Sitting of 28 June 1996

Preamble
The House met at eleven of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Ripon.

Business of the House, 2nd and 3rd July
The Minister of State, Department of the Environment (Earl Ferrers): My Lords, on behalf of my noble friend the Lord Privy Seal, I beg to move the Motion standing in his name on the Order Paper.
Moved, That Standing Order 38 (Arrangement of the Order Paper) be dispensed with to enable the Motion standing in the name of the Earl Russell to be taken before the Child Benefit, Child Support and Social Security (Miscellaneous Amendments) Regulations 1996 on Tuesday next and to allow the Third Readings of the Trading Schemes Bill and the Noise Bill to be taken before the Motion standing in the name of the Lord Chancellor on Wednesday next.—(Earl Ferrers.)
On Question, Motion agreed to.

Asylum and Immigration Bill
11.6 a.m.
Lord Strathclyde: My Lords, I beg to move the Motion standing in my name on the Order Paper.
It may be of assistance to the House if I say a few words by way of explanation. When my noble friend the Leader of the House responded yesterday to the complaints of noble Lords opposite about the timing of proceedings on the Asylum and Immigration Bill, he indicated that it was already intended that the Bill should be recommitted in order that the Government's amendments on benefits for asylum seekers could be debated by noble Lords in Committee. The Motion before the House today gives effect to that agreement.
My noble friend also undertook yesterday to reflect on whether any arrangement could be made to accommodate the wish of certain noble Lords for more time in which to consider the Bill, and I am happy to say that such an arrangement has been possible. It is now proposed that the Committee on recommitment on Clauses 9 to 12 should take place on Monday. After that, Third Reading will follow, with consideration of any amendments which have been tabled to Clauses 1 to 8 of the Bill. At that point it is proposed that proceedings after Third Reading should be adjourned, and that they should be resumed at the beginning of business on Tuesday, in the expectation that they might be completed in about two hours.
I am glad to say that this course of action has full usual channels agreement, and I believe that it has significant advantages which will, I hope, commend
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themselves to the House. It combines a second opportunity, on an additional day, for debating the Government's new amendments, with the minimum of inconvenience to those involved in other business to be taken on Tuesday. As such, I hope that it will meet with the approval of the House.
While I am on my feet, there is one other matter to which I should like briefly to refer. During yesterday's proceedings on the Security Service Bill, the noble Lord, Lord Avebury, suggested that my noble friend the Leader of the House had, albeit inadvertently, misled the House in stating that certain draft amendments had been placed in the Library, when in fact they had not yet been lodged there. That was the result of an administrative error of which my noble friend was entirely unaware. He was not present in the House when this matter was raised by the noble Lord, and, regrettably, he is not able to be present in the House today. But he does not wish the point to be left at issue and has therefore asked me to convey his unreserved apologies for having, entirely inadvertently, misled your Lordships.
Moved, That the Bill be recommitted to a Committee of the Whole House on Monday next in respect of Clauses 9 to 12 and the schedules to the Bill and that Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with to enable further stages of the Bill to be taken on the same day.—(Lord Strathclyde.)
Lord McIntosh of Haringey: My Lords, the Chief Whip is quite right in saying that the arrangements that he has just outlined have been agreed by the usual channels. I can confirm that on behalf of my noble friend the Opposition Chief Whip. There are two periods in which noble Lords who wish to address the government amendments have difficulty. The first is the period between now and Monday afternoon when we consider the government amendments in Committee, and the second is after that has been done and a final decision has to be taken on Third Reading.
The Chief Whip will recognise that the agreement which has been reached tackles the second of those problems, but not the first. We still have difficulty in mounting a fully coherent and prepared attack as we would wish on what we consider to be thoroughly objectionable amendments. The only other point is that the Chief Whip, referring to Tuesday's business, used the phrase "in the expectation" that the business will be concluded in about two hours. Anyone who knows this House knows that expectations about the timings for any business are likely to go awry. I believe that the noble Lord should use the word "hope" in preference to "expectation".
Lord Renton: My Lords, I hope that my noble friend the Chief Whip will amplify what he said on one point. He said that Third Reading would be taken at the end of business on Monday and that the rest of the proceedings will take place early on Tuesday. Therefore, does he mean that any further amendments—I hope that there will not be any—will be taken on Tuesday and

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that then we shall have the usual general debate—I hope that we can keep it short—that normally follows before the Question that the Bill do now pass is put?
Lord Monkswell: My Lords, the noble Lord, Lord Renton, has introduced an interesting question as regards the Third Reading of this Bill. Can the noble Lord, Lord Strathclyde, confirm that it will be possible to put down amendments within the normal time-frame for the section of the Bill which will be considered at Third Reading on Tuesday as though it were a Third Reading itself and not within the time-frame of the Third Reading before the beginning of the Third Reading of the Bill? I believe that the noble Lord understands the point I am making and I hope that he can answer it.
Lord Strathclyde: My Lords, I am grateful to the noble Lord, Lord McIntosh of Haringey, for recognising that this has usual channels agreement. I am sure that he and his noble friend Lady Hollis will make full use of the extra time for dealing with the amendment. I also recognise that although we have dealt with the second problem of Third Reading and the time between now and then, there is still the difficulty of tabling amendments in time for the recommitment on Monday afternoon. However, I hope that as the noble Lord has now received the full amendment, he will not have too much difficulty making sure that his amendments are tabled for a very full debate on Monday afternoon.
Lord McIntosh of Haringey: My Lords, before the Question is put, I have just one tiny technical point. At Committee stage one may assume that it is possible that government amendments will be agreed to and therefore that the Bill will be in a different form for Third Reading. At what stage will the revised Bill be printed?
Lord Strathclyde: My Lords—
Lord Graham of Edmonton: Take your time!
Lord Strathclyde: My Lords, as the House knows from the Motion I have tabled, it is anticipated that we shall start Third Reading immediately after the Committee on recommitment. I shall have to take advice as to what happens about the reprinting between recommitment and Third Reading. However, I suspect that the House authorities will be entirely pragmatic in their approach and that we shall use the copy of the Bill that was printed after the Report stage and that the government amendments, which, of course, I hope the House will approve on Monday, will be accepted as part of the Bill.
As for the point made by my noble friend Lord Renton, yes, there will be a full opportunity to have a debate on the Motion that the Bill do now pass which will take place at the end of the Third Reading on Tuesday afternoon. I accept the point made by the noble Lord, Lord McIntosh, about those two hours being an aspirational target—a hope rather than an
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expectation—but I do trust that noble Lords will stick to it because we have other business to deal with on that day.
On the point about the placing of amendments, raised by the noble Lord, Lord Monkswell, the House will be sitting late on Monday evening to deal with the first part of the Third Reading. I hope that the noble Lord will be able to table his amendments to the later clauses which will be taken on Tuesday afternoon in good time on Monday evening so that they can be printed for Tuesday morning. I commend the Motion to the House.
On Question, Motion agreed to.

Community Postal Services: ECC Report
11.15 a.m.
Lord Geddes Lord Geddes rose to move, That this House take note of the Report of the European Communities Committee on Community Postal Services (10th Report, HL Paper 81).
The noble Lord said: My Lords, I move this Motion on behalf of my noble friend Lord Elibank, and I must begin by conveying to the House my noble friend's regret that ill health prevents his being here. I know that he is particularly sorry to have missed this occasion as it was likely to have been the last report he would present to the House as chairman of Sub-committee B of the European Communities Committee. I spoke with Lady Elibank about half an hour ago and got the good news that my noble friend is recovering well and is leaving hospital today. I am sure that the whole House will join me in wishing him a speedy recovery.
Noble Lords: Hear, hear!
Lord Geddes: My Lords, there are two other matters with which I should deal before turning to the principal subject of the debate. First, in concluding the inquiry on which the report is based, the sub-committee received oral evidence from an unusually large number of overseas witnesses, including representatives from three other Community post offices and two different branches of the Commission. The assistance of those witnesses deserves full acknowledgement. The report is, I think, broader in its outlook as a result of their assistance.
Secondly, our thanks are very much due to our specialist adviser, Mr. Chris Nicholson of KPMG; and to our clerk, Dr. Andrew Mylne, and his secretary, Miss Valerie Bath. Without their joint and several efforts and expertise neither our deliberations nor the report would have achieved the very high standards that we believe they attained.
As I said, we heard evidence from two directorates general on the Commission's plans to harmonise and introduce common standards for Community postal services. The reason we felt that to be necessary was that we started our inquiry with two separate documents: a draft directive, which aims to lay down some new

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rules for the postal sector, and a draft notice, which is meant to provide guidance on how existing Community competition rules apply to the sector.
The sub-committee felt from the beginning of the inquiry that the combination of those two documents was not a happy one. That view was shared by many of our witnesses. The notice seemed to go much further than its stated purpose, laying down policy rather than merely interpreting the existing law. Many witnesses also found inconsistencies between the draft and the directive. Because of those problems we welcome the fact that the notice has now been suspended until the directive is issued.
The directive starts with two basic principles: that everyone in the European Community should have access to the same level of service and that such a universal service can be guaranteed only if national post offices are given some monopoly protection. Virtually everyone accepts those principles. The difficulty is that the countries of the Community vary widely in the services currently available and in the efficiency of their post offices. The different interest groups in the postal sector—post offices, unions, customers, governments and private operators—have different views on the crucial question of how much competition can safely be introduced into the sector.
The basic problem is simple. Some parts of a universal service are expensive to provide and this loss-making; others are cheap and therefore profitable. A single operator can only afford to provide a universal service if it can be sure of getting enough of the profitable business to offset the cost of providing a loss-making service elsewhere. There are also significant economies of scale. The sheer volume of mail that post offices' monopolies handle is an important factor in keeping costs down. Too much liberalisation carries the risk of letting private operators cream off all the profitable business, leaving post offices unable to provide a universal service at a price that everyone can afford. Too much monopoly protection risks denying other operators any commercial opportunity and denying customers the benefits of cheaper prices and improved service that a competitive market can bring. The liberalisers also point to the growing competition that postal services face from faxes and electronic mail, saying that a vigorous entrepreneurial approach is necessary if post is to keep its share of the communications market.
That, then, is the challenge the Commission faces with its draft directive. It was never going to be possible to please everyone. Nevertheless, much of what the Commission has proposed the committee welcomed and found sensible. First, there are rules governing the extent of the universal service and the quality of that service. Those are quite modest compared with the standards which the better post offices, our own included, already achieve. For example, the Commission proposal only requires post offices to collect and deliver once a day, five days a week and only demands that 80 per cent. of mail reaches its destination the following day. When not disrupted by strike action, the UK Post Office delivers six days a week, twice a day in most places and achieves well over 90 per cent. next-day delivery of first-class
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mail. Incidentally, only the UK Post Office within the Community offers two classes of mail. Other Community post offices are less efficient. For them the Commission standards are a tough challenge.
We conclude in the report that the Commission has, on the whole, struck a sensible balance so long as those universal standards are seen as a minimum by those post offices which already exceed them. There are other aspects of the directive which we regard as moderate and sensible; for example, rules requiring transparency of accounts and the establishment of independent national regulators.
The key aspect of the draft directive concerns the rules about which services can be reserved to those operators prepared to offer a universal service; in practice, national post offices. In other words, how much monopoly protection are they to be allowed? As I said, the aim is to introduce some liberalisation without jeopardising the financial viability of national post offices. The Commission wants to introduce liberalisation in two stages. The first opens to competition items of domestic mail weighing more than 350 grammes or costing more than five times the basic tariff. In practice, that leaves around 98 per cent. of domestic mail within the reserved sector. In the UK it will have virtually no impact since the Commission's price-and-weight threshold is roughly equivalent to the Post Office's existing monopoly limit of £1.
Also proposed for liberalisation at the first stage, which means six months after the directive is approved, is outgoing international mail. That will have no real effect as such mail is in practice already open to competition. The first stage of liberalisation, then, poses no great threat to the universal services. In fact the only witnesses who did not like it were those most enthusiastic for liberalisation and for whom the proposal did not go nearly far enough.
The real controversy arises over the Commission's second stage of liberalisation due to begin in 2001. That will open to competition incoming international mail and what is called "direct mail"—junk mail to most of us. Although we may curse the ever larger quantities of such post that lands on our doormats, it is a highly profitable part of post office business. Incoming international mail, though a small segment of the market, is also important. We heard many views on that crucial aspect of the Commission's proposal. In the end we concluded that those types of mail should not be liberalised. We felt that there was too big a risk that to do so would undermine the post offices' need to survive. We were also concerned that distinguishing the mail that is open to competition and the mail that is not by reference to its contents raises difficult problems of enforcement. How could we prevent mail that is supposed to be carried only by post offices from being diverted into liberalised mail streams?
Another issue that concerned us was that no one seemed very sure of the effects of the second-stage liberalisation. Yet the Commission—this is the crucial point—expects the member states of the Community to agree now that the second stage should go ahead just a few years after the first stage. The directive requires the

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Commission to conduct a review in 1998, but it will be for it alone to decide whether, as a result of that review, the second stage of liberalisation goes ahead as planned. We prefer a more open approach which would allow the whole Community to see the evidence before a decision is taken. In our view that is particularly important given that liberalisation measures are in practice irreversible.
The Government's response to our report was, unfortunately, received only three days ago and has not been discussed by the committee. My reaction to that response is therefore a personal one. It is pleasing that the Government agree with nearly all our recommendations but I am concerned by a paragraph which reads,
"A start must be made on the liberalisation of European postal services and a clear timetable set for the second stage in order to ensure that the necessary re-structuring of some of the public postal operators takes place and that growth in the sector is stimulated. To achieve this there must be a compromise. We [the Government] believe that an efficient and competitive Post Office such as our own can accommodate liberalisation of direct mail in 2001 without a threat to the universal service. For these reasons the Government now believes that the right course is to strongly support"—
I hasten to add that I am in direct quotes and find myself unable to avoid splitting an infinitive—
"the Italian Presidency's proposal".
That proposal is,
"A review of the reserved area in 1998 with a view to further liberalisation but provision for direct mail to be liberalised in any event from 2001".
To elaborate, the Government believe that the right course is to support that proposal as a means of trying to reach political agreement in the Council. I understand that a Council of Ministers meeting was scheduled for yesterday. In her reply I ask my noble friend to advise the House of the outcome of that meeting in the context of our report and of this debate.
There is one other aspect of the directive that I should mention because I know it concerned many of us on the committee. I refer to uniform tariffs or, rather, the lack of any mention of them. As I said, the directive lays down very precise rules about what level of universal service must be available within each member state. But there is no requirement that everyone within that state should pay the same price for that service. Instead, the Commission merely says that postal services must be "affordable". Affordability of course is not defined, and is probably undefinable. We felt fairly strongly that that was not good enough. To most of us, I think, a universal service without a uniform tariff requirement is pretty meaningless.
In the course of our inquiry we heard much interesting evidence. In particular, I mention the witnesses from the Swedish and Dutch post offices. Those countries have gone further than most—the Swedes in particular—towards liberalisation. They are convinced that it can bring nothing but profit. I have to say, however, that we were not entirely persuaded. Sweden Post has no legal monopoly at all, so that in theory any rival can set itself up to cream off all the profitable mail. One such rival did appear in Stockholm for a while but never succeeded in making much profit.
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It does, to the best of our knowledge, still exist but has gone bust more than once and was, at least for a while, partly owned by the Swedish post office. So this is not a success story for competition.
Nor were we convinced that the Swedish case showed that monolopy protection was unnecessary. Sweden is smaller than the UK. It has a different population distribution; postal prices are significantly higher; and the level of service poorer. The Swedish post office also used fairly vigorous methods to see off its rival, including lowering its prices to Stockholm customers while keeping the same high prices for everyone else. In the process it got into trouble more than once with the competition authorities. So we did not feel, on reflection, that that was a route that either the UK or the Community should follow.
Our own Post Office, by contrast, comes out rather well from our report. We felt it combined efficiency and profitability with a higher level of service than in any other country. Significantly, perhaps, in view of recent events, that was a view that was persuasively argued not just by the Post Office itself, but also by the Union of Communication Workers. It, among other witnesses, impressed upon us the great dangers faced by competition from other means of communication. Its recent actions, sadly, seem almost calculated to persuade the Post Office's customers to use faxes and e-mail. In response, the Government seem ready to threaten to remove, temporarily or permanently, the Post Office's monopoly protection and let in the competition. We can only hope that common sense prevails on both sides. Postal services are vital to us all, for their social role as well as their economic importance. That is why we must take great care to ensure that changes to the rules under which they operate—whether those changes are proposed in Whitehall or in Brussels—are considered soberly and carefully and implemented gradually so that we can be sure they will not undermine the service that serves us well and which so many of us so often take for granted. I beg to move.
Moved, That this House take note of the Report of the European Communities Committee on Community Postal Services (10th Report, HL Paper 81).—(Lord Geddes.).
11.33 a.m.
Baroness Dean of Thornton-le-Fylde: My Lords, as a member of the committee, I am pleased to take part in the debate and also to commend the report to the House. It is regrettable that our chairman, the noble Lord, Lord Elibank, is unable to be with us because of ill health. I should like to join the noble Lord, Lord Geddes, in wishing him a quick recovery and return to the House. I should like also to support the noble Lord in his thanks, which he has put on the record, to our staff and special adviser. I should like equally to thank the noble Lord, Lord Geddes, who stood in for the noble Lord, Lord Elibank, at one of our meetings during the course of the review.
I am sure that when the noble Lord, Lord Elibank, reads in Hansard the noble Lord's presentation of the report to the House on his behalf he will be fully

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satisfied with the wide ranging comments made by the noble Lord, Lord Geddes. I, too, am satisfied. I would have said fully satisfied until he referred to the dispute—a point to which I shall come later. The noble Lord, Lord Geddes, has done the committee a good service in the way in which he presented the report this morning.
Of course our postal services in the UK and debate about them are not new. It is something which has been ongoing over the past few years. They have been extremely emotional debates on occasions and ones in which parties—the Government, in particular—have not always had their own way. It is a debate which is very much at the heart of our community. The very first paragraph of the report refers to the fact that changing the rules governing postal services is controversial. That may be an understatement.
The Post Office is a large industry. It is a large employer and a major public service. However, in major parts of our country it is also a social service, with the free delivery of prescriptions, rural buses provided by the Post Office, free services to the blind, and a whole range of services which a business person might say are not related directly to the delivery of mail.
The report shows that the committee took evidence from a wide range of providers of services, and those involved in the distribution and delivery of them, both from the Post Office and the private sector. It was that wide-ranging evidence and that contained in a number of presentations from users of the service that led the committee to conclude in paragraph 185:
"The United Kingdom Post Office combines efficiency with a high level of service".
It is against that background that we need to judge the draft directive and the, fortunately now suspended, draft notice which have come from the Commission. I suggest that the key issues for the public in this country with regard to postal services are the same as they have always been: a universal service in these islands at a universal cost, irrespective of where one lives; to have deliveries as near as possible to the next day; for them to be as frequent as possible; and of course, at the cheapest possible price.
The efficiency of the postal services is central to the achievement of the public's wishes for good deliveries and a universal service at a uniform tariff. As the noble Lord, Lord Geddes, said, there are major differences between the UK and our partners in the Community in the whole area of efficiency, cost and universality.
The committee welcomes the Commission's decision to bring forward the proposals for postal services and the five declared aims of the draft directive. But in my view, and if noble Lords read the report, in the view of the report, the Commission has some of the framework and detail of the draft directive badly wrong. The first area is to use the telecom model of liberalisation, superimpose it onto postal services, and believe that it will work. I shall return to that point later.
The key issue addressed by the Commission is the universal service, which it accepts as necessary and which plays a central role in postal services in all nation states. However, the Commission does not deal with a
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uniform tariff, which is central. It is the other arm of having a universal service. In the draft directive the Commission proposes that the universal service be linked to one of two measures, and it puts forward both—five times the basic rate within a country which, in the UK would mean that the reserved universal area would be limited to a cost of £1.25—£1.30 from next month because of the Treasury's demand that the Post Office return more of its profits to it—or five times the basic rate, or 350 grammes. It is messy. One takes one or the other.
In Britain we have a limit of £1. The reserved services figure was set in 1981, and I gather today is worth about 88p. It has not been increased since 1981 and so its value has gradually reduced. I suggest, therefore, that the reserved services themselves de facto have reduced.
In that time there has been a 60 per cent. increase in mail and an increased delivery. Today in Britain more than 90 per cent. of first-class mail is delivered the next day. That is very different from the situation in Italy where it is approximately 14 per cent. How many of us still go abroad and find that we are back home before our families have received the postcards which we sent to them?
It is against that background that we must judge the draft directive and the suspended notice. In Germany, for instance, the reserved mail area equates to approximately £4.50 for the monopoly to be maintained against our £1. Indeed, fewer than 50 per cent. of the member states in the Community have a six-day delivery. In the rest there is a five-day delivery. We want to maintain our six-day delivery and many of us would like to see a return to a seven-day delivery.
Perhaps I may say as an aside that we have a home in Cornwall. Some years ago we received a card which was posted at 12 noon in Truro, some 20 miles away, and delivered at 3.15 that afternoon. My goodness, that was a good quality of delivery!
The omission in the directive to deal with a uniform tariff for the reserved area greatly flaws the proposal. The noble Lord, Lord Geddes, referred to that. That omission means that one could have a legal universal service requirement but could charge different tariffs in different parts of the country for that service to be provided. That is a great flaw in the draft directive and it must be addressed.
The Committee addressed that point by asking the Post Office for figures. We were told, "If we take the first-class letter here in the City of London, for instance, you could probably deliver it for 8 pence less than the 25 pence that is charged. But, of course, if you live in Scotland that same letter could cost between £2.50 and £3 to deliver". One of our committee members lives in Scotland and was horrified to hear that. I suggest that it is essential to maintain the universal delivery with the uniform tariff.
Most postal services in the Community are still within public ownership, albeit that some are at arm's length trading as agencies—in some instances agencies independent from the government. But we wanted to look at alternative models, which was why we looked, among others, at Sweden. Sweden stated that it did not

