of the overriding questions has been the issue of the shortage of donors. While noble Lords have welcomed the idea of a campaign, some issues have been raised about it. As the noble and learned Lord, Lord Mackay, put it, why are we right to be optimistic? Indeed, the noble Earl, Lord Howe described this as "blind optimism". In so far as our policy has to be evidence-based, I think that we have used the evidence that is available. This suggests that there may well be a temporary drop and we must be prepared for that. This is why we have put aside

365
£200,000 to be invested in the campaign in the first instance. Trying to draw in new donors and to make them—I address this point particularly to the noble Lord, Lord Alton—fully aware of their responsibilities is a very serious undertaking. Those responsibilities are greater now that they include the potential for being identified.
Apart from a campaign—and it is something which we have every intention of taking seriously——I should like to make some other points about the supply of donors. It is possible that fewer live births per donor will be permitted under the regulations. The noble Earl, Lord Howe, raised that issue. The number might he three or five, rather than 10, so we will need to increase the number of donors. Two hundred sounds like a small number of donors, but there is a high attrition rate, and there is a huge gap between the number of people who put themselves forward and the number of those eventually selected. It is a serious undertaking.
9.30 p.m.
Lord Alton of Liverpool: My Lords, before the noble Baroness leaves the issue of the campaign that is to be waged next year, I want to know the answers to my two particular questions about the cost of the campaign and whether it would emphasise the risks to women involved in egg donation.
Baroness Andrews: My Lords, I answered the question on cost: £200,000 has been set aside. As for the risks to women, every donor who comes forward for egg donation or sperm donation is told whether there are risks to their health. We will continue to do that.
Another reason why we can be fairly optimistic about our stocks of gametes is that, although it is hard to get the information, some clinics tell us that their stocks are high and that they have enough for a year and some tell us that they have stocks for more than a year. So, we have a temporary respite. We will, of course, liaise with the National Gamete Donation Trust to make sure that clinics are as fully prepared as possible. We also know that the technology is changing. I understand, for example, that, in Sweden, there are new technologies that enable sperm to be kept for longer. We are not going into an identical situation, and we can bring in gametes from other countries, provided that we can source them and identify them. So, there are other sources. I hope that that helps noble Lords to understand the background.
Several noble Lords raised the important issue of research. The research that I quoted is unpublished, which is why noble Lords will not have come across it. It is about to be published. The researchers are well prepared to do further work, and we will look at it with great interest. I take what the noble Earl, Lord Howe, my noble friend Lord Turnberg and the noble Lord, Lord Patel, said on that point. We recognise that, as the noble Lord, Lord Alton of Liverpool, said, there is
366
a need for more research on infertility, and we are putting increasing amounts into medical research as a whole.
We would consider whether there was a need to widen the scope of the 1990 Act to cover fresh sperm, if we needed to take such a step. The noble Lord, Lord Alton of Liverpool, spoke about how women should not be put under pressure to donate eggs. It is a fundamental part of the whole arrangement that people are not put under pressure. They are voluntary donations. When it comes to egg sharing and altruistic egg donation, a great deal of counselling goes on. I was not making a direct allusion between blood donation and gamete donation; I was simply commenting that the notion of a gift relationship goes back a long way.
The noble Lord also asked why the measures were not retrospective. Historically, donations have been made under conditions of the strictest anonymity, and we would break faith with those donors if we made the legislation retrospective. That is an ethical position that I think the noble Lord will accept.
I was also asked about the future of the HFEA. The noble Lord is right: there is a review of arm's-length bodies, including the HFEA. We will have to wait for the outcome, as the matter is still under consideration.
In relation to the details of the advertising campaign, we are developing that campaign by liaising with the National Gamete Donation Trust, the Infertility Network, the Donor Conception Networks and the clinics themselves, so it will be put on a sophisticated footing.
I was asked why we do not allow information to be made available to those under 18. The age of 18 is in the primary legislation and these regulations cannot address that. That is why the information will become available at that point.
The noble Lord, Lord Alton, asked whether embryos can be donated for uses other than fertility Treatment; for example, stem cell research. Embryos are donated with informed consent, and this must include informing the donor. It does include research, including stem cell research. I cannot give the noble Lord the figures he seeks, but I will certainly do so if I can.
I hope noble Lords will forgive me if I have left any other questions unanswered. I shall not reiterate what I have said. I am grateful for the support the regulations have received. We are acting in good faith. While I would not say that we are dealing with futurology, it is certainly difficult to know what the world will look like in 18 years' time. We have done our very best to keep faith with all the people involved in these provisions, but we cannot be expected to have all the answers. I believe that the changes achieve a balance of rights and interests and I am happy that they seem to command the majority of opinion in the House.
