Lords Sitting of 10 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 Chelmsford.

Smoking and Women
Baroness Massey of Darwen: My Lords, on National No Smoking Day, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the estimated number of women who smoke; and what action they are taking to reduce that number.
The Parliamentary Under-Secretary of State, Department of Health (Lord Warner): My Lords, in England in 2001, 25 per cent of women aged 16 and over smoked cigarettes regularly; that is around 5.1 million women. We have a comprehensive strategy to tackle smoking aimed at the whole population, including ending tobacco advertising, promotion and sponsorship: education and media campaigns, and helping smokers to give up. We are aware that women are taking our messages to heart and that NHS smoking cessation services are used more by women than by men.
Baroness Massey of Darwen: My Lords, I thank my noble friend for that Answer. Is he aware that the health risks of smoking to women have been found to be increasingly severe? What is being done to help young women not to take up smoking as opposed to stopping smoking?
Lord Warner: My Lords, before answering those questions, perhaps I may say how much the Government support the theme of today's 21st National No Smoking Day for smokers "who want out". We know that more young women have set a quit date with the help of NHS stop smoking services, which have seen a very substantial increase in take-up by young women, of around 100 per cent. The Government have published their consultation paper, Choosing Health?, setting out a number of proposals and ideas to which we are asking people to respond.
Baroness Trumpington: My Lords, as regards the original Question tabled by the noble Baroness, does not the Minister agree that it is rather strange, because surely the action that the Government could take to reduce the number of women is to give them some more cigarettes?
Lord Warner: My Lords, perhaps we need some especially genetically modified cigarettes for that.
Lord Clement-Jones: My Lords, in the report, Smoking Cessation and Young People—Should we do more to help young smokers to quit?, produced by the Health Development Agency, the point is firmly made that most smoking cessation campaigns are directed at adults. What discussions has the department had with the HDA about running specifically targeted promotional campaigns directed at young people, and in particular at young females?
Lord Warner: My Lords, the Government's current campaign, while directed at adults, also shows them the impact of smoking in relation to young children and the damage it does to them. The prevalence of smoking among children is declining, falling to 10 per cent in 2002.
Baroness Gale: My Lords, what further measures are being taken to ensure that the law preventing the sale of cigarettes to people under 16 years of age is robust? Has there been an increase in the number of prosecutions of those who sell cigarettes to children under the age of 16?
Lord Warner: My Lords, enforcement is a matter for local agencies. I do not know the precise number of prosecutions, but I will write to my noble friend.
Baroness Masham of Ilton: My Lords, can the Minister let me know whether any research has been carried out on whether women who are heavy smokers also have problems with alcohol? If so, is there any connection with addiction?
Lord Warner: My Lords, it is quite possible that, there is research evidence on that. I do not have it, but I will write to the noble Baroness.
Lord Tomlinson: My Lords, will my noble friend note that his condemnation of smoking is widely welcomed? However, it would be more persuasive if he were able to give an undertaking to come regularly to this House during European Union budget discussions in order to tell us precisely what steps are being taken by Her Majesty's Government to propose the banning of tobacco subsidies in the budget, who are their allies and what success they have achieved.
Lord Warner: My Lords, I love to participate in all matters European. I take note of that kind invitation from my noble friend.
Lord Walton of Detchant: My Lords, given the strict laws relating to the age at which it is legal to consume alcohol, would not a major contribution be made towards reducing smoking by young people if smoking were banned in bars, clubs and restaurants?
Lord Warner: My Lords, we have been discussing this issue for some time in the House. I draw the noble Lord's attention to the consultation document, Choosing Health?, published last week. The Government have asked a number of questions and

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are awaiting the responses. Covered in those questions are matters such as: should the Government pass a law to make all enclosed workplaces and public places smoke free; what about restaurants, pubs and bars; and would local authorities be better placed than central government to introduce such laws? We want to await people's responses to that consultation paper.
Lord Chan: My Lords, women living in poorer inner-city communities, in particular those who are single parents, find it very difficult to give up smoking. What can the Government do to support them, in particular through schemes such as Sure Start and others?
Lord Warner: My Lords, I will look into that suggestion and write to the noble Lord. As I said in answer to an earlier question, women are doing better than men in using smoking cessation services. We have seen a large increase in the number of women who have managed to quit smoking, from around 19,000 in 2001 to around 40,000 in 2002–03, as a result of those services.
Earl Howe: My Lords, is the Minister aware that since 1997 total tobacco consumption in this country has gone up, compared with a marked decrease over the previous 25 years? Is he also aware that one in five of the cigarettes smoked in the UK is smuggled into the country? What are the Government doing to prevent contraband tobacco entering the UK?
Lord Warner: My Lords, in 2000, the "Tackling Tobacco Smuggling" strategy was launched to reduce the flow of smuggled cigarettes. The proportion is now down to 18 per cent rather than 20 per cent. Government investment of more than £200 million has helped to fund almost 1,000 extra Customs officers, a national network of X-ray scanners and the introduction of "duty paid" marks on legitimate packets of cigarettes.
Lord Elton: My Lords, do the Government regard nicotine impregnated chewing gum as a useful means of reducing addiction? If so, do they support its use? Will there be suitable instructions for the disposal of the gum on every packet sold?
Lord Warner: My Lords, I hear what the noble Lord says.
The Earl of Listowel: My Lords, can the Minister say what impact smoking during pregnancy has on the birth weight of children? What impact does it have on the IQ of these children? What is the likely significance of smoking during pregnancy for the later development of children into adulthood?
Lord Warner: My Lords, the Government's position is clear: it is to warn women about the undesirability of smoking during pregnancy. Around 6,800 pregnant
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women set a quit date through NHS stop smoking services in 2002–03. About half of those had successfully quit at the four-week follow up.
Earl Ferrers: My Lords, in order to give a lead, do all Government Ministers undertake not to smoke?
Lord Warner: My Lords, I would not dare inquire into their personal practices in this matter.

GM Maize
2.45 p.m.
Baroness Byford Baroness Byford asked Her Majesty's Government:
What, if commercial growing of genetically modified maize is approved, will be the anticipated effect on commercial assurance schemes, organic produce and home-grown vegetables.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, we recognise that if GM crops are grown it will raise questions about the possible effect on other forms of production. As we announced yesterday, the Government will facilitate measures to enable GM, conventional and organic crops to co-exist.
Baroness Byford: My Lords, I thank the Minister for that response. Does he accept that the Government have put the cart before the horse? Surely they should have come forward with a proper legal framework and an agreed liability programme before giving approval to GM maize? Will he consider the important issue of oilseed rape? I know that the current strain has been turned down but a winter rape trial is still ongoing and, as cross-fertilisation can take place, a decision on legal liability is even more important. Can he assure the House that such liability will be agreed before any future approval is given?
Lord Whitty: My Lords, I think I can assure the noble Baroness. As we indicated in the Statement yesterday, no planting—even of the one crop we have approved—will be possible before Spring 2005 at the earliest. By that time, not only will the conditions of how we manage that crop be clear, but also the general conditions for co-existence and liability should be in place. We intend to consult on those terms very shortly.
Earl Peel: My Lords, the Minister will be aware of the considerable misgivings expressed to date by English Nature, the independent advisory body to the Government on nature conservation issues, about the planting of GM crops. Was English Nature invited to give an opinion prior to the Government's announcement to allow the commercial cultivation of GM herbicide tolerant maize? If it did so, can the Minister tell the House what its opinion was?
Lord Whitty: My Lords, in the consultation, English Nature gave its views in relation to all the GM crops being tested. It has indicated that it still has some concerns about any of them being given approval. That is reflected in some of the press coverage today. The Government obviously considered the opinion of English Nature, along with other opinions but, as we indicated yesterday, we feel that there is no scientific reason for a ban on this form of GM maize.
Baroness Hayman: My Lords, while it is obviously important that the Government put in place robust structures to ensure co-existence of different types of farming if and when GM crops are introduced into this country, is it not important that the organic movement does not make a rod for its own back by differentiating between the standards required for non-contamination, to use that phrase, of conventional crops as against GM crops? Will he confirm that there is no need for it to do so under European standards for organic produce?
Lord Whitty: My Lords, it would not be reasonable for the organic movement to insist that the thresholds were unachievably tight. There are, however, ongoing discussions, both at European and UK level, on whether differential thresholds should apply in relation to organic crops. The Government's position is that any such threshold, and therefore requirement on the GM producer, will have to be both feasible and verifiable if we are genuinely to protect organic crops.
Baroness Miller of Chilthorne Domer: My Lords, the Minister said yesterday in reply to questions on the Statement that he "expected" that the rules on co-existence would be in place; today he said that they "should" be in place. Can he assure the House that they "will" he in place before any planting of GM maize? This is really important, not only to the organic sector but also to conventional vegetable growers.
Lord Whitty: My Lords, the conditions attached to t his particular crop, and therefore its co-existence with other crops, will undoubtedly be clear before any planting takes place. The process of consultation on the general conditions of co-existence and of liability will start as soon as possible and should be completed well before the earliest possible planting date. I see no reason why that should not happen. But complex issues are involved, particularly in relation to the liability provisions.
Lord Rotherwick: My Lords, does not yesterday's Statement on GM crops effectively stop them being grown? If the Government, the GM industry and the insurance industry do not accept liability for compensation to be paid for any adverse effect on the environment, will there be any farmers brave enough to grow the crops?
Lord Whitty: My Lords, the approval which the Government gave was in relation to one particular crop. We do not believe that that crop, if grown according to the conditions would, in practice, contaminate conventional or organic crops. The decision whether to produce it obviously depends on the growers' and farmers' view of what the market will be and is not therefore a matter for the Government.
We have also said that if, under any form of GM crop growing in future, a liability for contamination arose, we would expect the consent holders—the GM growers—to meet that liability. But we would not, under the conditions we are attaching to this crop, expect such liability to arise.
The Duke of Montrose The Duke of Montrose: My Lords, when the detailed results of the GM trials were published in October 2003, we were not told how many sites were used for testing the GM maize crop or the number of sites used for testing conventional maize. Can the Minister tell us how many sites used a regime including atrazine and how many did not?
Lord Whitty: My Lords, the exact number is available, and I can write to the noble Duke with it. However, the number of fields involving pesticide treatment which was not atrazine was limited. The rather complicated article published in Nature last week showed that 28 different comparisons can be made between atrazine and non-atrazine-treated fields in GM and conventional mode. The article makes it clear that—if and when atrazine is banned; there is enough information from the trials indicating that non-atrazine alternative pesticides would have less differentially had effects on the environment—there would still he a big advantage remaining for the GM form of cultivation.

Zimbabwe: Parliamentary Elections
2.53 p.m.
Lord Blaker Lord Blaker asked Her Majesty's Government:
What action they will take to encourage the international community to recognise the importance of the parliamentary elections in Zimbabwe in spring 2005 being free and fair.
Baroness Crawley: My Lords, we and our partners in the wider international community will be making it clear to the Government of Zimbabwe that we want next year's parliamentary elections to be conducted in a process which is free, fair and transparent. The Zimbabwean people must be allowed to exercise their democratic rights without the threat of violence or intimidation. If the Government of Zimbabwe are to have any chance of the election results being taken seriously, they must agree to the independent observation and monitoring of these elections.
Lord Blaker: My Lords, I am grateful to the noble Baroness for that statement, so far as it goes. Is she aware that in his speech in his constituency last Friday, the Prime Minister suggested that the world should be moving on from the Treaty of Westphalia of 1648, the philosophy of which is that,
"a country's internal affairs are for it and you don't interfere unless it threatens you, or breaches a treaty, or triggers an obligation of alliance".
That is a quote from the Prime Minister's speech. He went on to suggest that we should not now accept that regimes have a right to brutalise and repress their people, and that we should do all we can to spread the values of freedom, democracy, the rule of law, religious tolerance and justice for the oppressed. Does that apply to Zimbabwe?
Baroness Crawley: My Lords, I very much agree with the Prime Minister in his speech last Friday. Given his great expertise in the subject, I am sure the noble Lord, Lord Blaker, is aware of the enormous and considerable pressure that the international community is bringing to bear on the regime in Zimbabwe. I cite, for instance, the very important lead that this Government took in ensuring the continued suspension of Zimbabwe from the councils of the Commonwealth and how we have worked extremely hard with our European Union partners to extend the rollover of EU sanctions.
Lord Avebury: My Lords, did the noble Baroness notice the report in the Guardian yesterday about the systematic violence and intimidation practised against not only the MPs of the MDC but their parliamentary candidates and supporters? Did she notice, too, the egregious Mr Jonathan Moyo's statement yesterday that journalists who took freelance work with "Voice of America" would be dealt with through the law? Under these circumstances, how is it possible for there to be free and fair elections?
While I am on my feet, may I ask whether the noble Baroness has anything to say about the British-owned aircraft which has been detained in Harare with its 64 passengers?
Baroness Crawley: My Lords, we have seen the story referred to in the recent breaking news on the report Playing with Fire by the South African NGO about the attacks on opposition MPs in Zimbabwe. The fact that 78 MPs and candidates have been subject to 616 attacks and other incidents is indeed shocking. We know that this has been going on for some time; for example, a by-election will soon take place in a constituency where an MP has been stabbed by ZANU-PF supporters. We pay tribute to the bravery of MDC MPs, councillors and candidates. The NGO report underlines the correctness of our Government's robust stand on Zimbabwe.
The noble Lord also asked about the press reports on a mercenary aircraft, as it is described. We are checking out these reports; the Government of Zimbabwe have not contacted us about this incident. Were British citizens among those detained, the
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Zimbabwean Government would have an obligation, under normal consular procedure, to inform us within 24 hours. We contacted the Ministry of Foreign Affairs in Zimbabwe this morning to remind them of this obligation.
Baroness Park of Monmouth: My Lords, what have Her Majesty's Government done to exploit the new warm relationship with Libya and Colonel Gaddafi, and between the EU and the African Union, to stop the African Union preventing any discussion of the situation in Zimbabwe at the UN? It seems to me that it is a waste of time for us to say we disapprove—we have to get other people to disapprove. At the moment, they are not doing so because they do not know the facts and they are not being allowed to know them. I hope that at least we shall be showing the "Panorama" programme at the UN to everybody.
Secondly, are we following the latest actions of the United States Government in imposing fresh, much more troublesome financial sanctions on individual Ministers, such as Jonathan Moyo? Are we doing anything like that and what, by the way, has been the result of our financial sanctions so far?
Baroness Crawley: My Lords, we continue to raise the issue of Zimbabwe with Libya. We have done so in the past and will continue to do so. Those discussions are ongoing.
We were, as I am sure all noble Lords were, absolutely disgusted by the "Panorama" programme and the evidence that it gave of the training camps in Zimbabwe. We call on the Zimbabwean Government to close them down immediately. We cannot take seriously any election prospects for Zimbabwe if such camps were in operation.
Baroness Boothroyd: My Lords, has the Minister read the speech made by President Mbeki at the opening of the South African Parliament only a few weeks ago? In giving a comment about his own country and its relationship with others in Africa, the word "Zimbabwe" never passed his lips. Have the Government made an appraisal of that important speech? What comments does the Minister have to make on it?
Baroness Crawley: No, my Lords, I have not read that speech. We continue to work very closely with the governments of South Africa and Nigeria, as well as partners in SADC, to ensure that considerable pressure is brought to bear on the Zimbabwean regime.

Cameroon
3.1 p.m.
Lord Avebury Lord Avebury asked Her Majesty's Government:
What were the results of their recent talks with President Biya of Cameroon.
Baroness Crawley: My Lords, the Prime Minister and the President of Cameroon had a useful exchange, focusing on Cameroon's programme of democratic reform. The Prime Minister underlined the importance that we attach to transparent, free and fair elections, as evidence of Cameroon's commitment to democratic reform. We also discussed the Cameroonian Government's active engagement with the UN joint mixed commission over the Bakassi dispute.
Lord Avebury: My Lords, I am most grateful to the Minister for that informative reply. What progress has been made towards setting in place the conditions for free and fair elections in Cameroon? In particular, has any reform been conducted of the electoral commission to enable it to consider complaints from people about the registration process and about restrictions on freedom of expression and assembly during the run-up to the election? Could she also say what has been done by the Cameroon Government to implement the recommendations of the Commonwealth-sponsored donors' meeting last October? Have the Government of Cameroon agreed to a visit by the Commonwealth mission to ascertain whether the conditions are in place for free and fair elections?
Baroness Crawley: My Lords, we remain firmly committed to supporting fair and transparent elections in Cameroon. The UK has funded the publication of the National Election Observatory's report on the 2002 legislative and municipal elections. A British consultant has been put in place to assist the government in preparing a strategy for the sensitisation and education of the electorate. We are also helping to supply literally transparent ballot boxes, so that there can be no question of stuffing ballot boxes, as has happened in many circumstances world-wide in the past. We are in close touch with the Government of Cameroon in preparations for the election and co-ordinate closely with the Commonwealth and the donor community.
Lord Rea: My Lords, will my noble friend say whether a particular aspect of the electoral process was discussed? It is one that has frequently been reported to be amiss—the accuracy of the electoral register. In all the elections that have taken place up to now, there have been reports of great difficulties for many people in getting on to the register. Therefore, the result of the election has been totally unrepresentative. Was that aspect discussed?
Baroness Crawley: My Lords, among our discussions with the Cameroon Government, we have made it clear that we believe a fair and transparent registration process is key to a well-run election. As I said, we have funded a consultant to work with the Government of Cameroon, to formulate a strategy for the launch of a national public information campaign. The result will be the production of clear and concise material for the public, outlining the laws and processes of the election, including the registration process itself.
Baroness Northover: My Lords, does the Minister agree that the situation in Cameroon harms the poorest the most? Does she see any sign that the government in Cameroon have any commitment at all to the achievements of the millennium development goals on the relief of poverty?
Baroness Crawley: My Lords, the Government of Cameroon are hoping soon to reach H IPC completion, which, as the noble Baroness will know, will involve debt relief when the completion point is reached. They have made some progress, which we commend. Of course, there is much further to go. We fully support the new developments—for example, the new legislation for the National Election Observatory, including consultation over its membership, autonomous budgets, plans for decentralised legislation and plans to establish a constitutional council and senate. They have put in place, with us, a poverty reduction strategy.

Afghanistan: Reconstruction
3.7 p.m.
Baroness Rawlings Baroness Rawlings asked Her Majesty's Government:
What assessment they have made of the progress of reconstruction in Afghanistan.
The Lord President of the Council (Baroness Amos): My Lords, the Government make very regular assessments of progress in Afghanistan. The recent approval of the new constitution guaranteeing equal rights of women and minority groups was a real landmark. Economic growth of 30 per cent last year and the opening of Standard Chartered Bank in Afghanistan are signs of economic progress, as are the resurfacing of the Kabul-Kandahar road and the opening of the Salang road tunnel. However, many long-term challenges remain, including the holding of democratic elections and the establishment of security across the whole country.
Baroness Rawlings: My Lords, I thank the Minister for that Answer. It is three years since the fall of the Taliban, yet Afghanistan still remains one of the poorest nations of the world. We welcome Her Majesty's Government's increase in assistance, announced this month, but, despite the achievements to date, we are seriously concerned about the country. Would the Minister agree that security remains a particular issue in the southern and eastern parts of the country? What are Her Majesty's Government doing to break the impasse on Afghanistan's paradox? Reconstruction will be stalled until there is greater security but, without more reconstruction, insecurity will continue.
Baroness Amos: My Lords, the noble Baroness is quite right. We have to get the security right in Afghanistan, or development will not happen at the kind of pace that we would all like to see. That is why the provincial

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reconstruction teams are being established throughout the country; there are now eight, and we hope to extend that to 13. But the difficulties in the east and the south remain, and we are continuing to work with our US colleagues and others in ISAF to bring stability to those parts of Afghanistan.
Baroness Northover: My Lords, is there now a timetable for the expansion in the number of NATO troops in Afghanistan, given the very serious security needs that have just been referred to? Do the Government support Colin Powell's proposal that NATO should be involved in Iraq from this summer? What implications does that have for NATO's involvement in Afghanistan?
Baroness Amos: My Lords, the noble Baroness will be aware that under ISAF we now have the Canadians, Germans, French, ourselves, Norway, Belgium, Turkey, Greece and Spain operating in Afghanistan. As I said to the noble Baroness, Lady Rawlings, we are hoping that the number of provincial reconstruction teams that are looking at military and other developments within particular areas will be expanded from some eight to 13. With respect to Iraq, we shall continue to talk to our US colleagues about the best way in which to secure peace in that country.
The Earl of Sandwich: My Lords, can the Minister tell us the latest figure for registration for elections in Afghanistan? Would she agree that the training of adequate numbers of police to ensure that elections can be free and fair is critical? Also, what is the UK's contribution to that training?
Baroness Amos: My Lords, from memory—and I shall write to the noble Earl if I have got this wrong—I think that to date we have registered over 1 million people. We are hoping to register 10 million. This is being done through eight regional centres at present and then the focus will be on rural areas. The UK has contributed significantly to that process. I shall write to the noble Earl and put a copy of my letter in the Library of the House.
Lord Renton: My Lords, Al'Qaeda is still assumed to be based in Afghanistan. Would not any further participation in improving Afghanistan by the United States and ourselves help to suppress Al'Qaeda?
Baroness Amos: My Lords, there is continuing concern about the activities of Taliban forces and Al'Qaeda in Afghanistan. This is a major threat and we are working closely not only with our US colleagues on this but also with Pakistan and other countries in the region.
Baroness Williams of Crosby: My Lords, is the Minister aware that the proportion of women in the voters registered so far is very low? Can she say whether this is being given any degree of priority and whether the people doing the registration are encouraged to try to persuade women to take part in the political process?
Baroness Amos: My Lords, we have been concerned about the low numbers of women being registered. We were very pleased with the outcome of the constitutional talks, as a result of which 25 per cent of the Members of the national Parliament will be women and equal rights for women have been enshrined. We shall continue to work to try to improve the number of women who are registered but, particularly in the rural areas where registration has not yet taken place, we are concerned that this may be a major problem.
Lord Tomlinson: My Lords, my noble friend mentioned the impressive economic growth in Afghanistan. Does she know what proportion of that economic growth relates to the re-emergence of the drugs trade in Afghanistan? What does she see as the interrelationship between the emergence of money from drugs and the insecurity that clearly exists in that country?
Baroness Amos: My Lords, there is clearly a relationship between the re-emergence of drugs and the security situation but it is not the only problem. I am not able directly to answer my noble friend's question with respect to economic growth. I can say that we think that the livelihoods of 20 to 30 per cent of rural Afghans are at least partially dependent on growing opium poppies so we have must find some form of alternative livelihood. Our strategy is to try to get rid of opium production, to work with the Afghans to improve their interception of drugs and, at the same time, to work to provide alternative livelihoods.
Lord King of Bridgwater: My Lords—
Lord Mackie of Benshie: My Lords—
Lord King of Bridgwater: My Lords, I think that it is our turn.
In view of the obvious interest that the House has shown in these issues, and in view of the importance of the commitment that we have made as a country to Afghanistan and Iraq, is the Minister satisfied that enough is being done to keep people properly informed on current progress in both those important countries? Will she consider whether there are better ways in which the House and the country could be more regularly informed on progress in the range of issues in which there is great interest?
Baroness Amos: My Lords, I am very happy to talk to noble Lords about whether there are alternative ways in which we can keep noble Lords informed. A great deal of information is available on the DfID website. I regularly draw the attention of noble Lords to it. We do not print it off and put it in the Library of the House, but I can look at whether that would be helpful to noble Lords. My right honourable friend Hilary Benn frequently makes Written Statements on this issue in another place that I then sign off in this House. If there are other ways in which noble Lords would like to be kept informed, I would be happy to hear of them.
Lord Mackie of Benshie: My Lords, can the Minister give us any information about the formation of a national army under the central government? I understand that it has been bedevilled by recruits joining and then deserting. Has this anything to do with them not being paid enough or not being paid regularly? If so, could they not be funded from an international fund that would, perhaps, ensure that they would stay?
Baroness Amos: My Lords, there are two ways in which we are seeking to support the Afghans with the development of a national army. First, there is a process of demobilisation from the forces that currently exist and reintegration, which particularly tries to get rid of the weaponry that is still around in Afghanistan. Secondly, there is a process of security sector reform that looks not just at the army but also at the police and other law enforcement agencies. It is important that the Afghans are taking these matters into their own hands.

Business of the House: Recess Dates
3.16 p.m.
Lord Grocott: My Lords, with permission, I should like to make a brief statement on recess dates. In October last year, I said that, subject to progress of business, the House would rise for the Easter Recess on Thursday, 8 April and return on Monday, 19 April. I also gave details of recess dates up to October this year, which was perhaps a brave, if not foolhardy, thing to do. But it is something that I intend to do my utmost to try to adhere to. I also said that we would try and get as close as possible to Commons recess dates, for all sorts of useful reasons. As the House may have noticed, the Commons have since announced different recess dates. They have extended the Easter Recess to give it another week. I would dearly like to match that. I can say that there has been some progress in the right direction and I am able to inform the House that, subject, as ever, to the progress of business, this House will rise on Tuesday, 6 April and it will return, as previously announced, on Monday, 19 April.

