Lords Sitting of 3 March 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 Rochester.

Diabetes: Blood Glucose Monitoring
Lord Harrison Lord Harrison asked Her Majesty's Government:
Whether blood glucose monitoring guidelines for people with diabetes are applied throughout the United Kingdom; and whether they intend to enforce new guidelines issued by the National Prescribing Centre to primary care trusts which make reductions in the level of home-based blood glucose monitoring.
Baroness Andrews: My Lords, both the National Prescribing Centre and the National Institute for Clinical Excellence made it clear in the advisory information and guidelines which they issued respectively in 2002 that self-monitoring of blood glucose can play a positive role in enabling people with diabetes to manage their conditions effectively and constantly. That approach has been reinforced by the Diabetes National Service Framework, which places a strong emphasis on education, information and integrated care.
Lord Harrison: My Lords, given that testing blood sugar levels leads to good diabetic control and, hence, saves money for the NHS in the long run, will the Government issue new guidance to GPs and primary care trusts confirming their unambiguous support for home-based training? Will my noble friend also tackle the problem of postcode prescribing of test strips, as reported by Diabetes UK, of which I am a member?
Baroness Andrews: My Lords, I shall deal with the last point first. We understand that the guidance issued by the National Prescribing Centre raised some questions about the overall usefulness of self-monitoring through blood testing outside a programme of self-management and self-care. However, we want to emphasise that, when it is combined with educational support for patients, self-monitoring plays a very important—indeed, critical—role. That point was brought out strongly in the NICE guidelines. Any PCT which tries to discourage doctors from recommending the use of blood-test strips is, in fact, acting contrary to NICE's own guidance on this matter and, indeed, contrary to the most recent statements of the National Clinical Director for Diabetes.
I turn to my noble friend's first point concerning whether we would ask NICE to issue new guidelines. NICE reviews its guidelines on a three-yearly basis as
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a matter of course. It will be doing so in 2005 and will certainly take into consideration any new evidence.
Lord Clement-Jones: My Lords, the Minister's remarks about self-monitoring warmed up as she answered the questions raised by the noble Lord, Lord Harrison. However, has she had time to consider Mr Wanless's significant report, which emphasises the importance of self-monitoring and the benefits that can be obtained from it? Does the noble Baroness agree that the Department of Health needs to warm up somewhat unless it wants to pick a fight with the Treasury?
Baroness Andrews: My Lords, I should tell the noble Lord that I do not need any warming up; I am quite hyperactive enough as it is. But he is right to draw attention to the emphasis that the Wanless report places on diabetes. It made it a case study in chronic self-management, and rightly so because 1.3 million people are affected by the condition and it is possible that another 1 million have not even been diagnosed. The report emphasised the importance of self-management and self-care as part of the Diabetes National Service Framework. As my right honourable friend in the other place emphasised, it is important to give people the information to make the right choices.
Lord Maginnis of Drumglass: My Lords, I ask this question as an insulin-dependent diabetes sufferer. Can the noble Baroness say whether the Government recognise the devastating impact that diabetes can have on every aspect and every facet of one's life? Is there continued awareness of the benefits of education, early diagnosis and strict ongoing monitoring from the perspective of both the patient and the cost to the National Health Service?
Baroness Andrews: My Lords, I know that there are many experts in this House on the condition of diabetes. The noble Lord was absolutely right in everything that he said. It is a devastating condition which brings many different complications, although it is hoped that many of them can be avoided with preventive measures. The Diabetes National Service Framework placed a huge emphasis on the need for patient education. Indeed, the clinical director recently told us that self-monitoring and learning how to act on the results must go hand in hand if people with diabetes are to live healthy lives. Essentially, we are trying to put that preventive strategy in place.
Baroness Gardner of Parkes: My Lords, can the Minister clarify the position with regard to any guidelines issued by the National Prescribing Centre to primary care trusts, which are referred to in this Question? What enforcement exists and what mandatory element do the guidelines have or can the primary care trusts simply ignore them?
Baroness Andrews: My Lords, the guidance is basically information guidance; it is not mandatory.

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The National Prescribing Centre does what its title suggests: it offers advice on prescribing. It is separate from, but partly funded by, NICE and therefore it often provides guidance which backfills the advice provided by NICE. However, it does not give mandatory advice to doctors which they must follow in terms of prescribing.
Lord Graham of Edmonton: My Lords, I declare an interest as a diabetic. I am someone in the Westminster village who has the condition just like many people outside. Is the Minister aware that injecting and using the strips at home is not only medically sound but also psychologically reassuring to those who do so? Will she take this opportunity to say to the House that, if there is any obstacle at any level inhibiting the free availability of the strips, she will see that that obstacle is removed?
Baroness Andrews: Yes, my Lords; the benefits that flow from self-management are specific. Patients are able to react to and correct for the information that they obtain and so manage their conditions. They can then live their lives, whether in work or in retirement, with a great deal more confidence. I entirely agree with what the noble Lord said.
On availability, anyone who is treated with medication will receive the blood testing strips free and anyone who qualifies for a free prescription will also receive them free. We certainly want obstacles to be removed, which is why we are anxious to ensure that the message about self-care goes out.
Baroness Masham of Ilton: My Lords, I too declare an interest as my husband is diabetic and I often have to test him. Is the Minister aware that often an error occurs when using the strips, as blood comes off the new ones, which are plastic and shiny? Is she aware that it is no luxury to have the strips; it is absolutely essential, as has been said? Is she aware that diabetes is increasing? With so many obese people it will increase and it must be taken very seriously.
Baroness Andrews: My Lords, I understand, having spoken to Members of your Lordships' House, that it is quite difficult to use the strips. Interestingly, the new technologies and the new machines that are being made available make the situation slightly easier. It is up to each doctor and each patient to negotiate what is best for them.
On the second point raised by the noble Baroness, Lady Masham, about obesity, there is a clear link with diabetes. That is why our policies to reduce obesity are indirectly also policies to help to prevent diabetes. Over the last year for which we have full information, the number of prescriptions for blood testing strips has increased by 10 per cent, which suggests that they are increasingly in use.

Minister for Men
2.45 p.m.
Lord Northbourne Lord Northbourne asked Her Majesty's Government:
Whether they have any plans to appoint a Minister for men.
Lord Davies of Oldham: My Lords, the Government have no plans to appoint a Minister for men.
Lord Northbourne: My Lords. I am grateful to the noble Lord for that succinct reply. Does he accept that in my Question there is no intention to suggest that there are not significant categories of women who suffer severe disadvantage in our society in a variety of ways? Does he agree that there are also significant categories of men and boys who suffer disadvantage for one reason or another? Examples that come to mind are in education, in employment and even in the legitimate wish of men to see their children under certain circumstances. Can the Minister explain how the Government reconcile with their equal opportunities policy the fact that the Government have appointed a powerful Minister to support the problems of disadvantaged women, but are not giving the same advantage to men?
Lord Davies of Oldham: My Lords, the Government, as the noble Lord has indicated, take the issue of unfair discrimination, wherever and to whoever it occurs, very seriously indeed. That is why we are very keen to promote the effectiveness of our equality institutions and why we have the new Commission for Equality and Human Rights, which applies to men as much as it does to women in areas where there has been discrimination against them.
One instance of that is that while maternity rights have been recognised for some considerable time, it is only recently that it has been recognised that fathers play a very important part in the early days of a child's life and that fathers are entitled to paternity leave and some support. I hope I have given the noble Lord a positive response to his Question.
Lord Skelmersdale: My Lords, given that on Monday the noble Baroness, Lady Scotland of Asthal, told the House that 50 per cent of the population in this country are men and 50 per cent are women, would the noble Lord care to reconsider his answer and refer to his noble friend the Lord Privy Seal?
Lord Davies of Oldham: My Lords, I am not sure that that is necessary. The Lord Privy Seal is all too well aware of the facts of the position. The reason that legislation is often needed to advance the position of women is because, historically, women have received lower pay than men for the same kind of work and they have received less support than men from the wider society. We make no bones about the fact that there were historical injustices that needed to be put right through our equality legislation.
Baroness Thomas of Walliswood: My Lords, I thank the Minister for those last words. Surely, the interesting

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fact about the Minister for Women is that she is the Minister for Women and Equality. On the equality side, or the lack of equality for women in access to senior positions, in pay, in promotion and in a whole range of issues, we still need positive help from Government to assist women. Perhaps the Minister will join me in looking forward to the day when the level of institutional disadvantage to women has been abolished and we no longer need ministries for men or women, or for other people who suffer from unequal status in our society.
Lord Davies of Oldham: My Lords, I join the noble Baroness in looking forward eagerly to that day. It will be a day on which there will almost certainly be equal numbers of men and women in our elected House.
Baroness Miller of Hendon: My Lords, while agreeing with the Minister that there will not be a Minister for men, which I am pleased to hear—not that I do not like men; I just do not think that it is necessary to have a Minister for men—I have some sympathy with the noble Lord who asked the Question. Men are definitely discriminated against in cases of divorce, where it seems that mothers are automatically given custody of children, and it is sometimes difficult for fathers to get access. I speak with some personal knowledge of this. I wonder whether that could be borne in mind in the general feel of the Question.
Lord Davies of Oldham: My Lords, the noble Baroness raised some important points. It is not the case that the law automatically discriminates in favour of women; it is a fact that judgments are often in favour of the mother, for reasons that we all recognise. The point that is becoming clear is that the issue of fathers' access rights needs to be approached by the courts more actively than in the past.
Lord Stoddart of Swindon: My Lords, going back to Monday, the noble Baroness, Lady Scotland of Asthal, said to the noble Baroness, Lady Gale, that positive action was a good thing where there was not equality of gender. Does the Minister believe that that should be extended to the teaching profession—where men are very much in the minority, particularly in primary schools where they represent only 15 per cent—the nursing profession, the legal profession, and, coming up, the medical profession? Do the Government believe in positive action in those cases? Would the Minister reconsider his Answer to the noble Lord, Lord Northbourne, about a Minister for men? It is about time that we had a Minister for men, because they are being hard done by these days.
Lord Davies of Oldham: My Lords, of course there will be some professions, and sections of some professions, that may be more attractive to one sex than the other. More women apply for teaching roles in junior schools than is the case for secondary schools. That is, rightly, often lamented by educationists,
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because we see the advantage of having significant numbers of men and women in each school as regards providing a balanced educational experience for children. It is not an area on which direct action is possible. We need men to come forward for those roles in greater numbers. That is often the case with other professions in the other direction. We need more women to come forward, and we certainly need to remove barriers where actual discrimination takes place, as it does in some cases.

Prison Farms and Gardens
2.53 p.m.
Baroness Miller of Chilthorne Domer Baroness Miller of Chilthorne Domer asked Her Majesty's Government:
What is their policy with regard to the future of prison farms and gardens on which prisoners work.
Lord Bassam of Brighton: My Lords, the policy of the Prison Service is to expand its horticultural activities, providing an additional 355 work places where certificated training will be provided in grounds maintenance and landscaping, which will better prepare prisoners for jobs on release. To fund this expansion, prison farms comprising field-scale cropping and livestock where few or no prisoners are employed will be phased out. Some land will be sold, with the returns reinvested in increased and modernised horticultural activities.
Baroness Miller of Chilthorne Domer: My Lords, I thank the Minister for his reply and for clarifying the position. Does he agree that although not many prisoners are directly employed on the farms, the farm prison service has been an exemplar of exactly what Defra and the Department of Health are trying to do; that is, it produces fresh food, grown in this country, and makes it available for this country's institutions? It seems that the Home Office is flying in the face of the aim of those two departments, which is the procurement of fresh produce. I also refer to the beneficial effects on prisoners that the preparation and distribution of such fresh food may have.
Lord Bassam of Brighton: My Lords, on this occasion, the noble Baroness has got it wrong. We are providing increased employment opportunities in this field of activity. By focusing more on horticulture, where there are expanded market opportunities" we will ensure that many of the prisoners are directly involved in providing fresh food and produce for the Prison Service as a whole. Of course, the Prison Service will benefit from that, and prisoners will benefit by producing fresh food.
Lord Forsyth of Drumlean: My Lords, could the Minister tell the House whether the reports in the weekend press are accurate that both prison farms and prison institutions are to have the Royal Arms removed from them and henceforth not be known as Her Majesty's Prison Service? If so, why, and how

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much will it cost? Is it linked to yesterday's announcement by the Home Secretary that he wishes to remove the Crown from the Crown Prosecution Service?
Lord Bassam of Brighton: My Lords, the noble Lord has asked questions that are well wide of the Question on the Order Paper. As I understand it, there is to be a Statement on the Crown Prosecution Service and its future naming—or not—after Question Time.
Lord Walpole: My Lords, I am sure that the Minister is aware that the stud for Suffolk Punch horses is on the farm at Hollesley Bay prison in Suffolk. Those horses are becoming an endangered breed. Could the Minister tell me what will happen to the stud and whether there is a future for it?
Lord Bassam of Brighton: My Lords, I am aware of the stud at Hollesley Bay prison. There was detailed consultation on the future of the stud and the Suffolk Punch horses. My understanding is that the farm will be sold, along with the land and buildings, to a trust, which will become known as the Suffolk Punch Trust, enabling the horses to remain in their home county. The trust will provide employment and training for prisoners, so the activity that is currently going on there will continue under another guise.
Lord Corbett of Castle Vale: My Lords, given the welcome extra attention that the Prison Service is now putting on rehabilitation, and against the background of the low educational achievement of many young offenders, can my noble friend say whether now that there is a bit more stability in the governance at Feltham prison, the massive opportunities there for horticulture and landscaping experience for prisoners have been restarted?
Lord Bassam of Brighton: My Lords, as I hoped that I had indicated clearly at the outset, there will be expanded opportunities in the Prison Service for horticultural activities. Young prisoners in particular may well benefit from this and, given that young offenders in general tend to come from urban areas, activities such as landscaping and parks maintenance are skills that will be acquired and developed by participating in the new and expanded service.
Baroness Trumpington: My Lords, is the Minister aware that prisoners won a high award—I think that it was a gold medal—at the Chelsea Flower Show last year? Such a pursuit is not only good for them in the future, but is an excellent way of spending time in prison. I speak as an ex-member of the board of visitors at Pentonville prison, where the meat provided by the prison farms was of excellent quality and was a reasonable price. It would be a pity if the meat produced by prisoners disappeared from prison fare.
Lord Bassam of Brighton: My Lords, I am sure that meat will not disappear from prison fare, but changes are being made. As the noble Baroness will know, in 1996 the pig farm enterprises at Littlehey, The Verne and Everthorpe prisons were closed. Some livestock farms will be retained as part of the changes. The noble Baroness is right that the farm service, and in particular the garden service that takes place in the prison estate, is of the highest quality. On many occasions, prison farms have produced winning entries at important flower shows such as those at Chelsea and Southport.
Baroness Masham of Ilton: My Lords, is the Minister aware that working with animals helps to rehabilitate very difficult people, including prisoners? If he looks at the farm at New Hall women's prison, near Doncaster, he will see that prisoners work there with horses and find jobs afterwards.
Lord Bassam of Brighton: My Lords, we certainly recognise the importance of rehabilitation. We recognise the importance and value of that offered by the prison farms. I shall look carefully at the points made by the noble Baroness. I am sure that they will be taken into account as the review process continues.
Lord McNally: My Lords, is the Minister aware that slightly more than 20 years ago, I visited Strangeways prison as a Minister—
Noble Lords: Oh!
Lord McNally: My Lords, that is wishful thinking! I visited the prison as a Member of another place. I found most of the training facilities there in mothballs because of overcrowding. Six months later, Strangeways was being dismantled from the roof downwards by prison rioting. Do the hopeful statistics that the Minister provided about gardening and horticulture extend to other aspects of prisoner training, or do we still face the problem of prisoners being in cells for 23 hours a day while training facilities go unused?
Lord Bassam of Brighton: My Lords, the Government have laid great stress on rehabilitation within the prison estate. We have invested in it and we have expanded educational opportunities. The education budget in the Prison Service is now in the region of £150 million per annum. That has been increased year on year since the Government came to office. We do understand the value of rehabilitation. As I explained to your Lordships today, the initiative is one small part of that. We are seeking to expand opportunities for prisoners, because we want to ensure that the training they receive inside prisons enables them to gain full and useful employment outside prison.

Nuclear Decommissioning Authority: Recruitment of Non-executive Chairman
3.2 p.m.
Lord Jenkin of Roding Lord Jenkin of Roding asked Her Majesty's Government:
What is the estimated cost of recruiting a non-executive chairman designate of the Nuclear Decommissioning Authority; and by what authority this expenditure has been committed.
Lord Triesman: My Lords, the cost of recruiting a senior policy adviser, who will advise the Department of Trade and Industry on the preparations required for the establishment of the Nuclear Decommissioning Authority is £45,000 plus VAT in respect of fees to the research consultants, Whitehead Mann, and £20,400 in respect of advertising the post. As the recruitment literature makes clear, the successful person is expected to become the chair of the Nuclear Decommissioning Authority in due course, but that further appointment is subject to the successful passage of the Energy Bill. The DTI sought the agreement of Her Majesty's Treasury to incur that recruitment expenditure in order for it to meet its current responsibilities effectively and efficiently prior to the completion of the Energy Bill, and in order to manage the transition of those responsibilities to the Nuclear Decommissioning Authority so that that body can start operating as effectively as possible after Royal Assent.
Lord Jenkin of Roding: My Lords, is the Minister not aware that anybody who reads the advertisement that appeared in the Sunday Times on 8 February will see that the DTI is in fact advertising for candidates to fill the post of a non-executive chairman of the Nuclear Decommissioning Authority? Is he not also aware that the Treasury rulebook makes it perfectly clear that such an appointment may be made only after the Bill has received a Second Reading in another place? Does the Minister expect this House to accept that the dressing-up of the advertisement to make it look like one for a policy adviser in the DTI is anything other than a transparent device to get round the Treasury rules and, as such, is wholly improper?
Lord Triesman: No, My Lords, I am not aware that that is the conclusion that should be drawn, although I understand from what the noble Lord, Lord Jenkin, said in Grand Committee on the Energy Bill on 15 January—which I think reflected comments that he made at Second Reading in your Lordships' House on 11 December—that that is his view. In brief, the job advertisement—I have it in front of me—makes it absolutely clear that a special adviser is required, who will not become the non-executive chairman unless the Bill passes through both Houses of Parliament.
Lord Ezra: My Lords, will the Minister explain what that person would be doing during the period before the Bill is enacted, bearing in mind that we have just
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completed a lengthy Committee stage in this House? The Bill has still to go through its remaining stages here before being referred to another place. That would be very long period for an advisory function to be exercised.
Lord Triesman: My Lords, the individual who is appointed will have a number of responsibilities. The policy adviser will consider the structure of the Nuclear Decommissioning Authority, which is subject to the Energy Bill receiving Royal Assent. Such consideration will cover the skills mix of the board of the NDA; appropriate non-executive director posts; senior appointments; the corporate governance arrangements of the NDA; and preparations for the transition to the new contractual arrangements for nuclear site management. That is a fairly extensive job remit and the advice of an individual of some capability will plainly be needed in the department for those tasks.
Baroness Miller of Hendon: My Lords, will the Minister confirm whether the accounting officer of the DTI approved the advertisement being made at this time?
Lord Triesman: Yes, my Lords.
Lord Smith of Clifton: My Lords, will the Minister confirm that the post will be filled by a Nolan-type process? I am sure that he will. Will be also assure us that there will be a Nolan-type outcome?
Lord Triesman: My Lords, there will be a Nolan-type process. Having been involved in one or two Nolan-type processes, I have yet to see one that did not have a Nolan-type outcome.
Baroness Carnegy of Lour: My Lords, what will happen if that part of the Energy Bill is not passed by Parliament?
Lord Triesman: My Lords, I can only repeat the point that I made a few moments ago. The post within the Nuclear Decommissioning Authority depends on the passing of the legislation. If the legislation is not passed, the authority will not exist. The role of a non-executive chairman of that authority will not exist either.
Lord Elton: My Lords, in that case, the person who is appointed to the post will have finished the work that he was appointed to do. What are the arrangements for his retirement?
Lord Triesman: My Lords, I am not sure that it is a good precedent to retire people so far in advance of their appointment. There is a serious job to be done. I have tried to set out for your Lordships what that job comprises. I hope that noble Lords will agree with me that it is an important job and that a person of

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exceptional ability is needed just for those tasks, let alone the tasks that will flow from the passing of the Bill. I do not envisage, and I hope that the House does not envisage, that the person will be retired so prematurely.
Lord Armstrong of Ilminster: My Lords, is the Minister aware—as he must be—that there is a good deal of doubt about whether the process complies with the standing conventions and Treasury rules for appointments in that it will take place before the Bill's Second Reading in the House of Commons? Once again, standards in public life are being called into question. May I suggest to the Minister that the matter be referred to the Committee on Standards in Public Life?
Lord Triesman: My Lords, I do not accept that suggestion. I was asked if the Treasury approved the advertisement. I have confirmed that. I was asked if the accounting officer in the DTI approved it. We are talking about independent, senior civil servants and their judgment should not be called into question.
Lord Brooke of Alverthorpe: My Lords, I played a relatively small part in the deliberations of the Grand Committee. I was under the impression from those meetings that all parties are in favour of the establishment of the NDA. A body to begin decommissioning nuclear facilities is long awaited and is welcomed by all people. Therefore, does it not make sense to take all the steps that we can, in advance, to get the process under way?
Lord Triesman: My Lords, I thank the noble Lord for the question. The fact is, everybody has welcomed the serious approach that has been taken to nuclear safety and making sure that we can dispose of nuclear waste in a serious and safe way. The sooner these processes are under way, with all due regard for the precedence of parliamentary process, the better. It would be ludicrous were we to delay it on these grounds, which have arisen only because of the Bill being introduced in this House before it was introduced in the other place.
Lord Dixon-Smith: My Lords, be that as it may, will the Minister explain—
The Lord President of the Council (Baroness Amos): My Lords, we need to move to the next Question.

Government Advertising: National Press
3.10 p.m.
Lord Higgins Lord Higgins asked Her Majesty's Government:
What analyses they make of the cost-effectiveness of taking full-page advertisements in the national press; and whether decisions on advertising are made by individual departments or centrally.
Lord Bassam of Brighton: My Lords, the cost-effectiveness of full-page national press advertisements is measured by cost per response—that is, the cost of the advertising space divided by the number of responses that can be attributed to the particular advertisement.
Decisions on the size of advertisement to be used are made in consultation between the government department concerned, the Central Office of Information and the specialist advertising and media planning agencies appointed to the campaign. Key factors considered include the nature of the message and the audience being targeted by the advertising.
Lord Higgins: My Lords, I am most grateful to the Minister for that reply. The Government's pensions credit is so complicated that barely half the people entitled to it are actually claiming it. So I can certainly agree that there is a strong case for advertising the Government's pensions credit. But the full-page advertisements that are being used are both wasteful and misleading. The whole of the top page contains absolutely no information whatever. The bottom half of the page says that a certain group of pensioners will get extra cash, when in fact they will simply be allowed to keep a little more of their own money. Can the Minister tell us the cost of this campaign, and whether the content has been approved by the Advertising Standards Authority?
Lord Bassam of Brighton: My Lords, I am not aware whether the content has been approved by the Advertising Standards Authority. I should have thought it was more appropriate for it to receive responses from the public over criticisms of advertisements placed.
I think that the noble Lord misses the point. That campaign has been extremely effective; it is a very eye-catching advertisement. It is likely that 75 per cent of pensioners every month who get an award will benefit in the sum of at least £43.50—that is the average award—on top of their basic state pension. That is a very large sum of money in my view. Two-thirds of those receiving the benefit will be the poorest women in our society. Its aim is to reach some 3 million households in all, and some 2.5 million are already in receipt of it.
I think this is an excellent campaign and I am surprised that the noble Lord seeks, perhaps by undermining the effect of the advertising campaign, to deprive millions of pensioner families of money to which they are rightly entitled. As to the cost of the campaign, at £12 million I think it is extremely good value.
Lord McNally: My Lords, does the Minister recall that when Mr Alastair Campbell had overall control of government advertising, the "Panorama" programme accused the Government of jiggery-pokery in terms of government advertising prior to the last general election? When Mr Alastair Campbell left his job, it was split, very correctly: Mr David Hill took over his position immediately, and we were promised a senior

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and independent civil servant who would keep an eye on government advertising to prevent any more jiggery-pokery. When will we get this civil servant?
Lord Bassam of Brighton: My Lords, I think that the noble Lord has asked a question along those lines in the not-too-distant past. I explained to him on that occasion that the recruitment of the Permanent Secretary, not for advertising but for communications across government, was in process.
Baroness Knight of Collingtree: My Lords, who paid for the full-page advertisements for changing the system of getting numbers from the GPO? Was it the GPO or was it the Government? Two rather ridiculous young men came galloping through the pages of our national papers frequently.
Lord Bassam of Brighton: My Lords, I do not know for sure, but I suspect it was the commercial organisation that was changing the numbers.
Viscount Goschen: My Lords, what is the Government's total expenditure on advertising and how does that sum compare with the amounts spent before they came to office?
Lord Bassam of Brighton: My Lords, prices in real terms, adjusted for inflation, from 1986–87 to 2002–03, are available. The spend in 2002–03 in real terms was £160 million, which is somewhat short of the £190 million recorded for 1986–87. For 1996–97, the sum was some £81,700,000.
Lord Higgins: My Lords, I have stressed constantly in debates that I am strongly in favour of people taking up the Government's pensions credit, but wasting paper in this way is not an ideal way to do it.
Lord Bassam of Brighton: My Lords, I am glad that the noble Lord is in favour of take-up campaigns for benefits. I am hoping that he will add his enthusiastic voice to that end. I am sure that the company which has advised the Government on providing advertising support for that campaign will be more than happy to advise the noble Lord further, should he so wish, of the success of that campaign.

Children Bill [H.L.]
3.15 p.m.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland): My Lords, I beg to introduce a Bill to make provision for the establishment of a Children's Commissioner; to make provision about services provided to and for children and young people by local authorities and other persons; to make provision in relation to Wales about advisory and support services relating to family proceedings; to make provision
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about private fostering, childminding and day care, adoption review panels, the making of grants as respects children and families and about child safety orders. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Baroness Ashton of Upholland.)
On Question, Bill read a first time, and ordered to be printed.

Asylum and Immigration (Treatment of Claimants, etc.) Bill
Brought from the Commons; read a first time, and ordered to be printed.
Asylum and Immigration (Treatment of Claimants, etc.) Bill

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

  Committee of Selection
  The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move the Motion standing in my name on the Order Paper.
  Moved, That the Lord Brooke of Sutton Mandeville be appointed a member of the Select Committee in place of the Lord Trefgarne.—(The chairman of Committees.)
  On Question, Motion agreed to.

London Local Authorities Bill [H.L.]
The Chairman of Committees: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Commons message of 25 February be now considered; and that, notwithstanding anything in the Private Business Standing Orders or practice of the House, the promoters of the Bill, which originated in this House in Session 2001–02 and which has passed all its stages in this House but not in the Commons, may proceed with the Bill in the present Session;
That the petition for the Bill be deemed to have been deposited;
That all Standing Orders applicable be deemed to have been complied with;
That the Bill be deposited in the Office of the Clerk of the Parliaments not later than noon on Thursday 4 March with a declaration annexed, signed by the

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agent, stating that it is the same in every respect as the Bill passed by this House;
That the proceedings on the Bill in the present Session be pro forma in regard to every stage through which the Bill had passed in the last Session and that no new fees be charged.—(The Chairman of Committees.)
On Question, Motion agreed to; and a message was ordered to be sent to the Commons to acquaint them therewith.

Crown Prosecution Service
3.18 p.m.
The Attorney-General (Lord Goldsmith): My Lords, with the leave of the House, I will repeat in the form of a Statement the Answer given in another place by my right honourable friend the Solicitor-General to an Urgent Question. The Answer is as follows:
"As Minister responsible for the Crown Prosecution Service, the Attorney-General has initiated and is leading a substantial programme of development reform of the Crown Prosecution Service. The Home Secretary fully supports this programme, particularly the closer working between the Crown Prosecution Service and the police. The Attorney-General first raised, some months ago, whether, to reflect this programme of change and reform, the name of the CPS should itself be changed. Further discussions are under way. The Attorney-General is making a Statement on this in another place this afternoon".
My Lords, that concludes the Statement.
3.19 p.m.
Lord Kingsland: My Lords, I think that this Statement has been provoked by a question asked this morning by my honourable friend the shadow Attorney-General in another place for answer by the Home Office. The question related to a statement made by the right honourable gentleman the Home Secretary yesterday. He said, accordingly to an article in today's Daily Mail by the deputy political editor, Mr Paul Eastham:
"We have agreed now that, right across the country, the CPS will become the Public Prosecution Service and will become much closer to being understandable by the public".
On the statement by the Home Secretary, I should like to make two observations. First, it appears that a decision has been taken to rename the Crown Prosecution Service the "Public Prosecution Service". Secondly, it seems that the Secretary of State for Home Affairs has participated in taking that decision.
Arising from that, I should like to ask the noble and learned Lord the Attorney-General two questions. First, does he regard himself as the Minister responsible for the Crown Prosecution Service? If he does, can he tell the House when the decision to change the name was taken, and whether the Queen was informed before it was taken?
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My second question concerns the exclusiveness of his responsibility. It is trite constitutional law to say that it is wholly undesirable for any political interference to have taken place in a decision to prosecute. That is true, not only as a matter of substance, but as a matter of perception. It is vital that there is a clear separation between the political arm of the constitution and that arm of the constitution that has to be wholly impartial in relation to the liberty of the subject— that is, the Attorney-General. In those circumstances, how can he explain why the Home Secretary had to agree with this decision?
I should like to make two further observations before I sit down. The first is that, irrespective of the matters to which I have just referred, would it be wise to change the name? In my submission, it would not. If you change the name to "state", you clearly implicate the Government, and therefore the political arm of the constitution. If you change the name to "public", you do the same thing, because the Government—as the democratically elected government—regard themselves as the incarnation of the public interest.
The right honourable gentleman the Home Secretary went on to explain the decision that he is supposed to have made by saying that it would be quite wrong for the Crown Prosecution Service—or the "Public Prosecution Service" as it now appears to be — to be impartial in relation to prosecutions. The public should know that it is on their side. But, with great respect, the right honourable gentleman the Home Secretary has misunderstood the whole point about describing the Crown Prosecution Service as the "Crown" Prosecution Service. It is described in that way in order to make it absolutely clear that it is independent from party politics.
My second observation concerns a phrase that the right honourable and learned lady the Solicitor-General used repeatedly in another place when she responded to some apposite questions posed by the shadow Attorney-General. She talked about the principle of partnership in relation to those agencies that are involved in the prosecutorial process. I was surprised to hear this, as I understood that the principle that was animating the Government's vision of the constitution was the principle of the separation of powers.
As far as the Supreme Court is concerned, the Government are not only keen to see the principle of the independence of judges respected, but also the perception that they are entirely separate from the legislature or the executive arm. That is why—despite the fact that they accept that there has been no evidence of political interference with respect to Her Majesty's judges whatsoever—they are determined to set up an independent Supreme Court. Yet here we have the Home Secretary blatantly breaching the principle of separation of powers by engaging himself in a decision that should be none of his constitutional business whatsoever.
3.24 p.m.
Lord McNally: My Lords, can the Attorney-General confirm the report in today's Daily Telegraph, that he took a sharp intake of breath when he heard of the Home Secretary's latest lollipop from his bran tub?
As the Attorney-General is aware, we on these Benches broadly support many of the Government's proposals for legal and constitutional reform. But would be not agree that they seem to be making an awful mess of this with various initiatives that seem to be popping out without due notice and consultation, and which undermine public confidence in a process of reform which should be winning public approval?
Can the noble and learned Lord indicate how the Government are going to get their act together—between his office, the Home Secretary and the noble and learned lord the Lord Chancellor—so that we get some indication that Ministers are singing from the same hymn sheet as they bring forward these complex and important measures?
As a layman, I am aware that we have a Director of Public Prosecutions. On the other hand, Her Majesty's judges and Crown Courts have a great deal of public respect and confidence. People want a system of prosecution that is credible, consistent and trusted. In order to have that, we need coherence such as I have urged over the whole matter of constitutional reform. The Home Secretary should not be responsible for some of those matters; they should properly be dealt with by a ministry of justice. As I have said, there should be some sense that Ministers are talking to each other and working to a coherent programme, instead of indulging in high-profile gimmicks that damage public confidence.
3.26 p.m.
Lord Goldsmith: My Lords, I want to start by making one thing clear. I want to leave the House and the people of this country in no doubt. I stand for the independence of the Crown Prosecution Service. No one will challenge that while I am Her Majesty's Attorney-General.
It is crucial to confidence in the criminal justice system that everyone knows that each decision to prosecute—or not to prosecute—is made independently, in the public interest and without political interference.
Everything that I am going to say in answer to the points raised by the noble Lords, Lord Kingsland and Lord McNally, must be understood behind that clear and unequivocal statement.
When an Urgent Question was asked of the Home Secretary in another place this morning—as the noble Lord, Lord Kingsland, said—it seemed important that, as the Minister responsible for the Crown Prosecution Service, the Attorney-General and my deputy, the right honourable lady the Solicitor-General, should respond. I hope that noble Lords who are concerned at yesterday's events would think that it was right for the Ministers responsible for the Crown Prosecution Service to come and deal with this question.
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Before I go on to some of the wider questions, let me deal with the position of the issue that was raised yesterday. It is not the first time that a suggestion has been made about a change to the name of the Crown Prosecution Service. I floated it myself at the beginning of last year. It has been mentioned in the press several times since. The Director of Public Prosecutions has himself mentioned it in the press. I am bound to say that it would do a lot of good if we could bring the temperature down in relation to this matter. I am surprised that some people have found renewed outrage in something that had already been floated. But I recognise that there are strong interests.
Let me make this clear: the name change remains under active consideration. The Director of Public Prosecutions and I have made it clear that we are in favour of the name change, but we are still considering it. He is discussing it with his staff but no final conclusion has yet been reached.
Let me deal with why it may make sense. I want to make it clear that it is only a part—and some, including me, would say that it is only a small part—of a much more important and much bigger programme of reform, to which my right honourable friend referred in the Statement. However, the reason why it might make sense to make the change, and the reason why the Director of Public Prosecutions and I believe that it does, is that it would clarify that the Prosecution Service in this country serves the public, not the Government—absolutely not the Government. It serves the public of this country in the public interest at all times. No prosecution can proceed unless the prosecutor in charge of the case is satisfied, not only that the evidence indicates that there is a realistic prospect of conviction but also that it is in the public interest to proceed.
As the noble Lord, Lord McNally, pointed out, there is nothing surprising or unusual about referring to the concept of public prosecutions. We have had since the late Victorian age a Director of Public Prosecutions. He has never been a director of Crown prosecutions. This House approved, the creation of a Prosecution Service in Northern Ireland—and it is a public prosecution service in Northern Ireland. I understand why the noble Lord, Lord Kingsland, made the point that he did, but I reject any suggestion that calling something the public prosecution service carries with it any implication at all that it is for the government, or that it is anything other than a prosecution service for the benefit of the public in this country. That is all.
I turn to the other questions that have been raised. It is plain from what I have said about the process that no final conclusion has been reached. Whatever may have been said in any newspapers or elsewhere in relation to the matter, no final conclusions have been reached. Questions do not therefore arise in relation to the particular involvement of particular persons. I have made it clear that there can be no political interference and therefore no interference by anybody—other perhaps than the Attorney-General—in any decision to prosecute. There certainly cannot be interference by any other Minister.

