Sitting of 6 February 2003

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

Business of the House: Debate this Day
11.6 a.m.
The Minister for Trade (Baroness Symons of Vernham Dean): My Lords, on behalf of my noble and learned friend, I beg to move the Motion standing in his name on the Order Paper.
Moved, That the debate on the Motion in the name of the Lord Plant of Highfield set down for today shall be limited to three hours.—(Baroness Symons of Vernham Dean.)
On Question, Motion agreed to.

Health (Wales) Bill
Lord Evans of Temple Guiting: My Lords, I beg to move that this Bill be now read a second time. I am delighted to introduce the Health (Wales) Bill to the House. This is a small but important example of the sort of partnership approach that the Government wish to promote. This is the first Wales-only Bill to have been the subject of full pre-legislative scrutiny. As a result, it comes before us improved in many respects by amendments made to reflect comments put forward during that scrutiny.
It takes the reforms introduced in the National Health Service Reform and Health Care Professions Act 2002—to establish local health boards and require the production of health and well-being strategies in Wales—and takes the next step in bringing to fruition the Assembly's plans to improve the health and well-being of the people of Wales, and give more power to patients.
It is therefore no exaggeration to describe this as an historic Bill. It is appropriate to observe that it takes the process of constitutional change pioneered by this Government—with the establishment of the National Assembly for Wales—another step forward.
I should like to say a little more about the policy-thinking behind the Bill. It has its roots in the policy document Better Health Better Wales, issued by the Welsh Office in 1998, and in the Assembly's 10-year plan, Improving Health in Wales, issued in 2001. In that same year, the Government announced their intentions to reform health services in Wales by establishing local health boards, strategic health partnerships, a Wales Centre for Health and, finally, Health Professions Wales.
The National Health Service Reform and Health Care Professions Act 2002 established local health boards in strategic partnerships. This provided the
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foundation for the delivery of the reform agenda to which the Government and the Assembly are committed. However, we still needed to reform and strengthen community health councils and establish the Wales Centre for Health and Health Professions Wales.
So we published the draft National Health Service (Wales) Bill and the accompanying Explanatory Notes on 17th May last year, containing those remaining three elements. Publication signalled the beginning of the pre-legislative scrutiny of the Bill. The Health (Wales) Bill has emerged a better and more widely understood and supported Bill as a direct consequence. Eighty-seven organisations and individuals representing the professional and other bodies that would be affected by it were sent copies of the draft Bill and Explanatory Notes and 27 of them replied.
We published the draft Bill on the Wales Office web-site and 15 people responded. Public consultation generated 25 recommendations for changes to the draft Bill. In another place, the Welsh Affairs Committee considered the draft Bill, taking evidence from stakeholders and Assembly and Government Ministers. The Committee's report recommended 17 changes to the Bill. Also in another place, the Welsh Grand Committee spent a whole day debating the report of the Welsh Affairs Committee. Noble Lords were invited to attend a briefing meeting with the Parliamentary Under-Secretary and the Assembly Health Minister.
At the National Assembly for Wales, the Bill was scrutinised by the Health and Social Services Committee and discussed at plenary. As a result, the Assembly asked for three changes to be made to the Bill. It says much for the effort that was put into the original draft that the draft Bill received a warm and widespread welcome from those whom it affected. Indeed, none of the pre-legislative scrutiny revealed any concerns with the principles of what was proposed. This scrutiny produced in total 45 recommendations for changes to the draft Bill. Some were to remedy omissions and some were to clarify or limit the powers of the bodies that it dealt v4ith or the Welsh Assembly.
Before presenting the Bill, the Government decided to consider further the principles behind 17 of the 45 recommendations for changes. In 16 instances, it was possible to amend the Bill in the way suggested and that was done. The changes made to the Bill have improved it. Some acknowledged omissions have been rectified and the powers and independence of community health councils, the Wales Centre for Health and Health Professions Wales have been clarified. This revised Bill has now passed all its stages in another place and comes before us unchanged.
The Bill is intended to achieve three purposes. The first is to reform and strengthen community health councils in Wales and establish a statutory association which will support community health councils and also have a performance management role. The second is to establish an independent Wales Centre for Health to disseminate research and provide multi-disciplinary

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advice and evidence to support decision-taking. The third is to establish Health Professions Wales, a body to quality-assure the continuing training and education of healthcare professionals.
By retaining CHCs and making their membership better reflect the people they represent, by providing complaints advocacy services independent of the NHS in Wales and powers for CHCs to inspect premises providing National Health Service services, we shall build on the strong local relationship which already exists within the health service in Wales.
Noble Lords will wish to be assured that when patients resident in Wales receive NHS services in England their local CHC will be able to act as their champion in investigating complaints. I am happy to give that assurance and to confirm that CHCs in Wales will have exactly the same powers as patients forums in England to inspect premises where NHS services are being delivered for patients resident in Wales, whether such premises are in Wales or in England.
By establishing a statutory association of Welsh CHCs, which will not only advise and assist CHCs but also have a performance management role, we shall guarantee the people of Wales a service of the highest standard, consistently, across Wales.
By establishing the Wales Centre for Health, we shall provide the people of Wales with an independent body working in partnership across all sectors to develop the skills and the tools necessary to take forward the drive to improve health. The centre will be a focus for multi-disciplinary advice on, and risk assessments of, hazards to health. It will ensure that research and other evidence is made available to support effective policy making and decision taking.
As to the third element of the Bill, by establishing Health Professions Wales as an Assembly-sponsored public body, we shall set on a proper statutory footing a body to provide quality assurance for the continuing personal and professional development of all sectors of healthcare. Its remit will be extended to cover not only nurses, midwives and health visitors but allied health professionals and clinical scientists.
This is primarily an enabling Bill, devolving powers to the Assembly to determine, through its own secondary legislation, the detail of the new arrangements. That is as it should be, with the devolved Assembly working in partnership with the health services in Wales and the people of Wales to determine what is right for Wales.
During pre-legislative scrutiny and the Bill's passage through another place, the nature and extent of the powers that the Bill grants to the Assembly, and the way in which they might be exercised, generated some debate. Six of the changes made to the Bill before it was introduced reflected recommendations made during pre-legislative scrutiny that the powers of the Assembly over WCH and HPW appeared too wide and could be felt to impinge on the perceived independence of these bodies. So the Government have already responded to those concerns.
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Perhaps I can also give an assurance to those noble Lords who I know take an interest in the exercise of devolved subordinate powers: in this case, powers which would be exercised by the Secretary of State if this were an England Bill will be exercised by the Assembly.
Your Lordships' Select Committee on Delegated Powers and Regulatory Reform considered the Bill in its 7th report, published on 15th January 2003. It concluded that the extent of the delegation was consistent with existing provisions relating to the National Health Service and was appropriate.
The Select Committee also considered the powers in the Bill allowing the Assembly, through the exercise of subordinate powers known as Henry VIII powers, to amend existing primary legislation. Those powers were questioned in another place, both in Committee and on Report. In the committee's view, those powers were sufficiently circumscribed. The conclusion of the committee was that there was nothing in the delegated powers in the Bill that it wished to draw to your Lordships' attention.
The Bill demonstrates once again that, through the devolution settlement, we are able to deliver policies adapted to the particular needs of Wales. It follows previous legislation such as the Learning and Skills Act 2000, the Children's Commissioner for Wales Act 2001 and the NHS Reform and Health Care Professions Act 2002. It represents devolution in action and, as I said earlier, progress through partnership.
The Government pledged in their manifesto for Wales to build on the already successful legislative partnership with the Assembly and to continue to enact specific legislation for Wales where appropriate. That is precisely what the Bill does. It is yet another example of government working in partnership with the Assembly to deliver a modernised, improved and more responsive NHS for the benefit of the people of Wales.
The Assembly has been working hard in partnership with interested parties to increase the responsiveness of the NHS to patients and the public and to strengthen the public's influence over the way in which the NHS is run. The Bill will ensure that the people of Wales have an even stronger voice in the planning and delivery of health services in Wales. I commend the Bill to the House.
Moved, That the Bill be now read a second time.— (Lord Evans of Temple Guiting.)
11.19 a.m.
Lord Roberts of Conwy: My Lords, I welcome the noble Lord, Lord Evans of Temple Guiting, to his new role in Welsh affairs. In doing so, I thank the noble Baroness, Lady Farrington, for the work she has done in this area in the past. I also welcome the noble Lord, Lord Hunt of Kings Heath, into the devolved area, which is comparatively new to him. I am sure that he will prove his expertise in this area of health as in all others. Perhaps I may also apologise in advance for my

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own fragile state of health in the aftermath of one of those vicious viral attacks that have affected many noble Lords over recent weeks.
This is a small Bill as Bills go, with just 10 clauses and four schedules. As the noble Lord said, it has been heavily and thoroughly scrutinised, not only here in Parliament but also in the National Assembly for Wales, where it began as the draft National Health Service (Wales) Bill. As this was the first Bill relating only to Wales to be produced in draft and made available for pre-legislative scrutiny, I raised the question of whether it should have pre-legislative scrutiny here in your Lordships' House in a letter sent last summer to our noble and learned Leader, Lord Williams of Mostyn. In his reply dated 31st July last, he laid down what amounts to a general principle:
"This scrutiny will be conducted by either a committee of the House of Commons. the House of Lords or a Joint Committee of both Houses. Which of these types of committee conduct the work will be determined on a case by case basis".
So that is where matters stand so far as concerns pre-legislative scrutiny.
The Bill itself, with its three major aims, should be relatively uncontroversial, as Ministers have suggested. However, it is the background and condition of the health service in Wales that is fraught with controversy. From 1979 to 1983 I had ministerial responsibility for the health service in Wales and as a Minister in the Welsh Office I was fully aware of the extensive developments in the service over the period up to 1997. A number of major new hospitals were planned, built and opened, new strategies were implemented and new treatments established during that time, as I am sure my noble friend Lord Walker of Worcester, the Secretary of State for Wales for some of those years, would confirm. During that time the NHS in Wales seldom lacked resources and I do not think that the present Secretary of State for Wales, the right honourable Peter Hain, is right when he blames the current failures on years of underfunding, as he did in his speech on the Second Reading of the Bill in the other place. I believe that the causes of the current ills lie in part in the misapplication of resources. The general impression is that there is far too much bureaucracy in the NHS in Wales.
Of course we cannot consider the Bill's proposals to reform and strengthen the 20 community health councils in Wales, which we on this side of the House are glad to see preserved, without taking account of the 22 local health boards that are shortly to take over the responsibilities of the existing live health authorities. There are also 15 hospital trusts to be added to that local dimension. The immediate question is whether the local structure is not bottom heavy and grossly bureaucratic. It is all very well to sloganise about "patient power", but the patient's first need is treatment. That is where the NHS in Wales has been failing, if we judge by the horrendous growth in waiting lists over the past five years.
I take no pleasure in telling noble Lords that the number of people waiting more than 12 months for inpatient treatment has increased by 82 per cent. The number waiting more than 12 months for outpatient
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treatment has risen from 378 five years ago to 36,000 today. That is a distressing outcome when more and more money is being spent on the service, especially on its administration. One is bound to ask whether the money is going to the right place and to the right kind of people—doctors and nurses rather than administrators—and whether the thinking behind the proposed reforms in the Bill is right and based on realities rather than a twisted kind of political correctness and wishful thinking.
It is my guess, although perhaps I am being pessimistic, that the United Kingdom will face hard times and that public spending will come under severe scrutiny over the next few weeks and months. Already the reorganisation of the NHS in Wales arising from the National Health Service Reform and Health Care Professions Act 2002 is proving more costly than had been anticipated. Originally it was thought to be cost-neutral. Then the costs were estimated at £15.5 million and now the National Audit Office has stated that a further £8.5 million of savings will be required. Those savings will have to come from somewhere.
In view of that experience, how realistic are the costs of implementing the Bill now before the House? More pertinently, will those costs/savings adversely affect patient care? That is a key question. The draft regulatory impact assessment published by the Wales Office to accompany the draft Bill estimated that the enhanced visiting and advocacy role of the community health councils would cost £580 million a year in all, and that the new association of Welsh CHCs would cost an extra £80 million in rent, rates and staffing. Are those firm figures? What are the anticipated costs of the other new bodies? In the Explanatory Notes a figure of £0.6 million has been given for the new centre for health, but nothing has been estimated for Health Professions Wales. Of course the allocation of funds is a matter for the Assembly, but the money is voted by this Parliament. Given that, I think that we and the public are entitled to know.
At Second Reading in the other place the Secretary of State for Wales stated that:
"The NHS in Wales is treating more patients than ever before".—[Official Report, Commons, 27/1102; col. 351.]
He said that there are no quick fixes to the waiting list problem. Nevertheless, he went on to talk about the Government's plans to open 10 new hospitals over 10 years and to project increases in nurses and members of the health professions in training. All that is good news, if it materialises.
The key issue with regard to Health Professions Wales is the relationship between that body and the United Kingdom Central Council for Nursing and Midwifery and the Health Professions Council, each of which has a UK-wide regulatory remit. Is the new Welsh body to take over responsibilities from them? I understand that that is to be the position. There is a hint of functional overlap between that body and the other major body referred to in the Bill, the Wales Centre for Health, which is also to have a role in training. Obviously we shall be able to examine the