Tobacco Smoking (Public Places and Workplaces) Bill [H.L.]
Lord Faulkner of Worcester: My Lords, I beg to introduce a Bill to limit tobacco smoking in public places, including workplaces, and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Faulkner of Worcester.)
On Question, Bill read a first time, and ordered to be printed.

Business of the House: Debates this Day
3.18 p.m.
Baroness Amos: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debates on the Motions in the names of the Lord Skidelsky and the Lord Sutherland of Houndwood set down for today shall each be limited to 2½ hours.
On Question, Motion agreed to.

Energy Bill [H.L.]
3. 19 p.m.
Lord Whitty: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order:

Clauses 1 and 2,

Schedule 1,

Clauses 3 to 11,

Schedule 2,

Clauses 12 and 13,

Schedule 3,

Clauses 14 to 27,

Schedule 4,

Clauses 28 to 35,

Schedule 5,

Clause 36,

Schedule 6,

Clauses 37 to 41,

Schedule 7,

Clause 42,

Schedule 8,

Clause 43,

Schedule 9,

Clauses 44 to 47,

Schedule 10,

Clauses 48 and 49,

Schedule 11,

Clauses 50 to 57,

Schedule 12,

Clauses 58 and 59,

Schedule 13,

Clauses 60 to 65,

Schedule 14,

Clauses 66 to 71,

Schedule 15,

Clauses 72 to 87,

Schedule 16,

Clauses 88 to 115,

Schedule 17,

Clauses 116 to 118,

Schedule 18,

Clauses 119 and 120,

Schedule 19,

Clauses 121 to 136,

Schedules 20 and 21,

Clauses 137 to 150,

Schedule 22,

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Clauses 151 to 168,

Schedule 23,

Clause 169.—(Lord Whitty.)

On Question, Motion agreed to.

Public/Private Partnerships
3.19 p.m.
Lord Skidelsky Lord Skidelsky rose to call attention to the role of public/private partnerships in improving the performance of the public sector; and to move for Papers.
The noble Lord said: My Lords, I am delighted to have won the Cross-Bench ballot for this debate, which introduces a topic that I think is important not only in the politics of this country but in the politics of most developed countries in the world.
In the beginning there was capitalism; then there was socialism; now there is the Third Way. At least that is the version of history dearest to the heart of new Labour. At the heart of the Third Way is public/private partnership, or PPP as I shall call it. It is the latest of the attempts to overcome the old divide between capital and labour, the private and the public: to get everyone humming the same tune, contributing to the grand harmony. I once asked the Prime Minister whether he was a Hegelian. He looked a bit startled. But it is, in truth, an effort at a new synthesis, a way of overcoming the old divisions which ramify in our minds.
Public/private partnership challenges both conventional market economics and our political tradition. Conventional economics suggest the need for a fairly small set of public goods provided through the tax system as complementing, and even underpinning, a market economy. In the British political tradition there is a rigid separation of the public and the private sectors, with different chains of accountability. The public sector is accountable to Ministers, who, through Parliament, are accountable to the public. In the private sector, the chain runs from managers to shareholders and, through market competition, to consumers. The public sector is supposed to meet social demand, the private sector individual demand. In the private sector, profit is supposed to be the spur to activity; in the public sector it is something called service, or the "public service ethic". Even in the post-war mixed economy the two sectors were kept separate, with different logics and different incentives. PPP claims to overcome this divide, hence its claim to be a genuine Third Way.
What is PPP? It is an umbrella term covering a large variety of efforts to forge partnerships between public and private sectors in delivering goods and services. Both sectors are deemed to be stakeholders in a giant enterprise called Great Britain. The IPPR sees PPP as a,
"risk-sharing relationship based on an agreed aspiration between the public and private (including voluntary) sectors to bring about a desired public policy outcome".
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In the notion of an "agreed aspiration" lies much of the attraction, and perhaps naivety, of PPP.
In practice PPP is somewhat narrower than that. Its key principle—and this is what I want to emphasise—is that the Government buy goods and services from the private sector rather than producing them themselves. As one commentator writes:
"Governments have increasingly asked non profit and for profit enterprises to carry out their politically-mandated objectives".
The Government set the goals, using private enterprise as the tool. The philosophy underlying this approach is portentously known as the "purchaser-provider split". The public have come to expect that certain services will be collectively paid for through taxes. But there is no reason why the Government should produce these services themselves if they can outsource them. The private sector provides, the public sector pays.
An alternative application of the purchaser-provider split is that of the "internal market". Here the purchaser, the buyer, need not be a public agency buying services on behalf of the consumer, but the consumer himself or herself, equipped with the buying power to choose between different providers. The purest example of this approach is that of the voucher. Its advantage is that it adds consumer choice to the public-private mix. The voucher in its pure form has almost never been tried in this country but the principle that public money follows consumer choice has made headway in both the NHS and the public education sector, though not so far, as far as I know, in the Prison Service. The principle of the internal market, then, is that we do not privatise supply; we try to privatise demand.
One can trace the history of this grand synthesis from the 1980s. It began with "contracting out", when the Thatcher government forced local authorities and nationalised industries to put out to tender services hitherto provided by public sector workforces. Notable examples were street cleaning, refuse collection, school meals, railway catering and hospital laundries. Even Her Majesty's School Inspectorate was outsourced at that time. Then, housing associations were created to build and manage housing estates on behalf of local authorities. Charities were subsidised to run services such as long-term health care. Finally, in 1992, came the private finance initiative, or PFI, whereby the public sector contracted with private companies to design, build, maintain, and in some cases operate public assets such as schools, hospitals, prisons and roads for a period of up to 30 years.
The dominant motive behind all these activities was the desire to provide an improved service at reduced cost—the El Dorado of cash-strapped governments—by engaging the self-interest and business skills of the private sector, and the philanthropic motives of the voluntary sector. Governments were forced to respond both to growing fiscal problems and to growing public dissatisfaction with the public services. Cynically, one may say that outsourcing was seen as the royal road to downsizing, or simply disciplining, mutinous public

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sector workforces. The private finance initiative added a more specific motive to this drive: to improve the presentation of the public accounts.
That is a somewhat technical matter, but it is important in understanding the evolution of public/private partnership. I am not just talking about getting a chunk of investment off budget by getting private consortia to raise the capital themselves. That, of course, was an attractive route for governments trying to improve satisfaction with the public services without raising politically unpopular taxes or incurring deficits which frightened the markets. I am also talking about the need to improve public sector productivity. The conventional wisdom used to be that public sector activities were inherently unproductive because they were so labour intensive. Therefore, national accounts priced inputs, not outputs. The consequence was that any increase in the public sector wages bill automatically showed up as an increase in the share of public spending in GDP. That was a nightmare for any government trying to control public spending, and especially for the Thatcher and Major governments who were trying to find room for tax cuts as well. However, it was also a nightmare for a Labour Government trying to justify increases in public spending by improvements in public services.
PFI was a device that promised to overcome that problem. The Government set private firms performance targets, leaving them free to choose the mix of inputs necessary to deliver the government objectives. Innovation is therefore built into the tendering process. The key argument is that PFI transfers risk. Because its own capital is at stake, a private consortium will deliver projects quicker and at a lower unit cost than a government department. Further, the long-term nature of the contract means that the contractor is forced to integrate design, building, maintenance and, if need be, the running of the facility into a single profit-making scheme. To put it simply: he is forced to design and build facilities whose running costs are likely to be less than those of a government department. The public realise they are getting better value for money and warm to the public sector. At least that is the theory.
How has it worked out in practice? Contracts under the public finance initiative are expected to account for an estimated £5 billion of public sector investment this year, which is about 11 per cent of the total. The Treasury does not expect that to increase. In fact. however, that presentation is misleading. Strip away depreciation and asset sales, and PFI accounts for about a quarter of public sector investment; and in some areas it is much higher. For example, 64 out of 68 hospitals built or ordered since 1997 have been under PFI contracts. Practically the whole of the new generation of our public infrastructure—hospitals, schools, roads, prisons, railways—is being built through PFI. Private companies such as Group 4 and Securicor not only build but also run prisons. Although technically owned by the Government and known as Her Majesty's Prison Service—I believe that it still is—they are to all intents and purposes in the private sector, operating under licence. In the United
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States there is the "charter" school movement whereby private companies or groups of parents are licensed and given a "charter" to run publicly funded schools. Early signs are that it will be one of the next developments of PPP.
The long-term benefits of PPP are still unknown because no one knows whether any of the private finance initiative projects will make a profit. It may be that, as in the railway boom of the 1840s, a new infrastructure for this country will have been built at a loss in a burst of fashionable enthusiasm. The main finding so far is that PFI has drastically reduced overruns on time and budgets compared with a conventional procurement process, but it has not achieved significant cost savings. That may partly be due to the cost of the tendering process itself. The main benefit of PPP as a whole may simply be that it raises the learning curve of the public sector. The threat of bringing in private contractors is itself a stimulus to innovation by public sector providers.
I turn briefly to some problems and then a couple of further possibilities. The first problem—it is a very serious one—is the blurring of accountability. When something goes wrong, who is responsible? I refer to unexpected events and new technologies that were not built into the original plan. The temptation for each side to blame the other, for risk transfer to become blame transfer, will become irresistible. Who is responsible to the consumer as a consumer in this rather cosy bipartisan partnership between two groups of producers?
Then there is the problem of bureaucracy. Every act of outsourcing requires a new act of regulation. This accounts for the paradox that the shrinking of state ownership and provision has led to a big increase in regulation. PPP is not the only cause of this, but I judge it to be an important contributory factor. That increase in regulation reflects the ambiguity in the purposes of PPP. Are the motives for it fiscal window dressing or more efficient services—value for money? Or is it an attempt to achieve, or at least not jeopardise, wider social aims such as fairness and uniform provision?
I turn in conclusion to a couple of ideas currently being developed for widening the ambit of public/ private partnership. The first is the concept of public value. This is an attempt to allow for the increased value of government activities beyond the material benefits people receive from paying taxes; in other words, to allow for immeasurables. It is very hard to build immeasurables into cost/benefit analysis, but they are there. Government activity adds value. It can also subtract from value. So how do we get a grip on this in the context of public/private partnerships?
The other PPP development that seems to have a future is co-payment. We have already experienced this in top-up fees for university students but it will probably become more general. In a co-payment system, the purchaser/provider split remains, but the purchasers are divided between the Government and private consumers. Arthur Seldon has recently advocated the extension of that principle to state education.
The suggestion that the state and the private sector working together can create more aggregate value than the sum of the values of their separate parts is, as I have tried to indicate, both attractive and troublesome. The question remains whether PPP is a genuine innovation in our political economy or an unstable halfway house between further steps towards privatisation or the renationalisation of public services. It is certainly food for thought. I beg to move for Papers.
3.35 p.m.
Lord Oakeshott of Seagrove Bay: My Lords, on behalf of the House I thank the noble Lord, Lord Skidelsky, very much for opening this debate with his fascinating tour d'horizon, which was both philosophical and practical. Following his grand synthesis, I shall move from the general to the particular. In so doing, I declare an interest both as an economist and as an investment manager with a particular interest in commercial property.
As the noble Lord said, PPP and PFI deals are all about risk—what risks are really transferred irrevocably from the public to the private sector, is the taxpayer paying a fair price for laying off those risks and is the process open enough for Parliament and public to get the straight answers they need to measure and judge these deals?
Today I want to explore one PPP deal in particular detail; that is, the outsourcing of the Inland Revenue's and Customs and Excise's property and facilities management to an offshore company called Mapeley Steps. In my view it shows how PPPs can increase, not reduce, risk for the taxpayer when they go wrong. It gives a salutary warning why these vast public spending commitments in PPPs and PFIs, often for up to 30 years ahead, must be open to proper public scrutiny.
I start—returning to the philosophical for a moment—by stating firmly for the record that we on these Benches hold no ideological torch either for or against PPPs. We believe that free trade and free markets work much better than protectionism and regulation. We want public services to be delivered as efficiently and as reliably as possible, giving the highest quality at the lowest cost. Big, bureaucratic public organisations can be sadly lacking in project management or specialist technical skills; too often in the past the rule has been, the bigger the public construction project, the longer the delay and the bigger the cost overrun.
But to get better bakers baking better bread you do not always have to give them the bakery for the next 20 or 30 years. Just as the public sector often lacks the skills to manage big projects, it also lacks the equally scarce skills needed to manage a PPP or PH bidding process professionally and to drive the hardest bargain possible with the bidders in a truly competitive, not a cosy, tender. Too often, in early PFI contracts in particular, private contractors have taken the taxpayer to the cleaners, setting up thinly capitalised single
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purpose vehicles leaving most of the risk in practice in the public sector, with enormous windfall profits if interest rates move the right way and non-existent, or minimal, clawback or profit sharing arrangements. Too often the deals have been set up so that it was heads the PFI contractor wins, tails the taxpayer loses.
Too often in one or two cases such as Mapeley, I am afraid to say, a cover-up has also followed the initial cock-up. That example is not some remote school or hospital trust; it is right at the centre of government. In the Mapeley Steps PFI, the Inland Revenue and Customs and Excise sold off 600 properties to offshore shelf companies registered in a tax haven and controlled by foreign investors. There has been much interest in the tax side of things, stamp duty and so on, but that is not what I am focusing on today. I am focusing on the risk and what risk was or was not transferred. In March 2001, the Revenue and Customs and Excise signed a 20-year PFI contract with Mapeley. By December, Mapeley said that it had a serious cash flow problem and asked for an extra settlement to bail it out. The departments were then concerned that the contract, on which the ink was barely dry, could collapse, with very substantial additional costs if they had to take the properties back. Civil servants then issued letters of comfort to the PFI contractor to enable it to refinance without, as it happens, telling Ministers.
Complex negotiations of that sort can all too easily create a climate of collusion between the public purchaser and the private supplier when things go wrong. No wonder the Treasury Committee of the House of Commons concluded, in its report last year, that in this case the financial crisis at the contractor and the potential consequences of the company going bust undermined the long-stated objective of transferring risk to the private sector.
What happened in the case—it is a classic property market operation—is that Mapeley took out the valuable freehold properties, put them in one company and transferred it to Bermuda, and left the long-term facilities management contract and the short leasehold properties, many of which were liabilities, in a company called Mapeley Steps Contractors, the rump company with the PFI contract. In plain English, the Inland Revenue let the man behind Mapeley, a gentleman called George Soros, get the British taxpayer over a barrel.
That is a pretty salutary example of how things can go wrong. I am also concerned about the more recent deal to extend the outsourcing contract for the DWP for jobcentres with Trillium. That is not because we are not talking about a substantial British company that has loan securities, but because I saw very little sign of a competitive tender when the contract was extended or of the competitive tension about which the PAC has talked. To me, it looked rather cosy, and it did not seem that the procurers had properly priced the two quite separate aspects of the contract, one of which was the sale of a lot of freehold property. With a lease of 10 or 15 years to the Government, that property is in very considerable demand and has a very high value

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at the moment. The separate issue was the facilities management contract. That was not properly analysed.
I have also raised similar concerns in the House in the past about the highly stretched finances of the likes of Amey and Jarvis, which were bidding for London Underground. Those were brushed off at the time by the noble Lord, Lord McIntosh. Since then, Amey has had to be rescued by a very low takeover hid when it was on the edge of bankruptcy, and most of its PPP interests have been sold off in the secondary market. That process flew very much in the face of Recommendation 12 from the latest report of the Public Accounts Committee, which suggested that:
"Before shortlisting potential bidders departments must be satisfied as to their financial and technical competence and their performance on other government projects".
It is obviously important that a PPP be a long-term relationship, and again, in such cases, there is now an active secondary market in PPP interests. Whatever is said at the beginning, people find out a year or two on that they are dealing with a very different supplier of the services.
PPPs can and do work well in areas where bidding systems are well established; where procurers have played themselves in, if I can put it that way; particularly where a new building is a key part of the service to be delivered; and where there is a culture of openness and transparency about the process. The best example is in the NHS, as the recent IPPR report made clear. In other areas, such as local authorities and schools, that report said that much was shrouded in secrecy.
We on these Benches take a highly pragmatic approach to PPPs. They can be useful to bring in private sector discipline, and to tie private contractors and to fix price contracts without overruns. However, the risks are enormous and, in many cases, the public sector is incapable of assessing them properly. We see the benefits of new PPP investments today, but we will know the real costs only in a decade's time.
3.44 p.m.
Lord Brooke of Alverthorpe: My Lords,—I, too, want to express my gratitude to the noble Lord, Lord Skidelsky, for initiating the debate in his usual stimulating manner, and to the noble Lord, Lord Oakeshott of Seagrove Bay, for bringing a particular viewpoint from his own experience for us to consider. Similarly, the debate gives me an opportunity to bring to the House some direct personal experiences of one PPP, NATS Ltd. I have been a non-executive director of NATS since it was formed in July 2001, so I declare an interest. Also, I want to share with noble Lords a number of conclusions that I and others who have looked at the PPP have drawn, and to raise a few questions.
When the PPP was launched—not without some opposition and controversy—Her Majesty's Government retained a 49 per cent stake. The Airline Group was the preferred strategic partner, selected on the basis of a not-for-commercial return, its key return
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being that it hoped for increasing efficiency and a more cost-effective operation. It gained a 46 per cent stake initially, and the remaining 5 per cent of the shares went to NATS employees. Those are currently non-tradable and not on the market. A good question for the Minister therefore might be whether the Government intend to leave the shares in that position ad infinitum, or whether there might not be some ideas about floating them.
The immediate principal beneficiary at the launch of the PPP, gaining more than £700 million in receipts, was the Exchequer. In spite of press reports and allegations of government hail-outs since—NATS ran fairly quickly into some financial difficulties—there has actually been relatively little support from the Government. We have taken a loan of £30 million, repayable at commercial interest rates. Subsequently, there has been an additional financial injection of £65 million, conditional on our matching that figure from the private sector. In the event, that match came from BAA, which now has a 4 per cent stake, thereby reducing the Airline Group's interest to 42 per cent.
The Exchequer has still done pretty well out of the exercise, and has retained well over £600 million from it. We now none the less have, as I will seek to demonstrate, an improved public service beyond what we could have expected if NATS' status had not changed into a PPP. However, NATS has had its problems, as I would not deny. Within six weeks of its formation, we were faced with the consequences of September 11 in the USA, when there was an unprecedented decline in air traffic. That was particularly damaging from NATS' point of view, as the major portion of our income comes from north transatlantic flights—it is our major income earner.
The Airline Group had also borrowed extensively from the banks to fund its stake purchase in NAT'S, and to provide the long-term capital expenditure programme that it was required to deliver—around £1 billion through to 2010–11. Its own airline businesses were, however, badly hit by the loss of air traffic following September 11. The first lesson to be drawn in my opinion is therefore that PPPs—fragile plants that some of them may be—should not be over-geared with debt. That picks up the point of the noble Lord, Lord Oakeshott. Put another way, if we are dealing directly with the Treasury, the Treasury similarly should not be greedy.
The second lesson is that PPPs must make certain that, in modelling their financial structure, they have been tested against the worst possible scenarios. The NATS PPP had been modelled against 19 adverse scenarios, including the Gulf War of the early 1990s. However, none had the severity of the consequences that we faced after September 11. Thirdly, it is worth pondering whether strategic partners should come solely from the industry within which the PPP will operate. Certainly one gains great industry know-how and insight from that, but might not there be a case for greater diversification and spreading the risk wider than has been the case with the NATS PPP?

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The Government's objectives for the NATS PPP were, principally: to enhance UK aviation safety by separating service provision from regulation; to provide NATS with greater project management and commercial expertise than it had had hitherto—it had long records of embarking on major projects and of major misses on timetabling and costs; to ensure access to adequate capital without recourse to public sector borrowing; and to move to incentive and performance-based regulation to replace the former "cost-plus" regime, which had operated for many years and led to allegations that the UK air traffic service charged the highest prices in Europe.
In particular, we needed more investment to meet projected traffic growth, leaving September 11 aside. Without September 11, the anticipation was of unfettered growth of a minimum order of 5 per cent per annum running through as far as we could see. Most European air traffic service providers and their USA counterparts have difficulties with investments similar to ours. Programmes are cut when there are budgeting problems in the public service. That has bedevilled all air traffic service providers. Prior to PPP, that had always been the case in the UK.
However, soon with privatisation we had similar problems to those that we had experienced in the past under public service. Therefore, we had to embark on a politically sensitive, complicated and lengthy financial restructuring. I can report to the House that the PPC—I will not make promises but I will read the phrase—is now "financially robust and independent" following the composite solution change and bond refinancing exercise that was undertaken last year.
The composite solution, as I mentioned earlier, involved the entry of BAA as a 4 per cent shareholder and the recasting of the CAA regulatory cost regime. Under the public service ownership practice, it was RPI-plus. After the PPP, we embarked upon an RPI minus 4 per cent regime to cut charges. That was a most ambitious programme, but it was not sustainable with the September 11 traffic downturn. Happily, the CAA regulator was prepared to make adjustments to RPI minus 2 per cent.
The consequence has been that in the past three years NATS has been the only provider to reduce prices. All our comparitors in the rest of Europe have increased theirs. That is quite a measure of progress in the light of our previous history.
What other progress has been made? Safety has remained paramount, although it was regrettable that there was an incident at Manchester airport two weeks ago. It is currently being investigated, but NATS has introduced more stringent safety measures than have existed hitherto. During the past two years, despite the growth in the density of low frills air traffic, we have seen a reduction in recorded incidents.
Significant improvements have been made in delay performance. The average delay per flight attributed to NATS was 0.7 minutes in 2003, to be viewed against a performance in 2002 of 2.6 minutes and an internal target for 2003 of 1.5 minutes. We have almost halved
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the target we set ourselves, which is an amazing performance. There has been an increase in the overall number of flights at 3.9 per cent. We are handling more flights with less money coming in because fewer have been on the north Atlantic run.
There has been a reduction in planned spending of £200 million as part of the regulatory regime approach. That would never have occurred under the previous public sector arrangements. Furthermore, as we have settled the bonding issue, that has triggered the release of the almost £1 billion investment plan I mentioned that will run to 2012. That will entail the complete replacement of the old legacy systems and a reorganisation into two main centres—one at Swanwick and one in Scotland—with the introduction of additional emergency standby facilities. It is difficult to contemplate that under the public service we could have had a programme running from 2004 to 2012 without interference in one form or another with the flow of funds.
The PPP has a new strategic mindset. much of which would never have been possible previously. In particular, it is developing a collaborative programme with Spanish and German counterparts and it is seeking a leading role in the development of the European single sky policy. Many in Europe and in the States are watching our unique model. Much work still remains to be done—culture changes do not come overnight. We need to develop greater staff involvement and commitment to the concept. I would like to see the 5 per cent staff stake in shares increased. Will the Government maintain their 49 per cent stake, or do they have ideas about changing that? It can go down to 25 per cent. Would they contemplate looking for means whereby staff involvement and commitment could be further increased by finding methods of transferring shares to them?
There are other intriguing questions about lines of accountability, which have already been touched on, and shareholders' responsibility. Who really bears most risk? Should NATS be quite so heavily regulated by the CAA or could there be a lighter touch? I pick up the point made by the noble Lord, Lord Skidelsky, about the growth of regulation. The UK airlines were given greater opportunities for self-regulation with limited CAA interference. Why should that not apply to the National Air Traffic Services?
After a rocky start, this is one PPP that is now working well. It is well funded with a good, sound long-term investment plan and it is a model perhaps for others to follow. My view is that each PPP must look at its own entity and decisions must be taken by government and their partners in the light of circumstances in which they find themselves. They should be customised to meet those circumstances. Overall, this PPP has worked well and is working well. It is increasing the provision of better public service, which in my opinion would have been the case had it continued down the same old route.
3.56 p.m.
Lord Selsdon: My Lords, I am doubly grateful to the noble Lord, Lord Skidelsky, first, for introducing the debate and, secondly, for in an all-too-brief 16-minute speech giving me the exact essay for which I have looked for a long time to explain what we are talking about today.
I suffer from several disadvantages. I have spent most of my life in the financial sector, rather like the mosquito with one foot on the land and one in the muddy water of public finance, experiencing the tide going in and out, bogs and difficult problems on the way. I started in the days of BOT—build, operate and transfer—the Bosporus Bridge. Other buildings and activities came about, often with aid funds. There was then BOOT and DCFO—design, construct, finance and operate. Everyone seemed to invent a new word or phrase and no one could explain to me what it was all about.
We knew Her Majesty's Government—and I hope that "Her Majesty" will always remain in front of it—will always have to obtain the best deal. But the problem with the public sector is that, in general, it has a different culture from the private sector. That was often demonstrated when senior officials from the public sector went into executive jobs in industry to watch their industrial company rapidly decline. That culture needs bridging and some of the concepts advanced and the learning curves are significant.
I declare an interest. I am a senior non-executive director of Gleesons and we undertake many PFI and PPP projects. I spent part of this morning with my colleagues, including my chairman who is chairman of the major contractor's group, discussing what had gone right, what had gone wrong, what the Government should do, and what we and others should do.
While we may talk about PPP being risk-sharing or a partnership, in reality PPP is the Government's attempt to transfer the risk completely. That is a misrepresentation of the truth, whereas PEI is more of a risk-sharing exercise. The term "alliance" is beginning to be advanced. I have spent recent weeks on the continent of Europe discussing with local authorities in Germany and elsewhere how the British example could be used to develop and manage public investment in the social sector. Then I thought to myself, "Wait a moment! The Government, and much to my surprise a Labour Government, have almost adopted what might originally have been Conservative or Liberal clothes".
The Government have a problem because they have promised the electorate that so much must be built and operated within a narrow time-frame. Here, I do not believe that there is any difference between the political parties but questions do arise in relation to the mechanism. What can we learn about it? As has already been indicated, PFI seems a more effective way of dealing with the issue, but we must understand that contracting is a risk business and does not usually involve capital; it involves working capital and working with one's client's money. In general, contractors cannot take big equity risks unless they have an equity group behind them.
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I turn to the different areas that we are discussing: schools, hospitals, roads, railways, prisons and secure centres, where PFI runs right across the board I shall begin with the hospital sector and the mechanisms that have been advanced successfully under what is known as "Procure 21". The Government seem to have different ways of procuring everything. I have been asked to suggest that, even from these Benches, and high though I may be at the moment, it would be far better to have greater centralism. The PS.4, the Ministry of Building and Public Works and—dare I say it?—the Duchy of Cornwall and the Crown Estate have had years of procurement experience. They knew every trick in the book. You knew that it would be a long, uphill battle when negotiating with them but, when you had signed your agreement, they were as strong an ally as you could wish to have and, perhaps to a certain extent, a little more of an ally than is the case today.
Turning to the subject of the hospital programme, the Government decide on the kind of hospital that they want and they hand it over to a trust. In general, the members of the trust do not have much experience of government or of the private sector. Obviously, they disclose their interests and express their own views and they can disrupt the progress of the construction contract quite considerably and cause delays. In addition—I have raised this matter with your Lordships before—many of them fail to realise that technically the trustees are shadow or non-executive directors. In this compensation world, one wonders whether they are aware of the liabilities that they might have if the hospital concerned failed or burnt out someone's eyes, with the ensuing claim that would run through the system. Such uncertainties are difficult to fathom.
The group with which I am connected has built many hospitals. I shall not disclose which ones have lost money, but the experience and the learning curve have been significant. The mechanism is good. However, there have been problems when dealing with UNISON, and perhaps the greatest problem has been the long-standing lack of investment in the health sector. There are also fears relating to issues such as MRSA and the infrastructure behind the hospital.
I move on to the subject of schools and the Building Schools for the Future programme—to some extent, another method of procurement. That has worked, too. Schools have been built quite successfully and quickly but little thought has been given to how useful the infrastructure could be during the school holidays. In some parts of the country, it could be used for temporary homes, for students visiting the country or for tourists. The point is that the infrastructure—the buildings themselves—is not necessarily used throughout a full year.
Moving down the line, we come to the subject of prisons. My group has built two or three detention centres and a high-security prison as PFI projects. Much to my amazement, the cost of building an individual cell was significant but the cost of the security for such a cell was roughly £40,000 per prisoner. In that sector, the five or six security