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have a monopoly in any area and had been deregulated in that sense. The report touches on the issue but perhaps does not go as far as I would. On closer looking we found that in Sweden it is a monopoly in name only. We found it impossible to find any functioning competitor to the Swedish postal services and therefore it is not an appropriate model with which to compare.
In New Zealand, the land of total deregulation, there is a charge of 40 New Zealand dollars for the delivery of mail in rural areas. I do not believe that we want that here. Indeed, in New Zealand it was proposed that, on the post office being privatised, the delivery payment in rural areas should rise to 80 New Zealand dollars a year. Unfortunately, that was at a time of a general election campaign and the government soon found that they had to run away from that proposal. However, it lifts the curtain on what can happen if one moves away from guaranteeing a universal service with a uniform tariff.
Of course, to believe that competition does not exist in the UK is wrong. It does exist in a whole range of postal delivery areas. One of the key new areas of competition is the new communications field on which the report touches. Fax transmission and e-mail are two such areas. I understand that 70 per cent. of all letters are processed by computer. How easy it is merely to press a key or to touch a switch to send that letter by e-mail rather than through the post. I suggest that that is a major area of competition.
The noble Lord, Lord Geddes, rightly touched on other areas of the second stage of development which cause us serious concerns and are referred to in the report. I mentioned the telecom liberalisation model as being one which we state in the report is inappropriate. However, the draft directive goes further in that. Taking that model, it suggests that the postal services should be four businesses: collection, sorting, transport and distribution. It states that a competitor should be able to latch into any of those four areas at a payment which is agreed—it does not say by whom—in order to use the postal service. In telecoms it is called interconnection and has caused a great deal of trouble in the privatisation. There have been major arguments about what the real costs should be and what should be paid to British Telecom. I gather that in the postal services it is called "downstreaming" and it is an area of major concern.
Finally, when we had completed our work, and were in the drafting stage of our report having agreed our conclusions, we learnt of the opinion of the Economic and Social Committee of the Community which had been consulted on the draft proposals. Its views are printed at the back of the report and are useful reading. Its views very much coincide with ours, approaching the issue from a different angle. I agree—it is a personal view—with that committee's opinion in paragraph 5.2.1 that as regards people employed in this whole sector:
"Before any further moves towards liberalisation there should be a thorough investigation into the effects on wages and working conditions".
The noble Lord, Lord Geddes, at the end of his presentation referred briefly to the current postal dispute: the strike that took place during the past
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24 hours. I am pleased to hear that the Union of Communication Workers has stated that it does not intend to call any more strikes. It is not a matter that is before us today in the sense that we are discussing the report. Furthermore, I suggest that industrial disputes of that nature are never settled by a third party in the form of government intervening. I do not suggest that the Government have directly intervened, but it is down to the union and the Post Office to resolve the problem.
I too ask the Minister to comment on this week's reports about the proposed liberalisation, privatisation, of direct mail. It is an issue that we looked at and we do not support the privatisation of direct mail. We hope that, despite what we have read in the press, the Government will support that view. I shall listen with a great deal of interest to the Minister's reply. I commend the report to the House.
11.47 a.m.
Lord Bridges: My Lords, I thank the noble Lord, Lord Geddes, for the careful, admirable and impartial way in which he introduced the committee's report. We greatly regret that our chairman is not here to take part in the debate but I entirely agree that the noble Lord did admirably in his stead.
The Commission's proposals are in many respects unusual. First, they do not follow the customary trend which is common to so many Commission proposals by suggesting more measures of centralised control and ever more tightly regulated markets. Rather, the move suggested is in the opposite direction by seeking to promote deregulation and greater commercial freedom in postal services, a sector which is still owned by governments in every member state. Thus, the Commission's initiative may be said to be inspired at least in part by the privatisation initiatives of the Conservative Government of the past two decades.
The proposal is also unusual because the Commission does not, as is normal, present a united front. There is an evident difference of opinion between Directorate-General 13, which is responsible for telecommunications and postal matters and produced the draft directive, and Directorate-General 4, which is responsible for competition policy and which produced the draft notice. That difference of opinion was confusing not only to our sub-committee but to all member states which considered the document. I believe that some confusion remains despite the withdrawal of the draft notice.
A third unusual aspect of this subject is the current labour dispute in this country between the Post Office and its labour force. According to newspapers, the Government believe that they may have to introduce some of the measures which are discussed in our report. That factor makes this debate of greater topical interest than would otherwise have been the case.
The broad approach taken by the Commission is to introduce more competition into postal services in member states, particularly in some sectors such as direct mail which have hitherto been reserved to postal administration. The general attitude of the sub-committee, which I share, was to find that approach

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unsatisfactory because it proceeded on the basis of economic theory and tended to disregard the social consequences and benefits which flow from the kind of efficient universal service which we normally enjoy in this country.
I agree with that reaction. Having spent much of my life away from the home base and having depended greatly on the speed and regularity of postal communications within my family, it has meant a great deal to me, when living perhaps several hundreds of miles away from home in different parts of the country, to know that a letter posted at three o'clock on Sunday afternoon would normally reach me early the next day. There are few if any other countries in Europe where that can be depended upon. Yet surely that is part of life in a civilised country and society.
In our view, it would have been better for the Commission to have concentrated on improving postal services throughout Europe to the level which we enjoy here. Indeed, as has been remarked, some member states have inadequate postal services. When I lived in Rome some 10 years ago, it could take up to a week for a letter to go from one part of the city to another. I do not believe that the situation has improved much since.
In southern Europe, the main political importance of the post office is as a large employer of unskilled labour rather than as the provider of an efficient service for all citizens. I suggest that that would have been the right target for the Commission to aim at.
But even if some European postal services are slow and inefficient, they are still very important from a social viewpoint. That importance takes different forms in different countries. We all know what it means here and we are all aware of the contribution which a friendly postman may make to the life of a small community.
I give a different example. Some 30 years ago, when living in Greece, we spent a happy summer holiday on a remote island in the Cyclades. The postal service there was an eye-opener. Communication with the rest of Greece depended on the arrival of a steamer from Piraeus, a journey which took some 14 hours and reached its destination in the small hours. Nevertheless, the island postman was on hand and rowed out to the ship with a bag containing the outgoing mail, exchanging it for the incoming mailbag.
I should explain that the Greek word for postman taxidromos means the fast runner and the Greek word for post office, taxidromeion, means the fast-running department. But on an island like the one we were on which was rocky and hilly, the best way in which to proceed was on a donkey. Therefore, for the next six days the postman travelled around the island on his donkey visiting each settlement in turn. On arrival at a small hamlet, he would tie a donkey to a pine tree—once I actually saw a notice saying, "Do not park your donkey here"—take off his satchel and extract a post horn from it which he blew. All the inhabitants would then arrive and he handed out the mail to them. In general, the envelopes were perused with interest but also in general were handed back to the postman so that he could read the letter to the recipient. After a pause and much discussion, the recipients of the letters might
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then invite the postman to inscribe their replies in return for a bottle of fizzy lemonade. That was the procedure. At the end of the week, the postman travelled back on his donkey and handed in the outgoing mailbag to the steamer.
The point of the anecdote is to illustrate that the social service provided by the post in isolated communities is important and, for them, the liberalisation of direct mail would mean nothing at all.
In our society, direct mail is of course of great importance, particularly for those offering services and products and other means of introducing them to the public and to the market. There are other means of doing that by advertising in all its various and competitive forms. It happens that since our report was completed, I received a letter from an organisation representing such firms which regrets that the committee's report favours leaving the postal system in this country much as it is. The letter says that customers will not benefit from that and regrets that we did not address further the needs of the private sector.
I disagree with that view. Individuals are well served by the present system and most of us do not wish to be deluged with unsolicited mail, much of which is thrown away after the most cursory examination. That seems to me to be a colossal waste of resources and I have even sometimes wondered whether we should not reintroduce the 18th century system of a tax upon paper. That would at least spare some of our forests, save money on unnecessary imports of paper; economise on newsprint, reduce the size of newspapers, and help to restore the essential link between communication and thought which seems to me is too often lacking in our society.
There is also the point made by the Government—and it is important—referred to in paragraph 66 of the report that:
"a degree of monopoly is needed to support the maintenance of the universal service and a uniform tariff structure".
The only exception which I should be willing to contemplate would be the provision of an express letter service which, exceptionally, our own Post Office has not provided in my lifetime to a high standard.
In contrast I could receive from my home in suburban Washington DC an express letter delivered by US mail even on a Sunday morning. That service was of a very high standard and was extremely useful. That would be an additional useful service for us to have here, particularly since the withdrawal of the old telegram service.
I hope that the investigations which we have made into this complex subject in a rather long report will help policy makers in this country and elsewhere in Europe. I do not believe that the Commission's proposals measure up to the needs of coming generations, partly because, as I said, it is too reliant on economic theory but also because it does not pay sufficient heed to the growing trend towards electronic communication. Just as the telephone has reduced dependence on mail in our lifetime, so surely will the fax and e-mail reduce it further in the next generation. All the witnesses from whom we heard concurred with that view. Therefore, a sounder approach might be to

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emphasise the role of governments and PTTs in providing and regulating a national and, perhaps eventually, Europe-wide network of high quality trunk cables with access for service providers at reasonable prices. That would be a more worthwhile contribution to our future communications needs rather than tinkering with the existing postal service on largely theoretical grounds.
11.58 a.m.
Lord Brabazon of Tara: My Lords, I join with other noble Lords in sending my best wishes to my noble friend Lord Elibank, the chairman of our committee, and I wish him a speedy recovery. I should also like to congratulate my noble friend Lord Geddes on stepping into the breach at short notice and on giving such a lucid description of our report. Following the speeches of the noble Baroness and the noble Lord, Lord Bridges, I shall be able to be brief.
It is timely that we discuss this report today because I understand that the Council of Ministers—and my noble friend Lord Geddes referred to this—discussed this issue only yesterday. I shall be extremely interested to hear from the Minister about what conclusions, if any, were reached on that issue.
I enjoyed sitting on the committee for this report. I found it extremely interesting. I found out many things which I did not know about the postal service and I was extremely impressed by a number of matters which I discovered.
As other noble Lords have said, it is important to remember that the postal service is an essential business tool for business customers in this country, but it is also an important social force for good, particularly for those people living in rural areas.
As a member of the committee, I was pleased when it became clear early on in our proceedings quite how good the British Post Office is compared with many others within the Community. That was a source of pride to me, and, I believe, to others as well.
The notice, which I now understand has been withdrawn—and I quote from paragraph 14 of our report—says that the task of public postal operators,
"consists in the provision and the maintenance of a basic public postal service guaranteeing, at affordable, cost-effective and transparent tariffs, nation-wide access to the public postal network … including … accessible postal boxes [and] regular scheduled delivery rounds".
Those are facilities which we in this country already take for granted. It is unfortunate that we should happen to be debating such a report on the day of a strike; indeed, reference has already been made to that fact. I only have one point to make in that respect. The noble Baroness, Lady Dean, told us that the unions have said that there is no need for further strike action and that talks will be resumed for the time being. However, I believe that that was said on Wednesday, so I find it somewhat strange that we are having another strike today. I hope that it will be the last one and that agreement will soon be reached.
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There are two issues which arise from that industrial action. The first is something to which we make reference in our report; namely, the competition that is undoubtedly coming—and, indeed, has already come—from fax and electronic mail. I saw an advertisement in a newspaper only the other day which said, "If the post can't deliver, BT fax can". There is no doubt in my mind that such disputes are bound to encourage people to use alternative forms of mail transmission. Unfortunately for the Post Office, some of that business will not return and those people may continue to use fax machines, and so on. I do not know how much it costs, but I believe that it is a good deal cheaper than sending a first class letter.
The second aspect is the possible suspension of the £1 monopoly threshold. I hope that that does not happen. It would be unfortunate if it did. If it is to be suspended, I trust that that will be only a temporary measure. As I said, I hope that the dispute can be brought to a rapid conclusion. However, at the same time, I hope that nothing that is finally decided so far as concerns the directives or notice will remove the Government's right to suspend the monopoly if in fact there was a really serious long-term disruption to services some time in the future.
As well as being one of the most efficient in the Community, our Post Office is also one of those that offers the best value for money. If one looks at the table on page 48 of the second part of the evidence to our report, one will see that the cost of posting a letter within the EC to another Community country is 25 pence in this country and that that is the second cheapest rate after Greece. The noble Lord, Lord Bridges, has already referred to the Greek Post Office and perhaps, therefore, enough has been said on the subject. It compares very favourably with the price of 38.3 pence charged in Sweden which, allegedly, has a more liberalised system than we have.
I should like to make one further point in that respect. The table to which I referred does not use straightforward exchange rates; it uses purchasing power parities to give a more accurate comparison of the prices. I should point out to the House that that seems to me at any rate to put the prospect of a common currency and economic and monetary union somewhat further away than some people may think.
On the question of the reserved area, the Commission proposes price and weight thresholds. I believe that a single price threshold would be much easier to operate. As has been said, we have had a £1 limit in this country since 1981. That has worked well. Despite having reduced in real terms, it does not appear to have damaged the business of the Post Office. Moreover, it is probably one of the lowest within the European Union. Indeed, I saw from the table that many countries operate a weight threshold as high as 2 kilogrammes. I do not know how much a parcel of 2 kilogrammes costs to post, but I believe that it would be considerably more than £1.
There is another area where I seriously disagree with the Commission's proposals. It is a matter that has already been well addressed, so I can only endorse my agreement with what has been said. I refer to the absence of a uniform tariff. I cannot conceive of a universal service without a uniform tariff being anything other than almost meaningless. Indeed, the noble

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Baroness, Lady Dean, made that point extremely well. If we were not to have a uniform tariff, it might well cost £2 or £3 to send a letter from London to Scotland, whereas it would only cost 25 pence to send one from here to the City. The Commission tries to get round that with the word "affordability". But what is affordability? Is a £2 postal charge to Scotland affordable, or is it not? I fully endorse what has already been said on the subject.
The main question is whether such a universal service at a uniform tariff can be guaranteed unless the operator is allowed a monopoly. I do not believe that it can. Again, by way of a sort of compromise, the Commission proposes to impose a levy on other competitive operators to compensate the provider of the universal service. I believe that that would be very bureaucratic and not at all satisfactory, especially as far as we are concerned in this country.
If someone were to leave the Chamber at the moment and go out into the street, I would have a small bet with that person that, within five minutes, he would see at least half a dozen motor cycle couriers riding past, going about their business. Is the Commission really suggesting that all those motor cycle couriers should have to be registered, should have to produce returns of their business and, indeed, be obliged to pay some kind of levy if, of course, they are allowed to enter the reserved area of the market? I do not believe that that is a practical suggestion.
There is one further point that I should like to make on the question of private companies in this country operating outside the reserved area; like, for example, couriers. I received a letter from one of the companies concerned. It seemed to me to make a good point which I hope my noble friend the Minister will be able to address. At present, the Post Office is exempt from VAT on services which are outside the reserved area, but its direct competitors in the express distribution industry are subject to VAT. That does not seem to be fair.
In summary, I do not believe that we in the UK have much to fear from the first stage of liberalisation proposed which, after all, will only bring the rest of Europe into line with the good service that we already enjoy in this country. However, as regards the second stage—that is, direct mail and incoming cross-border mail—I believe, for the reasons that have already been given, that we should move forward with extreme caution; otherwise damage could be done to the universal service, and that is something that none of us on the committee would wish to see happen.
However, I would enter one caveat in that respect. If a post office is not offering the minimum acceptable service in terms of delivery and collection as laid down in the directive, I believe that it should be open to competition. I do not think that we would have much to fear in this country from that prospect, but there are other post offices which, after all, have an effect on the business that we do here which might. Having said that, I can only join other noble Lords in commending the report to the House.
12.7 p.m.
Lord Kenyon: My Lords, I, too, should like to thank my noble friend Lord Geddes for introducing today's debate on behalf of my noble friend Lord Elibank. I want to take this opportunity to send my best wishes to my noble friend for a speedy recovery. I congratulate the Select Committee on a very comprehensive and searching report.
My reasons for speaking in this debate on the liberalisation of the Community postal services stems from my membership of the Committee of the Regions of the European Union, of which I have been a member since 1994, following its creation under the terms of the Maastricht Treaty.
Perhaps I may, first, give a brief introduction to the Committee of the Regions for the benefit of those noble Lords who may not be familiar with it. Article 198a of the Treaty calls for:
"A Committee consisting of representatives of Regional and Local Bodies, hereinafter referred to as 'the Committee of the Regions' is hereby established with advisory status".
That is all it has: advisory status. The treaty further states that the members may not be bound by any mandatory instructions, and that they shall be completely independent in the general interest of the Community. The committee must be consulted by the Commission or by the Council in five key areas of policy that directly affect the responsibilities of local and regional authorities. These are economic and social cohesion, trans-European transport, telecommunications and energy infrastructure networks, public health, education and youth, and culture.
In addition, the Committee of the Regions must be informed by the Commission or the Council whenever the Economic and Social Committee is consulted and may form an opinion if it feels that specific regional matters are involved. Finally, the Committee of the Regions may issue an opinion on any subject where it considers such action appropriate. I hasten to add that we do not take that route lightly. We measure our achievement by the quality of the debate on the opinions before us and not by the number of opinions that we generate in a year.
All the members of the Committee of the Regions are elected members of regional or local government in their respective countries. My colleagues from the United Kingdom are all from county, district or borough councils, whereas my German colleagues include the presidents and ministers of the Lander. While our levels of influence in our respective regions may be vastly different, we share a common purpose to ensure that careful consideration is given to European legislation that may affect regional matters by politicians who have a regional mandate. As noble Lords will have noted from the preamble to the draft directive on the liberalisation of the postal services, this was a case where the opinion of the Committee of the Regions was sought.
The Committee of the Regions organises its work into eight sub-committees, rather confusingly referred to as commissions. In this case the opinion was referred to Commission 3, of which I am a member, which deals

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with transport and communicationns networks. We formed a small working group to hear representations from all concerned parties and to draft the opinion before its consideration by the whole Commission. It will come as no surprise to noble Lords to learn that the evidence that we heard and the conclusions that we reached were similar to those of your Lordships' Select Committee.
Right from the beginning we noted the absence of any mention of a uniform tariff. We heard evidence from representatives of employers' organisations arguing for complete freedom to set postal rates that truly reflected the cost of each particular delivery, with the result that a letter to the Outer Hebrides would be prohibitively priced. From a regional point of view that would set the clock back by further marginalising the more peripheral areas of the country. I am sure that I do not have to remind noble Lords that I come from Wales and that I already have an acute awareness of the implications of marginalisation. We do not want more money from the cohesion or structural funds; we just want a level playing field. Indeed, a number of members of the Commission went further and supported strongly the concept of a single European uniform tariff.
We also noted that the draft directive was surprisingly sparse in its coverage of regional and local aspects, particularly in failing to acknowledge the important role of post offices in rural areas, which do not just receive and deliver mail and sell stamps, but provide valuable community services. These are listed in the evidence at page 97 in a response from the Communication Workers Union to the noble Baroness, Lady Dean of Thornton-le-Fylde.
Many of these community services are undertaken by the Post Office at considerable additional expense, and they are undoubtedly at risk if they are not protected. Particularly worthy of mention is the free post service for the blind—the noble Baroness mentioned this earlier—which is currently subsidised by the Post Office to the tune of some £10 million per annum. Bearing in mind that blindness is one of the most debilitating afflictions—my father suffered from severe short-sightedness throughout the whole of his life, and therefore I know what I am talking about—the continued subsidy of this service is a small price to pay, and the inclusion of an explicit obligation on member states to include such a service in the universal service obligation throughout the European Union would be of great benefit to this highly disadvantaged sector of our society.
The Commission was also extremely concerned that the timescale for liberalisation was too fast and would not allow the universal service provider sufficient time to re-organise the business to be able to continue providing a satisfactory service at an affordable price. Our final opinion calls on the Commission to submit its report four years after the date of entry into force of the directive. I believe that this is in line with the views of most consultees except for the Mail Users Association.
The one disappointment I have to add is that we were unable to adopt our opinion unanimously at our plenary meeting on 13th June as the representatives from the
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Netherlands and Sweden felt obliged to vote against the opinion. Having heard and read the evidence of the state of the postal services in those countries, I have no hesitation in welcoming the Select Committee's conclusion at paragraph 186, that the measures taken in these countries,
"do not provide a suitable model for the United Kingdom or for the Community as a whole".
Finally, I should like to address Article 9 of the directive. It comprises only a couple of lines which state:
"Member States shall appoint the entity or entities that are entitled to place letter-boxes on the public highway for the reception of postal items and to issue postage stamps bearing the name of the country".
Those are only a couple of lines but they are the sort of stuff that Euro-myths are made of. The Post Office picked it up in the annex to its memorandum at paragraph 5.15 on page 61 of the evidence. I recall it from my days at school when I used to collect stamps. In those days the only words to be found on United Kingdom postage stamps were the words "Postage" and "Revenue"; never, never the name of the country.
I am quite sure that there was never any intention that this article should try to instruct us to change a proud tradition more than a century old. I would surmise that the most likely reason is that the simple article was drafted by someone from one of the 14 other member states who was unaware of this practice. But it has been drawn to our attention by the Post Office and I sincerely hope that Her Majesty's Government will ensure that the final words of that article are dropped from the final directive.
The proposed developments try to strike a balance between strongly divergent interests, as well as aiming to impose a standard of service that will mean a vastly improved service in many other member states. This will not be easy, but I too share the views of the Select Committee in welcoming the proposals and inviting the Commission to look to the United Kingdom Post Office as a model for the European Community.
12.17 p.m.
Lord McNally: My Lords, the most exciting comment I have heard in this debate was made by the noble Lord, Lord Brabazon, when he remarked that the European Commission has ambitions to control the cycle and motor cycle couriers in London. I did not think anyone controlled those free spirits. It seems an ambitious project even for the Commission to consider. I wish to associate myself with the remarks about the noble Lord, Lord Elibank. I wish him well in his recovery. I congratulate the noble Lord, Lord Geddes, on his role as substitute in introducing the debate. Indeed, listening to the speeches, I recalled a remark made to me by a senior official of the European Commission who said that the best scrutiny of Community business was carried out by the House of Lords standing committee on Europe. The quality of its work justifies that kind of comment.