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Notwithstanding that fact, there will be questions in relation to the organisation of the public prosecution service—the Crown Prosecution Service—in which others will have a legitimate interest. After all, the service works on a budget that comes from the taxpayer. We are not at the point at which my right honourable friend the Home Secretary has been involved in a decision in relation to that. However, even if that were the case, I would not regard it as interfering in the slightest with the independence of the Crown Prosecution Service or with any prosecuting decision. With respect, it seems to be going far too far to suggest that for Ministers to have a view and even to take part in decisions in relation to a name change can conceivably affect the independence of the prosecuting decisions, on which we all agree.
I turn to the question of partnership. We have recognised and realised that in order to have an effective, efficient and fair prosecution and justice system in this country, it makes sense for the different parts of the justice system to work together. They must do that always in accordance with their own particular missions and principles. Noble Lords passed, in the Criminal Justice Act, a very important measure, which gives the Crown Prosecution Service the responsibility for deciding what charge should be given in any case, or whether a charge should be made at all. That necessarily involves a close co-operation, or partnership, between the police and the prosecutor. It does not subvert in any way the independent decision of the prosecutor on whether the case should go ahead, but it involves working in partnership.
So, too, we have demonstrated that by working in partnership with court management, we can enable victims and witnesses to be better served, so that courts are ready to take their cases when they arrive, are protected from defendants who intimidate them, and all that sort of thing. I am very strongly of the view that with that sort of partnership, which we have in the National Criminal Justice Board and the local criminal justice boards across the country, we are really helping to serve the people of our communities—the public—and enabling us to have a better justice system. I very much hope that your Lordships will enthusiastically support many or all of the changes that are being proposed, which we shall bring before noble Lords when we are ready to show them the full agenda. All those changes are towards the same objective, of a prosecution system which, as the noble Lord, Lord McNally, put it, is credible, trusted and effective. Ultimately, we are involved in reducing crime and the fear of crime.
I do not in fact agree with the noble Lord, Lord McNally, about the concept of a ministry of justice, but that no doubt is for others on another day. I conclude by thanking both noble Lords for the questions that they asked and the comments that they made. I hope that I have covered them all; if not, I am sure that they will be put again. The fundamental point about independence—that it is for the Attorney-General to support that independence—is absolutely my view.
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What is up for discussion may be the name change; what is not up for discussion is the independence of the Crown Prosecution Service. That is non-negotiable.
3.36 p.m.
Lord Wright of Richmond: My Lords, having had the privilege on three occasions of serving as one of Her Majesty's ambassadors abroad, and having for five years been the head of Her Majesty's Diplomatic Service, can I have an assurance from the noble and learned Lord that no thought whatever is being given to either removing or diluting that important and much valued connection between the Diplomatic Service and the Crown?
Lord Goldsmith: My Lords, I am aware of absolutely no suggestion of that. The reason why I identified my own title as Her Majesty's Attorney-General was to indicate that the proposal has nothing to do with discourtesy to the Queen or any lack of pride in the long historical connection that we have to Her Majesty.
Lord Slynn of Hadley: My Lords, has the Attorney-General just said that there is no intention that Her Majesty's judges will cease to be Her Majesty's judges?
Lord Goldsmith: None whatever, my Lords.
Lord Forsyth of Drumlean: My Lords, following on that answer, would the Attorney-General like to take the opportunity to deny the newspaper reports that appeared over the weekend, suggesting that the Home Secretary wished to change the name of Her Majesty's Prison Service to remove the references to "Her Majesty", much to the consternation of the Prison Officers' Union? If that is the case, are we not entitled to expect that Parliament is told these things in advance of the newspapers? Are we not entitled to conclude that there seems to be a link between the Home Secretary's view of the name of the prosecution authority and of the Prison Service? That suggests that an attempt is being made to marginalise the role of the Crown in our constitution.
Lord Goldsmith: My Lords, not at all. With regard to the Prison Service, the Home Office is not planning to drop all references to the Crown. That is untrue.
Lord Campbell of Croy: Any?
Lord Goldsmith: My Lords, I said "all references". I will finish the question, if noble Lords will allow me to continue. This is important. The noble Lord made an observation from a sedentary position, as they would say in another place.
Every individual prison and young offender institution, whether public or private sector, will continue to be known as Her Majesty's prison X, or Her Majesty's prison Y. Every prison officer working in public sector prisons will continue to wear the crown on their uniform and will continue to be a civil servant working to the Crown. That seems a strong endorsement of the present position,

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whatever may be the name of the organisation in which prison officers and others involved in the correctional services are employed.
It is apparent from what I have seen that my right honourable friend the Home Secretary may have been responding to a question that was put to him. There was no announcement of a change yesterday; final decisions or conclusions have not been reached.
Baroness Whitaker: My Lords, could my noble and learned friend confirm that a public prosecution service—which would be rightly named because it is after all in the interests of the citizen that the rule of law is maintained, not in the interests of the state—could prosecute the Crown, for instance, as employer?
Lord Goldsmith: My Lords, I need to think carefully about the substance of that question.
The Public Prosecution Service will continue to be the service that prosecutes on behalf of the public. At present the Crown embodies the public. The difference is in relation to the name. It will continue to prosecute all persons who can be prosecuted.
Lord Campbell of Alloway: My Lords, does the noble and learned Lord accept that justice was originally administered by the monarch and, since then, by those in the name of the monarch? Has there been consultation with the monarchy about the proposals? Do the Government observe the conventions of consultation with the monarchy?
Lord Goldsmith: My Lords, I wish to make two points in response to the noble Lord. First, I emphasise that the proposed change is part of a wider and more important programme of reform and strengthening of the prosecution service in the interests of the public. It will help to reinforce the message that that is what the prosecution service is for. We are confident that many people do not understand the meaning of "Crown" in Crown Prosecution Service as opposed to what is meant by public prosecution service.
Secondly, in response to the noble Lord, I want to reinforce the importance of the independence of the prosecution service. None of that will change.
Lord Morris of Aberavon: My Lords, I welcome the clear statement of the Attorney-General that there is no question whatever of diluting the independence of the prosecution service. As he is head of the prosecuting service in this country, why did the Home Secretary trail the matter yesterday? Was the noble and learned Lord comfortable with that? Will there be changes with regard to the form of indictments, which are currently Regina v Defendant? Will the change need legislation?
Lord Goldsmith: My Lords, I am the Minister responsible for the Crown Prosecution Service, which I have made clear today. The Home Secretary would be the first to agree that when announcements need to be made it will be for me with the consent of the director of public prosecutions to make them.
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It is not proposed to change the form of indictment. That is no part of what is being considered. As we take the discussion forward, the need for legislation will be considered and determined before any change is implemented.
Lord Craig of Radley: My Lords, following from the previous question, will the noble and learned Lord assure the House that there is no intention to change the name of the Crown Court?
Lord Goldsmith: My Lords, none at all, but following on from the comments made by other noble Lords, it would not be for me to talk about it if there were.
Baroness Knight of Collingtree: My Lords, the noble and learned Lord said that one of the reasons for changing the title was because people would understand more readily that a Public Prosecution Service was more independent. Is he suggesting that the term "Crown Prosecution Service" had some mysterious meaning that indicated to the public that it was not independent?
Lord Goldsmith: My Lords, I did not intend to suggest that the present name indicated to members of the public a lack of independence. I was reinforcing the message about independence. My point was that some members of the public do not really understand who the Crown Prosecution Service is for. One frequently hears people in court talking about, "my barrister", but they do not fully understand what the public prosecution service—to use the term generically—is for. They do not realise that it is to prosecute on behalf of the public in the interests of the public. It is not about prosecuting on behalf of a particular victim, and it is certainly not about prosecuting on behalf of a particular individual or the Government.
Lord Lloyd of Berwick: My Lords, if defendants are to appear in Crown Courts before Her Majesty's judges and, if convicted, are sent to Her Majesty's prisons, why is a change of name from Crown Prosecution Service to Public Prosecution Service even being considered?
Lord Goldsmith: My Lords, that is exactly what happens in other places, including Northern Ireland. Defendants are tried by public prosecutors on behalf of the Director of Public Prosecutions before Her Majesty's judges and sent to Her Majesty's prisons. What surely matters most of all is that, first, we should reinforce and stand behind, as I do, the independence of the prosecuting system. Secondly, we should have a prosecuting service that responds to the needs of the people whom we are there to serve. That includes recognising that we are there on behalf of the public. At a time of substantial reform, that should properly be reflected in a change of name to bring it into line with the name that its head—the Director of Public Prosecutions—has.
Lord Elton: My Lords, the noble and learned Lord has skilfully reduced the temperature, as he set out to

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do in his first—and for that reason, I suspect—very lengthy response to interventions. That will enable him and those who take a different view to look dispassionately at the discussion that we are having. He cannot fail to notice the extreme sensitivity of the proposal and the great weight of not only sentiment but also logic that attaches to the use of the Crown as a symbol of national authority and independence. That is why the Crown prosecutor is engaged in preserving the Queen's peace.
Before any decision is made, it is important to have thorough and wide consultation, including those in the Crown Prosecution Service itself, and not merely the director. Although the Statement is about the Crown Prosecution Service, as the noble and learned Lord has already acknowledged it is in the context of a highly controversial news story over the weekend that was raised by my noble friend Lord Forsyth. He was choked off during Question Time, but was allowed off the leash in the Statement to ask about the future name of Her Majesty's Prison Service.
Does the noble and learned Lord see that although the juxtaposition of those two stories may be fortuitous, to those outside they each appear to sustain the same suspicion that there is an intention to erode the apparent involvement of the Crown in the constitution.
Noble Lords: Hear, hear.
Lord Elton: My Lords, shaking the head may show that one does not agree with a point, but it is a matter of fact that that is how the issue affects all those who have just loudly said, "Hear, hear". Will the noble and learned Lord please tread gently, and following on from the noble Lord, Lord McNally, will he try to remember what joined-up government is?
Lord Goldsmith: My Lords, the noble Lord, Lord Elton, as he often does, brings the temperature down. I am grateful to him for that and for his comments.
On an historical point, we were prosecuting to preserve the Queen's peace long before the Crown Prosecution Service was introduced in 1986. On that small point, I beg to take issue with the noble Lord.
There have been discussions within the Crown Prosecution Service and its staff. I hope that I have made that clear. Certainly a press statement issued by the Director of Public Prosecutions made that clear yesterday. That is precisely what he is engaged in at the moment. It is very important. Thousands of staff are engaged in the service and it is absolutely right to discuss the matter with them.
I also understand the point of sensitivity. But I would say again that I have indicated clearly to noble Lords— and it is in the press records—that I was the one who first raised the issue at the beginning of last year. It had nothing to do with eroding the position of the Crown in relation to any other area or indeed in this area. I recognise that it may be an unfortunate juxtaposition of matters, and it may be precisely
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because of that—as I understand it—that the Home Secretary responded to a question which has led to our debate today.
I should have added that—and I apologise to the noble Lord, Lord Campbell, that I did not answer his question properly in relation to the palace—the palace is aware of the change. There will be further discussions as the decision takes place. I have spoken to the palace, but only very recently, in relation to this matter. But I have made it very clear that there has not been a final decision or a conclusion to this issue and that certainly there will be consultation with the palace before we reach that point.
Lord Campbell-Savours: My Lords, what work is being done on the provisional costings involved in this name change? Surely that work should be done before we proceed further down this very sensitive route.
Lord Goldsmith: My Lords, my noble friend makes a very important point. One has to balance—as indeed the former Director of Public Prosecutions said in a radio interview today—the benefits, which I believe will be significant, against the costs. We have absolutely no wish to do something if the cost of it will be disproportionate to the benefit that will be received. That point must be looked at.
Lord King of Bridgwater: My Lords, the noble and learned Lord speaks of Northern Ireland, but he knows well that there is a particular reason and sensitivity why for the 1.25 million people in Northern Ireland it has been decided to call the service the Public Prosecution Service. That is not a good argument to pray in aid for the 55 million or 60 million people who exist under the Crown Prosecution Service.
I appreciate what the noble and learned Lord has made clear to the House. I think that he has made some very helpful announcements to clear up some of the confusion that his colleague has left behind: and he has made clear statements which obviously will be honoured. While the noble and learned Lord has discussed this matter in a rather smaller forum, I hope that he has found this exercise today not unhelpful in guiding him to what the conclusion might be if he were ever to consider the matter further.
Lord Goldsmith: My Lords, absolutely, and I genuinely always do find hearing what your Lordships have to say on these issues important and things that need very carefully to be considered.
I take issue with the noble Lord in relation to the position in Northern Ireland. I am responsible also for the Director of Public Prosecutions and the Public Prosecution Service in Northern Ireland. It makes enormous sense, to my mind, that it is clear to the people of Northern Ireland—as it would be clear to the people of England and Wales if we made the same change—that a prosecution service is there to serve them and to serve in their interests.
Lord Waddington: My Lords, is the noble and learned Lord in a position to say yes or no to this

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question? Did the Home Secretary say what the papers say he said? Surely his officials have been in touch with the Home Office and the noble and learned Lord is in a position to answer that simple question. If the answer is that the Home Secretary did say what the papers say he said, was he not saying quite plainly that a decision about this matter has been made?
Lord Goldsmith: My Lords, I do not know whether the reports that the press have put forward are correct records of what the Home Secretary said. But they cannot in fact be right for this reason; that, as I have made clear and as the Director of Public Prosecutions has made clear, a decision has not finally been reached.
Lord Tomlinson: My Lords, does my noble and learned friend agree that it would generally be very helpful to the process of government if, before we had a debate on a report from a Minister in the Government flying a kite that apparently does not yet have wind behind it, we first had the full development of a proper hypothesis?
Lord Goldsmith: My Lords, I repeat to my noble friend Lord Tomlinson that it is not the first time that this proposal has been discussed in the press. It arose for the first time when I suggested the idea at the beginning of 2003 and it was reported in the press at that stage. It was reported subsequently and was referred to when the Director of Public Prosecutions referred to this issue only two or three weeks ago. It seems to be because of the context and the reference to the Home Secretary that it has attracted this degree of attention.
But what is important—and I hope noble Lords will be as enthusiastic about debating this with me at a future date as they have been about debating the name change—is the overall future of the prosecution service and how it is going to prosecute and protect the people of this country. There have been important changes already. The charging initiative has increased guilty pleas and has produced conviction rates which are 30 per cent up in the pilots that we have carried out. The prosecution service is achieving conviction rates above 90 per cent in magistrates' courts and Crown Courts. It is taking charge in areas concerning antisocial behaviour, domestic violence, homophobic crime and many other areas which are important to the people of this country.
Lord Stoddart of Swindon: My Lords, can the noble and learned Lord say what surveys he undertook before he came to the conclusion that the public did not understand what the Crown Prosecution Service was and that it therefore needed a change of name? Do the Government and the noble and learned Lord not understand that, taken together with the proposals which will come before us on Monday to abolish the post of Lord Chancellor and to expel the judges from this Chamber and, indeed, the proposals to change the name of the Police Service of Northern Ireland, there
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may very well be a suspicion among many people that the Government intend to abolish the monarchy by stealth?
Lord Goldsmith: My Lords, when I first suggested this change at the beginning of 2003, it had absolutely nothing whatever to do with the suspicions referred to by the noble Lord. We have information —not from formal national opinion poll surveys, but from what prosecutors on the ground know—that some people have difficulty in understanding what the prosecution service does.
I conclude with this final comment. I have made it clear throughout that I am the Minister responsible. It is my job to protect the independence of the prosecution service. That is what I shall continue to do.

Special Educational Needs
3.58 p.m.
Baroness Massey of Darwen Baroness Massey of Darwen rose to call attention to the implications of the Department for Education and Skills' document Removing Barriers to Achievement: the Government's Strategy for Special Educational Needs; and to move for Papers.
The noble Baroness said: My Lords, I am delighted to have secured this debate on the report Removing Barriers to Achievement: the Government's Strategy for Special Educational Needs. I am indeed honoured that it has attracted such a distinguished group of speakers, all of whom have a long-standing interest in children and education, and who will, I know, offer different perspectives to the debate. Several noble Lords from all sides of the House are elsewhere engaged in discussing the draft Disability Discrimination Bill and are very sorry that they cannot be here today.
I shall first give a little background to the report we are discussing and a brief overview. I shall then look at issues which schools are currently dealing with and ask the Minister to respond to specific areas of concern, which have arisen in my discussions with teachers. In speaking about children's issues, I should declare an interest as the co-chair of the All-Party Parliamentary Group on Children and as a school governor.
The report is, I know, generally welcomed by parents and teachers. Removing barriers implies that we need to look at the systems a child is in as well as the child herself or himself. Special needs mean that special intervention needs to be set up to benefit the child and that inclusion in the education system, not just integration, is important.
The issues are changing. There are more children with special educational needs in our schools as neo-natal and medical services have improved their chances of survival. Their disabilities vary, so their needs vary. Others may go into the issue of how we diagnose children with learning disabilities and what factors go into that diagnosis. Mistakes are, no doubt, made. Statementing of children is not a precise science. I shall refer to statementing later.
In my experience, teachers of children with SEN are among the most inventive and dedicated in the teaching force, whether they are in special schools or

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in mainstream education. They sometimes work under enormous pressure. They deserve the support and recognition that the current emphasis on getting it right for children with SEN gives them. Increasingly all teachers will have some role in this kind of teaching.
Education for children who have special needs has come a long way since I was a teacher in schools in the 1980s. The report that we are considering is a welcome culmination of previous policy. The strategy set out in this report was promised in the Green Paper, Every Child Matters. The 1997 Green Paper, Excellence for All Children: Meeting Special Educational Needs, and the 1998 programme of action sought to build on best practice and to improve the statutory framework for SEN. The Special Educational Needs and Disability Act 2001 and the special educational needs code of practice took matters forward. It will be interesting to see how a Disability and Discrimination Bill and the national service framework for children contribute to improving matters for children with special educational needs. The Children Bill, which received its First Reading in your Lordships' House today, will also contribute to an overall government strategy for children. It is good to see children feature so prominently in policy and legislation.
The 2002 Audit Commission Report, Special Educational Needs: a mainstream issue, highlighted challenges including children having to wait too long to have their needs met; children who should be educated in mainstream schools being turned away; staff feeling under-confident about dealing with pupils with a wide variety of needs; special schools feeling uncertain about their futures; and families experiencing varying levels of support in schools and other settings.
The key principles set out in the report that we are discussing are the rights of children with SEN to have a good education and the need to educate teachers to be able to deal with SEN. The report calls for an examination of the way schools are funded and of the way we judge achievement.
There are four key areas. The first is early intervention to ensure that children and their parents receive appropriate support as soon as possible; the implementation of a new strategy for childcare for children with SEN and disabilities; working with voluntary organisations, for example Mencap, on a feasibility study for a national early intervention centre of excellence; and the encouragement of information technology.
The second area is removing barriers to learning by embedding inclusive practice in schools and early years settings. This will involve improved access; practical tools for schools; collaboration with the Disability Rights Commission; improved local planning through SEN regional partnerships; minimum standards for SEN; and monitoring through self-evaluation and Ofsted.
The third area is raising expectations and achievement by developing the skills of teachers; working with the Teacher Training Agency; personalising learning for pupils; changing performance tables so that schools get
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credit for the achievements of all pupils, including those with SEN; and working across agencies to improve transitions for pupils with SEN.
The fourth area is delivering improvements in partnerships by setting up a team of national advisers; developing the SEN national performance framework; encouraging best practice and support for parents; integrating children's services—an issue highlighted in Every Child Matters; collaborative work including a joint Department for Education and Skills and Department of Health implementation strategy for SEN; and the children's national service framework.
The report calls for greater consistency of high quality provision across services at a local level in order to make children who have special needs, and their parents, valued in the community. The report helpfully divides each concern into sections: where we are, where we want to be and action we will take. I am particularly encouraged to see sections on monitoring progress and supporting collaboration improvement in local authorities and schools. The Minister may want to comment further on this as monitoring is the key to success. It is not easy and it is time-consuming but, as the report says:
"Inclusion must be an integral part of whole school self-evaluation and improvement".
It can no longer be simply about a few dedicated individuals or direction from outside. As Ofsted pointed out, performance targets need to be set for pupils with SEN. Their achievements should be recognised and promoted. David Bell, the Chief Inspector of Schools, said:
"Setting challenging targets for pupils with SEN can help both pupils and schools focus their efforts and learning on achieving realistic goals".
Let me now turn to some of the issues that will need to be kept under review and given attention. The first is the statementing of children. A recent article in the Economist, which included an interview with my noble friend the Minister, pointed out that one child in six has some sort of special need but that two-thirds of the money spent on SEN goes to the 3 per cent who receive statements of their needs.
Statementing is stressful for parents and children. It is time-consuming so local authorities are trying to draw up fewer statements. Research commissioned by the DfES to investigate local authority practices and outcomes found great variations between authorities and suggests that in some LEAs pupils with learning, behavioural and social difficulties now have their needs met without statements; pupil attainment does not seem to suffer. Statements follow the child and are not discontinued. I have heard of some schools applying for statements to get the extra money that goes with a child who is statemented as all SEN money is spent in other ways, for example on extra staffing. The issue of statements needs to be looked at in some detail.
Not surprisingly, authorities with high levels of deprivation also have a high proportion of SEN pupils, with or without statements. It seems that anti-poverty strategies may reduce the number of pupils

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diagnosed with SEN, pointing to the need for systems to work together at a local level. Local authorities with high levels of deprivation need to be vigilant to ensure that needs are met. In a Times Educational Supplement article, John Wright, a spokesman for the Independent Panel for Special Education Advice, said:
"Whether a child's needs are met depends upon their individual parent or carer being able to police their local authority. It is inevitable that children of less advantaged parents are less likely to receive the provision their needs call for".
This is unacceptable. It is something that the report is trying to avoid but it is a difficult problem. How can we make the implications of the report serve all children and all parents?
With money being delegated to schools, they have choices on how to spend it. Some schools are doing extraordinary jobs. A feature in the Times described the efforts of a state secondary school in Tring. It has educated children with a wide variety of disabilities. The head of learning support said:
"You can't drop a child in and expect everything to just happen. A huge amount of engineering needs to go on. It's amazing how you become inventive at getting over obstacles".
The team there has developed a system where a child who needs help at lunchtime can be accompanied by a classmate; computer games clubs occupy children with Asperger's syndrome; class material is translated into Braille; circles of friends provide volunteers to play with isolated children; and the staff meets fortnightly to discuss every child with special needs. In this kind of situation, it is not only children with special needs who benefit, but also the other children who are involved in befriending and social care. Of course, all schools will not provide such a service but many are. Is there an intention to share good practice? Even with good practice, how do we overcome the desperate shortage of SEN teachers in secondary schools?
Some pupils will continue to need special schools. In the Economist article, the Minister said that she sees the situation not as "either/or", but as "both/and". Presumably, we should be able to rely on specialist schools and teachers to advise and mentor others. How will this work in practice? She also said that, "We need to get very clever quite quickly". Can systems move as quickly as we want them to?
Yesterday, I had a discussion with the SEN co-ordinator in the school where I am a governor. In this school, 136 children out of 445 are designated as having special needs. As she pointed out, some of these special needs are due to deprivation, poor family relationships, a negative view of schooling in the family and recent immigration where trauma, speech difficulties and physical problems may be present. I asked whether SEN could be worked through and whether a child could become a high achiever. She said yes, but that there needs to be not only good organisation in the school, with committed staff time and sufficient adults in the classroom, but effective organisation surrounding the child and his or her family. Collaboration between educational, medical and social services has to be extremely good—a recurring theme for children's services everywhere. I think that this is apparent, and in some localities this
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collaboration is happening well, but it is a challenge for people to come out of specialisms and see a whole child or a whole family. Those working in schools such as school doctors, nurses and dentists may find this less of an issue, but access and follow-through for agencies outside the school can be problematic. Is the Minister optimistic about getting that sorted out?
The co-ordinator and two head teachers to whom I spoke emphasised the problem for pupils with SEN transferring from primary to secondary school. This is known to be difficult for pupils who do not have special needs. It must be traumatic for those who do. Not only are they faced with change with a bigger environment, new teachers and a variety of new teachers, but also with new subjects and different learning support assistants in each new class. In some cases learning mentors can follow the child from primary to secondary school to help them to settle. In the school where I am a governor there are two learning mentors who act as key workers on transfer to secondary school. They are paid from the Excellence in Cities budget. In Wandsworth the NSPCC is running a pyramid club doing work looking at how to improve transfer systems. Is the Minister aware of that and will she look at the outcomes? Again, good practice will be important.
In conclusion to my introduction to what I am sure will be a fascinating debate, let me simply say how much I welcome any effort to improve education generally and, in this case, the education of children with special needs. I think that this report will give a boost to teachers, parents and children. It puts the focus clearly upon the needs of children and provides a strategy for carrying out reform. I know that the Minister, with her interest in this aspect of education, will follow progress carefully, as shall we all. I beg to move for Papers.
4.13 p.m.
Lord Lucas: My Lords, I am extremely grateful to the noble Baroness, Lady Massey of Darwen, for giving us the chance to debate this document. I am also grateful to my Chief Whip because if he had not refused to have the Statement on this subject repeated in this House I would have had to fight for a share of 20 minutes and not even be certain of getting anything rather than being able to make a decent speech on the subject. The noble Baroness has done us a great favour in bringing this matter before us in a way that allows us a proper debate.
This debate is also a great illustration of the virtues of having Ministers in the House of Lords. You are able to choose people with experience and quality and set them at an unfashionable subject within the department which the more publicity-conscious Ministers do not want to have too much to do with. It is not a case of dealing with people who chop and change every year as they fight for promotion. An extremely well thought-out and effective document has been produced. When the Secretary of State sees it, puts his own name on it and leaves no trace of its

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author, there is not a squeak of protest. Over the Peers' Entrance we should have the legend, "Abandon ambition all ye who enter here".
By and large I am full of praise for the document. I read it with an uplifted heart. I am an optimist about these matters. I agree with many of the things that are said in the document and support many of the directions that are taken within it. I certainly do not have it in my heart to be too carping about it. I think, though, that one ought to be realistic. There is a long way from where we are now to where we wish to be. We are not taking a stroll through the Elysium Fields; we are in something much closer to a briar patch.
Even the noble Baroness's own ministry has bits that are not up to the standard which she is hoping will be displayed by her special educational needs colleagues. She will know that I have fights and difficulties with another part which is not her responsibility. I was told at one remove by that department the other day with regard to a project which it had initiated and sponsored that it did not know how many schools had taken part or what the results were, and that it was not that department's responsibility to know. There had been an initiative and they had the publicity for that but now they were moving on to other things and they did not really care what had happened. However, that is not the message that shines through the document. I very much hope that the spirit that the noble Baroness has infused into the document will be allowed to come through in execution. If that means we have to have another six years of Labour government, that will be some compensation.
The thing that pleases me most is the emphasis on personalised learning and the involvement of children in developing the way in which their own particular needs are addressed. Where that happens in schools—and it does happen in some schools; as the House knows, I am editor of the Good Schools Guide so I get a fair view of what is going on, at least in some parts of the education sector—it makes an enormous difference to all children because everyone has needs of some kind. Everyone is different. The old-fashioned school in which the ethos is, "We have this way of doing things and you take it and make the best of it" is not the best way of doing things for anyone, or only for very few children. A school that is much more responsive to each individual child— that necessarily emerges in a really good inclusive school—is a great bonus to everyone who is involved in it. Some schools still like to hide the fact that they do well with special needs pupils because they think that it will frighten off the bright kids. I believe that that attitude is beginning to go and that parents understand these matters better than teachers fear.
However, some real backwaters exist in this area. I have had a fight with a university department which has its own particular way of doing things and has not made proper effort to compromise in favour of a student with multiple disabilities. Bits of the education world have just not caught up with the way in which the spirit of special needs education has changed and the way in which the requirements that we as a society place upon it have changed. An awful lot of schools
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when faced with a child in a wheelchair are reluctant to make the necessary changes. Some are delighted to make those changes and love the challenge involved. One school I know created a physics laboratory on the ground floor where there was none before so that a particular child could take her A-level there. Such schools undertake those projects with real enthusiasm. The occasions on which one comes across that are a real delight.
However, there is an awful long way to go in educating schools generally on how to open their hearts to the gospel of inclusion which is being preached by the Minister. It will not be an easy road. The document refers to spreading best practice and giving encouragement in this way and that way. I just hope that it works because there is an awful lot to do to overcome the way we do things now.
I am also encouraged by what the document says about special schools. One of my doubts about the way the Government were going concerned whether they were being sufficiently supportive of special schools. I believe that the place that special schools have in the system is now recognised. I would take the matter a little further than the document. One of the great benefits that I see of special schools is that they offer time out for a lot of kids who have special needs not of the deepest forms but of the kind that can lead to emotional and behavioural problems at school. Spending a year or two catching up and consolidating their confidence in a place that really understands and can support their special needs can make an enormous difference to children. There are a number of schools that do that extremely well, and such schools need relationships which run a long way beyond just a one-to-one with one or two local secondary schools. Networks that are larger than just close relationships have to develop. It is like dealing with specialist departments in the National Health Service: those which are more specialist have to have a very wide reach, and sometimes some of the structures we think of for the health service cut off the supply of patients to the specialist centres because we have structured the payment system wrongly. We have to be very careful not to lose these great centres of excellence in dealing with individual kinds of special needs; we need to allow their networks to be wide enough.
I am delighted, too, with the move away from statements. The document is very optimistic about some of the effects that may come of it, in releasing educational psychologists back into schools, which has become a rarity in many areas. It had become a very overworked service, with little time to follow up the people who were diagnosed and provide the correct service. I do not know an individual case well enough to know yea or nay, but if that is the effect the document has, that would be extremely encouraging and absolutely the right direction in which to move.
My dream is to get back to a position—or perhaps it never existed, so perhaps to get to a position—where the local authority is the child's friend, where it is not a matter of the local authority battling desperately to keep within budget because it has no free money left within the education budget, and where—if another