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companies—several have already been mentioned—are effectively the client and the Government are completely out of the picture. On the other hand, when building schools, one often has to deal with local authorities and governors, who may sometimes wish to disrupt the very objectives that the Government set at the beginning. Therefore, PFI seems to be effective and to work, but the long term has not been thought through.
We move to the phrase "partnering". Partnering is not really PFI or PPP. It tends to occur where a former public utility—a water or power company, which, regrettably, nowadays are often owned by foreign interests such as the French and Germans—sits down together with a contractor and a design company and designs, builds and operates a treatment plant or something of that kind. That works fairly well. However, ultimately, people have yet to work out the value of their long-term investment. A 15 or 20-year investment, particularly for a contractor who must achieve a high turnover on his capital, is long term. The Treasury is about to produce a new paper on the subject of PFI.
In many countries, that type of investment is considered by pension funds to be long term because it is secure and reliable once it is off the ground. If only we could raise the yields on those projects to somewhere around 6 per cent, I am sure that pension funds in this country and the world over would invest in them because they like the security of the public sector having been involved at some time or another.
I come to another technical issue. As the noble Lord, Lord Oakeshott, pointed out, ultimately it all comes down to money. Contractors want to have a good contract and they want to be proud of the results. As an example, my group is building a court somewhere. We were building it for the noble and learned Lord the Lord Chancellor—a very eminent man in a high position—and we thought we had a prime job. Now we are building it for the Secretary of State for Constitutional Affairs—rather lower down in the batting order. Today, I was asked whether the covenant was just as good, but I am happy to know that the building will open on time and I shall write to the noble and learned Lord the Lord Chancellor to ask whether he will open it.
The fear of those in the private sector does not necessarily relate to understanding the Government. Those concerned may be the bankers but certainly not the contractors, who are closely involved in the negotiations. Gradually, as one negotiates on one school and then another, the learning curve becomes shallower and people begin to get to know and to trust each other.
My experience of dealing with the public sector—mainly the long-standing bodies that I mentioned earlier—has always been that they do their job very professionally. However, they have to extract not the last pound of flesh but a deal which they hope will involve no risk in terms of cost overruns and so on. But, ultimately, the sharing must be looked at more closely and technical issues can arise.
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I shall refer to a body called the Urgent Issues Task Force, which my noble friend on the Front Bench will know about. You may be selected as a preferred bidder and will hope to sign a contract. If the Government or the public sector suddenly change their mind, which they are entitled to do, and decide that, instead of going through a PFI project, they will go down the normal, traditional route, you will have to write off, or may be reimbursed for, substantial costs which are incurred between the time you are selected as a preferred bidder and the time the contract is signed. Under current accountancy regulations, you cannot capitalise those costs and therefore you have a major problem. There may even be a balance sheet problem, which affects medium and small-sized contractors. I should be grateful if the Minister would consider that and other issues which I may introduce later privately.
There is a genuine willingness throughout the construction and contracting industries to work in this sector. In general, our group finds that perhaps three-quarters of our business now comes under the heading of "partnering". One likes it because, in general, the risks are fewer and the margins are lower. People who assume that contractors make enormous margins must understand that there are such things as ground conditions and other issues that can cause absolute havoc, let alone the weather.
I am proud to have been involved in this sector. I believe that it is going in the right direction. Much tinkering could be done but, again, although I am a Conservative, I say that if the Government would look a little more at centralism, I believe that that would go down very well. Can they also please bring back the original Ministry of Building and Public Works, which I always saluted when I passed it in the street?
4.8 p.m.
Lord Dahrendorf: My Lords, it is already evident that we have reason to be grateful to the noble Lord, Lord Skidelsky, for having initiated a debate which is clearly informative and stimulating. I want to offer a few observations which come some way between the philosophical remarks of the noble Lord, Lord Skidelsky, and the very practical comments of my noble friend Lord Oakeshott and the noble Lords, Lord Brooke and Lord Selsdon.
I start with the presumption that the notion of a partnership between public agencies and private finance and companies which provide services is attractive. I do not say that because I am a Hegelian; I am emphatically not that. If anything, I am a Kantian who likes clear and clean distinctions rather than fuzzy synthesis.
Having said that, I find the notion attractive that one might combine public interest with efficiency. In any case, the world in which we live is one in which in many cases it has become difficult to distinguish between public and private. My distinguished successor but four as Director of the London School of Economics, Howard Davies, was recently reported to say that we even lack a rigorous taxonomy of the new menagerie of public/private sector life, and I am sure he is right.

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It is also the case that successive Chancellors have been rather enthusiastic about public/private partnerships—the noble Lord, Lord Lamont, introduced the PFI part of that category in 1992; his successor, Kenneth Clarke, took it up and Mr Gordon Brown is a considerable enthusiast for this idea of partnership—or is there perhaps something very slightly suspicious about the enthusiasm of Chancellors for this particular invention in our political world?
I should like to raise a few questions in that regard, to which there may well be satisfactory answers. Indeed, I do not expect all the answers from the Minister today. In a sense I regret our ritual that the initiator of a debate such as this moves for Papers and then withdraws the Motion at the end of the day. I should like to see papers which answer the questions I want to put before the House.
My first question is the familiar and simple one to which the noble Lord, Lord Selsdon, alluded. Is there not a built-in conflict of interest between the values of public service on the one hand and the values of private profit on the other? To put that even more acutely and sharply, does not the extensive use of public/private partnership destroy some of the service values which are part and parcel of a good system of public services? That is not a theoretical question. There may be a satisfactory answer to which the noble Lord, Lord Skideisky, alluded. It may be the good old answer that there should be a narrow definition of truly public services, which should be "public/public", and a definition which leaves a wide space for private interest and private action but emphasises public services.
I liked the reference that was made to another kind of partnership; that is, the partnership between the public sector or the public interest and the voluntary sector or the philanthropic interest. In some ways, the values of public service and the values of a voluntary sector are closer to each other than those of the public and the private sector. I repeat, I am raising questions to which there may well be a satisfactory answer.
My second question is: can one distinguish between areas of public services in which private finance is useful and others in which it is not or perhaps less so? I used to feel that the distinction could be made between infrastructure and operation, between track and trains. But what I used to feel is evidently irrelevant today because my sense was that there are aspects of the infrastructure of our society which are distinctly public/public and should be public responsibility, whereas operation might be private. What is happening now is almost the opposite. Certainly that is true in the case of PFI. Hospitals are built by private initiatives but run by the NHS. By analogy, the same is true for schools. The question is whether there are other dividing lines.
I was interested in Research Paper 03/79 submitted to the House of Commons on the private finance initiative which states, for example:
"While road and prison projects have achieved reasonable efficiency gains. projects in other sectors such as schools and hospitals have shown minimal gains".
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The reason given in this research report for this particular difference is that in the former case there is no clear division between core and ancillary services whereas in the latter cases there is such a distinction.
If I am not mistaken, the Government distinguish between projects with a small and a large capital value and regard only the latter as useful candidates for private finance initiative activity. Certainly, there seems to be a relevant question as to whether this distinction or any distinction of this kind can be usefully applied to policy decision.
My third question is almost by the way, but nevertheless I hope will not be regarded as irrelevant. Is it not critically important for effective public services that the possibility of cross-subsidies remains open? There may well be a risk in some cases that private sector interests enter above all where activities are profitable. Railways are an example which have not yet been discussed in any depth. Transport, at any rate, accounts for 60 per cent of all PFIs. So, in some ways transport should be one of our main themes.
Long-distance rail lines may be profitable; commuter travel is not. Is it not more appropriate to have a system in which it is possible to cross-subsidise rather than to privatise one and leave the taxpayer with the other? Indeed, there is a deeper question: should there be profit in public services?
I now come to two or perhaps three questions which take me back to the interests of Chancellors in PPPs and notably PFIs. My fourth question is: Is the private element in PFIs and PPPs additional to public expenditure otherwise decided or is it a substitute for such public expenditure? It is one of those questions which can never be properly answered. It reminds one of the vexing question often asked about European structural funds and what they are used for. Clearly, money that would often not be available now if it had to come from the public purse is sometimes found from private sources, so there must be an assumption that to some extent private finance is a substitute for cash-strapped public funding.
If that is possible—-if private money can do the trick—what magic makes it possible? What is so special about the private element? Is it to be understood that taxpayers' money cannot afford what is necessary but also need not do so because private sources are happy to come in?
That leads me to my fifth question, which in some ways is the most difficult. Is the entire PPP/PFI system in some ways a method of saving current expenditure by imposing future burdens and by the same token investment for current expenditure? In other words, is the whole PPP show a game with mirrors?
The case is stated concisely and unambiguously in the summary of the House of Commons research paper to which I referred, one paragraph of which is worth quoting in full:
"The PFI has meant that more capital projects have been undertaken for a given level of public expenditure and public service capital projects have been brought on stream earlier. As at 4 April 2003 there had been almost 570 PFI deals signed with a total capital value of almost £36 billion. The increased level of activity must be paid for by higher public expenditure in the

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future, as the stream of payments to the private sector grows. PFI projects signed to date have committed the Government to a stream of revenue payments to private sector contractors between 2003/04 and 2028/29 of over £110 billion"—
as against the current value of £36 billion.
These "future liabilities" do not show up in current accounts—and, incidentally, they do not include unexpected burdens on the public purse which may arise when private contractors fail for one reason or another.
That leaves my sixth and final question, which of course is on the question of accountability. Is accountability for this new instrument of public policy sufficient or is there—as the noble Lord, Lord Skidelsky, put it—a "blurring of accountability"? All this is not said to make a case against public private partnerships, but in the hope that we will gain an even clearer understanding of what we are doing and why we are doing it—and perhaps to get an understanding which helps us to evolve an instrument that might well turn out to be more useful than harmful.
4.21 p.m.
Lord St John of Bletso: My Lords, I join in thanking my noble friend Lord Skidelsky for introducing this extremely topical debate. I do not profess to have any personal expertise on the subject, but I am firmly of the belief that PPPs do indeed play—and have played—a very important role in improving the performance of the public sector, particularly in the build out of healthcare, school and university facilities. Sceptics of PPPs and PFIs will naturally refer to the London Underground, which so far has not delivered the improvements in reliability and service that were originally anticipated.
However, rather than speak on the woes of the London Underground and the negative features of PPPs, I wish to confine my remarks to the many hundreds of smaller PFIs which have been very successful in both delivery on budget and on time. In essence, what we all want are high-quality public services, which are built on time and within budget, and where the risk does not fall on the taxpayer but more on the private contractor. The four key elements to the success of PFI—I refer more to PFI than to PPPs—are the design, the build, the finance and the operational skill sets.
It is easy to get bogged down with the academic issues of the control relationship between public and private sector, more specifically on whose balance sheet the asset of' the property part of the services should be situated. I shall not elaborate on this point, but my central theme is that public sector infrastructure projects invariably tend to go over budget and over time. In essence what is needed is a combination of the best of the public sector and the best of the private sector. All too often major infrastructure projects fail because of poor management. Here no doubt the private sector invariably tends to have a far more disciplined and financially focused management style. I do not in any way undermine the management style of the public
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sector, but certainly on cost I believe that the private sector is in a far better position to take control of these issues.
As my noble friend Lord Skidelsky very eloquently outlined in his précis of the past, present and future of PPPs, the public sector looks to the private sector for expertise, innovation and management of appropriate risks, so as to improve productivity. So far there have not been many cost savings, but there is scope for far better cost savings. The private sector is invariably better positioned to raise competitive funding in the capital markets.
There are a number of PPP projects, which clearly will have huge benefits for the public sector. I refer to Project Aquatrine, which effectively will transfer the responsibility for the operation and maintenance of the Ministry of Defence's water and wastewater assets and infrastructure to private sector providers. By transferring this environmental risk to the private sector, which certainly is far better positioned to manage it, the MoD will be able to exit a non-core activity and concentrate its efforts on delivering military capability.
PPP will also play a very important role in the build out of future modern schools, utilising higher standards of design and innovation and more importantly delivering these facilities on time and on budget.
Britain has played an important role as a role model for the promotion of PPPs, which have been promoted in many countries around the world. I am not of the opinion that PPPs will be the panacea for the budget constraints of many countries. I refer specifically to the new European Union member states like Poland, the Czech Republic and Hungary. All have a major need to invest in infrastructure and social services to catch up with western Europe. But it is difficult to combine PPP projects with EU structural funds because PPPs obviously cover a longer period than the structural funds are designed for and because interest payments are not eligible for EU funding.
The National Audit Office has made a number of very constructive recommendations on PPPs. In its recent report the NAO made a strong point that public and private sector partners should not enter into a customer/supplier relationship but need to take—in its words—a whole business approach with proper checks and balances showing more transparency and accountability.
I agree with the noble Lord, Lord Oakeshott of Seagrove Bay, that PPPs carry a fair amount of risk. Clearly there is a lot of scope for improvement of PPPs. The tender process—a point mentioned by my noble friend Lord Skidelsky—is very bureaucratic and costly. There is scope for driving down costs in that one area and scope also for greater efficiencies. I welcome the recent move by the Department of Health to batch PPP projects by grouping several PPPs and then putting them out for joint tender. We certainly should expedite and streamline the whole process. However, I remain sceptical on the success of "lifts". I shall not go into the issue of the definition of lifts.

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I should like to see a far more entrepreneurial approach to PPPs. The private sector is best positioned to inject entrepreneurship into private sector projects, which are often very monolithic. I refer to some experience I had in the past when I worked for a large oil company. We used to build service stations and provide service stations as a convenience centre. I certainly believe that in the hospitals for the future there is far more scope for value-add services in the build out of these much needed facilities.
With the public sector currently accounting for just over 40 per cent of UK GDP, I conclude, as I mentioned at the start of my speech, that there is no doubt that PPPs have played, and will continue to play, an important role in improving the performance of the public sector. The system is far from being perfect. There are risks. But the upside, once several of the impediments that your Lordships have already mentioned have been removed, is a win-win for both the public and the private sector.
4.28 p.m.
Lord Haskel: My Lords, I congratulate the noble Lord, Lord Skidelsky, on moving this very topical Motion. Purely as an aside, perhaps I may say that somehow I find his arguments much more persuasive since he moved to the Cross-Benches.
However, I am not sure that I agree with the noble Lord that the private finance initiative is part of the Third Way. The private finance initiative arose out of need. It has been around a long time; rather longer than the Third Way. In the private sector 15 or 20 years ago creative accounting was very much in fashion. At the same time, the public sector was starved of investment—cash-strapped, as the noble Lord, Lord Dahrendorf, put it. The creative accountants argued that if the investment was contracted to the private sector, it need not be limited by the PSBR, which the noble Lord, Lord Skidelsky, mentioned. The rate of investment could be speeded up.
At that time, the public sector used the knowledge and experience of the private sector, but when a project was completed the private sector then walked away. To retain the private sector's management skills and involvement, long-term contracts of 20 or 30 years would be needed to bind it into the contract. If, in addition, the private sector could be persuaded to accept some of the risk, the entrepreneurial drive of the private sector, about which the noble Lord, Lord St John, spoke so eloquently, combined with the public service ethos of the public sector, would give us better opportunities of raising the level and quality of public infrastructure.
That is the theory out of which the private finance initiative was born. I agree with the noble Lord, Lord Skidelsky, that it is too early to say whether it works in practice. I do not think that any project has gone its full term. I have no objection to it in principle, as it must be right to use all our resources to provide the public with the most cost-effective infrastructure, and that must assist in the performance of the public sector. Neither do I think that it is privatisation by
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another name, so long as it is made clear that the project's first priority is the public sector. Where the project is clear and the risks are clearly defined, especially when things go wrong, as the noble Lord, Lord Oakeshott, pointed out, PH projects can work, particularly where they relate to new construction of schools, hospitals, regenerating urban houses, bridges and flood defences. There is a powerful incentive for all sides to work together and to understand clearly what each is expected to do and what each will be paid for. I agree with the noble Lord, Lord Selsdon, that many more projects can be started because they do not rely entirely on public money, and the public benefits.
Problems arise where those deals go beyond the provision of infrastructure and move into the provision of services as opposed to infrastructure. They arise because it becomes more difficult to reconcile the need of the private sector to create shareholder value with the state's need to put the public first. The private sector operates in a market; the state must look after the public interest. I join the noble Lord, Lord Dahrendorf, in asking whether there can be a partnership between the two. Can the invisible hand of the market also be a helping hand to the public? It probably can. I agree with other noble Lords that a lot of thought must be given to the way in which such partnerships are set up and managed.
There was a time when Labour believed that public service required public ownership. That was because people thought that a market economy prospered only at the expense of a fair society. It was John Smith who persuaded us that a market economy and a fair society were not in conflict. They went together; they were the same side of the coin. Since then, a lot of thought has gone into the role and limits of the state and markets in providing the public interest. A year ago my right honourable friend the Chancellor of the Exchequer, in a truly seminal speech to the Social Market Foundation, laid out the relationship, as he saw it, between individuals, markets and the state in meeting the interests of the public.
That relationship is absolutely crucial and central to the way in which public services will be delivered. Services such as healthcare, education and the funding and management of universities are very much influenced by it. The noble Lord, Lord Dahrendorl, mentioned transport. I agree with him that it should be included. That is why it is no accident that the kind of public and private partnerships that work best are current areas of intense political controversy and great public concern. Some noble Lords may have been present at the current series of seminars on that question, run by the Smith Institute—the one named after John Smith, not Adam Smith. I declare an interest as chair of the trustees.
It seems that public/private partnerships will work only where the role of the market is fully understood and acknowledged. That is because the role of the market will define where to draw the line between the public and the private interests in those partnerships. I think that the Minister will agree with me—and I pray in aid the most reverend Primate the Archbishop of Canterbury and the Chief Rabbi—that where the

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market plays a role in human relationships, we all find it unacceptable. It is unacceptable because there is imperfect information; the market ignores morality; and the outcome is uncertain and can be catastrophic. That applies in human services such as health, and it is why I think that public/private partnerships have no role to play in the delivery of medical services but certainly have a role to play in providing the infrastructure.
On the other hand, the private sector can provide human services such as professional and skills training. Even though it is a public service, there is an element of competition in the delivery, so markets can do their work. The outcomes can be measured and judged so that the public can assess that it is getting what it needs and at what cost.
In between these two extremes market control mechanisms must be built. Other noble Lords have mentioned regulation. Regulators decide whether the public is paying a fair price for gas, water or electricity, because it would be wasteful to have real competition—one cannot simply duplicate the wires and pipes. But, in practice, there are problems: as the operators know much more about the business, regulators become their captives, and they are dependent on the operators for information. If there are accidents or failures, the regulator is often blamed by the public, even though he or she can do nothing about it. It is not easy; lack of competition denies the regulator the opportunity of market testing.
Companies themselves can do more to make such partnerships work. Businesses active in delivering public services can build in their own controls and make public service part of their ethos. They can do that by accepting obligations in their corporate governance and corporate responsibility culture that go beyond normal trading and exchange. So one has firms such as the British Airports Authority, a quoted company, which is responsible on the one hand for delivering a commercial service to airlines and on the other for delivering a service to the public. Companies such as BAA virtually regulate themselves. They decide on the boundary between the market and public service. To me, that is the kind of public/private partnership that works well.
Additional business risks are associated with the management of those public service issues—social and ethical risks. Investors and investment fund managers are becoming increasingly interested in that. In response, companies are starting to report on those issues in the same manner in which they report on the assessment of financial and trading risks. The Company Law Review is looking at the issue. Perhaps the Minister can say whether the Government propose to make that kind of reporting mandatory.
In spite of all that, some have suggested that it is too difficult to combine the public and private interest in traditional companies, and that a new kind of hybrid company needs to be invented. So-called social enterprises are appearing. They are a kind of public/private enterprise. They compete in the marketplace and are there to make a profit, but their purposes are
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social and include regenerating inner-city neighbourhoods or combating rural decline by bringing in jobs and investment. Another good example is Social Firms UK, which helps create businesses that give disabled people a route into normal employment. Perhaps because they are owned by their employees, users or clients, by the local community or even by charities, it is easier for them to be managed with their social objectives in mind. Another great advantage is that they are small and local. They too are public/private partnerships that appear to work.
With careful thought about the role of the market, public/private partnerships can combine the dynamism of markets with the promotion of the public interest. There are several questions: which area of public interest is best served by the market—the noble Lord, Lord Dahrendorf, asked that question—which aspects of public policy are best governed by free market forces of supply and demand; and how do the Government make sure that such partnerships are consistent with equality, fairness, opportunity and security? I hope that my noble friend the Minister can tell us.
4.41 p.m.
Lord Tanlaw: My Lords, like many other noble Lords who have spoken, I am grateful to my noble friend Lord Skidelsky for instigating the debate. Taking part in the debate, I feel pretty well out of my depth, because the issue on which I wish to question the Minister is something that provides no direct or discernible benefit to the public, creates no profits and requires huge, long-term financing. I refer, of course, to space and space projects. Such projects have been underfunded in this country because they do not have access to PPP or any of the other things. The parameters of risk management and the attitude to health and safety and to political expediency are completely different in the public and private sides of space projects.
Politicians are more inclined to react to rather than anticipate events because their events horizons are always bound by the date of the next election. Therefore, party managers from all political parties attempt to create public investment programmes that will have a time-frame of no more than four to five years. Anything outside those parameters is not usually government-financed, unless it is considered beneficial for re-election strategies. Space programmes, which, more often than not, span a decade, rather than the lifetime of a government, fall into that category. The European Space Agency's current Rosetta programme to intercept and analyse the structure of a comet is a case in point. It took 18 years to gestate and will take another 10 years to execute. Nevertheless, the results from it may have an extraordinary effect on all our thinking about how we look on our place in the universe of the past, present and future. In this thoughtful debate instigated by my noble friend, I want to ask how long-term space programmes will fit into the category of public/private