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proposals in more depth in Committee, but care must be taken to ensure that any overlap which may exist is productive rather than counter-productive.
The Wales Centre for Health is prima facie an attractive proposal. Wales has been plagued by higher morbidity rates than many other regions. In the past, this was attributed largely to the concentration of heavy industry—coal and steel—in many of our communities. But the balance of the Welsh economy has now changed in favour of healthier work in manufacturing and in the service sector. Yet some of the old unhealthy lifestyles and practices remain, and there are new threats to public health. There is ample scope for research into these issues and the need for sound advice, effectively disseminated.
I am not the first to express the hope that the centre will not be focused on a bricks and mortar establishment, but that it will begin by building upon the work already being done within the NHS and within the colleges of the University of Wales. I declare an interest as president of the University of Wales College of Medicine, which lies literally at the heart of the University Hospital in Cardiff and is closely connected to the NHS throughout Wales. There are other colleges—notably in Cardiff, Swansea and Bangor, and in north-east Wales—with medical and health professional training facilities. Some of those who teach at these institutions are world leaders in their field—a fact not always appreciated in Wales. The new centre would be wise to anchor their efforts in this expertise, which is well represented in this House by the noble Baroness, Lady Finlay of Llandaff, who is a medical professor in her own right.
The Bill covers three pillars of the NHS in Wales. We are still unclear about the rest of the edifice, which reaches its pinnacle in the National Assembly, with its Health and Social Services Committee and its Health and Social Services Minister, Jane Hutt. Some of us have been briefed on the contents of the Bill by the Minister and by the Parliamentary Under-Secretary of State, Mr Don Touhig, MP. I want to record my thanks to them for that briefing and for their generally helpful attitude. We on this side of the House shall not stand in the way of the Bill but will assist its passage and improve it if we can.
11.32 a.m.
Lord Thomas of Gresford: My Lords, we welcome the Bill. I congratulate the Minister, not only on his appointment but on his presentation of the Bill. I add my personal thanks to the noble Baroness, Lady Farrington, for the sensitive and helpful way in which she has conducted Welsh affairs over the past few years.
My welcome is tempered by some slight disappointment. I had applied, through the usual channels, to address your Lordships from the Government Benches in token of our happy marriage in the National Assembly for Wales and in the belief that this is as much a Liberal Democrat Bill as it is a
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government Bill. Unfortunately, the fervent reformers of the House of Lords on the Benches opposite were unwilling to give up their seats.
The Welsh Office report, Better Health—Better Wales, published in May 1998, highlighted the need for priority to be given by the National Assembly to health issues. The report summarised the position in this way:
"Within Wales, a significant proportion of the population remain deeply disadvantaged in terms of expectation of life and health-related quality of life, and there are wide variations between those with the poorest health and those with the best".
Compared with England, the mortality gap in Wales had increased in the previous decade from 5 per cent to 9 per cent—that is, life expectancy in Wales was shorter, and increasingly so. The rate of cancer registrations in Wales was among the highest in the European Union, 50 per cent higher than in some countries. There was consistent poor health in the South Wales valleys: for example, in Blaenau Gwent, deaths from heart disease among people under 65 were at twice the rate of those in Ceredigion, while deaths from lung cancer, among men under 75, were at twice the rate of those in Powys. The report pointed out that 12.5 per cent of people of working age report a limiting long-term illness, compared with 8.5 per cent for Great Britain as a whole.
Clearly, there are serious problems to be tackled. Despite the angst of those who still oppose devolution, such as Mr Llew Smith in another place—and with the greatest respect to the noble Lord, Lord Roberts of Conwy, and distinguished former Secretaries of State for Wales who are in their place today—it was during Westminster's period of responsibility that the health service got into that situation. It is not likely—it is in fact impossible—that a Westminster government could have focused upon the problems with the energy now devoted to them. I pay tribute to the leadership of the Minister for Health and Social Services in the National Assembly, Jane Hutt, and to the backing she receives from the cross-party Health and Social Services Committee, chaired by the Liberal Democrat, Kirsty Williams.
It is not surprising that a key point in the partnership agreement between Labour and the Liberal Democrats in October 2000 dealt with health matters. It set out the following principles:
"We believe that access to high quality health care is the right of all the people of Wales as set out in 'A Healthier Future for Wales'. We will tackle the causes of poor health, such as poverty and bad housing. In partnership with local government and other agencies, we will put a greater emphasis on prevention of ill health and improving nutrition.
We will implement distinctly Welsh solutions to improve our National Health Service and to tackle the problems of understaffing and bed shortages which have led to longer waiting times for consultations and treatment".
Among the initiatives agreed were substantial spending on health over a three-year period to improve the NHS and to cut waiting times, tackling inequalities in health provision, additional funding targeted at groups in greatest social and health need, and free prescription charges for those in need. In response to the last point, prescription charges were frozen and,

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for the under-25s, abolished. In the National Assembly, on Tuesday, Kirsty Williams moved that persons suffering from a life-long condition should also be exempt. The Minister agreed to set up a review group to identify the relevant conditions. The Motion was supported by all parties, save for the Conservatives, who abstained. Kirsty Williams pointed out the stark fact that 88 per cent of patients in Wales already receive free prescriptions. She said:
"That so many people are currently exempt gives a stark picture of the kind of country in which we live".
I repeat: 88 per cent of people in Wales are exempt from prescription charges.
A further initiative that formed part of the partnership agreement—free eye tests and dental checks—remains to be tackled. In another place, the Liberal Democrats attempted to move an amendment to the Bill to introduce a power for the Assembly to bring such provisions into force. It was held not to be within the ambit of this particular Bill.
In January 2001, the Welsh NHS Plan, Improving Health in Wales, and the subsequent partnership government document set out the policy aims of the partnership government in a 10-year programme. These included increasing life expectancy and reducing death rates from major and long-term illness, especially in our most deprived communities. The programme also aims to bring infant mortality and five-year survival rates for serious cardiac disease and cancers far closer to the best in Europe and to transform the NHS, resulting in a service better attuned to the needs of the people. It is not surprising, with the problems that we face in Wales and the initiatives that the partnership government, through the National Assembly, is seeking, that solutions to our problems should be developed which are different from those pursued in England.
These aims and initiatives have been tackled with vigour, first, through the establishment of local health boards and strategic health partnerships on the back of the 2002 Act, and now by this first all-Wales Bill.
We welcome the strengthening of community health councils and the increased allocation of £550,000 for them for future years. I hope that in addition to their independent advocacy role, the councils will be foremost in tackling how best to promote a healthy society in their communities. The aim should be not simply to deal with illness but to promote health. For that purpose, it is important that the range of organisations whose premises the councils will now be entitled to inspect has been increased, as a result of consultation, to include local authorities, NHS trusts and GPs.
We also welcome the powers given to the Welsh Assembly to decide the composition of those councils. They should be broad, representative, and open, there should be transparency about how they are selected and who sits on them. I hope that their powers will include carrying out public consultation on significant changes in local health services.
The Wales Centre for Health is, in my view, crucial. There are huge challenges in meeting the problems I have described. Clause 3 sets out the functions of the
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Wales Centre for Health. First and foremost, it will undertake research and then provide information to the public to protect and improve health in Wales. It will also provide and develop training. These are all crucial functions. I welcome its independence. It has to be independent. It may be necessary for the Wales Centre for Health to criticise the provision of services by the National Assembly and the funding that is provided for the National Assembly to carry out its functions. Therefore, it is essential that the centre be independent. I believe that the way in which it is set up will make it an authoritative body which will approach these endemic problems and, one hopes, cure them.
In his letter of May 2002, Mr David Ravey, acting chief executive of Health Professions Wales—the third area of the Bill—set out its role. He said that it would support high quality education and training for the NHS workforce, call for future functions to be developed— including agreeing standards for education—and develop best practice benchmarks for staff development. I hope that that will lead the way in developing standards for healthcare support workers which will be followed throughout the United Kingdom. This body has the opportunity of leading the way for all.
The noble Lords, Lord Roberts and Lord Evans, recalled how the Bill had been brought forward. The noble Lord, Lord Evans, described it as historic, and it truly is. The draft Bill for pre-legislative scrutiny was sent out for consultation. There was considerable input by consultees, discussion by the cross-party committee chaired by Kirsty Williams and a plenary debate on the floor of the National Assembly. But, very importantly, the matter came to the Welsh Affairs Committee of another place and was debated by the Welsh Grand Committee. As a result of their input, very important changes were incorporated in the Bill when it was finally published. All the information was gathered together and the Bill came forward, as we have it, with important amendments. I am grateful that the Minister for Health and Social Services, Jane Hutt, came to Westminster to discuss the matter with your Lordships.
What, then, is our role in putting the Bill through the House? I am pleased to see the noble Lord, Lord Richard, in his place. The Second Reading debate in the House of Commons took some live hours, and, frankly, makes depressing reading. For much of the time, it was simply the usual party name-calling without anything constructive being said to assist in the promotion of the Bill. The work had been done in the committee where Members of another place had worked very hard and responsibly. The Second Reading debate was disappointing.
One and a half days in Committee added nothing. All that was discussed were footling amendments as to how many councillors should sit on the community health councils and matters of that sort—no use at all. So why are we putting through all the panoply of primary legislation in Westminster? Surely it would have been far more sensible if the National Assembly for Wales had had the power to make the ultimate decision in Cardiff, following consultation through something like the Welsh Grand Committee or a Joint