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two kids with autism turn up—it has to start raiding "care for the elderly" to keep within its capping limits. That is an immensely destructive position to have got into. It' we can start attacking the pressure put on local authorities by funding, and allow them—as I think most of them would wish—to become the advisers and friends of the parent and child with SEN, so that authorities can really help and point them in the right direction, that would be immensely constructive.
I would go further. If we run down this road, I would look at the end and say that for the serious cases we will centrally provide individual funding, that those with, for example, severe autism will be funded by the National Health Service. Local authorities should not have to worry; it should not be like being hit by a bomb every time one of these children appears within their area; they should be able to rely on central funding to deal with these cases. When it comes to the funding that authorities distribute to schools and on which they provide advice, that is indeed the responsibility of the authorities because that is within their purview. However, the more serious cases—the ones which verge on illnesses—are best dealt with by central and national funding. Then perhaps we can find ourselves in a position where local education authorities do not find themselves as pressured as they are now.
I am also extremely encouraged by what the document says on research. There are several mentions of research—doing projects, seeing what the results are, measuring, and trying to develop something along the line of evidence-based treatment. That is a new thing in education—my goodness it is! We have had this in the health service for a little while, but educational research is an absolute miasma of unfinished, unsupported, undocumented activities. Nothing ever seems to be carried through; nothing ever seems to be done with the quality one would hope for; and at the end of the day none of it seems to underpin what is provided in schools or by local education authorities. If we can take on the example of NICE and build on that as an example—and I am enormously encouraged by what the document says on this— then we will have the start of a real understanding of how best to deal with an extremely complex problem of special educational needs.
Would the noble Baroness be prepared to sit down with me and discuss a protocol for the many groups outside the mainstream that have methods that may help with special educational needs? These groups run from small outfits to DDAT. Such a protocol would clarify the evidence needed by the Department for Education and Skills in order for it to agree whether these methods are worth investigating and can be taken on by the department for a proper study to see if the methods work. At the moment it seems extremely difficult for anybody to get to that stage. I agree that these things have to be initiated outside the department, that they have to be carried out with the enthusiasm of one or two individuals and with the funding that they can obtain, but this situation cannot continue—there has to be a way in which the Department for Education and Skills can get involved, because the funding for a proper study is £500,000 or £ 1 million and then it has to be done in
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exactly the way the DfES wants if it has to have any function. Thus there has to be an interface there, and I would love to clarify it.
Lastly, I just hope that the news we have had today is two more nails in the coffin of the misuse of Munchausen Syndrome by Proxy. Parents and children who look as if they have special educational needs or problems should be treated with enormous sympathy. The presumption should be that they have a problem and it is our responsibility to help them find out what that problem is and deal with it. Far too many people who have children with the more behaviourally accented forms of SEN have talked to me over the past few years about the brushes they have had with social services and about their fear of being tipped into this terrible diagnosis at which point their children and family are ripped away from them There are undoubtedly cases which deserve to go down that road but the initial interface should not be one of antagonism and danger; it should be one of friendship and support.
4.26 p.m.
Baroness Warnock: My Lords, perhaps I may say first how welcome the Government's strategy document is, if only because it is always good to see something after waiting for it for quite a long time. I welcome the chance to debate the document today and I am extremely grateful to the noble Baroness for making it possible to debate it so very soon after it was published, which is excellent.
There are many very good things, as I am sure all noble Lords would agree, about the document. For one thing, up to a point it is what it set out to be, which is a statement of strategy rather than a quick fix. The document takes notice of some of the adverse criticisms of present provision in the Audit Commission's most recent publication on special needs; and it recognises in particular the patchiness and variability of the provision currently available.
The document recognises the need for proper research, which I very much welcome, in a number of areas where it is necessary to know rather than to guess or theorise about what works and what does not work, and it acknowledges, as has long been acknowledged, the crucial importance of training for all teachers in identifying the needs of individual children and developing ways of meeting those needs with sensitivity.
However, in one respect at least the document is disappointing. I do not think I shall be the only person to be disappointed here. Though in some ways the strategy seems to be quite bold, it is basically the same strategy that has been in place for nearly 30 years. No fundamental questions are raised in this document. For example, though there are hints that there should be fewer statements for children, that is largely on the grounds that to issue fewer statements would lead to less bureaucracy and fewer delays in intervention. The question of whether there should be any statements is never raised and it seems that this bears on something the noble Lord, Lord Lucas, said about the adversarial position that parents and

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children find themselves in with the local authority. Although the document shows no sign of an adversarial position, the question of how the issue has arisen and how it can be eliminated is not addressed. Therefore, the question whether statements ought to be issued should have been raised.
Statements are referred to in the document as a safeguard for some children, but the degree to which they work as a safeguard and the extent to which local authorities are committed by their contents to full provision to meet a child's needs is not raised. For example, it is widely believed that what now goes into a child's statement is dictated more by what an authority believes it can afford than by the actual needs of its subject.
In a truly strategic document, surely the foundations of old strategies should be critically examined. Certainly the Audit Commission raised the question whether statementing had had its day and had outlived its usefulness. The idea of special needs, which seemed so fruitful 30 years ago, now seems a little outworn. Again, that question is not raised in the document, although there are hints. Surely the question should be raised again and examined.
As I previously reminded your Lordships, in the 1970s a line was drawn between social deprivation and special educational needs, even though the number of free meals in a school was taken as a broad indication of the number of children who would have special needs. In the 1970s, it seemed helpful to avoid the vocabulary used for special education hitherto and instead to concentrate on what help a child would need in order to make progress at school, rather than on the nature of his disability. The old words such as deafness, blindness, mental retardation, maladjustment and autism were on the way out and the concept of special needs was introduced as an umbrella term. But now it seems to me that it is time to think again. We have perhaps fallen into the opposite trap of thinking of children with special needs as all of a kind—all needing one thing; namely, inclusion in mainstream schools wherever possible.
I realise that to some extent we are bound in the matter of inclusion by the Disability Discrimination Act 2002. We are committed to allowing parents to require almost as a right that their disabled children should attend mainstream schools. But that Act was based on the taken-for-granted assumption that inclusion must always be in a child's best interests. He should be denied it only if his parents eccentrically did not want it for him or that it would harm the interests of other children in the school if he were in the regular classroom.
The document contains plenty of hints that the Government recognise that that is not always the right assumption. Some of the examples of the imaginative use of special schools and special units contain many such hints. I believe that special schools or units may be the best option for, for example, autistic children who may suffer deeply in the relatively rackety environment, inevitably, of a mainstream school and flourish well with the comparative peace of a small school—and a special school at that.
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However, we must avoid at all costs the danger, well recognised by the Government, that we pretend to inclusion when in fact it means exclusion from school of the most difficult and therefore the most needy children. I witnessed something of that kind long ago in the 1970s in Oslo. At that time, Norway was uniquely proud of its policy of what used to be called "integration". However, the most intractable children, and those who were most severely disabled, did not go to school at all. That danger is real if we persist in thinking that all special needs children, whatever their problems—whether they are sensory, intellectual or emotional—fall into one vast category of those who can best be helped to learn in mainstream schools, provided that the staffing is good enough.
Perhaps not only statements of special educational needs but the concept of special education needs are due for a rethink. A truly strategic document ought surely to have examined such fundamental issues as these. I am concerned in my suspicion that to concentrate too much on the blanket, catch-all concept of special educational needs is a mistake by the fact that there are two great grounds for optimism in this area of education. Like the noble Lord, Lord Lucas, I am an optimist in this field.
The great grounds for optimism at present are the result of government thinking which has nothing specifically to do with special educational needs. The first of these is the Government's admirable development of early years education. I must pay tribute to the work that has gone and is going into this field of endeavour, which is of enormous importance to all children. Early education, early intervention, enables children to develop their social and communication skills before the age of five, when it may be too late for many of them to overcome the disadvantages they started with.
The second ground for my optimism is the new flexibility to be introduced, as I sincerely hope, into the education of 14 to 19 year-olds. This will have huge benefits for many young people currently included among those with special educational needs. I urge the Government to bear this in mind, among other considerations, when they must finally decide what to do about the Tomlinson report.
Lastly, I return to the statement. The aspiration to use special schools as centres of excellence providing research or sharing their expertise with mainstream schools sadly made me smile. The words used were almost identical to those used 30 years ago with the same aspiration and hope. I believe in that hope but it seems to me that very little has changed in that field in 30 years. And still more, the brave goal for collaboration between different agencies all working together in perfect harmony with the common aim of the interests of the child made me sad.
So much work has gone into an attempt to bring that about that I almost despair of its ever happening. But, an optimist must not be cynical. Miracles can happen. Perhaps, as I hope, the new children's trusts may be exactly what is needed to bring off the miracle in this case.
4.40 p.m.
Baroness Linklater of Butterstone: My Lords, this is a subject dear to my heart. I am grateful to the noble Baroness, Lady Massey, for bringing it to our attention. I declare an interest both as a mother of a wonderful daughter, with special needs, and because, as a result of watching and sharing in her experience in mainstream schools until she was 16, she became the inspiration and template for a school which I founded 12 years ago called the New School, Butterstone. She was able to attend that school for just over two years and remembers them as the happiest experience—indeed, the only happy school experience—she ever had.
The school caters for "educationally fragile" children—children who do not have severe or complex difficulties but who have special needs ranging from specific learning difficulties such as dyspraxia or dyslexia to children with Asperger's syndrome or autistic spectrum disorders, children who are school refusers, elective mutes or those who have developed other responses to the stress of the experience of mainstream school such as developing whole body rashes or losing all their hair. Many of the children have mild to moderate learning difficulties, others are quite academically able and, within the range of difficulties they have, they are all significantly underachieving in relation to their potential and are finding the experience of mainstream overwhelming. At the same time, they have also experienced significant teasing and bullying at school as a consequence of their difficulties and are socially isolated both at home and at school. The school consists of 40 boys and girls aged 12 to 18 who come from all over Scotland. They board weekly and the vast majority of them are funded by the local education authority.
It is the twin experiences of watching my daughter's struggle and of the subsequent growth and development of the school—described by many parents as the most inclusive place they know—that underpin my remarks this afternoon.
I have read the Government's report with great interest and find that there is much to commend in it as a way forward in meeting the needs of children with SEN. Indeed, the past 12 years has already seen great strides in the understanding of and provision for such children in all their varied and often complex forms. I hope that the report will maintain the momentum and address seriously the deficiencies which it has so rightly identified. We are, after all, talking about nearly one in six of the school population, and it is a key area of concern.
I endorse entirely the aim to personalise learning for all children and to make education more responsive to the needs of individual children. I support in large part the four key areas which have been identified. Early intervention is key. Better interagency working, parent support, better childcare facilities and better resourcing have all been identified as areas urgently requiring improvement. Increased working with the voluntary sector is also a highly desirable way forward with all it offers for shared learning and better outcomes.
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I have some concerns about the section called Removing barriers to learning. Rightly, the report says that inclusion is about much more than the types of school children attend. It is, crucially, about the quality of the school experience and how far children are helped to learn to achieve and participate fully in the life of the school. It also identifies, rightly, a concern about the lack of clarity over the future role of special schools within an inclusive education system. Their role seems to be reduced in the future to providing only for those with the severest difficulties and most complex needs.
The issue is what inclusion really means and I question the assumption of an automatic connection between inclusion and mainstream. The paradox is that in reality some children will feel and be more included in the real sense in a special school than if they were in a mainstream school— however good and well provided for—and go on to achieve more academically and find a place in society. Indeed, if the experience of my school is anything to go by, it has been precisely the experience of mainstream which has been deeply and damagingly excluding to some children. This is no reflection on the quality or the provision of the children's previous schools, which have been good, competent, caring schools. But inclusion is above all about that quality of experience, of feeling included, which in turn has everything to do with the total environment of the school in relation to the child's particular needs and the attitudes of young adolescents.
Professor Tomlinson's seminal report on inclusive learning in 1996 speaks of the different learning needs and learning styles we all have, from the most able to the most disabled, and the pivotal influence of the learning environment which we all have to have to be helped to learn. For some, such as the fragile child, a mainstream school is simply overwhelming both in its scale and nature. The hurly-burly of the big secondary—the noise in the dining room, the rush on the stairs, the bustle in the playground and the size of the classes—all coupled with the upheavals of adolescence leave the most robust uncertain, trying to find out who they are, coping with emotional, hormonal upheavals as well as the pressures of academic achievement, and so on.
I am never off my knees in thankfulness that I shall never again have to be an adolescent. It does not take much, therefore, to imagine that if you have Asperger's, or you are dyspraxic and always making a fool of yourself in gym or games, or if there is teasing and bullying because you are just that little bit different, slow and unable to cope with the complications of friendships—if you have any, and probably you do not—and all you know is that in any situation you are the person nobody wants as a partner, that it is a short step to school-refusing, or the kind of behaviour which may get you into trouble, or the physiological reactions I mentioned earlier. Self-confidence goes to rock bottom, self-esteem ceases to exist and learning cannot take place. Additional resources, auxiliary help, better trained teachers, a good learning support department—all of

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which are priorities now—are not the answer for these children because it is the total learning environment which creates the barrier to learning.
For those, and many other children with SEN, the starting point is a much smaller learning environment where different needs can be acknowledged and celebrated and where with individualised educational programmes even a class of seven takes an experienced teacher all his or her time to be sure that all needs are being met.
The Government say that they want to see special schools providing education for children with
"the most severe and complex needs, and sharing their specialist skills and knowledge to support inclusion in mainstream schools".
I urge the Government to recognise that true inclusion comes in many forms, and simple mainstreaming is not the answer for many whose needs are not the most severe and complex but simply different. We talk about celebrating diversity in our society. Why cannot we celebrate a wider, more flexible range of provision, which is essentially needs-led, which recognises that even in the most perfect mainstream school the best may not be brought out of every child and cannot help them to grow into confident and independent citizens, valued for the contribution they make?
It has always seemed to me a most disturbing irony that as the Government have been developing "specialist" schools with enthusiasm, it is the "special" schools at the SEN end that are being phased out. My school is a place where, for the first time, the children feel truly included, valued for who they are, warts and all, where they experience friendships for the first time—including those with Asperger's or with autistic spectrum disorders. And as a direct result of being in an appropriate learning environment they discover that they have abilities they never dreamed of and achieve more than anyone believed possible.
The inclusion development programme is excellent in many ways in that it is predicated on partnership programmes with all the relevant agencies, drawing on shared knowledge and expertise, developing an evidence base of what works and building a consensus on how to implement good practice most effectively. That is precisely what we do at the New School where we are building partnerships with several local authorities and are recognised as part of a range of provision depending on need. For example, our work with school refusers is currently seen as a particularly helpful service, and children can be fed back into the system when and if they are ready. But one must be very careful of those transitions with fragile or vulnerable children. They are difficult to manage.
I urge the Government to apply their programme flexibly, using the criterion of meeting individual need, rather than some inexorable process of working towards the mainstreaming of all but those with the most severe and complex needs. To do so will be to negate all the best practice and the achievement of true inclusion.
Lastly, perhaps I may say a brief word on parents. We talk in my school about fragile children and fragile parents. I speak as a fragile parent. They do not seem to
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have featured much in the report's consultations. The report speaks of a "culture of mistrust" which is right and springs from the very real anxiety that parents so often have that mainstreaming their children is just not right for them, coupled with the fear that their views are not heard or do not have much weight and thus their only protection comes through a statement.
In Scotland, the Education (Additional Support for Learning) (Scotland) Bill proposes to do away with the record of need—the equivalent to a statement in Scotland—and the requirement that that lays on local authorities to consider and take account of parental views. For many parents, it is a kind of crutch. They feel that it is the one way in which their views will be heard. It appears that the proposals in the support for learning Bill will be followed in England, and that is causing real anxiety for many. Parents must be part of the partnership programme, coupled with the acknowledgement that some of their children's needs may not be met in the mainstream setting. That would do so much to allay fear and suspicion, which springs from the feeling of not being heard.
Of course, many children with SEN will do more than just cope and will thrive in mainstream if the Government achieve all the objectives that they are laying out and if the right levels of support and adequate training and commitment are available from the teachers, whose task is already enormous. I applaud all those who can and do. But, in the interests of best practice, a differentiated range of provision must remain so that all children's needs can be met in the most appropriate way possible. If that is not the case, I fear that we condemn many who, like my daughter, drowned quietly at the back of the class because her needs were not so severe. I cannot believe that that is what the Government really want.
4.51 p.m.
Lord Davies of Coity: My Lords, first, I express my appreciation to my noble friend Lady Massey for introducing this important debate on special educational needs. Secondly, I congratulate the Government on producing their report, Removing Barriers to Achievement, which I wholeheartedly welcome.
As many noble Lords will know from my previous statements in your Lordships' House, my concern for the interests and protection of children has been a major priority—so much so that I have found myself at odds with the Government whom I support. I refer, of course, to the issues of promoting homosexuality in schools, reducing the age of consent and the adoption of children by homosexuals. It has always seemed to me that, although perhaps the Government wished to extend freedom for the adult, in their haste in such matters they did so at the expense of the protection afforded to the child.
However, the Government's document that we are debating today goes a very long way in the right direction towards making greater educational provision for children who have special needs and towards ensuring that they receive the best education possible and are able to enjoy the best quality of life possible. For that, the Government must be applauded.

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Of course, very many schools up and down the country will have pupils of all ages and at all levels of education to whom special educational needs are applicable. Indeed, my wife is a governor of Pownall Green Primary School at Bramhall near Stockport, where 12 per cent of the pupil population of 460 have special educational needs. For years, the school has had a special needs action policy, which it conscientiously applies and reviews every two years. However, in addition to those categorised as having special educational needs, the school also has, on a list of concern, a number of children who are slow learners and to whom extra help is provided. The school has received beacon school status and the headmistress, Mrs Helen Ashcroft, was invited to sit on an advisory committee, chaired by my noble friend Lord Puttnam, dealing with creativity in the curriculum.
However, in my contribution to this debate, I shall concentrate on those with the greatest need—those with the severest disabilities and those who need the maximum attention. I wish to concentrate on those in an educational establishment where the ratio of teachers and carers to one pupil can be 1:1, 2:1 or sometimes 3:1. I refer to the Royal School for the Deaf, Manchester, which is a charity established in 1823 before, I believe, Manchester was afforded parliamentary representation.
For more than 180 years, that school has been catering for children with deafness and other disabilities—often a multiplicity of disabilities, both physical and mental. So much so has that been the case that very shortly the school, of which Her Majesty the Queen is patron, will change its name to "The Royal School for the Deaf and Communication Disorders". As the school is non-maintained, a large amount of the funding comes from the voluntary sector. As I have recently become a little involved in that work, I should declare my interest.
The Royal School for the Deaf, Manchester, costs in the region of £5 million a year to run. Currently, it has 78 pupils. About one-third of those are from Greater Manchester; approximately one-third are from elsewhere in the north-west; and a further one-third are from all over the United Kingdom. Half the pupils are residential and a number of those are in the school's care 365 days a year. At present, there is a short waiting list for places.
All the children at the school have exceptionally complex learning and social needs with a range of additional disabilities, including multi-sensory impairment, exceptionally low cognitive ability and additional communication needs. The school also admits a significant number of children within the autistic spectrum, children with cerebral palsy and those with challenging behaviour alongside other special educational needs. The school is often referred to as "end of continuum" as it takes children and young people whose placements in mainstream and special schools have broken down, more often than not because their complex needs are being compounded by their challenging behaviour. For some, the only alternative would be some form of secure provision.
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Having tried briefly to acquaint your Lordships with the work of the Royal School and the children that it takes, I shall now quickly address the Government's strategy for special educational needs, which, of course, builds on the strategy Every Child Matters. The strategy illustrates a continuation, starting with early intervention and working in partnership, which includes working with parents, and it looks at ways of tackling bureaucracy. Those can obviously be wholly supported.
However, the Royal School for the Deaf, Manchester, feels that some areas have not been fully addressed and it has some genuine concerns, with which I am persuaded to agree. In the Government's document, pages 44 to 48 are appropriate to the Royal School. The last sentence of paragraph 2.29 on page 44 includes the words:
"There are concerns about the high cost of such placements".
Although that is a general and not a specific statement, the Royal School is worried. Although it has received a glowing report from Ofsted, the Royal School is concerned that the document may not fully recognise that high costs reflect the high need of provision required. The costs for a day student at the Royal School are approximately £15,000 a year but, for a 52-week residential pupil with a multiplicity of disabilities, requiring education and care on a ratio of one-to-one or higher, the cost can be as much as £180,000 a year.
The fear that arises from the document's comment is that, if the costs are to be trimmed, the quality of provision will also suffer and that will be counter to what the Government's strategy is all about. We feel that there must be a clear realisation of the costs involved in providing education and care for children who suffer from the worst of disability and behaviour difficulties. Although the Government's paper addresses broad issues, it appears, we feel, not fully and specifically to address the needs of children with the most complex difficulties.
In our view, there is certainly a need to ensure that those children do not lose the resources and skills required. Unfortunately, at present, there is a desperate shortage of suitable support for children with complex needs who have additional mental health problems. Regrettably, there is a lack of skilled staff to deal with the needs of complex children, particularly in regard to child and adolescent mental health services. We feel that there must be very positive action on the part of government to ensure that skills and resources are in place if the strategy is to succeed in respect of those children about whom I have spoken.
In conclusion, I hope that I have highlighted the fears and concerns of those at the Royal School who, day in and day out, provide service to those children whose need is great. I hope that in reading this debate the Government will enter into a positive dialogue with those at the sharp end who provide the education and care for those who need it the most. That, I feel, is the approach that will achieve the greatest success for these children and young people.
5 p.m.
Baroness Brigstocke: My Lords, all must applaud the Government's sentiments as set out in the recent document. For me, the most important word in the document is "support". It is not only the fragile—a word used by the noble Baroness, Lady Linklater—children who need support. Their fragile parents and often their rather fragile teachers, who sometimes encounter cases of extreme behaviour with which they do not know how to deal, also need support.
When I first entered the House 14 years ago the late Lord Joseph, who as Keith Joseph was at different times Secretary of State for Health and Secretary of State for Education, asked me to be a patron for Home-Start, a charitable organisation using trained volunteers to give friendly, unthreatening help to families who find it difficult to cope with their children up to the age of five. He told me that Home-Start was one of his favourite charities because early support for parents with what we used to call difficult children was essential. Today Home-Start UK has 330 schemes running in the UK and for the British forces in Germany and Cyprus. It helps with more than 27,000 families and nearly 61,000 children. It has had, as it were, a baby, Home-Start International, which has more than 100 schemes all over the world. I have the privilege of being chairman of that baby. I hope I am not mixing metaphors. Good practice is being shared and I am sure that those in the DfES today who are developing the strategy for early intervention to identify and to help SEN children will acknowledge their debt to Home-Start.
The second group of people whom I believe need support are teachers. At this point I should declare that I have been a teacher all my adult life, teaching in both the maintained and the independent sectors. I am very proud of the city technology college that I have served as chairman of governors for the past 10 years. Landau Forte College is truly comprehensive, set as it is in the former industrial centre of inner city Derby. It has an admissions procedure that, I am glad to say, is approved by the DfES. It was an excellent idea to have city technology colleges and I am glad that the present Government continue to support them.
Naturally, at Landau Forte College we have our full share of SEN children. Some have physical disabilities such as sight and learning impairment, some are slow learners, some have speech impediments, one or two use wheelchairs and some can hardly read when they come to the college at age 11. Every effort is made to integrate those children, giving them self-confidence, realistic aspirations for the future and a sense of being valued and true members of the community.
Our special educational needs department consists of three full-time and four learning support teachers. The college places high priority on budgeting provision for SEN support. That is what I mean by support for the teachers. The children who need more help than can be given in a large class can be given expert, individual help quietly, on their own. I do not like to use the phrase "withdrawn from a class" because I see those children as
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being given extra-special treatment. That is how it is seen and the specialist SEN teachers co-operate fully because they are colleagues of the subject teachers.
By the way, I do not believe that there is any shame in the phrase "special educational need". One of the aims at Landau Forte College at the moment is to deliver an even more rigorous and demanding curriculum to those at the top end of the academic scale. They, too, have their special educational needs.
I agree with the noble Baroness, Lady Warnock, that there is a great diversity and range among the different kinds of SEN, but there is one group of children with special needs who need more help than a mainstream school—even a very good one—can possibly provide. Those are the boys and girls with extreme behavioural difficulties. I mean extreme. We have plenty of naughty children and we can cope with them, but I am talking about something that is very serious indeed. Nowadays, we call it ADHD. It has taken me a long time to ensure that I can remember what it stands for—attention deficit hyperactivity disorder. There are also those with emotional and behavioural disorders that can be very worrying too.
Such children need extra, specialised help. I worry that if such a boy or girl remained in a regular class he or she could be harmed by being given perhaps too much of the drug Ritalin which is used to calm and, I suppose, sedate. On the other hand, the presence of just one aggressive, hyperactive pupil can disrupt the school experience of an entire class—one person versus, say, 29. Exclusion from mainstream schooling, yes, but inclusion in a special school must be facilitated. The present bureaucratic system of tribunals, sometimes reversing the decision of a school principal, is damaging to the morale of the principal and of the staff and does the school and the student concerned no good.
Of course, it is important to have an overall special educational need strategy hacked by government, but the best way to implement it is by encouraging and suggesting good practice in the schools themselves. All good teachers want to get the best possible results from their students. However, if noble Lords will forgive me, orders and regulations piled on from on high can be rather dispiriting. A focused and enthusiastic senior management team, working with the rest of the staff, can motivate students and encourage them to develop the necessary skills naturally and comfortably. Good practice is then developed as a joint project.
I will finish by mentioning a few of the ideas that have been pioneered at Landau Forte College to give help to students with special needs, both those who are "underachieving" and those who are capable of achieving much more than the norm. First, there is the structure. We divide classes into smaller groups at key stage 4 in the basic subjects of mathematics, English and science. We made eight groups across a year group, where there were six before. We operate a longer school day, to give extra time for individual help or for quiet study for those who have no place to study at home.
A personal tutorial system has proved a good idea in Derby. Each tutor group is run by a member of staff who has his or her buddy, and the two of them become

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almost mentors to the children in their tutor group. It is a vertical tutor group down the ages, so there are two students from each year in the group. Often, the older students in year 12 and year 13 are natural mentors to the younger ones.
Strong communication between the school and the parents is vital. Landau Forte College produces a school guide and a workbook for every student. Parents are encouraged to look to see what their daughter or son is doing, and we like them to sign when they have seen it and the child has done the work. Parents' evenings can be a nightmare both for parents and teachers, as I know only too well. There are long queues of people waiting to be seen and talked to. I once said, "I am the mother of x"—I will not say which of my children it was—and the only answer that I got from the teacher was, "Oh dear".
We have a student guide system, and we endeavour to give a clear explanation of the system and the learning objectives. We share the assessment criteria with those who are being assessed. These are just a few ideas that have worked for us. There are so many good ideas in many schools throughout the country, and I visited a great number of such schools when I was on the education trust for the Wolfson Foundation. I look forward to seeing the development of better provision for S EN overall in the country over the next few years.
5.14 p.m.
The Earl of Listowel: My Lords, it is a great privilege to follow a Member of your Lordships' House who has had such a long and important career in teaching, especially in a debate such as this. I hope to come to the point that she made about allowing teachers to teach and riot expecting them to be social workers and take on too many other roles. I thank the noble Baroness, Lady Massey of Darwen, and I join my thanks with those of many other noble Lords who have spoken, for this important and timely debate.
I will concentrate on the education of children in public care and the implications of this important document for their education. Today, I visited a children's home run by Shaftesbury Homes and Arethusa. Their education specialist said how much she welcomed the changes that the Government made in the Education Act 2002, in prioritising the access to education admissions for looked-after children and in the statutory obligation to provide children with education within 21 days following their exclusion from school. I come to this debate with a prejudice in favour of what the Minister has come up with, because what she has done in the past has been so advantageous to the group of children about whom I am most concerned.
Her Majesty's Government acknowledge that the access to education of looked-after children has not been sufficient. The Government wish to raise their achievement. More than half of these children experienced abuse or neglect before being taken into care. Perhaps more than any of our other children, they need the advantages that a good education can provide to help compensate for that lack of early nurture in their lives.
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One in seven children in public care experiences more than three placements each year. Their placement with a foster family collapses once, twice or thrice a year. It is vital for the stability of placements that there is a stable educational place. I ask noble Lords to imagine what it is like for a foster family to take in a child who has perhaps had experience of neglect or abuse and the strain that that puts on that family. Now, imagine if that child is not in school in the regular school day, how difficult it will be for that family to keep that placement going. It is vital that children in care get the full school hours of a full school week. The Minister is concerned about the shortage of foster carers. In England, we are short of 6,000 foster carers. Better access to education for children in public care would facilitate the recruitment and retention of foster carers.
I appreciate the Government's recognition of the special needs of looked-after children and their aspiration to remove the barriers to achievement for all our children and for children with special educational needs. I welcome the personalisation of education and the tailoring of education as far as possible to the individual child; the desire for a better partnership between special and mainstream schools; the adjustments to performance tables so that they better reflect the efforts of schools to include children who are not average; the intention to improve teacher development in the postgraduate certificate in education and for newly qualified teachers, so that they understand the needs of special educational needs children; and the focus on training for school leadership, so that they too are better attuned to the needs of these children.
Special schools often envy the facilities available in mainstream schools. Teachers in special schools wish to share their specialist experience with mainstream schools. However, a special school in Lambeth said that it had approached the local secondary school, a large comprehensive, which had been in special measures, but was now an improving school. Its overtures had been rejected. Apparently, the secondary school wishes to hide its light under a bushel. It was good at managing and working with children with emotional and behavioural difficulties. However, it was afraid that if it gained a reputation of success in such work it would be given ever more children with these difficulties and that that would be too much for it to bear. So I ask the Minister how the Government will prevent schools being penalised for working successfully in these partnerships and with children with emotional and behavioural difficulties.
We should not ask teachers to do more than they are equipped to do. Teachers in France and Japan are expected to teach; they are not given the wide range of pastoral responsibilities assigned to our teachers. Teachers in Paris are not asked to run the after-school photography course or other extracurricular activities; they are there to teach. These extracurricular activities and pastoral care may offer great benefits, but, combined with the additional bureaucracy, are we being fair to teachers by asking them to undertake them?