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Last night, attending a conference in Birmingham, I was told by an industrialist that drills used to be made in Birmingham and that the people of Birmingham were confident they made the best drills in the world. They felt they did not have to worry about competition as their drills were so good. However, one day someone produced lasers and the people of Birmingham suddenly realised they were not in the drill business but rather in the business of making holes. They realised that if someone developed a better way of making holes the people of Birmingham who made drills would be in trouble.
On the day of the last postal strike, having received a flyer from BT offering to put me without charge on to the Internet, it struck me that the intricacies of the industrial dispute are not the important factor. From the long experience of the noble Baroness, Lady Dean, I accept the advice that we on these Benches should not pontificate or interfere in the minutiae of a dispute. However, when such disputes arise in hundreds of thousands of different places individuals will discover that there are other ways of communicating. That can only do long-term damage to the postal service, workers and management alike.
The starting point of any debate on the postal services must be the finding of your Lordships' Select Committee that,
"the UK Post Office is a model for other Member States combining profitability with a high level of service".
Given that bill of health, the first temptation is to say, "If it works, why try to fix it?" We want a postal service which is commercially successful and socially responsible and which offers universality of service at a reasonable price; and we seem to have it. So why the need to examine and ponder over our postal service and its future?
Experience shows that fossilising or romanticising an industry, no matter how well respected or well loved it is, is almost to condemn that industry to die. There is a need to continue to examine the bases of that industry. In 1991, when the Prime Minister launched the Citizen's Charter he said,
"We believe that further benefits to [the] consumer would now flow from an additional and significant liberalisation of the domestic postal market".
I give broad support to that idea. We on these Benches did not support the idea of full blown privatisation. Nor did a large number of Government Back-Benchers. The idea of postal service privatisation came when the bloom had gone off the privatisation success story and constituents were becoming suspicious of some aspects of the behaviour of the beneficiaries of privatisation in certain industries. That is a pity. Privatisation has its success stories. Having been through a number of debates as to what would happen to specific industries if they were privatised, and having then seen the outcome, I have to say that a blanket refusal to consider privatisation was wrong. BT is an outstanding example, but there are others.
I suspect that there is a need for the Post Office to spread its entrepreneurial wings, to compete, to invest and to innovate. In doing so, it needs to satisfy two
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conflicting concerns; the social concerns of rural communities and the blind. Like other noble Lords I have received briefing from the RNIB about the importance of the postal service to the blind. But there is also the need to make sure that competition is fair. The only criticism I have read of the committee's report is from the Association of International Courier and Express Services which states:
"We feel that it is regrettable that the Select Committee did not address the concerns of the private sector. We have always advocated that the Postal Administrations of Europe must be subject to the same customs procedures, VAT laws, transport regulations and other requirements which the private sector must comply with. Until private companies can operate on a 'level playing field' with the postal administrations, the consumer's existing options will be further restricted".
Given the importance of the private sector, there is a need to examine its treatment when considering the broader policies. There is a record in Europe of state monopolies playing the nationalist card to defend vested interest. One has only to look at the state airlines to see how the consumer can be cheated by playing that card. On the other hand, we have to be realistic. There is a tendency by the private sector to cherry pick. If we are too dewy-eyed about the situation, we shall see cherry picking in the postal services which can undermine the service as a whole.
It is not a one-way argument. Perhaps the best summing-up occurred in a debate in the European Parliament. That is sometimes considered a rather dull place. The quotes I shall give indicate that it can have quite spirited debates. I cite first a letter from the Labour MEP, Mr. Brian Simpson. He said:
"it is my belief that citizens living in the Shetland Islands or the West of Ireland, or in the Pyrenees or the Greek islands, are entitled to the same universal service at an affordable price as the citizens living in London, Paris or Athens. The effect on rural areas will be catastrophic. Up will go the charges, down will go the quality of service, closed will be the small post offices, redundant will he the postal workers, finished will be such services to the community as post buses and travelling post offices".
Those are serious charges, indeed. However, Anne McIntosh, the Conservative MEP said,
"The socialists are misguided in the belief that privatisation leads to worse services. It is blatant protectionism. The opening up of the Europe's postal market will provide new opportunities for both industry and Europe's citizens … We are creating a Europe where the consumer decides and industry competes … No one should be frightened of competition or new technologies. The socialists have no regard for consumers' interests. They seem determined to resist the advantages of liberalisation. They refuse to see the benefits for British industry and users of the [liberalised] post services".
Those are powerful and sincerely held views. In some ways both are right. Despite the fact that the Government and the European Commission seem to be urging the case of liberalisation, the Post Office, taking pride in its operating efficiency—it is confirmed by the report—urges caution. As a number of the members of the committee have said, the committee want us to proceed along the path of liberalisation but with caution. Can we have universality and social responsibility, efficiency and choice? Can we have our cake and eat it? That is the dilemma that faces the Government and policy makers. The Post Office warns that incautious liberalisation could threaten postal services, not improve them. Both the European Parliament and the

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United Kingdom Parliament, with eyes on their own electors, have expressed similar suspicion and hostility. Yet my mind returns to the Birmingham industrialist making his drills with competition from lasers.
The postal services cannot debate their future in happy isolation. They must equip themselves in their technology, work practices and marketing for the dawning information society and the 21st century with all its demands. I hear the words of caution from all sides of the House. All I say to the decision-makers is, "Do not allow that caution to become fossilisation. Do not allow it to become a reason for total inaction." That is no friend of the postal services. I should like to see develop a Post Office which is given the maximum freedom of commercial action. If that were done, it would need an Oftel-type regulator to ensure that it behaved properly and transparently. However, that is the way ahead, not just for the postal services but for our whole approach to communications in the years ahead.
12.30 p.m.
Lord Haskel: My Lords, we on these Benches welcome the report and congratulate the Select Committee on its thoughtful and balanced work. We particularly regret the absence of the noble Lord, Lord Elibank, and are delighted to learn that he is leaving hospital today. We wish him a speedy recovery.
The committee and most noble Lords who have spoken today are absolutely right to recognise the economic and social importance of a universal service at affordable prices. This is a sensible and civilising view. They also show some insight in recognising that the competition to this universal letter service is not only from other letter carriers but from other forms of communication: fax, the Internet, e-mail and even the telephone. It is for that reason that the Commission's proposals in the draft directive for liberalising the service by the year 2001 are seen as impractical. As all speakers have said, liberalisation will undermine the universal service.
The Select Committee is absolutely right. The first priority should be the provision of a good quality universal service at an affordable and uniform price, not the promotion of liberalisation. It acknowledges that the universal service will only be provided if it continues to be financially viable and independent of subsidy. The market will not provide this universal service. It will be achieved by the Post Office having sufficient monopoly protection to support the less economic parts of the service.
As many noble Lords have pointed out, the balance between the high fixed costs necessary to provide a universal service on the one hand and the degree of monopoly required to ensure financial viability on the other will only be achieved if incoming, cross-border mail and direct mail are included in the monopoly area reserved for the national post offices.
However, as the noble Lord, Lord Geddes, told us, the Government seem to be in favour of liberalising direct mail. This poses obvious problems of verification and classification. We all get direct mail advertisements
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with our gas and electricity bills. How will this mail be classified? Also, once it is in the envelope, how will we verify that the direct mail is what it says it is? These questions need to be answered to prevent unfair competition.
Electronic forms of communication already provide competition to these sectors. Noble Lords who use e-mail will have noticed that their mailboxes already contain direct mail, including special shopping offers and free magazines with advertisements. We have been promised a whole lot more.
My noble friend Lady Dean reminded us that most business correspondence and invoicing is done on computers. Virtually all business computers sold today have modems already built in so that messages can be transmitted straight off the screen, without anyone having to print them out and send them through the mail. Added to that, most retailers and many manufacturers today insist that their suppliers and customers are logged onto their own electronic networks for ordering, invoicing and stock control. This applies to national as well as cross-national communication. For non-business mail, there is a huge growth in the number of people with access to the Internet. It is no longer limited to the e-mail service providers. The cable companies and BT are all offering cheap access.
There is now a set-top box costing £99 which will enable access to the Internet using a telephone and TV set—equipment which most people already have in their homes. This is where the competition will be to the letter monopoly.
The impact of all this competition on the reserved sector will have to be met by increased efficiency and excellence of service and by adapting to survive. I agree with the committee that the sector will not be helped to compete by the liberalisation steps proposed in the draft directive. It will certainly not be helped by privatisation. These steps only dilute or avoid the problem. They do not deal with it.
I agree with other noble Lords that the competition cannot be dealt with by breaking up the service. For some years this has been a fashionable formula used by business consultants for dealing with many industrial problems. Managers now realise that an end-to-end service under their control is valued by their customers and essential to provide continuous improvement—essential for any business to progress.
Here I must congratulate the Post Office. As the noble Lord, Lord Geddes, told us, it emerges from this report extremely well. Its service is acknowledged as being one of the best in the Union: a successful combination of good service, profitability and low cost.
As the Committee says, it has,
"struck a successful balance between commercial and social considerations".
As other noble Lords have reminded us, included in this balance is the Freepost articles for the blind scheme. There are nearly 1 million blind and partially-sighted people in this country and the scheme is a lifeline to them. Incidentally, the draft directive ignores their needs. Neither does the Post Office ignore the express service. The noble Lord, Lord Bridges, will be interested

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to learn that the Post Office offers a same-day service in most major cities. In fact, the committee compares the United Kingdom Post Office with the more liberalised services in Sweden and the Netherlands and it concludes that those are not examples to follow. Indeed, the committee considers that other member states should be encouraged to use the UK Post Office as a benchmark.
The recommendations of the committee are in no way invalidated by the postal strike. Even though this is the first strike for eight years, any strike is to be regretted. Recent statements by the party opposite implying that the way to deal with the strike is to remove the Post Office's monopoly is misconceived. Other firms will not provide the universal service which is the committee's first priority. As the noble Lord, Lord McNally, said, all it will do is to allow other firms to cherry pick or cream skim, as the directive puts it. Anyway, tough competition already exists from electronic mail.
The strike is a serious matter. It affects the working and private lives of virtually all of us. Yet why politicians want to involve themselves in a dispute of this kind where they can contribute nothing defeats me. Where politicians can be effective is in ensuring that there is a level playing field outside the monopoly area. For example, is there equal treatment between the Post Office and other competing services as regards VAT or customs charges, as the noble Lord, Lord Brabazon asked? Are the Government satisfied that there is no cross-subsidy by the Post Office from its monopoly service area to those areas outside the monopoly? Have the Government considered appointing a regulator to examine the interests of the consumer and others in the monopoly sector? These are areas for political involvement, not the strike.
Meanwhile, will the Minister confirm whether the Government have or have not agreed to, or are in the process of agreeing to, the proposals in the European Commission's draft directive? I understand the matter is being dealt with by Mr. Taylor. If the answer is yes, can the Minister explain the U-turn? In the past the Government have been opposed to the liberalisation proposals. The Government's approval of the directive would, indeed, be a kind of back-door privatisation via Brussels. The irony is that they would be achieving that by qualified majority voting, which the Government have been so anxious to criticise in recent months.
So I hope the Minister will not take the view that because of the strike the opinion of the Select Committee is invalid, wrong or impractical. This strike is a matter of managing change and industrial relations; it has nothing to do with the rights and wrongs of a universal service. I hope the Minister will not confuse the two.
I agree with my noble friend Lady Dean that this dispute must be settled by Post Office management, staff and unions. Industrial change is tricky in all sectors of business, public and private.
It could well be that the Post Office is suffering from BOHICA. I see the Minister looking a little confused. BOHICA is a disease prevalent among the staff of companies where new and fashionable management
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techniques are continually being introduced. It is found in Britain and in many other countries. It is best cured by managers, not by Ministers. Let me explain. BOHICA is an acronym for, "Bend over, here it comes again".
I congratulate the committee on this report, and hope that the Government will accept its sensible proposals.
12.41 p.m.
Baroness Miller of Hendon: My Lords, despite the excellent way in which my noble friend Lord Geddes moved the Motion, I know that he will not mind my saying that I very much wish that the noble Lord, Lord Elibank, had been well enough to do so himself. On behalf of all those who have not had the opportunity of speaking today, I wish him a very rapid recovery.
I would like to thank the committee for the attention it has given to the Commission's proposals, the thoroughness of both its inquiry and the subsequent report, and for the opportunity it has given for a full debate. I thank the House for the excellent contributions made—even though I did not know anything about BOHICA.
I apologise to noble Lords for the delay in their receiving the Government's response. That, I am afraid, was due to the fact that the department was determined to provide the committee with a full and thorough response. It therefore took a little while to complete.
The Government fully share the committee's view that the development of a European postal policy is important and warrants careful examination. Without doubt the postal sector has great significance for both economic and social reasons. The committee's report and our debate today have rightly drawn attention to the striking record of our own Post Office.
As the report reminds us, in the mid-1970s the Carter Report anticipated only problems and predicted that the Government's likely task was confined to managing the decline of the United Kingdom Post Office. But in 1996 we can be proud of a highly successful and profitable Post Office that is the envy of many countries. My noble friend Lord Kenyon said that it was a model that others might want to follow.
And how was this achieved? In 1981 the Government took the unprecedented step of reducing the Post Office monopoly to items costing up to £1 to post. This, coupled with consistently sound management, effective restructuring with cost reduction programmes where needed, and a philosophy that put the customer first has led not just to a successful Post Office but to a thriving private postal sector.
I say that because while the Government are in full agreement with much of what the committee's report says, there is a difference between us over liberalisation and its effectiveness as a tool for promoting reform and growth in this sector.
The Government are firmly committed to the Commission's overall aim to develop the postal sector through a programme of controlled liberalisation. We share the concerns highlighted in the committee's report and repeated today about the threat from the new

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electronic communication alternatives like fax and e-mail, and other more sophisticated systems. The story told by the noble Lord, Lord McNally, about drills and lasers well illustrates that point. The report referred to this as a "growing challenge" and I think that that is the way to view it.
We share the committee's view, as my noble friend Lord Geddes and the noble Baroness, Lady Dean, said, that the more extensive liberalisation measures adopted in Sweden, the Netherlands and Finland do not provide models for the Community as a whole. The variations in geography, social needs and cultural expectations and the stage of postal development in each member state demand tailored solutions within a broad regulatory framework. These liberalisations are also relatively recent and longer experience of them will be necessary before definitive conclusions can be drawn. Nevertheless the vigour and imagination with which these countries have approached the problem of potential declining postal markets is to be commended.
As my noble friend Lord Geddes and the noble Baroness, Lady Dean, pointed out, we share the committee's view that postal services have a vital social as well as economic role. We welcome the fact that the Commission has now set in hand a number of independent studies that will help inform discussion and decisions in the future. Community postal statistics are also inadequate and we shall continue to press for improvements in that area. We welcome the provisions in the directive for the establishment of a committee comprised of individuals with relevant experience with whom the Commission can consult.
What the Community does not have is the luxury of time. We have to move forward, and swiftly. Too many member states still have public postal services with over-staffed monopolies that neglect the needs of their customers and require urgent reform. They need a regulatory framework that will compel them to restructure if they are to provide a universal service, achieve and maintain financial viability in the 21st century and, of course, improve the postal service throughout the Community.
I should like at the start to address the controversial issue of the second stage of liberalisation—and in particular the Commission's proposals for liberalisation in 2001 of direct mail and incoming cross-border mail. This is certainly the major issue for most member states, and the committee rightly gave it considerable attention.
We had hoped that real progress would be made at the Telecommunications Council meeting yesterday and that the directive would be adopted before the end of the year. Unfortunately, no political agreement was reached and the timetable for adoption has certainly been set back.
Noble Lords may know that at the Telecommunications Council meeting yesterday there were two possible compromises on the table concerning the second stage, one of which proposed the liberalisation of direct mail—but not incoming cross-border mail—in 2001. The hope was that political agreement would be reached and real progress made
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towards adoption of the directive. That did not happen and the matter must now go back to the Council working group for further discussion. That is a great disappointment.
I take full note of the committee's concern about a firm commitment to liberalisation of direct mail in 2001, referred to by my noble friend Lord Geddes and others. However, the Government have become increasingly concerned that the first liberalisation measures will not produce the level of change that is needed in some member states if the postal sector as a whole is to meet effectively the challenges of the 21st century. My noble friend Lord Brabazon commented on that point. It is for this reason that we have argued strongly for a clear timetable for liberalisation based on a Commission review in 1998 of all the options, without prior presumption, being on the table. We have now moved forward from this position in an attempt to be flexible and reach agreement with other member states.
Direct mail represents 17 per cent. of Royal Mail's volumes and 10 per cent. (or £500 million) of its income and we have therefore had to look carefully at whether or not removal of this traffic from the reserved area could threaten its ability to provide a universal service at a uniform tariff, particularly if this was coupled at the same time with liberalisation of incoming cross-border mail. We have concluded that an efficient and competitive Post Office, such as our own, could accommodate liberalisation of direct mail in 2001 without a threat to the universal service. Furthermore, we believe that our Post Office would be a strong competitor in a liberalised market. Many of your Lordships have congratulated the Post Office today and we believe that they have the competence and ability to do that. The UK is therefore prepared to support a firm commitment to liberalisation of direct mail in 2001.
Europe needs this directive and we are concerned about the lack of progress. We believe that the postal sector needs competition, and the liberalisation of direct mail in 2001 is a comparatively modest step and a reasonable compromise. We shall continue to state our view, but we shall also strive for an acceptable compromise among member states on this crucial issue.
I was fascinated by the story told by the noble Lord, Lord Bridges, of the Greek island and the donkey. No doubt the pace of life in such communities is such that one delivery a week does meet their needs. The story illustrates clearly why the Council of Ministers finds it so difficult to reach agreement on the universal service and the reserved areas that should be adopted at European levels. What suits one place clearly may not suit another.
I shall now turn to the detail of the recommendations and try to address the particular points that have been made in debate. I want to reaffirm the Government's commitment to a universal letter and parcel delivery service to every address and household in the United Kingdom. That would certainly ensure delivery to the address in Wales of my noble friend Lord Kenyon. We also have a firm commitment to a uniform and affordable tariff and to a nationwide network of post offices. As we have said on many occasions, these are, for the Government, non negotiable.

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We share the view of the committee that the universal service obligation proposed in the draft directive represents the minimum acceptable service that Community post offices should provide. We think that the weight limit for packages could be reduced from 20 kilogrammes to 10 kilogrammes without difficulty, but this too was one of the items discussed yesterday and on which there was no agreement among member states.
Of course, we would like all member states to offer a six-day service, like our Post Office, but that is unrealistic at the present time. Nor, as the report suggests, must those that currently offer a higher level of service be tempted to slip backwards. We are confident that that will not happen. The public postal operators are well organised at Community level and the successful post offices are driving up standards.
We think the reserved area proposed for the first stage of liberalisation is about right. As the noble Baroness, Lady Dean, said, the combination of price and weight makes for unnecessary complication, but it recognises that some member states define their reserved area by weight and it has the broad support of member states.
For some public operators it will mean a significant reduction in their monopoly, but I would emphasise that the directive sets only a maximum reserved area. Member states are free to set a smaller reserved area. We have further work to do on the detail but we shall not enlarge the United Kingdom's present reserved area. The advantage of our current price-only definition is that it allows for gradual liberalisation as the real monetary value reduces. We shall want to retain this feature.
We share the views of my noble friend Lord Geddes, the noble Baroness, Lady Dean, and indeed other noble Lords, that the uniform tariff concept could have received more attention in the Commission's proposals because of its importance to so many member states. The Commission's reasoning, however, is that there must be a degree of flexibility to accommodate both those member states that do not have a uniform tariff structure and future customer needs that may require some adaptation in services. There is the safeguard in the directive that requires the universal service to be affordable. On balance, we think this is an acceptable way to proceed and that we cannot impose a uniform tariff requirement on all member states.
I understand that the European Union is reviewing the public postal service exemption under their sixth VAT directive. We are well aware of the private couriers' concerns and we will take them into account when reaching a United Kingdom view. The first stage of liberalisation, however, remains quite modest and cautious. It is only a step in the right direction.
The noble Baroness, Lady Dean, referred to the notice's separate market definition of collection, sorting, transport and delivery. That has been widely interpreted as requiring open access to all but the delivery market, but the Commission has made it clear that the requirement is simply that, where a member state chooses to permit open access, it must be provided on a transparent and non-discriminatory basis. Clearly, the ambiguity in the text must be removed.
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We also share the committee's doubt that the optional suggestion of a levy on other operators to contribute to the universal service provision, referred to by my noble friend, Lord Brabazon of Tara, and, I should add, included largely on account of the new German regulatory proposals, may prove cumbersome and difficult to enforce.
With regard to the Royal Mail strike referred to by my noble friends Lord Brabazon of Tara and the noble Baroness, Lady Dean, they are both right in that it is not strictly to do with this Motion today. However, we also welcome the UCW's willingness to sit down with the Post Office, in a calm and constructive atmosphere and, without the threat of strike action, come to a reasonable and acceptable conclusion.
I also wholly agree with the noble Lords. Lord Kenyon and Lord McNally, and indeed the noble Lord, Lord Haskel—I expect I may have missed out some other noble Lords—that our Post Office's free post for the blind scheme is extensive and well-established, and we are fully committed to its continuance.
My noble friend Lord Kenyon referred to Article 9 of the draft of the European Union directive. The United Kingdom is the only country which does not have to include the name of the country on its stamps. We have a dispensation from the Universal Postal Union in recognition of Rowland Hill's invention of the postage stamp as a means of pre-payment. I can assure noble Lords that this position has been accepted by the European Commission.
The noble Lord, Lord McNally, asked that the Post Office should be given the maximum possible amount of commercial freedom. The Government will look at any proposals which the Post Office puts forward that in its view will help it to compete more successfully in the European postal market. They will be considered on their merits, but against the background that the Post Office is a public undertaking. We must have regard to possible displacement of private sector activity and the need always for fair competition.
Finally, I emphasise again the Government's firm commitment to the universal postal service concept and to the development of high standard postal services throughout the Community. We believe that that can best be achieved through a programme of controlled liberalisation broadly as set out in the Commission's proposals. In the further negotiations on the directive we shall try wherever possible to take account both of the committee's recommendations and the points made in the debate this morning. I thank the committee for its valuable contribution to this important discussion.
12.58 p.m.
Lord Geddes: My Lords, I hope all noble Lords who have taken the time and trouble to be in your Lordships' House on a Friday morning share my view that this has been a most worthwhile debate, and delightfully short, if I may say so. I would particularly like to thank the noble Baroness, Lady Dean, the noble Lord, Lord Bridges, the noble Lord, Lord Brabazon of Tara, and fellow members of the sub-committee for taking part. I know my noble friend Lord Elibank will be extremely grateful for their

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contribution. I also thank my noble friend Lord Kenyon for an extremely interesting speech regarding the European Union's Committee of the Regions. I find it gratifying that the noble Lord, quite independently, comes largely to the same conclusions that we did. It is always pleasing when some other body looks at the same subject and comes up with the same answers.
I thank my noble friend the Minister for her comments. Perhaps to her surprise, I am relieved that no decision was reached at the meeting yesterday. As I said in my opening comments, I personally was not at all happy with the view that the Government took. While asking her to pay attention, of course, to all the recommendations made in the report, I particularly ask her to look again at the question of uniform tariff, summed up succinctly in paragraphs 162 and 163 of the report:
"We consider a universal service to be meaningless in the absence of a geographically uniform tariff within each Member State … We therefore regard the draft Directive as unsatisfactory to the extent that it does not impose a uniform tariff requirement on Member States".
I press that point in particular on my noble friend and her ministerial colleagues.
Finally, I again emphasise the opinion of the committee, encapsulated at the end of paragraph 168:
"The only commitment the present Directive should impose on the Commission should be to produce a report evaluating the first stage of liberalisation … If, on the basis of that report, a second stage is considered to be justified, a proposal for legislation could then"—
I emphasise the word "then"—
"be brought forward for the Council and Parliament to consider".
We looked at that point, as my noble friend was kind enough to say, very carefully. That was a very strong and unanimous decision of the committee.
With those remarks, I commend the Motion on the Order Paper in the name of my noble friend Lord Elibank.
On Question, Motion agreed to.