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Committee of both Houses, which would act as a revising and scrutinising body for one stage of the Bill's consideration. On behalf of my party, I would think it entirely wrong to attempt to move amendments altering the policy behind the Bill, which is essentially to be determined in Cardiff. We are taking the Bill but it is in Cardiff where scrutiny is required. Our role is otiose. Plenary powers for primary legislation of this sort should be given to the National Assembly.
I wish I had been saying this from the Government Front Bench, but, as I said, that position has been denied to me.
11.48 a.m.
Baroness Finlay of Llandaff: My Lords, I, too, pay tribute to Jane Hutt and Kirsty Williams in the National Assembly for Wales. They have consulted widely and demonstrated, as the noble Lord, Lord Evans of Temple Guiting, said so well in his introduction, that they have been in touch with the root and branch of the NHS in Wales. I declare an interest, as someone who works in the NHS in Wales.
The Bill is very important for several reasons. First, it is a Wales-only Bill and, as such, it recognises the unique and different nature of the NHS in Wales. The NHS in Wales is on a different direction of travel from the NHS in England. This is a comparative study in action and warrants research rigour applied to monitoring this natural experiment. As the noble Lord, Lord Thomas of Gresford, has said so well, we are indeed living with our heritage in Wales of social and economic deprivation.
We have social services strongly represented on the local health boards. The health authorities are being abolished but no regional or all-Wales body has come in to replace them. The local health groups are excited about their emerging role, but there is widespread concern that they are not yet ready and able to take on the complexities of commissioning from secondary care, nor is it clear how they will in practice retain and strengthen the governance functions over primary care.
The clinical service networks are beginning to work across Wales. They are bridging boundaries in the secondary care sector. They will be essential in service stability, so local health boards will have to consult with networks. Just as there is a serious recruitment and retention crisis in primary care, a similar shortage exists in secondary care. Support services are suffering from a manpower crisis. Pathology is so short-staffed that in some parts of Wales it has taken months for non-urgent histo-pathology reports to come through. I know of one instance in which a malignancy was then reported.
Five consultant posts in psychiatry that are currently advertised are unlikely to be filled. It has been estimated that £15 million is needed to bring community mental health teams up to the standards that have been agreed for the NHS in Wales. Physiotherapists and occupational therapists are not out there to fill the vacancies. The list goes on.
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However, I am glad to say that many thousands of healthcare professionals across Wales remain deeply committed to providing the best patient care they can in the face of repeated and exhausting management reorganisation. The healthcare professionals need increased secretarial and IT support to be able to work effectively.
The second important point about this Bill is that it sensibly preserves and strengthens community health councils. They are a point of stability in a changing service. They are a constant for patients and have an important role in advocacy. They can and should have an important role in the handling of complaints. There are some recent examples of excellent practice. In BroTaf, the community health council has recently steered and supported a family through a very complex complaint that involved several trusts, keeping all parties focused on the real issues of concern. They have shown that they can function across from Wales into England as well.
The community health councils have, by and large, a mature understanding of the workings of the NHS in Wales and will be an excellent safeguard for patients and staff. When things go wrong, the patients and their families deserve the best support in seeking redress. When complaints are inappropriate or unsubstantiated, the staff need to be protected from inordinate time taken in dealing with a complaint. That time takes them away from patients and may even result in them leaving the service. Sadly, we have had an example of suicide being precipitated by such a complaint.
The community health councils need to know exactly who to relate to for each issue. They may be the first to see where the fault lines lie in the new commissioning processes. I hope that community health councils will broaden their remit into primary care, as the independent contractors are relatively autonomous and could greatly benefit from the overview and experience of the community health councils in working with patients and their carers.
The community health councils could also help to steer the service away from fallacious targets to ensure that need is met. Currently, waiting list initiatives provide appointments, at great public expense, to those who have been waiting over three years. About 50 per cent of the patients offered appointments in rheumatology do not attend. Among those coming to these evening clinics, many no longer suffer from the original complaint, but present with something completely different. Meanwhile, urgent rheumatology referrals pile up on the routine waiting lists while money is available for long-term waiters only.
The third issue relates to the Wales Centre for Health. Health promotion is essential. The public must be informed about issues for health protection and improvement and this must be evidence-based. The recognition of research on the face of the Bill is a great step forward. There is perilously little research underpinning the reorganisations in healthcare provision that are happening. The research base on all aspects of human behaviour and service utilisation in

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Wales must be established for its decisions to be informed and appropriate to the needs of the population.
Health protection and promotion is the job of everyone in the NHS and beyond. The centre must have a specific duty to educate as well as to train. Staff need ongoing training, but first they must be educated in the topic. At undergraduate and postgraduate level, health protection and health improvement need to be embedded in curricula. Education and training are linked, but are different. I propose to table an amendment to the Bill to that effect.
The centre can then support and work with the established sectors in education and make the sectors more responsive to the evidence base. It will not compete with the educators in Wales, but it must not be able to opt out of supporting education.
The Wales Centre for Health is a new body. It demonstrates the way that devolution is working to research and act directly on the problems affecting the health of people in Wales.
The fourth and final very important area is the creation of the health professions council in Wales and the ability of the Assembly to abolish it. Within the UK, the regulation of healthcare professions is probably better undertaken at national level with national registers. A regional office of the health professions council may turn out to be the way forward for economies of scale and cost efficiency. However, it may be that that council in Wales will protect the professions from interference by Whitehall in professional regulation.
The role of Health Professions Wales in education and training may in the future require partnership working or handover of some personal development skills escalator functions to the NHSU. I gather that is not the NHS University, so I shall use the initials only.
The Bill is to be welcomed. It has been the subject of wide consultation in Wales and it deserves an easy passage. The comments from the service have been listened to and the draft Bill modified accordingly.
11.56 a.m.
Lord Morris of Aberavon: My Lords, I congratulate my noble friend the Minister on the careful way in which he explained the Bill to us. It is good to follow the noble Baroness, Lady Finlay of Llandaff, who has an intimate knowledge of what is happening on the ground in the health service in Wales.
Now that the existence of the National Assembly for Wales has lost most of its controversial nature, 11 have one or two procedural points to make. The fact that we can legislate to allow divergence in administration between Whitehall and Cardiff goes to the heart of devolution. The Bill is an example of how a Whitehall government can legislate to allow things to be done differently in one part of the country. After the power has been given to the Assembly—as my noble friend has just told us, this is an enabling Bill—it is up to the Assembly to implement it by secondary legislation. That is none of our business. The noble Lord, Lord Thomas. put his finger on our role.
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Since the National Assembly for Wales was formed, we have adopted two mechanisms to provide the necessary primary powers for it to govern. The first is inserting Wales-only clauses in Bills affecting both England and Wales. I have criticised Ministers in the past for totally ignoring the substantial number of Wales-only clauses in such a Bill in their Second Reading speech. After receiving a fulsome apology from the then Secretary of State for Education and Skills and with the assistance of the Leader of another place, I do not expect this to happen again. However, that episode indicated a cavalier attitude of a centralist department.
The second means is by a Wales-only Bill that has been seen in draft. My noble friend was right to say that this is an historic Bill. I have spent many a long summer afternoon in the legislative committee of Cabinet, seeing so many favourite children of Bill-sponsoring Ministers being slaughtered. The Secretary of State and the First Minister deserve real congratulation on winning a place in the always congested legislative timetable.
What would be the situation if different parties were in government in Cardiff and in Westminster? What would be the chances of getting primary legislation? That is the fundamental point arising from the present division of powers. That is for the Richard commission to examine—and how opportune that it should do so now.
Secondly, the Bill is the result of massive consultation with the Assembly, the Grand Committee and the Select Committee, proceedings in another place and in this House, plus massive and substantial public consultation. A great deal of that happened on the draft Bill, and I very much welcome the fact that we had a draft Bill. We are told that 45 recommendations arose from the consultation, of which 16 were accepted. I understand that nothing of significance was rejected, unless it was more appropriate that it should be catered for elsewhere. I welcome that, too. However, will my noble friend assure the House that nothing of significance desired by the Assembly was rejected by the Government in presenting the Bill?
In short, given the devolution agreement, it might be said that we are facilitators for the Assembly. Are Members of the Assembly wholly happy bunnies in the context of the Bill? The very fact of Parliament finding time to enact the Assembly's Bill is a considerable sign that at the moment devolution is working, procedurally.
My third question reflects on the strengths of the above conclusion. Are there sponsors of Bills in the Assembly who are straining at the leash because no time can be found for their legislation? They would not be unique, if that were the case. From my experience, many Westminster functional Ministers have their disappointments, too. We would like to know the general picture.
I turn to the Bill itself. As Secretary of State, it was my privilege to develop the Welsh Office supervision of the health service in Wales between 1974 and 1979.