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A few years ago I had the great pleasure of attending the graduation ceremony of the Association of Child Psychotherapists. After the ceremony I spoke to a former teacher who said, "We ask too much of our teachers. We ask them to be social workers and child guidance counsellors. We should stop doing that". The Joseph Rowntree Foundation's recent report on schools and regeneration said that the biggest contribution schools can make to improving pupils' life chances is to help them attain well in their subjects and gain knowledge. If we ask teachers and schools to include more troubled children, we must properly resource schools and properly equip teachers to do it. Neither must that happen at the cost of other pupils.
There must always be alternative special schools for the children who are most difficult to manage, who have the most demanding needs or who do not quite fit into the mainstream, as the noble Baroness, Lady Linklater, said. I therefore welcome the training which I mentioned earlier and the development of an advance qualification for teachers in special educational needs, with a follow-on specialist qualification, to enable teachers to understand the needs of these children and work with them.
The noble Baroness, Lady Massey of Darwen, rightly emphasised the importance of partnership working. I welcome the strong emphasis which the document gives to such working. However, I remind the Minister that child and adolescent mental health services face some difficulties. If a child psychotherapist works face to face with a child, that work is registered and reported on. However, when the psychotherapist works with a staff group, that work can be very difficult to fund and nearly impossible to recognise. A child psychotherapist at a school in Lambeth told me that the NHS regarded his work in support of a staff group working with very difficult children as about as valuable as if he were playing a round of golf. This afternoon a clinical psychologist supporting staff in a children's home reiterated that point to me.
We need to be able to recognise that work. If we are to have inclusion we need a more emotionally literate front line. We need to support the front line in their stressful work with troubled children if we are to retain them in this field. Will the Minister undertake to look at this particular issue? I will write to her with more details.
I finish by warmly welcoming this document. Implementation will be challenging. However, if children in care are to thrive as they should, this is definitely a step in the right direction.
5.25 p.m.
Lord Puttnam: My Lords, I, too, should like to add my thanks to my noble friend Lady Massey for making this debate possible. I should like also to take the opportunity to congratulate my noble friend the Minister, whose knowledge and commitment to the subject are evident on just about every page of both the Green Paper, Every Child Matters, and the report which is the subject of this debate.
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It is a debate that allows me to take a stab at coherently addressing some of the sights, sounds and experiences I have absorbed in these past almost seven years. I have been enormously privileged to have had access to, as it were, a front-row seat from which to observe the largely unreported and certainly under-appreciated improvements that have taken place in the provision of education for every child in the state sector. My years as chair of the General Teaching Council for England involved not only listening to the way in which the inclusion/exclusion debate was developing within the profession, but travelling the country looking at how practice was developing and being implemented on the ground.
I think that it is fair to say that, over the course of the 350 or so school visits I have made, I have been left with about a dozen memories that have not only informed my thinking generally but will remain with me for the rest of my life. And of these, at least half resulted from visits to special schools or, in a couple of cases, special needs departments within the mainstream. It may interest the noble Earl, Lord Listowel, that one of my most vivid memories of last year was giving GCSE certificates to a group of looked after children in the north-west. It was extraordinary because none of the children received more than three certificates that day and most received one. The enthusiasm and excitement in the room were extraordinary, as much among the carers as the recipients. It was the very first group of children in care who had ever passed a GCSE in that region.
So in some ways I suppose that it is not all that surprising to be moved when one is dealing with the special needs sector. One has to be pretty hard of heart not to respond to the extraordinary efforts being made day in and day out by teachers and their assistants trying to build fulfilling lives for children who in many cases suffer every form of disadvantage imaginable. That said, noble Lords can well imagine how much I welcome and endorse the broad thrust of the Government's policy. The report sets out to identify and address the confusion of aims, means and priorities that have for years bedevilled this vital branch of education entitlement.
The report acknowledges that too many children have had to wait too long to have their needs met. It acknowledges that good provision is "patchy"—and I would say that that is being somewhat generous. It acknowledges that the levels of uncertainty that the policies of successive governments have helped to generate have to be a thing of the past. Lastly, it acknowledges that for too long too many children have been denied places within a mainstream setting because lack of provision, inadequate funding and a lack of specialist training make it too easy for schools to duck what some of them see as simply an additional burden.
I should like to address that last point at a little more length. As I see it, this is where we fail to understand the full nature of the opportunity that society is offered when asked to address the issue of disability. Schools certainly represent the best microcosm of society that I have ever come across.

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Were I to be totally honest, I would have to admit that when I started off on my educational adventure in 1997, if I thought about special education at all, it was with the belief, or at least the assumption, that children with reasonably severe disabilities would probably be most advantageously educated separately from the mainstream. It did not take many visits to schools of all kinds to discover how very wrong I had been and almost more importantly, the degree to which I had been looking at only one side of the coin.
The benefits to be gained through integration or inclusion within a well staffed mainstream school with a committed head and an understanding local authority have to be seen to be believed, most particularly in terms of the atmosphere and ethos of the school as a whole. I found myself, not for the first time, entirely agreeing with the noble Lord, Lord Lucas, who I thought made this point rather better than I call. From the very earliest years, it can only be good for young people to come to terms with the fact that they live in an imperfect and sometimes very unfair world, and that, as individuals, they have the capacity to help make it that much better.
Imagine spending one's formative years in a relatively enclosed social environment, forming a constructive relationship, even a close friendship, with someone who will never be able to live life as fully as you, and then discovering that, through one's own efforts and through one's own response to their affection and need, one can enrich one's own and their lives in so many ways. I leave it to noble Lords' imaginations to think of a more productive and worthwhile way of enabling young people to develop as caring and sensitive citizens. These are anything but one-way relationships. What the disadvantaged child can offer back to the school is, as most headteachers will confirm, simply incalculable.
Yesterday afternoon, I visited a UNICEF project in Johannesburg. It existed as a children's support group through a co-operation with British Airways and the local council. It is dealing with problems on a scale far greater than any we can even begin to imagine, yet those problems are being addressed with an enthusiasm, a commitment and a desire for change which I am not sure that we constantly or consistently match.
In the time that remains to me, I should like to add a few practical observations. An enormous amount of debate has taken place in the past year or so about what is termed "workforce reform", including the role and the professional development of support staff. However, if one is to go to any school offering first-class provision for special needs children, one will see that most, if not all, of those seemingly intractable staffing problems are not only resolved but are part and parcel of the day-to-day functioning of the learning environment. Every qualified special needs teacher—of course, there are not enough of them—will confirm that they could not for one moment function without the support of their classroom assistants. In many cases, the ratio of assistants to teachers is two to one—occasionally even three to one. I have never understood why the experience of the special needs sector has not been drawn on more
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heavily in thinking through the most appropriate composition for the professional workforce as a whole. The analogy is not perfect, but valuable lessons for schools' staffing and management are surely there to be learned.
On the subject of lessons learned, while the profession and the Government agonise over the introduction of a more personalised approach to teaching and learning, once again, there is abundant experience in SEN on which to draw, where nothing but a personalised approach has ever been appropriate. That is also true in developing experience of behaviour management and most particularly in the introduction and day-to-day use of technology-enabled learning, but that subject deserves a debate all of its own.
As the report indicates, partnerships, both formal and informal, have developed between special schools and the "engaged mainstream". That is in every way to be encouraged. Special schools have so much to offer, not just to those children with profound disabilities, to many of whom they represent the only lifeline outside of a caring home.
I also am a fully signed-up optimist, so I hope that noble Lords will not deem it inappropriate for me to end on a note of caution. In driving ahead with these overdue and, for the most part, admirable reforms, we must be careful not to throw the baby out with the bath water. Even the best of our special schools will feel their future to be threatened by the now-overwhelming acceptance of the argument in favour of inclusion. However, within our special schools resides a vast wealth of experience, most particularly of differentiation between types of need—how to apply what, and when.
I recall one small and telling statistic, which is little more than a variation on that cited by my noble friend Lady Massey. At any one time, some 2 per cent of the school population attends special schools, yet more than 20 per cent of school-age children are in need of some kind of special needs support. Most of the specialised, highly trained staff in that area have historically been unable to offer their expertise to the vast majority of children who need it. The partnerships to which I have referred offer one way forward, but as the Government's policy develops, I hope that every effort will be made to secure the future of our special schools, while developing and spreading their expertise wherever it is needed. It is absolutely crucial that we develop a range of excellent provision that is sufficient to meet all needs. That was exactly the point of the noble Baroness, Lady Linklater.
I am concerned that those who see state education as largely a number-crunching exercise will be tempted to seek "one-size-fits-all" solutions to uniquely individual problems. In saying that, I simply echo the noble Baroness, Lady Warnock. I sincerely hope that we can rely on successive governments to resist that temptation. Good education is expensive and it is likely to become even more so. Nowhere is that more true than in our constant search to improve the life chances of children with special needs.

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Any society in the 21st century that wishes to consider itself civilised cannot seek to minimise that investment. If noble Lords feel in need of a clinching argument, they should look no further than the title of the Green Paper. It is because "every child matters".
5.36 p.m.
Baroness Howe of Idlicote: My Lords, all of us owe particular thanks to the noble Baroness, Lady Massey, for securing this early debate. Perhaps I may echo the congratulations of the noble Lord, Lord Puttnam, to the Minister on her influence being clearly shown in the report before us.
Earlier this afternoon, I was at a conference in Portcullis House, under the sponsorship of Oona King MP. A film was shown that featured a group of dyslexic young people from Hackney. They were very talented young people. It was an outstanding production. It was outstanding because it reflected the determination of the film's director, herself dyslexic, to encourage the youngsters themselves to tell the story of how talent can be released by the right professional help. The film also made clear the importance of peer-group support and encouragement, rather than the mickey-taking and bullying that can happen all too often in the school programme and elsewhere, even from adults, who should know better.
Some youngsters who took part in the film joined us for a little while to hear some of the debate. They saw for themselves that all of us in Parliament really are concerned to reduce, and remove where possible, the very real obstacles that they face and, in the words of the Secretary of State for Education, to allow,
"all children to enjoy education which enables them to fulfil their talents and provides a firm foundation for adult life".
The report is a welcome step forward. It clearly acknowledges that despite what the Government had believed to be a robust legal framework and set of procedures, set down in the Special Educational Needs and Disability Act 2001, far too many children with special education needs do not receive the support that they and their parents need.
The postcode lottery, about which so many of us spoke when the matter was debated in February of last year, is firmly acknowledged in the report, as is the legal struggle that parents often have to face in order to obtain statements and the like. That means double jeopardy for those in most need of help, because parents from disadvantaged backgrounds are the least able to take the legalistic and bureaucratic route to addressing their problems.
Therefore, many of the conclusions about the way forward that are set out in the report do indeed make sense. The breadth of the whole strategy is impressive. The report accepts that SEN schooling should be tailored to each individual child's need. That is the "personalised learning", as the report calls it, on which so many noble Lords have made comment. The decision to transfer responsibility for children's social services to
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the Department for Education and Skills is also a step in the right, joined-up-government direction. It might even result in money being saved and/or better spent.
The policy decision that more opportunities should be provided for parents who wish to see their children educated in mainstream schools probably makes good sense too—again, many comments have been made on that—but with the provision that the necessary support and expertise are available. Here, the intention to use the teaching expertise that already exists as a resource from special schools to mainstream schools is clearly right. So is the policy to encourage more special schools, whether in the private or the public sector, to participate in federation, cluster and twinning arrangements with mainstream education.
However, not all parents and children will accept that mainstream schooling is the right route for the child. At present, one third of all SEN children attend a special school, and changing views will take time. It will be important to get parental backing for the policy. Like the noble Baroness, Lady Massey, I was particularly pleased to see the remark attributed to the Minister that the approach should be towards a system that can provide not "either/or" but "both/and".
Currently, one in five or one in six children need help during some part of their schooling, and we know that that number will grow, for two reasons. First, there is an increasing recognition of the complex spectrum of SEN and other disabilities. Secondly, more babies survive who, in earlier times, would have died at birth. So the need for special units in mainstream schooling should be a very high priority. That approach is right because the hallmark of any civilised society is the way in which it treats its most disadvantaged citizens. However, it is also right because there is a clear bottom-line benefit for so doing. Releasing and developing the talents of every citizen benefits the whole economy. The more successful we are in that —with every child, particularly SEN and disabled pupils—the greater will be the degree of self-help and personal satisfaction engendered and the less will public resources be needed.
In this respect, your Lordships will also have been pleased to see that the availability of a minimum standard of support and expertise will be a required provision for each local authority, and for every school as well. I hope that that, too, will help to ease the current postcode lottery situation.
There are two other points I should like to commend. First, as others have said, there is the importance given to early intervention. As the report rightly puts it, this is "the cornerstone" of the Government's strategy—that is,
"reducing the risk of long-term under achievement and disaffection".
Secondly, children themselves should be involved. The involvement of parents and children is becoming increasingly obvious in every form of planning for their future. The Salford Early Support Pilot Programme referred to in the report was a useful illustration. It shows how voluntary organisations can and should be involved.

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The importance of early intervention is picked up again by acknowledging the very real current difficulties in finding suitable childcare for children with SEN and other disabilities. The new strategy, involving Sure Start and children's trusts, with links to children's centres and extended schools, should certainly help with the dissemination nationally of best practice. If it is still believed that where possible, parents, including single parents, of SEN and disabled children should be encouraged to return to employment, then surely a far greater priority needs to be given for extended hours childcare with the necessary expertise.
There is one more specific issue. It was good to see an acknowledgement of the extra problems faced by looked-after children—again, the issue was highlighted during our debate last year. The finding, in 2001–02, that these children were 10 times more likely to be permanently excluded than their peers is, and remains, particularly worrying. So it is reassuring that the Government are committed, in full, to implementing the recommendations of the Social Exclusion Unit's report, A Better Education, for Children in Care. What is not clear is the timing of that commitment. By when will it be implemented?
For looked-after children, a local authority is, by definition, in loco parentis. Surely, in that case, as the Disability Rights Commission has pointed out, the special educational needs or disabled child concerned should have an advocate independent of the local authority to represent his or her best interests. Can the Minister please address this point in her reply?
The Disability Rights Commission also draws attention to the important provisions in the draft discrimination Bill which will require every public authority to have due regard in carrying out its duties to the need to eliminate discrimination and promote equality of opportunity. Those two phrases are carved on my heart from the Sex Discrimination Act, and I am very glad to see them in the draft Bill. This is a requirement where facilities for disabled persons are not as satisfactory as those for other citizens. Can the Minister assure the House that the Government's strategy, along with the Children Bill—which, in a most timely way, received its First Reading today—ensures that this happens?
Let me close by asking the Minister to expand on three other issues in her reply. First, how is progress to be monitored? Should more specific targets be set? Again, the Disability Rights Commission has pointed this out. What time-scale is envisaged for the various targets that are set?
Secondly, as the Minister will know, the Independent Panel for Special Education Advice is calling for a genuinely independent agency to be established to receive complaints and to enforce the law. Can the noble Baroness say a little more about that and assure us that such an agency is not needed, if that is the Government's policy?
Last, but by no means least, the plans outlined, which so many of us have endorsed today, will clearly cost money, yet we are told that no extra resources are to be made available. So how is that gap to be bridged?
5.47 p.m.
Lord Dearing: My Lords, my vivid initial impression of this House was of a packed Chamber debating higher education. I dare say, in another few weeks, we shall have another packed House debating higher education, and we shall all enjoy it. It makes it all the more welcome that we have this opportunity today, thanks to the noble Baroness, Lady Massey, to debate our concerns about that one in five of our children who need special help in our schools. We need to be so concerned for them, for our own sakes as well as theirs.
Therefore, I particularly welcome the government report, Removing Barriers to Achievement, and congratulate the Minister on it. I am sure she will be a powerful advocate of its implementation. As an old hand, who has seen many reports come and go, I say to the Minister that the easy part is saying what should be done— the part that matters is getting it done. As a spur to the sides of the Minister's intent, may I request that at annual intervals for the next four years we have a progress report on the implementation of the proposals made in this document?
Let me turn briefly to the specifics in the report and what was said by the Audit Commission in its 2002 report. I welcome the commitment to early identification and action, and the Audit Commission report's frank recognition of the need to break free of the slow-moving bureaucratic processes that stand in the way of instituting action. I can well imagine the frustration of parents as they see their child's needs and, against that, the time—the months, maybe the years— before action is taken which, possibly, because of financial stringency, is insufficient to meet the need.
My second point deals with inclusion, which has been much mentioned this afternoon. Paragraph 122 of the Audit Commission report reads:
"Almost every head teacher interviewed raised the issue of 'league tables' of school performance. This lay behind the reluctance of some to admit children with SEN, for fear they would 'drag down' the school's position; and could have a damaging effect on staff morale, failing to reflect the considerable achievements of some of the hardest-to-teach children and their teachers. This was seen as perhaps the key issue that the Government in England needed to address if committed to pursuing its policy of greater inclusion".
I am sure that the Minister is strongly committed to inclusion. But, if we are going to get that, we need a "pull" factor as well as a ministerial "push".
If teachers, parents and children are going to be as motivated as possible, we need recognition of achievement. In 1996, the Government of the day invited me to write a report on qualifications for 16 to 19 year-olds. That report was proposed that there should be national awards at four levels: the highest level would be equivalent to A-level; the next level to GCSE grades A to C; the next, to GCSE grades D to G; and then there would an entry level. That would allow us to recognise what to some children would be remarkably good achievements; and recognise, also, the teachers and their work.
Mike Tomlinson's report says exactly the same thing: we need four levels, including an entry level. I urge that we do not wait another eight years for implementation of its recommendations, as we did after the Dearing report.

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I ask the Minister to pick up the Tomlinson report as a matter of urgency in the interests of children with special educational needs so that there is recognition of their achievements. I further advocate that a very important part of that recognition is to value added, and inclusion of the results in the value added tables.
As for the "push" factors, the Minister has potential allies in Her Majesty's inspectors and Ofsted. About a month ago I found myself saying that the work of Ofsted was so important that we ought to have a debate on it in the House. In her response to my supplementary question, the Minister adroitly asked me if I would like to lead such a debate.
I will make a brief overture. The inspectorate is a force for immense good in our schools, especially when it concentrates on what can be done to improve matters, rather than on what is wrong. It should look at the arrangements for securing inclusion on admissions policy, to see that children with special educational needs are admitted to the schools to which they are attracted.
I would like to see a vigorous attack on these time-consuming, bureaucratic processes, that stand between early identification and action to assist those children before they slip so far behind that they may be condemned to regressing even further, because it is so difficult to catch up.
I would also like them to be advocates. The noble Lord, Lord Lucas, and others referred to innovative ideas that are proving successful—for example, the Lazarus Centre in Birmingham and the National Grid Transco Foundation initiative in Reading. I have been impressed to see innovative approaches working very well.
We trust the Minister to act as the champion of the needs of these children. In doing so, she will have the opportunity to help those who otherwise would have impaired lives. What she does matters to the wellbeing of our whole society. Unless we help these youngsters while there is time, we shall reap the cost of a dislocated society. The wellbeing of our society depends on us responding to the report and securing action on it.
5.55 p.m.
Baroness Sharp of Guildford: My Lords, I thank the noble Baroness, Lady Massey of Darwen, for initiating this debate. As she and others have mentioned, we were deprived of the opportunity to debate the statement when it was put out three weeks ago, and some of us felt that that was a shame.
It is much more satisfactory to have a three hour debate and be able to give consideration to this matter, rather than to give a quick response when most of us have hardly seen the document. I have enjoyed the opportunity for this debate. We have all benefited from it.
I should also like to congratulate the Minister. It is very much her document. I like its format: where we are; where we want to be; actions that must be taken. It is clear. We know where we are going. I like that.
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Like other noble Lords, I looked back to the debate we had on 29 January last year following the Audit Commission's report on special educational needs. The noble Baroness, Lady Warnock, mentioned that debate because the key issue that we considered was whether we needed another review of the issue of special educational needs, as was suggested by the Audit Commission. In particular, we considered whether it was right that 70 per cent of resources devoted to special educational needs should be concentrated on the 3 per cent of children in our community who have severe special educational—needs severe learning difficulties—as distinct from the 20 per cent of children who have special educational needs of one sort or another.
At the time, the noble Baroness, Lady Warnock, argued that we needed, and should have, a fundamental review. Her argument was endorsed by the noble Baroness, Lady Blatch. The Minister and I took the view that we needed to see the Special Educational Needs and Disabilities Act 2001 and the new code of practice bed down before we considered whether we needed a fundamental review. I remain of that view. We are not yet ready for a fundamental review.
However, as the noble Baroness, Lady Warnock, suggested, some very real questions need to be answered. This paper has the wrong title. It is not a "strategy". The strategy was laid out 30 years ago in the work that she did. It has been continued and reinforced in the past few years with the series of papers that the Government have issued, and in its implementation through the Special Educational Needs and Disabilities Act. That is the strategy and the framework of legislation that we are working to.
What we have here—and it is what the Minister promised us in the debate last year—is a programme of action. The Green Paper Every Child Matters is also part of the programme, answering to the Climbié inquiry and being a precursor to the Children Bill which had its First Reading today.
As a programme of action, it picks up on the criticisms that were brought forward by the Audit Commission report. It answers those criticisms by saying, "This is what we are going to be doing and this is the timetable we have in which to do it". What we see in this report is the emphasis on the importance of early intervention and the development of a coherent programme for intervention for those with special educational needs in early years. We see that there is a need for more co-ordination between health services, social services and education services, and the development of the idea of the children's trusts, which was incorporated into the Children Bill and Every Child Matters.
I have to say that I share with the noble Baroness, Lady Warnock, some scepticism about how satisfactorily we are going to be able to get joined-up working within the concept of children's trusts. I am very uncertain about the whole question of whether schools should be the prime actors in some of that co-ordination. It will be extremely difficult to achieve that.

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Another item that is considered in the paper is the need for more support for schools in managing the whole diverse range of provision needed with special educational needs. Again, it mentions the lack of systematic measures for achievement of children with special educational needs and the need to develop those measures. Lastly, it refers to the uncertainties over special schools.
That is what the paper is about, and there is much in it that I welcome. I suppose that I am particularly pleased, as many other noble Lords are, with the emphasis on early intervention. There is no doubt whatever that the earlier the intervention can be made, the more likely remedial measures are to have effect. We welcome the commitment of resources to that early intervention; to the gradual rolling out of the early support pilot scheme, making it more extensive in the country; to the establishment of a national centre for excellence in early intervention; and to the general emphasis on joined-up thinking, working and partnership at this level of intervention.
I welcome, too, the clarification of the role of special schools. We have had a good deal of discussion of that subject today, and my noble friend Lady Linklater made a special plea that the complementary role between inclusion within mainstream and the role of special schools should be acknowledged. She echoed widespread concerns that there are fragile and vulnerable children who are not necessarily well served within the mainstream sector and who need to be rather more protected—possibly just for a short time. The notion of spending two or three years in a special school and then going back into the mainstream community is one that, if one can achieve it, one would like to see. Undoubtedly, however, we are all agreed that there is a special place for special schools. We certainly do not want to see the demise of special schools in any sense; it is important that they are seen as part of the overall provision.
I welcome very much the development and extension of the techniques for monitoring and assessing performance of special educational needs pupils. It is not right that, in a world so dominated by performance indicators, the special educational needs children have effectively often been left out of the picture completely. Because they have been left out, people have sometimes not been concerned about them. Equally, however, since we on these Benches aspire to a world in which tests and testing play a somewhat lesser part in education policy, we worry about the degree to which performance indicators have in themselves led to a climate in which children with special educational needs, who will not achieve highly within performance league tables, will find it difficult to find places at the schools that they would wish to attend.
Finally, I welcome very much the new emphasis being given to teacher training and continuing professional development, as well as to the development of practical tools and the toolkits for teachers for teaching within special educational needs. That said, some parts of the action programme seem to remain aspirational, as the noble Baroness, Lady Warnock, said. The key issue in
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that regard must be resources. In my speech last year, I referred to the time taken out of mainstream teaching by those teachers who were training in special aspects of special educational needs. For each different variety, whether it is language problems, dyslexia, the autistic spectrum or behavioural difficulties, there are different training programmes. That means teachers taking one or two days out of mainstream schooling. That is a matter of resources. The longer that teachers arc required to spend on training, the more resources are required to undertake those courses.
Similarly, with regard to partnership, yes, we can talk about it, but it means finding time to sit down with the professionals from the social services and health services and work out the plans. That also means time away from mainstream teaching. Extending advice and awareness is good, but that too means teachers spending time talking to parents and explaining to them what is available, and working with them through the choices available. We are short of specialists in those subjects: we are short of teachers for special educational needs, of speech therapists and of educational psychologists. We are short of more or less every form of specialist. Time is money and money is resources. Are we really putting enough into the pot for special educational needs? That is a question that we have not considered. If we have a fundamental review, we are bound to consider it. The paper leads to very real questions as to whether we have enough resources.
I am delighted that we are doing more on initial teacher training, but are we doing enough to cope with the full range of needs within special educational needs? That requires taking people out of teaching and having special training for them. I worry slightly whether we are training teachers to work with other adults. The noble Lord, Lord Puttnam, mentioned how well special educational needs teams work with learning assistants. However, on the whole we train our teachers to work with children, not to work with other adults. Are we training them enough to use their learning assistants well, and are we training the learning assistants well enough? Sometimes they have four days training but that is all, and they sometitmes have remarkably little in the way of an educational background. It is important that we not only train them but offer them a career pathway, because they could be some of our teachers of the future, if they were well trained.
Will the Minister say a little about gifted and talented children, and whether resources are going to them? I also wish to say something about admission arrangements. I was rather shocked to talk to a friend from London whose child is 11 and applying to secondary schools to discover that she had taken seven separate tests for admission for London schools. The school that they would like their child to go to happens to be at the end of their road, but they cannot get her into the school at the end of their road. It seems absolutely ludicrous that we are in such a situation, when we have created so many schools, which are their own admissions authorities. That is one of the problems. We have set up admissions forums, but

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those forums have no real ability to mandate in that regard. It is important that we do not use admissions procedures as a way in which to select or deselect the kids. I am delighted that the looked-after children get such high priority, but it is vital that there is not another way in which to select children.
6.10 p.m.
Baroness Seccombe: My Lords, I add my thanks to the noble Baroness, Lady Massey of Darwen, for raising an important topic, which unites so many Members of this House, especially those who have participated in the debate.
We on these Benches warmly welcome the report, Removing Barriers to Achievement, and its commitment to giving children with special educational needs the opportunity to succeed. SEN covers a wide range of needs, including learning, behavioural and physical difficulties. But it is important to tailor the specific requirements of each child. Sometimes we talk too often of categories and not enough about individuals. Understandably individual tailoring will be a huge task in terms of resources, but it is surely the only way to go. We cannot have blanket policies.
Will the noble Baroness tell us of the further investigations that the Secretary of State promised about looking into the funding for an individual child's SEN? We have always promoted the theory of early intervention, and we were glad to see it in the White Paper. Catching problems early will help to give children a better chance to overcome their learning difficulties and give them the best opportunities in life. There is no doubt that the first six months are crucial. Will the Minister assure us that her department will work with the Department of Health to expand birth-to-six-months screening, especially for cognitive and sensory development? I understand that there is a correlation between low birth weight and later special needs problems. Has any research been commissioned on either of those issues, as debated last month in the other place?
I am sure we all agree that finding that one has a child who has special educational needs must be a frightening and devastating experience for any parent, so it is essential that there is early intervention to give support not only to the child but to the parents. I agree wholeheartedly with my noble friend Lady Brigstocke and the noble Baroness, Lady Linklater. We need to ensure that parents do not feel isolated from the process that involves their child.
That means not only effective co-ordination of joined-up government at all levels, but access to suitable child care and the correct information for the child's particular disability. Many parents have made the case that greater co-ordination between the various responsibilities of different authorities would be welcome in the form of a one-stop shop. Will the noble Baroness comment on that? In addition, may I plead, along with other noble Lords, for teacher training colleges to give specialist training, and at least a minimum training in SEN to every teacher to aid that
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vital support and early identification of problems once the child enters school? That is an issue to which many noble Lords have alluded today.
Within that context, will the Minister comment on the issue raised by the noble Baroness, Lady Warnock, that it is now time for a comprehensive review of the statementing process? The noble Baroness was largely responsible for setting it up and is now suggesting that it may be too combative. Many parents say that they have to fight for the interests of their child. Each statement of SEN costs on average £2,500, and local education authorities in England and Wales are spending £90 million each year on assessments and writing statements. That is a huge amount of money. Yet between 2000 and 2001, nearly 1,000 children and families had to wait more than five months for a statement.
Despite the fact that the number of pupils with statements of SEN has gone up by 7 per cent to 250,550 since 1997, I was disturbed, as were other noble Lords, to see that 79 special schools have closed and that the number of pupils being taught in special schools has declined by 5 per cent to 93,880. In addition, there are thousands of pupils with SEN but without statements, which I understand currently constitutes nearly 20 per cent of children in England. I find it very difficult to accept that one in five of our children falls into that category. Perhaps I should agree with my noble friend Lord Lucas that to parents all children have special educational needs.
The Government's policy of inclusion is arguably hurting the very people whom it was designed to help. The Disability Rights Commission has highlighted that two thirds of pupils with disabilities attend mainstream schools, and that more than a third of those surveyed felt that they did not receive adequate support. For example, 20 per cent said that they had been discouraged from sitting GCSEs, and the vast majority did not go on to higher education—only 4 per cent of university students are those with SEN.
SEN children make up 90 per cent of permanent exclusions from primary schools, and 60 per cent from secondary schools. The National Autistic Society states that one in five autistic children is excluded. That is because their needs are not fulfilled—perhaps not even recognised. Will the Minister guarantee that when a child enters school there will be enough teachers and classroom assistants with appropriate training? Will she also accept that inclusion can fail other children too? The noble Baroness, Lady Sharp, said that we need to be aware of the importance of children who are gifted. There is a growing incidence of children with attention deficit disorders, dyspraxia and autism disrupting the classes for other pupils. Parents of mainstream children are obviously anxious when this occurs.
I am worried that although there is a significant and important debate relating to SEN to be had, we must not neglect another category that has special needs. The children to whom I have just referred are brilliant and academically talented pupils who, I fear, are not