Appropriation (No. 2) (Northern Ireland) Order 1996
1.2 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield)The Parliamentary Under-Secretary of State, Northern Ireland Office (Baroness Denton of Wakefield) rose to move, That the draft order laid before the House on 5th June be approved.
The noble Baroness said: My Lords, I beg to move that the draft Appropriation (No. 2) (Northern Ireland) Order 1996, laid before the House on 5th June, be approved.
The draft order before us today authorises expenditure of £3,617 million for Northern Ireland departments in the current financial year. This is in addition to the sum of £2,821 million voted on account in March, and brings
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total estimates provision for Northern Ireland departments to £6,438 million, an increase of 6.2 per cent. on 1995–96.
I know that your Lordships continue to take a close interest in the prospects for economic development in Northern Ireland and I should like to say a few words about the local economic situation before turning to the contents of the estimates. Both official data and survey evidence show that there is a marked improvement in the recent performance of the Northern Ireland economy and that future prospects are now brighter than for many years.
The latest data for the main economic indicators presents a positive picture. The output of manufacturing and production industries continues to rise at a rate well above that achieved at national level. Over the past five years, Northern Ireland's manufacturing sector has increased output by just under 12 per cent. compared to a 3.1 per cent. rise nationally. Over a similar timescale there has been a significant improvement in the Province's gross domestic product relative to the United Kingdom, with GDP per head rising from 77 per cent. of the national average in 1989 to around 82 per cent. by 1994. Between 1991–92 and 1994–95, exports by Northern Ireland companies (to countries outside the United Kingdom) increased by 48 per cent., significantly outperforming growth in exports in the United Kingdom of 30 per cent. On inward investment, recent survey evidence shows that the value of potential planned investment in Northern Ireland from overseas companies already operating in Northern Ireland is in excess of £270 million, with 73 per cent. of firms planning further investment in Northern Ireland. That is an enormous tribute to the workforce of Northern Ireland.
1995 saw the seventh consecutive rise in visitor numbers, with a record 1.5 million people coming to Northern Ireland, a 20 per cent. increase on 1994 and, spectacularly, a 67 per cent. increase in holiday visitors. Visitors to Northern Ireland spent £214 million in 1995, an increase of 17 per cent. on the previous year. Combined with recent survey evidence, that suggests a very favourable outlook for the future.
At March 1996 the number of employees in employment in the province stood at 573,880, the highest March figure on record. In addition, the seasonally adjusted unemployment rate has fallen for eight of the past 12 months to reach 11.1 per cent. of the workforce.
All that is very welcome news for the people of Northern Ireland and I am confident that the performance of the economy will continue to be sustained. But a brighter economic future will, without doubt, be put at risk if violence were to continue.
I now turn to the main items of expenditure covered by the order as detailed in the estimates booklet; all the figures are, of course, in pounds sterling. I shall start with the Department of Agriculture. The net provision in the two agriculture Votes amounts to some £164 million. In Vote 1, some £20 million is to fund EU and national agriculture and fishery support measures. The net provision covers the pre-funded

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market support measures under the common agricultural policy which total £135 million. The Vote includes some £6 million for various capital environmental and other grants to assist structural improvements. Some £14 million is for the hill livestock compensatory allowance scheme to provide support for farming in special areas, while £6 million is in respect of processing and marketing of fishing.
Vote 2, includes £144 million for regional services and support measures. That includes £60 million for the development of the agriculture and agricultural products industries and for scientific and veterinary services. Some £27 million is for farm support, enhancement of the countryside, and fisheries and forestry services. There is £24 million for central administration, including information technology and specialist accommodation services; and £5 million is for the rural development programme. Some £18.4 million is for watercourse management. This Vote also contains net provision of £9.3 million in respect of the EU peace and reconciliation programme which incorporates agricultural, rural and water based projects.
In the Department of Economic Development's Vote I, some £134 million is for the Industrial Development Board. This will enable the board to continue to attract and support industrial development in Northern Ireland, mainly through the provision of factory buildings and selective financial assistance to both new and existing companies. In 1995–96 the board supported some 35 inward investment projects offering almost 5,000 jobs.
In Vote 2, £32 million is for the Local Enterprise Development Unit, Northern Ireland's small business agency. This will allow the agency to maintain its excellent track record in developing, strengthening and improving the competitiveness of the important small firms sector in Northern Ireland. Some £15.5 million is for the Industrial Research and Technology Unit, primarily to promote the competitiveness of local companies through encouraging innovation, industrially relevant research and development and by technology transfer. That underlines the importance the Government attach to helping Northern Ireland industry to grasp the technological opportunities which underpin successful economic development. Finally, in this Vote, £14.6 million is for the Northern Ireland Tourist Board.
In Vote 3, £212 million is for the Training and Employment Agency. This includes £73 million to fund 16,000 training places under the Jobskills training programme. Some £46 million is for the action for community employment and community work programmes, which will provide some 8,000 places for long-term unemployed adults in projects of community benefit. Some £24 million is to assist companies to improve their competitiveness by developing the skills of their workforce and providing training for management careers in industry.
I now turn to the estimates for the Department of the Environment. In Vote 1, £180 million is for roads, transport and ports. This includes some £147 million for the development, operation and maintenance of Northern Ireland's public road system. Maintenance of the road system remains a priority with some £72 million being spent this year.
Vote 2 covers the important area of housing. Some £210 million will provide assistance, mainly to the Northern Ireland Housing Executive and to the voluntary housing movement. When net borrowing and the Housing Executive's rents and capital receipts are taken into account, the total resources available for housing will be some £607 million. This is some £5 million more than in the previous year and will enable the Housing Executive to start some 900 new houses while housing associations will start some 1,250 new dwellings.
In Vote 3, gross expenditure on water and sewerage services is estimated at £181 million. Some £75 million is for capital expenditure and £106 million is for operational and maintenance purposes, as well as for administration costs.
In Vote 4, some £200 million is for environmental and other services. This includes provision for the environment and heritage service, planning service, construction service and land registers of Northern Ireland, which all achieved agency status in April 1996. Some £37 million is for urban regeneration measures, which continue to be targeted at areas of social, economic and environmental need. These measures provide a catalyst for higher overall investment through partnerships with the private sector. Some £25 million has also been made available under the EU peace and reconciliation programme, of which some £18.5 million is being funded from EU receipts.
The estimates for the Department of Education seek a total of £1,422 million, an increase of 2.5 per cent. over last year. Vote 1, which now incorporates the provision previously provided in Vote 2, includes £877 million for recurrent expenditure by education and library boards, an increase of £34 million over 1995–96. This includes £829 million for schools and colleges of further education. Also included is some £48 million for libraries, youth services and administration and £39 million for the boards' capital projects. The sum of £134 million is for recurrent expenditure by voluntary and integrated schools, while £35 million is for capital projects in voluntary and integrated schools. These amounts include £24 million for integrated schools, which is an increase of £9 million over 1995–96.
Vote 1 also includes £116 million for universities, £125 million for mandatory student support, £17 million for arts and museums and some £3 million for community relations.
In the Department of Health and Social Services, Vote 1 includes £1,432 million for expenditure on hospitals, community health, personal social services, health and social services trusts, family health services and certain other services, which is an increase of 2.5 per cent. on last year.
In Vote 3, £26.5 million is for expenditure on certain miscellaneous health and personal social services. Costs of the services now borne on this vote were previously provided for in Vote 3 administration and miscellaneous services. The provision sought is 12.1 per cent. higher than last year's final net provision.
The sum of £150 million in Vote 4 is for the department's administration and other miscellaneous costs. This includes £99 million for the Social Security Agency, £7.5 million for the Northern Ireland Child Support Agency; £9 million for the Health and Social Services Executive and £4 million for the Health Estates Agency.
In Vote 5, £1,628 million is for social security benefit expenditure administered by the Social Security Agency. This represents an increase of 9.2 per cent. on last year. An amount of £370 million in Vote 6 is to cover expenditure on the independent living funds, housing benefits, the social fund and payments into the Northern Ireland national insurance fund.
Finally, I turn to the Department of Finance and Personnel where, in Vote 3, some £5.8 million is sought for the community relations programme. In addition, some £3 million has also been available through funding from EU receipts under the EU peace and reconciliation programme. This, I hope, illustrates the importance which the Government continue to attach to this important area in Northern Ireland.
I hope that this necessarily short summary of the main components of the estimates is helpful. I commend the order to your Lordships.
Moved, That the draft order laid before the House on 5th June be approved.—(Baroness Denton of Wakefield.)
1.15 p.m.
Lord Williams of Mostyn: My Lords, I thank the Minister for her exposition and introduction. It is heartening to hear of the marked improvement she speaks of. I am sure that everyone present in your Lordships' House welcomes it, in particular her references to housing and tourism. I congratulate the Minister specifically on her work which was successful in obtaining 300 new jobs in Cookstown in the mid-Ulster constituency. Obviously, everyone is extremely pleased to hear of that.
We have to bear in mind that local scrutiny in Northern Ireland is not possible. Speaking for myself, I am always conscious that we do very little by way of detailed scrutiny on these occasions. We have to bear in mind that in many areas of Northern Ireland wage levels are unacceptably low.
Perhaps I may ask one or two specific questions. The first relates to our old friend the Criminal Injuries Compensation Board. I have been asking the same question for some years now. The Minister always smiles charmingly and says that the Government are thinking about it. I wonder whether the thought will end at some stage and action ensue, because the Northern Ireland scheme is different to that in the rest of the United Kingdom. I urge the Minister to maintain the more generous scheme in Northern Ireland. It cannot be left in limbo forever.
I turn specifically to the question of BSE, which has had a devastating effect in Northern Ireland. I believe it to be the case that 80 per cent. of Northern Ireland beef production is exported, mainly to Europe. There are no
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fewer than 16,000 farms dependent to some extent on that trade. There is widespread concern, perhaps despair, as to whether the levels of compensation are going to be fair and adequate. With so many farmers—that means families—dependent on the beef trade and forced, through no fault of their own, to sell their animals at a price which inevitably means that their annual income will be severely attacked, if not wiped out, is the Minister able to give any word of comfort and reassurance in respect of the levels of compensation?
It would be helpful also to have words of assurance about the backlog which, I understand, is increasing and causing great concern to farmers who have to maintain their stock at great expense. I know that the Minister is well aware of these concerns because, on an earlier occasion, she mentioned that traceability is much easier and more advanced in Northern Ireland. Ninety per cent. of herds are grass fed and there is a very low incidence of BSE. Is the Minister able to say something specific about what is contemplated as regards the staged scheme which the Prime Minister mentioned in another place on his return from Florence? Is it anticipated, bearing in mind the positive advantages of the Northern Ireland beef herd, that an early removal of the ban can be looked to there, even though its removal in stages may take place later in England and Wales where there are different problems. Can the Minister say what the likely cost of the ban will be? Her colleague in another place gave the figure of £2.5 billion. May I ask how much of that will be attributable to Northern Ireland—that is, if it is possible to make a distinct calculation?
Electricity is another serious problem in Northern Ireland. I know that the most favoured words in the English language are "I told you so"—but I did. At the time of the electricity privatisation—it was not this Minister who was answering questions on Northern Ireland—I ventured the widely held view that the privatisation of the electricity supply industry in Northern Ireland would lead to high prices and unconscionable profits. Last year, Northern Ireland Electricity paid £500 million for electricity and made a profit of £150 million. Those profit figures are simply not acceptable. I should be grateful for a word or two from the Minister about what is suggested. It is no answer to say that the Government provide help to the consumer when the real point is that those profit levels are unreasonably and unsustainably high.
The Minister mentioned the health Vote. Is it a fact that the Royal Victoria Hospital is to close operating theatres for five weeks this summer? I would not regard it as an acceptable response to say that it happens every year unless the Minister can say that it is a common occurrence throughout other surgical institutes in the rest of the United Kingdom.
I turn finally to quangos. During our last discussion the Minister was helpfully able to say that the Government were well aware of the fact that more representatives of constituents were needed on quangos as that would mean that consultation would be more widely spread. I wonder whether she can say something about the progress made.
I repeat how grateful I am for the care, courtesy and clarity with which the Minister discharges her work.
1.21 p.m.
Lord McNally: My Lords, this is my first contribution in this House on Northern Ireland matters. It gives me great pleasure to speak when the noble Baroness, Lady Denton, is to respond. When I lost my seat in the other place and found my earnings in the public relations profession, the noble Baroness was already a doyenne of that industry before being tempted into public service.
What has struck me over the past 20 years as I have observed Northern Ireland Ministers going about their business—this was evident in the Minister's introduction also—is that whatever the background and whatever locality of Britain from which Ministers for Northern Ireland come they quickly acquire a dedication and a commitment to the success of the Province which does them great credit. That has been true of Labour Ministers as well as Conservative Ministers. The story which the noble Baroness reported of the upturn in investment in Northern Ireland is a great tribute to the continuing efforts of her department.
I suspect that the upturn in tourism reflects something else—the outpouring of goodwill for the people of Northern Ireland and our good wishes for the success of the peace process and the ceasefire. It is a tragedy that the ceasefire has broken down here on the mainland. One hopes that it does not damage either tourism or investment in Northern Ireland. When I was a Member of the other place I served on the Select Committee on Trade and Industry which carried out a study of inward investment into Northern Ireland. We noticed that the industries and nationalities that came to Northern Ireland liked what they found. They were sometimes surprised by what they found, but they quickly asked for more in terms of expansion or were followed there by other industries from their own country. Northern Ireland has a good story to tell about inward investment and the department is to be congratulated on its continuing good work in that area.
There are three small and specific points on which I should be grateful for some ministerial comment. First, I refer to the Action for Community Employment schemes. I understand that the budgets of those schemes have been cut and that their future has been severely curtailed. There is no dispute about the fact that the schemes perform an extremely valuable function for the local economy and the local communities of Northern Ireland. Will the Minister consider providing more funds for those valuable schemes?
My second point has already been raised by the noble Lord, Lord Williams of Mostyn, but I should like to associate myself with his remarks about seeking clarification from the Minister on how she and her department estimate that the BSE crisis has affected Northern Ireland and its beef farmers. The beef industry is particularly important in Northern Ireland and some clarification of what the Government are doing for beef farmers there would be most welcome.
My third specific point relates to integrated education, something that my party and its sister party in Northern Ireland, the Alliance Party, have been keen to advocate. Some 5,000 pupils currently benefit from
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integrated education in Northern Ireland. We believe that it is a very good investment and one that is well worth making. I should be interested to hear the Minister's comments on the future of integrated education.
I have now made my specific points, but with those specifics go my enormous good wishes and my hope that the Minister and her department will continue to carry out for as long as it is needed the task which in very difficult circumstances attracts the admiration of us all.
1.27 p.m.
Lord Cooke of Islandreagh: My Lords, it was a real pleasure to listen to the Minister describe—accurately, I thought—the improvement in the economy and the many different events that we have seen in the past year which show how the economy of Northern Ireland is improving. Investment is increasing. The IDB has done very well this year and business life generally is positive and moving forward. The Minister omitted to mention her part in that. The noble Baroness is the Minister responsible for the economy of Northern Ireland and she has been leading its industrial and commercial development from the front. It is obvious that she works tirelessly; she gets around; she listens and she visits many firms to see for herself just what is going on. On behalf of many of us in business, I cannot thank her too warmly for the work that she is doing.
One can question and discuss many things under this Appropriation (No. 2) Order, but I shall confine my remarks to one subject which may take some time. I know that I can reasonably expect the noble Viscount, Lord Brookeborough, to deal with other important matters. I should say first that we are fortunate in Northern Ireland that the size of the total Vote is large enough to do all that has to be done. Our comments relate more to administration and how the money is spent than to the total sum, which is handsome.
Energy costs are very important to domestic and industrial users in Northern Ireland and for many years we enjoyed electricity prices similar to those in Great Britain. However, since privatisation the cost of electricity has increased each year while there have been reductions in Great Britain. Numerous comparisons have been made between manufacturers in Northern Ireland and those in Great Britain with similar load patterns and they show a 20 per cent. disadvantage to Northern Ireland—that is after taking into account £50 million government assistance this year, which amounts to around 3 per cent. of the cost.
In November of this year the nuclear levy will be removed in Great Britain—that amounts to 6.3 per cent.—and without that government assistance the adverse difference will amount to approximately 29 per cent. If the existing contracts with the generators are not amended in any way, Northern Ireland costs will increase in line with inflation whereas Great Britain costs are expected to be lower than inflation, so that by 2010 when the contracts with the generators expire it is not unreasonable to suggest that Northern Ireland industry could be paying 40 per cent. more than industry in Great Britain.

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The present government assistance totalling £60 million is most welcome and this year enables a reduction of approximately 3 per cent. in charges. However, the Department of Economic Development has not yet said how that assistance will be applied in the remaining three years. Power-users hope that it will be applied to reduce the bulk supply tariff, thus helping all users, and it will be helpful if the Minister can say that next year and in the following years the £15 million will be applied to the bulk supply tariff.
The elements in the high costs of electricity in Northern Ireland are more clearly understood now than a year or two ago. Northern Ireland Electricity is responsible for distribution and sales of power purchased from the generating stations, which are owned by three companies. NIE has done and is doing much to improve its own productivity and to improve the distribution system, which was out of date. Its efforts are to be commended and the regulator is now looking at NIE's cost and profits and has power to regulate its prices. If the regulator regards NIE prices to be excessive he has powers to alter those, and we await the regulator's report in the autumn. I expect that his report will be fair to both parties. However, for large customers, NIE costs are only 20 per cent. of the total price.
The most adverse cost element derives from availability payments to the generators in accordance with long-term contracts offered to generators by the Government.
The regulator has no powers to interfere but he is requesting that NIE enter discussions in the next few months in an effort to see what can be negotiated to reduce costs. It is hoped that some easements can be negotiated but I have no doubt that government involvement will be required at some stage in order to ensure that the generator's charges relate much more closely to those current in Great Britain. This is a vital matter of great importance to industry in Northern Ireland and I know that the Industrial Development Board, which is doing an excellent job in attracting new industry, finds the high cost of electrical power to be a considerable disadvantage which, if action is not taken, may well be a critical disadvantage by the end of the century.
Can the Minister undertake to keep closely in touch with these discussions and, if necessary, become involved if the long-term contracts prevent a satisfactory outcome? It is also important that, when the first generator contract expires next year, the Minister should permit NIE to seek competitive tenders for power from interested generators.
In Northern Ireland, consumers have to pay for the consequences of environmental legislation, whereas in Great Britain the generators pay. The conversion to gas in Ballylumford and the future flue gas desulphurisation, (FGD), will each add 4 per cent. to future electricity prices. At Ballylumford the price to be charged for gas was fixed before privatisation and is more than twice the current gas price on the mainland. It will provide a quite unplanned-for profit to British Gas. I hope the
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Minister will be able to oversee an amendment to the contract which will ensure transparent open market pricing of gas, pending which the station at Ballylumford should be licensed to burn oil when it is economically beneficial.
There is already agreement to delay FGD at Kilroot for two years. That was a voluntary arrangement whereby part of the Great Britain bubble has been transferred to Northern Ireland. In the meantime, the emissions bubble allocation to Northern Ireland should be examined, as Great Britain has space in the emissions bubble due to the low emissions from combined cycle gas stations.
The Industrial Pollution Control Order in Northern Ireland is presently being revised. Can the Minister ensure that that legislation will not include any new specific constraint on existing plant? Energy costs can of course be reduced by energy-saving measures and the Minister's department is promoting the efficient use of energy in a variety of schemes. Building heating costs, both domestic and industrial, are a high proportion of total spend on energy. It happens that new building regulations are presently out for consultation in Northern Ireland and those are close to the English regulations. They will make a 20 per cent. to 25 per cent. reduction in heating costs but this is an opportunity to go beyond the English regulations. Why not aim for a 50 per cent. reduction in heating costs? That is not difficult and would add perhaps 3 per cent. to building costs, which of course would be recovered by fuel savings many times in the life of the building. I urge the Department of the Environment in Northern Ireland to have courage and take a real step forward, and perhaps move closer to the standards that have existed for many years in Denmark. If it does, it will be forever thanked for the greater comfort and lower heating costs throughout the life of new buildings.
To indicate what is practicable, I work in a traditional-looking office where the energy requirement is around one-third that of an office built under the current regulations. I must declare an interest in insulation but that is far from being the only element in energy saving.
Gas is about to come to Northern Ireland. It is an exciting new power source which will be landed at the end of this year. If gas can be supplied throughout the Province at prices comparable to those in Great Britain it will revolutionise the energy scene. Indications of gas prices so far are extremely high and there is great absence in transparency. It will be helpful if the Minister could say what European Union grant was provided for the undersea gas main from Moffett in Scotland to Ballylumford. It would also be interesting to know if grants are available for the high pressure line which will shortly be laid from Ballylumford to Carrickfergus. Every encouragement should be given to companies undertaking to develop the distribution system throughout the Province.
I make no apology for speaking in detail on energy matters. Energy costs are an important element in the economic prosperity of every country or area.
1.40 p.m.
Viscount Brookeborough: My Lords, I, too, thank my noble friend for her introduction of this appropriation order, thereby giving us the chance to say a few words about how Northern Ireland's finances are arranged. I am sorry that I shall be unable to keep to one subject, but we from Northern Ireland are rather thin on the ground today. I have several points on different subjects that I should like to raise.
First, I welcome the money available for agriculture, but it would be remiss of me not to mention that, department in the light of the BSE crisis. Northern Ireland is a society based on agriculture, and 80 per cent. of the beef is normally exported outside the Province. At this stage I must declare an interest not just in farming but in tourism linked to farming.
The farm diversification scheme, which was discontinued last year, would seem to be a positive way of helping farmers in difficulty to become less reliant upon traditional farming. It supported the introduction of activities such as fishing ponds, golf driving ranges, and, in my case, a small business centre. Can my noble friend tell us when that scheme might be introduced? The other schemes available—such as rural development and cross-border community regeneration schemes—are not available to the private sector and individual farmers who are suffering now as a result of this other crisis.
On the tourism and IDB fronts, can my noble friend the Minister say whether there is a fair distribution of funds for new projects between those two areas? The IDB seems to have unlimited funds while tourism—one of the foremost industries in the world and equally important in the Province—is capped at £3 million to £4 million in the tourist development scheme. I heard the overall figure that my noble friend gave, but that was in the new projects tourist development scheme. Will my noble friend confirm an undertaking given by a predecessor of hers—Peter Viggers—who said:
"No worthwhile project in tourism will fail for lack of Government support"?
However, the projects—for example, hotels on the Causeway coast—to take us into the 20th century now frequently cost more individually than the total amount. Perhaps my noble friend would look at that important issue, give us an answer and give the industry some hope.
On education, I note that two of the five education boards are to go. According to the Minister for Education that will save money. In the light of that, I should like to ask about the funding of Tirella Primary School in County Down. Of the pupils at that school, 95 per cent. are children of soldiers in the garrison regiment at Ballykinla, who change over every two years. At changeover times, normal transitory payments for each pupil are paid, but Tirella's position is unique as 95 per cent. of its pupils change over in a short space of time every two years. In addition, the pupils arriving during the last changeover came from, for example, no fewer than 23 different schools in England during a four-month period. During that period the children leaving-95 per cent. of the pupils from the previous
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regiment—had to be assessed, reported on and prepared for their new schools, while the incoming children went through a similar process.
That is an abnormal task for the staff of any school, and we should remember that that happens every two years in this case. Consideration has also to be given to the permanently enrolled resident pupils who have to continue their classes during that time. An added burden is presented by 11 children with learning difficulties, and two more are to arrive shortly. That is apparently not an unusual number for any regiment.
Due to small financial difficulties, two teachers are to be made redundant on 31st August 1996. The mothers, who have accompanied their husbands to Northern Ireland on the assurance of good education for their children, are very concerned. I was surprised when I met them to find how strongly they felt that they had been let down. That is one additional worry that soldiers' families in an operational environment could do without.
I know that over several years the school's deficit has risen to £100,000, but surely in that case the department could find a way of providing some additional annual funding to do justice to our soldiers' families in this unique and difficult situation. Perhaps it could find funds from abolishing two of the boards.
I have read the correspondence between my honourable friend Mr. Ancram, the school and parents, and I am disappointed at the intransigence shown. I ask my noble friend to convey the parents' concern about this state of affairs to Mr. Ancram.
I should like to say a few words about the management of the health service in Northern Ireland. Before I do so, I must declare another interest in that I have been a non-executive director of the Green Park Healthcare Trust since it was set up three-and-a-half years ago. My comments, although relating largely to that trust, bring out examples of what is happening in other areas, which I have no time to study.
This trust provides many of the regional services for the Province, such as the cancer centre and orthopaedics. Since the formation of hospital trusts in Belfast, there has been an unhealthy open war between them over which hospitals should supply particular services, and indeed which ones should survive in any reorganisation.
The health wing of the Civil Service, otherwise known as the Management Executive (ME) should be controlling the future development of hospitals and should be insisting upon the trusts getting on with the job of running their own businesses not those of other trusts. For example, the Campbell Report has said that in an ideal world, in line with the Calman Report in England, the cancer centre should be moved from Belvoir Park Hospital to an acute hospital site.
After consultation, an option appraisal will be carried out, as has been announced, and the result will be announced in the spring of 1997. It should be noted that, due to the complexity of moving radiotherapy, that move could not be completed until 2000 at the earliest, and a sum in the region of £40 million would have to
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be dedicated to it. I should like to ask my noble friend how, if that decision is taken, it will be guaranteed to be funded in total.
Continual discussion and comment in the public domain is extremely damaging to the service at present. Staff are worried about their future careers, and the public is most concerned. It must be remembered that one person in three suffers from cancer at some stage in their life. That is not only in Northern Ireland. The ME seems to do little to alleviate those concerns. I ask my noble friend why the NIO has not put more pressure on it to do so.
In addition, Professor Bob Stout, a member of the Eastern Health Board, which is in practice a Department of Health agency, was quoted in the News Letter on 13th June as saying at the board meeting: first, that Green Park Healthcare Trust could be dissolved; and, secondly, that the management of Belvoir Park should be transferred to the City Hospital as soon as possible. Not only does that fuel the fire when the process of option appraisal will be taking place within a year, but why does the ME permit him to speak like that?
It is interesting that Professor Stout is also—this is rather worrying—a consultant geriatrician at the City Hospital. Does my noble friend agree that it seems most inappropriate for Professor Stout not to withdraw from that discussion while he has a foot in both camps? Yet again, the ME does not seem to care as it allows a person with a vested interest to use the Eastern Health Board to suggest that his trust hospital should take over the services of another trust.
Mr. Dan Thompson, chairman of the Eastern Health Board, is also keeping the fires burning in Belfast. He is quoted as saying:
"There are too many trusts in the Eastern Health Board and is it not time for a reduction to take placer?"
Will my noble friend tell us why a reduction in the number of health boards is not on the agenda? Their workload has almost halved now that they no longer have to administer hospitals which have become trusts. I can see great savings in doing that. It would create far greater efficiency. We should remember that patients come first and it is the Civil Service bureaucracy which should look at itself, especially when dealing with a King's Fund accredited hospital trust, which the Green Park Healthcare Trust is. It is the first NHS trust to achieve that standard in the UK.
Earlier this year the Minister, Mr. Moss, announced a 3 per cent. reduction in funds to health boards and therefore a 3 per cent. cut in their buying power. Presumably that was done after consulting the ME. A 3 per cent. cut overall was announced, but of course that could not come out of acute services—those dedicated to life-threatening problems (casualty, cancer and so forth). It took some time, and a great deal of work and money by the health boards and hospitals to show that, if 3 per cent. overall could be saved, it would have to come out of a reduction in elective surgery and procedures such as hip replacements and wheelchair provision. However, a 3 per cent. overall reduction
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made in those circumstances would have meant a 50 per cent. reduction in them. Eventually the decision was partly reversed. However, it should never have been put forward if the ME and others had done their research. While that was going on there was a virtual halt in such treatment, the boards delayed in signing contracts, and waiting lists grew. And we were all worried about the Citizen's Charter. The public, the patients and the professional staff became very concerned. They are now somewhat reassured. However, none of that should have occurred if the ME had done its homework. I ask my noble friend to put it to Mr. Moss that people are rightly concerned about the ability of the management in that department.
I turn to my final point. The noble Lord, Lord Williams of Mostyn, mentioned quangos when, unfortunately, I was out of the Chamber. My point is related directly to the management of the hospital trusts in general. I believe that the health service is not looking forward to the new year when the appointments of the present non-executive directors end. We were on a steep learning curve with the chief executive and non-executive directors who had previously been clinicians and so forth. They did not have management experience and therefore, three-and-a-half years ago, we were all learning together. However, when the non-executive directors finish their terms of appointment in six months' time half of the board members will be totally new. I wish to know how the Minister expects those changeovers to take place in the interests of the continuity and efficiency of the trust boards. If we are to widen the catchment area for the membership of those boards, surely we should have heard something about that by now. The Northern Ireland Office should be looking at new appointees.
I have been privileged to be a member of a trust board and I have learnt more from it than I suggest it has learnt from me. I am not sure how the posts will be advertised because the income is £5,000 before tax. If one advertises an appointment at that level of income, requiring the amount of attention that we have given it for three-and-a-half years, one could receive applications from many people in the dole queue, which may be appropriate. However, I suggest that the office must do some fairly hard canvassing to find people appropriate to the post.
In conclusion, I support the appropriation order and I hope that the NIO can take some action to rectify the problems which I have pointed out.
1.51 p.m.
The Earl of Harrowby: My Lords, I rise in the gap to make one brief point supplementary to a remark made by the noble Lord, Lord Williams of Mostyn. He referred to BSE and compensation levels and I should have liked him to mention the timescale. I make a general point that cashflow is vitally important in the industry. It may well be the deciding factor in the survival of many farmers in Northern Ireland, as in the UK. The House cannot expect banks to be able or willing to bail out farmers indefinitely.
I hope that my noble friend the Minister will be able to comment on that subject. I make the point generally and not specifically with regard to Northern Ireland.