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I appointed the first memberships of the community health councils. Various bodies, including local authorities and voluntary organisations, made nominations. The Secretary of State—myself—made nominations too. We had great hopes for the CHCs, which were seen as a vital part of the health service in Wales.
Years earlier, I had enshrined in statute the need to publicise the role of the Transport Users' Consultative Committee. I came from that stable. I was a supporter of such a role for representatives—if I can use that term—of community. However, in my time in Wales the CHCs were a disappointment. I say that as a supporter and as the one who set them up. The CHCs did not come up to expectations.
There were two reasons for that disappointment— and I plead guilty on this matter. First, it was due to the quality of the nominees. Sometimes, dare I say, local authorities did not put up their best people. Secondly, but equally importantly, it was due to our failure as a government department to give them adequate resources. There has always been a tension involved in allocating scarce resources to CHCs at the expense of other needs of the health service. After all, there is a finite amount in the pot.
I can say frankly that, in their old form, I would have been happy to abolish CHCs. However, I come from the stable of wanting public consultation and participation, and I earnestly hope that with the relaunch of CHCs there will come a new role, a new vision and a new membership. I welcome their role in patient advocacy, which is part of their remit, and the £500,000 of extra resources. I hope that it will do the trick, because there is a need to monitor and involve the public—especially patients. I hope that the relaunched CHCs will provide for that real need, and do somewhat better than when CHCs were under my supervision.
I also welcome the introduction of the Wales Centre for Health. How I wish that I had had the benefit of such collective wisdom in Wales when I was Secretary of State. I shall give one instance.
My noble friend Lord Prys-Davies was my special adviser and a former distinguished chairman of the Welsh Hospital Board under another administration. He campaigned long and hard to convince me of the real need for a chair of geriatric medicine in the Welsh School of Medicine in Cardiff. He told me, time after time, that many if not most parts of the country had such a chair, but that we did not have one in Wales. Would the medical profession have it, however? In fact, the medical profession was split right down the middle. Individual medical disciplines, such as orthopaedic surgeons, would not accept that there was a role for a general medical practitioner who would necessarily adopt a more holistic approach. There was a division of opinion.
The only way to break the logjam was for me to seek a private meeting with a provost of the School of Medicine, with no advisers present from either side. It was a very successful meeting. I went away on holiday
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and told my Civil Service advisers that on my return I would make a speech announcing the new chair. That concentrated the mind wonderfully, and some outstanding creative work was done to devise a scheme for my endowing a chair. I handed over the cheque to the president of the school—the distinguished predecessor, no longer with us, of the noble Lord, Lord Roberts. I handed it over with the blessing, albeit with varying degrees of reluctance, of both the Welsh Office and the Treasury. The Treasury was prepared for the chair to go ahead because I endowed it with a one-off cheque, so the Treasury did not have a continuing liability.
The prevarication and the forcing of one's will on a divided medical profession would not have arisen if we had had the benefit of an informed view of a body such as the Wales Centre for Health. It worried me a great deal, as Secretary of State, that I was imposing my will in that way. I believed that it was right to do so, but I would have been extremely grateful to have a much wider source of advice when the medical profession was so divided. I look forward to the work that will be done by that body.
The Bill exemplifies the kind of work that can be done in a small country that is able to feed well thought-out material into the legislative process. I wish the Bill well.
12.9 p.m.
Baroness Gale: My Lords, the Health (Wales) Bill has, as other noble Lords have said, probably received more scrutiny than any other Bill and is consequently uncontroversial. By now, one hopes that all the concerns have been ironed out, making the passage of the Bill run smoother than it might have done.
The pre-legislative scrutiny of draft Bills is a great innovation, but I was disappointed that the House of Commons undertook the scrutiny rather than a Joint Committee of both Houses. I believe that this Bill would have been an ideal opportunity for a Joint Committee. Members of your Lordships' House could have made a useful contribution if only they had had the chance. Perhaps that possibility will be considered in regard to future Bills, and perhaps a Joint Committee will become the norm when appropriate. Nevertheless, like other noble Lords, I know of the good work that has been done and that pre-legislative scrutiny is a good thing.
The partnership between the Assembly and Westminster has worked well on this Bill. Other noble Lords have mentioned the meeting with Jane Hutt, the Minister for Health in Wales. With the Under-Secretary of State, Don Touhig, she recently met Peers who have an interest in Welsh matters for a briefing on the Bill. All agreed that this type of meeting is very useful, enabling a free exchange of views and an opportunity for Peers to speak directly to Ministers from the Assembly and from Westminster. It was a good example of how well the partnership and devolution are working. I am speaking of the partnership between Westminster and the Assembly rather than the good partnership which is currently

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working in the Assembly. Westminster and the Assembly are working together for the good of the people in Wales.
The case for retaining the community health councils in Wales has been made. My noble and learned friend Lord Morris spoke with great experience on community health councils. The councils have in the main worked well. In the community of Wales, people understand them and know how they work. It is good to see that the Bill seeks to strengthen their powers, which has been welcomed by many organisations. There has also been a discussion on the change of name. I am aware of the importance of the CHCs in this respect and of the need to consult with them. There may be a case for finding a better and more user-friendly name. My view is that the name is well understood in Wales, but of course a better one might be found. Is the Minister aware of any conclusions at this early stage?
The Bill describes the functions of the Wales Centre for Health: to develop and maintain arrangements for making information about matters related to the protection and improvement of health in Wales available to the public in Wales; and to undertake and commission research on such matters. In the Bill's consultation period, the National Asthma Campaign welcomed the formation of the WCH. The campaign envisaged that the WCH would bring together much needed advice on a wide range of hazards. It also believes that passive smoking is a hazard for asthma sufferers. In its submission, it said:
"Cigarette smoke is a highly common trigger of asthma attacks causing difficulties for up to 80 per cent of people with asthma. Other people's smoke prevents people with asthma from enjoying their lives to the full, and the impact of cigarette smoke extends even further and can harm unborn children. It is therefore a hazard and there is an opportunity for advice and risk assessments of threats of death to be conducted which we hope will in turn lead to a ban on smoking in public places".
Can the Minister say whether that is a matter which the WCH could and should investigate? I am bearing in mind the recent discussions in the Welsh Assembly on the possibility of a ban on smoking in public places.
I am pleased to note that the shadow WCH has already undertaken work in the Rhondda, where I live, on the controversial Nantygwyddon tip. Local residents have been campaigning for many years against the tip as they fear its effects are causing ill health in the locality. If that is an example of the type of work the WCH will be undertaking—investigating local health-related issues—it will be greatly welcomed.
There are many good things in the Bill which we hope will, when implemented, bring about a healthier Wales. That is something that we all want to see. I welcome the Bill and look forward to its progress though the House.
12.15 p.m.
Lord Prys-Davies: My Lords, I, too, warmly welcome and support this modest but important. Bill. It has been promoted by the UK Government at the request of the executive of the National Assembly for
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Wales, the two administrations, as I understand it, having reached a common position as to what should be in it. We should therefore be careful before we interfere with the provisions of the Bill. I think that the Bill is further evidence that the NHS in Wales is now moving in a markedly different direction from the NHS in England; a conclusion which has been drawn by the Constitution Unit. Our hope, indeed our belief, is that the new structure will make it easier for doctors, clinicians, nurses and other workers in the health service to give a higher standard of care to the patient. But I am a fair man and will acknowledge that time alone will tell whether that will come about.
Like the previous speakers, I pay warm tribute to the work of the Welsh Affairs Select Committee. The committee sought out evidence. It received thoughtful evidence. It subjected the draft Bill to detailed and constructive scrutiny. The legislation was much improved in the light of some of the recommendations of the committee. I shall return to the issue of scrutiny before I sit down.
The Bill has been rightly described from the Front Bench as an enabling Bill. It devolves marry regulation-making powers to the Welsh Assembly. I think it should be borne in mind—it is well worth bearing in mind—that the Assembly's standing orders require widespread public consultation on proposed regulations and their scrutiny by the relevant permanent subject committee of the Assembly. Of course, the draft regulations are amendable by the subject committee and by the Assembly in plenary session. So the regulations enacted by the Welsh Assembly rest on a very firm democratic mandate in Wales.
I have great appreciation of the contribution of Jane Hutt, the Health Minister of the 'Welsh Assembly. However, I was a bit worried by a couple of sentences in her oral evidence to the Select Committee on Welsh Affairs on 25th June 2002. The Welsh Assembly Minister had this to say about consultation with the select committee on the draft Assembly regulations:
"I think this is something where we need to then see how you could be engaged in that process … Maybe this is an area where two committees could agree to work together on the draft Regulations".
I read the reference to "two committees" to mean the Welsh Affairs Select Committee of the House of Commons and the National Assembly's Health and Social Services Committee. I am not clear what is meant by the words "work together".
I am sure that the Assembly Minister was trying her best to be helpful, but we do not want to end up with joint responsibility for Welsh Assembly regulations. There should be no shadow of doubt that the National Assembly is solely responsible for the legislation which it enacts and is accountable to the Welsh electorate for that legislation. That principle should not be compromised.
I should like to comment briefly on two specific matters which have not been touched upon. As we have been told, the Bill places a duty on CHCs to provide independent advocacy services to patients on behalf of the National Assembly. There are 20 CHCs

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and there will be 22 local health boards. In that situation I submit that it is important that patients' complaints at whatever level in the structure and from whatever part of Wales they originate should be treated in a similar fashion. I hope that the Assembly regulations will not be silent on that point.
I warmly welcome the intention to set up a Wales Centre for Health. That is described by the noble Lord, Lord Thomas of Gresford, as being of crucial significance and I agree with that. It seems to me that there are more problems than ever facing the health service in Wales, perhaps more so than in England, although many of them are not new. I am sure that my noble friend Lord Morgan will confirm that historically the main justification for setting up the office of Secretary of State was to tackle the problems of ill health in Wales. It is estimated that the centre will have a staff of about 20 and a budget of about £600,000 per annum. I should very much like to know more about the work on which those somewhat modest resources will be engaged. There have been various interpretations of the centre's possible remit.
There is evidence that the NHS is losing the battle in improving public health and enhancing its profile. The evidence for that—I think that my noble friend on the Front Bench will be aware of this—is to be found in a recent Fabian Society publication. If the proposed Wales Centre for Health could improve public health and enhance its status, that would be a signal contribution towards health improvement in Wales.
It would be unusual to have a Bill brought before us which has not left out some deserving candidates. It seems to me, having read the debate in the Assembly, that at least two candidates stand out. The first is the submission that members of CHCs who are in full-time employment should be allowed to take time off work to attend to CHC business in the same way as do members of other health authorities and local authorities. It has been pointed out that all that is required is an amendment to Section 50 of the Employment Rights Act 1996. I am sure that the Minister will confirm that that is what is required. But will he also confirm that the Secretary of State intends to introduce an order to extend the scope of Section 50 to include CHCs? The relevant power is contained in subsection (10) of that section.
The second candidate is the proposal that CHCs should be empowered to inspect healthcare provision in prisons and young offender institutions. This candidate emerges from the Select Committee's scrutiny of the Bill and from the earlier report of the Select Committee's inquiry into young people from Wales in prison. The reports of the Chief Inspector of Prisons have also highlighted the shortcomings. I am fully aware of the response of the Home Office which usually has the last word in this field. Nevertheless, I hope that a way can be found to involve CHCs in this important area when the resources become available.
There is a third possible candidate which has already been mentioned; namely, that the Bill should empower the National Assembly to ban smoking in public places. An amendment in those terms was debated in
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the Assembly on 18th July. It was lost. But I see from the official record of the debate that the Assembly health Minister, who supported the principle of the amendment, indicated that if such an amendment were passed by the Assembly it could mean that the entire Bill would be lost. With the greatest respect, I believe that that is a misunderstanding.
A ban on smoking in public places raises a crucial issue in England as well as in Wales. Of course there are reasons for caution. The problem of enforcement has to be resolved. As far as I can see, unless I have missed a paragraph or two, that was not addressed in the Assembly debate. But I hope that all is not lost and that my noble friend the Minister will be able to give an assurance that the issue is being urgently addressed by the Government. If it is not, pressure will grow for the issue to be tackled.
I now turn briefly to my final point which has been raised by a number of speakers. What should be the role of this House in the pre-legislative scrutiny of all-Wales legislation? Noble Lords with an interest in Welsh affairs were given an opportunity to discuss the Bill and the draft Bill on which it is based with a Welsh Office Minister. We were grateful for that opportunity. The meetings were helpful. But I do not think that we would claim to have scrutinised the legislation during those meetings, each of which lasted about an hour.
We have heard throughout this week that one of the strengths of this House is that it benefits enormously from contributions from noble Lords who are experts in various fields of national life. I accept, as I am bound to do, that it is for the other place to determine its own procedures. But I should like to support the suggestion made by a number of previous speakers that wherever possible the two Houses should set up joint ad hoc committees, or joint special standing committees, or whatever one wishes to call them, consisting of Welsh Members to undertake the pre-legislative scrutiny of all-Wales draft legislation. That would be an opportunity to innovate in order to improve the quality of Welsh legislation.
12.30 p.m.
Lord Morgan: My Lords, I am privileged to follow my noble friend Lord Prys-Davies, although I share none of his enormous expertise in public health. I do not intend to speak for very long, not least because it is the hour before dinner, which J.B. Priestley said was a time of anxiety in England.
I take an interest in the Bill as a welcome outcome of the processes of devolution. We considered its theme in the Constitution Committee, of which I am privileged to be a member. We noted the effects of devolution, in which I took particular interest as the only Welsh person serving on the committee. It is the second measure of primary legislation to come from the Welsh Assembly, the first being that on the Children's Commissioner in 2001.
The process of the Bill on that matter showed some of the difficulties and complications of the present devolution settlement in Wales. That Bill shed light on