On Question, Motion agreed to.

Health Professions (Operating Department Practitioners and Miscellaneous Amendments) Order 2004
9.35 p.m.
Baroness Andrews Baroness Andrews rose to move, That the draft order laid before the House on 28 April be approved [18th Report from the Joint Committee].
The noble Baroness said: My Lords, I am going to cut short my speech, in view of the hour. I propose to write to noble Lords if they want further information about training opportunities, and so on. I shall whizz through as fast as I can.
The order will introduce statutory regulation for operating department practitioners—ODPs. It will strengthen public protection for patients undergoing operations by setting and maintaining in law standards of practice, training and conduct for this group of healthcare staff who are closely involved in the delivery of patient care. It will bring ODPs in line with their medical and nursing colleagues who work in the same area.
I do not know how much noble Lords know about ODPs. I knew very little, and I am very impressed with what I have learnt about the role they play. They are important healthcare professionals who have to ensure that every operation is as safe and effective as possible. Their work takes in the whole range of peri-operative care, from preparing anaesthetics right through to taking care of the patient when they are coming round.
The history of the profession goes back to the 1970s. I shall not rehearse it, but I will say that the qualifications over the years have changed as the role itself has developed. We have moved from an NVQ to a Higher Education Diploma in Operating Department Practice, which will come into operation this October.
ODPs are skilled members of the medical team, and they are important to ensuring the patient's recovery. Not only are they employed within operating departments, but they are also now being employed in accident and emergency and cardiac arrest teams. If we are to deliver a modern and responsive health service, we have to ensure that they meet national standards set by an independent regulator.
The order has the warm support of the Association of Operating Department Practitioners and the entire profession. But if they are to benefit from Agenda for Change, they have to be able to register by October 2004. Failure to do so could damage recruitment and retention of ODPs.
The protected title is proposed, as it is currently in use by practitioners and recognised by members of the public. We are not going to protect alternative
368
titles, such as "anaesthetic practitioner" or "surgical practitioner", since these titles are already in use and they reflect different roles. We propose to protect the single title of ODP.
The legislation also proposes opening a new part of the HPC register for ODPs. This means that there will need to be new members of the council—registrant, alternate and lay. This will increase the HPC from 12 practitioner members and 11 lay members to 13 practitioner members and 12 lay members. I am sure noble Lords will know that once ODPs are regulated they will have to pay fees of £60.
The order has been the subject of extensive consultation over three months and has attracted, I am pleased to say, broad agreement. The provisions of the order are compatible with the European Convention on Human Rights.
This programme has grown out of the order that set up the Health Professions Council in April 2002, which was designated with the power to regulate new professions that were currently unregulated. This is the first new profession to be covered in this way. It will be followed by applied psychologists in 2004; healthcare scientists in 2005; and psychotherapists and counsellors in 2007–08.
The effect of the order will be to bring ODPs within the remit of the Health Professions Council, the role of which is to set standards of proficiency, conduct, performance and ethics under Article 21 of the HP order; to set standards of education and training under Article 15 of the HP order; to maintain a register of those who meet the standards and are fit to practise under Article 5 of the HP order; to have a mechanism for investigating complaints; and to deal with registrants who cease to meet the standards by taking any necessary action. That, of course, will be the responsibility of the HPC's "fitness to practise" system.
I shall conclude my contribution at this point. I have available a great deal of detail about how we shall incorporate the Association of Operating Department Practitioners, which has brought the profession to this point. I pay tribute to it. There are 6,000 members already on the voluntary register. There are a further 10,000 outside it, many of whom share the same training and qualifications. We wish to make sure that such people are also registered because they have the right qualifications. To ensure that people who came into the profession early are able to register, grandparenting arrangements have been introduced to enable them to prove that they also have the right training and qualifications. I shall happily write to noble Lords about how we intend to achieve that.
With that very short explanation, I commend the order to the House.
Moved, That the draft order laid before the House on 28 April be approved [18th Report from the Joint Committee].— (Baroness Andrews.)
Earl Howe: My Lords, we welcome the order and I thank the Minister for her introductory words. Operating department practitioners have very considerable professional responsibilities for patient care and there can be no doubt that professional self-regulation under the umbrella of the HPC is entirely right and appropriate.
I do not have any comments of major importance other than to congratulate all involved in laying the groundwork for the order, including officials in the department and, particularly, the Association of Operating Department Practitioners. I wonder, however, whether I could ask a couple of subsidiary questions.
In any new move of this nature there has to be a managed transition. As the noble Baroness said, there are 6,000 practitioners already on the association's register but probably up to 10,000 ODPs who are practising but not registered. That is a very large number of unregistered practitioners. The extent of the professional competence of this latter, very large, group of people is a closed book. Some will no doubt have reached standards of competence which they can demonstrate readily and there will be little difficulty in admitting them to the new register; others, however, will need to be formally assessed and undergo the relevant training before completing a test of competence.