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stretched to their abilities. What are the Government's plans to increase support and opportunities for those children?
I am sure that Members of this House would like to hear about the current status of the application of the Government's strategy to Northern Ireland. Now that there is no devolved government, it is our responsibility to ensure that the same facilities extend to parents and children with similar problems in Northern Ireland.
A good well-rounded grounding can be established only by high quality education for all abilities of pupil at an early age through to A-level. That is so necessary, especially for those with SEN. Only that will help to remove barriers and prepare them for life with its ups and downs. It is their basic right in a civilised society and our duty of care to provide.
6.18 p.m.
Baroness Ashton of Upholland: My Lords, I, too, am grateful to my noble friend Lady Massey for this debate. I confess that I was sad that we did not have the opportunity to have a Statement, but I am delighted to have this debate. I pay tribute to my noble friend for her work as co-chair of the all-party group for children and her work as a governor.
I was flattered by the remarks of the noble Lord, Lord Lucas. I recognise what he was saying about abandoning ambition. I have no problem about doing that for myself, but I will not do it for children. I am glad, too, that I perhaps gave him a good reason for there to be another Labour Government.
I pay tribute to the noble Baroness, Lady Warnock. I am always sorry if I disappoint her. I hope to rekindle the fire of enthusiasm. Sometimes ideas formed 30 years ago need to find their time. I have no problem if some of our work has strong or faint echoes of the work done by the noble Baroness, which was important, lasting and critical.
There is so much to agree with on what the noble Baroness, Lady Linklater, said. Of course we are humbled by the knowledge and understanding brought by parents of children with special educational needs and/or disabilities. That is the reality of life and it is our duty to respond to it.
My noble friend Lord Davies of Coity described the Royal School for the Deaf in Manchester. I have not had the privilege of visiting that school. Perhaps that can be rectified. He pointed to an important issue in the debate about how our special schools are working increasingly with children who have more complex needs as children survive longer, as medical science advances and so on. The message from our special schools that I have heard loud and clear is that although they may all have the same number of children to work with, the complexity of needs has certainly grown.
The noble Baroness, Lady Brigstocke, spoke with great authority as a former teacher and with a continuing involvement with the City Technology College. She gave a very good description of what we have described in the strategy as the good day-to-day practice with enthusiasm regarding what is happening
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in that setting and exactly what we want to do. For example, she described the mentoring scheme. Those are exactly the kinds of practice we want to spread around.
The noble Earl, Lord Listowel, predictably in a positive sense reminded us yet again of children in public care. This critical group of vulnerable children, many of whom have special educational needs and most of whom have suffered and need to be in care because of that suffering. I agree with everything the noble Earl said. The group is important in relation to the Green Paper and the strategy. As we speak, a great deal is going on in the department. I shall be pleased to talk about it to the noble Earl as time goes on.
I was grateful to my noble friend Lord Puttnam for his kind words. He has an extensive knowledge—as he rightly pointed out—of our schools and teachers. He has been a strong advocate of support for the teachers and classroom assistants we have been privileged to have in this country. My noble friend made the point that inclusion benefits everyone. If we have one message within this document, it is that it is not a do-gooding strategy, it is about a recognition that done properly and done well—and I will come on to define what I mean by inclusion, because it is not about the setting—all children actually benefit. That is the critical part of it.
My visits around the country too are littered with examples of the kind of enrichment that the noble Lord spoke about in terms of the support that this gives to children who do not have special educational needs and the benefits that they get from working alongside their colleagues who happen to have a special educational need or a disability.
I was grateful to the noble Baroness, Lady Howe, for her support. The noble Baroness made clear points on personalised learning. She gave an important example of the meeting she attended about children with dyslexia. Children with special educational needs can and do succeed. We should never assume otherwise. They fit into the full range of ability of all children. That is the critical point to remember.
The noble Lord, Lord Dearing—who I know is not very well today, so I am particularly pleased to see him—focused me, as he always does, on getting the job done. It is critical. He knows all about that. I am not sure whether I would agree with an annual report, but I do accept, and would be more than willing, to come to your Lordships' House at any time to talk about progress. Perhaps I will leave that in the noble Lord's capable hands.
The noble Baroness, Lady Sharp, told me that she thought the paper was not a strategy. I am perfectly happy to call it whatever she likes; I am not prepared to shred the document, for obvious reasons. But the noble Baroness made, as always, important points, especially—and we will come on to this—in relation to children's trusts and the role of schools in terms of their critical focus. More generally I will say that I am looking at admissions and exclusions for children with special educational needs. I have commissioned a piece of research which reports in September, and I am

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committed to acting on its findings. I want to get underneath what is often anecdotal, but clearly very important, information and evidence to understand precisely what is happening.
It is lovely to see the noble Baroness, Lady Seccombe. I know she will not mind if I refer to the fact that these issues are very dear to the noble Baroness, Lady Blatch. I am very sorry that she is not here tonight. I, for one, would wish to know her views on this strategy. She has been a strong advocate of this area of work. I have her very much in my mind when I think about what I am doing in this area. I hope that she will have a chance to read the strategy and perhaps I will have a chance to discuss it with her.
However, the noble Baroness, Lady Seccombe, raised some important issues. I say straight away that I shall be in discussion with health colleagues and will need to write to her about some very important issues she raised about low-weight babies because I do not have an answer tonight. Equally, on the points about Northern Ireland, I shall be in discussion and will make sure that I write to her.
Noble Lords raised the point that in fact we started the debate, in a sense, in January 2003 when the noble Baroness, Lady Warnock, raised the whole question of a strategic review of special education needs. At the time, the Audit Commission had just published its report, to which noble Lords have referred. As the noble Baroness, Lady Massey, said, too many children are waiting to have their needs met; some children who should and could be taught in mainstream settings are turned away and too many staff feel ill-equipped to be able effectively to support children; many special schools feel uncertain of their future roles and many parents feel that they face an either/or choice in the school that their child attends—that is, either a mainstream or special school—and too many unacceptable variations in the level of support available from the school, local authority or local health service.
In a sense I describe that as a backdrop of lack of confidence—a lack of confidence by parents in what their children would get; a lack of confidence by schools that they could address the needs effectively; and a lack of confidence sometimes in our local authorities to know exactly what our strategy was and to be able to address the needs effectively.
So, within this document—whatever we describe it as—I have used the watchword with the people who have been good enough to write it—and they have been very good at writing it—to say that it must address the issue of confidence. I decided very deliberately to go down that route rather than going for a fundamental review. I think that a fundamental review simply will raise all those fears and concerns again and again and we shall spend too much time trying to address those issues rather than getting on with the job.
I hope that as we progress this work—as we get into the "doing" phase of it we shall be able to debate some of the issues more effectively because there will
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be more confidence in the system. I say to the noble Baroness, Lady Seccombe, that when she talks about inclusion sometimes failing other children, we have to be very clear that the inclusion means that every child is appropriately educated in a setting. It is quite possible for a child to be excluded in a mainstream setting by being at the back of the class, ignored, bullied or whatever.
It is also true that some children with special educational needs would feel more included in a mainstream setting. I think that inclusion is what happens to you as a young child or person in the world in which you live. It is not about saying, "That means you always have to be educated here"—for the reasons I have given. That is an absolutely fundamental principle, on which I think all noble Lords would agree.
I am not prepared, and I know that other noble Lords feel even more strongly about this, to see us waste the potential of some of our children because we have not yet found the ways of taking away all the barriers that get in the way of learning. We cannot afford to waste some fantastic good practice that goes on in schools. The noble Baroness, Lady Brigstocke, and my noble friend Lord Puttnam referred to that. Our early years settings, our local authorities and the voluntary sector have an enormous contribution to make in this area.
I say to the noble Earl, Lord Listowel, that the strategy is about wanting every single school with children with special educational needs to be successful. If one in six or one in five of our children have a special educational need, every school must have children within it who have a special education need and/or a disability. Therefore, our plan should be to make sure that every school is capable of effectively addressing their needs.
The strategy is also meant to provide a bit of national leadership. That became very clear in our deliberations and discussions with schools, teachers, young people and parents. They wanted us to say what it was that we wanted to do. I hope that noble Lords when they study the document more carefully will see that it is about that. As I have said, it is about wherever children are educated feeling that they are able to be given a high-quality education to get them ready for adult life.
But I accept that that is one of the most challenging areas of public policy, particularly for local services. I agree with the noble Lord, Lord Lucas, that improving provision and sustaining improvements is not about a quick fix. It is very important and I do not pretend for one moment that we either can achieve this with a quick fix or that the Government have all the answers.
I want to focus on the role of special schools that I began to talk about. As I have said already, special schools increasingly tell us that the children with whom they are working have more complex needs. It is my suggestion that as time goes on those children will continue to be educated in special schools, but that increasing numbers of children will be able to be

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educated in mainstream schools as we get better at the provision, supporting teachers, providing resources and so on.
True inclusion, as I have said, is not about setting. I am very wedded to the concept of "both/and" and not "either/or". It is possible for children to move across these settings. It is also possible—dare I say it —for teachers to move across these settings. It should be recognised that if a good special school is educating some of its children there, it is a fantastic resource that we need to release to support children in the mainstream setting. It is also true that some children with special needs are in mainstream schools, and others with similar needs are in special schools. We need to give flexibility.
There are fantastic examples around the country of children from special schools being educated in whole or in part on mainstream sites. They have the opportunity to be included, to mingle, learn, grow and develop alongside their colleagues and they are getting the intensive educational work that they need at a level appropriate to their needs. There are good examples of co-location and good examples of all these issues being taken forward.
Noble Lords have pointed to the four areas on which we have focused. There was the greatest endorsement for early intervention. I am grateful to the noble Baroness, Lady Warnock, for her tribute to the importance of early years, to the noble Baroness, Lady Howe, who is a great supporter of the work of Sure Start and of all of our early years work, and to the noble Baroness, Lady Linklater, who described it as the key. I agree with her.
The noble Baroness, Lady Seccombe, wants a one-stop shop. I agree with her. Part of the thrust of the work that we are doing with the Green Paper and with the Children Bill is to try to develop that. In the Early Support pilot programme we are giving parents information about what they should expect from the services and trying to help them to get integrated support, with one assessment that addresses their needs for education, health and social care.
It is also important to address the issues of childcare for parents and children with special educational needs. I know that noble Lords feel very strongly about that.
The noble Lord, Lord Lucas, spoke about getting research right and the national early intervention centre of excellence is a good example of that.
We intend to cut bureaucracy on special educational needs. It is an aim in the document and I am wedded to it. I hope that the noble Baroness, Lady Brigstocke, in particular will agree that it is very important.
It is my view that if early intervention is right and the work in schools is being done effectively, the numbers of statements will drop because parents will not feel that they need to get a statement. We recognise that statements are very important and will continue to be important for children with complex needs. But if resources in schools are right and there is appropriate early intervention and identification then, as I have said many times in your Lordships' House, children
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should arrive at school with their needs addressed, ready, willing and able to be part of the school community, whatever the setting. We must get beyond the idea that in order to get needs addressed there must be a period of failure. This is too often the system at the moment and it is something that we cannot have any more.
Removing barriers to learning is also critical. We need to ensure that the learning environment is right for those children. That is particularly important, not least when it comes to the transfer from primary to secondary school. I think that is the most scary part, not just for children with special educational needs but, as noble Lords have said, for all children. But it is particularly scary for children with special educational needs. When the transfer is done well, it is fantastic. When special educational needs co-ordinators work well together, children transfer happily. But there is the fear, which is very much a parental fear, of the big, noisy "big school" with large people in it who might bully or put off the child. In really good examples that I have seen those big people become the biggest advocates of support for children with special educational needs. It takes leadership and a feeling that the children are really wanted in the school. It is an ethos issue that many schools have addressed. It is very important.
I say to the noble Baroness, Lady Linklater, that it is completely unacceptable that the reason that any child is in a special school is because he was bullied. It is completely acceptable that he is there because it is the best setting, but it is totally unacceptable that it is because of such a horror that he ends up there. It is something from which we must move away.
In the inclusion development programme we shall focus on some of the areas which many noble Lords have referred to, including children who are on the autistic spectrum or who have behavioural and emotional problems. I think that the noble Baroness, Lady Brigstocke, in particular spoke about the challenge of children with very challenging behaviour. It is an important issue. We have a number of children in residential schools or referral units and many of them are there because of family problems that create those kinds of behaviours. We must address this. It is critically important.
We must also raise expectations. That is important. Children with special needs are perfectly capable across the spectrum of educational attainment. We must improve the skills of our teachers and other staff. The noble Lord, Lord Puttnam, and the noble Baroness, Lady Massey, paid tribute in particular to our teachers and classroom assistants and I know that every noble Lord shares their view. It is important that we give them help. We are working with the Teacher Training Agency on what happens in training, in the induction year and in continuous professional development. It will not work if teachers do not feel confident or if we do not train high quality support staff who can work with these children. But it will work if we do. Where schools do train, it works extremely well.

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As the noble Lord, Lord Lucas, said, personalised learning is important. It is at the heart of all of this. It is the individual opportunity. This is as true for gifted and talented children as for children who may not achieve on the higher end of the spectrum, and for every other child. If we can get that right as a whole then we start to have one education system addressing the needs of all children.
My noble friend Lady Massey also spoke about the issues of self-evaluation, good practice and, of course, about performance tables. I have never and will never apologise for wanting to give information to parents but I agree, and I think that I said this in the Economist article and have said it all over the country, that we must get smarter at what information we give. We must recognise schools for their achievements with all their pupils and recognise the quality of life of all their pupils where inclusion is done effectively. It does not mean that other children get pulled back or left behind; it means that everybody gets a good education. We must get good at that and make schools feel confident that inclusion does not mean that they will get many more special needs children and that parents who have children who do not have special needs will reject them. It is about confidence, as I described earlier. It is interesting that the school that came top of the value-added performance league tables was a special school.
The noble Lord, Lord Dearing, spoke about the 14 to 19 strategy. It is important that we think about that. The noble Baroness, Lady Warnock, also described the relevance and importance of that. The 14 to 19 strategy is about making sure that as many of our young people as possible are able to stay in education. It is important that we see special needs embedded in that. I know that Mike Tomlinson is very keen to do that.
I want to take a second to talk about the Transco CRED project because I played a very small role in the development of that project. I know what a fantastic job it has done in supporting children in danger of exclusion and is a real success. I think it is still has a 100 per cent record on year three or four.
Partnership is critical. How do we develop our services, our children's trusts, our different services coming together to be a friend for the child? It is a real challenge not just here, but in the Green Paper and in the Children Bill. The noble Earl, Lord Listowel, again raised child and adolescent mental health services. They are critical players. What they are able to achieve in schools is very important.
I say to my noble friend Lord Davies of Coity that it is interesting how half a sentence provokes a response. One of the issues in this area of policy is that it is very emotive. People look in a document and see something that makes them worry. It is important that schools have the resources but I accept that it is expensive to look after children with complex needs. We should do so; I have no difficulty with that.
I want look at where our schools are positioned geographically. Some parents have no option but a residential place and would prefer not to be in that
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position. As we look across the map of special school provision we need to consider that and make sure that the best is not the enemy of the good.
Looking at making schools the centre, the point raised by the noble Baroness, Lady Sharp, and at extended schools, it is true that teachers are not social workers, but sometimes they feel as if they are. We must make sure that we put them in a position where they can call on expertise, whether in health, social care, social services or whatever, rather than feel that they are constantly trying to find a way to address these matters. Schools want to be at the focal point of their communities and want to be able to get those services working closely with them.
I say to the noble Lord, Lord Lucas, that we fund much research and I should be delighted to discuss with him the issues that he raised. I have gone over my time for which I apologise. The noble Baronesses, Lady Brigstocke and Lady Linklater, referred to fragile parents. I take on board what they say about the strategy not addressing those parents. The parent partnerships we have funded are a critical part of that matter. It is absolutely crucial that parents feel that a measure will work for their child.
I pay tribute to Home-Start. I declare an interest as a friend of St Albans Home-Start. The Green Paper suggests that we have a Home-Start style operation in every community. We shall come to that. I say to the noble Baroness, Lady Howe, that the education that we are discussing is covered by the Disability Discrimination Act. There will be attainment targets for all children but, interestingly, we shall for the first time know where our children with special needs and disabilities are situated as we are collecting data on all our children that will enable us to develop a better approach for them and ensure that they get the highest possible attainment. I do not support the idea of a separate agency. The system works well now; we just have to ensure that we work better.
I recognise that we need resources. I decided to design a plan that did not rely on resources and crumble without them—we allocate £3.5 billion to special needs—but made them work better. However, that does not mean that I shall not seek more resources in the spending review.
I again offer my grateful thanks to my noble friend Lady Massey. As the noble Baroness, Lady Linklater, said, I want to ensure that no child drowns at the back of the class.
6.41 p.m.
Baroness Massey of Darwen: My Lords, I said at the beginning that this would be a fascinating debate and it has exceeded all expectations. I am always struck by the knowledge and concern of your Lordships for children. This debate has reflected that. All speakers have expressed passion, commitment to children and to the needs of teachers and parents.
Yes, there is much fragility but there is also—and I am glad to hear it—much optimism. We discussed research, definitions, transitions and collaboration between agencies. We have heard several moving examples of good practice in schools.

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I congratulate the Minister not just on her galloping but comprehensive response tonight but also on her involvement in the report and most of all on her continued dedication to the needs of all children. With those words, I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

British Industry and the Global Economy
6.42 p.m.
Lord Haskel Lord Haskel rose to call attention to the role of innovation in enabling British industry to compete in the global economy, and to the role that government can play in creating the best possible conditions for it; and to move for Papers.
The noble Lord said: My Lords, it is particularly appropriate to debate innovation this evening because of the concern felt all around the country about the loss of jobs and business to east Europe and to Asia.
I spent 30 years of my working life in the textile industry and so I know a lot about business going to Asia. Some months ago I met someone I used to know who manufactured industrial netting. I asked him about business, and yes he had lost his traditional business to low-cost manufacturers in the Far East and, yes, his business was now more prosperous than ever. This all came about, he explained, not through importing but because he had met a chap in a pub who had spoken to him about fishing for chub. Apparently, when you fish for chub you throw the bait into the water and the more concentrated it remains, the better the catch. What was needed was a way of holding the bait together for a short while.
My friend remembered reading something about fibres that dissolved in water and so he went to his local university and initiated some work on fibres that dissolve in water but do not pollute. He soon captured the netting market for chub bait and went on to discover other markets in medicine and agriculture and construction where netting that dissolved was a distinct advantage and solved lots of problems. With typical Yorkshire understatement, he told me that it was a good product for repeat orders.
That is just one small example of innovation. I particularly wanted to give an example from the textile industry for two reasons: first, because it is an industry about which I have some experience; and, secondly, because it is a traditional industry trying to re-invent itself through innovation. Indeed, I declare an interest as honorary international president of the Textile Institute.
Most of the time that I worked in textiles, much of the industry tried to protect itself by controlling imports. In spite of effective lobbying and considerable support from successive governments, the industry declined by 60 per cent and many firms lost their business to low cost countries. But other firms prospered. They thought up ways of improving old products and inventing new products, discovering new markets and new ways of doing business—in short, innovation. And so today not
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only do we have new ways of fishing for chub, but the fishermen enjoy more comfortable clothing which is light and flexible and which keeps them warmer and drier but breathes and is not clammy.
The textile industry has revolutionised the treatment of burns and ulcers and other wounds by inventing fabrics that grow a patient's own skin cells and so speed up healing and recovery. By inventing fabrics that can be moulded or sandwiched into engineering components which are lighter and stronger than steel, in a modern car or aircraft many of the components and some of the bodywork are now based on textiles. Today you find innovative textiles or technical textiles everywhere. Indeed, in these kinds of textiles the European Union has a balance of payments surplus. All this is thanks to innovation.
However, all this cannot just be left to a fortunate encounter in a pub. It requires a lot more than that. It requires academia, science and business to work together. It requires business to carry out its own research. So my first question to the Minister is that while I very much support the Government's commitment to free trade, what is the DTI doing to encourage and assist our traditional industries to compete through innovation in today's global economy?
But innovation also means inventing new industries—industries that result from the flow of knowledge and information from our science and technology base to the world of business. I know that my noble friend the Minister is committed to this but in practice what can the Government do? Some would say that this is a matter best left to market forces but turning science into products and processes involves a lot of risk, a lot of money and a lot of commitment. But that is a combination that market forces do not like very much. Venture capitalists would prefer to fund things such as management buyouts where there is a greater degree of certainty. Financial institutions are reluctant to fund developments from new science as more fail than succeed. Then there is the role of skilled designers in translating science and technology into products and services. There is a great shortage of them. If innovation is going to produce these new products and services from our science base, then we need to know how all these different facets of risk, finance and knowledge are to be put together and helped along to overcome that kind of market reluctance.
However, it is even more complicated because much innovation draws on science from several sources. Cell communication technology drew on science not only from wireless communications but also from information technology, miniaturisation, the physics and chemistry of batteries and many others. But combined together they gave birth to the whole new industry of mobile phones. So as well as learning more and more about individual sciences, innovation must somehow draw them all together in order to create new industries. Can the Minister say what the DTI is doing about that because it has particular responsibility in this area?
But it is not only science which initiates innovation; society itself does it also. We do this by demanding

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higher and higher standards to improve our quality of life and to improve the surroundings in which we live. It is often innovation which can deliver these higher standards rather than rationing or controls. Let me give an example. It was thought that commercial flying would have to be restricted because of aircraft noise. To solve the problem, Rolls-Royce developed the Trent 600/900 engines to reduce considerably both noise and pollution, and this engine is now used in one third of all passenger jets. Perhaps the noble Lord, Lord Methuen, who worked at Rolls-Royce had a hand in this.
My point is that the Government should encourage this kind of outcome-based regulation which is both friendly to society and encourages innovation at the same time because, in addition, industry is encouraged to cut costs, to be more efficient, to eliminate waste and to achieve higher standards. All of these are essential factors in competing in today's global economy. So does regulation have a role to play in innovation or is innovation best left to competition? This is a very important matter and I hope the Minister can say something about it.
Achieving higher standards and solving environmental problems through science, technology and innovation have created a whole new industrial sector. I declare an interest as honorary president of the Environmental Industries Commission.
I mentioned Rolls-Royce aero engines. Of course other engineering companies could copy the engine and Rolls-Royce would find themselves in a price war. So an important part of innovation is to keep on innovating to hold on to your competitive advantage. What Rolls-Royce did was to stop selling engines and start selling flying hours. They established teams of trained and skilled engineers at all major airports who service and change the engines. This completely altered the dynamics of the aero engine market by combining manufacturing with service. It is this breaking down of the barrier between manufacturing and services which is the key to much new innovation, especially in the service sector—the service sector which, itself, is now feeling the effect of globalisation.
The sector is feeling globalisation through offshoring. What is different is that the impact is being felt in the service sector rather than in manufacturing. But this is not new. Smart and intelligent technologies have been replacing workers in banking, insurance and retailing for years. Call centres that are not moving abroad are raising their productivity by using voice recognition systems. Businesses today are a highly connected interdependent chain. You cannot just move one link offshore without any effect. In reality, it requires a sophisticated and determined management team to both offshore and maintain the value of their product or service.
I see offshoring call centres as one more reminder that even in the service sector we will not be able to compete simply on the basis of cost. Innovation applies here too. When innovation breaks down the barrier between service and manufacturing, offshoring can also be reversed. Let me give another example,
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from the textile industry. I do not know how many noble Lords buy their clothing at Zara stores, but those who do will know that nothing remains on the racks for longer than two weeks. This means that if you see something you like you had better buy it. Now, this 14-day turnaround requires very sophisticated management and planning. There is insufficient time to get the clothing from low-cost manufacturers in the Far East, so their clothing has to be made locally. They are one of the fastest growing retailers on the high street, and other firms are now trying to copy them.
However, innovation does not only affect the economy; it also affects society. Yes, it provides new and more interesting work, higher pay and better prospects, but in return it means more career changes. It demands more and better skills. It requires continuous learning with personal dedication and commitment. It demands higher professional standards and education in numeracy and IT. All this depends on how well we teach and encourage science and technology at school and university.
Thankfully today many firms are committed to training and developing their own staff so that they can meet the change and challenge of innovation. But other firms do not or cannot. They may rely on poaching or finding skilled staff from overseas. They may be too small. Certainly the textile industry has Skill Fast to help with training, while the engineering industry has SEMTA, but what about other industries and what about those industries that are only now in the process of being invented? Perhaps the Minister can say what the DTI is doing about this as it is part of its responsibility. What about those who cannot cope with innovation—those who are being left behind and form part of the two-tier society that exists in this country? Does the Minister have any thoughts on that?
At the end of the day, innovation is a matter for business. It is not easy. Many firms find it difficult to compete in the global economy because they see themselves at the mercy of impersonal forces—forces such as inflexible wages, fluctuating exchange rates, industrialisation in developing economies, unlevel playing fields, new technology, poor access to capital and overbearing regulation. But other firms seem to overcome this. What is it that they do that is different?
It seems to me that those firms create their own luck and good fortune by encouraging and rewarding ingenuity, creativity, resourcefulness and initiative without which there would be no innovation. In doing this they seem to sweep away the barriers of their own assumptions. In this way they grasp their destiny in their own hands and release the abilities of their people. They give people the tools, the time, the encouragement and the money to improve quality and productivity and achieve higher standards. Indeed they invest in productivity and skills and so introduce these competitive elements into their businesses. They use the proven techniques of continuous improvement and lean manufacturing. They eliminate waste and identify unused capacity and unused talent. Instead of complaining about regulation, somehow these companies seem to reflect and adapt to the values of their communities and their staff and build up a special

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kind of loyalty in this way. For years, data have been collected by business organisations, stock markets, financial institutions and researchers which show that this way leads to improved business success. Indeed it is this kind of spirit and outlook which led to the rebirth of the netting business that I mentioned at the beginning of my remarks.
These firms are the seed bed of innovation. They can be large, medium or small enterprises, or even a single individual. I hope that my noble friend will do all he can to encourage them. Mine has been a simple business "hands on" approach to innovation. I look forward to the remarks of other noble Lords who have far more special knowledge than I and a much deeper understanding. I beg to move for Papers.
6.59 p.m.
Baroness Warwick of Undercliffe: My Lords, I thank my noble friend Lord Haskel for that timely and compelling introduction to this debate. I want to concentrate on the role of universities and higher education in innovation so I declare an interest as the chief executive officer of Universities UK.
I am sure that the importance of innovation to the UK and global economy is now clear to government, business and universities alike. Both the recent Lambert review and the Department of Trade and Industry-led Innovation Review have highlighted the importance of increasing innovation and business-led R& D in the United Kingdom. This is because the UK's performance, by level of business R&D and patenting, is only average compared with our international competitors. The UK is well behind the USA and roughly equals the EU average.
The Lambert review stated:
"Compared with other countries, British business is not research intensive, and its record of investment in R&D in recent years has been unimpressive".
UK business research is concentrated in a narrow range of industrial sectors and in a small number of large companies.
All this helps to explain the productivity gap between the UK and other comparable economies. Factors such as increasing competition, lower labour costs and well-educated alternative labour forces—wages in China are 5 per cent of those in the UK—mean that the UK faces a transition to a new phase of economic development. It is notable that after many years of decline in UK investment in R&D, it is now increasing.
At the same time, companies around the world are increasingly outsourcing their R&D activities, often to universities, so that the role of universities in economic development everywhere is becoming more important. Improving competitiveness in the UK means that we need to combine the excellence in teaching and research with the will and ability to convert science and technology into commercial enterprise.
The research output of UK universities compares very favourably with that of many other developed countries and a wide range of business-university collaboration already exists. Richard Lambert's report celebrates this
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success by universities in engaging with business. All HEIs are now engaged in collaboration with business at some level. In 2000–01, for example, they earned £126 million from UK industry and commerce.
The 2003 higher education-business interaction survey shows continuing improvement in HE-business interactions by almost every indicator and a 19 per cent increase in higher education staff dedicated to commercialisation and related activities. Spin-out firms of all types from higher education institutions are estimated to have had a turnover of £340 million in 2000–01 and the income from the sales of shares by higher education institutions in such companies was around £30 million.
Indeed, United Kingdom universities are far more efficient than their American counterparts at producing spin-outs. Higher education research expenditure per spin-out is much lower in the UK at £12 million than it is in the United States at £46 million.
It is also worth making the point that the UK higher education sector is a major "business" in its own right. In 2000–01, institutions attracted a total income of £12.8 billion; they generated output worth £34.8 billion; and they created 563,000 jobs either directly or indirectly. That is equivalent to 2.7 per cent of the UK workforce in employment. Indeed, income in 2000–01 from the UK private sector accounted for £3.7 billion, or 27 per cent of all higher education institution income. HEI overseas income, or gross export earnings, was £1.3 billion.
The Lambert report recommended that universities should do more to provide continuing professional development to business employees. I am delighted to say that the 2003 higher education business-interaction survey, not available to Richard Lambert when he wrote his report, shows a marked increase in university planning for business support provision, and, indeed, university provision of courses for business. These statistics illustrate just what the sector has achieved. They show just what a positive impact the higher education sector has on the UK economy.
It is important to recognise that the university-business collaboration has been under-way for years—decades even—and that the UK higher education sector is proud of the achievements that have already been made to support the economy.
In the past decade, aided by government support, almost all universities have added a third leg to their traditional activities. The third leg is outreach to business, especially local and regional businesses. Universities are actively seeking to play a broader role in the regional and national economy. The quality of their research in science and technology continues to compare well against most international benchmarks and much more attention is being paid to governance and management issues.
I welcome recognition by the Government in the Innovation Report of the need for an increase in investment in the knowledge-driven economy to create competitive advantage through a strong science and technology base, incentives for knowledge transfer and business research and development, and high standards

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of education at all levels, a point reinforced by my noble friend Lord Haskel. I also welcome Richard Lambert's proposal for a new stream of business-relevant research funding—between £100 million and £200 million—and his clear recognition of the achievements of universities.
Entrepreneurship, competitiveness and innovation in the UK are dependent on building the next generation of collaboration between industry, academia and the public sector. There are barriers to this collaboration, and improved communication and understanding between these sectors are the only way to boost entrepreneurship and the commercialisation of new ideas.
Of course I recognise that there are improvements which need to be made to ensure that business-university collaboration is strengthened and that these changes need to occur across the board, not just in universities but in business, in government and the regional development agencies.
With gradual devolution, regional strategies and initiatives such as centres of excellence are becoming increasingly important as they seek to bridge the business academia gap and identify technologies that have commercial potential.
There is also the Government's regional agenda to be considered. Of course all the regions need appropriate support, but it is imperative that government understand that institutions are competing internationally with countries like the USA and Japan, not just with other regions in the UK. In order to promote high-quality research and effective collaboration, appropriate support is required for universities, for business and for the regions.
Universities need consistent and appropriate levels of funding, businesses need appropriate support to help them approach universities for help in meeting some of their technology and skills needs, and the Government need to have a clear agenda which promotes international and UK-wide collaboration.
It is for these reasons that I welcome the recent announcement by the Treasury of a fundamental review of funding needs and policy priorities for science, engineering and innovation, with a 10-year investment plan to be announced as a central priority for this summer's spending review. I am also pleased that this will provide an overarching strategy for research. The review will take stock of the current framework for funding science, covering the Office of Science and Technology and the research councils and the funding for research provided to universities through the funding council. So it is vital that universities are central to this debate.
Universities UK's recent spending review submission outlines the success of UK universities' research performance. They have continued to deliver an outstanding performance both in terms of quality and value for money and their importance to the economy at regional, national and international level through links with their communities and business is beyond doubt.
The Government have recognised this success in their strong commitment now to science and the science base, but they will be judged on how far they
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create the conditions—of resources and support—to enable that to be sustainable. I look to my noble friend the Minister for reassurance that that support will be made available.
7.9 p.m.
Baroness Byford: My Lords, I am most grateful to the noble Lord, Lord Haskel, for gaining today's important debate. He reflected on his many years working within the textile industry, which is something in which our family have shared for many years. Sadly, our family company is no longer. The noble Lord also recognised that innovation needed money, commitment and a willingness to take a risk. That is hugely important. He also acknowledged the importance of teaching science and technology in school and university. I greatly support that.
Innovation is a function of the individual being free enough to innovate; in other words, a minimum of taxation and regulation. Nanny does not always know best.
Only last week, my noble friend Lord Vinson initiated a debate calling attention to the unintended consequences of regulation. It was a pity that the noble Lord, Lord Sainsbury, was unable to be present because, without doubt, he could not have failed to hear the clarion call from all sides of the House for the need to create a regulatory framework that is, above all, proportionate and that is applied intelligently and realistically. As my noble friend said, no one is against sensible regulation. The noble Lord, Lord Haskel, also spoke in that debate. He said:
"That does not mean that more regulation is good … it must be balanced. It must reflect the aspirations of our community. It must have reasonable lead times".—[Official Report, 25/2/04; col.288.]
My noble friend Lord Hodgson of Astley Abbotts stated that there appears to be no overview or cross-departmental view of regulatory burdens. There is duplication, overlap, inconsistency and, sometimes, outright opposition between regulations from different departments.
The CBI calculates that since 1997, Labour has introduced £54 billion in new business taxes. The British Chamber of Commerce estimates that Labour's actions have cost business more than £21 billion. The employment firm, Penninsula, sponsored a survey which implied that red tape has cost businesses more than £20 billion since 1997. Will the Minister state on the record whether he accepts those estimates? If not, why not, and what are the correct figures?
I ask the Minister to recognise that the Government can make a major contribution by freeing up businesses wherever possible. This would be of great help to small businesses which carry a proportionately higher burden and which have a good record of innovation.
Clearly, we need action. As the noble Lord, Lord Haskel, said, manufacturing employment has fallen under Labour by nearly 700,000 jobs. The year 2002 saw the biggest trade deficit since records began three centuries ago. If Great Britain plc is to remain