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the powers of the Welsh Assembly, currently being investigated by the commission headed by my noble friend Lord Richard. It had an interesting passage before this House finally showed its effectiveness, and the role of the Children's Commissioner was greatly enhanced and is now valuable.
The Health (Wales) Bill has made a very different kind of progress in Wales and Westminster. The draft Bill was published and there was extensive pre-legislative scrutiny and public consultation. Peers had the valuable and helpful meeting with Jane Hutt, so the process is not one of scrutiny, as my noble friend rightly said. That process has produced a Bill that will strengthen and reinforce the National Health Service in Wales, which was after all the creation of a famous Welshman—a great Briton in reality, although apparently not so from the BBC poll bearing that name.
As we have heard from my noble and learned friend Lord Morris and others, the Bill still reflects the difficulties of framing Welsh legislation. It goes side by side with earlier Bills, including the then National Health Service Reform and Health Care Professions Bill. In that Bill, a variety of Welsh provisions were dotted about somewhat haphazardly, but this Bill is specific to Wales. It raises many aspects of the role of the Assembly, and its relation to other bodies within Wales and to Parliament.
Earlier speakers raised a number of issues that focused on the fact that subordinate legislation and regulation is the domain of the Welsh Assembly, but many aspects of it have come here. That is in contrast to, and possibly in conflict with, the Government of Wales Act that set up devolution in the first place. That is all grist to the mill of the Richard commission. However, in both the Welsh Grand Committee and when the Bill was in Committee in another place, I noticed that there was a tendency to tilt the power in the direction of the Assembly in certain areas. To me, that seems all to the good.
The Bill is not controversial, and we should all welcome it. It is an enabling Bill. It gives new powers and additional finance to the community health councils, which have been abolished in England but flourish in Wales. That is appropriate, as it reflects a long-held tradition of communitarian involvement in Wales. Aneurin Bevan himself began his interest in such matters through his involvement in the Tredegar Medical Aid Society back in the 1920s.
It has been suggested several times, including by the noble Lord, Lord Thomas of Gresford, that the roles of the councils might be looked at, particularly their powers of inspection, which are increased. That matter will no doubt he considered. Others have welcomed the centre for health, which will be an important body. The noble Lord, Lord Roberts, mentioned a number of institutions within the University of Wales with which it might collaborate. To my dismay he did not mention, perhaps rightly, the Centre for Welsh Health Informatics, which was set up in my time in Aberystwyth. I hope that his silence does not mean that it has subsequently disappeared, but in its time it certainly did valuable work in the area.
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The noble Lord, Lord Thomas, raised the issue of the independence of the new centre. That is a matter of political and social judgment, a balance to be struck between a centre that should be independent and the power of the National Assembly to set up its own priorities for Wales. That seems the kind of issue that frequently comes up in framing policies, and it is not an extreme of one thing or another. That is to say that one could have research inquiries within a broader national framework.
The Bill has been discussed by Members of this House far more knowledgeable than I am on the matter. I shall raise only one question, which relates again to the national university. I presume that the various healthcare professionals and their training and monitoring will be related to work in the University of Wales, through a number of colleges that will train them including the national college of medicine. I am not quite sure how the monitoring provision will relate to the quality assurance provision that already exists within the higher and further education system. If there could be an exegesis of that, I would be grateful.
We welcome the measure. It raises constitutional questions about considerable elements of ambiguity in the devolution settlement for Wales. If the Bill were amended in the course of its passage—its brief passage, I trust—it would not be possible for the Welsh Assembly to have control over those changes. It would be as powerless as, oddly enough, the Scottish Parliament is when it considers measures that move to the Houses of Parliament under the Sewel conventions. Even Scotland loses control at that point, and it seems in conflict with the principle of devolution that that should happen on the Bill.
Another question that I suppose arises from devolution is how necessary variety and diversity in provision is related to the maintenance of overall standards. On the health and social care reforms, that arose in connection with the proposal for a separate health inspectorate for Wales, and whether that would have been of the same quality and competence as what was monitored under the Wanless reforms in the NHS in England.
Broadly, the Bill is a landmark in constitutional history and the history of health in Wales. It deserves broad support, and like other noble Lords I wish it Godspeed.
12.38 p.m.
Lord Hooson: My Lords, the first thing that I would like to say is how I much I welcome the noble Lord, Lord Evans, to the Government Front Bench. No one has yet touched on his Welsh connection. The export of the Welsh family of Evans from Wales to East Anglia was of great benefit to East Anglia. His father, George Ewart Evans, was a famous oral historian who wrote almost exclusively about rural areas in England. I think that he published no fewer than eight volumes, was a frequent visitor to Wales and is a greatly respected figure there. I am very glad to see his son representing Wales on the Government Front Bench.

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I want to make a very brief contribution, as I entirely agree with what was said by my noble friend Lord Thomas of Gresford and do not intend to repeat any of it.
I have listened to this debate and noted the comments of the noble Lord, Lord Roberts. The Bill has been heavily and thoroughly scrutinised, in a manner that is quite unnecessary, if one thinks it out. One of the most important noble Lords who attended this debate—he has now left the Chamber—is the noble Lord, Lord Richard, who will consider and report on the workings of devolution.
Of all matters, surely the subject matter of the Bill should have been devolved to Wales, which should have powers of primary legislation in that regard. The National Health Service is very important in Wales. I venture to suggest that there are probably fewer subscribers per head of population to private medical insurance in Wales than in any other part of the country. Wales is heavily dependent on the National Health Service and there is great interest in it.
I congratulate the Government and all parties on the fact that everything has been done to facilitate the Bill's progress. It will give effect to what Welsh Assembly Members wish to achieve. Why was it necessary to go through this whole palaver? Fears have been expressed that we might be drawn into joint committees with the National Assembly. Such a situation should not be allowed to continue.
It is obvious that there should have been devolution of legislative power in certain spheres in this regard. We are learning as we go along. I was a great admirer of the then Secretary of State for Wales when he introduced the Bill for devolution. He worked hard to achieve it but there were so many compromises along the way that in the end it did not produce an effective means of achieving what is best for Wales.
I was so glad that the noble Lord, Lord Richard, was in his place. He must have considered, as the process continued, the length of time spent discussing the matter in the National Assembly and through the consultation process, although that would have been necessary anyway. However, the House of Commons also considered the matter—it dotted the "i"s and crossed the "t"s—and we have had a debate in this House. All of that was entirely unnecessary. If anything was needed to demonstrate the need for greater legislative devolution to Wales, it is the process of the consideration of the Bill.
12.43 p.m.
Lord Walker of Worcester: My Lords, I add my congratulations and good wishes to the noble Lord, Lord Evans, on his new role and wish him every possible success. I, too, hope that the Bill results in an improved service to the people of Wales and that the new organisations will be successful. Wales has a ghastly inheritance of bad health. The coal and steel industries have inflicted much bad health on Wales. I was always advised by the chief medical officer in
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Wales that drinking and smoking and eating Welsh cakes did not improve the health of the people of Wales. There are enormous problems to tackle.
I hope that Cardiff will do much better than Whitehall in dealing with one issue in particular; that is, hospices. In Wales, as everywhere else, the hospice movement has made an enormous contribution in terms of meeting the problems of the dying and their families. It is sad to reflect that we had a debate in this House two years ago in which every speaker from every party expressed dismay at the declining support for the hospice movement. Although the Minister said how moved he had been by the debate, the decline continues in England and Wales.
When the Labour Government came to power, 41 per cent of all expenditure on hospices was met by the National Health Service. In England, that has now declined to 29 per cent and in Wales to 20 per cent. I was delighted that Jane Hutt, the Minister for Health and Social Services in the Welsh Assembly, last month made a statement saying that 10 million would be allocated for palliative care in Wales and that an announcement would be made on Valentine's Day, 14th February. I hope that it will be a good and specific announcement; it is very much needed. I am afraid that the statement contained the sorts of phrases that Whitehall has been using for years: that the arrangement must be "part of a partnership" with the National Health Service and that the plans must be "carefully considered". Such phrases have excused government in Whitehall from doing anything about the decline in the financing of the hospice movement. The money is allocated to the National Health Service, which decides locally that it will not give it to hospices but will use it for many of the projects for which it wishes to secure funding. The money never reaches the hospices.
Currently in Wales, 4,892 patients are being looked after in hospices, which employ 146 full-time nurses. The impressive fact is that the hospices also have 1,828 volunteers. It is a tragedy when a movement has attracted that number of volunteers and is willing to finance 50 per cent or 60 per cent of all expenditure, but year by year government support declines. It would be useful if all those in favour of devolution to Wales—noble Lords will know that I was not one of its most enthusiastic supporters—pointed out over the next few months that, so far as the hospice movement is concerned, action can be taken in Wales that Whitehall has failed to take for five years.
12.46 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, this has been a good debate and some distinguished noble Lords from the Principality have spoken with a great deal of expertise and experience on the devolution settlement and on the condition of the National Health Service in Wales. On behalf of my noble friends Lord Evans and Lady Farrington, I thank those noble Lords for their kind words.