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funding. What role can the public and private sectors play in the development and encouragement of space science in the next 30 years or so?
Last week, I attended a most interesting seminar at the Royal Society, hosted by the lateral thinking Demos organisation. It was entitled "Masters of the Universe" and was about science, politics and the new space race to Mars by 2030 between NASA and the ESA, with possible late entries from China and Russia. Noble Lords will be aware that, on 14 January, President Bush threw down his space gauntlet to the world, when he proclaimed:
"today, we set a new course for America's space program. We will give NASA a new focus and vision for future exploration. We will build new ships to carry men forward into the universe, to gain a new foothold on the moon, and to prepare for new journeys to worlds beyond our own".
Those are stirring words. They are also expensive words for the American taxpayer and for the European taxpayer, if we take up the gauntlet.
President Bush went on to say:
"Mankind is drawn to the heavens for the same reason we were once drawn into unknown lands and across the open sea … So let us continue the journey".
Those are striking words. I believe that we should take up the gauntlet in any way that we can. However, like a number of Peers who have been Members of this House and some who still are, I have ancestors who gave their life to exploring and developing the "unknown lands" of the Far East, in the interests of private trade. Navigational equipment at that time was basic, and their craft often proved frail against the elements that they encountered in the course of their journeys, but they persevered. They were not civil servants and were not publicly funded. They were usually employees of the East India Company.
The brave men and women astronauts of today are not much better equipped to face the harsh realities of outer space in ships that have proved on re-entry to be no more than insulated eggshells. The high cost of NASA's space vehicles for the future will be the result of trying to achieve 100 per cent success, without further loss of human life. That will be difficult, while there are severe payload restrictions due to having to launch from the terrestrial surface with chemical rockets. Safety must be a top priority wherever public funds are concerned or where national pride is at stake. Historically, the private sector has been prepared to take greater risks for monetary reward. There is no political fall-out when there is failure or loss of life in their endeavours. Therefore, it goes without saying that the private sector could stand a better chance of achievements in space at less cost than government-sponsored projects.
It is difficult to combine private and public finance. What will be the rules on something as fundamental as health and safety and something as fundamental—and dangerous—as travelling in space? What are the parameters for the new ships that the President of the United States will call on? Will they use nuclear power for propulsion and for power in space, to get off either the surface of the Earth or the surface of the Moon? Many people do not like the idea of nuclear power and
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do not want to put money into anything that has something nuclear in it. There will be problems if the Government do not wish to pursue the nuclear power programme, which is being run down here on Earth in this country. There are strong political views on the matter. How will finance he put together to create a safe rocket ship?
How can we address the issue in this country, which has a record of investment in space projects that is worse than Belgium's, in spite of the good fortune of having a qualified Minister for Science in charge? When Mr Kenneth Clarke was Minister for Space in a previous administration, he succinctly summed up his party's attitude to investment in the European Space Agency when he asked:
"Why should we pay to put a Frenchman on the Moon?".
That is a good question. Why should the British taxpayer do that? I ask—a letter in the Daily Telegraph asked the same thing—"Why should we put a Frenchman on the Moon? Why not put a British citizen on the Moon?".
In spite of all the good talk from the Government, there is no finance to do anything like that at the moment. The insular attitude of both major political parties is understandable in the light of the wide time-frames involved. However, it is not understandable in terms of British business opportunities or of firing the imagination of young people to take up the many different aspects of space science as school subjects. What is the point of taking up astrobiology, when we do not have anybody likely to go into space and are merely spectators? The exciting ESA Aurora project, involving robotic and human space flight, will take about 30 years to complete in two main parts. As I understand it, there is no direct British involvement so far, in spite of the fact that 30 other countries have signed up for it. Are we to remain as disinterested onlookers on what could be the most important European project of the century with huge potential benefits to British industry and education? I hope not. But the British National Space Council (BNSC) seems to think so. In its 69-page document entitled, UK Space Strategy 2003–2006 and beyond, its conclusions are clearly set out:
"Previous administrations decided not to maintain capabilities associated with launchers or human spaceflight. The Government will periodically assess areas of space development … taking account of affordability and competing claims for investment".
Those words are about as inspiring as a cost accountant's old balance sheet. Will young people take up science or anything connected with space sciences at school when they know that no money will be put into them? In future, they will not be engaged even as civil servants; currently, we have some of the best and most professional civil servants in space science. Where will young people divert their energies?
I have mentioned the Aurora project, on which a decision is to be made shortly. We have all heard of Beagle 2, the amazing work of Professor Pillinger and its sad failure. But it was not a failure: it was a highly technical device that was under-funded and manufactured under appalling time-restricted conditions. There is a possibility that a Beagle 3 could

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be developed and be part of the Aurora project. Who will finance that? Will it be the Government or the British taxpayer? Will private individuals finance it?
I ask that again because the Mail on Sunday published a list of 300 private individuals who are very rich indeed. I am not very good at arithmetic, but I added up the figures and those 300 people are worth about £150 billion. As has happened in the United States and elsewhere, would it not excite people who have made their money brilliantly through hard work and effort to put money into space projects? They have made enough money to make them comfortable here on Earth and might like to be involved in something as exciting as the new space projects. They should be encouraged to do so.
NASA has given up the search for extraterrestrial intelligence—the SETI programme. That has been taken up by a private and very rich individual from the Microsoft empire. There are others who have made their money and would spend millions to go on tours in space.
I shall go right back in time. As I said, I am quite out of depth on the economics of the debate. But, I dream that my grandchildren and great-grandchildren might be given an opportunity, such as the issuing of letters patent as happened in the old days, to explore the regions of space by private voyagers and private merchant venturers.
It has not been said before, but it has been said by another Lord who was a Member of this House. In his poem, Locksley Hall, Alfred Lord Tennyson wrote:
"For I dipt into the future, far as human eye could see,
Saw the Vision of the world, and all the wonder that would be;
Saw the heavens till with commerce, argosies of magic sails,
Pilots of the purple twilight dropping down with costly bales".
I hope that we can find either public or private finance to make those dreams a reality.
4.54 p.m.
Lord Smith of Clifton: My Lords, the noble Lord, Lord Skidelsky, merits our gratitude, as many noble Lords have remarked, for proposing this debate and for his exposition of the history and theory of the concept. It is a timely debate. The last and only parliamentary debate on the subject of PFI/PPP, as far as I can discover, was that initiated by the honourable Member for North West Leicestershire in another place on 17 July 2001.
Since then. of course, PPP schemes have expanded geometrically and it is appropriate that the record of performance should again be assessed. This short debate cannot be a substitute for the detailed analysis that is really needed; that would require a major scrutiny. But at least those of your Lordships who have participated in this debate have helped keep the issue alive, although I must confess that at times I thought it risked sounding like a revivalist meeting of the PFI faithful. As my noble friend Lord Dahrendorf indicated, the record of PFI/PPP has been very mixed.
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As the noble Lord, Lord Skidelsky, observed, virtually all of the new developments in health, education, transport, the emergency services, government computerisation and defence have been financed through PPP schemes. That followed the edict of the Chancellor of the Exchequer. In terms reminiscent of Mrs Thatcher, he proclaimed, "there was no alternative". Furthermore, Gordon Brown asserted that any criticisms or even considerations of other options were "ideological", as though his edict was not!
The vehemence with which Mr Bob Riley's proposal for using a bond issue to finance the refurbishment of London Transport—a far cheaper option than PPP—was strenuously resisted illustrates the degree to which PPP had become a dogma. Since Ken Livingstone has now been hastily installed as the official Labour candidate for Mayor of London, there have been welcome signs that the Treasury will allow bonds to be used to fund future London Underground projects. As the noble Lord, Lord Brooke of Alverthorpe, remarked, the Treasury has already approved the use of bonds to finance further NATS' developments, as we on these Benches urged at the outset when the NATS PPP was proposed, and that is welcome.
It is difficult to make a precise audit of the overall costs and benefits of PPP schemes since 1997. There have been some major failures, ranging from the Hull Gipsyville estate refurbishment to the Skye Bridge construction where only £500,000 was contributed by the contractors to the total cost of £25 million, and for this peppercorn rent they are likely to reap £88 million in profit.
The new hospitals in North Durham and Carlisle revealed major faults. Inevitably, poor examples attract publicity while successful ones are not reported, although we have had some rosy accounts today. In truth, there has been too large a catalogue of PPP disasters. It has proved a very costly learning curve and, to repeat what the noble Lord, Lord Skidelsky, said, we are still learning.
In winding up the debate from these Benches, I shall concentrate on some of the broader questions that have been posed. First and foremost perhaps, is the taxpayer getting value for money, bearing in mind that PPPs are generally the most expensive option in cash terms? Do the Government have the capacity to conclude tightly negotiated deals? Thank goodness that in future the Government have decided not to finance any more IT projects through PPP schemes because they proved disastrous. What has been the record of Partnerships UK, the government lead agency in this area? Can the Minister say how the Government are seeking to improve the procurement capacity in these highly complex deals than has been the case so far?
My noble friend Lord Dahrendorf and other noble Lords mentioned the issue of openness and public accountability. These schemes take a long time to negotiate. The University College Hospital rebuild was a classic example of where the original plan had to be aborted and everything had to be started again. The

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bidding process was extremely costly. If the rumours are true, the rebuild of St Mary's Hospital, Paddington, will cost far above the original estimates. Indeed, already costs for preparing tenders appear to have spiralled out of control.
The chief executive of Kent County Council went on record last month. In an interview with the magazine, Public Private Finance, he made his disillusion clear about PFI/PPP:
"Our experience is that it takes far too long to negotiate, the economic benefits are doubtful and it ties the council up in long-term and inflexible obligations".
Similarly, as my noble friend Lord Oakeshott reported on the IPPR study by Labour's leading think-tank, PPP schemes are too often shrouded in secrecy. It is still common practice for an unacceptable amount of information to be withheld. Although the National Health Service seems to be better in this regard, it is clear that education authorities and local authorities have much further to go in this direction. "Commercial confidentiality" is too often employed as an excuse for cover up. There must be much more transparency in future tendering processes and contracts concluded.
Then, again, there is the question of how far PPP funds are to be publicly recorded. They are a form of off-balance-sheet accounting. Can the Minister say how much money has gone into PPP projects since 1997 to date, and how high is this sum expected to rise by, say, 2010? Future generations are now in hock to repay these debts and the room for manoeuvre on the part of future Chancellors will be very constrained. As my noble friend Lord Dahrendorf suggested, the crunch will come when public spending transfers from capital to current spending on a large scale. That point is not far off.
Can this level of funding, increasing as it is all the time, be sustained, and when will the ceiling be reached? How do the Government ensure that these 30-year contracts will be fully complied with over time? Already contractors have incurred penalties for non-compliance. Can the Minister tell us how many have been fined, and what is the total to date? PPPs have long since overtaken task forces as the main domestic emblem of this Government, but there has been no resolution of many of the issues that PPPs have raised.
Last year in the Financial Times, Mr James Strachan, chairman of the Audit Commission, sounded a general warning about the Government's approach towards public services. It was moving from,
"command and control and a battery of targets, to pouring billions of pounds of public assets and funds into highly nascent structures"—
not all of which, he implied, will prove fit for purpose. This applied to foundation hospitals, primary care trusts, the new regional housing boards, PPPs and RDAs. There was a real risk that,
"it is going to end in tears".
Of that list, PPPs are seen as among the most vulnerable and it remains an open question whether it was wise to go down the PPP route as extensively as has been the case.
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PPPs were meant to secure, among other claims, the advantages of the inculcation of private sector techniques into the renewal of public infrastructure. The record to date reveals a very chequered history.
5.3 p.m.
Baroness Noakes: My Lords, I am glad that the noble Lord, Lord Skidelsky, has given us the opportunity today to debate the role of public/private partnerships in public sector performance. This is an important and interesting topic in its own right, as the noble Lord's own speech and those of many other noble Lords amply demonstrated. My noble friend Lord Selsdon demonstrated many of the practical issues that arise from PPPs and PFIs, and I hope that I will not disappoint him if I do not try to deal with the Urgent Issues Task Force and its views on accounting for it. Instead I should like to shift my emphasis to the key issue of how the performance of the public sector links to the important issue of the delivery of public services.
In 1997 the Government were elected on the promise to deliver improved public services. Since that year we have had over 60 stealth taxes. On the Chancellor's calculations, the forecast tax burden is set to rise to over 38 per cent. On that basis, the public is entitled to look for improved public services, but the truth is that they have not improved commensurately with the money that has been put into them.
NHS spending has gone up by 37 per cent, but acute sector activity has increased by only 5 per cent. While waiting lists have reduced, the average experience of patients in terms of waiting times has deteriorated—the mean waiting time has increased from 43 days to 50 days just since 1999. And pretty well everybody except the Government thinks that NHS productivity has fallen.
In the public sector more widely we have seen a massive expansion of public sector employment, but to little effect. Schools are not performing massively better. Our streets are not safer and our transport system is certainly not any better. The man in the street, whose taxes have been paying for these, knows that public services have not improved. Indeed, that is what the polls have shown. Against that background of failure in public sector performance and in public service delivery, it is important to take time to examine the role of public/private partnerships.
Let me start by affirming for the record that noble Lords on these Benches believe that the private sector has an important role to play in the delivery of services in the public sector. We have long favoured the contracting-out of services whenever the private sector can do it better. It was my party, when in government, that invented the private finance initiative. My noble friend Lord Lamont set the ball rolling in 1992, and following that my right honourable friend Kenneth Clarke pushed it forward. I was pleased to play a small part myself as a founder member of his Private Finance Panel, set up in 1993.
The private finance initiative, as we conceived it, was a way of harnessing the private sector's skills of risk management, innovation and cost-effective

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service delivery. Our aim was better and cheaper public services, to which the noble Lord, Lord Skidelsky, referred. We actively sought new ways of involving the private sector, not only in infrastructure projects, but also, for example, in the building and management of the delivery of services in prisons. We opened up the issues of how the private sector could contribute to the provision of services and facilities in the NHS and in schools. My party bequeathed not only a healthy economy to the Labour Party in 1997, but also the firm foundations of a successful private finance initiative.
It is our belief that if that momentum had been sustained, PFIs could have been a major force for the delivery of public services on an improved basis. This required real innovation. The noble Lord. Lord Skidelsky, referred to innovation as being a necessary part of the PFI and PPPs. It also required the boundary of service provision between the public and private sectors to be challenged and changed.
What has happened since 1997? The Government have massively expanded the PFI. The Treasury's website shows that since 1997 the capital value of PFI deals has been over £30 billion. At one level we are extremely pleased with that because imitation is the sincerest form of flattery.
But at another level we have some real concerns that the PFI has not been used to improve the delivery of public services as we had intended. In practice, it has been used as a device to get borrowing off the public sector balance sheet. We estimate that around £100 billion has been excluded from the Chancellor's borrowing figures and, like the Institute for Fiscal Studies, we believe that if PFI debts are counted properly, the Chancellor's golden rule is very likely to be breached.
As I have said, we saw innovation at the heart of the PFI. If there has been innovation since 1997, it has been in the complex financing structures that underpin the average PFI deal and not in the way that services are delivered. When I covered the health brief on these Benches, I visited some PFI hospitals. One of the strong messages that I got was that innovation was simply not emerging from the way that the PFI was being pursued. That may be the key to the lack of efficiency gains identified by the noble Lord, Lord Dahrendorf.
We all sign up to the proposition that PFI deals must represent value for money to the taxpayer. This has been examined several times—for example, by the NAO. We agree completely with the noble Lord, Lord St John of Bletso, that PFI has generally delivered projects on time and on budget in stark contrast to the public sector's performance before we introduced PFI.
I always had doubts about why the public sector could not achieve the same result through hard-nosed and well specified procurement contracts but there are still too many runaway projects, such as the Scottish Parliament building, which tell me that PFI does indeed add something that the public sector would not achieve by itself.
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Whether all of these projects will deliver value for money in the long term is, in my view, an open question. The noble Lord, Lord Haskel, echoed that scepticism. As he pointed out, it is, unfortunately, not a question that can be answered until we have many more years of experience of how these PFI contracts work out in practice.
Much depends on the effectiveness of the long-term maintenance obligations. The public sector is paying today for the long-term costs of delivering fully maintained buildings and we have yet to see whether PFI will actually deliver assets that are maintained to the high standards that have been specified. If it does not do so, we should be well aware that at the heart of PFI arrangements are thinly capitalised special purpose vehicles which may not be up to bearing the strain of things going wrong, as the noble Lord, Lord Oakeshott, reminded us.
Another area that can be judged only in the long term is how well contracts can deliver reconfigurations to meet the changing needs of service delivery. Clearly contracts cannot specify what we do not know today, but we do know that some areas of service provision are likely to be subject to major change. For example, we are fairly sure that health services will be delivered differently in 15 years' time. But we do not know exactly and, therefore, what impact that will have on PFI contracts.
One of the things I learnt from my days as a seller of services is that, with a tight basic contract, the real profits are made through contract variations. That is when one has the upper hand in negotiating. We can but speculate as to what will happen to the cost of PFI contracts when they have to be renegotiated to meet changing needs, but my money is on rising costs and declining value for money.
I have spent my time talking about the private finance initiative, but that is only part of public/private partnerships. PPPs are a bit of an enigma. The Government have helpfully given a description of the different types of PPP in their publications but I detect some muddled thinking. To prepare for today's debate I checked some of the Government's websites and found quite a wide variation in usage. For example, the DfES website describes a school project in Ellesmere Port as a PPP, notwithstanding that it is wholly financed by a combination of DfES and ODPM money. I am not sure which one of those is meant to be the public or private part of that partnership. DfID's website takes one to a hilarious quiz, which talks about a water project in New York in the year 1800, featuring private sector corruption, and describes it as a PPP. If the noble Lord, Lord Tanlaw, gets his way and space exploration manages to get to Mars and brings back a visitor for us, I do not think he would find any of this easy to understand.
The Government usually describe partial privatisations and the wider markets initiative as PPPs. Whether these have made any contribution to the performance of the public sector is a moot point. They include the partial privatisation of NATS, to which the noble Lord, Lord Brooke, referred in some

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detail. It was very interesting but I do not believe that we can regard it as a shining example of a PPP, certainly in its early days.
Often the term PPP is used to cover up the bailing-out of private sector projects, such as the Channel Tunnel rail link. I, for one, wait with bated breath to see whether the next bail-out PPP is the Channel Tunnel itself.
I wish that we could identify a clear contribution to public sector performance through public/private partnerships, but the way in which the Government have developed PPPs and PFI do not lead to that conclusion. They are often no more than a device to raise money for the Chancellor or to keep liabilities off his balance sheet. PPPs talk the language of partnership but financial expedience is their driving force. It is a pity that the Government have squandered their inheritance.
5.15 p.m.
The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey): My Lords, I am grateful to the noble Lord, Lord Skidelsky, for introducing this subject and for doing so in such a wide-ranging and philosophical way. He is a living example of the fact that if you do not believe in jet lag you do not actually have it. It was an impressive introduction. It has led to a very good debate, for which I am grateful.
My response to the debate has to start with the point made by the noble Lord, Lord Haskel, that this arises out of need. In other words, what is the problem that has to be addressed by the various forms of interaction between private and public finance? If, as we do, we have an objective to deliver world-class public services, we have to have substantial increases in investment—and, of course, matching reforms—to deliver services that meet public expectations in this country.
Investment in public services had been on a declining trend since the 1970s. That meant falling standards in schools, hospitals and other public service assets and we needed to address the legacy of neglect which we inherited in 1997. There were backlogs of school repairs estimated at £7 billion; maintenance backlogs in the National Health Service of more than £3 billion; and, of course, as everyone can see—even if they do not go to schools or hospitals—huge, long-term neglect of the transport infrastructure.
What was the reaction? It certainly was not to substitute public finance initiatives or public/private partnerships for public investment. We have provided for a massive increase in the investment being delivered to schools, hospitals, public transport and the public sector estate. The total investment in public services stands at more than £40 billion—compared with £23 billion in 1997—and it will continue to rise to more than £48 billion in 2005–06. So that is the answer to the fourth question of the noble Lord, Lord Dahrendorf. He will appreciate that I cannot take his questions in order—they were very acute questions—but I shall try to deal with as many of them as I can. But certainly PFI or PPP are not substitutes for public investment.
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I want to make two modest points about the balance between public investment and private investment. First, as I said, the vast majority—more than 85 per cent—of the increased investment is conventionally procured public investment which does not use private finance. Therefore, in answer to the second question of the noble Lord, Lord Dahrendorf, it is incumbent on us to look carefully at those factors which distinguish cases where more private investment is appropriate and those where less private investment is appropriate.
On the whole, PPP is a modest addition to the investment policy of the Government. My second point is that there is no contrast between the ideals and values in public service as is suggested. After all, in everything we do in the public service we are using privately produced goods and services. All the inputs—the pens, the computers, the construction work—has always been private, and there is no change in that. The difference introduced by PPP is that some of the output—in other words, after the construction phase, the continuing maintenance and availability for use of these public sector assets—is now in the private sector as well. The ownership, of course, remains in the public sector. The difference, I suggest, is that the private sector is now being required to take responsibility for what it does rather than simply selling it to the public sector and walking away. That is my answer to the first question of the noble Lord, Lord Dahrendorf.
We have to look, coldly and objectively, at that minority of public investment which is appropriate for private sector involvement and that which is not, and whether we are making that judgment correctly. The evidence shows that major PFI investment projects have been completed in time in almost 90 per cent of cases. In every case, the public sector has paid what it expected to pay, whereas in traditional procurement, three-quarters of the projects were late and three-quarters over budget. That gives rise to the question: why are we still using traditional procurement methods? I think the noble Baroness, Lady Noakes, should be attempting to answer that question—q is a profound issue which we inherited from her government.
I have used the quotation before from Jeremy Coleman, the Assistant Auditor-General of the NAG because it is so vivid. He said that,
"the evidence is that on the whole PFI deals deliver to time and to budget. You get what you want, you get it when you want it and it costs you what you thought it was going to cost".
Of course, it is right that we should be looking in detail at the boundaries between projects which are suitable for PPP and PFI and those which are not. One of the issues clearly is the long-term benefits of having the responsibility for maintenance and operation in the hands of those who made the capital investment. The noble Lord, Lord Oakeshott, made that point very effectively. It is true that in many cases we simply do not know because not enough years have passed for us to be able to tell. But I do not think we can draw the conclusions of the noble Lord, Lord Smith, about it, even if we cannot track through the 25 or 30 years' subsequent life of PFI projects, and we are not able to

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give useful answers to his question about individual projects. Because we are responsible financially, we give an estimate of the future obligations for 25 years, and we have done for some time. That is contained in Table C20 of the Red Book. We are not shying away from that.
What kinds of projects have a serious risk both to contractors and ultimately to the private financiers which can be transferred from the public sector with benefit to the public sector? If a PPP project goes wrong, the private financiers would have to replace the contractor, knowing that there would be no payments until the service was online. That, as has been said by a number of speakers, contrasts with the soft budget constraint of traditional public procurement. I will not go as far as some of the Ministry of Defence's examples, but it is clear that there is a tip-over point. With a soft budget constraint, you get to the stage where, however much goes wrong, you cannot afford to cancel the project.
That is what we are trying to avoid with PPP. The analysis given by the noble Lord, Lord Selsdon, was particularly important. He is right in pointing out that contractors cannot take big equity risks—it has to be for the financiers behind them. Therefore, you are restricted with PFI and PPP to those projects in which there is a market for the ultimate financial risk. We have abandoned PFI on information technology projects, for example, because there is no such market.
Even if we do not go down to the far end of the maintenance period, the experience of construction costs is that, according to the NAO, only 8 per cent of PFI projects are more than two months late, which contrasts with the 1999 figures of 73 per cent being late.
There has not been much discussion, oddly, of value for money. There is a range of possible value for money criteria and National Audit Office research shows that three-quarters of public sector clients described the performance of their PFIs as satisfactory or better. That contrasts rather favourably with the previous situation.
I have accepted that we have made mistakes. I have accepted that we have made mistakes in IT projects, and the noble Lord, Lord Smith, welcomed that. The fast change in the sector makes it hard to define the outputs, therefore making it hard to do the risk transfer which is necessary.
The other example, which relates to accusations of bureaucracy, concerns projects worth less than £20 million. There is no doubt that in the early days of PFI, the time taken by lawyers and accountants in drawing up contracts was excessive. That would continue to be the case if we went on doing it for smaller projects, so we have cut those out of the system.
We have taken steps to deal with excessive bureaucracy and expense. We set up Partnerships UK to provide private sector expertise to the public sector which has the responsibility of commissioning PFI projects. We set up CABE—the Commission for Architecture and the Built Environment—to look at
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the role of design in improving the efficiency of buildings. The Office of Government Commerce has been doing that as well. Generally speaking, standardisation of projects will reduce bureaucracy and the initial costs.
There have been criticisms this afternoon of standards of accounting and reporting PFI liabilities. I reject outright the repeated criticism from the noble Baroness, Lady Noakes, that we are trying to do it to get it off balance sheet. If we were, we were pretty bad at it, because 57 per cent of these projects are on balance sheet. It is always a little arcane how the national statistician and the National Audit Office can legitimately, in accordance with their own rules, produce two different criteria. I have had difficulty in explaining it to the House before. However, this really is not a serious consideration. The independent Comptroller and Auditor-General, in his general report for 2001–02 said,
"where he considers that the liabilities arising from financing arrangements are not correctly reflected in the financial statements of the bodies that he audits then he will qualify his opinion and report to Parliament accordingly".
However, he goes on to say:
"He has not yet had the need to do so".
I think that is as clear an exoneration from that charge as it is possible to have.
There have been a number of criticisms of particular projects. I do not think I can deal with them all, but I will try to deal with some. The first was the criticism of the noble Lord, Lord Oakeshott, of the Inland Revenue, Customs and Excise Mapeley Steps project. He has been reading Private Eye as intensively as I have. You do not go into a project of that kind expecting to have to produce a letter of comfort within 12 months of entering it. So, clearly, something was not as intended. However, I do not think that the noble Lord can deny that there has been fairly intensive public scrutiny or that new guidance has been issued, including model procurement clauses that relate to the issues in the Mapeley Steps case. In particular, they provide that in future we shall not allow offshore tax avoidance structures for PFI projects.
I cannot accept the criticisms that the noble Lord, Lord Smith, made, either about Paddington Hospital, where the project has not yet gone out to the market—so he is a little bit premature—or of the bond issue alternative for the Tube that he is recommending, and which Ken Livingstone used to recommend before he took responsibility for those matters. After all, there is no risk transfer in a bond issue, and no one will deny that there is risk transfer for those operating the Tube PFI.
I was interested and encouraged by what the noble Lord, Lord Brooke of Alverthorpe, said about the NATS project, which bore out many of the things that I have said. We have no present plans to change the share structure of NATS. I do not know that I have an answer to his other question about whether employee shares are to be traded in future; I do not believe so, but if I am wrong I shall write to him.