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solvent we need ideas, applications and developments leading to sales and a healthy return on capital employed—both human and financial.
I am sorry that the noble Lord, Lord Sainsbury, has been unable to take part in our deliberations on the Energy Bill which yesterday completed its Committee stage. Amendment No. 132A, headed "Application of renewables obligation to coal mine methane" was spoken to ably to my noble friend Lord Jenkin of Roding. If that waste gas were to be captured and used for generation, it would cut its global warming potential (GWP) by more than 100 per cent. It would save nine times more CO2 equivalent per kilowatt hour than wind power. The amendment was not accepted. That is an example of where government policy means that innovation in that field will not take place in the UK. Germany has forged ahead, and I understand that UK firms in the sector, disappointed by the lack of support in Britain, have moved to develop their interests elsewhere.
I am particularly concerned with "proof of concept" funding. This is needed to establish whether an idea is commercially viable. It may also be of benefit in identifying changes that would enable an original concept to become acceptable. Such support is crucial but not easy to obtain privately. It is one area where the Government can make a definite contribution to innovation. The Lambert report of December 2003 made this point among others which were equally important.
I give an example of innovation. A couple of years ago, there was a proposal to use sheep's wool to insulate houses. The Minister may be able to tell us whether there has been significant progress in that area. It has the potential benefits of using a commodity for which demand has fallen drastically. It is a commodity that is not normally produced in urban areas but in those parts of the country where job creation to replace a rapidly declining agricultural sector is increasingly urgent; and a commodity whose revaluation would help a sector under great threat. Were it to be successful, it would be a regional development with large chunks of the country having little or no interest in it.
The balance of regional development makes a fascinating study. In times past, Yorkshire was associated with wool and coal, Lancashire with cotton, Sheffield with steel, and so on. Modern-day equivalents are the Thames Valley and Cambridge with marked concentrations of modern technologies. Should the Government attempt to manipulate that? If so, how should they regulate their own interference?
The north-east and north-west have plenty of housing available. They have an abundant, skilful workforce ready for retraining as necessary. They have airports, seaports and road links. Is it not possible that astute direction and use of innovation might build on these assets and relieve some of the pressure on the south-east?
The important of government assistance and support for the maintenance and development of skills in our workforce has been highlighted during the
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passage of the Energy Bill and by the Royal Academy of Engineering. In its response to the Energy Futures Task Force consultation paper, it states:
"The Academy's response expressed concern at the shortfall occurring in the numbers of newly qualified entrants to the disciplines of importance to the energy and environment sector. Overall, this situation was due to the general malaise in the perception of engineering and science by young people.
What are the Government doing to improve that?
One of the ways of helping innovation is through government policy. I refer to the lack of policy with regard to energy production. At present, we are pushing for wind farms. That is but one sector. We can gain energy from waste, combined heat and power, and non-food crops.
Rural districts of England contain more than 577,000 businesses which represents 30 per cent of England's total. One way in which the Government can help is to encourage the spread of broadband, or high-speed electronic communication. In debate on the Queen's Speech in December, I cited the figure of 3 per cent access in the rural areas compared with 11 per cent in urban areas. What is the current position?
At page 90, the DTI innovation report recognises the difficulty experienced by small and medium-sized enterprises in gaining access to research funding. In 2001, the Government established the small business research initiative and set government departments the target of purchasing at least 2.5 per cent of their R&D from small and medium-sized enterprises by 2004–05. What progress has been made to date?
Finally, over the years British industry has been good at inventing ideas but not so successful at developing them. While much research is undertaken by our universities, many new projects come from businesses throughout the UK. Of course, we can all pay lip service to innovation. But the reality is that innovation needs innovators; and innovators need freedom from regulation and to have incentives to succeed.
7.19 p.m.
Lord Layard: My Lords, as has been said, this debate goes to the heart of one of our greatest national problems—the problem of low productivity. As we know, productivity per hour worked in Britain is approximately 20 per cent lower than it is in France, Germany and the United States. If one asks what is the biggest reason for that, the answer is chronic lower investment compared with those other countries. However, if one then asks what is the cause of the low investment, the answer is poor levels of innovation and poor skills. Those are the issues that we are discussing. As we know, the Government have come forward with major initiatives in those areas, as documented in the excellent Innovation Report. However, as the report also makes clear, there is still a very long way to go.
Perhaps I may start by referring to our universities, the knowledge that they produce and the way in which they transfer it to business. As has also been said, in the generation of knowledge, our universities have an excellent record in terms of value for money. I shall

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give some facts. When compared with GDP, our universities receive more citations in academic journals than universities in any of the other countries that I mentioned. Yet our universities receive less in research funding—that is, a lower share of GDP— than universities in any of those other countries. If one compares those two facts, one can see that we have a comparative advantage in university research: we produce the most for the least. But we are not exploiting that advantage as we should because we are not being given enough resources to do so.
Fortunately, the Government are improving that situation step by step. The news that we read yesterday about a further initiative in the funding of science is extremely welcome. I shall give some more information on what can be expected. The best evidence that we have on the economic rate of return on university research shows that it is higher than the rate of return on R&D carried out in business. That means that it would have been completely wrong for the Government to give many hundreds of millions of pounds to business in R&D tax credits unless, at the same time, they gave extra research funding for university science, as we know they intend to do. In that connection, I hope that the funding bodies will have the guts not to spread the money too widely as evidence shows that the value for money is greatest in the highest-quality departments.
However, the biggest problem relating to research in universities—especially in the research universities—is not the funding of research staff and equipment but the abysmal level of salaries, which are paid out of general university income. Roughly speaking, the top US universities have four times the general university income per student of our top universities, and they pay double our salaries. That has had a long erosive effect, which will, we hope, be stopped if the Government's Bill on variable tuition fees is accepted. That is why that legislation matters so much.
Turning to the universities' record in transferring their new knowledge to the outside world—especially business—one has to say that it is not good but, as we have learnt, it is improving. Let us see what can be done. In the US, the impact of universities is extremely impressive and it shows how university research can help local industries. One piece of research shows that every dollar spent on research in universities in a US state stimulates 4 dollars of business research and development in that same state. That extra R&D generates an increase in the number of patents which are obtained by businesses in that state. That is a measure of what universities can contribute to the local economy, and that is what the Innovation Report and the Lambert revaew are aiming to promote in Britain.
I fully endorse the suggestions in both those reports, including the importance of a third stream of university funding dedicated to knowledge transfer. However, I want to raise one matter. The key issue is always: what is the incentive for the individual academic? The proposals in both the documents that I mentioned rely largely on financial incentives. But
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academics also care a great deal about their personal recognition and promotion. Currently, that depends essentially on their performance in the research assessment exercise. If we want them also to look more widely, we should consider far more seriously a parallel exercise which involves an assessment where each academic sets out his contribution to knowledge transfer and to the life of the community.
So much for universities. Of course, when we think about innovation, it is easy to focus too much on the innovators and not enough on the environment within which they innovate, and especially the people who have to do the work—those on the shop floor and in the office. Potential innovations will be generated and adopted only if there are workers skilled enough to make the investments profitable.
Unfortunately, our national approach to the supply of skills below graduate level has, until recently, been a total disaster. We relied on the local TECs to do a job that they could never do. Instead, we always needed a national framework delivering high-quality skills by the apprenticeship method. Thanks to David Blunkett and his successors, we now have much of that framework in place and a surprisingly large number of people are embarking on modern apprenticeships. I wonder how many of your Lordships know what that number is. I attended a meeting with some senior civil servants—some were from the Department for Education and Skills—and I asked them what they thought the number was. They were all amazed that the answer is that 28 per cent of all young people are embarking on apprenticeships.
I believe that that story illustrates both the strengths and the weaknesses of the situation that we have reached. We have the apprenticeship framework and we have substantial numbers of apprentices but, in many areas, the quality and commitment is not there. The drop-out rate is around two-thirds, and the knowledge content of many apprenticeships is not yet up to scratch.
The Learning and Skills Council has now decided to make apprenticeships the top priority, and I greatly welcome that. However, to make that happen requires constant effort and serious promotion of the idea to young people by senior Ministers. I should like to hear Ministers say, "Please come to university if you want to but, if you don't want to, go into an apprenticeship". That is the only practical method of acquiring a skill other than going to university. On paper, we now have guaranteed access to apprenticeship for every qualified young person, and the qualification is low. However, the task is now to make all that happen. Unless we do, our innovators will not go ahead because they will not have the plumbers, and so on, to carry out the innovation which is being proposed.
A huge general deficiency in our workforce is innumeracy. We cannot have innovation when we have innumeracy at all levels in our society, including among university graduates. Starting at the bottom, something like 30 per cent of the adult population has less numeracy than we expect in an 11 year-old. That

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is unbelievable. Of course, this is the only country in the world where one can go to university with no maths beyond the age of 16.
Therefore, the report on mathematics by Professor Adrian Smith is very timely but, unfortunately, he has left to the Tomlinson inquiry the vital question of which university entrants should take mathematics beyond the age of 16. The answer must be: all of them. We cannot wait for that to happen until the Tomlinson proposals are implemented in 2010 or whenever. There is already an excellent Use of Mathematics paper, which is designed specifically for people who do not want to study mathematics at A-level but who need the kind of maths used in business or in government. That paper was introduced in 2001 with the hope that it would become a standard requirement for university entrance. I hope that Ministers will seriously pursue the plans envisaged when the qualification was adopted.
Finally, I congratulate the Government on having established two of the most essential conditions for innovation: a competitive environment and a stable economy. Bravely, the Government have done the right thing in intensifying our rules on competition and, with regard to a stable economy, they have achieved the best record of any government in recorded history.
7.30 p.m.
Lord Ponsonby of Shulbrede: My Lords, I too thank my noble friend for initiating this debate. I shall never think of a chub in the same way again; I have never thought of it as a source of innovation before. Today's debate is about innovation in industry and we have heard much about the key drivers to achieving innovation. A variety of speakers have spoken about the various building blocks that make an innovative industry. I want to talk about another building block, one that would not naturally be covered in this type of debate: the innovation of changing one's working practices. I have two specific examples of companies that have changed their working practices and have generated wealth as a result in industries normally considered to be mature industries where it is difficult to innovate.
The first example is of a construction company in the West Midlands called Farrelly Facilities and Engineering, a business that installs ventilation and heating systems. One may not consider that to be a natural area in which to introduce progressive working practices, but the managing director strongly believes that his introduction of the practices has benefited his company. I quote what he says:
"We realised that the services we offered were no different from our competitors—it was our people who would give us our competitive edge".
The managing director changed his working practices. Now the new rules within the company are that no one starts work before 8.30; everyone knocks off at 5 o'clock and at 4 o'clock on Fridays; no one is allowed to take work home at the end of the day; and there is total flexibility for family emergencies. A
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variety of other soft management approaches have been introduced and the net effect has made employees feel that they own their jobs.
The result has been a cascade of effects. First, there has been a huge reduction in staff turnover, a big improvement in the relationship between clients and the staff which, in turn, has led to an increase in the sales' figures. The managing director is very happy for me to quote him as saying that customers' complaints have almost become a thing of the past. He is a strong advocate of changing working practices; his innovation has led directly to increased sales.
My second example is different. It concerns an oil company of which I am a director, as I have declared. It is one of a new breed of small and agile companies in the British North Sea. About two-and-a-half years ago my colleagues acquired some boxes of unwanted and dusty data which was of no interest to any other oil company. The data was on the old Argyle field which had been abandoned about 10 years ago and had been overlooked ever since. Over the past two-and-a-half years they have worked up a development proposal; worked very closely with the DTI to acquire approval for a licence; the field has been renamed as the Ardmore field; they have secured funding; and they have entered into innovative contractual arrangements with the largest contractors to try to spread the risk. The net effect is that there was first oil in October 2003 and the field is now producing 15,000 barrels a day. That is a huge achievement in two-and-a-half years and totally unprecedented for a start-up oil company.
The key to that success is not just the innovation of my colleagues, but the innovation of all the stakeholders in the North Sea. The company itself was innovative, as was the DTI, which was extremely innovative in acquiring the licences and working with the company; the finance parties were also innovative in backing the company and in understanding the economics involved; and the contractors were engaged in innovative contracts in order to make the project work. Across the board there are examples of people changing their working practices as a mature market changes, so that wealth can be created. Other larger, better capitalised companies, were walking away from the oil.
In conclusion, the point that I am trying to make with those examples is that, whether one is talking about flexible working with ventilation engineers or about a group of oil company executives having; an idea and being able to pursue it, the changes in the working practices themselves generate wealth. In my experience on the oil side, the DTI needs to be quick on its feet to recognise the changes in the market conditions and to support those who lead that innovation.
7.36 p.m.
Lord Hunt of Chesterton: My Lords, I am grateful to my noble friend Lord Haskel for initiating the debate. I want to emphasise how the Government contribute to innovation and make some points about the role of

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government funding and the management of science and technology, where I believe that there has been much progress. I also believe that the UK could do better still by not forgetting the special role in innovation of public research and development institutions in the UK and in Europe.
My qualifications are that I worked at the bottom of a government laboratory in the 1960s and at the top of one in the 1990s. Even in the 1990s there was only limited thought of commercial innovation and even now the heads of such institutions in Britain have no general mandate to help UK innovation.
I spent the 1970s, the 1980s and this decade in universities, where there has definitely been a progressive shift towards applying knowledge. During that period government policies for applying research have changed from Harold Wilson's white heat of technology to Lord Rothschild's customer-contractor principle, to Mr Waldegrave's interesting mixture of foresight and disengagement, to what one might describe as the Sainsbury-Brown expansion of basic research and financial measures to help innovation. But a feature of the past 20 years has been an absolute decline in the number and scale of major public laboratories; for example, in energy and waste technology. However, some of the greatest successes have been associated with those public laboratories: for example the MRC laboratory in Cambridge, the Hadley Centre and the Meteorological Office.
That UK phenomenon contrasts completely with the United States, the continent of Europe and Japan, where universities and industry have always benefited from the strong continuing support and knowledge provided by openly funded—not commercially funded—organisations. The European Space Agency laboratories provide a vital input to the work of universities across Europe, including those in the UK.
I echo the noble Lord, Lord Haskel, in emphasising the huge possibilities for science and technology to help innovation in new areas of technology which is where one sees the greatest opportunities for wealth creation—he mentioned some himself—and improvement of the quality of life here and around the world. I acknowledge that the Minister, in a recent parliamentary Question, redefined "quality of life" as referring to the quality of life all round the world: for example, in health, environment, new energy and agriculture.
However, one of the puzzling features in government documents and speeches on science and technology and innovation is that they always seem to omit the point that 40 per cent of the economy relates to the government and the Government's role. Their policies and procurement are extremely important in science and technology and innovation. I looked through the Lambert report—page after page—and to my astonishment I could find nothing; nor could I find anything in the Innovation Report. Maybe I did not see it so perhaps the Minister can explain that. However, I gave him credit for a helpful Parliamentary Question on 26 January, when he said that government procurement is very important in this area.
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Another major role of innovation, as our US friends always like to point out, is that the use of science and technology often helps to depoliticise difficult political decisions; for example, for reducing greenhouse gas emissions by technology, for exploring alternatives to animal testing by technology and for dealing with foot and mouth disease problems.
The capabilities of the UK Government and university institutions to help with these difficult problems should provide huge opportunities in the future for commercial development. A witness to the House of Lords Committee recently said that the United States is boasting that it will win the race for energy efficient, non-polluting systems—one of the world's biggest drivers for the future.
This Government have greatly increased funding for universities, as my noble friend Lord Layard emphasised, for research and for helping them to apply this knowledge to industry and commerce. For example, London Metropolitan University is helping furniture business in London by knowledge transfer initiatives. The Design Council has emphasised the vital role of these new specialisms in universities. I cannot tell noble Lords how bitter the arguments were in a certain university just north of London when these issues were discussed in the 1980s. That argument has been won. With colleagues, it has been exciting to see small, spin-off companies forming and marketing their products world wide.
Another important development has been the international high quality of UK universities, which have had a beneficial effect by attracting foreign companies to invest in their research. As noble Lords know, the rest of the world always follows the timetable of the House of Lords. To coincide with our debate today, Le Monde had a special supplement on research and innovation. Noble Lords can see there that the UK is at the top of the graph. It has the highest rate of attracting foreign investment into research institutions. We see the Hewlett-Packard laboratory in Bristol and Schlumberger and Microsoft in Cambridge.
It is important to realise that innovation is to do with people. The Government's financial and social policies have enabled small companies to provide proper careers for women, who can now have six months paid maternity leave in a small company and then go hack and resume their career. I can tell noble Lords about that from personal involvement—not in quite the most relevant way, I should explain. The other important development of government policy that has not been emphasised is the increasing effectiveness of the overseas representation by the DTI and the Foreign and Commonwealth Office. This has certainly helped UK science and technology in overseas markets, and again I speak from experience. This programme could be stronger if there was a stronger connection between this initiative and the role of UK agencies. For example, the United States Environmental Protection Agency has its own office in Beijing, to push environmental exports. That kind of thing does not happen here.

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I summarise by saying that there are about five ways in which we can use this public dimension of science and technology more effectively. It is extremely important that in such institutions there should be of the order of 15 to 20 per cent core funding—the point made by Lord Rothschild and my colleagues in the Netherlands— to ensure that such laboratories have strong continuing programmes, open access to industry and ensuring effective application to universities. The trouble is that many such institutions in Britain have something like 5 per cent core funding from the Government. That does not enable them to maintain their competitiveness and also provide open access.
Government procurement is another important point, which I have already mentioned. The third point is that the role of government agencies is important in promoting innovation abroad. It is not in the job description of many UK government agencies to do that, whereas it is in the United States. A simple development would be for the web page of every UK government agency to describe the connection between what they are doing and approved UK collaborating organisations. Foreign people often look at the web pages of our government departments and say, "Why do they not list the approved UK organisations working with them?". It is sometimes easier to find a company on the US Government web page than on the British Government web page.
The fourth point is that to recognise that such public institutions, with their long corporate memory, often provide an integral part of the Foresight process and part of the access of rapidly changing technology from universities. A previous Minister of Science, when asked why public institutions were not part of the Foresight programme, described them as part of the stage army. That attitude has changed and needs to continue to change.
Some House of Lords committees have noted that we do not have UK laboratories for important areas such as waste technology and new energy techniques, although a European one exists. Maybe we should not be thinking in terms of public laboratories in each European country, but rather on a European scale. I hope that that can go forward. Finally, the Government are investing considerably in major international programmes. One of the most important is through the World Bank, where we invest many hundreds of millions of pounds on projects for sustainable development around the world. From my experience as chairman of a non-governmental organisation, I can tell noble Lords that the UK may be contributing, but the way in which it contributes is such that UK business is not involved. Other countries are contributing in such a way that they have maximum leverage of their involvement. This is partly due to inter-relationships and different government departments not being joined up.
If we go back to Mr Wilson—who I am sure is listening to this debate—resurrecting the Ministry of Technology might not be everyone's solution. However, there might be some way of looking at these questions of the public university role and the industry
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role to see whether there could be some improvement there: but also looking at a European-wide scale, where we need to think as Le Monde tells us to today.
7.46 p.m.
Lord Peston: My Lords, the title of today's debate uses the word industry. I take that to mean all economic activity relating to competitiveness in the global economy. By innovation, I mean new methods, new products and new thinking of all kinds. An important part of that is good design, in the sense of products that are useful, user-friendly and a pleasure to own. The classic example, regrettably not British, is the Apple computer, which is a superb design compared to the Microsoft alternative.
In considering the Government's contribution, we must refer first, as my noble friend Lord Layard did, to the macro-economic framework. Here, the Government have been outstandingly successful. We have low and stable inflation and high employment, verging on full employment. Despite the usual siren voices, the Government have stuck to a policy of trade liberalisation in respect to both goods and services. They seem to have a bit of a problem on international labour mobility, but that too can be solved.
As the Economic Affairs Committee said in 2002, participating in the global economy is a necessary condition for economic success, although it is not a sufficient one. I emphasise that globalisation is not free trade in the old-fashioned sense of producing goods at home and exchanging them for goods made abroad. First, it is increasingly about services rather than goods. Secondly, it is very much about the ownership of assets, domestic and foreign, real and financial. Thirdly, the decision making of British-owned companies is to do with inputs of all kinds, including labour located abroad or brought in from abroad, together with the location of some of our plants abroad.
What is meant by innovation is much wider than British decisions makers using new British methods and ideas to generate new British outputs in Britain. Those who investigate these matters, together with policy makers and decision makers in industry, require a much broader vision than that. To get the perspective right, I add two further points. In the advanced countries of the world, the production of services now far exceeds the production of goods. There are problems of definition, but the ratio is about 2:1 or 3:1. I note en passant that the value added of the agricultural sector is tiny and is 1 to 2 per cent of the GDP. One notes with amazement the enormous amount of time and public resources wasted on that sector, not least the time wasted on it in your Lordships' House.
The second contextual consideration is the vital importance of competitive markets. Despite the existence of OFT and the Competition Commission, one views with despair the scale of restrictive practices that continue to exist. We have moved forward, but it is obvious, to take an example from the retail sector, that there still appears to be much abuse of market

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power. To quote the latest OECD report, the Government's recent approach to planning has made new large scale entry into that sector very difficult. Furthermore, despite its illegality, retail price maintenance still seems to exist to an alarming degree in that sector.
More especially on the role of government, my chief proposition is that their criterion should be first and foremost to avoid doing harm. If they do that they can then move carefully to trying to do some good. The main method of avoiding harm is that, while we all accept that it is impossible to remove uncertainty, the Government should at least not add unnecessarily to business risk.
Secondly, an important task for government is to generate appropriate conditions for the provision of a modern infrastructure. Unfortunately, because of disastrous privatisations by the earlier government, to too great an extent the Government are not in a position themselves to provide the infrastructure. The obvious example is transport. What we have there nationwide is a poor state of affairs verging on the primitive. The Government have a responsibility to see that the private utilities do something about that.
I am not an admirer of the current President of the United States. However, I am depressed when he can talk seriously about planning to send people to Mars while we in this country cannot manage to build a state of the art dedicated main line to the north and Scotland. The contrast is depressing beyond belief. I make a similar remark about environmental constraints. The ecological lobby in our country is too powerful and in my judgment is immensely damaging to the economic interests of this country. I see them as damaging to the environment, too; in terms of unforeseen consequences, they are masters at it. The remarks this morning by the Royal Society for the Protection of Birds relating to wind farms is as good an example as any. If I had more time I would give the House many more examples of the idiocy of the ecological lobbies.
I turn to some remarks on science and industry. My position is that although the relationship is important, it should not be allowed to become too close. It is of course useful for the two to get together, but such a relationship can also be damaging. Business interests are not the same as higher education interests, especially when it comes to fundamental work, and there is especially the problem—which I came across in my academic days—about the restriction on access to data, the restriction on publishing data used in PhDs, and the attempt which has happened more than once to restrict the dissemination of research results adverse to the profits of the sponsoring organisations.
I also believe very strongly—and if my own committee had not been meeting I would have said this in the debate initiated by the noble Baroness, Lady Greenfield—that science should not get too close to government either. I should add that I am somewhat disappointed by the lack of natural scientists who felt able to participate in this debate.
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None the less, I welcome the remarks of the noble Lord, Lord May, set out in today's Financial Times. I am especially pleased by the balance he shows between bringing researchers' ideas to the marketplace as products and services while not jeopardising basic science. It may be, however—dare I say it in his absence?—that he might be somewhat naïve in thinking that it is possible to do one without risking the other.
This is not an area where we have no knowledge; economists have studied this subject very fully. The connections between scientific research, innovation and economic success turn out, not surprisingly, to be rather complex, and it has been hard if not impossible to establish what they are. However, the proposition that pouring more money into science which would then lead to more innovation in the country in question, which in turn would lead to greater economic success, does not stand up. Similarly, the argument that a country that has a poor science base and is not very innovative cannot succeed economically is not validated by evidence. That does not place me in the anti-science camp. Quite the contrary, I am convinced that we need more natural scientists and even more mathematicians. I strongly welcome Adrian Smith's report on mathematics which I hope we shall find time to debate in this House. However, it does cause me to plead that extra funds should be allocated with care and should certainly not be distributed to what used to be called "old boy networks".
I very much welcome the extra funds that my right honourable friend the Chancellor of the Exchequer has promised, or indicated that he might promise the universities—I am not sure which. However, those funds, assuming they become available, should be dispersed as far as possible according to objective criteria—and here I disagree with my noble friend Lord Layard—with no bias in favour of a few self-important universities which praise themselves to the enormous detriment of the rest of us.
I am bound to say that my main conclusion is that the problem for our country is not science but industry. Apart from the fact that business leaders and their representative bodies spend more time complaining and not doing, we still find that short-termism pervades UK industry. They seem to want early rewards, preferably based on clever finance rather than anything else. Too many of them do not seem to see R&D based investment coupled with good design as the way forward. I also have to point out that scientists themselves are absurdly poorly rewarded in industry compared with lawyers, accountants and, dare I say it, economists.
This debate is about innovation in industry, but I cannot conclude without making a few remarks about the public sector, which does, after all, employ 20 to 25 per cent of the working population. We cannot argue that the private sector must be innovative, abandon old ways and be open to new ideas while at the same time the public sector is conservative to the highest degree. The Government have a direct responsibility to encourage innovation in the public

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sector and to ask in all cases whether present structures and methods are suitable for delivering the desired outcomes and whether new ways might not be more suitable in terms of lowering costs and improving results. No matter how well we think we are doing—and this is true of both the private and the public sector— we must create a culture in which we always want to do better.
7.57 p.m.
Lord Methuen: My Lords, I, too, welcome this debate on the role of innovation in enabling Britain to compete in the world marketplace. I think we can all agree that it has been a fascinating debate. I only regret that, because the subject of the debate was announced so late, I am the only Liberal Democrat speaker.
I thank the noble Lord, Lord Haskel, for his comments on Rolls-Royce. It is true that we had a very large noise department, and I was instrumental in trying to specify the computers for it. I had the pleasure of working for both IBM and for Rolls-Royce, both well known and innovative companies. I had access to all the shop floors of Rolls-Royce in order to see how they did things. The processes and innovative methods of making things were a marvel to me. I am an engineer and I was always fascinated to be part of that organisation. I shall have more to say about Rolls-Royce later.
This country has a long history of successful innovation. We were world leaders during the Industrial Revolution, the Victorian era, and the 20th century. Sadly, we seem to some extent to have lost our way. Our country's future depends on our ability to innovate, develop, exploit and bring new products to market. In many cases recently, we have made the inventions and others overseas have reaped the benefits. One can think of may such examples immediately following the last war.
Yesterday's announcement by the Chancellor of the Exchequer, Mr Clarke and Patricia Hewitt of the long-term strategy for supporting British science and technology and the commitment to make Britain one of the world leaders for science research, development and innovation are to be welcomed. The recent Science and Technology Select Committee report on Science and the Regional Development Agencies—which I hope we will debate soon—emphasised the importance to the regional economy of science, engineering and technology. Within the regions, universities and industry must work together with the relevant financial institutions to promote and exploit world class innovation and development. The formation of regional science councils that is beginning to occur, with a membership drawn from a region's university and industrial sectors, should be a major driver for the enhancement of science and engineering technology within those regions.
As was stated by the Government yesterday, it is essential that adequate funding is available in the education system. Many other speakers have mentioned that. It is essential to provide for teachers and lecturers to inspire and train our children and
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young people to believe that science, engineering and technology are subjects of interest, and that careers in those fields will be worth while and rewarding, both financially and personally. I had 45 years in industry and I enjoyed practically all of it.
It is appalling that universities can even contemplate the closure of a science or technology department because the cost of providing the courses and laboratory facilities is too high compared with arts courses. If we do not have those departments, how are we ever going to train the new scientists and engineers that we desperately need, or to provide the incentive for university spin-off companies, which are the seed corn for so many hi-tech companies?
Provision of finance for start-up companies is another matter that has been raised by noble Lords. Beneficial tax incentives from the Government can help allay the national aversion to financial risk-taking. Further, we need to induce the City to take a longer-term view of investments in R&D, which is an area where our EU partners seem to be better organised than ourselves.
During a Science and Technology Select Committee visit to California in connection with our Chips with Everything report, we went to the IBM Almaden research laboratory. When one of the researchers was asked the period of time before which some financial benefit was expected from his research, he told us that IBM were looking at a time scale of 10 to 15 years. How many UK companies are operating to those kinds of time-scales? The financial market is reluctant to support that type of basic research. Only a few UK companies, such as the pharmaceutical industry, Rolls-Royce and some others, are perhaps so forward looking.
I shall make one point about Rolls-Royce developments. It is interesting that the RB5211 family of engines, which includes the Trent engines that were mentioned by the noble Lord, Lord Haskel, is a continuing development rather than being a new idea. It incorporates new design techniques, but it is essentially the progressive development of a family of engines and that is one of the reasons for its great success in various airlines.
It is good to hear the Government acknowledge the need for long-term commitment to achieve a resurgence in UK innovation. Sadly, those long-term ideals are so often abruptly terminated by an unexpected hiatus in the economy or a change of government. To achieve those aims will require extensive cross-departmental co-operation—truly joined-up thinking. I look forward to the Minister's reply.
8.3 p.m.
Earl Attlee: My Lords, I thank the noble Lord, Lord Haskel, for introducing such an important and fascinating debate. His timing is remarkably good in light of the Chancellor's announcement of his 10-year plan for research and development.
I fear that my contribution may be a little thin as was informed of the debate only two days ago and I have had no time to read, for instance, the DTI

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Innovation Report of last year, which was so ably spearheaded by the noble Lord, Lord Sainsbury. I also regret that only my noble friend Lady Byford has spoken from these Benches.
I started out in industry in the late 1970s with Smiths Industries, manufacturing vehicle instruments for the motor industry. I am technically minded, but I cannot claim to be a professional engineer, far less to have worked for, or even with, Rolls-Royce. However, that was a difficult time. I did not realise it then, but my noble friend Lady Thatcher was restructuring British industry. From a junior level in the factory, I could not see how the UK would survive as an economic power without the traditional industries of steel, heavy engineering and self-sufficiency in manufacturing. Nor could I see how we would survive without the textile industry that was mentioned by the noble Lord, Lord Haskel. I now call that attitude "industrial romanticism".
However, our products of the time were not very good. Our markets were feather-bedded in a number of incestuous and uncompetitive ways. We wasted resources on "sunset industries" rather than investing in industries of the future. On top of that, considerable scientific effort and engineering resources were expended on the Cold War.
Now, of course, we have huge new industries that were not even thought of in the 1980s, and we are still the fourth or fifth biggest economy in the world. Nobody seriously considers returning to the interventionist policies of that era. It is unfortunate that some of our EU partners did not reconstruct as we did in the 1980s.
It seems to me that as long as we have ideas, capital and a highly skilled workforce in the widest sense of the term, we can be competitive in the world economy. The noble Lord, Lord Haskel, gave an interesting example from the textile and clothing industry of innovation in new products.
However, we still face the perils of bureaucracy, regulation and red tape, so ably described by my noble friend Lady Byford. Those perils can adversely affect research as well as industry. For instance, the medical devices directive is not entirely helpful to research. However, it is not clear what mischief that directive seeks to remedy. That is why we on these Benches are for ever banging on about the burden of regulation. Your Lordships had an excellent debate on that very subject last week and my noble friend Lady Byford reminded us about some of the concerns raised. In many cases, the best that the government of the day can do is to get out of the way or, as the noble Lord, Lord Peston, put it, "at least do no harm".
In his article in today's Financial Times, the noble Lord, Lord May, identified a worrying fall in the number of A-level entrants between 1991 and 2003. He cited an 18 per cent fall in chemistry applications, a 25 per cent fall in maths and a 29 per cent fall in physics applications for A-level examinations. That does not bode well for the future. That is not necessarily the Minister's responsibility, but it is a worrying indicator.
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The noble Lord, Lord Haskel, made some interesting observations about technical textiles—a new material, if noble Lords will forgive the pun. One can only guess what Leonardo da Vinci would have achieved if he had all the materials that we have available to us now. The noble Lord mentioned the Rolls-Royce Trent engine. I well recall in the aftermath of the RB211 problems, a depressing TV documentary entitled, "Can we Afford a Rolls-Royce?" Fortunately, UK plc made a good judgment around that time.
The noble Lord, Lord Haskel, also asked the Minister about firms that cannot keep up, that cannot innovate. I think it is the Minister's duty to create a favourable environment, but the noble Lord will recognise a definite limit to what the Minister and the DTI can do to save firms, or even industries, that cannot innovate or be competitive.
The noble Baroness, Lady Warwick, not unsurprisingly, talked about R&D and universities. She also painted a very encouraging picture from higher education.
My noble friend Lady Byford asked some very tough questions about the cost of regulation and bureaucracy. I am sure the Minister will have winced when she described the situation in the manufacturing industry. She also talked about the need to spread more evenly high-tech "sunrise industries' across the country.
The noble Lord, Lord Layard, suggested concentrating government research expenditure on fewer but higher quality institutions. I am sure he will be aware that a balance has to be struck, because concentration could threaten quality, which was based on the recognition that higher education teaching must take place in an environment of research and scholarship. This point excited the noble Lord, Lord Peston, who said that funds should be allocated objectively. The noble Lord, Lord Layard, also made some very interesting comments about apprenticeships.
The noble Lord, Lord Ponsonby, talked about innovation in working practices. One of the best military training courses I ever attended was a Total Quality Management team leader's course. It suggested a management philosophy very much along the lines suggested by the noble Lord.
While innovative business plans are not patentable, the Minister will be pleased that I will not be pursuing that concept during the passage of the Patents Bill.
The noble Lord, Lord Hunt, talked about overseas trade representation, among other matters. We see the Foreign and Commonwealth Office working closely with the DTI and we are receiving positive feedback. Of course, there is always room for improvement. The noble Lord also suggested research organised on an EU basis. One anxiety I have is about research that turns out to lead to a dead end. Is there any EU database of research that does not bear fruit? It worries me that various organisations may be researching the same dead end and everyone keeps quiet about it, for obvious reasons.