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Sadly, unlike my noble friend Lord Evans, I cannot claim Welsh ancestry but I do claim a great deal of interest in the health service in Wales and in what noble Lords described in one way or another as the interesting divergence in the different health services in different parts of the UK. That divergence can be to the good only so long as we maintain the integrity, philosophy and principles of the National Health Service and ensure that people can cross borders as patients or staff and that none the less there is close collaboration and co-operation.
A number of noble Lords discussed the scrutiny of the Bill. For a relatively short Bill, it involves considerable scrutiny. I doubt whether noble Lords will follow the stricture of the noble Lord, Lord Thomas, and propose no amendments in Grand Committee. I have observed the comments on whether future pre-legislative scrutiny concerning Welsh Bills should be undertaken by a Joint Committee of both Houses. It is not for me to respond to that but I assure the House that I shall bring those thoughts to the attention of the appropriate authorities in both Houses.
The noble Lord, Lord Thomas, felt that another place had not done itself justice in relation to the Bill. Many Members of another place do not believe that this House should exist. Perhaps the noble Lord is proposing a Motion to abolish another place, in the spirit of co-operation that we are currently observing in relation to Lords reform.
Lord Thomas of Gresford: My Lords, my criticism was in relation to the Second Reading debate and the committees that followed that. It certainly did not involve the Welsh Affairs Committee, which I thought gave excellent consideration to the Bill and showed that there is a real role for Members of another place from Wales.
Lord Hunt of Kings Heath: My Lords, that I fully understand. My noble and learned friend Lord Morris of Aberavon raised the question of the legislative proposals that come from Wales. He asked a number of questions and raised an interesting point concerning the chances of a similar Bill being given fair wind if different parties were to be in government in Westminster and Cardiff. Of course, such a question is purely speculative and, so far as concerns the Westminster Government, I hope that it will be many years before it has to be tested. However, I suppose that that is the kind of issue that would be embraced within the Richard commission. I say to my noble friend that I have found a great deal of constructive working in the relationship between Ministers of the Westminster Government, the Welsh Assembly and officials. That is to be commended.
The noble Lord, Lord Hooson, raised more substantive issues about the extent of devolution. He questioned whether a Bill such as this should be decided by this Parliament or whether it should be delegated and devolved to the Welsh Assembly. Again, I believe that that is a matter for the Richard commission. Noble Lords will know that the
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commission is expected to draw its conclusions in September this year and to publish its report in December.
My noble and learned friend Lord Morris asked whether Members of the Welsh Assembly were "happy bunnies", as he put it, in relation to the Bill. I do not think that I could go so far as to say that they are happy bunnies. But my understanding is that they are content with the Bill as it now stands and wish to see it supported and passed through your Lordships' House.
As to the question of the number of Bills that the National Assembly for Wales would like this Parliament to consider, my noble friend will know that there are always pressures on the legislative timetable. I suspect that those pressures are as much a concern for my department—the Department of Health—as they are for the National Assembly.
As I said earlier, a different approach is being taken within the Bill, which continues the trend of the approach towards the NHS in Wales. My noble friend Lord Prys-Davies said that time alone will tell the outcome of that change. But it seems to me that there has always been a degree of diversity between the four countries of the UK in relation to the way in which the NHS has been managed. I believe it is positive for that diversity to continue, for us to learn from each other, to learn what works well and to share problems and experiences. That must surely be the culture and philosophy that we wish to develop together.
The noble Lord, Lord Roberts, spoke of the number of challenges that face the NHS in Wales. The noble Baroness, Lady Finlay, also raised issues of concern, particularly in relation to the recruitment and retention of key staff. It is not for me either to proselytise or to defend the conduct of the National Assembly in its management of Welsh health affairs. But it may be appropriate for me to comment that, although it would be wrong to say that there are no problems or challenges in relation to the Welsh health service, it is right to point out the achievements and progress taking place in the Principality. For example, the NHS in Wales is now receiving unprecedented levels of investment; more patients are being treated than ever before; the number of staff working in the NHS in Wales has increased; and some additional hospital beds have been funded.
The issue raised by the noble Baroness, Lady Finlay, about the shortage of doctors and nurses is well taken. We face the same issue throughout the United Kingdom. Just as in England, the National Assembly for Wales has taken important actions designed to ensure an increase in staff numbers. A workforce planning mechanism is in place which will enable the National Assembly to come to conclusions about the number of staff and training places that will be needed in the future. But it is good to report that the commission's figures for student numbers in Wales show a considerable increase over the past four to five years. For example, since 1998, there has been a 63 per cent increase in the number of training places commissioned for nurses. There has been an increase

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of 39 per cent for midwives, and 87 per cent for the allied health professions. I consider that to be very good progress.
The question of waiting times will always be important for those who are concerned about the National Health Service. I say to the noble Baroness, Lady Finlay, that I know that some doctors feel that we should not go down that path in relation to waiting times generally. But when patients are asked their major concerns with regard to healthcare, waiting always comes near the top of the list. I also say to the noble Baroness that my experience of 25 years in the health service is that, unless there are targets for waiting, I am afraid that the NHS lets them slip.
It is important that clinical priorities are always to the fore and that the patients who most need treatment receive treatment first. Equally, it is important that we cut waiting-list times as much as possible. I know that the National Assembly is as determined as we are to ensure that that happens.
The noble Lord, Lord Roberts, raised the question of bureaucracy. He suggested that the new structure coming into operation in Wales on 1st April might be bottom heavy and grossly bureaucratic. I accept that we must always ensure that any structural changes in healthcare are non-bureaucratic. But I believe that there are real advantages in making changes which align the health service to local government. I consider that the development of 22 local health boards, coterminous with unitary local authorities in Wales, offers many advantages in terms of collaboration and in ensuring that health, social services and other local government services are integrated.
Costs are important. I understand that the Assembly budget for transition costs of structural change ranges from £12.5 million to £15.5 million. So far as concerns the report of the Comptroller and Auditor General, I am advised that it is the view of the National Assembly that, once the transition has been made, the new structures will cost no more to run than the existing ones.
I now turn to the question of community health councils. My noble and learned friend Lord Morris was responsible for the establishment of CHCs in Wales. He expressed disappointment. Putting on my hat for a moment as a Department of Health Minister, I share that point. I believe that English CHCs have had a very patchy record—they have disappointed. But, in Wales, the National Assembly has decided that CHCs are an effective mechanism to build upon to ensure effective patient involvement and representation in the future.
I had a shock when the noble Lord, Lord Roberts, quoted the figures for the cost of running community health councils in Wales. My understanding is that there was a mistake in the House of Commons research paper. I am glad to tell the noble Lord that the figures are nowhere near those that he suggested.
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So far as concerns the question of CHCs and their future performance, I agree with the noble Lord, Lord Thomas, that inspection, and its proposed extension, is indeed crucial.
I agree with the noble Baroness, Lady Finlay, about the importance of ensuring that community health councils make stronger links with primary care. My noble friend Lord Prys-Davies is surely right when he talks of the need for consistency in the handling of complaints. As regards time off work for CHC activities, the noble Lord is right to raise the question of the Employment Rights Act 1996. This is not a matter for my department, but I understand that officials from the Assembly are liaising with their counterparts at the DTI further to discuss this matter.
The HPW fulfils and is intended to fulfil an important role in relation to the health professions in Wales. It will complement, not conflict with or duplicate, the activities of other bodies concerned with professional practice and regulation. I believe it will fulfil an important role. Perhaps I may say to my noble friend Lord Morgan that pre- registration education will be monitored in the same way as all university education. Health Professions Wales has no remit for monitoring pre-registration education. However, I am sure that it will wish to collaborate with higher education institutions and other relevant bodies in Wales.
I sympathise with the point made by the noble Lord, Lord Thomas, concerning health care support workers. He may be interested to know that that is a matter the Department of Health is currently considering in terms of regulation. There is no doubt that healthcare workers play a crucial role. It is important that they are given appropriate training and support to take on great responsibilities. Alas, I believe that the decision made some years ago to phase out state-enrolled nurses was a grave error.
My noble friend Lord Prys-Davies asked about prisons. That question has been considered in relation to CHCs. It is felt that the current proposals strike the right balance. There are no plans to extend their remit to other areas such as prisons. As regards the Wales Centre for Health, a number of noble Lords raised the issue of inequalities in health in Wales. I believe they were right to do so. The figures are striking. Anyone looking at those figures and seeing the incidence of ill health in Wales would be concerned to ensure that a focus of future endeavour is strategies and implementation of programmes to tackle the root causes of ill health. The Wales Centre for Health will have an important role to play. It will be an independent body which will provide information and impartial advice on public health in Wales. I believe it will be a great source of support to everyone concerned with tackling inequalities. It will act as an advocate for public health at national level; I agree with the noble Baroness, Lady Finlay. I believe that it will cost £1.3 million per year, although I shall provide further information in relation to that. I correct myself. That figure is for Health Professions Wales. Perhaps I may confirm that figure in writing.

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Other issues raised concerning public health relate to smoking. I note with interest the comments of my noble friends Lady Gale and Lord Prys-Davies. It is true that on 22nd January the Assembly voted in favour of calling on the UK Government to bring forward a Bill to give the Assembly power to prohibit smoking in public places. The Assembly has been concerned about that issue. We shall most carefully consider the Assembly's position. However, we have previously concluded that compulsion in that area is not the answer.
My noble friend Lady Gale raised the important question of asthma and smoking. I believe that the WCH will have a crucial role to play in terms of research and advice on tackling what is an increasingly worrying and important area of concern.
The noble Lord, Lord Walker, raised the question of hospices. I am glad that he recognised the progress being made within Wales. I well remember the debate. My department is concerned to ensure that the resources we wish to see spent within palliative care are indeed spent in that area. My colleague Ministers concerned with this matter frequently meet with representatives of the palliative movement to try to ensure that the NHS and the voluntary palliative care sector work together and to ensure stability in funding contributions from the National Health Service. It is not just a question of the size of the contribution but of the period of time that hospices are given in terms of a grant being made. Stability is important.
I hope I have endeavoured to answer most of the points raised.
Baroness Finlay of Llandaff: My Lords, I rise briefly to reinforce the statement made by the Minister. The consultation over provision of money to palliative care services has been extremely extensive and has tried to involve health care professionals in all walks of palliative care services. For that we are all grateful.
Lord Hunt of Kings Heath: My Lords, I am grateful to the noble Baroness for that comment. In conclusion, I believe that the Bill commands general support. It will help the National Assembly to make significant changes to the organisation of the health service in Wales.
On Question, Bill read a second time.
Lord Hunt of Kings Heath: My Lords, I beg to move that this Bill be committed to a Grand Committee.
On Question, Bill committed to a Grand Committee.

Access to Justice (Northern Ireland) Order 2003
1.6 p.m.
Lord Bassam of Brighton Lord Bassam of Brighton rose to move, That the draft order laid before the House on 19th December 2002 be approved.
The noble Lord said: My Lords, the draft order is an important instrument for the people of Northern Ireland. It provides for the reform of the administration and provision of publicly-funded legal services in Northern Ireland.
The order before the House has been the subject of detailed consultation and scrutiny. A Green Paper, Public Benefit and the Public Purse, was published for consultation in June 1999. That was followed in September 2000 by the publication of a White Paper, The Way Ahead. The decisions in the White Paper were the subject of an examination by the Northern Ireland Affairs Committee in April 2001.
In May 2002 the Government published for consultation the proposal for a draft Access to Justice (Northern Ireland) Order. The formal consultation period on the proposal closed in July 2002. As part of our consultation we had the benefit of a report from the Northern Ireland Assembly and a debate in the Northern Ireland Grand Committee. Our proposal to establish the legal services commission in Northern Ireland has been generally welcomed by consultees.
The order contains three key themes of reform which merit specific comment: first, the establishment of a new body to administer publicly-funded legal services; secondly, measures to take control of expenditure on publicly-funded legal services; and, thirdly, the establishment of a registration scheme and codes of practice to demonstrate that legal services purchased at public expense are of an appropriate standard and quality.
Article 3 of the order establishes a new administrative body, the Northern Ireland legal services commission. That is at the heart of reform of publicly-funded legal services. The order does not create an additional body; instead, it transfers statutory responsibility for the administration of legal services from the legal aid committee and legal aid department of the Law Society to the new commission. That proposal, widely welcomed, removes any perception of a conflict of interest from the Law Society and provides a modern basis for the administration of legal services.
There will be a chair and between six and 10 other members of the commission. All will be appointed by open competition. Members of the commission will bring a breadth of experience and knowledge to the whole spectrum of the commission's responsibilities, including judgment on obtaining value for money, the quality of services provided and an independent view of how best to provide legal services to the people of Northern Ireland.
The commission will be an executive non-departmental public body. It will be arm's length from government and will be responsible for important research and analysis regarding people's need for publicly funded legal services. That analysis will inform decisions on how services can be provided under the order.
The second issue that I mentioned was taking control of the costs of providing legal services. The year-on-year increases in publicly funded legal