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I hope that the House and the Minister will forgive me if I have to read her answer because I have to leave for another appointment.
1.53 p.m.
Lord Fitt: My Lords, of all the Ministers in the Northern Ireland Office, the noble Baroness has most responsibility. She is in charge of the Departments of Economic Development and Agriculture. They are the two main facets of life in Northern Ireland without which Northern Ireland could fall apart. Since the noble Baroness took over those responsibilities two or three years ago she has undoubtedly proved to be a very efficient and compassionate Minister in both those areas. I rise for only a few minutes to make a specific appeal in relation to some of the problems that we have in Northern Ireland.
West Belfast, the constituency which I represented for many years, has always been a problem constituency. Many people on this side of the water will have seen that 22,000 people in West Belfast voted for Sinn Fein in the recent Forum elections. Many people will mistakenly believe that all those people were voting in support of Sinn Fein and therefore in support of the campaign by the IRA. That is definitely not so.
I have been in touch with people in West Belfast since I became a Member of this House. Many of those votes were cast because in that area there is social deprivation. Of all the constituencies in Northern Ireland there is a higher incidence of employment in West Belfast and in the adjoining constituency of North Belfast. Many of the votes which were cast for Sinn Fein were cast out of a feeling of desperation. Many people in that constituency feel that they have been pushed to the side and are regarded as being republican activists and therefore not worthy of consideration. That would be a mistaken point of view.
I know that in recent weeks announcements have been made with the object of attracting industry into West Belfast. But what we have achieved is a small drop in a very big ocean. I know that the noble Baroness has travelled the world in an attempt to attract investment into Northern Ireland. However, if there is ever to be a solution and a change in the attitudes of those people who appear to be voting out of desperation for paramilitary spokesmen, I believe that the noble Baroness should do whatever she possibly can to attract more industry into West Belfast. Of the 18 constituencies in Northern Ireland West Belfast has been sorely neglected.
It may be due to the image that has been projected to the outside world that potential investors are reluctant to set up industries and to invest in that particularly troublesome area. However, those 22,000 votes cast in West Belfast for Sinn Fein were not cast in support of the IRA campaign. They were cast because people feel neglected and there is an air of despair in the area. Many young people over the age of 18 who voted in that constituency did not vote for Sinn Fein as spokespeople for the IRA. They voted because they had no job and saw no prospect of getting a job.
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The noble Baroness has a record in Northern Ireland which far exceeds those of her predecessors. The noble Lord, Lord McNally, mentioned that when Ministers are appointed to their various portfolios in Northern Ireland they go "native", for want of a better word, and begin to develop a feeling for the Province. The success of the noble Baroness has been due to the fact that she has never been over-political in any way towards one community or the other. People accept her for what she is trying to do as a Minister in support of the whole community in Northern Ireland.
The noble Lord, Lord McNally and I were MPs in another place, and I have to say to him that a previous Secretary of State for Northern Ireland was not accepted by the whole community as not being political. I refer to the noble Lord, Lord Mason, now a Member of this House. The noble Lord in fact created untold difficulties in Northern Ireland. The noble Baroness has been able to carry out her functions with the support of the whole community in Northern Ireland.
Finally, the noble Baroness will know that there is great fear that the Royal Victoria Hospital may be stripped of its role in Northern Ireland and eventually close down. If that happens West Belfast would see that the hospital to which all the communities give their allegiance will be taken away. That would not be good for the morale of people who live in that area.
2 p.m.
Baroness Denton of Wakefield: My Lords, I thank all noble Lords who have spoken for their interest and concern in Northern Ireland and for the knowledge which is brought to any debate on the subject. I also thank noble Lords for their courtesy. I should say to the noble Lord, Lord McNally, that I believe that being a Northern Ireland Minister is one of the best jobs in government. I particularly enjoy my work as the Minister responsible for the economy because I believe that working for jobs provides the best cement for peace.
The noble Lord, Lord Cooke, was extremely generous in his remarks. I should tell him that I love visiting companies. But that creates paperwork. My officials will confirm that I do not have such a deep affection for that.
We always welcome the noble Lord, Lord Fitt, on these occasions. He omitted to mention that a major part of my portfolio is to deal with women's issues. The women in the Province create enormous strength. However, as the noble Lord said, my job is to ensure that there is hope and prosperity for all in the Province.
I welcome the noble Lord, Lord McNally, to our debates on Northern Ireland. His noble friend the noble Lord, Lord Holme of Cheltenham, always brought great experience to our debates. I am sure that he would be proud of the support which the noble Lord, Lord McNally, has given today to everyone in the Province.
The noble Lord, Lord Williams, and I have long debated these issues and, as he pointed out with great courtesy, we have long discussed the issue of criminal injuries. The noble Lord said that he is not too unhappy that the long grass is the shape that he would wish it to be. After every debate I draw the remarks of the noble

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Lord to the attention of my honourable and right honourable friends. This is an issue on which decisions must be taken. But there is constant change in the situation in the Province and hopes rise and, unfortunately, fall. Again, I shall take back the message of the noble Lord to my right honourable friend.
Your Lordships have rightly identified two major issues which concern Northern Ireland at present. The first is the agricultural situation brought about by the BSE crisis; the other is the question of energy costs. I too am extremely concerned about those issues, which have major implications for the economy. The beef and dairy industry represents 4 per cent. of our GDP. I wish to clarify that before the crisis, more than 50 per cent. of our beef was exported but more than 70 per cent. represented sales outside the Province, including the United Kingdom market. Fortunately, that has not gone away completely because there is great respect for the quality of Northern Ireland beef. We continue to have outlets there; we continue to try to build on that.
As regards support for the industry, the whole policy is based on the fact that the Government's aim is to ensure that there is an industry after the crisis is over. We have based our compensation and support packages on that premise. We are determined to keep the industry. I confirm the figure which my honourable friend announced in another place. The Government will be bringing forward something in the order of £2.5 billion to ensure that there is still an industry when the crisis is over and that, because of its needs and because of the great success it had in export markets, Northern Ireland will receive more than its fair share of that. In addition, I should point out that I was able to negotiate for Northern Ireland a special programme to deal with the bulls in Northern Ireland in connection with the Dutch consumer market. Therefore, we do have support for that very serious health and safety problem which must be dealt with.
I praise those in the industry in Northern Ireland. We have received enormous co-operation; we have worked together. The noble Lord, Lord Williams, referred to traceability. Because of that and because of the high standard of the veterinary service in the Province, we have managed to cope with the problem better than in other parts of the United Kingdom. I assure the noble Lord, Lord Williams, that the backlog in Northern Ireland is coming down very rapidly due to the level of co-operation we have received. I know that some of my colleagues have had much greater difficulties than those I have experienced in the Province.
In some cases it is not necessary but we continue to draw to the attention of other European countries the high standards that exist in Northern Ireland. We do have BSE but we are dealing with it. And there is a much smaller incidence there than in other parts of the United Kingdom. The average number of cases per month is running at between nine and 12 which indicates that the measures we are taking are working. Again, that is because the farmers have abided by the requirements.
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My noble friend Lord Harrowby is no longer in his place but I should tell him that we well understand the problems of cash flow. I have great experience of Northern Ireland and I have seen that the banks play a sustainable role. We are grateful to them. But as a government we have arranged that payments of some £300 per animal should be paid on account. Also, I have asked that my officials should work overtime to ensure that all payments due to farmers go out as quickly as possible. Therefore, we are dealing with the problem and we seem to be having some success.
Electricity and energy prices are high. However, the situation is changing. I am well aware of the needs of the Province in that regard, in particular those of residential users. Competition is coming, and we look forward to welcoming gas to the Province. I am delighted also that one of the largest users, Shorts, has committed itself to combined heat and power. The company's experience in that regard will prove a very good role model for other large users. I look forward to that coming on stream.
I understand the question asked by the noble Lord, Lord Williams, but I believe it inappropriate for me to comment on the financial performance of a private company. The regulation of the electricity industry is now the responsibility of the independent Director General of Electricity Supply for Northern Ireland. When his appointment was announced, I was extremely pleased that it was praised both by NIE and the chairman of the Electricity Consumer Council. That marks the respect in which he is held. The director general is currently engaged in the first electricity price controls review since privatisation and his proposals will take effect from 1st April 1997. The director general also published in January 1996 a consultation paper on the introduction of greater competition and consumer choice in the electricity market in Northern Ireland. He plans to issue a further paper with his definitive proposals shortly.
It is more expensive to produce and distribute electricity in Northern Ireland than in most regions of Great Britain. Power stations are small, the spinning reserve margin is higher and the customers, on average, are more dispersed. When making comparisons, it always appears that we are behind in the privatisation programme by about two years. That has an effect. However, I also believe that a more relevant comparison is not with London prices but with prices in Cornwall.
I should tell the noble Lord, Lord Cooke, that the Government will continue to encourage both efficiency and competition. We believe that there is a role for all in that respect. As I said, the discussions between NIE and the generators about the revision of the generator contracts are a matter for the companies concerned. It is the regulator who has the responsibility to examine the proposals arising from discussions to amend an exiting generator's contract and, if not content, to consider a possible referral to the Monopolies and Mergers Commission.
The noble Lord, Lord Cooke, also raised the question of prices at Ballylumford. I should tell him that negotiations are taking place and the contracts between

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the parties concerned can be amended. The Government are watching the situation keenly. The noble Lord also asked that I, as Minister, should, if necessary, ensure the involvement of government in matters concerning regulators and private companies. I can assure the noble Lord that I am keeping a very close eye on the situation because it is important when attracting inward investment.
We believe that we should await the outcome of the regulator's efforts to introduce greater competition, and his initial review of NIE's price controls, before deciding on the use of the remaining £60 million which was made available to the Province. I hope that the noble Lord will appreciate that that is a sensible decision. We hope there will be a change in the situation to the benefit of users.
The noble Lord will be pleased to know that the recently published sulphur strategy for the United Kingdom proposes a new system of control which will in effect remove the concept of the regional bubble. It future, it is proposed that an application will be made in respect of individual plant based on the principle of best available techniques not entailing excessive cost. When the proposed Industrial Pollution Control (Northern Ireland) Order comes into effect next year, it is anticipated that the authorisations for the Northern Ireland electricity industry will take effect from mid-1998. I suspect the noble Lord will think that that is too slow. I promise him that it is being done with all due speed.
The noble Lord also raised the question of EU assistance for the natural gas project. The EU is providing a total of £49 million between 1994 and 1999 for the undersea natural gas pipeline between Scotland and Northern Ireland, and a grant of £14 million will be available for the high pressure main from Ballylumford to Carrickfergus. We in Northern Ireland have reason to be very grateful to the European Union for the support that it shows.
There was considerable comment both from my noble friend Lord Brookeborough and from the noble Lord, Lord Williams, on the question of priorities and the ability to manage the issues, which are enormous, in the health service. I should point out that the health service in Northern Ireland is funded at 14.5 per cent. more per capita than in England. But, even so, priorities have to be set so that the service may live within its budget. A reduction of services in low priority areas will enable additional resources to be found for community care, which is so important, renal services and additional drugs for cancer patients.
However, there is always an issue. The noble Lord, Lord Williams, raised the suggestion that operating theatres may close at the Royal Victoria Hospital. I am afraid that I do not have knowledge of that but I shall write to the noble Lord on the matter. My noble friend Lord Brookeborough and the noble Lord, Lord Fitt, also asked what was happening as regards the hospital and spoke about the position of affection in which it is held within the community. The proposals which have emerged from Dr. McKenna's committee are with my honourable friend and are being considered. The results of that consideration will be made known.
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The noble Lord, Lord Williams of Mostyn, and also my noble friend Lord Brookeborough, referred to quangos. I take this opportunity to pay tribute to the people who serve on quangos in Northern Ireland. We place great demands on those people. We invite people to take up positions. We say the position will take up half a day a month but they quickly realise that they have to devote two days a week to the post in some instances. I have witnessed high levels of commitment from those people. They are experienced but in many cases they experience a big learning curve, as my noble friend said. However, they are always anxious to offer the best service.
We are conscious of the need to spread the posts among as many people as possible. I am particularly proud that the percentage of women serving on public appointment boards in Northern Ireland is higher than in the rest of the United Kingdom. We are always seeking to extend that. Since I took office I have seen councillors serving in this capacity. We have tried to spread appointments as widely as possible. My noble friend referred to the appointment to the HSS trust boards. Those appointments are made by the Department of Health and Social Services with the approval of the Secretary of State. The department seeks to achieve equality of representation. We are all well aware of the need to balance experience with the need to introduce new views and new experiences to the board.
As regards Northern Ireland, we shall, of course, implement the suggestions made by the committee of the noble and learned Lord, Lord Nolan. However, we have to bear in mind the fact that the two communities there do not always agree—I say that gently—but both must be involved in decision making. I must inform my noble friend Lord Brookeborough that Belvoir Park Hospital has rightly developed a tradition of high quality care which is much respected by those who have been treated there and by their relatives and friends.
The cancer working group's report is the subject of public consultation until 10th July. Everyone is well aware of the issues involved. Even if the results of the consultation exercise and an option appraisal support the relocation of services from Belvoir Park Hospital, that could not realistically be carried out before the year 2000. There is no question of services currently provided at Belvoir Park Hospital being run down or diminished. I understand the anxiety of my noble friend as regards the insecurity generated by media reports. However I am sure my honourable friend the Minister for Health in Northern Ireland would always be pleased to reassure people who have anxieties in that regard.
My noble friend also referred to the comments made by Professor Stout. I assure him that Professor Stout is not a member of the cancer services working group. Nor has the HSSB been involved in any of the decisions relating to the location of Green Park's services. People who have experience of this matter have a right to comment. However, I have great respect for the tradition of your Lordships' House of declaring an interest before making such comment.
My noble friend also referred to tourism funding. There are great opportunities in the tourism industry. The Government may now adopt a different role in that

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area because of the opportunities for enterprises to make a return on investments. My predecessor, Mr. Viggers, made the comment that at one time one almost had to glue tourists onto aircraft seats and into ferries to get them to Northern Ireland. There was a difficult climate at that time. However, there has been a 67 per cent. increase in numbers of tourists this year. The funding of the Northern Ireland Tourist Board has been consistently increased over recent years. We seek to support a wide range of projects as tourism will play an important part in Northern Ireland's future prosperity.
The noble Lord, Lord Fitt, referred to West Belfast. I have sympathy with his anxiety for that area but I am more hopeful than he appears to be. I believe that our targeting social needs policy is beginning to make a difference. I spent much time in West Belfast last August trying to learn about people's concerns. One anxiety was that if one applied for a job with a BT 13 postcode the chances of being accepted were much reduced. I believe that the position is now changing. People are learning to overcome that problem.
I am delighted to tell the noble Lord that unemployment in West Belfast has reduced by nearly 14 per cent. That is nearly three times the national average. We have companies such as Fujitsu, the Europa Tool Company and Colorite. There is the significant announcement by F G Wilson which seeks to take 400 jobs into West Belfast. Now that people can achieve aspirations, I hope that it will give them more confidence.
There is also the growth of local companies in the enterprise parks which the Government have created throughout the area. Glenwood Enterprise Agency, which I visit frequently, has some thriving, growing small companies. I believe that there is hope, and I think that there is change.
The noble Lord, Lord McNally, raised the question of integrated education. I assure him that the Government remain fully committed to supporting viable proposals for new integrated schools. There are now 28 integrated schools with an enrolment of almost 6,000 pupils but with potential to achieve enrolment in excess of 7,500. A number of new integrated schools, two secondary and two primary, will open in September 1996. The recurrent expenditure on integrated schools is estimated to be £15.4 million in 1996–97 with capital expenditure of £7.3 million. I hope that I reassure the noble Lord that we are not considering lessening our support. However, those proposals have to be viable, and wanted by the parents of the pupils.
On education, my noble friend raised the issue of Tyrella Primary School. It is obviously important that we ensure that children who travel with parents who are part of the security team in the Province are provided for. I assure my noble friend that that school has a high per capita expenditure level compared with the average for primary schools in that area. It is receiving its full budget allocation. That makes allowance for the extra-curricular pressures which a small school faces with fluctuating enrolment of children from Army personnel. However, as my noble friend requested,
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I shall draw the matter to the attention of my right honourable friend the Minister responsible for education.
Perhaps I may reply to the ACE issue raised by the noble Lord, Lord McNally. It is a matter of concern. The percentage reduction is not the 40 per cent. that was mentioned in another place; the figure has been 25 per cent. But it was based on the number of people in place at the time. The balance had to be made without full consultation because the issue was a budgetary matter and could not be discussed ahead of the announcement of the financial issues. There has been intense consultation since. The aim in making that reduction was to balance our training towards ensuring that the jobs we create in the Province go to the people in the Province. We moved away from community work to ensuring that we skewed training for the jobs available. At present we have a record number of vacancies in Northern Ireland. That was the reason that that balance was made.
The opportunities are easing through and we have been working closely with other departments using the service of ACE employees and in the development of the community work programme. In it we work with companies to try to ensure that people go into specific work opportunities which put them at the top of the ladder when jobs come along. We hope to see a great increase in the number of opportunities and, therefore, in the amount of trust we can expect from the long-term unemployed by showing that we are dealing with the problem. The decision was not made lightly and it was made on the policy that, I am pleased to say, the economy is growing.
I thank everyone in your Lordships' House who has taken part in the discussion on how we plan the future of the Province. If I have not dealt with any matters, I shall ensure that I write to noble Lords. With that, I commend the order.
On Question, Motion agreed to.