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The noble Lord, Lord Peston, mentioned, en passant, the problems of railway development. It seems extraordinary that although railway signalling technical challenges seem relatively simple—perhaps similar to the management of air traffic control—railway signalling is fabulously expensive.
It would be bizarre for me to oppose the Chancellor's announcement. The Minister recognises the danger inherent in intervention and market distortion, and will be trying to avoid them. I hope that when he responds, he can say how the needs of funding blue sky curiosity-driven research will be met but balanced against the attractions of the immediate marketable results.
Finally, we on these Benches are deeply concerned about all-pervasive regulation and red tape. The Minister loses no opportunity to point to the high levels of employment in the UK. He is right, but we have been on a favourable economic curve since 1992. The problem is that the adverse effects of regulation take a long time to become apparent. It takes even longer for painful corrective action to take effect and to be seen to be taking effect. I look forward to the Minister's response.
8.12 p.m.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville): My Lords, I am very grateful to my noble friend Lord Haskel for raising the challenge which British industry faces from low-wage fast-growth countries such as China and India, and the need for the Government to create the best possible conditions for industry to innovate, so that it can compete effectively. I believe that these are extremely important issues for the future success of our economy. This has been an excellent debate, which shows the House of Lords focusing on a key issue for the country. I should like to reply to the points made and set out the action the Government are taking to position the UK as a key knowledge hub in the global economy.
There are two fundamental reasons why innovation today is so vital to our future. The first is simply globalisation. Trade liberalisation and a rapid fall in communication and transport costs mean that the UK has increasingly to compete against countries with significantly lower labour costs and reasonably well educated labour forces. My noble friend Lady Warwick was right to point out that wages today in China are 5 per cent of those in the UK. Perhaps even more sobering is the fact that the hourly labour costs in Korea are just over half UK levels, but the proportion of graduates in the working age population is almost identical to that in our society.
The second reason why innovation is so important for companies and governments is the major advances that are taking place in science and technology. Today, technology and scientific understanding are changing our world faster than ever before, and developments in ICT, new materials, biotechnology, new fuels and nanotechnology are unleashing new waves of innovation, and creating many opportunities for
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entrepreneurial businesses to gain competitive advantage. On the one hand we have the challenge of emerging economies, and on the other the developments in science and technology and the huge opportunities that those open up for us.
The only way that we will be able to compete in this new world is by moving resources out of the low added-value areas into the high added-value ones. That is why the Government have put so much emphasis on knowledge and entrepreneurship, and why we want to see the start-up and fast growth of many more high-tech businesses.
As my noble friend said, earlier innovation is helping traditional industries, such as the textile industry, to reinvent themselves and compete successfully. The growth of the textile industry—particularly in the north-west of the country— is a real British success story, and a model of what we have to do in many more traditional industries.
At the same time, we have to build new industries, such as optelectronics, biotechnology, e-science and others, which will create jobs for the future. While the total manufacturing industry has reduced over the past 10 years, there have been high growth areas within that. That tells us where we ought to be going in the future.
In the period 1991 to 2001, the growth for computers and office equipment was 16.1 per cent; for communications, TV and radio it was 6.4 per cent per annum; and for pharmaceuticals it was 6.6 per cent. These are, of course, high-tech areas. Those figures compare with low-tech areas such as plastic and rubber products where growth was 1.4 per cent, and food, drink and tobacco where it was 0.4 per cent. I am not saying that companies cannot be profitable in low-tech industries, but only if they find sources of competitive advantage, particularly science and technology. I believe that there are no high-tech and low-tech industries, only high-tech and low-tech companies. What characterises the success stories is that they tend to have relatively high inputs of research and development and skilled labour forces, compared to those industries that only have a small growth rate.
If innovation is so important, what is our record in this country? The two best measures of technological innovation are business research and development and patenting. They show that the UK's performance is not good enough compared to our international competitors.
My noble friend Lord Haskel asked what we could do to stimulate innovation in traditional industry. The Government can do a lot. The same range of public goods are necessary to support a dynamic and innovative economy for both traditional and new, high-tech industries. Both require the same essential public goods.
The first of those is a dynamic science base. Over the past eight years we have doubled the science budget from approximately £1.3 billion to nearly £3 billion in 2005–06. We have also introduced research and development tax credits that are worth £600 million per year to business. The Government have made

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significant changes to the tax regime to encourage greater levels of investment by UK companies. I would say to the noble Baroness, Lady Warwick, that our record is good in trying to remedy the failures of the past, but there is still a long way to go.
We have also provided the universities with incentives for knowledge transfer through schemes such as University Challenge, Science Enterprise Centres and the Higher Education Innovation Fund. The noble Baroness, Lady Warwick, was right to point to the extraordinary culture change that has taken place in our universities in the past five years, and the way in which they have successfully responded to these incentives.
As the noble Baroness pointed out, there was a slight drop from 248 spin-outs in 2000–01 to 213 in 2001–02, but that compares with the situation five years ago when the average was about 70 per year. There has been a radical change.
Income from licensing increased from £18 million to £33 million last year, an increase of 83 per cent. There was also a substantial increase in the number of patents.
My noble friend Lord Layard said that the situation did not compare well with American universities, but I am not certain that that is true. If one decided simply to take any American university and picked MIT for comparison, it is true that we do not do as well. However, MIT is not a typical American university. As the noble Baroness, Lady Warwick, pointed out, in terms of spin-offs per one million dollars of research, we do better than the USA.
With business R&D, while the UK is well behind the US and roughly equal to the EU average, it is encouraging that after a steady period of decline from 1.5 per cent of GDP in 1981 to 1.16 per cent in 1997, there has been a move in the right direction. Business R&D has gone up to 1.24 per cent in 2002. We have also seen a huge growth of the number of incubators in this country; there are currently 220. That compares with a figure of 100 in 2000, and about 25 in 1996. So we are creating the conditions for the restructuring of business and the start up of new companies.
A number of speakers raised the question of skills. That is clearly essential if we are to move out of low added-value areas and into the high added-value areas. At the higher level we actually do very well, as we produce more science, engineering and technology graduates than any other G8 country except France. However, as the noble Baroness, Lady Warwick, and the noble Earl, Lord Attlee, pointed out, the overall improvement in numbers conceals a decline in specific subject areas such as materials science, electrical engineering, chemistry, physics and biochemistry. That is an area of real concern although, interestingly, it is a problem that one finds across the world. It is an extraordinary factor that as we enter this new world in which science and technology are going to be more important, young people are turning away from physics, chemistry and engineering in particular. That is true of Germany, Japan, South Korea and even China.
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There is a real challenge here to communicate to young people the excitement in the physical sciences. Young people see all the excitement being in biology and IT, but we need to convey to them the extraordinary excitement and changes in the physical sciences—in optelectronics, aerospace, satellites, nanotechnology, telecommunications and bioengineering. However, as my noble friend Lord Layard pointed out, the real problem is at the middle range of skills and particularly at the technician level, where we have a serious shortage of skills in comparison with Germany and France. While 27.7 per cent of the workforce have intermediate skills levels in the UK, that compares with 51.2 per cent in France and 65 per cent in Germany. There is no question but that that clearly has a serious impact on our productivity.
We have to make rapid and major improvements here, which is why we issued a new skills strategy last year. We have made a large and important change by putting business demand at the centre, whereas previously things have been driven from a supply side perspective. That is a huge move forward for industry and our economy, as it recognises that our education system has failed if it does not meet the needs of the workplace. Without the DTI, the voice of industry would not have been heard. We have made a real change to how skills are addressed by government.
A number of noble Lords made comments about government policy. Let me deal with those views. My noble friend Lord Haskel asked what we would do about those who lose their jobs because companies fail to innovate. It is absolutely key that we do not try to get back into the world in which we keep companies afloat that have been unsuccessful. Equally, however, it is essential that the Government create the opportunities for those people to retrain and move into new jobs. We must create opportunities for everyone throughout their careers, not only at the beginning of their careers. We need to make lifetime learning, as we are doing, a real reality for people, so that they feel that they can retrain during the course of their lives.
The noble Baroness, Lady Byford, raised the question of burdens on business and the question of regulation. I shall deal with the specific figure of the £20 billion burden on business since 1997. It should be clear that we are talking about two things here. The first is the administrative cost of the new regulations, which is a tiny fraction of that figure. The big figure are the benefits that people will enjoy as a result of the regulations, such as decent wages the minimum wage—paid holidays, time off to attend to family matters, and the working time regulations. I shall not apologise for any of those benefits. They are what modern business is about. We are happy to stand behind them as long as people understand that they are not costs of administration, but go towards what people are paid and decent working conditions.
Regulation is an enormously important subject. Government constantly have to work hard to make certain that there are no new regulations. The noble Baroness is wrong to suggest that there is no strategic overview of regulations. We have a regulatory impact

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unit in the Cabinet Office to take an overview and scrutinise departments. We set up the better regulation task force with independent members to challenge the Government.
It is also important to realise that regulation is not the only issue that hinders or causes problems with innovation. The Government need to do positive things. To omit to put alongside the issue of regulation the importance of education and training, science and competition policy is to show that one does not realise the key challenges facing British industry.
The noble Baroness, Lady Byford, also raised the question of methane gas being a renewable energy source. That is not correct; it is not a renewable energy source. We support it because it is a good thing to do for quite other reasons. It should also be said that in the total energy policy it will make hardly any difference because the amount is so small.
The noble Baroness also raised the question of the proof of concept idea. That is what University Challenge was all about. One of the new products from business support in the DTI covers the same field. The proof of concept idea has been successfully developed in Scotland. It is a great success story.
The noble Baroness referred to energy policy and the new sources of energy. We are putting considerable amounts of money into wave power, non-food crops and photovoltaics, which are all important. We are investing in the research for the future and setting up a special centre with the research councils to monitor and network that research for the future.
The noble Lord, Lord Layard, raised the question of motivation of academics. I do not think that we want another RAE to cover the subject of innovation, which is difficult to measure. There are financial incentives and the esteem of colleagues, which falls on people who innovate, who set up their own companies and work with large business successfully. That is doing a good job in motivating academics. The exciting thing is that there is no longer a sense among academics that to work in industry is something that reflects badly on one's academic career. On the contrary, it is now seen as reflecting well on one's academic background.
I agree very much with the noble Lord, Lord Layard, that mathematics is a key skill for undergraduates. I shall follow up the question of David Blunkett's idea that all young people should take mathematics at A-level as a qualification for university.
I agree with the noble Lord, Lord Ponsonby, that changed working practices can lead to improved business performance. Innovation is driven largely, but not exclusively, by science and technology. Innovation can take many forms, all of which are to be encouraged.
The noble Lord, Lord Hunt, raised a very interesting question on the decline in research institutes not located in universities. I think that this is the way the world is going and that the countries with strong research institutes not in universities, such as France and Japan, are now suffering in terms of the quality of the research.
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The noble Lord also raised the question of the impact of government departments on innovation through knowledge transfer, procurement and output based regulations. I would simply draw his attention to Chapter 5 of the Innovation Report, which is entirely on that subject and is headed "Innovation policies across Government". It covers that in great detail because we feel that procuring £109 billion per year is an enormous resource which government can use to support innovation. We are very keen that that should take place.
My noble friend Lord Peston raised the question of competition policy. According to a recent survey, our competition regime in this country is reckoned to be one of the best in the world. My noble friend also argued that the relationship between science and business should not get too close. I had hoped t hat we had got away from that kind of view of science and business. We need to fund basic science extremely well so that scientists have the independence to pursue blue skies research without any considerations of its use or any pressure from anyone to exploit it. Equally, we need to have incentives for knowledge transfer because of its key role in the economy. I cannot think that there is any doubt that American economic success in the past 15 years has been based crucially on both the high quality of its basic research and the incentives for its exploitation. That has been its great strength.
There is no question of "old boy networks" in the way that science money is handed out; it is done through the most rigorous form of peer review in the research councils by the scientists themselves.
I agree with the noble Lord, Lord Methuen, that we need to scrutinise the closure of university departments very carefully, particularly those which are still attracting a good many students. It is very worrying if those are closed.
As far as concerns cross-government co-ordination, we have a cross-departmental ministerial group, chaired by Patricia Hewitt, which is doing just that in terms of implementing the Innovation Report.
I end by saying that our vision is that the UK should be a key hub in the global knowledge economy. That means that we should be a country famed not only for our outstanding record of discovery but also for innovation—a country that invests heavily in business R&D and education and skills, and which exports high-tech goods and services to the world. We also want to be a country with strong science and technology links with the best research around the world, so that we can stay always at the leading edge.
We should be a country to which talented entrepreneurs and world-class companies come from around the world to carry out research and to set up high-tech companies. We see these companies being attracted by the quality of our research, the strong links between universities, research institutes and industry, the geographic clusters of high-tech companies, the ability to raise finances—particularly venture capital—and our quality of life.

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We have made much progress in achieving that vision, but there is still a long way to go. That is why at the end of last year we published the Innovation Report and why we are determined that in the next year to 18 months we will fully and properly implement that report.
Lord Haskel: My Lords, the debate was arranged at very short notice, so I am particularly grateful to all noble Lords who have spoken. In spite of the short notice, we seem to have debated the many facets that involve innovation. I am most grateful to noble Lords who have brought their specialist knowledge to the debate.
I am most grateful to my noble friends Lord Layard and Lady Warwick who spoke with their special knowledge about the contribution made by universities. Our economist, Professor Layard—my noble friend Lord Layard—and my noble friend Lord Peston spoke about the macroeconomic success that is necessary to underpin innovation. My noble friends Lord Hunt and Lord Preston spoke about innovation in the public sector. This is something that is quite new and is of increasing importance.
The noble Baroness, Lady Byford, and the noble Earl, Lord Attlee, spoke about regulation and its impact on innovation. They spoke about the debate last week on the Motion moved by the noble Lord, Lord Vinson. I spoke in that debate and I have the impression that in it the compensation culture was blamed on regulation. I think that this compensation culture is largely to do with the fact that if one does not win, one does not pay. I felt that a mistake was made about that in that debate.
I was most grateful to the Minister and the noble Earl, Lord Attlee, who spoke about the importance of not protecting industry by artificial means. That is important. The textile industry suffered from that and was set back many years by it.
The noble Lord, Lord Ponsonby, spoke about the importance of progressive working practices; I agree with him. The noble Lord, Lord Methuen, spoke about Rolls-Royce. One of the reasons why continuous development of the Rolls-Royce engines took place was that carbon-fibre fabrics were used for the rotor blades in the engine. It is another example of new textiles in engineering producing an improvement.
I am grateful to the Minister for his detailed reply. I think that he covered all the key issues. We all agree that he has done so much to champion science and we are all grateful to him for that. He referred to young people being turned away from science and technology but he started the ambassador scheme, which is very popular. The shortage of mid-range skills that he spoke about greatly affects our innovation. Our debate has covered all the important factors and I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Moldova, Ukraine and Belarus
8.38 p.m.
Lord Ponsonby of Shulbrede Lord Ponsonby of Shulbrede rose to ask Her Majesty's Government how the European Union is developing its policy towards Moldova, Ukraine and Belarus.
The noble Lord said: My Lords, the purpose of my Unstarred Question this evening is to look at the European Union's new eastern neighbours, namely Belarus, Moldova and Ukraine. Of course, these neighbours rightly see themselves as being at the heart of Europe—not at the eastern edge but at the centre.
On 1 May the EU's border will move and a new border will be formed. It will be a physical border of some 5,000 kilometres. It will represent the border between relative wealth and relative poverty. Some will see it as a new frontline between East and West. I believe that it is of the utmost importance for the European Union to counter such a perception. While it is true that the EU has its own values and that not all countries on this border share those values, it is also true that the European Union has its own interests and those interests should be advanced. The EU has an interest in expanding the zone where the same economic rules apply, where the fight against crime and terrorism is co-ordinated and where migration issues are addressed. In short, the EU has an interest in a border that is both open and secure and the best way to achieve that is through co-operation with our new eastern neighbours.
The EU has said that it wishes to agree action plans for each of the countries on its new border. It has also said that "differentiation" is a key word since no single policy would be appropriate or desirable for each of the new neighbours. So I shall deal with Belarus, Moldova and Ukraine in turn as they too each have their own interests and aspirations.
First, I shall deal with Belarus. Belarus has expressed no desire to join the European Union. It sees its main ally as Russia and one still hears the echoes of the Cold War in the speeches of President Lukashenka. There is a debate in the international community about the extent to which we should engage with the authorities in Minsk. There are those, led by some American politicians, who wish to punish Belarus for its human rights abuses, for lack of freedom in the media and for lack of economic reform; and there are others who argue for selective engagement and the expansion of constructive programmes in parallel with isolating the President and his close administration. I have been actively involved in this debate over the past few years and I have two observations: first, that the countries physically closest to Belarus seem to favour selective engagement—here I am thinking of Poland, Lithuania and Sweden in particular—whereas countries further away from the new border are more ready to see Belarus remain isolated. My second observation is that the Belarusian leadership do nothing to help themselves. Barely a month goes by when I do not receive an e-mail about an NGO being shut down, or

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a newspaper being closed. With the growth of the Internet and the availability of media from Belarus's immediate neighbours, this seems a particularly shortsighted and counterproductive activity by the Belarusian authorities.
I would argue that the expansion of the EU to the Belarusian border offers a new opportunity to engage with the people of Belarus. The OSCE office is up and running again and important decisions will have to be taken about the forthcoming elections. But where is the European Union? Why is it that there is no EU office in Minsk? It seems bizarre that the EU has offices from Barbados to Nepal but nothing with its new next door neighbour. I would argue that the EU should open an office in Minsk with a view to disseminating information about its activities. If there is to be a policy of differentiation between countries, there can also be a policy of differentiation within Belarus itself. It seems to me that when Commissioner Prodi offers the EU's neighbours four freedoms— freedoms for people, services, goods and capital—he should also offer to help those countries, including Belarus, take advantage of those freedoms with practical projects. President Lukashenka will not be in place for ever and it is important to work for good will between the people of Belarus and the European Union.
Next I shall speak of Moldova. Moldova is a different case as it borders Romania and Romania aspires to join the EU in 2007, so there will not be an EU border with Moldova in the near future. Moldova, however, does aspire to join the EU, which seems logical given its close relationship with Romania. The Transnistria conflict and its economic dependence on Russia will hamper Moldova in its aspiration to join the EU; nevertheless, the very fact that Moldova even aspires to join the EU gives an opportunity for the EU to influence Moldova's development. Moldova is a small country and it is a poor country. Many of its people have become disillusioned with the political process due to falling standards in the economic and social spheres and this was reflected in the 2001 elections when the Communist Party won landslide victories. This all adds up to a fragile country where maintaining stability should be at the top of the EU's agenda. The longer term goals of attracting foreign investment, fighting crime and corruption and building stable institutions mean that the EU should see its goal as helping to normalise the legal structures and to give confidence to potential investors be they domestic or foreign.
The situation in Transnistria is fluid. I do not want to say much about that as I know that the Russians have advanced possible solutions and the OSCE and the Council of Europe are actively involved in trying to find a way ahead. My only comment on this matter is that it is difficult to imagine the Moldovans solving this problem for themselves and that whatever the final solution is, the Russians and the international institutions will be central to finding the way ahead.
Finally, I shall say something about Ukraine. In my view Ukraine will be the key to the success of the whole of the EU's policy to its eastern neighbours. It is a large
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country with extensive links with Britain and other countries in the West, and, importantly, it aspires to joining the EU. The EU should promote Ukraine's independence and the best way to do this is to base EU policy on the Copenhagen criteria for EU membership. This approach has proven to be successful with the current new member states and offers a tested framework for reform and the implementation of those reforms necessary to join the European Union.
In previous years I have been a rapporteur for two papers concerned with Ukraine. The first was about how the minority Tartar people were treated on their return to Crimea from other parts of the former Soviet Union. The second paper was about the financing of the shut down of the Chernobyl nuclear power plant. In both cases, while I was critical of particular aspects of Ukrainian government policy, I was extremely impressed by the importance that Ukrainian officials, institutions and politicians attached to the views of the international communities of which I was a part It was refreshing that we were taken so seriously.
I know that there are concerns regarding Ukraine. Its treatment of journalists and some dissidents, for example, is not so very different from other countries in the region which are regularly pilloried by the international human rights organisations. Nevertheless, there is an active and organised opposition in Ukraine; the parliament is a focal point for national debate, and its economy is growing so quickly that I recently overheard one international diplomat complain about it. He said that we could lose influence there because they will not need to borrow so much money in the future, which seems a perverse argument. Nevertheless, most importantly, there is the aspiration to join the EU. For these reasons I argue that Ukraine should be seen as the key to the success of the EU's policy towards its eastern neighbours and therefore a constructive programme of working towards the Copenhagen criteria should be a central part of the action plan for Ukraine.
Throughout my contribution I have tried to avoid mentioning Russia. The reason for this is simply that when one brings Russia into the equation it so dominates the considerations that it almost denies debate about the countries concerned. There could be no clearer illustration of this than when on 18 February this year the Russians cut off the gas to Belarus for 24 hours in a dispute about tariffs, one was immediately catapulted into debates about security of energy supplies and all sorts of other things. It is then difficult to get back to talking about the immediate neighbours. However, it is impossible not to talk about the influence of Russia.
I opened my contribution by saying that there is a fear that all that EU expansion will achieve will be to redraw the dividing line between East and West, which is the dividing line between Russian and western influence. I argue that, given that Russian influence is so dominant in Minsk, Chisinau and Kiev, the Russians should be a partner in the wider Europe process, but also that the EU should actively and independently co-operate with its new neighbours in the new neighbour policy.
The new neighbour policy of the EU should concentrate on Belarus, Moldova and Ukraine, but the wider Europe policy should include Russia and its strategic concerns. There may well be limits on how far the EU can export its model for free trade and social democracy, but other international groupings, namely the OSCE and the Council of Europe, can be used to bind Europe together.
However, when one looks at how the EU treats its other neighbours in south-eastern Europe, it is difficult not to make comparisons which are unfavourable. The EU has invested far more in south-eastern Europe. The funding for CARDS is double that for TACIS, while it serves only 10 per cent of the CIS population. I understand that comparisons of this type are always invidious and they are difficult, but I believe there is a strong argument for putting the treatment of Belarus, Moldova and Ukraine on a new financial footing.
I want to conclude on a lighter note. At the time of the last European IGC in Strasbourg, I met a couple of Belarusian officials and I made a joke. Belarusians are fond of jokes. I said that the Polish were the new tough guys in Europe since the Sun newspaper said that Poland had saved Britain from the new European constitution. The Belarusians laughed like drains: they loved the idea of Poland saving Britain from Europe. It seems to me that the example of Poland as an assertive and assured partner in Europe could give as much encouragement to the Belarusians and to others to reform as any amount of finger wagging by the international institutions.
It is a very select group of Members of this House who take an interest in these matters. However, I know that what my noble friend says here today will be of great interest to many people at the heart of Europe.
8.51 p.m.
Lord Howe of Aberavon: My Lords, I rise in this exclusive climate, conscious of the extent to which my familiarity with European institutions is fading fast and that I am a fading Euro buff. However, I am reassured by the aura of authority and wisdom that has been manifest in the speech made by the noble Lord, Lord Ponsonby, and I am confident that I shall be rescued from any misunderstanding by the noble Baroness, Lady Symons, in due course.
I speak, in the old Chinese fashion, as an "old friend of Ukraine" and I declare an interest as having received the honour of the Order of Public Service of Ukraine, of which I am very proud. It does not need me to underline the point made by the noble Lord that Ukraine is an important nation. One tends to forget that in terms of population it is on the same scale as the United Kingdom—much larger than that—and that we have many human links with Ukraine. I always think with affection of the fact that Stefan Terlezki became a Conservative Member of Parliament, having been a refugee in his teens from Ukraine. One of the individuals I was able to get Mr Gromiko to release from Ukraine to come on holiday to this country was
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Stefan Terlezki's father. It is the kind of human link that lives in one's mind to remind one of the humanity of the relationship. I am sure the Minister will agree that Terlezki is an honorary Welshman born in Ukraine.
I first went there in 1988 when it was still part of the Soviet Union. I last went as a parliamentarian leading an IPU delegation with the noble Lord, Lord Morris, the late Lord Dormand of Easington and Ann Clwyd, who is now chairman of the Anglo-Ukraine Parliamentary Group. I made a number of other visits in company—if the noble Lord, Lord Wallace, will not misunderstand this—with the noble Baroness, Lady Williams of Crosby. We were both members of the Economic Advisory Council of the Supreme Rada for a number of years.
In those early days one had a glimpse of the difficulties that were to develop. On our first meeting with President Kravchuk, some time after Ukraine's claim to independence, one of us was surprised to see on the wall behind him in his office the picture of Lenin still in place and asked, "Mr President, forgive us for asking, but why is that picture still on the wall?". We got the rather disarming reply, "You can't expect us to do everything at once". At the same time, I remember an observation by the then American head of mission saying, "You will have to go through simultaneously what the United States went through in 1776, 1861 and 1931". That is the scale of the problems that they have to face.
One must admire the courage of those who have grappled with them over the years, particularly given their loneliness on the edge of the European Union, in a region not renowned for its security. One thinks of the tragically poor economic performance of the country for its first decade. Although Moldova is the poorest of the three countries, with an income of 417 euros per head, Ukraine is not far behind at 855 euros per head. Happily, real progress has been made in the past three years. That was confirmed to me today when the Anglo-Ukrainian parliamentary groups had a meeting with the First Deputy Minister for Foreign Affairs for European Integration, Mr Olexandr Chalyi. He was confident that that economic performance would be maintained. He pointed out that the scale of Ukraine trade with the European Union is one-third of its total turnover. The European Union is of great importance to it. The percentage of EU trade with the Ukraine is insignificant. That might tempt us to feel that it is not a country of significance to us. Happily, that is not the view that we have been taking.
Its success matters hugely to the stability of the region and to us. In that respect, the European Union has been giving an enormous amount of help. It is perceived as one of the targets as regards the way in which Ukraine develops itself. The United Kingdom is seen genuinely as one of the countries which can do the most within the European Union to help it in that direction. There is no doubt about its economic and political aspirations.
I dare to mention the Russian factor at this stage. There is no doubt about the competitive nature of Russian foreign policies in relation to Ukraine and the

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European Union. They have been offered the prospects of a customs union, a single currency union and joining the security umbrella of Russia. As the noble Lord pointed out, one has somehow to conduct the European Union's management of those questions in a fashion which does not provoke increasing rivalry and hostility. That is why I underline his point about the need for our relations with Russia to be part of our general relations internationally.
In preference to that road, Ukraine wishes to set the prospect of the closest possible relationship with the European Union, aspiring to membership of the Union and of NATO. There is no doubt that it attaches real value to the partnership co-operation agreement. It looks forward to early completion of the agreed action plan—agreed to the extent that it will then be able to claim ownership of that with clearly stated goals for the next steps they want to achieve along the road, and rightly so.
It had doubts about the wisdom of that course at one time when the Balkan war was at its height and there was a tendency to resile from a European partnership. Happily, that has now given way, if to anything, to hesitation about the Chechnyan alternative. That is another reason for us to want to hold out a welcoming hand.
I wish to stress the need for help, not solely or primarily in the economic field. I certainly would not enthuse over the past economic policies of Ukraine, but now at least they are on an upward path. It is still the politics which lack confidence, coherence and authority. Political stability—the need for an effective political structure founded on electoral legitimacy—is probably the most important feature that we can now commend to it. Its constitution makes life very difficult in that respect. It has carried intellectually the concept of separation of powers even further than has the Lord Chancellor, the Secretary of State for Constitutional Affairs. I remember making an observation quite early on in my presence in Ukraine to the effect that Montesquieu threatened to do far more damage to Ukraine than Marx had ever done. That is at the heart of what has been happening. There has been gridlock of the most frustrating kind between the president and the Rada.
In that context, in the past few months, quite dangerous change in constitutional reform has been attempted. It has been criticised—certainly understandably—by the opposition as being no more than a device to prolong the tenure of President Kuchma. On the other hand, if one is charitable, one can see arguments in favour of altering the balance of power as between the legislature and the presidency. That may be one explanation for what has happened recently.
However, it certainly appeared to the opposition and to outsiders that the changes made at about Christmas-time were designed by the Rada members who voted for them, as well as by the courts, to prolong the president's term and legitimise the prospect of his remaining in office for a third term. Then the changes were observed as being designed to guarantee that, if
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he did not become president, the powers of the presidency would be reduced and would be exercised by Parliament instead. Therefore, one can see the possibility of sinister interpretations being made of the situation. All that has happened without consultation with the opposition or with the country.
In those circumstances, the Council of Europe and the Strasbourg institutions rightly protested about what was happening and the way in which it was happening. Happily, those protests seem to have led to the repudiation and withdrawal of all the earlier measures. It is important that that change of heart should be genuine and complete. We now have an assurance from President Kuchma that he will not seek to stand as president for another term; nor will he seek to stand for election as Prime Minister or Speaker. However, I heard this morning that he intends to establish a foundation for the study of the future of his country, rather following the fashion set by Mikhail Gorbachev and others.
It is now most important that we do all that we can to ensure progress along this line of development of bona fide democratic institutions. I wonder whether we are yet putting enough resources and coherency into the delivery of political advice. I remember being very struck in the early years by the extent to which the Ukrainians had been confronted by visiting delegations. Our advisory council was bundled out of the room to be succeeded on one occasion by a group of wise people from Harvard and even, on another, by wise people from the London School of Economics. The poor Ukrainian Government had to select from this pot-pourri of advice without knowing whether they needed a plumber, an electrician or an economist.
I believe we should try to do all that we can to integrate the wisdom that we offer so as to ensure that the process towards a clean, democratically legitimate government—president and Rada alike—really does emerge. Here, I should declare an interest. I am president of the British-Ukrainian Law Association—a rather modest organisation but, for what it is worth, it is there. We should also try to ensure a coherent rule of law.
As the noble Lord pointed out, free and fair access to the media is probably the most worrying feature. Free and fair elections should be carried out and delivered to the genuine satisfaction of independent election monitors, including, in particular, the Office for Democratic Institutions and Human Rights of the OSCE—all in compliance, I hope, with clearly laid out benchmarks.
Today, I had the clear impression that, as the noble Lord pointed out, there is a fund of good will within people on all sides in Ukraine. They want the path to be made clear and they want help and guidance in going along it. Therefore, I hope that we shall ensure that the resources, whether intellectual or economic, of the European Union, the United Kingdom and the United States that go into Ukraine are concerted as well as possible and that they contribute to one flow of wisdom and to securing the legitimacy of the political process in that country.