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services in Northern Ireland are unsustainable. Expenditure has risen from £12.19 million in 1990–91 to £41.53 million in 2001–02—an increase in real terms of 149 per cent.
The Government's primary focus is not on cutting expenditure but on targeting expenditure on priority cases. The order addresses the issue by introducing the concept of allocated funds for the provision of publicly funded legal services, which the commission will manage. Legal service providers will be remunerated from these funds by payments on a per case basis of all-inclusive standard fees. Article 47 of the order provides for remuneration orders to be made. There will be provision for exceptional cases to be remunerated outside the proposed standard fee structure, although we envisage that the vast majority of legal issues bought at public expense will be remunerated by reference to standard and graduated fees. The first area of work to be remunerated under the new standard fees will be criminal cases. The commission will advise on the future work programme after that.
By taking control of the rate of increase in expenditure we will be in a position to target expenditure on the most deserving cases, which bring the greatest benefits to individuals. That will involve establishing priorities for the delivery of legal services. To ensure that funding is targeted at priority areas, a funding code will be established that will set out the criteria to be applied when determining whether civil legal services should be provided in a particular case.
The final issue I shall address is the development of formal procedures to demonstrate the standard of services provided. Article 36 addresses that by providing for the development of a registration scheme and codes of practice. Consultees argued for that approach at an early stage. The order provides a distinctive solution that is appropriate to the legal services' culture in Northern Ireland, but which has no equivalent in England.
Registration with the commission will be a prerequisite for any individual or organisation wishing to provide publicly funded legal services. Firms and individuals registered with the commission must also undertake to comply with a code of conduct. Compliance with the code will be monitored. Failure to comply with it will result in a range of sanctions, including removal from the register.
In conclusion, I want to assure the House that the order will bring significant benefits to the people of Northern Ireland. It will deliver a modern, transparent publicly funded system of legal services, which is flexible and takes account of local factors in Northern Ireland.
Our immediate priorities are the establishment of the commission and the introduction of standard fees for criminal cases in this calendar year. We will then work with the commission in order to refine the detail of our implementation plan. Our approach will be evolutionary, not revolutionary. We have consistently stated that it would be neither appropriate nor desirable to implement all the proposed reforms to
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publicly funded legal services at one time. That is consistent with the clear message given to us by those who were consulted. Reform of civil and criminal services will be taken forward once the commission is established and is well placed to begin detailed research and consultation. I beg to move.
Moved, That the draft order laid before the House on 19th December 2002 be approved.—(Lord Bassam of Brighton.)
1.15 p.m.
Lord Glentoran: My Lords, I thank the Minister for introducing the draft order to the House. Although I have some questions and perhaps the odd criticism, we, on this side of the House, welcome it.
Perhaps it is worth reflecting, as was done in another place, on whether this is the right forum for such an important piece of legislation. The honourable Member, Lady Hermon, strongly stated her views on it in another place in Committee and at Third Reading. I realise that the matter is still a reserved power so, unfortunately, this legislation could not have passed through the Assembly, but it was certainly felt by Lady Hermon that insufficient consultation had taken place within the Assembly.
While from the Opposition Benches we are doing our best to examine this legislation and to challenge the relevant parts, it is regrettable that only one member of the Northern Ireland parties is present today. It is also regrettable that we do not have any Members of the SDLP and the other parties in this House. That matter gets highlighted in situations such as today's.
This legislation sets up yet another Northern Ireland institution. We have too many of them, but, I have every sympathy with the Government for so managing the situation. This commission is probably the best way to carry out, and to take future responsibility for, the reform of legal aid in the Province. I should like to hear more from the Minister about the selection and appointment of that commission, both as to the commissioners themselves and its staffing.
The legislation states that it will be "representative of the community". We should not debate that matter again today. We have done so many times and I am sure that the Minister and Members of your Lordships' House are as familiar with the subject as I am. But it is important because this is not the kind of commission to which any group of—if I can use the word—"ordinary" people can be appointed. It requires specific skills and knowledge because certain judgments need to be made, in particular as to what cases should or should not receive legal aid. Therefore, I feel that some expertise is necessary.
My second point is that the size of the commission appears to be small. The Minister in another place suggested that the workload will not be that great— perhaps two or three days a week once it settles down. But quangos are quangos. I remember my own experience of being asked to be a member of the Millennium Commission. When I asked the official who sounded me out about the workload that would

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be required, he said, "Oh, probably one lunchtime for a month or two". It actually took something like three full days a week for quite a long time. That is what can happen with these types of new commission when they are first set up. I just point out to the Government— and hope that sufficient note will be taken of it—the workload that will be required of the commission and the commissioners in particular in its early stages.
I also wonder whether the commissioners will be remunerated and how and at what levels. I note, as the Minister pointed out, the significant increase in the cost of legal aid over the past 12 years. I also note, which I do not think he pointed out, that despite that 149 per cent increase in cost, there was no noticeable increase in the number of people aided. I sincerely hope that that will change; that more people will enter the net and that it will all be managed considerably better.
Can the Minister say how much he expects the budgeted running costs of the commission to be? How many people will it employ? And, what will be the total estimated cost, including the legal aid package awarded for 2002–03, bearing in mind that the figure for 2002 is £41.53 million, which was the top end of the 149 per cent increase? Where will the Government start their budgeting? That will give us a good idea of the scope that the commission will be able to cover. It may be asking too much, hut, the person carrying out the budgeting, or who has carried it out, should have estimated or assessed how many cases in the Province will need legal aid.
I was slightly concerned and did not fully understand the point that the right honourable Member Lady Sylvia Hermon made about flexibility for different forms of remuneration in different parts of the Province. I am fairly satisfied on that, but I should be grateful if the Minister could give me more information on why flexibility is needed. In principle, we support the order.
Lord Smith of Clifton: My Lords, broadly speaking, we, too, support the order. I have two observations and two questions. My first observation relates to the membership of the commission and echoes a point made by the noble Lord, Lord Glentoran. We again see creeping into NIO language the word "representative". I thought that we had exorcised that term with the Administration of Justice Act, during the passage of which our amendment to include the term "reflective" was accepted. I reiterate that point.
My first question is: can the Minister reassure us that, in making the appointments, the noble and learned Lord the Lord Chancellor will consider factors other than both sides of the community—for example, gender and ethnicity? Secondly, when the commission draws up its funding codes setting out the criteria according to which a decision is to be taken on whether to fund legal services and the services to be funded, we should like reassurance that the code will not be so rigid as to exclude cross-cutting cases.
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My final observation is that the order also provides for the introduction of conditional fee agreements into Northern Ireland. In my experience, there is enough litigation in Northern Ireland without encouraging lawyers with that morsel.
I do not share the disdain of the noble Lord, Lord Glentoran, for ordinary people. I hope that there will be room for ordinary people as members of the commission.
Lord Laird: My Lords, the Ulster Unionist Party welcomes the principle of legal aid reform in Northern Ireland. It is the first major change to legal aid in Northern Ireland for nearly 20 years. Noble Lords will therefore agree that it is a vital issue. As such, I regret that the legislation is an Order in Council and not a full Bill, particularly as criminal justice is not a devolved issue. We strongly believe that an Order in Council procedure is wholly inappropriate for such a major change.
The order is largely skeletal. We are given little to go on. For example, how will the commission be set up? What are the running costs likely to be? Will the Minister assure us that the commission will not become yet another elaborate and expensive bureaucracy? The absence of details such as the time-frame for implementation must be addressed.
Article 9 states:
—(1)"The Commission may not fund—

(a) civil legal services, or

(b) criminal defence services,

relating to any law other than that of Northern Ireland, unless any such law is relevant for determining arty issue relating to the law of Northern Ireland".
I seek clarification that that will not prevent cases that go before the European Court of Human Rights and the European Court of Justice from receiving legal aid.
Throughout the order, the Lord Chancellor is empowered to give directions and guidance to the commission. I draw noble Lords' attention to Article 47, in particular, which outlines the Lord Chancellor's role in making remuneration orders. If the intention in setting up a new non-departmental legal services commission was to provide an independent framework for the provision and administration of legal services, do not the extensive powers given to the Lord Chancellor undermine that independence? One of the Lord Chancellor's powers is to appoint members to the commission. In the light of recent revelations of a spy ring operating in the Northern Ireland Office, suitability of employment in the new legal services commission is worth highlighting. I therefore seek assurance that stringent security checks will be put in place to ensure that undesirables will not be at the heart of the commission.
I also draw noble Lords' attention to the fact that nowhere does the order say how cases are to be prioritised. What criteria will be put in place for prioritisation, and what conditions will dictate whether one case deserves priority over the next? In the

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Northern Ireland Grand Committee in another place, miss Rosie Winterton said that it was vital that money was,
"used to secure legal services for the most meritorious actions and for actions that are of most importance to the individual citizen and the community".
I remind noble Lords of the significant breach of human rights brought about by the bombing of Omagh. The Minister may wish to explain why legal aid was not granted to those campaigning to take civil action against two members of the Real IRA, which was responsible for the bomb, while the defendants, who are known to be independently wealthy, have been granted legal aid. I also seek assurance that that will not be repeated, or that it will not become the norm.
Will the Minister explain why, under Article 23(4),
"The Commission may fund advice and assistance by different means—

(a) in different areas of Northern Ireland, and

(b) in relation to different descriptions of cases."?

Why should there be regional variations in such a small jurisdiction? In the interests of consistency and the provision of quality of service, should not everyone, regardless of where they come from in Northern Ireland, receive and have funded the same quality of legal aid?
I am also concerned about the provision under Part 3 of the draft order known as the alternative funding option. Part 3 is identical to legislation in place in England and Wales. The Law Society of Northern Ireland has already stated that those provisions are entirely unsuitable for Northern Ireland. It would appear that they have caused great difficulty in the English litigation process. The Law Society said that they have led to the,
"unregulated operation of claims-management companies, such as Claims Direct; the exploitation of individual litigants; the domination of the market by the same insurers who operate the defence side of litigation; and the effective denial of choice of solicitor".
Will the Minister ensure that legislation is not introduced that will result in the same thing happening in Northern Ireland?
In conclusion, I ask the Minister to pay particular attention to the skeletal nature of the order, to the extensive powers given to the Lord Chancellor, which undermine the independence of the new legal services commission, and to the issue of prioritisation.
Lord Hylton: My Lords, the Minister has already been asked some difficult questions. I wish to highlight the most important question, which the noble Lord, Lord Glentoran, asked: what amount of money will be available in the coming financial year for legal aid? How much will that sum be diminished by the heavy layer of new administration proposed by the order?
We are all concerned with the interests of justice and with the interests of defendants in criminal and other cases and of other litigants. It is important to uphold those interests. We have heard from practicing
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solicitors, including the noble Lord, Lord Phillips of Sudbury, how, in England, firms are being squeezed by the new standards and limits placed on legal aid. It would be desirable to avoid that, if possible, in Northern Ireland. I look forward to the Minister's reply.
1.30 p.m.
Lord Bassam of Brighton: My Lords, first, I ought to welcome the fact that there seems to be broad support for the measures throughout your Lordships' House, although several important issues were raised and some important questions asked during our short debate. I always give this apology: in advance, I say that, if I fail to address a point, we will try to pick it up and ensure that it is dealt with thoroughly in correspondence. That correspondence will be shared with all parties. I shall go through the points that arose and deal with them in turn.
Several noble Lords asked about the appropriateness of having the matter before us today. I understand that concern. However, legal aid is a reserved matter under the Northern Ireland Act 1998. That means that it is one of a range of issues that remain with Westminster at present but may, in due course, be devolved to the Assembly, when it is reinstated. I understand the concern that it is an Order in Council, but that is the standard procedure for making Northern Ireland laws in matters that have not been devolved to the Assembly.
I thought that I had set out clearly the fact that we had undertaken as wide a consultation as possible on the matter. Having reviewed the files, I must say that we have been extremely thorough and diligent. We have had many meetings with consultees on the proposals, and we have benefited from that consultation. The quality of the proposition on offer has improved greatly. I referred to the Select Committee on Northern Ireland Affairs, but we also benefit from the fact that the Assembly itself considered the legislation, as did the Grand Committee. There has been a great deal of preparation done, in getting to this point.
The noble Lord, Lord Laird, raised some concerns about the position and power, as it were, of the Lord Chancellor and his ability to direct and issue guidance. It is always a difficult balance to strike, but it is our view that matters of policy and priority fall to the Government, not the commission, and that we need to have flexibility in balancing the services provided with costs. The difference between the power to make regulations and issue directions, which lies with the Lord Chancellor, and the responsibility to advise and implement, which lies with the commission, is clear. It is an important difference, and the balance between them will depend on whether the matter is a non-executive government function or an executive service function.
The commission will be empowered to provide the Lord Chancellor with the advice that is considered appropriate and necessary in the circumstances. The commission will, after all, be the joint engine of reform with the Government, in a unique partnership. In view of the nature and scope of the responsibilities that the