Northern Ireland Act 1974 (Interim Period Extension) Order 1996
2.25 p.m.
Baroness Denton of Wakefield Baroness Denton of Wakefield rose to move, That the draft order laid before the House on 4th June be approved [22nd Report from the Joint Committee].
The noble Baroness said: My Lords, we once more seek approval for the renewal of the current provisions for the government of Northern Ireland by direct rule. This we do with a certain sense of regret that it is necessary, once more, to renew what are in principle less than wholly satisfactory arrangements, despite our best efforts to operate them fairly, impartially and efficiently. But they clearly remain necessary. For the moment there is no measure of agreement in Northern Ireland broad enough for any system of government founded on greater local accountability.
We are now embarked on a process of negotiations that we hope will bring us closer to the goal of establishing such a system. The continuation of the direct rule arrangements for the time being gives us the opportunity to make progress in the negotiations.
The last year saw a series of significant milestones in our journey towards that goal. In stark and grim contrast was the end of the IRA ceasefire. Looking back at the elation with which the ceasefires in 1994 were greeted, this regression is deplorable. The IRA's latest attack in Manchester has provoked almost universal outrage, at home and abroad. But we must not and we shall not let ourselves be deterred by IRA violence from our search for a fair, comprehensive and lasting political settlement.
Let me outline some of the policies by which we have in recent years discharged our responsibilities under direct rule and which we shall continue to follow. They are comprehensive and interlocking policies, directed to achieving peace, order and good government in a society under threat from terrorism and subject to a significant degree of inter-communal division.
I begin with security policy. I assure your Lordships that the Government will not yield to the pressure of terrorism. It remains our priority to deal with terrorism effectively and resolutely, within the basic principles of fairness and the rule of law, recognising that the security forces' work needs to have the support of all sections of the community to be fully effective. We shall work to intensify still further the excellent co-operation we enjoy in security matters with the Irish authorities. We shall be ready to consider all measures that new circumstances may require, if they are in accord with the basic principles I have set out.
I make clear our deep gratitude to the security forces. Their work is challenging. Terrorist organisations have remained intact, and the IRA has continued to examine potential targets in Northern Ireland and to train personnel. There is continuing evidence of paramilitary involvement in drug dealing and racketeering. Murders have been carried out by terrorist organisations under the veil of action against drugs. Punishment beatings of a revolting nature have continued in both sides of the community.
I emphasise that terrorism will continue to be confronted with the greatest resolution.
Social and economic progress in Northern Ireland over the past year has, as I said, been tremendous, and I quoted evidence of that earlier. There is much welcome news to report—news which has often attracted little public attention. I was pleased that the CBI's latest regional trends survey revealed a continuing increase in manufacturing employment in Northern Ireland. Employment has been rising faster throughout the 1990s than the UK average. This year we saw more people in work in Northern Ireland than ever before. As I said, vacancies are at record levels. One of the most pleasing aspects is that long-term unemployment has continued to fall. It has dropped by 8 per cent. over the past year.
Perhaps I may expand a little on inward investment, for which 1995–96 was the best year ever. Thirty-five of the 63 projects negotiated were new investment or expansions by externally owned companies, investing £432 million, promoting almost 5,000 new jobs and safeguarding a further 1,083—companies such as Seagate Technology, Stream International and Fujitsu. We are now seen as a leading successful location for multinationals.
The most recent announcement of an investment of £113 million by F. G. Wilson (Engineering) Ltd—a joint venture of the American companies Emerson Electric and Caterpillar Inc., backed by the Industrial Development Board—shows how positively overseas companies now regard Northern Ireland as an investment location. All that is endorsed by a recent independent survey of inward investors by Coopers & Lybrand in April this year, which found that Northern Ireland is one of the most competitive inward investment locations in the United Kingdom. Those noble Lords who know the Province as well as I do will not be surprised that the main reason for that is not money, but people.
I spoke of the growth in export sales. In particular, exports to the Republic of Ireland grew from between £437 million in 1991–92 to £632 million in 1994–95, an increase of 45 per cent. I must confess that we have a trade deficit with the Republic of Ireland. But it has 3.5 million people and we have 1.5 million. There is no reason why we should not turn that deficit into a surplus, and it is our intention to do so. Some 72,000 manufacturing jobs are estimated to rely solely on sales outside Northern Ireland.
We celebrated the tourism figures in an earlier debate. The hotel investment plans scheduled both before and since the ceasefires are going ahead, including those of the Hilton Group, Stakis of Glasgow and Jury's of Dublin. Those three together account for some £33 millionworth of investment in the Province.
I turn now to political matters. The House will be aware that comprehensive multi-party negotiations opened on 10th June. Their purpose is ambitious. It is to achieve a new beginning for the totality of relationships within and between the various parts of these islands.
One objective of the negotiations to which we attach great importance will be to develop arrangements for government in Northern Ireland that permits a much greater local involvement than those whose renewal we are now considering. Any such new arrangements must be able to command support in the two main parts of the community. But a settlement of an exclusively internal nature would not in our judgment secure the widespread acceptance we seek. Any new political agreement must, we believe, address wider relationships not just within Northern Ireland, but within the island of Ireland and between the people of the two islands.
The negotiations have now been in progress for three weeks. That is longer than many projected at the beginning of these discussions. The three independent chairmen have been appointed: Senator George Mitchell, General John de Chastelain and Mr. Harri Holkeri. We are extremely grateful to

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those gentlemen. All the participants have formally affirmed their commitment to the six principles of democracy and non-violence set out in the report of the international body under Senator Mitchell.
Discussions on procedural matters have followed. It is, I suggest, not unnatural that the participants should wish to reassure themselves in such important negotiations that the right procedures are in place.
We believe these talks can succeed. We shall press on with them with a view to reaching the most widely acceptable settlement. Any settlement would then be put to referenda in Northern Ireland and in the Irish Republic before being submitted to the respective Parliaments.
Whether Sinn Fein is in the talks or not is a matter for it and its associates. The talks will be taken forward in any event, with the greatest energy and determination. As the Prime Minister has reiterated, for Sinn Fein to take part the IRA will need to declare an unequivocal ceasefire. It will also have to show that the ceasefire is credible and lasting, and is not just a tactical device to enable it to enter the talks until such time as it is convenient for it to leave. The choice is Sinn Fein's. It is to the credit of the combined loyalist military command that it has not let itself be provoked into ending its own ceasefire.
An important complement to the talks will be the Forum, which had its first meeting on 14th June. The Forum is a deliberative body, but one, we believe, of great potential value in Northern Ireland. It will be able to debate ways forward in the development of dialogue and understanding between the communities in Northern Ireland, and more broadly. We look forward to the results of its deliberations.
My Lords, we hope that the negotiations will point the way to better arrangements for administration in Northern Ireland. In the meanwhile, however, we need statutory underpinning for the system of direct rule. I commend the draft order to the House.
Moved, That the draft order laid before the House on 4th June be approved [22nd Report from the Joint Committee].—(Baroness Denton of Wakefield.)
2.36 p.m.
Lord Williams of Mostyn: My Lords, I thank the Minister again. I propose to be very brief because, in a sense, there is an overlap between our discussion on this present occasion and the discussion we had on the previous order.
This is of course a melancholy occasion. There is no alternative that anyone can imagine to the continuance of direct rule by the mechanisms of this order. We are speaking in the shadow of Manchester, the murder of Garda Detective McCabe—just a decent man going about his work of public protection—and now the gross killing of an independent journalist. When there are criticisms of the police and the emergency services in this country and sometimes criticisms of an independent press, which are occasionally excessive, we ought to remind ourselves of the sacrifices made in Manchester and of the sacrifice made by that noble woman.
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I entirely reaffirm the Minister's remark that there is no way to progress without the closest possible co-operation and liaison with the Government of the Irish Republic. The Leader of the Labour Party made it plain after Manchester that, if the IRA thinks that it can shift the resolve of any government with this action, it is cruelly mistaken. We, on this side of the House, have made it unequivocally clear, time after time—and I repeat it now—that there can be no change in the constitutional status of Northern Ireland without the consent of the majority of its people.
I would simply ask whether the Minister can give us a little more detail about the progress of the talks. I can fairly describe her present description as cautious hope. Certainly, caution is required, but it is nice to see a glimmer of hope. I also underline the fact that there has been restraint among the paramilitary loyalist groups, a restraint for which, in a curious way, they are entitled to have credit.
I take it that prisoner transfers are continuing, despite the explosions and the violence. Perhaps the Minister can reassure the House on that point.
Other than those specific questions and bearing in mind the overlap that I mentioned earlier, I deliberately ask no further questions because I believe it to be mischievous on some occasions to ask questions in a public forum which may be better addressed on a private basis.
2.40 p.m.
Lord McNally: My Lords, whenever one considers British involvement in Northern Ireland, I think of a couplet associated with the Spanish Civil War. I quote it from memory and so it may not be quite accurate. It goes something like this:
"We are here not for plaudits, medals, honours or pay;
We are here because with our open eyes we see no other way".
Although, as I said earlier, today saw my first intervention in this House on Northern Ireland affairs, I have been involved with Northern Ireland for nearly 30 years. As a young Labour Party official, I remember, in the late 1960s, arranging a meeting at the St. Ermin's Hotel for some young men from Northern Ireland called Gerry Fitt, John Hume, Austin Currie, Paddy Devlin and Ivan Cooper. They came with great hope and many positive commitments to peace in Northern Ireland.
Over the years I have seen hopes rise and hopes dashed. But one thing of which I have always been absolutely convinced is that the Ministers and officials involved in trying to find solutions to the problems of Northern Ireland from the United Kingdom mainland have done so with a total commitment to the benefit of that Province. It has often been extremely infuriating to hear misguided views from the United States about our presence in Northern Ireland being some kind of British imperialism.
I remember the "Troops Out" movement campaigning along similar lines, implying that somehow British troops were there for some ulterior motive. I represented Stockport in the other place. I remember the loss of life

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of young Stockport lads who had gone to Northern Ireland with no sense of imperialism or anything other than a sense of duty.
I shall follow the example of the noble Lord, Lord Williams, and be brief. We on these Benches wish the present talks well and the initiatives that the Government have taken. We support the Government's stand so far as concerns Sinn Fein's participation in those talks.
Let me speak as a native of the North West who experienced the bombing in Warrington and more recently the bombing in Manchester. Also, last night I was in the City of Birmingham discussing the emotional scars which are still present as a result of the Birmingham bomb. It is sometimes said that we do not understand the IRA. I sometimes think that the IRA do not understand the British people. We will not be bombed into a solution to the problems in Northern Ireland. What impresses me each time it commits an outrage is the community and the political solidarity that emerge in those communities. Manchester has a reputation for robust political division. All parties on Manchester City Council were united in defiance of a terrorist outrage, with a commitment to rebuild that city and the city centre. Every time these outrages have occurred in the City of London, in Warrington, Birmingham and Manchester, the reaction and the resolve have been the same; namely, that we on this side of the water and in all parties are committed to a solution in Northern Ireland which comes from the people there and which has the support of both communities. If they can achieve that, they will have nothing but the good wishes of the rest of the United Kingdom.
2.45 p.m.
Lord McConnell: My Lords, I support this order because there is no alternative. We are not offered any choice and therefore we must support the only method presented to us for the government of Northern Ireland. But I believe that the prime consideration of the Government at the moment should be defeating terrorism. I was glad to hear the noble Baroness make reference to that in her opening speech.
I congratulate and support the President of the United States on a recent statement that he made. The Times newspaper of yesterday reported President Clinton as admitting that he could think of little else in the wake of the Saudi bombing and that he would make the defeat of international terrorism his priority at the G7 meeting. The President said,
"My first order of business will be to focus the strength and energy of the G7 on the continuing fight against terrorism".
He went on to say,
"The United States will lead the way and we expect our allies to walk with us hand in hand. We cannot tolerate this kind of conduct".
He went on to say that the Saudi attack underscored the struggle of all who believe in tolerance, freedom and security. He also referred to the fact that the world faced a new peril that included rogue states such as Iran and Iraq, drug smugglers, those who deal in weapons of
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mass destruction and terrorists who strike not just in Saudi Arabia but also in the Tokyo subway, on the streets of London, in Israel and in America's heartland.
It is indeed encouraging to hear those words attributed to the President when one thinks back, not very long ago, to the time when he welcomed to the White House the head of a party which would not denounce terrorism although, admittedly, on a second occasion he thought better of it and did not repeat his first error. I am also glad that our own Prime Minister also condemned the bombings. I believe that he will support the President in the G7 discussions.
Appeasing evil not only degrades any government or body that does it, but it also achieves nothing. The Government are taking a firm stand at the moment against those who will not renounce terrorism. I hope that they will not, as has happened in the past, have secret talks with terrorists, whether it be through Ministers or, as happened on certainly one occasion in the past when the Government said that there was no ministerial contact, using civil servants to act as messengers from the Government to the terrorists' supporters. I hope that the Government are going to stand firm. I gain some encouragement from the words which the Minister has uttered in the House today.
I believe that there is a much greater prospect of coming to some reasonable agreement among those who are negotiating in Northern Ireland without the presence of Sinn Fein because it is obvious that Sinn Fein will not accept anything except capitulation to its views. Our future ought to be decided by our own people—and by those of them who are against violence. At the moment there is too much interference by a minister of a foreign government who has been brought into Northern Ireland. That is something that we could well do without, particularly when he represents a country which persists in its chauvinistic claim (through Articles 2 and 3 of its constitution, which it resolutely refuses to alter or to seek the consent of its electorate to alter) to part of the territory of the United Kingdom.
Indeed, 85 per cent. of the voters in the recent election were against the terrorists—and those 85 per cent. are, I believe, the people who are entitled to try to mould our future without having to kow-tow to the other 15 per cent. Furthermore, I believe that that figure of 15 per cent. is inflated, possibly for the reasons given earlier by the noble Lord, Lord Fitt, and by the appearance of the odd success. Whenever there is any appeasement people say, "Oh yes, that party is very good and is getting somewhere. It has achieved something", and that in turn increases its vote. If that party was seen not to be successful, I think that its vote at any future elections would be very much less.
The Government should turn their attention to local government in Northern Ireland, which is nearly powerless at the moment. We have undemocratic quangos and our local authorities do not have the kind of power enjoyed by other local authorities in the rest of the United Kingdom despite the fact that members of those local authorities are getting on peaceably and agreeably with each other more and more.

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We should try to get more agreement with the Irish Republic on measures against terrorism. Hot pursuit, for instance, comes to mind. When the security forces are on the heels of terrorists, once the terrorists get to the Border the Army and the police have to stop and the terrorists just wave bye-bye to them as they cross the frontier.
The Minister referred to any agreement being the subject of referenda. I am never quite sure whether the word "referendum" has been absorbed into the English language and whether its plural now has an "s" at the end instead of an "a", but I see a noble Lord who is an authority on the matter looking sternly at me. If there has to be a referendum in the Republic, does that mean that the Republic will have a veto on any agreement that is reached in Northern Ireland? If an agreement is reached by the people of Northern Ireland, approved by them and then put to a referendum in the South, can the people of the South turn round and say no? It is not their country. It is up to the people of Northern Ireland to decide.
Finally, I would like to look to the future. I was delighted to hear the noble Lord, Lord Williams, say that there would be no change in the constitutional position of Northern Ireland without the consent of its people. If it is ever necessary in years to come—I hope it will not be—I shall bear that in mind and remind him of those comments if the occasion should arise. I follow the example of other speakers by being reasonably brief and simply say I support the order before the House.
2.55 p.m.
Viscount Brookeborough: My Lords, I thank my noble friend yet again for the introduction to this order. First, I want to express sympathy for those who have suffered over here as a result of the recent IRA bombs and those families of the Garda officer and the journalist in the Republic. We in Northern Ireland know only too well what trauma, misery and anguish are caused by such treacherous attacks. I know that the people of the Province understand and really feel for the victims and their families.
Sinn Fein/IRA's conduct recently has shown its members up for what they are: incapable of involving themselves in any democratic society. I must congratulate the Government on getting us this far during this process—I am not sure that we can really call it a peace process—and also add my thanks to the Members of the Opposition parties for standing by the Government and creating a united front. It is important not only that they do that, but that the governments of the Irish Republic and the USA are doing the same.
In addition to what has been happening recently in the Republic and over here, there is continued organised crime, intimidation and horrifying thuggery going on in the Province. It is therefore of great credit to the Government and the security forces that matters are not a great deal worse. I do not wish to spend time on the security situation in the Province, and everything that I have said in the past still stands. Our security forces, including the police and the Army, are doing a truly magnificent job.
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I should like to look for one moment at the recent election. The results have been analysed and dissected a dozen times, but one factor is sometimes missed by people over here—the noble Lord, Lord Fitt, mentioned it to a certain extent in the previous debate—and is sometimes not fully understood. Sinn Fein's vote of 15 per cent. was in fact 10 per cent. of those eligible to vote. People ask: why so many? The Sunday Tribune—a Dublin paper—did a poll of Sinn Fein voters soon after and found that over 90 per cent. wanted it to call a ceasefire and go to the talks. In addition, over 60 per cent. said that it should hand over its weapons. One can see therefore that the vote was not in favour of the IRA and its tactics.
A couple of days after that I heard a reporter on the radio interviewing several Sinn Fein voters. They all took roughly the same line—I accept that there is a small minority who may take another line. One person put it particularly well when he said, "I am not Sinn Fein. I am SDLP. I do not want violence and I am anti-IRA. But I voted Sinn Fein to try and get its members to go to the talks". It is quite revealing and we should not despair at the size of the Sinn Fein vote. Perhaps it would not be so high now after Manchester and the murders in the Republic. People were giving it a chance; the whole world has given it a chance which it has rejected.
There is also some hope that the teams at the talks may progress things. The characters involved are quite surprising; for example, a prominent catholic on the Ulster Unionist side and Conor Cruise O'Brien in Mr. McCartney's team. There is also some hope that the Reverend Ian Paisley's stance may moderate. What a tragedy that Sinn Fein is excluding itself.
On the economic side my noble friend the Minister has been tireless in her endeavours to press forward economic progress—and she has succeeded. Although tourism took a small step back on last year, it is well up on two years ago. My noble friend is now an accomplished globetrotter in her search for new business and I know that we in the Province are greatly in her debt. There is one area where we in Northern Ireland can rightly ask our Government for changes; I refer to the way in which we are largely a Civil Service-run Province. I know that my noble friend does not put up with Civil Service stonewalling in her department, but it does not always seem that way with other portfolios. Consultation, and decisions taken, as a result often fall short of the mark of excellence. For instance, during the past year there has been consultation about the number of education boards we need. Two days ago there was an announcement that they would be reduced from five to three. That is probably a good thing, for all I know. Education was never my strong subject.
But why was there then such outrage at the decision? I know that the option taken was not one previously discussed, but, right as it may be, why on earth was not the ground better prepared? The local boards, schools and parents, feel totally undermined by that failure in Civil Service management.
One more example is the decision on the fluoridisation of water. The Health Department, through the boards, asked for consultation with the district

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councils and the local health councils. It received views. All 26 district councils and the four health councils indicated that it was not wanted. However, the health boards recommended it to the Government. The rights and wrongs of that are not for me to decide, but what happened indicates a severe lack of management skill in preparing the ground with persuasive argument but then ignoring the result.
How can the Government seek to achieve sensible compromise on more important matters when failures at that level undermine the people's confidence? I ask my noble friend to give the reasons behind asking for consultation but then walking right over the top of the result in the other direction. Northern Ireland, and its future is about compromise. It is about trust. It is about taking note of people's views when they are asked for, or at least they should be told why they are not being taken note of. One cannot discard the views of 100 per cent. of those consulted and impose something without first convincing those people of the argument.
In conclusion, I support the order and wish the Government well in the coming year.
3.2 p.m.
Lord Cooke of Islandreagh: My Lords, the approval of this order (the Interim Period Extension Order) is the most important piece of legislation in respect of Northern Ireland which comes before this House each year. It determines how Northern Ireland should be governed, and all other legislation and orders stem from it. I support the order. I recognise that at the moment there is no alternative.
How different is the situation today from what it was this time last year. Last year we had enjoyed some eight months in which the IRA had not attacked communities anywhere in the UK. In Northern Ireland the effect was dramatic, because we had been under attack and seige for 25 years. Almost half the population had not known what it was like not to be threatened by violence.
The IRA had refused to declare the ceasefire permanent, but there were high hopes that it would be permanent, and talks were planned in which all democratic political parties in Northern Ireland would discuss and, it is hoped, reach agreement on how Northern Ireland is to be governed in future.
That period of ceasefire had enormous benefits. It brought home to people who had become almost used to violence, just how dreadful it is. It showed what life could be like without threat. I wish to acknowledge the part played in that by government, and, in particular, by the Prime Minister who, in the interests of peace, accepted the risks.
Now, 12 months on, the situation is entirely different. Three people have been killed and enormous damage done at Canary Wharf. There have been several minor incidents, and only by great good fortune has Hammersmith Bridge not been destroyed. To think of that is horrifying. Now the centre of Manchester has been devastated, and 200 people have suffered injury. We have had almost nightly so-called punishment beatings of a revolting and horrific nature. I join the
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noble Viscount, Lord Brookeborough, in expressing sympathy for all those who have suffered in the recent so-called incidents.
It is now obvious that the ceasefire, which we so much enjoyed, was tactical. There was no intention of it being permanent unless the IRA's demands were met in full. It is obvious that any future ceasefires will be tactical, with the threat of renewed violence if immediate demands are not met. It should also be quite clear that the IRA has no intention of decommissioning—of giving up their stocks of bombs and guns—until all its demands are met. IRA/Sinn Fein do not hide its objectives. "An overall settlement", as it terms it, will require the Brits to leave in a very short time and Protestants also to go if they do not accept the settlement which includes rule from Dublin on IRA/Sinn Fein terms. I mentioned Protestants because the IRA is a very sectarian organisation.
The Northern Ireland Office appears to be blind to reality. It has not understood the significance of recent IRA action and continues to believe that a purely political solution is possible. It continues with the contrived structure for the talks with the sole objective of attracting Sinn Fein and fudging in one way or another problems such as decommissioning. It is proposed that a very eminent American citizen, the chairman, will be the sole arbiter as to whether Sinn Fein/IRA can be admitted to the talks and whether it will discuss decommissioning with serious intent to act. Subject to an IRA ceasefire, Sinn Fein is offered talks on the constitution of Northern Ireland, on the police structure, on parity of esteem and on equal rights for minorities which inevitably borders on joint jurisdiction. At those talks the Dublin Government will play an equal part to Her Majesty's Government. In Strand 1, concerning Northern Ireland matters, they are nominally not represented but that is only optical and in effect they will be there.
In addition, the two governments have presented a framework document for further change, and promise cross-border institutions which have no practical value but are seen by unionists for what they are; a half-way house to an all-Ireland Government. The confused language used in the framework document has been interpreted to read that the Governments will enforce this framework if the parties to the talks do not reach agreement on it.
The majority in Northern Ireland in favour of the union are perhaps a little slow and we are not always very articulate. But the enormity of what has happened to part of the UK is beginning to sink in. It is now realised that the Northern Ireland Office has been taking its instructions from the Department of Foreign Affairs in Dublin, which is the political power house of the pan-nationalist front so carefully constructed by the Hume/Adams partnership.
Very strong feelings are beginning to build up. Unionists who were regarded as moderate unionists are now hardline but it is still beneath the surface and is not yet obvious. I regard the present situation in Northern Ireland to be potentially as dangerous as at any time during my lifetime. Resentment is growing at