The trouble is that we simply have no idea how many individuals fall into the latter category. Is the Minister satisfied that the two-year period allowed in the order to enable unregistered practitioners to apply to become registered is sufficient to ensure that there is no disruption to the NHS? My understanding is that the standard training requirement for a practitioner is a two-year higher education diploma. Therefore, any delay on the part of unregistered practitioners in submitting their names to the HPC for assessment may result in large numbers being technically unfit to practise when the transitional period comes to an end.
Secondly, I understand that the title of operating department practitioner is to be protected, but no other title. I do not question that decision, but what is to prevent someone using the unregulated title of surgical practitioner or anaesthetic practitioner? What steps will be taken in the NHS to ensure that as far as possible those individuals employed to carry out the role of operating department practitioners are professionally entitled to use that name?
Thirdly, will the Minister reassure me that the ADDP will continue to fulfil a relevant role as the professional advisory body for the HPC in relation to operating department practitioners? I am a little unclear about the role it will have. Officially it will be for the HPC to define standards of competence and ethical behaviour and to devise appropriate education and training and to assess fitness to practise, but where
370
will the expertise on those issues within the ADDP be directed, and will it be retained there? What exactly will be its function?
Lord Clement-Jones: My Lords, I wish to join the noble Earl, Lord Howe, in congratulating the Association of Operating Department Practitioners. This is the first of the new professions to come under the Health Act 1999. Many of that Act's provisions were reasonably controversial, but it was agreed between us all at the time we debated the Bill that the provisions were a more satisfactory way of allowing the emergence of new professions by regulation rather than having to have primary legislation, provided that those new professions were prepared to come within the umbrella of the HPC.
The HPC is an interesting umbrella; a diverse range of professions nestles underneath it. As always, I suspect one of the key issues for new professions is inevitably—and I suspect it will be the same for the profession coming down the track mentioned by the Minister—so-called grandfathering, which means that there is a controversial area about the training requirements and so on. I do not wish to go much further tonight because of the hour, but I know that such issues are always controversial and I suspect that the Minister may like to say a little about it in her winding up.
I am interested in the reference to Agenda for Change and so on. One hopes that when such new professions are formed and placed under the regulator we will see flexibility and we will not see a new profession building a little regulatory laager; that it will continue to play a flexible role and an even more flexible role in the future, if that is what Agenda for Change is designed to secure.
While congratulating the new profession, I hope that it will not pat itself on the back and say, "This is what we do, our competencies are thus and we don't take a wider role". I hope that that is not the spirit in which it is going forward.
Baroness Andrews: My Lords, I have been impressed by the way in which the new profession has developed its competence and its skill over the past few years. I am sure that it will continue to do so. It is an admirable example of a flexible profession.
The noble Earl asked me three questions. The AODP will concentrate on being a professional body, developing the professional scope of practice, advising on training curricula to meet service and professional needs and providing membership services and developing specialist groups. It has no fear for its future. It probably has a very bright future with registration.
The noble Earl raised a serious point about not wanting to see disruption and dislocation in the service. He is right to be concerned about that. We believe that the two-year period is sufficient. The NVQ is running alongside the new diploma; we will not be recruiting to the NVQ any more, but there will not be a gap, as I understand it, between the two.

371
The noble Lord, Lord Clement-Jones, invented the term "grandfathering". The word is "grandparenting". It is a sign of the wisdom that comes with grandparents. The 10,000 people outside the scheme will have to prove that they have practised safely and effectively as an ODP for three out of the past five years. Some of them may have trained. Some young nurses, for example, have been in the health service for many years, and have an HND qualification. They have grown up through the system and continue to make very important and sometimes different contributions.
We do not want to lose those experienced, safe and effective practitioners just because they do not hold the most up-to-date qualifications. Obviously, the HPC must have safeguards in place to make sure that practitioners can have their training and experience assessed properly. They may be asked to undergo further training. We are trying to strike a balance
372
between making sure that those people are not lost to the health service while weeding out people who do not have that experience and training but may be able to acquire it in the future.
The education and publicity for ODPs and employers by the HPC, the AODP and the Department of Health will make it clear that only ODPs will be able to use the title. That will be the legal situation. Anaesthetic practitioners will not be able to use it, nor will the other practitioners referred to by noble Lords. It is a very clear requirement in the legislation.
I hope that that explanation satisfies noble Lords. We have taken this order rather faster than I anticipated. If there are further questions, I would be very happy to write to noble Lords.
On Question, Motion agreed to.
House adjourned at eight minutes before ten o'clock.