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Let us consider the actual record of better delivery of services by the PFI programme. It has expanded, along with public investment. In 1997–98, PFI investment was worth £1.5 billion; in 2002–03, it will deliver investment worth £4.6 billion. We have signed projects worth £35.5 billion with £32.1 billion since 1997. Those have included health projects worth £3.2 billion; £1.9 billion of schools projects; and investment in transport worth £20.5 billion. We have delivered 34 new hospitals and 119 new health schemes; 239 new and refurbished schools; 23 new roads and public transport schemes; 47 new fire and police stations, courts and prisons. When a PFI has proved successful—and I repeat, when and only when it has proved successful—we are expanding it.
The noble Lord, Lord Selsdon, went through the sectors rather effectively. In health, projects worth £6.5 billion are planned to sign by 2005–06, with 11 new hospitals being built and 44 more redeveloped. In education, we have already planned £1.5 billion in investment, to redevelop or refurbish 278 schools and deliver 45 new schools. In housing, 28 projects will deliver capital investment worth more than £800 million by 2005–06.
If there are possibilities of going into further new markets, we shall examine them. There is the Deputy Prime Minister's sustainable community plan, to deliver urban regeneration and investment in growth areas. There is waste and recycling, for which the characteristics of our programme mean that PFI could offer significant value-for-money gains. There is investment in social housing, and continued investment in the prison estate. I believe that there are many more.
That is a long way from what we inherited in 1997. I remind the House that, in that year, the previous government demanded universal testing of PFI opportunities for all public investment projects. That was a totally extravagant bureaucratic process that was entirely unjustified by the results. In contrast, by being selective and imaginative and by looking at the results—after all, there have been 34 National Audit Office reports on PFI since 1997; there is no shortage of public scrutiny—we are on the way to making a modest—and I have always said "modest"—but real improvement to the quality of public services in this country. It is important that we should see that as a complement to a massive and comprehensive public investment programme, delivering the infrastructure of public services on time, to budget, with quality locked in for the long term.
5.35 p.m.
Lord Skidelsky: My Lords, there has been a wide though not uncritical acceptance of the value of PPP, and I hope that we shall be able to return to the topic as it unfolds and develops. It remains only for me to say how grateful I am to those noble Lords who have taken part in the debate, with their wealth of intellectual and political acumen and technical and practical experience. I also thank those who have had
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the fortitude and interest to sit through the debate without taking part. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Alzheimer's Disease and Dementia
5.36 p.m.
Lord Sutherland of Houndwood Lord Sutherland of Houndwood rose to call attention to the needs of those who suffer from Alzheimer's disease and other forms of dementia; and to move for Papers.
The noble Lord said: My Lords, I am grateful to my colleagues on the Cross Benches who agreed that the topic of Alzheimer's and dementia was appropriate for debate at this time, and to the distinguished group of speakers from all parts of the House who have listed themselves to take part.
The fact that this year sees the 25th anniversary of the foundation of the Alzheimer's Society and the 10th anniversary of Alzheimer's Scotland—Action on Dementia, gives us an opportunity to pay tribute to the work of those societies, and particularly the many thousands of voluntary workers associated with them. I also take the opportunity to declare an interest as the president of the second of those two organisations, and as someone associated in the private care home sector with three organisations—the English Community Care Association, Scottish Care, and NHP—all of which are involved in the provision of care for many who suffer in this way.
Few in this House will not have encountered through the needs of a relative, friend or neighbour, the significant place which the diseases of dementia now hold in our society. To a considerable extent that is because we now all live longer—much longer than we did in preceding generations. All being well, that trend will continue. The robustness of debates in this House illustrates well the benefits of such longevity to the wider community.
Demographic change in our society brings opportunity as well as some problems of adjustment. In the current state of medical science, about which some who will contribute to this debate are clearly more competent than I am to comment, the comparatively wide prevalence of Alzheimer's is the central of many examples to which we must pay more attention, whether as individuals, communities or governments. I look forward to the contributions of the noble Lord, Lord Walton of Detchant, in that area, and the noble Baroness, Lady Finlay of Llandaff, among others.
Even a layman can read the message of the statistics, however. Dementia affects more than 750,000 people in the UK alone. The consequences of that are heavy, both in terms of individual and family suffering, on the one hand, and in terms of financial costs. The number of those living beyond the age of 80 happily rises each year, but with it also does the risk of developing dementia. An average of one in five who live beyond the age of 80 are likely to develop some form of

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dementia. Approximately one in 20 of those who live beyond 65—and I look around meaningfully—will develop dementia. Indeed, more than 18,000 people under 65 already suffer from some form of dementia.
Those are the statistics, and the impact is wide within our society. There is the immediate and often initially devastating impact on families. There is the huge need for non-professional carers, and on them a huge burden falls. The two societies that I mentioned at the beginning of this speech devote much time and energy to the support of those non-professional carers.
Looking around the House and looking at the list of speakers, I have no doubt that other speakers in this debate who are very experienced in the implications will tell us more about the impact of the development of Alzheimer's and dementia on carers. At a more formal level, there is a need for the recruitment, training and regulation of those for whom the provision of such care is a career as well as a commitment; for example, nurses or residential and community carers. This is a problem of what used to be called "manpower planning and training" to which further attention must be given.
An additional impact of dementia and Alzheimer's is to be seen in the pattern of expenditure in our health service. As we know, the health service devotes a major part of its resources to the older members of our community. As I have suggested, in this group the problems of dementia figure significantly. Equally, the impact on the care home sector, both private and public, finds it struggling to deal with demand at local and regional levels. If one looks at the numbers, there appears to be roughly the right number of beds and rooms available on a national basis, but their distribution is not helpful to the needs of folk living in one part of the country where there is under-provision and over-demand. If one is unwell in Croydon, it is not helpful to be offered a residential place in Bootle—albeit that Bootle might be a fine place to live otherwise. Equally, the problem of delayed discharges is still with us. It has to do with the difficulty we have in providing adequate care on a long-term basis for those of whom we speak.
In due course, I shall be critical of some aspects of government policy and the implementation of that policy, but I want to recognise that, in committing increasing sums to the provision of care for the elderly, the Government have shown good intent in this area. That should be recognised.
Before turning to that issue, let me stress some positive factors. It is easy to be very gloomy about Alzheimer's and dementia. The first positive factor is the enormous commitment in the voluntary sector to drawing attention to, and supporting the needs of, carers and those who need care. There is still more to be done but if, with jaded political palates, noble Lords are tempted to cynicism, I urge them to look at the altruism in our society that is seen so clearly in the adoption of the burdens and responsibility of caring, not least in the area we are speaking about today. It is no rose-tinted scenario that you will see there. Do not expect simply to smile automatically. There is a real
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burden, but it is a burden and a responsibility that is widely shared in our community and that speaks well of the continuation of genuine altruism in our society.
One positive part of all of this is that these are the problems of a society in which one consequence of affluence is increasing longevity. This is not bad news, this is good news. No longer do we retire at the statutory age and conveniently die within two years. That is progress; it is good. It is opportunity rather than problem.
Many of the illnesses that curtailed demographic optimism and reduced longevity in the past have been contained through the dedication of our sisters and brothers in medical care and research. Research allowed us to deal with the suffering, as well as the costs, of stomach ulcers. That is a benefit to the individual, to the Exchequer and to those who have relatives who suffer in that way. Similar research hares are running in relation to Alzheimer's and doubtless we shall hear more of this later in the debate from other speakers. If success is achieved in research into Alzheimer's that is equivalent to the success of betablockers in dealing with some heart conditions, then the benefits will be shared by patients, carers and, I stress, by the Exchequer as well. The fact that someone, for example, who has an ulcer no longer needs days and days of hospital care after major surgery and thereafter needs a significant period of convalescence is a benefit to the Exchequer as well as to the individual. I have no doubt that progress in research in the area of Alzheimer's and dementia will see some such benefits coming to us in due course. There is no reason, in principle, why with adequate research support—I could not help inserting that—this should not happen in the areas of dementia and Alzheimer's.
One of the more positive messages that must also be spread is that, although Alzheimer's is a degenerative disease, it is not an immediate "all or nothing". This must be understood by those who have to confront it. Through support, care and drug treatment, symptoms can sometimes be contained and quality of life maintained well beyond expectations when the word was first mentioned. That message needs to be relayed. I have met some people who suffer from Alzheimer's who, with the support of a sympathetic employer and perhaps a rescheduling of duties, continue to be employed. It is not simply an immediate cessation of normal life. I have one correspondent, a dementia sufferer, who has devoted his time and energies to the positive task of designing cards to be used in local communities in a way that makes the use of public transport much more possible and reasonably safe. This is enterprise from someone who suffers. It is self-help that belies the suggestion that it is "all or nothing" immediately. Knowledge and understanding of this is part of the support system which the two national societies provide.
So is all as well as can be expected? I seem to be giving a very positive message. Is the ship sailing in comparatively calm waters? May we as a society feel reassured that all is being done that ought to be done? Inevitably the answer is, "No". I submit to noble

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Lords that there is a flaw at the centre of government policy. The flaw in question is accompanied by the frustration of those who, watching the implementation of this policy, see large sums of money being spent, and the good intent of the Government, but want to raise issues of value for money and of how the money is spent.
If you doubt this, I recommend the special report of the health ombudsman, NHS funding for the long term care of older and disabled people HC 399. The essence of the matter is the manner in which need for care is assessed at local level and the eligibility of individuals for financial support. In this report, the ombudsman is not shouting, "Let's have more money" but rather, "Let's look at how the assessments are carried out and how the allocations of support are being made". She writes of the consequence of her recommendations in that report in a subsequent report:
"My office has received over 3,000 complaints about this subject since we published our special report".
A hitherto officially unacknowledged problem is identified here in the work of the health ombudsman.
The problem that still dogs the implementation of government policy is this: Alzheimer's is not treated as an illness or a disease on all fours with other illnesses and diseases. If you are unfortunate enough to have heart problems, to the best of their ability, the staff of the National Health Service will deal with them, and there will be no charge for the care offered, even if it involves state-of-the-art surgery and the excellence of our intensive care units. The same is true, for example, of cancer of the lung, or cirrhosis of the liver, even if in part it is self-induced. This does not apply to the needs of many people who suffer from Alzheimer's. In all parts of the United Kingdom other than Scotland, they will be progressively charged for what is described as "social or personal care" if they have assets over £18,000. At one time that may have seemed a large sum of money, but it is not a criterion that identifies "the rich". A normal-sized family car costs about £18,000 and may be the product of years of scrimping and saving. A Department for Work and Pensions report in 2002 showed that 61 per cent of self-funders in residential care had incomes of under £200 per week. These are not rich people. Yet if they have any assets at all—regardless of their weekly or annual income—they will be charged for their care until their assets are depleted to £10,000. They will be so charged, irrespective of the fact that their only offence is that they perhaps suffer from a brain-based disorder. That cannot be right.
The problem to which the Government are not yet facing up is the attempt to draw the line between healthcare and social care and to define eligibility for support on that basis. A sign of the artificiality of that is the old joke, "What is the difference between a health bath and a social bath?" Formerly, a bath given in the hospital by a nurse was a health bath, while a bath given at home by the local care worker was a social bath. It is nonsense. I suppose that that is the example that everyone uses.
Recent redefinitions have focused not only on where care is provided but on who provides it. If it is provided or directly supervised by a doctor or an NHS nurse, then the patient is not required to pay. If care is provided by someone else, perhaps a non-professional or a professional carer in the patient's own home, the cost of the care will fall to the patient. I have already quoted the health ombudsman's report (HCI 19). As I said, it stated that more than 3,000 subsequent complaints were lodged. She commented: "I hope"—not "I know", but simply "I hope"—
"that, as a result, many complainants will be satisfied that the patients involved will have been re-assessed fairly against lawful and transparent criteria".
There, it might be said, is the rub. Are the criteria lawful and transparent?
In the report of the Royal Commission on the Funding of Long Term Care of the Elderly, which I had the honour to chair, a whole chapter was devoted to how to define care and the need for care. Without exception, our 2,000 correspondents and the many professional bodies that gave evidence to us indicated that, for them, that is an artificial distinction that cannot in practice be drawn in a transparent and legally acceptable way. Yet, government policy and the Government's advice to local authorities is based on drawing such an artificial distinction—hence the difficulty at local level; hence the ombudsman's involvement; hence the 3,000-plus complaints lodged immediately on her first ruling on the matter.
I am not suggesting that this is simply a call for more money. If the problem is one of resource and cash and people are to have these needs met on an equitable basis, then it is a problem for health service funding, and other charges may have to be introduced. If that is so, let us face the problem squarely and not in a manner that continues to penalise those suffering from Alzheimer's or dementia. I beg to move for Papers.
5.53 p.m.
Lord Jones: My Lords, I thank the noble Lord, Lord Sutherland of Houndwood, for initiating this debate and for the authoritative and caring nature of his remarks. I, too, declare an interest, not only as a layman but as president of the Flintshire Alzheimer's Society in Wales.
Dementia is a terminal condition. In the later stages, people experience severe memory loss and lose the ability to walk, wash and feed themselves unaided. Chewing and swallowing are difficult, and many will be doubly incontinent and lose their speech. However, unlike those with other terminal conditions such as cancer, people with dementia do not necessarily qualify for free care on the National Health Service. That is the nub of the matter.
Much of the issue has to do with the Government's definition of what constitutes health care. A large part of the care which people with dementia require comes from care assistants which the Government class as "social care" and is means tested. If that care were

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provided by a nurse, then people with dementia would not be charged for care. In all of this, that is an important fact.
There is also a need to raise the profile of dementia care in the National Health Service and social care. People with dementia are regularly cared for in care settings where the staff do not always know how to care for them effectively. So perhaps dementia-care training should be a compulsory part of training for all those in the National Health Service and in social care. Of course, I hasten to say that there is widespread effective and devoted care. But that is not always the case.
People with dementia and their carers want to remain in their own homes as long as possible. Regrettably, however, there is often not enough support to make that a reality. So the result is that many have to go into long-term care far earlier than is necessary. That is not the best solution either for those immediately involved or for society more generally. After all, there is huge pressure on long-term places. Moreover, we also need better access to respite care. In this subject, respite care is a boon to hard-pressed families. The question should be asked, when shall we have more?
Access to drugs has improved since the National Institute for Clinical Excellence issued guidance, but will the Department of Health please ensure that the national institute guidance is implemented uniformly and effectively? Many think that the situation requires effective implementation. The aim is to give affected people the chance to benefit from these treatments wherever possible.
In the past 30 years, and perhaps more, I have visited at least a dozen such homes a year. I have seen at first hand the terrifying impact of dementia. I have witnessed the heartbreak and the perplexity of the attendant loyal and loving families. The National Alzheimer's Society has been a shining light in all of this. It has become an authoritative leader and opinion former in this complex field. For many years I worked with the society's previous chief executive, Mr Harry Cayton. He has been a good friend to many. I wish his successor, Neil Hunt, all the very best.
Surely your Lordships will agree that the society is one of the most successful and honourable organisations in the land. I am glad that the society is now spreading its influence across the Principality. This debate enables me to praise sincerely the Flintshire Alzheimer's Society and particularly its newly formed committee. Our chairman, Mrs Hughes, leads a very dedicated team which links up with our north Wales officer, Alwyn. It is clear to me in the work that I do with the committee that its dedication is definitely engendered by personal family experience, often of a very prolonged and harrowing nature. The committee members are very public spirited people. They seek to help others now facing similar challenges to those that they had to face up to. I admire them and I know that there are many people like them throughout our country. They should be praised often and loudly, and thanked.
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The Flintshire society is a good mix of voluntarism, practicality and compassion. We have been encouraged by very generous financial support from local employers such as Airbus, MBNA, HSBC and the steel-making company Corus. Additionally, our county council and Deeside Rotary Club have been in the van. They have been generous and we should thank them. Our local office is now open several days a week. We are a small, good quality team seeking to give service in our community. It is a fact that we are needed. We are new, we need more money and we need more backing, but I know that the work we are doing is of the finest. No praise is too high for the committee.
Finally, I urge the Government to make care available on the National Health Service and to give even more help and assistance to the Alzheimer's Society.
6.1 p.m.
Baroness Finlay of Llandaff: My Lords, I, too, am most grateful to the noble Lord, Lord Sutherland of Houndwood, for having brought the terrible plight of those with dementia, and those who are about to experience dementia, to the fore.
Before diagnosis, memory lapses fluctuate with delusions, depression or even suicide attempts. The family, in despair, may find the diagnosis a relief and may say, "We always knew there was something wrong". But it is after that that the full reality of the disease dawns. No one should underestimate the burden for carers, nor how, with excellent professional care, that can be eased. Other noble Lords will address the issues of patient care and the stresses on carers. The personality who was is no more and the family grieves long before the person dies.
I plan to confine my remarks to the importance of research and the hope that it holds. I am proud to declare my interest as vice-dean of University of Wales College of Medicine, which is at the very forefront of genetic research in this field. Currently, about 536,000 people across Britain have moderate or severe cognitive impairment. The incidence rises steeply with age. Estimates are that the overall numbers are predicted to rise still further because of ageing demography combined with earlier onset vascular disease over the next 20 years.
Current treatment of Alzheimer's dementia relies on the group of drugs that inhibit an enzyme in the brain called acetylcholinesterase. These drugs work by blocking the breakdown of acetylcholine, a deficit of which seems to contribute to the development of certain behavioural disturbances seen in Alzheimer's. Four of these drugs are currently licensed. They each work in slightly different ways, but despite that overall they are effective only in about 40 per cent of people. The National Institute for Clinical Excellence looked at these very early on and produced helpful guidance on prescribing and monitoring. The monitoring, to be undertaken at one and three months, is expensive because it is time consuming. If the drugs are not helpful after three months, they are stopped; if they are effective, monitoring is ongoing. However, they only delay the time when long-term care is needed.

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These drugs are also helpful for a time regarding demential arising from vascular disease but are not licensed for this use. Lewy body dementia, a specific type of pathology manifested by fluctuating confusion mingled with visual hallucinations, also responds well to these drugs. So where does the drug research need to be done? The neurobiology of behaviour must be understood to enable drugs to target specific problem changes—functional neuroradiology with PET scans has much to offer, both in understanding the disease and in tracking the response to drugs.
Other bio-markers of disease progression need to be developed. But the difficulty is that these patients already have impaired competence, so consent is problematic. Some will have left an advance statement that they would wish to enter a research study that may help them or someone else with the same disease. Some in the early stages may have given consent to enter trials, but those with more advanced disease also need to be studied to ensure that later stages can be understood, with an aim to ameliorate. The Government have been looking very carefully at issues around mental incapacity and I hope that the European regulations on research will not exclude these patients from participating so that better treatments can be developed for them and for the next cohort of sufferers.
The Alzheimer's Society and the Alzheimer's Research Trust are jointly funding the establishment of a "brain hank". This will be an incredibly important resource. Carers and sufferers are very supportive of this plan to collect post-mortem brain tissue and I hope the potential difficulties that the Human Tissue Bill may pose can be ironed out so that the unique potential of such a tissue bank can be realised.
Genetics research may hold one key to unlock understanding of the pathology. Genes have been localised that seem to predispose to being ill with dementia. Blood samples from families where there is more than one sufferer are proving important and again it will be important that the Human Tissue Bill does not impose so many barriers to epidemiological research that it becomes impossible to look at the epidemiology of traits of dementing diseases.
Another consideration must be the relatives. The family of a person with dementia may have had a traumatising and exhausting experience. When the person finally dies family members may well feel relief, wish to escape from their recent experiences and move on. If researchers have to go back repeatedly after the patient's death to obtain consent for studies that look at the surplus specimens of blood, or other tissue, many of those relatives will be deeply upset and disturbed, being hauled back in time in their bereavement process. They, of course, need to be able to access information on research that is ongoing, but at the time and rate of their choosing.
The brain is the very seat of personality, reasoning and all higher functions as well as the control house of all activities and regulation of the body itself. So the role of research databases, perhaps accessed through those charities that support research in this area and
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have been so active in moving forward the frontiers of improved care, will be very important if the complexities of this disease process in the brain are to be understood and then controlled, both for the good of current patients and, equally importantly, for the next generation of patients who are just round the corner.
6.8 p.m.
The Lord Bishop of Coventry: My Lords, in addressing your Lordships for the first time I should like to express my thanks to Members of this House and others who have made my induction thus far wholly congenial and relatively painless. I am most grateful and trust that it will continue in similar vein.
I wish to say something today about the pastoral care of those suffering from dementia and their capacity for spiritual awareness. My interest in this subject springs partly from the experience of trying to care for my mother-in-law who suffered from dementia for some 13 years. For much of that time my wife and I attempted to do this in our own home but, sadly, there came a time when this was no longer possible. During the time that she was with us, there were occasionally lighter moments as, for example, when my mother-in-law chastised my secretary for not cleaning the cooker properly. We quickly became aware that, in reality, that was more a mechanism for helping us to cope with the situation than any alleviation of her own suffering. For us, as for so many carers, the constant challenge was to remember that she was still a person and not simply a patient.
The Churches, in common with other faith communities, have of course always been aware of the problem. In past ages, physical illness often took its toll of people before dementia set in. Now, with people living longer as we have been reminded, it is not uncommon to find that those whom we love are physically well but suffering from a mental impairment that makes normal relationships difficult, if not impossible.
It is my underlying conviction that the subject of dementia needs a specifically religious or spiritual perspective, and not simply one drawn from medical science or social policy, crucial though those are. In saying that, I should like to quote the pioneering work of Professor John Swinton of Aberdeen University. He has written and spoken a great deal on spirituality and mental impairment. He points out that dementia is frequently misunderstood as a form of mental illness, saying:
"The particular way in which dementia has been constructed under the influence of the bio-medical model of health and illness has blinded us to some fundamental issues of personhood, spirituality and humanness. The crucial significance of dementia as a human experience, and indeed as a deeply spiritual experience … has been overlooked or down-played in the development of current understandings of dementia and accompanying modes of caring. Re-constructing dementia using a spiritual perspective based on the lived experience of dementia (spirituality being understood in its widest sense as the human quest for meaning, purpose, value and hope, as well as that which is transcendent and captured within established religions) … offers new possibilities of understanding dementia. A concentration on the spiritual contributes to a process of holistic reframing of what dementia is