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the manner in which the majority of people in Northern Ireland have been ignored. There is even a feeling of betrayal.
All that has taken place under direct rule. The influence of the Dublin Government in the internal affairs of Northern Ireland increases by the day. That is not acceptable to the majority. The chief constable was entirely right to make his statement last week. He said that if the IRA attacks Northern Ireland the loyalist paramilitaries will react. A very nasty, unpleasant situation could result. He also stated that targets in the south would be attacked. The possibility of something approaching civil war in both parts of Ireland, only 12 months after it was peaceful, is quite terrifying. There is a widespread conviction that that is a result of dual sovereignty in political matters in recent months.
I shall be bold enough to offer advice to the Government. They should realise that a purely political situation is no longer possible. We have a very urgent security problem. I recommend that the Government should talk to Mr. Bruton about the development of a joint security plan. Mr. Bruton may be found to be very ready to discuss such a plan now that the citizens of the Republic of Ireland have learnt that bomb factories and arms dumps exist in their territory.
The present talks should be suspended as they were contrived in a manner solely to appease Sinn Fein. They should be reconvened under straightforward democratic principles. Unless it becomes clear—and I find it difficult to understand how that could be possible—that Sinn Fein has become a democratic political party, it should not be included. Those new talks should discuss fair and equal treatment for everyone and the development of devolved administration in Northern Ireland similar to other parts of the United Kingdom. There should be no assembly in Northern Ireland. As an integral part of the United Kingdom, it is not needed. I do not believe that the citizens of the Republic, who were getting on very well on their own, have any wish to become involved in the internal affairs of Northern Ireland. Our Government must see to it that Northern Ireland is governed from Westminster without interference in its internal affairs.
Very simply, the Government must remember that Northern Ireland is an integral part of the United Kingdom and should be governed as any other part. I earnestly hope that in 12 months' time we shall commend the Government on restoring peace and good order in Northern Ireland. But in the meantime, there is not a day, not even an hour, to be lost.
3.13 p.m.
The Earl of Clanwilliam: My Lords, in the previous debate my noble friend on the Front Bench recalled the success of the economy in Northern Ireland in which she has played such a large part, as has been recognised on all sides of the House. The sum of £3.6 million added to the defence costs is borne by the taxpayer. In mentioning defence costs, I wish to associate myself with the remarks made on all sides of the House in
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commending the work of the defence forces and the police in the Province. But of course, the whole nation will be better served when those costs are diluted by peace.
There is a particularly difficult upsurge in terrorism at present, with the IRA renewing its war aims. As has already been mentioned, there was the bombing in Manchester, the killing of the Irish gardai and the murder of the Irish Times journalist in Dublin, to mention only those in the immediate past. The forces of terrorism are inextricably linked, as my noble friend on the Front Bench said, with fraud, protection and drug rackets. The elimination of those sources of funds will help to bring peace.
In the meantime, the recent meeting of heads of state of the G7 is particularly timely and may perhaps herald a new era of international co-operation in opposing the forces of terrorism and in particular the successful raid by the garda on an IRA bomb factory may indicate a renewed effort to starve the terrorists of their equipment and arms.
The co-operation of the Irish Government is vital in all matters concerned with Ireland. I believe that one encouraging sign is that their historic patience, not to say ambivalence, in relation to the Sinn Fein/IRA relationship is wearing rather thin. We must keep pressure on both those factions—that is, if they are to be described as different factions—and starve them of their oxygen. After all, we are only fighting a tiny minority, as my noble friend Lord Brookeborough and the noble Lord, Lord Fitt, said. There is no mass movement supporting unification. Indeed, the costs that we have just approved would be a burden that, I believe, the Republic would be reluctant to absorb.
While we may call, and rightly so, for the surrender of arms by all paramilitary factions—and it is opportune now to mention that the unionist paramilitaries have maintained their ceasefire—it is not so much the surrender of arms as the elimination of war-making capacity that must be our joint aim. Having said that, I commend all that the Government have done to date and support them in their efforts to continue the search and the fight for peace.
3.15 p.m.
The Earl of Longford: My Lords, I am sorry to say that my noble friend Lord Fitt has insisted that I should speak before him. My noble friend is certainly better qualified than myself and, indeed, better qualified than anyone else in the Chamber to speak on such matters. In my opinion, he is one of the heroes of our time.
I have only one advantage over other speakers in the debate, in that I have been longer on the planet. I do not know whether anyone present in the Chamber had been born at the time, but I visited Lord Craigavon in 1934. I was writing a book on the Anglo-Irish Treaty of 1921 which has since become a standard work. Lord Craigavon, who served under my father in the Boer War, greeted me hospitably. Of course, being an Ulsterman, he did not give anything away. He insisted that I should drink whiskey. He kept saying, "It's Irish whiskey". I never forgot that

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that great Ulsterman insisted that, so far as he was concerned, Northern Ireland was Ireland. Indeed, he insisted on Irish whiskey. But perhaps that was because he manufactured Irish whiskey, or so I believe. At any rate, that was my early experience of Northern Ireland.
When people talk about terrorists in England they naturally assume that we mean the IRA, but what about the Protestant paramilitaries? We did not hear much condemnation of them, did we? Yet they have committed more murders than the Catholics over the past few years. Therefore, perhaps we might hear a little condemnation about them the next time that some of our passionate Unionists speak on the subject.
However, let us take, for example, the noble Lord, Lord McNally. He was a very helpful political adviser to my noble friend Lord Callaghan when he was Home Secretary. But what did my noble friend say on his return from Northern Ireland? He said: "Too many guns". Then, Mr. Maudling, another Home Secretary, said on his return, "What a bloody awful country. Give me a whisky and soda". However, that was different.
I repeat what my noble friend Lord Callaghan said; namely, "Too many guns." But where did those guns come from? Perhaps some of the Protestant Unionists opposite may remember that the guns were brought in by the Protestants and the Unionists. I suppose that I am one of the few people present today—although there may be others—who has actually stayed in the house of a leading member of the Ulster Volunteer Force, which is a paramilitary force among paramilitaries. He was disappointed because I had not known Carson. When one thinks of Carson and the leaders of the Conservatives in this country before 1914, one remembers the slogan: "Ulster will fight and Ulster will be right".
It will be interesting to know whether noble Lords still use that slogan; in other words, that fighting is all right for the Ulster paramilitaries. But perhaps that is not the case, I do not know. Indeed, there is no suggestion of it. We are told that it is natural. However, when terrorism arrives on our doorstep—
The Earl of Clanwilliam: My Lords, will the noble Earl permit me to intervene?
The Earl of Longford: Yes, my Lords; when I have finished the sentence. I was about to say that murder by Ulster Protestant paramilitaries is just as bad as murder committed by anyone else.
The Earl of Clanwilliam: My Lords, I thank the noble Earl for giving way. I should just like to point out that, as I said, the Ulster Unionist paramilitaries have declared a ceasefire and maintained it despite the resurrection of the wartime effort by the IRA.
The Earl of Longford: My Lords, they have done so for a short while, but, as I said, over the past few years they have killed more Catholics than the Catholics have killed of them. That is a fact. For the moment, I am glad to say the Protestant paramilitaries are controlling
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themselves. I only hope that the IRA will do the same. I cannot think why it does not; it cannot possibly be in its interests to do otherwise.
The noble Lord, Lord Callaghan, said it was a question of too many guns brought in by the Protestants before the war. Later the Catholics brought in some guns but not on the same scale. I have no means of assessing the situation but I would guess—unless anyone here can offer a better opinion—that the Protestant paramilitary forces are more heavily armed than the Catholics. Let us not talk as though all terrorism is Catholic terrorism. That is quite lamentable.
What do we make of the situation today? In my opinion there is one easy answer—I put it in three words—"Back to Sunningdale". That ought to appeal to Conservative Members opposite, because Sunningdale was introduced by a distinguished Conservative statesman, Sir Edward Heath, together with the noble Viscount, Lord Whitelaw. It was a fine idea and it worked extremely well. The noble Lord, Lord Fitt, is better qualified to speak of it than anyone else because he was one of the leaders of the new government which was set up. It worked extremely well because it restored the confidence of the Catholic community. I was in Northern Ireland soon after the time of the noble Lord, Lord Callaghan. What was the situation among Catholics then? They were terrified of the Protestant paramilitaries, whom they assumed to be in league with the police. That was the situation. The Army was sent there to protect the Catholics. Let us get that quite clear. The British Army was sent in large numbers to protect the Catholics in Northern Ireland. We must never forget that. It was a case of the Protestant menace threatening the minority.
Things have moved on since. As I said, Sunningdale was a wonderful idea and it worked extremely well. Protestants and Catholics were getting on perfectly together. People may ask how all these paramilitaries can exist at all. As regards the Catholic side, it is because they are frightened of the Protestants. Of course most Catholics do not favour violence, but they do not repudiate the IRA. They would not bring to an end—
Lord Dubs: You have spoken for six minutes. You are only allowed to speak for four minutes.
The Earl of Longford: My Lords, my noble friend tells me that I am only allowed to speak for four minutes. I am glad to have said what I have said. If he wishes to stop me speaking, I must put up with it.
3.22 p.m.
Lord Fitt: My Lords, I have been provoked into speaking in this debate for a few moments. I suggest that the members of the Northern Ireland Forum should read the report of this debate. It may give them serious thought as regards the future of Northern Ireland.
This is an order that we cannot possibly refute because without it every other order or enactment falls into disrepute in Northern Ireland. There is now a Forum taking place in Northern Ireland. I desperately hope with all my heart that it will arrive at some conclusion. But

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let us not be too optimistic about that because there are insurmountable obstacles to be overcome. I have no great faith in some of the representatives who were elected to that Forum on the basis of the regional list. The Government went out of their way to make certain that people who had been involved in paramilitary activities—people who had been convicted of murder—would be assured of getting a seat on the regional list. I make no apology for saying that it makes my blood run cold when I see as a member of that Forum, elected to the regional list, a man by the name of John White, who brutally murdered my close colleague, Senator Paddy Wilson, in 1973 purely and simply because he was a Catholic.
Reference has already been made to the fact that one of the Forum representatives—a Unionist—is a Catholic by religion. I desperately hope that people within that Forum, irrespective of their religion, will give their allegiance either for the Union or against the Union. We hear repeatedly that 25 per cent. of those in Northern Ireland who are Catholic by religion stand in favour of the Union. If that figure is true, those in Northern Ireland who are Catholic by religion but who support the Union should make their presence felt. Some members of the Protestant religion may not be fully in support of the Union and may eventually give their allegiance to some form of an alliance with an Irish Republic. While we have those tribal divisions—Catholics vote for the unity of Ireland; Protestants vote for the continuation of the Union—we shall never reach any settlement in Northern Ireland.
It is true that the vast majority of people in Northern Ireland wish to see a reinstatement of the ceasefire. They wish to see an end to the violent campaign with which we have had to live for so long. But many of them want that peace to be brought about on their terms. Now that the Forum has been elected, the representatives of the people of Northern Ireland are gathered there, it is in the interests of all the people in Northern Ireland that some political accommodation must be found.
The noble Earl, Lord Longford, said, "Back to Sunningdale". I desperately hope that some realignment of politics would make that possible. I make an appeal; my voice may not be listened to with any seriousness. If the official Unionist Party, the SDLP, and the Democratic Unionist Party—which represent overwhelmingly the people of Northern Ireland—take it into their heads to do so, they can reach a political settlement which will be supported by the vast majority of people in Northern Ireland. I only hope and pray that they will listen to my advocation of such a course because then and only then can we envisage peace in Northern Ireland.
3.27 p.m.
Baroness Denton of Wakefield: My Lords, we have had a most interesting debate. I thank noble Lords for their unqualified support for the order which we all regret but see as necessary. I am extremely grateful for the bipartisan support the Government receive on these matters. It makes it possible to hope at least to start to
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build the foundations. It is appreciated that when we are shoulder to shoulder with the Irish Government in the fight against terrorism that action is likely to be effective.
The noble Lord, Lord Williams, supported by other noble Lords, rightly drew attention to the great sympathy we feel for the family of Garda McCabe and for the family of the journalist so outrageously murdered in Dublin at traffic lights—and, as was stated in the Dail, for the attack on the state that that represented. We express sympathy to those people of Manchester going about their business. I found it particularly moving that many were buying cards for Father's Day. Without a thought for Ireland in their minds they were subjected to an act of terrorism. I share with your Lordships the pain felt by many people in Northern Ireland, and, I am sure, throughout the island of Ireland, that it was their countrymen who inflicted the injuries and scars that day. There was revulsion against the attack being spread to innocents with no involvement.
However, I still today feel greater optimism than perhaps has been expressed in some quarters. We are working to build for peace and the majority of people in the Province feel that way too. I am glad that the noble Lord, Lord McConnell, recognised that more than 85 per cent. of the Northern Irish nation totally abhor and reject violence.
The noble Lord, Lord Williams, asked me two questions. I assure him that the Government remain committed to their policy of repatriating prisoners under the terms of their international agreements. His more difficult question concerned the progress of the talks. Some would suggest that continuation of the talks is progress, and the noble Lord expressed a mood of cautious hope. He is right. I believe that we are making gradual progress. We all wish to move faster to the substance of the negotiations, but there are personal timetables which, like the timetable for forgiveness, are no matter for politicians. They are personal and have to move at their own speed. There are also important points of procedure to consider.
We believe that there is a real wish on the part of those involved to work for success. Probably by hard, protracted slog, success is within our grasp. I say to those who have hesitation about the success of the elections and the consequent talks that participation is more inclusive. There are voices at the table who have never participated in political discussions before. I am pleased that some of the voices are of women who have a contribution to make towards building the future.
I plead that people should recognise that the discussions may take place in Northern Ireland but that they are watched globally. Words flying around rather than paving stones is progress. However, discourtesies flying around between people in Northern Ireland is not the message we wish to see in developing, building and helping the Province to grow. I pay tribute to my colleagues involved in the talks for their patience and that of those who have been prepared to accept chairmanships.

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The noble Lord, Lord McConnell, questioned the involvement of the Irish Government. If the Irish Government are to continue their readiness to remove Articles 2 and 3, they will need to go to their constituents for support. Co-operation on security with the Irish Government remains of vital importance. Like us, the Irish Government are determined that the scourge of terrorism should never again be allowed to set the course. Much co-operation already takes place and there are constant discussions between the relevant officials and security forces. I assure noble Lords that the Government will never walk away from their responsibility to protect their citizens. It is a role of government.
The noble Lord, Lord McConnell, strayed into the hypothetical situation of whether the noble Lord, Lord Williams of Mostyn, should have responsibility for such matters at a future stage. I assure the noble Lord that the matter is hypothetical. I am glad that he recognised it as such.
We heard from my noble friend Lord Brookeborough of the need to establish trust, not only between communities but between those in government and those who are affected by government. I have always felt that one of the strongest advantages in Northern Ireland is that its size means that one never has to make a decision without being able to visit those whom it affects. That gives my colleagues much comfort also.
We must build trust and recognise that we are all working for the future of the people of Northern Ireland. Those of us in public service have a duty to serve them. The noble Lord, Lord Cooke, rightly paid tribute to the role that the Prime Minister played in building on the situation. I extend that tribute to the role played by the Taoiseach in being 100 per cent. committed to the rejection of violence. I pay tribute also to the role played by President Clinton. Unfortunately, what we hear from Lyons is that terrorism is not exclusive to Northern Ireland. We have, and the noble Lord has, long and painful experience of it. It is something that we shall all work to dismiss. I assure the noble Lord, Lord Cooke, that the Northern Ireland Office writes its own policies. Its policies are to bring forward a situation in which Northern Ireland people make their decisions about the shape of the future by majority consent.
I was pleased that my noble friend Lord Clanwilliam joined in the debate. My noble friend identified how much we have to do, but also how much work is going on. The noble Lord, Lord McNally, drew attention to the fact that many young men left the North West to serve from a sense of duty. I say to the noble Earl, Lord Longford, that the issue is not whether killing Catholics is wrong, or killing Protestants is wrong. Killing people is wrong. When we can work towards the situation that was the aim of Martin Luther King, whereby his children were judged by their character, not their colour, we shall have made real progress in Northern Ireland. We have much progress still to make. But I believe we can aim to work towards that progress. I thank noble Lords for their support in helping us continue along that road. I commend the order to the House.
On Question, Motion agreed to.

Stalking (No. 2) Bill [H.L.]
3.36 p.m.
Lord McIntosh of Haringey: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord McIntosh of Haringey.)
On Question, Motion agreed to.
House in Committee accordingly.
[The DEPUTY CHAIRMAN OF COMMITTEES (Lord Geraint) in the Chair.]
Clause 1 [Definitions]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 1:
Page I, leave out lines 7 to 19 and insert ("molests another person").
The noble Lord said: It may be for the convenience of the Committee if I speak to all the amendments together. They all have the same object and effect. Therefore, with permission, I shall speak also to Amendments Nos. 2 to 26.
The purpose of all these amendments is to remove the criminal element from the Bill that received a Second Reading and to turn the offence of stalking into a civil matter instead. It therefore becomes a civil tort of molestation: there is a right not to be stalked—not to be molested—and the offence is a breach of any non-molestation order in the civil courts.
We debated the matter as a criminal offence at Second Reading. However, I recognise that, although the Government share with me the view that creating a criminal offence is an appropriate way to deal with some of the issues involved in stalking, it is premature to introduce a Bill which provides for such a criminal offence.
I am grateful to the noble and learned Lord the Lord Chancellor for suggesting that it would be appropriate for the Bill to abandon the concept of a criminal offence and for indicating to me the thinking behind how the relevant provisions of the Family Law Bill might be used in the more general area of stalking where no family relationship already exists. As I take the Committee as rapidly as I can through the amendments it will be seen that they all point to that same objective.
Amendment No. 1. removes the complicated definition of stalking for the purpose of a criminal offence and simply says that Clause I shall read:
"In this Act, 'stalking' shall mean engaging in a course of conduct whereby a person molests another person so as to be reasonably likely to cause that other person to feel harassed, alarmed, distressed or to fear for his safety or for that of one or more third persons".
That is the end of Clause 1. All the issues debated in Committee about whether the actions themselves are offensive are left to the courts in their consideration of whether a non-molestation order is appropriate.
Clause 2 is completely replaced by a new, simple clause which states:
"(1) It is unlawful for a person to stalk another person.
"(2) A claim by a person that another person has acted unlawfully under this section may be made subject to a non-molestation order as defined in section 3(1)(b) below".
The phrase "non-molestation order" is not very elegant, but it is the phrase used in the Family Law Bill in that part which deals with family homes and domestic violence. As the Lord Chancellor pointed out to me, although the Family Law Bill uses a non-molestation order to relate only to somebody who has a relationship with the person who is being molested, by removing that relationship from the drafting of the Bill, the phrase "non-molestation" does have a useful meaning.
I do not think there need be any fear of the non-molestation order under this Bill being confused with a non-molestation order under the Family Law Bill because it can be referred to in respect of the Act of Parliament which is being used for the purposes of the order. So we have a simple Clause 2 which establishes that there is a right not to be stalked and the remedy for that is to secure a non-molestation order.
Clause 3 has been divided into more than one clause, so Amendment No. 4 refers to the whole "Act" rather than to the single section.
Amendment No. 5 extends the remedy from the magistrates' courts to the county court and the High Court because, again on the analogy with the Family Law Bill, those courts are appropriate for a non-molestation order.
A whole series of amendments removes the word "prohibitory" and replaces it with the phrase "non-molestation order".
Amendment No. 8 strengthens the requirement of a person who is being stalked to provide evidence that he is being stalked, rather than simply believing he is being stalked.
Amendment No. 9 removes the possibility that any other person acting on behalf of the applicant could seek an order and restricts it to
"a constable, employee of the Crown Prosecution Service or solicitor".
Amendment No. 10 re-words Clause 3(3) in accordance with the wording of Clause 42(1) and (3) of the Family Law Bill.
Amendment No. 11 removes subsections (4) and (5). There is a replacement for them in Amendment No. 14, which reflects Clause 42(2) of the Family Law Bill.
There is then a series of amendments changing the wording from "prohibitory" to "non-molestation".
I have already referred to Amendment No. 14.
Amendment No. 20, frankly, I do not understand, although I believe that the lawyers understand it. It provides that any relief which is available from a non-molestation order is not in replacement of a general tort but is additional to other tort relief.
Amendment No. 21 removes subsections (13) and (14) because they are replaced by the more detailed provisions of the new clause after Clause 3 (Amendment No. 22) and the new schedule to be placed after Clause 5 (Amendment No. 25). The new clause is called a breach of order clause. Again, it derives very largely from the Family Law Bill, with amendments as appropriate to remove the relationship between the applicant and the respondent. It provides, as the original Bill did not provide, adequate provision for the discharge of an order on application. Above all, it provides for powers of remand for breach of such an order. I am sure the Committee will agree that it is important that there should be proper provision for somebody to be remanded in custody if the order is breached. Otherwise, there is no real protection against stalking.
Amendment No. 23 removes the reference to a person acting under statutory or lawful authority because there is now no offence as such under the Bill. Amendment No. 24 provides, as is common, that the Act should come into force two months rather than one month after enactment. As I said, Amendment No. 25 is the new schedule about the powers of the High Court and the county court to remand. That is taken directly from the Family Law Bill. Finally, Amendment No. 26 makes the necessary amendment in the Title to remove the criminal element of the Bill as originally drafted.
I recognise that the Bill is very different from the previous Bill. But I am sure the Committee will understand me when I say that all the changes are solely motivated by the desire to provide for a civil procedure rather than the creation of a new criminal offence. It is my belief that it would be desirable for Parliament to enact this more limited legislation, even though the Government are now consulting publicly about the problems or opportunities for a criminal offence and even though the Government have given an undertaking, which I acknowledge, that they will introduce legislation to provide the criminal offence when the consultation is complete and when the lawyers have decided how to do it.
Much as we agree with the objectives of the Government and believe that they agree with us that these amendments and the Bill as amended would provide a satisfactory basis for the civil procedure provided for under the Bill, we feel that the Bill should be enacted now. No damage whatsoever is done to the prospect of further legislation under some more general criminal procedure Bill. Nothing is lost but a great deal could be gained by practical relief for those women who are being stalked at the present time, have no adequate relief in the courts and need to be reassured that the law is prepared to take the action necessary in order to protect them.
I suggest to the Committee that this is a fail-safe piece of legislation. It does not in any way conflict with the longer term objectives of the Government or indeed the longer term objectives which I stated and which in the other place Mrs. Janet Anderson stated. It provides immediate relief. I commend Amendment No. 1 to the Committee. I shall then commend to it the subsequent amendments.
3.45 p.m.
Lord Dixon-Smith: I shall commence what I have to say by congratulating the noble Lord, Lord McIntosh, on bringing forward this string of amendments, because there is not the slightest doubt that the consequence of their application to the original draft is to improve the Bill. I hope that it will be for the convenience of the Committee if I deal with the subject in the same terms as the noble Lord has already done. My remarks will be on the Bill as amended, as though these amendments already applied. In that way we shall save a deal of time.
When I spoke at Second Reading I had two concerns which still exist. The present law has in it remedies for the crime of stalking. Indeed, there is reported in today's press another case of stalking which has been successfully brought to court. There is no point in going over that ground. We have the Bill before us. The fact remains that, despite what the noble Lord, Lord McIntosh, has said, cases of stalking are successfully brought to court and people are prosecuted under the existing law.
The second point of concern which was raised at Second Reading, was that the Bill is deficient in its definition of the crime of stalking. I still have that concern about the Bill as amended. Clause 1 will now read—and the noble Lord, Lord McIntosh, has already read it—
"In this Act, 'stalking' shall mean engaging in a course of conduct whereby a person molests another person so as to be reasonably likely to cause that other person to feel harassed,"
and so forth. I dislike negotiation across the Floor of the Committee as to the meaning of words. But I wonder if the word "molests" is an appropriate definition standing in isolation as it does in this case. Even if we set aside the issues of child molestation and sexual molestation, all of which involve physical contact, the Oxford English Dictionary defines "molest" as meaning,
"cause trouble to; vex, annoy or put to inconvenience".
We are in a situation where the wording of the Bill is in what I describe as a, "You know what I mean" phase. Indeed, the noble Lord, Lord McIntosh, said in his opening remarks that this matter can be left for the courts to define and decide. I am a naive layman, but I believe that that will provide an open door through which a flood of canny lawyers will wish to rush. My understanding of the workings of the Court of Appeal has always been that, when a matter is brought to it, it tries to interpret the intention of Parliament in the legislation. Here, we are saying that we do not have a particular intention and that we are going to leave it to the courts to decide. It may be that I am being pernickety, but I believe that we have here a circular argument which is dangerous.
I have one other point of concern. The new Clause 3 deals with the issue of non-molestation orders and the penalties that can be attached to them and so forth. Again, I believe that this route is to be preferred in every way possible to the wording of the original Bill. However, there is a difficulty. All too often the crime of stalking involves somebody who is likely to be unknown by name to the person stalked. One sees cases in which that causes an immense amount of trouble. A non-molestation order
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requires an application to the courts and it is for the courts to decide to apply such an order. Again, it seems to me that the courts will never apply such an order if they do not know to whom to apply it.
There has to be a way of resolving what is another circular situation. I do not know the answer to this one, but it seems to me that if the Bill as it stands requires the courts to do something which the courts will not do the Bill is deficient because it will not provide the protection which we should all like to see provided. Those are my two causes of concern on the Bill. As it now stands, it is vastly better, but I still think that it is deficient.
Lord Monkswell: In rising to support my noble friend Lord McIntosh of Haringey on what I am sure we all recognise is a rewriting of the Bill, I should like to make a few brief comments. First, we must thank my noble friend for the concise way in which he explained the impact of his amendments. They take forward the resolution of the problem which society faces, but I am sure that we all recognise that this does not completely resolve the problem. It is readily understood that at some stage there will need to be a criminal sanction mechanism for dealing with some of the stalking activities that take place.
The noble Lord, Lord Dixon-Smith, asked what happens if the person being molested does not know the identity of the molester. That is obviously an area where the police will need powers to make inquiries and to investigate what should be a criminal offence. We all recognise that we are not talking about that today, but that is something that will need to be done and I hope that the Government are actively pursing that problem.
The amendments address the most significant objections that were raised on Second Reading. The noble Lord, Lord Dixon-Smith, raised the prospect of somebody being "lifted" on the street on the basis of a complaint by an individual almost out of the blue. That caused a number of people some concern. I am sure that it was never the intention of the framers of the Bill that the provisions should work in that way, but that concern was raised and it has now effectively been addressed. My understanding is that instead of someone who is being molested going to a police officer and saying, "Arrest that man because he is molesting me", that person has to go to a solicitor and go through the legal process of going to court and seeking an order.
I am pleased that in his amendments my noble friend Lord McIntosh has seen fit to include what I would describe as "latest practice" in terms of the mechanisms which are enshrined in the Family Law Bill. That is a sensible way of going about things. Obviously, there will be that boundary, particularly where one reading of a case may suggest that it was a domestic situation but where, because there is no clear relationship between the two people concerned which can be picked up by the provisions of the Family Law Bill, there will be a grey area which these provisions address.
The concept of molestation rather than stalking fits better with our understanding of the English language. The word "stalking", for those of us who grew up a few years ago, has a different meaning from the one sometimes ascribed to it in relation to this subject and "molestation" is probably a better description.