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We cannot, of course, do it all for them. When considering what to say today, I was reminded of a quotation in Rodric Braithwaite's CER pamphlet. The quotation is from George Kennan in 1951 talking about Russia, but the same argument applies here:
"When Soviet power has run its course, or when its personalities and spirit begin to change (for the ultimate outcome could be one or the other) let us not hover nervously over the people who come after, applying litmus papers daily to their political complexions to find out whether they answer to our concept of 'democrats'. Give them time; … let them work out their internal problems in their own manner. The ways by which people advance towards dignity and enlightenment in government are things that constitute the deepest and most intimate processes of national life"
They have had time; the ball is still in their hands and not in ours. We can and must do all that we can to help, but in the last resort it is for the people of Ukraine who will save themselves, as I am sure they intend to do. They have all our good wishes in that respect.
9.6 p.m.
Lord Selsdon: My Lords, I am most grateful to the noble Lord, Lord Ponsonby, for introducing the debate. I was not aware of his interest in these areas until I went—I was not dragged unwillingly to school—to a Foreign Office seminar one day, where I saw he was in charge, surrounded by people with the most amazing collection of names that I could not pronounce and whom I thought were masquerading as British. It made me realise what little involvement we have had to date in these countries. At this time of night I shall not try to entertain your Lordships, but I want to express a few views as I stand here and look towards, say, the east, or perhaps the Baltic with Estonia, Latvia and Slovenia somewhere nearby—one Division Lobby—and the Black Sea on the other side.
Geography plays an important part, as it always has done, in our economic and political history. There is a line of states but I do not know whether they are beyond the border of Europe. I have yet to find anyone who can tell me where the border of Europe is and draw that line in the sand or on the hills. I was always told that it was the Urals. Once upon a time children studied geography at school. This evening I went to the Library to consult a map to see where the Danube came out because I was not sure. One fact that I knew is that the main rivers of Europe often flow in that direction.
Now we have a time of change. I should declare an interest as I have worked in and with the countries of central and eastern Europe on and off for years. Perhaps I should say that I have tried to work in and with them but somehow they have always won and I have never had much success other than receiving two Know-How Fund grants. Change in those countries does not happen quickly. I know nothing of Moldova. I have a great affection for the Ukraine, where I have been many times. The noble and learned Lord—"Sir Howe", as he is called there—is heavily respected because he is an island unto himself; he is a form of Crimea in Europe, as they have described him to me.
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I do not want to consider the European opportunities, but the British opportunities. At this moment our competitors—we have competitors within the European Union—in matters of trade and economic affairs are reeling a little. Germany is bankrupt because of the cost of eastern Europe; France has too much capital expenditure; we, as a country, for whatever reason—there is no political credit—are in a position where enormous resources are passing through London which can be directed almost anywhere in the world. We are now the third largest investor in the world but with the lovely phrase OPM—other people's money.
I return to my favourite country in that part of the world, Ukraine. I first became involved with two countries because originally Scotland was called Albania—the white people—and because Ukraine is next door to the United Kingdom in the alphabet. I went out there to see one of my Ukrainian friends. I have been privileged to sit with most of their politburo and found that your Lordships' card with the red and white stripes gets one into the KGB and anywhere in the Ukraine. I thought that it would be nice if we could build ships so we set up "British Ukrainian Shipbuilders". The idea was that they would build the hulls and we would equip them and trade with them. At the end of the day, they did not need us. The Black Sea shipping company—BLASSCO—was one of the most successful in the world and traded almost everywhere. Their shipbuilding did not have to rely upon the need to produce profit. Profit was the picture you hung on the wall and dreamed about one day, but it did not come into the scene.
Shipbuilding interested me first, and from that came the spin-off—the technology of trying to turn swords into ploughshares. I did not realise the remarkable economic and industrial strength that there was in the military, with 40 per cent of Ukraine's economy defence-related, but with parts of that defence being in a fairly high-tech area. I mentioned this in your Lordships' House some years ago. When I was first taken out there, they set me up a bit. I was asked if I would like to go and look at a factory. I ended up in the SS24 missile factory in Dniper Petrosk, where I was taken in, supposedly through the clean rooms. The doors squeaked shut, and I suddenly found that my colleagues had walked round the outside, because their equipment was designed to work in any area at all.
When the first Ukrainian Airways flight took off and went out there it was run by Aer Lingus. The pilot who I happened to sit next to—we were on a Boeing, because they did not think that people trusted Ukrainian or Russian aircraft—said, "The one thing that you should never do is fly on a plane where the only training that the pilot has had is from Boeing, because we know in our country that anything that can go wrong will go wrong". We discussed Murphy's Law, and in Scotland MacDonald's Law says that Murphy was an optimist. He said, "We are used to anything going wrong that can go wrong. We have the extremes of weather. I could even land this Boeing with a hook on one of the aircraft carriers that we are trying to sell to you".

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Going in to the missile factory, I realised that these were people who sent things into space; but they did not have the lightweight technology, the software. It was only then that I realised the association that goes back to the twelfth century between Kiev and Belarus, and Belarus was the country that had some of the greatest software and the lighter parts of high technology. I suppose the former Soviet Union had deliberately tried to divide or control its empire by allocating to some areas one form of technology and production and the others to another area. The engines for ships were not made in Ukraine, they were made somewhere else. The transfer prices after perestroika were such that it was not possible to make it economic.
I realised that with these countries the words economic and profit did not seem to apply. The wonderful concept of PPP, or privatisation, was a much simpler issue. The general manager or the management of a company in most of these countries would find that he no longer had the resources from central government, so he would ask if he could have control. There would be a government decree that would effectively hand over the business to him and his former colleagues. He may not be allowed to have two cars or four secretaries, but his job was to make sure that the workforce was paid, and that it received its facilities in sport and other areas. The community of interest became more isolated from the centre.
This is where our country could step in. We have much to offer that part of the world. In general, we are not disliked. I think that we are regarded as a friend, and not as a competitor. There are little things that stick in my mind. I never realised that the two presidents, former and current, had flats next door to each other, although they were each other's main rivals. When you went out to a dacha up on the way to Chernobyl, you looked to make sure that the pine cones were on the trees, and that you were not too near to that area. You would find their dachas were next door to each other. I took the occasion to invite them out to dinner. To show me that things had not changed, we had an excellent dinner of lobster, champagne, and so on. When the bill came for eight people, I was told that it was so many local currency. I asked how much it was in dollars. "We do not take dollars, my Lord. It is £5, preferably an old white £5 note". That showed the devaluation of the currency.
I got to like these people. When they asked whether I could help them in the management of their football club, or by looking after that young, slim skater, who came to the West and did extraordinarily well, I realised that we were dealing with a deep culture that somehow struck at one's soul. One only had to go to an opera in Kiev and it was like a pantomime. Suddenly, just before the curtain went up, the children would come in dressed in uniforms, each carrying a stool. They would sit in the aisles and learn about their culture.
I am not trying to promote a country such as that. However, I had to open my own eyes as I had previously understood that we were dealing with a military power.
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I was drawn through and told that 3 million people had been killed or starved to death under Stalin and that 3 million had been killed by the Germans in the war. I was told that it was the breadbasket of central and eastern Europe. Black grow bags, almost as if they were from Fyson's, came down from the delta, and there was an ability to grow as much food as one could wish, but without the organisation of the farms. Under Lazarenko, all the technology and finance had been allocated to the military and people were still raking by hand in the fields.
Then, I suddenly became interested in Belarus, for one simple reason. It is quite intriguing when a president has his own website. When a man says, "In order to unite my country we must gang up together against our common enemy, and our common enemies arc the United States, Russia, Japan and Western Europe", you have to say, "There is a man who has an idea. He may become a benevolent dictator rather than what people call him at the moment". I thought it might be a good idea to go there. The noble Lord, Lord Ponsonby, will remember the advice given by the Foreign Office: "It might be a hit dangerous to go there. We do not have a lot of interests".
So I thought that I would go off and meet the people. I met the Foreign Minister in Geneva and said, "Why don't you come to lunch and see us here". He said, "I am not allowed to". We are not allowed to exchange ministerial visits; I have forgotten how far back that convention goes. I ask the Minister whether it would not be possible to allow Ministers to go freely unencumbered from one place to another in the world. Do we really have to wait until all sorts of things happen before we make friends again? I speak from my time in the Middle East. Whenever a Minister could not go, they would send traders like me to Libya, Iran, Algeria—it did not matter where—because we could not have official relations.
This line from the Black Sea up to the Baltic is critical for the future. On the other side of that line lies enormous oil and mineral wealth. As the Drushba pipeline which runs through Ukraine demonstrates, these countries are interposed in an important way as regards materials exported from the east. No one has yet managed to produce a true mineral map or an oil map of those parts of the world, I suppose because it was a secret. I remember, at an oil conference, being asked whether the British had the technology to tell the countries where the oil pipelines ran through their countries. They had been kept secret.
I am grateful for this debate. As noble Lords have probably gathered, I have a lot of affection for these people who stare at you, do not smile for maybe two to three years, but then suddenly become one's friend. I think that we need some of their technology. With our industrial base so eroded—as outlined in the previous debate; I was able to hear only part of it—I think that there are new opportunities which we could explore bilaterally and not necessarily through the EU. Part of me says, "Let us keep the EU out of this and let us do it bilaterally". However, I still have great affection for Kipling and the Great Game as you can

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find it. There are so many opportunities in countries which are yet unknown to us. In almost all cases, we will probably have to pass through one of the three countries which are the subject of this debate.
9.18 p.m.
Lord Wallace of Saltaire: My Lords, I have been sitting here thinking we all go out to these countries in one capacity or another. They welcome us all as we go there. I hope that we do more good than others. I visited many of the countries in the early 1990s in, I am ashamed to say to the noble and learned Lord, Lord Howe, the capacity of an expert—he will know that one of the definitions of an "expert" is "someone carrying a briefcase a long way from his office"—while I was working for the Open Society Foundation. I remember staying in a hotel in Yerevan and being told in hushed tones by the key lady on my floor at the hotel that the noble Baroness, Lady Cox, herself had stayed on that floor only a few months before. So we leave impressions behind us of one sort or another.
I also remember a particularly fascinating but frustrating conference in Kiev when Ukraine had been independent for only two weeks. I again regret to admit to the noble and learned Lord, Lord Howe, that I was part of a joint Harvard/LSE delegation—at least it was joint—in which the Foreign Minister arrived to say as his opening message to us that Ukraine had two strategic objectives in its foreign policy for the next two years. The first was to join NATO and the second was to join the European Union. That was some time ago. I recognise the frustrations that NATO and the European Union have had in dealing with Ukraine and even in attempting to deal with Belarus and Moldova.
Those three states suffered immensely in the 20th century—above all, in the Second World War. After all, the grandchildren of many displaced Ukrainians arc still living in this country. I pass the graves of many in Bradford when I go to see where some of my own and my wife's family are buried. I remember a sad joke that was told in Rochdale a generation ago: Rochdale had three Ukrainian clubs one for those who had fought with the Germans; one for those who had fought against the Germans; and one for those who thought that you should not argue about that any longer. Ukrainians suffered desperately during the Second World War. It was only after the Cold War that some of those disappearances began to come to light.
Those three countries are caught between the European Union and Russia; they are desperately dependent on both; and they have so far failed to organise their own future orientation or, in the case of two of them, even to manage their own state. The European Union has tried to extend its conditionality policy from the new states that are joining the EU this coming May to the next set of neighbours through neighbourhood policy, because that works only if the potential partner is interested in bargaining by the same rules.
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The noble Lord, Lord Ponsonby, compared the situation with the western Balkans. The EU is in a very different situation in the western Balkans. In effect, it is operating in a trusteeship situation in Bosnia and Kosovo; and for Albania and Macedonia, the recognition and acceptance of dependence on the EU is strong. Belarus does not accept its dependence on the EU. Ukraine sees itself as an important country, but certainly does not see itself bargaining on the same basis as the western Balkans. For all the difficulties we face in the western Balkans, there is in some ways a more straightforward understanding on both sides of the nature of the relationship.
We clearly have immense common interests with our three new neighbours. Border management is difficult enough. Three years ago, the Belarusian authorities had not even finished demarcating their side of the boundary with Lithuania and Poland. We need to ensure that there is as much continuing cross-border trade and contact as possible—after all, there are links between populations on both sides of the border—but at the same time, we have to control illegal transactions. A great deal of smuggling and illegal immigration takes place. In preparation for our debate, I read of the large number of illegal immigrants in Belarus and Ukraine who are waiting to cross the border and move west. Therefore, the control of cross-border crime, illegal immigration and smuggling are clearly important factors.
The European Union is trying to export stability from western Europe across those states and it is conscious that unless it succeeds in doing so, it will import instability. Indeed, it has to some extent already done so. I note from the figures that I was looking at that the population of each of those three states has gone down on the official figures by at least 10 per cent in the past 10 years. In Moldova, I understand that the population is much more likely to have gone down by 15 to 20 per cent. There are substantial Moldovan and Ukrainian minorities in Portugal. On my previous visit to Athens, I met a Moldovan couple who had walked through Bulgaria to Greece. That is desperate poverty. How we reverse that flow and give those people an opportunity to make something of their own countries is a real problem.
We have a substantial problem in parts of Europe of Ukrainian criminal networks operating within the European Union, particularly across Hungary and the Czech Republic. There are also problems of arms traders into Africa and elsewhere based in Ukraine.
Belarus presents a particular problem for the European Union. We really do not know what to do with it. I have been struck at many meetings by the number of occasions on which Belarus simply is not mentioned when it comes to talking about the wider Europe because no one really knows what to say. The European Union embassies have had their great

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difficulties; the OSCE was excluded for some time. I hope the Minister will tell us what the position is with the OSCE and the monitoring group. Belarus will, after all, be a transit state between two parts of Russia once the EU has expanded, and the problems we will have with managing the Kaliningrad issue will necessarily involve a close relationship with that extremely difficult country.
With Moldova, I understood that some months ago there was some prospect that we would manage to persuade to negotiate withdrawal of the remaining Russian troops from Transnistria and that discussions were under way within NATO and the EU about sending a limited number of troops to play an intermediate peacekeeping and peace monitoring role as we achieved a reunited Moldova. But that appears to have stalled, and I would be very grateful if the Minister could tell us whether anything is now moving forward, or whether we have again reached an impasse over the Transnistria situation.
With Ukraine, we have seen very limited transition so far. There is a semi-democratic Government with a semi-legal system and a semi-market economy. Real assets, as other speakers have said, include agriculture—underutilised at present—and heavy industry, some of which is still valuable. I have been doing some work on the European defence policy and have noted that the number of members of the European Union which depend on Ukrainian Antonovs to get their troops to anywhere outside Europe is high. There are clearly assets which we use and could use more.
We all understand that Ukraine is a key state, and have a direct interest in its independence because Russia, without Ukraine, is a state, and, with Ukraine, is an empire again. But I am not sure whether full EU membership, as offered, is necessarily the answer, because there is a problem with just how large the European Union becomes. I say this with some passion, because I spent this afternoon with a group of Turkish students and academics who were all arguing that Turkey has to become a member of the European Union but there is no reason why Ukraine should. It seems to me that the two necessarily go together; the question of when the European Union becomes too large to be manageable is raised by these very major states to our east.
The European Union needs a new strategy for Ukraine. I hope the Minister will tell us what is in mind. Should we be putting more money into education? Should we be attracting more Ukrainians over here for technical, administrative and military training? What can we do in this difficult situation?
The new members of the European Union can clearly play a very important role. I know that the Poles have already been talking actively about future relations with Belarus and Ukraine. It is important that everything we do goes alongside and works with Polish efforts. But we all recognise that this is a hard and unrewarding row to hoe, and we hope that the British Government will nevertheless continue to try to hoe the ground.
9.29 p.m.
Lord Astor of Hever: My Lords, I, too, thank the noble Lord, Lord Ponsonby, for raising this issue. The importance of this debate is surely shown by the fact that there are as many officials here tonight—six—as we have speakers.
We welcome the enlargement of the EU and hope that Romania and Bulgaria will join in 2007. We also hope that negotiations will eventually lead Turkey into membership. The EU acknowledges that closer cooperation with countries on its new border is inevitable from 1 May this year; but there is still a vast amount to do regarding the EU's relationship with the Ukraine, Moldova and Belarus. How these will complement or contrast with the EU's relationship with Russia is also a significant issue. It would be a tragedy if the result of enlargement was to weaken the ties that those countries enjoy with the rest of Europe.
The assumption that the regional degrouping that took place after the collapse of the USSR would result in those countries remaining closely allied with Russia has, in many cases, been proved wrong. The noble Lord, Lord Ponsonby, mentioned the recent dispute between Russia and Belarus, in which Russia accused Belarus of tapping illegally into the Russian gas giant Gazprom's pipeline, and natural gas supplies were cut off. That left a huge swathe of land stretching from Germany to Lithuania without its main source of fuel in the dead of winter.
The Ukraine, Moldova and Belarus are three ex-Soviet countries with serious problems, both social and economic. These include human rights, democracy and the rule of law. For example, Moldova's failure to establish a functioning, stable economy and internal tension between the ethnic Russian and Romanian populations; Belarus's ongoing issues with human rights and the worrying deterioration of democracy; and the Ukraine's problems with law and order.
The Centre for European Reform has rightly said that,
"EU states can never be sale so long as their neighbours are poor and unstable countries, rife with the trafficking of arms, drugs and people".
Can the Minister update the House on the EU's delegation to these three countries and their progress in fulfilling their mandate? What is the current status of implementation of the partnership and cooperation agreements—PCAs—between the EU And Ukraine, and the EU and Moldova?
My noble and learned friend Lord Howe gave a fascinating overview of Ukraine, a country of which he is obviously very fond and where, as my noble friend Lord Selsdon said, he is highly respected. I agree with my noble friend that one must admire the courage of' those in that country who have grappled with its problems, particularly, as we have heard from both my noble friends, when things move slowly.
As my noble friend said, one-third of their trade is with the EU, and I agree that we should do everything that we can to help them. As my noble friend Lord Selsdon said, we have much to offer them.

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Relations between the EU and Ukraine are fairly advanced—the most advanced of the three. The EU gives Ukraine generous aid—48 million euros plus an additional 126 million euros based on regional programmes last year alone. This goes to a country that, despite being well placed to take advantage of the benefits of EU enlargement, continues to have significant problems with law and order.
Denis MacShane, the Minister for Europe, has said:
"It is difficult to talk seriously with our Ukrainian friends while the rule of law … remains broken".
The Foreign and Commonwealth Office Human Rights Report 2003 highlights serious failings in women's rights, particularly in rural areas; minority rights; the censorship and control of the media; and disabled people's rights. Can the Minister inform the House what steps the Government are taking to help to ensure that the presidential elections this October will be free and fair?
Despite Moldova's president stating that,
"integration with Europe is an absolute priority in Moldova's foreign policy",
it still has significant child abuse and prison reform problems, and issues with disabled rights. The most worrying is the continual ethnic tensions between the Russian and Romanian populations, which have not eased since the 1992 war. Some 1,500 Russian troops remain in the Dnestr region, and the unrecognised separatist government there have said that, if international troops are sent in, Europe will see another war. What discussion have Her Majesty's Government had with Russia on that issue to work towards preventing such a situation occurring?
Belarus remains the most out on a limb of the three. We strongly welcomed the introduction of sanctions in 1997 as a response to its poor human rights record. President Lukashenka's moves towards authoritarian rule and his rejection of several overtures by the EU to assist the return to basic democratic standards are of great concern, bearing in mind the importance of Belarus as a future neighbour come May this year. It has never expressed any interest in joining the EU and remains the only European successor state of the former USSR without a ratified partnership and co-operation agreement. Its application for WTO membership is still under consideration nine years on. There are signs of growing trade. Imports have nearly doubled since 1996 and exports to the EU are up by nearly half over the same period. As the noble Lord, Lord Ponsonby, said, it is important that the EU works very closely with Belarus, so it seems surprising that there is no EU office in Minsk.
We must not back down on our position regarding human rights and good governance in that country. Will the Minister assure the House that Her Majesty's Government will not support the lifting of sanctions until Belarus is back on the track to democracy?
9.37 p.m.
The Minister of State, Foreign and Commonwealth Office (Baroness Symons of Vernham Dean): My Lords, I, too, thank my noble friend Lord Ponsonby of Shulbrede for bringing this important issue before the House. As he says, the imminent enlargement of the European Union has given new impetus to strengthening relations with Ukraine, Belarus and Moldova. The EU has a clear interest in ensuring that the countries on its borders are stable, democratic and prosperous.
As my noble friend reminded us, from 1 April the EU will, for the first time, share a border with Ukraine and Belarus, and Romania's accession in three years' time will give the EU a shared border with Moldova. All three countries will share with the EU a greater interest in increasing trade and investment and co-operating on cross-border issues, such as counter-terrorism, immigration and the environment. Those are all very important issues, as the noble Lord, Lord Wallace of Saltaire, reminded us.
My noble friend is right that the very proximity of those countries will create some challenges for us, and how we react will be crucial. It was, of course, the United Kingdom that first proposed the creation of the "wider Europe" policy. Our aim was to deliver to the people of the EU and its near neighbours the mutual benefits of security, stability and development. As we know, that UK initiative has now been developed into the European "neighbourhood" policy. That policy sets us a new agenda; it aims to develop a zone of enhanced economic growth and stability, which is enormously important across a range of industries, as the noble Lord, Lord Selsdon, told us, in his characteristically interesting intervention. It will offer to the near neighbours closer co-operation and greater integration with Europe, in return for political and economic reform.
The noble and learned Lord, Lord Howe of Aberavon, was right. We—that is, the European Union—want and need those countries to have real success in their trade and commerce and their economies as a whole, because that in turn will increase our own security and prosperity as their close neighbours. Of course, both Ukraine and Moldova have ambitions to become members of the European Union. As the noble Lord, Lord Wallace of Saltaire, implied, both countries have some way to go along the path of reform before the question of their possible EU membership can be addressed. Belarus under the present leadership, as many of your Lordships have remarked, has no ambitions towards EU membership.
The European neighbourhood policy should be seen as a response to the practical issues posed by proximity and neighbourhood as we see them impending and as separate from the question of accession. We believe that our new eastern neighbours should focus for the

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moment on their domestic reforms and take advantage of what the European Union is offering in this neighbourhood policy. What is on offer includes the prospect of eventual full access to the EU's internal market and the gradual extension of the four freedoms of that internal market—the freedom of movement and people, and the freedom of goods, services and capital. It is significant that that would represent a fundamental advancement in relations, were that to be achieved. As the noble and learned Lord, Lord Howe, implied, it is a tremendous opportunity for those of the EU's neighbours who are ready to seize that opportunity.
How would the European neighbourhood policy work? The countries that border the enlarged EU are very different judged by most standards. A key element of the European neighbourhood policy will be differentiation, which is the country's specific action plan, setting out clear targets and benchmarks by which progress on reform can be judged over several years. Those will form an integral part of the policy. In order to encourage progress, the benchmarks for reform and the action plan are linked to credible incentives, such as preferential trading relations and targeted development assistance.
As the noble Lord, Lord Ponsonby, and the noble and learned Lord, Lord Howe, indicated, action plans from Moldova and Ukraine are now being drawn up. The European Union Commission has been asked to work closely with each country throughout this process.
The noble Lord, Lord Astor of Hever, asked specifically about progress on those two action plans. The precise content of each country's action plan— the benchmark for reform— is under discussion, so I am unable to give any details as those discussions are still in progress. However, I can give some details of the areas that are likely to be covered by those plans. They include OSCE validated free and fair elections. I hope that that answers the point raised by the noble Lords, Lord Wallace of Saltaire and Lord Astor of Hever. In addition, they would also cover media reforms, progress on other human rights, such as judicial reforms, economic and social reform, the improvement of environmental standards and achievements on other cross-border issues, such as drug trafficking and illegal immigration, which were important points raised by the noble Lord, Lord Wallace of Saltaire.
The noble Lord, Lord Ponsonby, asked about Moldova in relation to the settlement of the Transnistria dispute. The Government are working with all parties to help where we can to achieve a political settlement in Moldova and to end the frozen conflict—if I can put it that way—with breakaway Transnistria. On Moldova, we expect progress on finding a solution to the problem to be included in action plans in the way in which my noble friend implied. We hope that negotiations with Ukraine and Moldova will be completed by May of this year and
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action plans endorsed at the June European Council. I hope that that gives the noble Lord, Lord Astor of Hever, a benchmark in terms of the progress that might be made this year.
The noble Lords, Lord Ponsonby, Lord Selsdon, and Lord Wallace of Saltaire, and the noble and learned Lord, Lord Howe of Aberavon, spoke about Ukraine and the constitutional changes. I was grateful for the thoughtful way in which the noble and learned Lord, Lord Howe, with his considerable experience, approached the subject.
Your Lordships will recall that late last year Ukrainian authorities pushed for constitutional amendments to reduce the next president's powers to shorten his term of office and to have his successor elected by Parliament instead of by popular vote. The main opposition party resisted. The noble and learned Lord, Lord Howe, set out a number of rationales for all that. The EU, the United States and the Council of Europe protested that the changes were ill-timed—only months before the presidential elections—and that they were being forced through without full consultation. We are glad that the authorities have now amended the draft proposals and that the president will remain elected by popular vote. President Kuchma has also declared that he will not stand again and will retire from politics.
We hope that President Kuchma's lasting legacy will be free and fair elections, providing for a democratic transfer of power, with any new constitutional framework agreed through full consultation.
My right honourable friend the Secretary of State made it clear to the Foreign Minister in January that Ukraine's closer relations with the EU were dependent on the democratic process. The extent to which the 2004 presidential elections are free and fair will be an absolutely crucial test of the Ukraine's readiness for this. Again that addresses the points raised by the noble Lord, Lord Wallace of Saltaire.
So, I hope that my noble friend Lord Ponsonby and the noble and learned Lord, Lord Howe of Aberavon, will be pleased to know that the Department for International Development and the FCO have committed almost £3 million to enhance the independent Ukrainian media to enable them to expose any electoral malpractice. We believe that this will make a real contribution to creating the right environment for democratic elections.
I turn to the fraught question of the inclusion of Belarus in the EU. A number of your Lordships were in some ways quite critical of what was seen as a disengagement or rate of disengagement in relation to Belarus.
In 1997, EU/Belarus relations did indeed stall as a consequence of serious setbacks in the development of democracy and human rights in Belarus. That year saw the replacement of the democratically elected Parliament with a national assembly nominated by the

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president in violation of the constitution. So, together with our EU partners in the General Affairs Council we reacted swiftly to these very unwelcome developments.
We immediately froze conclusion of the EU's Partnership and Co-operation Agreement with Belarus. That is why we restricted ministerial level contacts and the scope of EU assistance. I hope that that gives some real explanation to the noble Lord, Lord Selsdon, and other noble Lords who were worried about that point.
Like my noble friend Lord Ponsonby, I am dismayed that despite repeated approaches—and there have been repeated approaches—by the EU, the OSCE and the Council of Europe since 1997, Belarus has applied a constant policy of deviation for the commitments it made in international forums.
The fact is that we deplore the current situation regarding freedom of speech and religion and basic human rights. There is oppression of civil society, harassment and closing of the independent press, of trades unions and NGOs. There is increasing pressure being brought on the OSCE office in Minsk. These are all very important issues. The failure of the Belarusian Government to initiate genuine investigations into the fate of disappeared members of the opposition is also a very worrying aspect of what is going on in that country.
The EU policy towards Belarus—and it is a policy which we all pursue together—is, however, based on a very clear proposition; namely, that the Government of Belarus improve the quality of democracy and respect for human rights and in return the EU will build close and mutually profitable relations. We have an agreed step-by-step approach towards Belarus, so it really is not a question of a complete block on relations in the way that the noble Lord, Lord Selsdon, perhaps implied. There is a way forward, but bilateral relations are restricted at the moment. They could be lifted if the clear political benchmarks for EU co-operation with the Belarusian authorities were moved forward.
I hope that that gives a more rounded picture of the relationship with Belarus and shows that there is a way forward for that country to improve its relationship with the EU. I do however have to report to your Lordships that sadly President Lukashenka has so far ignored this offer. Instead, we believe that he is moving Belarus back towards its totalitarian past.
The UK and the EU would prefer a better relationship with Belarus. We shall continue to offer opportunities for dialogue and to make every effort we can to encourage the re-establishment of democracy and the rule of law there.
Perhaps I should just say that the EU does cover Belarus, but not from Belarus itself. It covers Belarus from Kiev. We maintain our assistance to civil society, deliver aid on humanitarian grounds and of course, as many of your Lordships will know, we try our best to alleviate the suffering still felt after the Chernobyl disaster.
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A number of noble Lords raised the question of the new neighbourhood policy in relation to EU/Russia relations. I agree with much of what my noble friend Lord Ponsonby has said—and of course the noble Lord, Lord Astor of Hever, asked questions on this point. The EU is determined to build a genuine strategic partnership with Russia based on equal rights and obligations, mutual trust and open and frank dialogue. The European neighbourhood policy should not be seen as competing with Russia for newly independent former Soviet states. Russia understands that its neighbours to the West are also the EU neighbours. We believe that we have a common neighbourhood and that we ought to be working together on those issues. The EU will seek to develop relations with Ukraine, Belarus and Moldova but will do so in co-operation with Russia, transparently, stressing the benefits that the economic development of the region will bring to all.
The noble Lord, Lord Wallace of Saltaire, also asked about the OSCE's role in Moldova, Ukraine and Belarus. The EU introduced a visa ban on President Lukashenka and seven other senior officials in January 2003 in response to the forced closure of the OSCE office in Minsk. The ban was removed when the new office was allowed to open in April 2003.
The OSCE can help to supplement the EU's policy towards all three countries through the work of its field missions and through project work by other institutions, for example, the Office of Democratic Institutions and Human Rights. The OSCE mission mandate in Belarus includes assisting the Government in further promoting institution building, consolidating the rule of law and developing relations with civil society, obviously in congruence, in accordance with the OSCE principles. The continuing presence and functioning of the OSCE presence in Belarus is of enormous importance to the EU.
I hope that I have been able to indicate to your Lordships the overall span across all three countries, all at very different stages in their relationship with the EU. As we clearly recognise, Belarus is at a greater distance from us. The fact is that EU relations with Ukraine, Belarus and Moldova will continue to be of enormous importance over the coming decades. For our part, we shall strive to achieve a relationship that delivers real benefits to both sides: to the people of the European Union and to our new neighbours in eastern Europe.
Lord Wallace of Saltaire: My Lords, before the Minister sits down, as we do have a little time, can she be more specific, if possible, about whether there is any movement on Transnistria and the withdrawal of Russian troops? It seems to us to be important. We have heard a certain amount about whether the EU would play a larger role, including perhaps sending peacekeeping monitors, if that conflict did move towards resolution.
Baroness Symons of Vernham Dean: My Lords, reinforcements have arrived from the Box, fully justifying the number of civil servants who are with us

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this evening. I can tell your Lordships that the UK continues to raise with the Russian leadership the need for Russia to remove its troops from Moldova. The UK will not ratify the adapted CSE treaty until Russia removes its troops. Many thanks to officials for running to the aid of their Minister. I hope that that satisfies the noble Lord on that question.

University of Manchester Bill [H.L.]
The petition against the Bill from Kenneth Rohde and Ian David Bell (No. 1) was withdrawn. The order made on 11 February last was discharged and the Bill was committed to an Unopposed Bill Committee.
House adjourned at seven minutes before ten o'clock