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as a biological, social and spiritual phenomenon, moving us towards a perspective which captures the fullness of sufferers as relational and spiritual persons with concomitant needs. Such an approach helps resurrect the personhood of dementia sufferers and reconnects people who are by definition in the process of being disconnected from self, others and God".
That person-centred approach is very much the one adopted by two organisations to which I would like to draw your Lordships' attention. The Christian Council on Ageing Dementia Group is perhaps best known for its award-winning video "Is Anyone There?". That network first came together some 15 years ago out of a shared concern that people with dementia were often not regarded as persons with the same rights and spiritual needs as others. The council's excellent practice guide offers practical advice to carers on how an understanding of spiritual needs may be integrated into existing care plans. It seeks to point to a holistic regime of care for dementia sufferers, a regime which addresses the whole person including the spiritual dimension. The council works in close collaboration with other faith communities and with a growing number of dementia services development centres.
The second organisation to which I refer is located just across my diocesan boundary in Temple Balsall. The Katherine Leveson Foundation offers a focus for inter-disciplinary study on ageing, spirituality and social policy. It seeks to develop an understanding of spirituality as lived by older people, including those suffering from dementia, and to support them in expressing spiritual awareness. It has recently launched a resource directory for those in churches and other places who are working with older people. It offers lectures and seminars on subjects such as "Seeing the Person Behind the Dementia".
I shall quote again, this time from a former dean of Coventry. John Petty retired from our cathedral three or four years ago and is now chaplain in a residential home in Shrewsbury. He describes two worshippers who came recently to one of his services, writing that, "Nancy is Welsh", not that that is relevant. He continues:
"When I put the hymn book into her hands she simply says, 'That's heavy'. Nancy sang in her church choir and knows much of the Prayer Book. Jean is her great companion. Jean once worked for the British Council in Lisbon. They are inseparable. As you push one wheelchair alongside the other, both faces light up but if you ask them the name of their friend they couldn't tell you. A constructed sentence is beyond them and yet the Lord's Prayer, the Nunc Dimittis and the Book of Common Prayer responses flow out".
I suggest that it is probably not possible for us whose minds are still relatively unimpaired properly to evaluate the experiences of those who are able to recognise the familiar words of hymns or prayers, but unable to recognise the face of a favourite daughter or grandson. What is clear, surely, is that if we are to continue to value such people as children of God, we must also continue to treat them as though they are made in God's image. And whatever else that term may mean, it implies a capacity for a relationship with God which exceeds the purely rational.
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I have spoken about spirituality and pastoral care. That is not because I am unaware that the House is here to discuss issues of policy and the well-being of the nation. I have spoken this way because I believe that spirituality offers us a way of seeing the individuals who are the focus of the debate in a holistic and relational way. I suggest that talking of the spiritual needs of those with dementia, and, indeed, of their carers, offers a new and fresh perspective on the issue.
I do not underestimate the difficulties that the subject raises, theological difficulties as well as medical. I do not imagine a world in which worship and pastoral care are easy. Nevertheless, it is at this point that I feel Christians and other faith communities may have something to offer.
6.17 p.m.
Baroness Pitkeathley: My Lords, it is a great pleasure to speak in this debate initiated by the noble Lord, Lord Sutherland, with whom I have had a long connection through his chairing of the Royal Commission on Long-Term Care of the Elderly. However, it is a most particular pleasure to follow the splendid speech of the right reverend Prelate the Bishop of Coventry.
It is always a dilemma what to say on such an occasion, especially as the right reverend Prelate and I have not met officially, nor served on any committees together, nor even until today taken part in any debates in this House together. His Who's Who entry lists his recreations as mediaeval music and woodcutting, but I am afraid that that is no comfort to me as I happen to be tone deaf and not very competent with a carving knife. I consoled myself with the thought that it would be sufficient to say how delighted the whole House would be to welcome another distinguished Member to the Bishops' Benches, and that we looked forward to hearing from him on many occasions in future.
I need not have worried, as it was very clear from the right reverend Prelate's speech that he has the caring experience so familiar to many of us. We were honoured to share in some of that. He and I, along with many others in the House, some of whom are speaking today, share a huge interest and a passionate concern for vulnerable citizens and their carers and those facing difficulties of the kind that we are discussing. His speech was both heart-warming and inspiring. It is an honour to welcome him to this House, and we look forward to hearing him contribute to our debates and the whole legislative process many more times.
Last September, I addressed a conference in Dunedin, New Zealand, organised by the Alzheimer's Society of New Zealand. I was there to talk about the progress made for carers in the United Kingdom and I was billed as the keynote speaker. My speech went quite well, but the real keynote speaker—the real star of the conference and the one who no one will ever forget, having heard her—was the woman who herself had Alzheimer's disease. Her presentation, her honest appraisal of her illness, the effect of it on her

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husband—her carer who accompanied her—on her friends and on her whole life was the most compelling presentation I have ever heard. It allowed us a glimpse of the complex dilemmas and the sheer guts of those who cope with this affliction. She, too, spoke movingly about her spiritual journey and I was very much reminded of that during the speech of the right reverend Prelate.
The speech also gave those of us who listened to her ammunition with which to counter the claims sometimes made by those who deal with Alzheimer's patients that they would be happier if they were treated as babies. The argument goes that they lose physical and mental abilities in the opposite order to how children gain them and eventually they return to the infant state. It is a great credit to the work of many physicians and of organisations such as the Alzheimer's Society that we have learnt that acknowledging that some behaviour may be child-like does not require us to infantalise the whole person.
I am reminded of the carer who was looking after her husband, who had Alzheimer's. She said of her husband, who was a music lecturer, "He bounces up and down like a baby in time to music". But she also acknowledged that his child-like pleasure must not mean that she concludes he would now prefer nursery rhymes to listening to opera, as he used to before he was ill. That carer seemed to be very sensitive to those important nuances.
The Alzheimer's Society has led the way in engaging those who are themselves sufferers in the governance of the organisation. It has encouraged them to stand for election to the board and to participate fully. That is a fine example to all voluntary organisations, and the fact that the former chief executive, Harry Cayton—my noble friend Lord Jones mentioned him—is now leading the Government's programme on patient and public involvement will make certain that the trend towards full participation in the development of public policy will continue.
That is good news. But of course we must not forget—and your Lordships would not expect me to—that we must couple the needs of the patients with meeting the needs of those who care for them. Caring for someone in the final stages of Alzheimer's disease is a challenging and isolating experience, however great the love you bear for that person. And you often have a double loss, of course; the loss of the person you love because of the great personality changes that take place, and the loss of your own freedom and the life that you shared together.
We must remember that the needs of the carer may not always be the same as those of the patient. Indeed, they may sometimes, perhaps often, be in conflict; for example, the carer needs some time off, but the patient is unsettled and anxious when anyone else comes in as a substitute. In such situations, the social workers, the medics, the nurses or other family members, have a role as brokers, negotiating to try to meet the needs of both parties.
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I said in the debate in which some of us took part last night that huge progress has been made in recognising carers, much of it under this Government, and we must never forget it. There has been new legislation about assessment; changes to earnings limits on benefits; credit allocated to carers for a state second pension; and some easing of age restrictions on other benefits. We now have the right to time off for domestic emergencies and the new Bill will soon come before your Lordships' House, the Carers ( Equal Opportunities) Bill, which will, I hope, promote the principle of equality of opportunity for carers. It is a Private Member's Bill, sponsored by Dr Hywel Francis in the other place. I know that your Lordships will support it when it comes here, with its emphasis on promoting information given out to carers so that they know about their rights.
But however much progress has been made, we must always acknowledge that much more remains to be done. In particular, I would cite the continuation of' funding for carers' breaks—respite for someone looking after an Alzheimer's patient is absolutely essential and government funding is due to finish in 2006; the promotion of more flexible working policies; and the development of more appropriate and flexible services.
There has been a huge change, too, in the attitude of those who come into contact with carers and a real commitment to acknowledging and meeting their needs. The carers' movement, led by Carers UK, has a great deal to be proud of, not least in promoting the position which users and carers now occupy as central to policy making and the development of practice. The changes in the way community care has been delivered over the years have required not just changes in organisational and financial terms, but a huge change in the attitude of those who deliver the services.
It is one thing to say that users and carers should be at the centre of decision-making processes; it is quite another to implement that. That demands a change in the attitude of the professionals about sharing information—and issues of confidentiality surround that when it comes to Alzheimer's patients; about allowing people to make choices that others may not think are the best; about risk-taking; and about managing conflict in relationships. It is also about developing the confidence of users and carers so that they have enough self-esteem to participate in the consultation processes, which are now, I am happy to say, sometimes but not always offered in a way that is not tokenistic and which really result in changes in practice.
It requires, too, that professionals are prepared to redress the imbalance of power which exists between patients and carers and professionals. They should divest themselves of the stereotype images which they may have—typically, a carer for an Alzheimer's patient would be seen as either a martyr or a victim. not necessarily as an equal partner in the development and provision of care. It also requires society to ask some of the more difficult questions which we often shy away from: questions such as, do adult children always have a responsibility to look after their parents?

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If so, in these days of serial monogamy, does that extend to extended families? What is your moral obligation to look after your former father-in-law or your step-brother? Those are difficult questions for society, but they need to be addressed when we are thinking about these issues. There is another vexed question: do children have a right to inherit their parents' resources, or should they be used to pay for care?
The carers' movement has an admirable history of pushing us all to address these issues and to look at the rights and needs of carers, recognising them as the prime providers of community care, but never looking at their needs as in conflict with those of the person they are looking after, even if they are—and they usually are—inextricably linked together. We should never forget that the care we give for those with dementia is predicated on the unpaid care of families and community to the tune of £57 billion—I cannot resist reminding your Lordships of that—given willingly and with love and duty. That offers a shining example in any society.
6.28 p.m.
Baroness Greengross: My Lords, I congratulate the noble Lord, Lord Sutherland, with whom I had the privilege to work some time ago. We know each other well and I am delighted that he has secured this debate on what is such an important subject. I also congratulate the right reverend Prelate. Although I have worked in this field for so long, he reduced me to tears. He reminded us of the spiritual needs of many older people who, just because they suffer from one form or another of dementia, need that spirituality more than ever. They can gain such joy and pleasure from church music, a reminder of their childhood, and the comfort and knowledge that someone cares about them in a wider sense than this world. I was very moved by his speech.
I was extremely fond of an eminent geriatrician, Bernard Isaacs, who, sadly, is no longer with us. I always wished that if any of my elderly family were ill they could go to see Bernard. I loved him dearly and I always remember one remark he made; that we now experience the survival of the unfittest.
That is quite a telling remark: it is a mark of our increasing civilisation and it is a triumph but it is also an enormous tragedy. Thankfully, many people with chronic diseases survive, but the one dread that most of us share is that we may be inflicted with dementia. It haunts us because it is a tragedy when it hits us. It is a tragedy for the dementia sufferer and a tragedy for the whole family and everyone who cares for the sufferer.
The noble Baroness, Lady Pitkeathley, has much experience of what it means to be a carer. I do not want to add many words to what she said; I simply want to say that the experience of caring for someone with dementia—someone who becomes unrecognisable as the person whom we used to know and love—leads to hugely mixed emotions. The carer wants the person to
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get better. He or she knows that the sufferer will die and therefore, in some ways, wants that person to die because it will be the only escape. With those feelings go tense mixed emotions. The carer is sometimes unable to cope with those emotions and with the problems of caring, and that, of course, can lead tragically to other forms of abuse of the elderly. We know that that is often the case.
In this country, we are sometimes very pleased to be able to say that about only 5 per cent of our elderly population are in any form of residential or institutional care. However, that means that huge numbers of people who suffer from this type of disease are being looked after at home—either in their own home or in that of a member of the family—by devoted carers who must try to manage.
We must also recognise that organisations such as the Alzheimer's Disease Society and the Alzheimer's Research Trust carry out important work but they cannot deal with this huge challenge without a great deal of funding and support from governments across the world. I declare an interest in that I head the International Longevity Centre-UK network hub. It is an international organisation and, through the Alliance for Health & the Future, it is examining indicators of cognitive health across European countries—both European Union countries and accession countries. It is producing health indicators of cognitive health and benchmarks of care. It is US-funded and is looking at the huge problems that this type of disease presents to us all.
Certainly, if there is no change in the dependency rates and patterns of care that we know at present, the number of people in Europe with dementia will rise by 23 per cent by 2020. If we could do something about dementia and if the dependency rates declined by only 1 per cent per year, the numbers in care would remain constant. Therefore, if we could reduce the numbers just a little, we would start to see enormous changes in the care patterns that would be required.
Others, including the noble Lord, Lord Sutherland, spoke about the very vexed debate on the financing of health and social care and the definitions of nursing care and so on. In this country, we believe that people who need healthcare should receive it free at the point of need, and we know that there is still gross unfairness in the system. The Alzheimer's Society sent me the following quotation with its briefing:
"My mum is totally bed-bound, doubly incontinent, unable to communicate or feed herself and has swallowing difficulties. She needs care 24 hours a day. I can't understand why she has to pay for her care".
That, to me, is a health need. I hope very much, and expect, that the impact of the health ombudsman cases, the Community Care (Delayed Discharges etc.) Act and other measures will mean that more people with dementia receive continuing NHS care, paid for outside the hospital environment, as their needs are often health needs and should be recognised as such.
Recently, the Medical Director of BUPA Care Services, Clive Bowman, carried out a survey of the 15,000 residents in BUPA care homes alone. He found

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that more than one-third of the residents suffered from dementia—38 per cent in nursing homes and 31 per cent in residential homes. He said that,
"the future of care is brain failure",
unless we do something to stop it. We know that by 2010 in the UK, 840,000 people will have moderate or severe dementia; by 2050, the number will be 1.5 million; and one in 20 of those aged 70 to 79, one in five of those aged 80 to 89, and one in three of those aged 90 or over will suffer from the disease. Whenever I am in a room with many people, I look around and wonder how many of us will suffer from dementia and how many—probably the remainder—will have to care for those who have it.
Statistics provided by the Alliance for Health & the Future estimate that in Europe 5.5 million people suffer from mid or late-stage dementia—the majority with Alzheimer's—and we know that vascular dementia accounts for 20 per cent. But it is possible that some dementias are preventable. We know that many cases of dementia are undiagnosed or wrongly diagnosed. Many elderly people who suffer from clinical depression are, in a way, put aside as suffering from dementia when that is not the case. Therefore, they are not treated in the best way or as well as they might be.
There are some very hopeful signs of what it will be possible to achieve with regard to the dementias. Recently, I heard Professor Colin Blakemore talk about some encouraging results that he had encountered when carrying out research on mice. Those results were almost accidental. As part of the programme of animal welfare, some mice used in the experiments were given toys to play with—for example, tunnels to run through and things to turn around. The mice were injected with Alzheimer's and it was found that it took far longer for those which experienced a great deal of physical and mental activity to develop the disease when compared with the ones which did not. I consider that to be terribly important because genetically we are so similar to mice. That gives us much to think about.
My noble friend Lady Greenfield talks and writes a great deal about the brain's extraordinary capacity to recover from disease and to compensate for the loss of function. Therefore, we must support research efforts and we must do so in the most encouraging ways that we can.
Individually there is much that we can do. Next month at the Annual Public Health Forum, the Alliance for Health & the Future will launch guidelines for a healthy future. One of those concerns cognitive vitality. It provides a helpful contribution and makes sensible recommendations on what we might do to avoid the onset of the dementias. Those include exercises for the brain, physical activity, social activity and intellectual activity. Portsmouth University carried out a study on older people who play bingo. One may not consider that to be terribly stimulating intellectually, but the people who played bingo did not suffer so much, or so early, from dementia as those who did not. I believe that the bingo provided a
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combination of social and mental activity. The guidelines also indicate that it is important to manage stress, have enough sleep and feed the brain with a healthy diet, avoiding some of the more dangerous anti-ageing drugs and supplements that are now available. It is also important to have regular medical checks.
In conclusion, we must support research efforts. There is much to be positive about if we recognise the challenges and make worthwhile efforts to support the voluntary sector. The voluntary sector's ca re for people with dementia is extraordinary. I remember a tiny Age Concern organisation, which took people with dementia, washed them, dressed them, and sought to help them to eat and to have their social skills returned and managed that without any professional help.
I remember a hospital psychologist who tried to return people with dementia to normal living by providing activities for them in a school within the hospital. The elderly people did not want to go to the school because their memories of schooling were so dreadful. However, the psychologist had the bright idea of changing the school into a pub inside the hospital. The people suffering from dementia learned the skills in an atmosphere which they found friendly, and half of the unit of dementia sufferers were returned back into the community. Nearly all of them died at home, not in hospital.
Those kinds of experiments are very successful. Despite the fact that Alzheimer's disease is the third most costly disease, less than 2 per cent of biotechnology companies in the US, where much more is spent on this research than here, have any serious programmes for this disease. So, there is a lack of funding for research into Alzheimer's and other forms of dementia. If we could postpone the onset of Alzheimer's by two years, we could close down a huge proportion of our care institutions. That needs 10 be done as a high priority. We must support research. I hope the Minister will agree that that is a priority in this country for everyone.
6.42 p.m.
Lord Chan: My Lords, I, too, congratulate my noble friend Lord Sutherland on securing this debate, which is important for older people and their carers. I congratulate too the right reverend Prelate the Bishop of Coventry on his sensitive and excellent maiden speech.
Having heard other noble Lords, I shall confine my observations to the needs of black and other ethnic minority older people with dementia. It would appear that the incidence of Alzheimer's disease and other forms of dementia among minority ethnic groups in Britain is no different from that of white people. Epidemiological research would give more accurate data in future.
As most migrants from the Commonwealth came to Britain in the 1950s to the 1980s, their populations are ageing at different rates. In the National Census for 2001, people over 65 years of age formed 16 per cent of

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the white population but among ethnic minority groups they form 9 per cent of black Caribbeans, 5 per cent of Indians and 4 per cent of Chinese people.
Given the statistics referred to by the noble Lord, Lord Sutherland, we can expect that with the increasing number of older people, more ethnic minority people will develop Alzheimer's disease and other forms of dementia in the next decade. They are also more likely to live in poverty and poorer housing than white people due to their previous unemployment or low-paid employment and a shorter time to contribute to pensions. The implications of those factors for statutory services and the NHS to consider in terms of service delivery are significant for the following reasons.
First, older people from minority ethnic communities are not fluent in English and need trained interpreters to access mainstream services. Even those who have been educated in the English language prefer to use their mother tongue as they grow old. This development implies that health and social services will require more trained interpreters in future than today. Part of that language need may be met by recruiting bilingual professionals from a variety of ethnic minority communities engaged in the care of older people.
Secondly, both formal and anecdotal evidence suggests that ethnic minority older people have some of the worst health in the nation and are more likely to experience unsatisfactory treatment from the health and social care system. If health and social care professionals share the patient's culture, communication and satisfaction levels with patients and carers would be better. As more women survive in older age groups, they would prefer care from female professionals. Cultural background influences the care of black and minority ethnic elders. In that context, it is a fallacious stereotype to assume that ethnic minority families, "look after their own".
Today, many African, Asian, Caribbean and Chinese older people tend to live alone rather than continue to live in the extended family. However, they maintain contact and are visited by their children. Carers from ethnic minority communities complain that they do not obtain support from statutory services because they are not able to access the range of help and benefits to which they are entitled. That was discovered in research done by the Afiya Trust and the National Black Care Workers Network in 1999 and 2000. Here, I declare an interest as chairperson of the Afiya Trust, an NGO focusing on the health and social care of the minorities in Britain.
That research led to a good practice guide being published entitled, We Care Too for people working with black and minority ethnic carers. The guide was launched by the Minister of State for Health in January 2002.
The common need of all older people, including those suffering from dementia, is to access services that treat them effectively and with respect and dignity. The so-called "colour blind" approach followed by many
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mainstream services has not provided the holistic care needed by ethnic minority older people. For first generation migrant older people, the services provided would involve information in different languages, involvement of community services, availability of staff who speak the same language, provision of appropriate food and access to familiar skin and hair products. Services would be more effective if they respond to different religious and cultural needs.
There have been some initiatives from the statutory sector as well as from voluntary agencies such as Age Concern England and Help the Aged that have promoted the health needs of ethnic minority older people. But continuing research and surveys show that while there are excellent examples of good practice, provision for the diverse needs of ethnic minority older people in the United Kingdom falls far short of the required level. While the National Service Framework for Older People makes only brief reference to ethnic minority older people, it does provide one of the most powerful tools to ensure effective service provision. It is now time to put into practice systems to ensure an appropriate response to needs.
Respite care is a priority because ethnic minority carers encounter particular difficulties accessing respite care for the older person with dementia living with them. Difficulties range from language barriers to concerns about whether the person for whom they care would feel secure and comfortable in respite care. High-quality respite care that caters for the needs of ethnic minority older people may be the factor that allows an individual to continue living in the community with the help of his or her carer rather than being moved into permanent residential care.
So, what can be done to improve the experience of ethnic minority older people and their carers? The Government introduced the Race Relations (Amendment) Act in November 2000. That powerful legislation requires every department in the statutory sector to prepare race equality schemes (RES) to improve the quality of services that they provide and experienced by their ethnic minority users.
Race equality schemes were to be implemented in May 2002 by all government bodies, including the NHS and local government services, but their development and implementation has been patchy and requires monitoring. If these schemes were effectively implemented, ethnic minority older people, including those suffering from dementia, and their carers would experience a better quality of care.
6.50 p.m.
The Earl of Listowel: My Lords, I too thank my noble friend Lord Sutherland for securing this deeply important debate. Noble Lords have referred to the importance of manpower planning and the need to consider the workforce. I would like to concentrate on the community and residential care aspect of this topic; to say a few tentative words on the training and status of workers with adults with dementia in residential care; and to reflect on the experience of current practice in residential childcare and how that might help inform us.

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In residential childcare there has been a historic divergence with Continental practice. I am told that this took place some time after the Seebohm reforms. In Denmark and Germany the majority of the residential childcare workforce has more than two years of high-quality training before working in such settings. In Denmark the great majority has three years of high-quality training before working with children who are recovering from trauma either due to neglect or abuse.
In 1998, I am given to understand that of workers in this country working in residential settings with children with worse histories than those in Denmark and Germany, 80 per cent had no relevant qualification in what they were doing. So there is a historic divergence in practice between ourselves and the Continent. One remedy which was sought to be made to this in the 1990s was to train-up residential care workers in social work qualifications to ensure that they had CQSWs. It was found that once the residential childcare worker had a social work qualification he or she moved into social work as that was better remunerated and had a higher status. So, regrettably that initiative did not work.
The Government have recognised the problem in this area and have brought forward several important initiatives to improve the circumstances in these settings. Among those is a qualification at national vocational qualification level 3 in childcare for the whole of the workforce. That is an admirable aim and will help to remove those workers who have difficulty in writing and reading reports and in managing numbers. It also is very helpful in improving competency in a number of areas.
But NVQs do not appear to address the problem of status for social care workers in these settings. They can see that social workers now have a three-year degree in social work, whereas they are being given something very different. It is hard to see how they will be properly remunerated for the very challenging work they do unless they have a training which is somewhat more similar to that given to social workers in terms of its depth. I should just add that those studying NVQs are expected to study in their own time; they are not given paid time to do this necessary training.
Perhaps it is time that we gave more thought to a full-blooded dedicated residential care training. The training I am most familiar with is the Postgraduate Certificate in Education where trainee teachers have a placement in a school with which they develop a special relationship over a period of time. A very thorough grounding in theory runs in tandem with that over two years. That seems to be a very thorough and necessary grounding in this important profession.
In Iceland, I understand, there is training for prison staff. Your Lordships may feel that that is quite a jump. But prison staff also work in a residential setting, often with mentally disordered people who are difficult to manage. They serve a one-year probationary period in a prison and one year in a special college which includes a mock-up of a prison for practice. It is recognised that people in residential
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settings working in challenging situations need to be highly trained, very well prepared and given a good grounding. I regret that training for prison officers in this country is very far from that. I wonder whether we might try to be more ambitious in terms of the training for those who work in such settings.
On the Continent work with children is informed by the philosophy of pedagogy. That model has been around for more than 60 years. It is an holistic approach to bringing out the best in children and ensuring that the best practice is employed. In Denmark pedagogues—people trained in this theory—also work with elderly people because it is recognised that there are similarities between the needs of children as they grow into adulthood and what happens to adults as they sometimes enter their second childhood.
In conclusion, living and working with troubled children or elderly people who have some mental impairment is a special task, which is distinct from social work. It is immensely challenging. I have run workshops in the past with children with emotional behavioural difficulties. I have never done anything as challenging or as stressful since.
I was speaking to the manager of a children's home recently. It is quite run-of-the-mill for workers to be assaulted by the children because those children have experienced such damage in the past. The workers have to think on their feet all the time and be extremely strategic so that they can pre-empt this behaviour.
I am sure that there are great disjunctions between residential settings for children and residential settings for those adults we are discussing now, but I hope that the Minister will take the opportunity to look at current practice in residential childcare and see how that practice might benefit adults in residential care. Perhaps he might care to pay particular attention to what is happening in Scotland with the Scottish Institute for Residential Childcare which provides high quality free consultation and training to residential childcare establishments and really is a manifestation of the greater perhaps commitment of the assembly in Scotland towards residential childcare than we currently have in this country.
The National Children's Bureau is currently looking at the Scottish Institute to see how we might be able to develop such an institute in this country. We might also like to think about whether there may be an opportunity to develop a common workforce pool between those who care for children in residential settings and those who care for elderly people. One reason specific training for residential care staff has not been developed for children is that it was considered that there are not a sufficient number of residential care workers to make it viable. There is that possibility if we do not get the drugs that we hope we will get and do not manage to avoid increasing numbers of elderly people developing dementia in the future.
The right reverend Prelate the Bishop of Coventry, in his moving and illuminating speech, observed the need to think about the relational and spiritual sides of