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The noble Lord, Lord Dixon-Smith, mentioned the latest case, which appeared on the front page of the Evening Standard today. It is worth pointing out that in that case there was evidence of criminal damage and that was the basis on which the police could act. We all recognise that there will be situations which need to be addressed which do not raise the problem of criminal damage and we need a mechanism for dealing with that area.
4 p.m.
Lord Dixon-Smith: I thank the noble Lord for giving way. I did not want to rake over all the ground of my Second Reading speech. There are other aspects of law which can be used for people who feel that they are being stalked. However, there was no point in going over that ground again at this stage.
Lord Monkswell: I recognise the point being made by the noble Lord, Lord Dixon-Smith. Indeed, there is general recognition that certain aspects of anti-social behaviour can affect individuals significantly yet there is no redress either through the criminal or the civil legal systems. That is what the Bill and the campaign seek to address. The Bill allows for the protection of individual members of our society who are being molested in a way that causes them great distress, but yet is not recognised by either the criminal or civil legal systems, and enables them to resolve those problems.
I hope that we do not go on for too long today because it is late in the afternoon. I make two final points. First, I hope that the Government recognise that my noble friend Lord McIntosh of Haringey has done a sterling service both to Parliament and the country in bringing forward this Bill and these amendments. Secondly, I sincerely hope that the Government will feel able to welcome the amendments and will give us some intelligence as to how soon they may be able to bring forward the necessary legal changes to institute the criminal sanctions needed to deal with the problem.
The Earl of Courtown: My noble friend the Minister made clear on Second Reading that the Government fully share the concern which has led the noble Lord, Lord McIntosh, to bring forward his Bill. Stalking can be a terrible scourge on the lives of its victims and the Government are determined to see that decisive action is taken to deal with it. But it is important that the remedies adopted should be the right ones, and should deal as comprehensively as possible with the phenomenon of stalking in all its forms, without at the same time unwittingly catching legitimate activities which ought not to be the subject of legal sanction.
The noble Lord, Lord McIntosh, eloquently explained the purposes of his amendments. I am sure the whole Committee is grateful to him for the efforts he has made to render his Bill an effective measure for dealing with this problem. He proposes, as he explained, to remove all vestiges of the previous criminal offence, and rests his whole response to the problem on a civil "non-molestation" order. He explained that his proposals are closely modelled on those in the Family Law Bill.
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I am also glad to hear that my noble and learned friend the Lord Chancellor has been of such assistance to the noble Lord, Lord McIntosh of Haringey, and I am sure that the whole House will be grateful for the wisdom that he has been able to bring to bear in this difficult area. I understand that it is his view that, although some manifestations of stalking may be successfully dealt with by the civil law approach advocated by the noble Lord, there will be serious manifestations of the problem which may come up. He has made it clear that the Government's view is that this is an area in which a period for consultation is necessary before legislation is brought forward and that this should include consideration of ways of dealing with other manifestations of the problem.
The noble Lord has clearly striven hard to find the right solution, and I hope the Committee will not feel that I am being churlish when I say that, in the Government's view, the Bill is not the complete answer.
There are broadly two reasons for that. In the first place, we remain convinced that there must be criminal sanctions, as well as a civil remedy. It is true that we had very considerable reservations about the terms of the criminal offences contained in the Bill as introduced. That would clearly have gone far too wide, and would have caught perfectly legitimate activities. It is also true, as my noble friend the Minister emphasised on Second Reading, that we attach great importance to seeing that any new criminal and civil remedies fit properly with each other. That remains vital, in our view. But of the fact that we need criminal offences the Government are in no doubt whatsoever.
On its own, a civil remedy, however carefully constructed, simply would not meet all the instances in which the law may need to intervene. We must have a vehicle to hand for the victim to seek help right at the start. There must be an immediate basis upon which the police can become involved, which, in the absence of a clear criminal offence, would be difficult. Equally importantly, there needs to be a means of dealing with the anonymous stalker, as noble Lords have said—the stalker whose identity is not known to the victim. Usually the victim will know the stalker, because a relationship of some kind will have existed between them, even if they have simply been work colleagues. But that will not always be the case. It would not be an adequate response to the problem for the victim to have to wait until the stalker had identified himself in some way, before she could go to court for an order preventing further molestation. And it cannot be right, even where a civil order is subsequently made, that the initial act of persecution and intimidation should remain unpunished. There may well be instances of stalking where the nature of the acts perpetrated demands a criminal penalty on grounds of retribution and deterrence. I understand that the honourable Lady who introduced an equivalent Bill in another place expressed the very strong view that a civil remedy on its own would not be a sufficient response, and I respectfully agree with her.
I said that there were two reasons why the Government remain unhappy with the noble Lord's Bill as he proposes to amend it. The second, equally important, consideration is that there must be an opportunity for all concerned with this problem to

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express their views on the possible solutions, before we move to set them in legislative stone. This is a difficult problem, and there are no easy solutions. It is perhaps significant that, when the honourable Lady's Bill was first introduced in another place, two of the organisations which have been campaigning on this issue took radically different views about the acceptability of the solutions offered.
We need proper consultation on the options, and that is what the Government have declared they will do. My right honourable friend the Home Secretary has undertaken to come forward with comprehensive proposals for addressing the problem of stalking, and I understand that he hopes to do so very shortly. That will give an opportunity for all concerned to express their views on the solutions on offer, which will, as I have implied, entail a combination of criminal and civil remedies. The distinction, and the links, between them are vital, which is why we cannot proceed with one element of the package without considering the other.
It would be quite wrong to suggest that the Government are dragging their feet on this matter. We are determined to make rapid progress, and to do so in the most effective way possible. We should not underestimate the extent of the problem we have to solve, however. Some commentators have instanced the fact that some other countries have legislated against stalking, as a sign that ready-made solutions may already be to hand. I wish it were so simple. The fact is that, although some other countries do indeed have laws specifically to deal with this issue, the content of those laws deals, for the most part, with behaviour which is already a criminal offence within our own law. Either that, or they are cast in terms which would, if translated as they stand into English law, make it difficult in practice to prove commission of the offence. We want to do better than that, and to find provisions which will really fill the gaps that have been exposed in the present law. The attempts by other countries are interesting, but they do not get us very far.
I have spoken at some length on these amendments, because what I have said here reflects the Government's view on the whole package proposed by the noble Lord. We respect what he is attempting to do, and we shall want to reflect in our consultation document on his proposals and the comments made in the course of this debate. We cannot support legislation at this stage. But we are determined to tackle the problem, and to do so quickly.
Lord McIntosh of Haringey: It seems to me that on almost all the important issues that we have debated today all of us are in agreement. Perhaps I may deal first with the points made by the noble Lord, Lord Dixon-Smith, and then refer in particular to the Government's response.
The noble Lord wondered, as he said, as a naïve layman—I too am a naïve layman—whether the words "molestation" or "non-molestation" were sufficiently precise. I wondered about that too, but having looked at the Family Law Bill, which uses the same words, and having had the benefit of discussions with the noble and learned Lord the Lord Chancellor, I am convinced that to have something which is not yet fully defined and which would have to be defined by the courts would be an advantage. It would enable action to be taken and
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case law to build up a dossier of examples of molestation which could properly be pursued in the courts without attempting, as the original Bill attempted perhaps in far too much detail, to define every element of an activity which combines lawful and unlawful elements. That is why, as in the Family Law Bill, which I understand has passed all its stages but not yet received Royal Assent, Parliament has indicated that the phrase "non-molestation" without further definition is not only possible but advantageous.
The noble Lord went on to say that the Bill does not deal with the problem of the unidentified stalker. Of course, he is right. That is one of the issues which would have to be dealt with by bringing the police in at an early stage and would almost require the criminal sanctions which I believe we all want.
The noble Lord's third point was that there are other laws which can deal with some cases of stalking. Again, he is right, but the Government agree with me that those laws are not adequate; otherwise the Government would not have issued their toughly worded press release on 11th May which, as the noble Earl, Lord Courtown, said, stated that something has to be done urgently. I am not suggesting that we go all the way. I am saying that the Bill goes a lot further than the existing legislation and makes action against stalking in a considerable number of cases more possible.
Of course I am disappointed by the Minister's final conclusion. However, I am very much encouraged by many of the other things that he said and in particular what he did not say. He did not criticise the wording of the Bill as it would be, amended. Therefore I am encouraged that the Government believe that, if we are not 100 per cent. there, we are nearly there in terms of the answers to this stage of the problem. The Minister went on to say that this is not the complete answer and it does not meet all the instances which arise. Again, he is right. It does not claim to do that. What we claim to do is to make an improvement on the present law.
I really must reject the Minister's final points. He said that it is necessary for consultation to take place before we proceed with legislation. I repeat the point that I made at the beginning; that nothing in the Bill pre-empts any legislation on a criminal offence. No damage is done to the consultation procedure or to the final solution which may emerge as a result of that consultation procedure.
The Minister went on to say that links are vital between the two. If they are, and I rather doubt it, those links can be provided when the criminal offence itself is defined at some later date. The provisions in the Bill are free-standing. They are modelled on the Family Law Bill, which has received the approval of Parliament. They stand up in their own right as a positive contribution to the protection of women who, as the Minister rightly said, suffer the scourge of stalking. I commend all the amendments to the Committee and I now commend Amendment No. 1.
On Question, amendment agreed to.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 2:

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Page 1, line 22, leave out from ("persons") to end of line.
On Question, amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2 [Offence]:
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 3:
Leave out Clause 2 and insert the following new Clause—

Stalking (No. 2) Bill [H.L.]

  STALKING TO BE UNLAWFUL
  (".—(1) It is unlawful for a person to stalk another person.
  (2) A claim by a person that another person has acted unlawfully under this section may be made subject to a non-molestation order as defined in section 3(1)(b) below.").
  On Question, amendment agreed to.
  Clause 2, as amended, agreed to.
  Clause 3 [Prohibitory orders, etc.]:
  Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendments Nos. 4 to 21:
  Page 2, line 9, leave out ("section") and insert ("Act").
  Page 2, line 10, after second ("Court") insert (", County Court or High Court").
  Page 2, line 11, leave out ("prohibitory") and insert ("non-molestation").
  Page 2, line 14, leave out ("prohibitory") and insert ("non-molestation").
  Page 2, line 16, after ("believes") insert ("and provides evidence that").
  Page 2, line 18, leave out ("another person") and insert ("a constable, employee of the Crown Prosecution Service or solicitor").
  Page 2, line 22, leave out subsection (3) and insert—
  ("(3) The court may in any case where it considers that it is just and convenient to do so, make a non-molestation order even though the respondent has not been given notice of such proceedings as would otherwise be required by the rules of the court.
  (3A) If a court makes an order by virtue of sub-section (1) it must afford the respondent an opportunity to make representations relating to the order as soon as just and convenient at a full hearing.").
  Page 2, line 27, leave out subsections (4) and (5).
  Page 2, line 27, leave out ("prohibitory") and insert ("non-molestation").
  Page 2, line 33, leave out ("prohibitory") and insert ("non-molestation").
  Page 2, leave out lines 34 and 35 and insert ("regard to all the circumstances including—

  (a) the safety of the applicant;

  (b) any risk of significant harm to the applicant attributable to the conduct of the respondent, if the order is not made immediately; and

  (c) whether it is likely that the applicant will be deterred or prevented from pursuing the application if an order is not made immediately.").

  Page 2, line 36, leave out ("prohibitory") and insert ("non-molestation").
  Page 2, line 38, leave out ("prohibitory") and insert ("non-molestation").
  Page 2, line 45, leave out ("prohibitory") and insert ("non-molestation").
  Page 3, line 2, leave out ("prohibitory") and insert ("non-molestation").
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  Page 3, line 4, leave out ("prohibitory") and insert ("non-molestation").
  Page 3, line 5, at end insert—
  ("( ) A non-molestation order may be additional to other tort relief.").
  Page 3, line 6, leave out subsections (13) and (14).
  On Question, amendments agreed to.
  Clause 3, as amended, agreed to.
  Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 22:
  After Clause 3, insert the following new clause—

  BREACH OF ORDER
  (".—(1) The court may attach a power of arrest to one or more provisions of a non-molestation order unless satisfied that in all the circumstances of the case the applicant will be adequately protected without such power of arrest.
  (2) A respondent who breaches any provision of a non-molestation order is guilty of an offence.
  (3) A person guilty of an offence under this section shall be liable upon conviction on indictment to imprisonment for a term not exceeding 2 years or a fine or both, or on summary conviction to imprisonment for a term not exceeding 6 months or a fine not exceeding level 4 on the standard scale or both.
  (4) If the court attaches a power of arrest to any provisions of a relevant order, it may provide that the power of arrest is to have effect for a shorter period than the other provisions of the order.
  (5) Any period specified for the purposes of subsection (4), the court attaches a power of arrest to any provisions of the relevant order, it may provide that the power of arrest is to have effect for a shorter period than the other provisions of the order.
  (6) Any period specified for the purposes of subsection (4) may be extended by the court (on one or more occasions) on an application to vary or discharge the relevant order.
  (7) If a power of arrest is attached to certain provisions of an order, a constable may arrest without warrant a person whom he has reasonable cause to suspect to be in breach of any such provision.
  (8) If a power of arrest is attached under subsection (1) to certain provisions of the order and the respondent is arrested under subsection (7)—

  (a) he must be brought before the relevant judicial authority within the period of 24 hours beginning at the time of his arrest; and

  (b) if the matter is not then disposed of forthwith, the relevant judicial authority before whom he is brought may remand him.

  In reckoning for the purposes of this subsection any period of 24 hours, no account is to be taken of Christmas Day, Good Friday or any Sunday.
  (9) If the court has made a non-molestation order but—

  (a) has not attached a power of arrest under subsection (1) to any provisions of the order; or

  (b) has attached that power only to certain provisions of the order,

  then, if at any time the applicant considers that the respondent has failed to comply with the order he may apply to the relevant judicial authority for the issue of a warrant for the arrest of the respondent.
  (10) The relevant judicial authority shall not issue a warrant on an application under subsection (9) unless—

  (a) the application is substantiated on oath; and

  (b) the relevant judicial authority has reasonable grounds for believing that the respondent has failed to comply with the order.

  (11) If a person is brought before a court by virtue of a warrant issued under subsection (10) and the court does not dispose of the matter forthwith, the court may remand him.
  (12) Schedule (Powers of High Court and county court to remand) (which makes provision corresponding to that applying in magistrates' courts in civil cases under sections 128 and 129 of the Magistrates' Courts Act 1980) has effect in relation to the powers of the High Court and a county court to remand a person by virtue of this section.
  (13) If a person remanded under this section is granted bail (whether in the High Court or a county court under Schedule (Powers of High Court and county court to remand) or in a magistrates' court under section 128 or 129 of the Magistrates' Courts Act 1980), he may be required by the relevant judicial authority to comply, before release on bail or later, with such requirements as appear to that authority to be necessary to secure that he does not interfere with witnesses or otherwise obstruct the course of justice.").
  On Question, amendment agreed to.
  Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No, 23:
  After Clause 3, insert the following new clause—
  (".—(1) A non-molestation order may be varied or discharged by the court on an application by—

  (a) the respondent; or

  (b) the person on whose application the order was made.

  (2) If, by virtue of section (Breach of Order)(1), a power of arrest has been attached to certain provisions of a non-molestation order, the court may vary or discharge the order under subsection (1) in so far as it confers a power of arrest (whether or not any application has been made to vary or discharge any other provision of the order).").
  On Question, amendment agreed to.
  Clause 4 negatived.
  Clause 5 [Citation, commencement and extent]:
  Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 24:
  Page 3, line 17, leave out ("one month") and insert ("two months")
  On Question, amendment agreed to.
  Clause 5, as amended, agreed to.
  Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 25:
  After Clause 5, insert the following new schedule—

  SCHEDULE

    POWERS OF HIGH COURT AND COUNTY COURT TO REMAND
    Interpretation
    1. In this Schedule "the court" means the High Court or a county court and includes—

    (a) in relation to the High Court, a judge of that court, and

    (b) in relation to a county court, a judge or district judge of that court.

    Remand in custody or on bail
    2.—(1) Where a court has power to remand a person under section (Breach of Order), the court may—

    (a) remand him in custody, that is to say, commit him to custody to be brought before the court at the end of the period of remand or at such earlier time as the court may require, or

    (b) remand him on hail—

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    (i) by taking from him a recognizance (with or without sureties) conditioned as provided in sub-paragraph (3), or

    (ii) by fixing the amount of the recognizances with a view to their being taken subsequently in accordance with paragraph 4 and in the meantime committing the person to custody in accordance with paragraph (a).

    (2) Where a person is brought before the court after remand, the court may further remand him.
    (3) Where a person is remanded on hail under sub-paragraph (1), the court may direct that his recognizance he conditioned for his appearance—

    (a) before that court at the end of the period of remand, or

    (b) at every time and place to which during the course of the proceedings the hearing may from time to time be adjourned.

    (4) Where a recognizance is conditioned for a person's appearance in accordance with sub-paragraph (3)(b), the fixing of any time for him next to appear shall be deemed to be a remand; but nothing in this sub-paragraph or sub-paragraph (3) shall deprive the court of power at any subsequent hearing to remand him afresh.
    (5) Subject to paragraph 3, the court shall not remand a person under this paragraph for a period exceeding 8 clear days, except that—

    (a) if the court remands him on bail, it may remand him for a longer period if he and the other party consent, and

    (b) if the court adjourns a case for any medical report or examination of that person the court may remand him for the period of the adjournment.

    (6) Where the court has power under this paragraph to remand a person in custody it may, if the remand is for a period not exceeding 3 clear days, commit him to the custody of a constable.
    Further remand
    3.—(1) If the court is satisfied that any person who has been remanded under paragraph 2 is unable by reason of illness or accident to appear or be brought before the court at the expiration of the period for which he was remanded, the court may, in his absence, remand him for a further time; and paragraph 2(5) shall not apply.
    (2) Notwithstanding anything in paragraph 2(1), the power of the court under sub-paragraph (1) to remand a person on bail for a further time may be exercised by enlarging his recognizance and those of any sureties for him to a later time.
    (3) Where a person remanded on bail under paragraph 2 is bound to appear before the court at any time and the court has no power to remand him under sub-paragraph (1), the court may in his absence enlarge his recognizance and those of any sureties for him to a later time; and the enlargement of his recognizance shall be deemed to be a further remand.
    Postponement of taking of recognizance
    4. Where under paragraph 2(1)(b)(ii) the court fixes the amount in which the principal and his sureties, if any, are to be bound, the recognizance may thereafter be taken by such person as may be prescribed by rules of court, and the same consequences shall follow as if it had been entered into before the court.")
    On Question, amendment agreed to.
    Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 26:
    In the Title, line 1, leave out ("make provision for a new criminal offence of stalking and for a prohibitory order") and insert ("prohibit stalking and make provision for non-molestation orders")
    On Question, amendment agreed to.
    House resumed: Bill reported with amendments.
    House adjourned at twenty minutes past four o'clock.

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