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working with such people. I submit that, if staff in residential settings are to bear that in mind and to keep treating their clients not as patients but as people, they need to be highly trained, highly skilled and fit for such work.
7 p.m.
Lord Walton of Detchant: My Lords, I, too, am very grateful to my noble friend Lord Sutherland for initiating this debate, in which we have heard a series of compelling and well-informed contributions. I, too, was much moved by the maiden speech of the right reverend Prelate the Bishop of Coventry.
The dementias are a group of physical organic diseases of the brain that are different in type, although the commonest is Alzheimer's disease. They result almost always in progressive disintegration of memory, intellect and personality. One form of dementia, less common than Alzheimer's disease, is fronto-temporal dementia; another, which the noble Baroness, Lady Finlay, mentioned, is Lewy body dementia, in which certain Lewy bodies are present throughout the brain, which is often, if not invariably, associated with Parkinson's disease. Then there is the relatively common form of vascular dementia or multi-infarct dementia, which commonly results from repeated minor strokes.
Over the years, there has been a great deal of diagnostic confusion as between Alzheimer's disease and vascular dementia. Regrettably, at the moment we do not have a single satisfactory diagnostic marker for Alzheimer's disease. That is crucial because, if one is to carry out research, upon which I shall concentrate in my remarks, it is important that one knows what disease one is treating at that time. There have been a number of suggestions relating to diagnostic markers. Under 10 per cent of cases of Alzheimer's disease are inherited, and three genes have been identified that are associated with those inherited forms of the condition, many of them of early onset. When I was a medical student I was taught that dementia developing before the age of 65—pre-senile dementia, as it was then called—was Alzheimer's disease, but that senile dementia was the disease that came on after 65. It is a very artificial barrier, but we now know that practically all of it is Alzheimer's disease and there is no age differentiation, except for the fact that some genetically determined forms of Alzheimer's disease are associated with early onset.
A marker has been identified called ApoE2, which is often associated with earlier forms of Alzheimer's disease; whereas a much commoner marker, called ApoE4, is more often associated with the late onset of Alzheimer's disease, which is sporadic and not inherited, therefore not genetically determined. Sadly, neither of those markers, which have been recognised for some years, is sufficiently accurate to give a totally accurate diagnosis. Even the most sophisticated psychometric testing, brain imaging and other methods still mean that we are only 85 to 90 per cent accurate in diagnosing Alzheimer's disease. We
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urgently need from research much more precise diagnostic information to help us to be certain with what we are dealing.
Many years ago, in Newcastle-upon-Tyne, I was associated with certain colleagues, a psychiatrist called Martin Roth, a geriatrician called Gary Blessed and a neuropathologist called Bernard Tomlinson, who carried out a number of very important pieces of research in which patients admitted for physical illness to geriatric wards volunteered to undergo psychometric testing and later made it clear in their wills that they wished their brains to be examined after death. They discovered during those investigations that the kind of problems that all of us encounter as we become older—difficulty in remembering proper names, known as benign senescent forgetfulness, or, if you prefer, benign cognitive impairment—was associated with increasing age and an increased concentration of structures called senile plaques in the brain. They measured the concentration of those senile plaques according to the number that they could find in a high-powered field under the microscope. But when the concentration of senile plaques became very much greater, one crossed the border into Alzheimer's disease. I shall return to the senile plaque in a moment, because it is crucial for future research.
At that time, biochemical studies were also carried out in which Perrys, in Newcastle, and Bowen and others, in London, took samples of brain obtained at post mortem and measured the concentration of acetylcholine in the brain. Acetylcholine is a common transmitter in the nervous system that conveys messages from one nerve ending to another. That substance is degraded by an enzyme called cholinesterase. They discovered in the Alzheimer brains a very low concentration of acetylcholine, hence they started by later trying to treat Alzheimer's disease by giving precursors of acetylcholine such as lecithin. But, as my noble friend Lady Finlay, has said, subsequent research demonstrated clearly that it was better to use drugs that blocked cholinesterase in order to allow the acetylcholine in the brain to persist for longer.
A generation of drugs, approved and recommended by the National Institute for Clinical Excellence, treats the disease in that way. One of those, donepezil, whose trade name is Aricept, has been shown in certain trials to help 30 to 40 per cent of patients with early Alzheimer's disease. There is evidence that sometimes it may even delay patients' need for long-term residential care for 18 months or so. It has therefore been very helpful. However, the problem is that the reduction in acetylcholine in the brain is not a primary cause of the disease; it is an epiphenomenon, so in a sense those drugs treat only the symptoms.
Pilot studies have been used in the treatment of Alzheimer's disease to test a series of things, such as oestrogens, vitamin E as an antioxidant and anti-inflammatory agents. Even more recently, there has been a suggestion that statins, which reduce the blood cholesterol, may have a beneficial effect. But larger trials of those types of treatment have proved on the whole to be ineffective.

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A year or two ago, in the United States, a company called Elan Pharmaceuticals worked with transgenic mice that developed in their brains beta amyloid plaques, which are senile plaques identical to those seen in the examination of the brains of patients suffering from Alzheimer's disease. There is now clear evidence that the accumulation of beta amyloid in those plaques seems to be the primary cause of the degeneration that occurs in such patients. The company took beta amyloid peptide and mixed it with a substance known to stimulate the immune system. That was a kind of immunisation or vaccination against the Alzheimer phenomenon. In injecting that type of substance into the mice, researchers found a striking reduction in the number of amyloid plaques in their brains and considerable improvement in their memory tests, which were designed by animal psychologists.
Other research teams in St Louis and at the Johns Hopkins School of Medicine in Baltimore have also found evidence that antibody therapy can effectively slow the deposition of beta amyloid or even remove it from the brain. That is all extremely helpful. However, in 2002, preliminary trials in human subjects with Alzheimer's disease had to be terminated because of inflammatory complications that were, in certain instances, serious. But expectation remains high in the research community and in the National Institute on Aging at the National Institutes of Health—the NIH—in the United States that the immunisation approach may yet produce effective treatment for Alzheimer's disease. We are certainly learning more and more about the metabolism of the amyloid precursor protein and beta amyloid. There is every likelihood that the result of that and other research will improve the diagnostic tools that we have and should allow us to develop treatments for Alzheimer's disease.
This is an extremely encouraging field. I have not concentrated on care, but I must say in passing that, when I lived in Burford in the Cotswolds, there was an organisation called SPECAL, which was a joint initiative taken by the Alzheimer's Society, local social services and the NHS, through its primary care trust, which produced outstanding day care services for patients with Alzheimer's disease. I believe that that model has been copied in other parts of the country, and it makes a major contribution to care. The noble Lord, Lord Warner, will not therefore be surprised when, after talking about the research in the United States, I say to him that I hope that we will see a considerable development of research in the United Kingdom. I echo the views expressed by many other speakers about the crucial importance of the long-term care of patients in the terminal stages of the disease, medically and socially, in relieving the sometimes intolerable burden on the families and carers, as the noble Baroness, Lady Pitkeathley, and others have said.
7.11 p.m.
Baroness Barker: My Lords, I too thank the noble Lord, Lord Sutherland of Houndwood, for initiating this debate. It has been remarkable in many ways, and
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there have been outstanding contributions, not least that of the right reverend Prelate the Bishop of Coventry. His speech was moving and insightful, and it will stay with many of us who heard it for a long time. I welcome him warmly and look forward to his contributions in your Lordships' House.
Among all those distinguished contributions, it is important to start with the growing consciousness in society of the existence of Alzheimer's disease. It came home to me in the past few weeks. In the past six weeks, the world of football has lost Bob Stokoe and Ally MacLeod, both distinguished in their field and in their country, to dementia-related illness. However, I say to the noble Lord, Lord Sutherland of Houndwood, as a Scot, that perhaps one of the biggest losses in the past few weeks has been the comedian Rikki Fulton, a man beloved by all Scots for his outstanding ability to provide a comic take on our lives with his wonderful characters—the Reverend I M Jolly lives in the heart of most Scots people. Rikki died about four weeks ago, having had Alzheimer's for the past couple of years. We miss him.
Other speakers talked about the incidence of dementia in a population that, for good reasons, is becoming more long-lived. One of the many consequences is that the population of those who have dementia and those who care for them is becoming increasingly diverse. That too is interesting. The noble Lord, Lord Chan, spoke eloquently about the black and ethnic communities, in which dementia is becoming a significant issue for the first time. He pointed strongly to the need for carers from this country and this culture to begin to learn about the cultural differences, so that care for such people is of a sufficiently high standard.
I take the opportunity to congratulate the Alzheimer's Society's lesbian and gay carers' project on securing funding from Comic Relief to enable it to run a helpline and develop support systems for carers and training for professionals. Your Lordships should think about what it would be like to be a carer and go through all the things that the noble Baroness, Lady Pitkeathley, talked about but not to be recognised and to be treated as somebody's brother or a distant relative of the person for whom you care. That must cause double hurt and trauma.
Perhaps inevitably, today's debate will focus our minds on the practicalities of caring, but I want to say quite strongly something that nobody else, I think, has focused on: dementia is not an inevitable part of ageing. We must never allow people to think so. For those for whom it is part of ageing, the biggest problem by far is gaining access to appropriate and timely care. The Government's policy on the funding of personal care and of continuing NHS care, which has been talked about by several speakers, has unintended consequences that are quite harmful to the care offered to people and to the carers. The current policy on the funding of care that takes place in hospital is dangerous. Those of us who sat through proceedings on the Community Care (Delayed Discharges etc.) Bill heard repeatedly from Ministers that hospitals were dangerous places for older people. They are full of

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infections such as MRSA, and we know that people with dementia are particularly susceptible to such infections.
Furthermore, it may be that, for many people, care is better when it is delivered in other settings. The right reverend Prelate talked a lot about care in care homes and the added dimensions to that. I heard recently about some research being conducted at the University of Kent that shows that, as the noble Lord, Lord Walton of Detchant, told us, it is possible to detect different chemical reactions in people's bodies. I cannot begin to use the terminology that the noble Lord used, but the research in Canterbury showed that singing brought about responses in people that were detectable in the chemicals in their body. I am certain that the right reverend Prelate is right: singing hymns has a beneficial effect. However, hospitals are not the place to do it, and busy nursing staff cannot go to such a level of detail.
The ombudsman has ruled that the NHS continuing care criteria and the way in which they are selectively and restrictively applied throughout the country are having a detrimental effect on carers. The department has consistently said that it has no plans to alter the guidance that it issues to strategic health authorities; yet, we had another demonstration in the past few weeks of how confusing the guidance is. How many ombudsman's reports must there be, before we get clear guidance from the department about NHS continuing care rulings? How many carers are having their case reassessed? Welcome as those re-assessments are, there is still a lack of clarity about eligibility. Will the reassessments be completed by March 2004? Will the many cases of people who live at home and wish to be cared for at home be fully funded, as a consequence of the ombudsman's ruling that care that takes place at home can be? Can the Minister also say how many strategic health authorities will have their criteria and assessment tools changed in accordance with the new standards as set out by the ombudsman by April 2004, as they are supposed to do?
I am extremely pleased with one particular part of the ombudsman's ruling; namely, that the psychological needs of people with Alzheimer's should be taken into account. That is something which has been wholly overlooked in the past. It hit home with me when a young man that I know of developed dementia at a very young age. He had been a psychiatric nurse and had nursed people with dementia. His wife wanted to care for him at home during the day. The professionals insisted that he should go to a day centre, which was on the second floor of a hospital block. The man used to walk around all day screaming. It was not until he opened a window and climbed down a drainpipe that the staff finally got the message that he wanted to be at home. He did not want to be there.
The noble Baroness, Lady Pitkeathley, is right. Professionals should receive training to understand that the needs of carers can be the same as—not in
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opposition to—the needs of those for whom they care. That is fundamental to good care and care that helps the psychological well being of those concerned.
Finally, there is much in our residential care sector that is good and should be encouraged. As we know, there is also residential and nursing care that is of an unacceptably low level. I point noble Lords to the work done by my honourable friend in another place, Mr Paul Burstow, about the over-prescription of neuroleptic drugs in order to keep older people with challenging behaviour quiet rather than to address the causes of their distress.
But most care home owners are extremely good and care for the people that live with them. Many care home owners have residents who are of much greater levels of dependency than their homes are registered for. That is for a very benign reason: that place is that person's home. The owners do not want them to move, nor do the people want to move. We should recognise that the number of dementia care places that there are in reality is well in excess of those in the statistics. They are just not recognised as such.
We ought to move towards a situation where we are not trying to fit people with Alzheimer's and other forms of dementia into increasingly scarce care places. I believe that we ought to train not just specialist mental health staff, but all staff—dentists, podiatrists, community nurses—working in the community, who enable carers and people with Alzheimer's to continue living in the community to do so. It is time that dementia care stopped being such a rarefied speciality and became a more general part of general medicine and community medicine.
The recent ombudsman's ruling takes away yet another of the straws that is holding up the Government's policy on NHS continuing care and personal care. The noble Lord, Lord Sutherland, is right. Until such time as the questions of good nursing care, who funds it and where are sorted out, people with Alzheimer's and their carers will continue living lives full of unnecessary uncertainty and sometimes unnecessary cruelty from a system that really should care for them much better.
7.24 p.m.
Earl Howe: My Lords, I often feel that the essence of a good debate is that those who participate should come away at the end feeling enlightened by the contributions of others and hopeful that the occasion may in some small way at least prove a force for good. I believe that we may say just that about the debate today, which I, for one, have found immensely informative and valuable. Our thanks are certainly due to the noble Lord, Lord Sutherland, for introducing the debate so ably, and for the many excellent contributions that followed, not least, the most uplifting speech made by the right reverent Prelate the Bishop of Coventry.
The language of 21st century healthcare is the language of choice and of patient empowerment. Those who are afflicted with dementia or Alzheimer's progress to a state in which personal empowerment is

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meaningless, which is why the test of good care for dementia patients is surely the degree to which they benefit from those things that we imagine they would have chosen for themselves had they been able to do so, perhaps the chief of which, at a human level, is simple kindness.
In terms of policy making, governments and societies are to be judged by the way that they look after those least able to look after themselves. It is that overarching thought that should, I suggest. guide us as we approach the subject of this debate. Whatever the numbers involved, the principle is the same. But the numbers are nevertheless sobering—750,000 people in the UK suffer from dementia, including one in five people over the age of 80. Unfortunately, those numbers will not get any smaller. We are looking, therefore, at a major area of health and social care policy.
Yet, despite that, if I, as a close relative of someone with dementia, wish to try to exercise choice on behalf of that person, I will find that the dice are loaded against me in a whole variety of ways. To echo the noble Baroness, Lady Finlay, for a start, without the mental incapacity legislation that the Government have promised, I can have no legal right to take any decision on behalf of my relation or even to be consulted about such decisions. In practice, of course, it is likely that I would be consulted. But what about an elderly person with no close family? We can see how important it is that someone in that position should be given the opportunity to appoint an advocate for them—a carer or, perhaps, a friend.
The significance of giving someone the legal right to represent you when you are no longer capable of taking decisions for yourself is perhaps most obvious when it comes to making a choice about the right care setting. The Alzheimer's Disease Society tell us that the type of care and support provided to a patient with dementia can have a huge impact on his or her quality of life. For those who need a residential setting, with staff who are properly trained in the care of dementia, the choice is in truth extremely limited. Although as many as three-quarters of all people in long-term care have dementia, only about 10 per cent of care staff will have any training in it.
A survey of residential and nursing homes three years ago found that not a single home surveyed showed even a fair standard of care for people with dementia. As I understand it, the official rule is that only homes registered to do so can accept residents with Alzheimer's, although one must suspect that this may he a rule honoured more in the breach than in the observance. It is no surprise that many people face a long delay in accessing a suitable care home or else are forced to move to one which is a long way from their closest family. As I researched for this debate, I found myself in increasing sympathy with the position taken by the Alzheimer's Disease Society, and echoed in large measure by the noble Earl, Lord Listowel; that national minimum standards for care homes need to evolve to include requirements for training which focus directly on the needs of individual groups of patients.
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The avoidable disaster that has taken place over the seven years of the present Government is what has happened to the care home industry. At a time when demand for residential care is growing, we have seen a contraction of 70,000 in the number of care home beds since 1997, equivalent to 13 per cent of capacity. Of course the situation is not the same in all areas of the country, as the noble Lord, Lord Sutherland, reminded us. But the south of England has been particularly hard hit.
The closure of care homes is not attributable to a single cause, but there is absolutely no doubt that the over-prescriptive nature of the original set of national minimum standards introduced under the Care Standards Act 2000 forced closure on to many homes whose owners realised that they could not or could not afford to undertake the kinds of building alterations which the standards looked likely to impose on them. In the event, the Government performed a U-turn on some of the most prescriptive of the standards for existing homes, exempting existing care homes from their scope, something for which I for one had been arguing consistently, but that was not before many hundreds of care home owners had taken fright and closed down.
All of us are in favour of higher standards—how could we not be?—but the risk that you run by adopting a tape-measure approach to standard setting is that you lose sight of the things that really matter to an elderly person. That is the quality of care—in other words, the intangible quality of "TLC" that they receive. If the result of standard setting is the forced closure of homes, I am afraid there can be only one consequence, which is that vulnerable residents will find their lives disrupted. In some cases that disruption is enough to precipitate death, a danger that the Government have themselves recognised.
I hope and believe that the care home sector has now stabilised, but clearly there is much more to do. If you look at the number of care home places per 100 people over the age of 65, the average across the country is 5.7. However, in the northern home counties, including my own, Buckinghamshire, the supply ratio is 4.6, while in London it is 3.8—a dangerously low level and a full one-third lower than the national average. The alarming prediction at present is that overall demand for care home places will outstrip supply by next year.
So, even in a matter like the choice of a care home, the dice are loaded against the dementia patient. But the dice are similarly loaded when it comes, as we have heard, to a patient's entitlement to free care. The Coughlan judgment, which gave rise to the Department of Health guidance of 1999, appeared at the time to signal the beginning of greater clarity on the question of who was eligible for free nursing care in nursing homes, particularly in relation to the chronically ill. What we found, though, was that some local authorities were misinterpreting the Department of Health guidance so as to deny free nursing care to those who were apparently entitled to it. A year ago the health service ombudsman reported precisely to that effect.

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Last month the ombudsman reported again on the case of Malcolm Pointon, a man with Alzheimer's disease whose care at home the local PCT had refused to fund fully. She agreed that Mr Pointon's case should have been classed as NHS continuing care and said that in making a decision of this kind a person's psychological needs should be recognised. There is an obvious message here for residential homes as well as dementia patients looked after at home, and I think we must ask the Government whether the misapplication of the DoH guidelines which gave rise to the Pointon case, as well as others, is something that they will now look into. I am in no doubt that some local authorities have moved heaven and earth to avoid their financial responsibilities towards dementia patients. My noble friend Lady Chalker has spoken to me about one particularly appalling case in Southend-on-Sea of a sectioned man whose need for residential nursing care has been emphatically confirmed by a mental health review tribunal, but who is being denied that care by the local authority.
It is the view of the Alzheimer's Society that people with dementia are effectively being discriminated against by the NHS because few sufferers meet the NHS continuing care criteria as set by the Coughlan judgment. What is certainly true is that the postcode lottery is alive and kicking in this area. Standard 2 of the National Service Framework for Older People, which called for a single, nationwide assessment process to decide who is eligible for free NHS continuing care, has been with us for almost two years, but the Alzheimer's Society is no less worried than before that the assessment process varies according to where you live.
The difficulty in many areas is what is commonly known as "system bias". The ombudsman stated in her earlier report that the distinction between nursing care and social care can easily become blurred. In particular there is an increasing trend for nurses to provide services that would previously have been offered only by doctors, and for care assistants to take on roles previously reserved for registered nurses. Care provided by care assistants does not at present qualify for free NHS continuing care. A decade ago, similar care might have had to be offered by registered nurses.
There is some evidence that this system bias has led to an increasing proportion of the elderly paying for their residential care. Since 1997 the number of older people paying their own fees has increased by 20 per cent. Personally, I do not think that there should be any argument. Care provided by trained care staff who specialise in providing nursing care to dementia sufferers should qualify as nursing care. To do anything else looks like splitting hairs simply in order to shield the taxpayer.
I have not mentioned medication, but I hope that the Minister will say something when he comes to speak about the postcode lottery that continues in the prescribing of Aricept, Exelon and Reminyl, and the critical need for early diagnosis of Alzheimer's disease to enable these drugs to be used to maximum advantage. The same applies to the newer drug, Ebixa,
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which is licensed for moderate to severe Alzheimer's disease. There is an unacceptable variation across the country in the availability of these treatments which, I believe, only the appointment of more specialists is likely to ameliorate.
Like other noble Lords, I pay tribute to the work of carers, which is always difficult, usually unsung and unremunerated, and which enables thousands of dementia sufferers to remain looked after in their own homes, sometimes for many years. It is in that context especially that the value of the licensed anti-dementia drugs is most keenly felt.
As we work towards higher standards, the empowerment of patients and carers, better treatments and better training, I hope that the ideal for the care of these most vulnerable individuals articulated by all speakers in this debate is indeed within our grasp.
7.37 p.m.
Lord Warner: My Lords, along with other noble Lords I am grateful to the noble Lord, Lord Sutherland, for giving us an opportunity to discuss this important topic. I am grateful too for his recognition of the increased investment into care of the elderly that the Government have made. I join him and others in paying tribute to the work of the Alzheimer's Society. In fact, its new chief executive used to work for me, which may totally destroy his public reputation, of course.
I also pay tribute to the moving and thoughtful maiden speech of the right reverend Prelate the Bishop of Coventry. We look forward to his further contributions in this House. I agree with the noble Earl, Lord Howe, that the debate has been informative and a force for good.
As noble Lords have said, there are probably around 700,000 people in the United Kingdom with dementia requiring care and support. By 2050, that number will have grown to around 1.2 million. The noble Baroness, Lady Greengross, illustrated the incentive this provides all of us to try to reduce the growth in that rate and its impact on services. Although in many instances support comes from family and friends—I shall return to that later—a great deal is provided by the statutory and voluntary sectors.
The first point I should like to address is one that was raised by a number of noble Lords concerning the capacity of the care home sector. The Laing & Buisson Care of Elderly People market survey, published in July 2003, put the national bed capacity in care homes from all sectors at 470,000, with demand estimated to be around 460,000. The survey also indicated that homes are closing at a slower rate than in either of the previous two years. We accept, as a number of noble Lords pointed out, that there are parts of the country where homes have closed in such numbers that a person's choice of care home is severely limited, and that there are local shortages and problems to be addressed. But I do not believe that this is a national crisis.

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Estimates of the number of people with dementia in care homes arc, we acknowledge, as high as two-thirds. That is why many councils have increased, or are looking to increase, their commissioning of specialist provision for people with dementia.
A number of noble Lords have raised issues in regard to medication. Although the care of older people relies on a complex arrangement of services across a range of settings, of particular importance to the treatment of those with dementia is the use of medication. The treatment of those with behavioural problems requires very careful consideration and planning. As the noble Lord, Lord Walton, and the noble Baroness, Lady Finlay, have reminded us, the disease classifications in this area can be extremely difficult.
Concern has been expressed in the past about inappropriate and over-prescribing of new atypical antipsychotic drugs for people with dementia, especially those older people in care homes. These new drugs can be an effective way of managing a range of conditions. However, it is important that they are used appropriately and as part of a wider package of care that, where possible, includes non-pharmacological interventions.
Yesterday, the Committee on the Safety of Medicines recommended that the use of two atypical antipsychotic drugs—Risperidone and Olanzapine—be avoided in the treatment of patients with dementia because of an increased risk of strokes. These drugs are not licensed for the treatment of patients with dementia. I hope this will be seen as an opportunity for local clinicians and care managers to look again at the range of treatments available for treating those with dementia, with a view to ensuring that the most appropriate and beneficial services are delivered.
The pharmacological treatment of dementia has been the subject of work conducted by the National Institute for Clinical Excellence, as the noble Baroness, Lady Finlay, and other noble Lords have said. NICE has already produced guidelines on the use of anti-dementia drugs and is currently in the process of producing further guidance on all aspects of treating patients with dementia.
I acknowledge to the noble Earl, Lord Howe, that there have been variations in implementing NICE guidance but, as I have said in public before, we are on the case in this area; improvements are being made; and all SHAs are trying to monitor the progress made by PCTs in the application of NICE guidance.
Turning to the planning and performance management of the system, the development of the right services, in the right place and at the right time, is important if those with dementia are to get the care they need. Central to service improvement is the National Service Framework for Older People, launched three years ago. It is important to emphasise that this framework is a 10-year plan—it is not a two-year or three-year plan but a 10-year plan—and it contains a standard dedicated to the improvement of mental health services for older people.
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The Priorities and Planning Framework for 2003–06 requires protocols to be in place across all health and social care systems by April 2004 to develop and provide integrated services for the care and management of older people with mental health problems. New performance indicators are being established to measure progress and the Commission for Health Audit and Inspection will this year complete an inspection of these services as part of the wider National Service Framework for Older People inspection.
I turn to the issue of research, to which a number of noble Lords, including the noble Lord, Lord Walton, and the noble Baronesses, Lady Finlay and Lady Greengross, referred. I agree that we have to do all we can to support research in this area. During the past few years, the Government have organised nearly £40 million of research on dementia via the Medical Research Council and the NHS Policy Research Programme. We need to be optimistic about this research investment, as the noble Lord, Lord Sutherland, and others have indicated.
I am grateful to the noble Baroness, Lady Greengross, for her information about the cognitive vitality of the benefits of bingo. I shall certainly pass on this information to my 87 year-old mother, who is an avid fan.
I turn now to the workforce issues, which have been raised by a number of noble Lords. Having the best services in place for people with dementia relies on an appropriate workforce. I recognise that there is a journey to travel in this area, as a number of noble Lords have mentioned. The department has convened an Older People Care Group workforce team to consider anew the workforce and training needs of those working with older people. This approach brings together a wide range of people. The workforce team has also established a subgroup to look particularly at dementia services.
We need more flexibility and there is much to be done, as a number of noble Lords have suggested, but there are some gleams of light such as the Croydon memory service, which is a one-stop shop for people of different ages with memory problems. Assessments can be done either by health or social workers and there is good access for people from ethnic minority backgrounds.
A number of noble Lords touched on the issue of carers. But professional care and support in this country is only one side of the coin. The majority of people with dementia are cared for at home, which can be a very demanding and exhausting task for their carers. I share the concern of all noble Lords that we recognise the contribution and altruism of carers and what they do in very difficult circumstances.
As the noble Baroness, Lady Pitkeathley, mentioned, the Government have done more to recognise the contribution and concerns of carers. We developed the national carers strategy in 1999 with carers and the organisations which represent them. I should like to pay tribute to the work that my noble friend Lady Pitkeathley has contributed to the area of carers over a long period of time.

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A carers grant was introduced in 1999 to support councils in providing breaks and services for carers in England. The grant has been increased annually and has provided an extra £225 million over the past four years. It is worth £100 million this year and by 2005–06 it will be £185 million, helping an additional 130,000 carers. Councils will be able to use the money to give carers help with taking a break from caring and also to give them ongoing support with caring.
A number of noble Lords raised the issue of personal care. All the initiatives we are taking to improve services for those with dementia and their carers are based on making services more person centred, and we believe that better choice and better services are beginning to be provided. It is worth quoting here from the National Service Framework for Older People in Standard Two:
"Older people and their carers should receive person-centred care and services which respect them as individuals and which are arranged around their needs".
It should,
"recognise individual differences and specific needs … including cultural and religious differences".
I hope that this reassures the noble Lord, Lord Chan, and the right reverend Prelate to some extent, but I recognise that we need to do more to make services accessible to ethnic minority older people.
As to the issue of race equality schemes, which was raised by the noble Lord, Lord Chan, we have launched a 10-point plan to ensure that black and ethnic minority groups are equally represented at all levels of the NHS. Trevor Phillips, chairman of the Commission for Racial Equality, is chairing the group that will be working on this issue.
Many, including the noble Lord, Lord Sutherland, feel that to offer truly person-centred services we must make all personal care free. We respect those views, but the Government have taken a different view and do not accept that this is a flaw at the heart of their policy. In their response to the Royal Commission on Long Term Care, which was chaired in such a distinguished manner by the noble Lord, Lord Sutherland, and which formed part of the NHS Plan, the Government stressed that free personal care for everyone would be costly, would not be guaranteed to lead to service improvements and would not help the poorest members of society.
Making personal care free for everyone carries a substantial cost, both now and in the future. It would consume most of the additional resources being made available for older people. We believe that the funding available should be used to help promote the independence of all older people. Free personal care for all would not achieve this. It would be difficult to distinguish between elderly people with different conditions.
At the moment, seven out of 10 older care home residents already have some or all of their personal care costs paid by their local council. If all additional money for older people were to be used to provide
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personal care to the rest of the older population, the frailer and poorer members of society—those in most need—would not benefit.
In July 2002, the then Secretary of State for Health, Alan Milburn, announced a wide-ranging package of measures radically to reform services for older people. By 2006, compared with the resources available today, another £1 billion a year will be spent on social services for older people. The package focuses on six main themes: faster assessment; stabilising the care home sector, which I have talked about; expanding the range of services; easier access to free community equipment; increased choices for older people; and more support for carers. All these services are of great relevance to older people with dementia.
With regard to intermediate care, this will build on the development of intermediate care services, heralded in the NHS Plan and funded to the tune of £900 million. Intermediate care is crucial to the care of all older people as it promotes care close to one's home in one's home, wherever possible. Hospitalisation for older people can lead to institutionalisation, and loss of independence and dignity. Older people prefer to be cared for at home. We aim to ensure through the initiatives outlined that they are able to exercise this choice.
A number of noble Lords, particularly the noble Baroness, Lady Barker, raised issues relating to ombudsman cases. The noble Baroness asked about progress on continuing care, and the pros and cons of guidance following the Health Service Ombudsman's judgment in the Coughlan case. Since publication of the report in February 2003, good progress has been made in investigating cases in which people may have been wrongly denied continuing care in the past.
I reiterate that the care people with Alzheimer's or any other condition receive from social services or the NHS should be determined by the assessed needs of each individual. That has consistently been the Government's policy. It is not, therefore, possible to say that in all cases, in any particular setting, all care will be provided either by the NHS or social services. However, the existing guidance, issued in the summer of 2001 in response to the Coughlan judgment, made it clear that,
"the setting of care should not be the sole or main determinant of eligibility. Continuing NHS health care does not have to be provided in an NHS hospital and could be provided in a nursing home, hospice, or the individual's own home".
It seems clear that continuing care may be provided in the home.
The same guidance also discusses the various aspects of eligibility criteria, including that,
"the individual has a rapidly deteriorating or unstable medical, physical or mental health condition"
and may require support from the NHS. Again, the guidance seems to cover the issue the noble Baroness raised.
On current activity in response to that ombudsman's report, all SHAs—strategic health authorities—are fully engaged in investigating cases of possible recompense brought to their attention.

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Strategic health authorities are expecting to complete the majority of cases and the changes needed by the end of the March 2004 deadline. All 28 strategic health authorities agreed new criteria for continuing care last autumn.
There is also a current review of continuing care in progress across nine strategic health authorities. We will consider new guidance in the light of that review.
The noble Baroness, Lady Barker, and the noble Earl, Lord Howe, alluded to the recent ombudsman case involving Mr Pointon. I do not want to comment in detail on this particular case in Cambridgeshire, but it has been referred to as a test case. However, it is a decision of the ombudsman in relation to the care of one individual. The ombudsman has said, very helpfully, and has been at pains to make it clear, that it is an individual case. In these cases, each individual should receive care following appropriate assessment, with services shaped around the needs of the individual, as the recent White Paper on choice and responsiveness in the NHS emphasised. That was the finding of the ombudsman, and that is what we are trying to ensure applies in these sorts of cases.
We have also required all strategic health authorities to agree new eligibility criteria for continuing care which, as I have said, they have done.
The noble Earl also mentioned the mental incapacity Bill. The Department for Constitutional Affairs has the lead on this; the draft Bill was published in the summer of 2003, and a report of the Joint Scrutiny Committee has, I believe, just been published.
In conclusion, let me say that older people with dementia need and deserve better services. The Government have set in place a number of initiatives to try to ensure that that happens. More money than ever before is being invested in older people's services. As well as the additional funding for intermediate care services and the extra £1 billion a year for social services by 2006 already mentioned, older people will benefit from the record allocations to primary care trusts announced in December 2002: £148.3 billion for 2003–04 to 2005–06—a cash increase of more than 30 per cent in the total allocation. A very considerable proportion of that will go to services for older people.
Many good local services are now developing, but we are not complacent. We must ensure that the personal needs and choices of older people and their carers are central to the services they receive, that they are able to play as full a part as possible in society and that they have their dignity and cultural differences respected and their independence protected as much as possible.
7.56 p.m.
Lord Sutherland of Houndwood: My Lords, I thank the noble Lord, Lord Warner, for his comprehensive reply to the matters raised in the debate. It seemed to me a reply characterised by two things, the first being a sense of engagement with reality. These are very complex issues, and that came through in the way in which he responded to the points we raised. Secondly,
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as a response, I am happy to say that it left me room to continue to disagree with the Government on one or two issues, and I appreciate that too.
I thank all those who took part in the debate. It is always a revelation, in a debate such as this, to see the cornucopia of cumulative wisdom and experience in this House that appears when the topic is raised and the button is pressed. I congratulate the right reverend Prelate the Bishop of Coventry on a very finely targeted and clearly focused maiden speech. We look forward to his further contributions to debate.
I am tempted to invite your Lordships to join me in a game of bingo, but I shall not. Instead, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Assisted Dying for the Terminally Ill Bill [H.L.]
7.57 p.m.
Lord Joffe: My Lords, I beg to move that this Bill he now read a second time.
The Bill enables a competent adult, who is suffering unbearably as a result of a terminal illness, to receive medical help to die, at his own considered and persistent request.
The purpose of the Bill is to provide an option for terminal patients who are suffering unbearably to bring an end to their suffering at a time of their choosing, in a way which will not place vulnerable members of society at risk, nor compel doctors or other members of medical teams to participate in processes to which they have conscientious objections.
Although more limited in its scope, the Bill is substantially the same as the Patient (Assisted Dying) Bill which had its Second Reading on 6 June last year. There are, however, three significant changes to that Bill, made in response to concerns which had been expressed on Second Reading.
First, the Bill is now limited in its application to terminally ill patients. Secondly, in assisting the patient to die, the attending physician may only provide the patient with the means to end the patient's life unless the patient is physically unable to do so, in which event he can actively end the patient's life. Thirdly, an additional safeguard has been included. requiring a specialist in palliative care to attend the patient to discuss the option of palliative care.
As the House has authorised the setting up of a Select Committee to consider the Bill, the noble Lord, Lord Alton of Liverpool, and the noble Baroness, Lady Finlay of Llandaff, who led the opposition to the Patient (Assisted Dying) Bill last year, have consulted others who spoke against the Bill and have agreed that there is no purpose in taking up the time of the House on a lengthy Second Reading that would largely be a repetition of the lengthy debate of 6 June last year. They have accordingly decided not to oppose the Second Reading, on the clear understanding that the decision is made solely for the convenience of the

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House and is in no way to be considered as an endorsement of the Bill. I have further been given an undertaking by the Voluntary Euthanasia Society that it will not seek to present that decision in any way as a victory for the Bill, and, naturally, I have given a similar undertaking myself.
In view of those facts, I shall not detain the House any longer, and I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Joffe)
8 p.m.
Lord Alton of Liverpool: My Lords, on a Friday last June, as the noble Lord, Lord Joffe, has just mentioned, many of us gathered in your Lordships' House for what must rank as one of the longest Second Reading debates in recent years, starting as it did at 11 a.m. and not finishing until just before 7 p.m. It was a memorable debate with many distinguished contributions. By a small margin, a majority of Peers spoke against the Patient (Assisted Dying) Bill, as it was then known, proposed by the noble Lord, Lord Joffe.
Although there are some modifications in the Bill before your Lordships' House tonight, the objections that I and others raised to the earlier Bill remain valid in relation to the Assisted Dying for the Terminally Ill Bill. My noble friends Lady Masham and Lady Knight of Collingtree have particularly asked me to associate them with the continuing objections to the proposals. The medical and ethical objections raised by the Select Committee on Medical Ethics, chaired by the noble Lord, Lord Walton of Detchant, who is present tonight, also remain valid, as does the opposition of those involved in palliative care, along with the British Medical Association and the Royal Colleges. Yesterday the BMA issued a powerful and cogent new statement, reiterating its strong opposition to this Bill.
However, I also recognise that on 14 January this year, your Lordships' House voted to approve the report of the Liaison Committee and, in particular, its recommendation that an ad hoc Select Committee upon my noble friend's Bill be appointed. Therefore, whether as a draft Bill or as one with a Second Reading, the Assisted Dying for the Terminally Ill Bill will in due course be the subject of a Select Committee of this House. Distasteful as my colleagues and I might find that, it is the reality that we face. Little would therefore be gained by reiterating the points made in the Second Reading debate last June. There may well come a time when we shall have to divide on this question, but that should obviously happen after the Select Committee has deliberated, not before.
The Select Committee at least gives us the opportunity to deal with this issue once and for all. I hope that its deliberations will clearly demonstrate that there is no consensus in support of legislative change and that, without such consensus, legalised euthanasia will not be sanctioned by the British Parliament.
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In common with many Members of your Lordships' House, I remain resolutely opposed to euthanasia and physician assisted suicide and believe that the consequences of the Bill proposed by the noble Lord, Lord Joffe, would be disastrous for the terminally ill, for the elderly, for disabled people, for the medical profession and for wider society. I am confident that when your Lordships have received evidence from patients, from disability rights campaigners, from palliative care specialists and from those who have witnessed the disastrous effects of legalised euthanasia in the Netherlands and elsewhere, the House will vote resoundingly to reject the Bill.
In conclusion, this is an issue to be resolved not by parliamentary tactics but by rigorous argument and honest debate. Therefore, the brevity of tonight's proceedings should not be mistaken for a lack of determination to scrutinise thoroughly and to oppose this Bill.
8.4 p.m.
The Lord Bishop of Oxford: My Lords, in the Second Reading of the Bill proposed by the noble Lord, Lord Joffe, on 6 June last year, I set out a range of reasons why I opposed the Bill. I believe that the reasons that I set out then are as valid for the revised Bill that comes before your Lordships now, but I shall not repeat those arguments because of the agreement made between the noble Lord, Lord Joffe, and the usual channels that we should be very brief indeed.
I understand that there is to be a Select Committee, and I am very glad to understand from the usual channels that they are very sympathetic to the idea of a bishop being a member of that Select Committee. When the matter comes before your Lordships' House, I hope that it will meet with your sympathy and agreement.
It is in some ways rather surprising that there should be a new Select Committee, given that there was a very thorough one in 1994. The noble Lord, Lord Joffe, set forth his reasons in a background note that appeared in Hansard in January. One reason that he set out there for changes that have happened since 1994 was that some of the noble Lords and noble Baronesses who were members of the original committee have in fact changed their minds. Those noble Baronesses included Lady Jay, Lady Warnock and Lady Flather. However, I hope that, when the Select Committee begins to meet, it will realise that there are members of that original committee who have not changed their minds. I see the noble Lord, Lord Walton, shaking his head in agreement. I have particularly in mind the noble and right reverend Lord, Lord Habgood, the then Archbishop of York, who made a very decisive contribution to that earlier Select Committee, who has not changed his mind. I hope that the Select Committee will not only ask for written evidence from people like that but will also call them for oral hearings.
Like the noble Lord, Lord Alton, I very much hope that groups that it is very easy to overlook, such as the Disability Rights Commission, will be called to give

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evidence. The commission believes that the Bill, however finely tuned—and respect must be paid to the noble Lord, Lord Joffe, for trying to get the Bill very precisely and finely tuned—seriously disadvantages disabled people. I hope, too, that the Select Committee will gather what evidence it can about the extent and quality of palliative care, which is clearly crucial to the whole issue. It is fortuitous that there is a House of Commons Health Committee inquiry into palliative care happening at the moment, to which the Church of England has contributed. That committee's findings should prove very useful to the Select Committee; it might want to make some recommendations about palliative care.
In the submission given by the noble Lord, Lord Joffe, in January, he rightly suggested that the medical profession needed to be consulted. So, too, do the Churches—and, I suggest, the other faith communities. When I had the privilege of chairing a committee of your Lordships' House on stem cell research, it was very good to get views from Muslims and Jews. In a way, I should have liked to hear from more Muslims and Jews, as we live in a multi-faith society. Their views will be very crucial indeed.
As far as concerns the Roman Catholic and Anglican Churches, the small group of Anglican and Roman Catholic bishops that put in a joint contribution to the original committee said:
"Neither of our churches insists that a dying or seriously ill person should be kept alive by all possible means for as long as possible. On the other hand, we do not believe the right to personal autonomy is absolute".
That is the final point that I would like the Select Committee to address. It includes some fundamental questions about what it is to be a human being. It might be suggested that human beings cannot simply be defined by their autonomy, by their capacity to make free, unfettered choices. We are born dependent on others and we die dependent on others. Our dependence is just as much a characteristic of what it is to be a person as our capacity to make free choices. I very much hope that the Select Committee will not just consider the evidence of what is happening in Oregon or the Netherlands, but will address fundamental questions of what it is to be a person.
Finally, the Orkney poet, Edwin Muir, wrote a very moving poem called One Foot in Eden, contrasting life in paradise with life in the world as we know it. He ended that poem by saying:
"Blossoms of grief and charity
Bloom in these darkened fields alone.…
Strange blessings never in paradise
Fall from these beclouded skies".
For me, that poem has always hinted at and pointed to some fundamental truths about what it is to be a human being, particularly when the clouds are particularly dark or beclouded.
8.10 p.m.
Lord Maginnis of Drumglass: My Lords, when the predecessor of this Bill, the Patient (Assisted Dying) Bill, was debated in your Lordships House on 6 June last year, I had the opportunity to set out clearly what
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was my attitude. In my considered judgment it reflected the attitude of a large majority of my community. I refer your Lordships to cols. 1644 to 1646 of the Official Report. Hence, it is not my intention to reiterate each of those arguments but simply to indicate that I am equally opposed to this new Assisted Dying for the Terminally Ill Bill.
I will, however, make a few brief points at this stage. It has become the accepted reality in the United Kingdom that state executions of murderers, rather than deterring them, brutalise society. For that reason, and also for religious reasons, I voted for the abolition of the death penalty, as did a large majority of our legislators. I do not think that I need to ask your Lordships how can we, as a society, reconcile that position with one where, only yesterday, the British Medical Association posed the case that:
"If assisted suicide were to be an available option, there would inevitably be pressure for all seriously ill people to consider it even if they would not otherwise entertain such an idea;
"Health professionals explaining all options for the management of terminal illness would have to include mention of assisted suicide. Patients might choose it for the wrong reasons. They might feel obliged to choose that option if they feel themselves to be burdensome to others or concerned, for example, about financial implications for their families of a long terminal illness".
My second point, also based on the British Medical Association opinion, is to ask whether the state has the right to legislate to alter the fundamental ethos of the medical profession. The BMA says:
"Legalised assisted suicide would affect patients' ability to trust their doctors and to trust medical advice;
"In particular, it could undermine the trust that vulnerable, elderly, disabled or very ill patients have in the health care system".
I wonder which doctor would be more trusted, one who had opted in to facilitating assisted dying or one who had opted out?
The BMA recognises what it calls the matter of enabling individuals,
"to achieve their personal goals",
but concludes:
"We believe that in the case of euthanasia and assisted suicide, benefit for an individual in terms of having their wishes respected, is only achievable at too high a cost in terms of potential harm to society at large".
Finally, I draw attention to the BMA's scepticism regarding the proposition in this Bill that there needs to be legal provision for pain relief. The BMA states that that assumption is inaccurate and,
"plays on unjustified public fears about the possibility of intolerable or unrelieved pain at the end of life. In fact the law and ethical position is already clear on the rights of patients to receive the most effective pain relief available".
I believe that that aspect of the Bill is cynical and tilts at windmills. It seeks unnecessarily and unjustifiably to play on the emotion of the most vulnerable—the elderly and the sick and dying. That must be resisted. That is both my experience and my conviction. That is why I oppose the Bill and why I hope the Select Committee will concur not only with my opinion but with that of the British Medical Association and the Royal Colleges.
8.15 p.m.
Baroness Finlay of Llandaff: My Lords, I do not wish to detain the House any longer than is necessary to confirm that there is little to be gained by reiterating the points made in the Second Reading debate, on 6 June 2003, on the Patient (Assisted Dying) Bill which was promoted by the noble Lord, Lord Joffe.
The Bill before us is changed in detail from that previously debated, but the principles remain unchanged. However, in the light of the House's decision to establish a Select Committee of inquiry after this Bill's Second Reading, that process of in-depth inquiry is to be supported. I am grateful to the noble Lord. Lord Joffe, for his letter stating, as he has reiterated today, that the action of the opponents of the Bill in agreeing to no debate and no vote must not in any way be interpreted as representing a victory or endorsement of the Bill.
The points of objection made in the debate on 6 June 2003 remain, in my view, valid in relation to the Bill before us. The Select Committee will, I hope, be adequately resourced to undertake this very serious and very important inquiry.
8.16 p.m.
The Duke of Montrose: My Lords, I apologise for speaking in the gap, but something was brought to my attention this afternoon that I should like to bring before your Lordships' House. I must also apologise for not having paid attention to the earlier Patient (Assisted Dying) Bill, to which the same question might have applied.
The Scotland Act 1998 devolves all powers to the Scottish Parliament other than those that were reserved under Schedule 5. Schedule 5, Part II contains specific reservations under Head J, which deals with "Health and Medicines". Dying is not mentioned. Therefore, I presume that legislation concerning dying is devolved to the Scottish Parliament.
There is a convention, as I understand it, that this Parliament does not consider devolved matters unless it has received notice that the Scottish Parliament has considered the matter and passed a Sewel Motion. May I ask the noble Lord, Lord Joffe, what steps he has taken to secure a Sewel Motion? If it has not been possible, what steps does he plan to take—or is this convention such that the consideration of this Bill should be held up until such a Motion is forthcoming?
8.18 p.m.
Lord Roper: My Lords, on these Benches, as I believe in most other parts of the House, there are a variety of views on the substance of the Bill. I am fortunate, therefore, that I do not have to try to go through all of them this evening. However, having had personal experience in the past 12 months of the remarkable quality of palliative care provided in this country and particularly within hospices, I should say that I recognise what is being done and I think that the contributions made by those involved are particularly important.
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This evening we are faced with the decision that was, as has been said, taken in the House on 14 January. There is a clear view from these Benches that the decision of the House to set up a Select Committee to evaluate the issues underlying the Bill is the correct one. I hope that the Select Committee will also be able to consider the issue of whether the provisions of the Scotland Act require that the Scottish Parliament pass a Sewel Motion before the Bill can be considered at later stages.
It is, of course, inappropriate for anyone who participates in the activities of the usual channels to divulge on the Floor of the House anything that might occur. However, in view of the views stated by the right reverend Prelate the Bishop of Oxford, I think that there is a reasonable chance that, next Wednesday, when the Committee of Selection comes to consider the composition of the Select Committee, provision will be made for the inclusion of one of his right reverend colleagues.
For those reasons, we on these Benches this evening—unlike the situation on Monday evening—will be able to support a Motion for the reference of the Bill to a Select Committee after Second Reading.
8.19 p.m.
Lord McColl of Dulwich: My Lords, I should simply like to say that I entirely agree with the views set out by the noble Lords, Lord Alton of Liverpool and Lord Maginnis of Drumglass. As a practising doctor, I should like to emphasise that I do not need any new legislation to enable me to relieve the pain of my patients who are suffering. I have been doing it without that for many years, and I hope that I shall do so for many more years to come.
8.20 p.m.
Lord Warner: My Lords, I am grateful to the noble Lord, Lord Joffe, for his explanation of the Bill before us today. It contains some significant differences compared with the previous Bill, which was debated in this House on 6 June last year. That debate was of the highest standard and reflected differing and strongly held views. I am sure that noble Lords are grateful to the noble Lord, Lord Joffe, for reflecting on many of the concerns expressed earlier in his changes to the Bill.
The noble Lord, Lord Joffe, will understand, as I do, the strength of feeling held on this issue; the differences of opinion and belief, and where those differences derive from. The public debate on this, both here and in other countries, reveals the many strands of human belief about how we as human beings should handle the end of life. This House has made a distinguished contribution to these very human debates: in 1994 the House of Lords Select Committee on Medical Ethics reported and, more recently in 2003, the House of Lords debated the Patients' Protection Bill of the noble Baroness, Lady Knight, and the previous version of the Bill now before us.
As a Private Member's Bill that involves issues of conscience, the Government's stance is one of neutrality. We listen carefully to the debates and offer

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advice on what we see as key issues and implications in the context of' our present laws. I refer your Lordships to the previous debate in June, when my noble friend Lady Andrews spoke for the Government. Of course, Members of the Government have personal views, but I stand by the comments made by my noble friend following that debate where all shades of opinion were expressed. The Government have no plans to change the current laws on euthanasia and assisted suicide, but welcome and listen closely to the debate.
The Government recognise the complexity of the issues involved and the polarity of views held. Decisions about the end of life are all about our personal values, views and circumstances and provoke strongly held and diverse opinions. I know that some noble Lords are disappointed that we shall not have a substantive debate tonight. However, the gravity of the issues have led to agreement that a Select Committee should be established to consider the Bill. A thorough and balanced consideration of the full range of issues in a Select Committee could therefore be a sensible way forward in informing policy in this area. It might be considered timely given that a decade has elapsed since the previous Select Committee.
The Government will, of course, co-operate fully with the Select Committee and will consider its findings carefully in due course. We look forward to revisiting the issues again, taking into account the position of our colleagues in the devolved administrations.
8.23 p.m.
Lord Joffe: My Lords, I express my appreciation to all noble Lords, and in particular to my noble friends Lord Alton and Lady Finlay, for so readily cooperating in order to ensure that this Second Reading should not unnecessarily use up the valuable time of the House.
A number of points have been made with which I profoundly disagree. However, in the spirit of the agreement to which I referred in my opening speech, I shall not respond to them but rather leave them to be considered by the Select Committee.
However, I refer to the specific question asked by the noble Duke, the Duke of Montrose. I must admit to some surprise at the point not having been raised al any time before with me or the House. I gave some consideration to it, and was advised that it would not be a bar. I should mention that, at the same time, a decision was taken that the Bill as it stands specifically excludes reference to Northern Ireland. I am sure that that would interest the noble Lord, Lord Maginnis.
I will, however, look further into the matter that the noble Duke raised, but the point will of course be considered by the Select Committee. If necessary, I am sure that that committee will form a view on it: certainly I do not at this stage see it being any bar to the decision of the House to set up a Select Committee.
On Question, Bill read a second time, and committed to a Select Committee.
House adjourned at twenty-five minutes past eight o'clock.