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commission will exercise, it would not have been right to devise a detailed implementation plan in advance, without working with the commission, which would give us the advantage of being able to take on board any issues raised with it.
All noble Lords who spoke raised the issue of appointments to the Legal Services Commission. They will be made through open competition and will be consistent with the public appointments procedure laid down by the Office of the Commissioner for Public Appointments. Independent assessors have already been appointed to oversee the process, in keeping with the right procedures. The order makes it clear that, in appointing members of the commission, the Lord Chancellor must have regard to the desirability of securing that the commission includes members who, between them, have experience and knowledge of the provision of services that the commission can fund—civil legal services or criminal defence services—the work of the courts, consumer affairs, social conditions and management. Staff employed by the Law Society will continue to be required. Presumably, transfer arrangements will have to be put in place and negotiations conducted with regard to the move from one employer to the other.
The question of costs was raised. Costs for 2002–03 are estimated to be roughly £50 million. That will include running costs of £4 million. Costs for future years are up for discussion with the Law Society. The current number of staff is, I think, 130, and it is envisaged that, broadly speaking, that number will be required for the future. The cost of establishment was not the only cost issue raised. There was also the question of the remuneration of chairpersons and members. The chair will be paid £380 per diem, which equates to roughly £39,000 per annum. Members will be paid £279 a day, which equates to about £28,500 a year.
The other issue of substance, raised in particular by the noble Lord, Lord Laird, was the position of the victims of the Omagh bombing who sought funding for a civil action against the alleged perpetrators. It is a difficult area, and the noble Lord will appreciate that it would not be appropriate for a Minister to intervene in or comment on an individual case, although I accept that it is a very sensitive case. One would not want the case to be tainted in any way by the suggestion that there had been some degree of political interference. The general rubric is that the Lord Chancellor has a statutory power in Northern Ireland to grant funding in exceptional cases that are outside the scope of legal aid. It is our intention that that power will commence as soon as is practicable. The exceptional power can be exercised only in respect of categories of cases that are excluded from the scope of legal aid. I am sure that noble Lords will appreciate that point.
There was also some concern about the flexibility of the funding codes. The funding code will set tests to determine whether a case is strong enough to be the beneficiary of legal aid. If it is a high priority case, it will be easier to meet the criteria set out in the test. For example, cases involving the loss of liberty would be a high priority, and the test for getting legal aid for such cases in England is easier to meet than for, say, a
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neighbour dispute. The code will be important, and it will have flexibility. We will ensure that that flexibility relates to the seriousness of the cases involved.
The noble Lord, Lord Laird, rightly raised the issue of security vetting. A review of arrangements for security vetting in Northern Ireland was recently announced—the noble Lord is probably aware of that. We will monitor the outcome of that review and implement the appropriate level of vetting identified by it when setting up the commission.
The noble Lord also asked specific questions about funding for cases in the European Court of Justice. I can assure him that funding will be available for advice and assistance in such cases. If a case is referred to the European Court from one of the courts referred to in Paragraph 2(a) of Schedule 2, funding will be available for representation. As regards the ECHR, funding will be available for advice and assistance. Funding for representation before the ECHR is available from the court, not through the order.
Regional variation is an issue. In answer to the point made by the noble Lord, Lord Laird, the Legal Services Commission will be able to target the provision of services to meet established needs. It will also provide different means of addressing local needs and enable the commission to identify gaps in the provision of services and respond in what we believe to be the most appropriate manner.
I hope that I have answered all the points that were raised. I have tried to keep my responses brief and deal with the specific issues. This is an important order. It puts the provision of legal services in Northern Ireland on to a new, more modernised footing and enables us to target the most appropriate areas. It also enables the Law Society of Northern Ireland to get away from the difficulty that it shared with the Law Society of England and Wales when it was responsible for legal aid of potential conflicts of interest in their relationship with the courts, clients, structures of governance and so forth. I commend the order to the House.
On Question, Motion agreed to.

Business of the House: Debates this Day
Baroness Farrington of Ribbleton: My Lords, I beg to move that the three Motions in the name of my noble friend Lord Whitty be postponed until after the six Motions in the name of the Lord Privy Seal.
Moved, That the three Motions in the name of the noble Lord, Lord Whitty, be postponed until after the six Motions in the name of the Lord Privy Seal.— (Baroness Farrington of Ribbleton.)
On Question, Motion agreed to.
Baroness Farrington of Ribbleton: My Lords, I beg to move that the House do now adjourn during pleasure.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 1.42 to 2 p.m. for Judicial Business and to 3 p.m. for Public Business.]

Sexually Transmitted Diseases
Baroness Masham of Ilton Baroness Masham of Ilton asked Her Majesty's Government:
Whether they will consider making the treatment of sexually transmitted infections and other infectious diseases a national service framework.
Lord Hunt of Kings Heath: My Lords, while there are no plans for a separate national service framework for sexually transmitted and other infectious diseases, we are determined to tackle rising rates of infections. We have developed a sexual health and HIV strategy and an infectious disease strategy, both of which contain a number of measures to develop recommended standards and to improve access to treatment.
Baroness Masham of Ilton: My Lords, I thank the Minister for that Answer. A national service framework would set national standards. Is he as alarmed as I am by HIV cases doubling in the past year, syphilis cases trebling and the incidence of many other infectious diseases rising? Is he aware that at the GUM clinic in Leeds there is a six week waiting list?
Lord Hunt of Kings Heath: My Lords, I do not recognise the figures given by the noble Baroness but she is right to draw attention to the increase in the numbers of sexually transmitted infections. It is a considerable worry. The publication of a sexual health and HIV strategy in itself will provide the impetus towards a strategy at national level and the implementation at local level of both preventative and treatment services. I understand the noble Baroness's concern about waiting times for treatment. The funding of local treatment services is a matter for primary care trusts. We have made additional money available and we shall look closely at the progress made by primary care trusts in their commissioning decisions over the next year in this important area.
Lord Clement-Jones: My Lords, chlamydia infection has risen by 122 per cent in the past 10 years. In the light of that figure, are the Government acting urgently enough in proposing that the national screening programme for chlamydia will come into effect only in 2004–05 at the earliest? Does he believe that moving the 31 Public Health Laboratory Service laboratories to the NHS will improve the surveillance of chlamydia?
Lord Hunt of Kings Heath: My Lords, I have no doubt that the improvements we are making within the new Health Protection Agency will lead to much greater co-ordination of services and surveillance at a national level and to close working between the new agency and the NHS at local level. As to the screening programme, we have had two successful pilots—one in the Wirral and one in Portsmouth—and we are now implementing a national screening programme. We are starting with 10 sites and a further 10 will be introduced by the end of this calendar year. I
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understand the need for speed but there are issues in regard to pacing and staff training. We shall review the progress of the screening programme in the light of the introduction of the 20 sites to which we are committed.
Lord Turnberg: My Lords, does my noble friend agree that chlamydia is a serious disease and the single most common cause of infertility, ectopic pregnancy and pelvic inflammatory disease? Up to 10 per cent of young women between the ages of 16 and 24 do not know that they have the infection. The screening test is very simple and treatment is very easy. Does my noble friend agree that we should move along with the screening programme?
Lord Hunt of Kings Heath: My Lords, I agree with my noble friend. The pilot screening tests carried out in Portsmouth and the Wirral proved to be very successful. The prevalence in women of the target age range at general practice was 8.5 per cent to 8.7 per cent—a very significant figure. Approximately 95 per cent of all positive cases are known to have attended for antibiotic therapies, which gives grounds for optimism in terms of introducing a screening programme throughout the country. As I said, we are committed to starting with 10 sites, with another 10 by the end of the calendar year.
Baroness Gardner of Parkes: My Lords, is the Minister aware that the figures quoted by the noble Baroness, Lady Masham, were presented to the All-Party AIDS Group and were considered to be reliable? In view of the alarming increase in HIV in the past year and the statement that 80 per cent of new cases resulted directly from infections developed in Africa, there is a very serious financial timebomb ticking away. We have now got to the stage where people believe that HIV can be dealt with through retroviral or antiviral drugs and is therefore not to be worried about. However, those drugs will eventually fail and even more expensive ones will be required. Does the Minister agree that it is time for more publicity to be given again to this issue in order to create the awareness that helped to control matters in the past?
Lord Hunt of Kings Heath: My Lords, there is a good deal in what the noble Baroness says. One of the reasons for HIV infection rates is complacency, part of which may be due to the fact that there are treatments now which were not available when the disease first hit us. We are committed to proactive campaigns for the promotion of good sexual health. We shall redouble our efforts. I can assure the noble Baroness that we shall very much focus on the point about complacency.
Baroness Finlay of Llandaff: My Lords, what provisions are being made to cope with the increase in carcinoma of the cervix which will emerge from HPV infection—that is, human papilloma virus infection— and the probable increase in pressure on infertility services because of the high incidence of chlamydia in young, sexually active girls?
Lord Hunt of Kings Heath: My Lords, the noble Baroness raises an important question. We need to

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embrace these issues in the workforce planning that we undertake on a regular basis, both in terms of the number of people we need to employ in those services and, more generally, in the light of the likely pressures on services in the future. We clearly need to take such matters into account.
Lord Soulsby of Swaffham Prior: My Lords, is the Minister aware of the link between sexually transmitted diseases, tuberculosis and multidrug-resistant tuberculosis, especially among foreign-born nationals? Will he ensure that the link is recognised and that the appropriate advice is given and treatment taken? I declare an interest as chairman of the House of Lords Sub-Committee on Fighting Infection.
Lord Hunt of Kings Heath: My Lords, I pay tribute to the outstanding work of the noble Lord and his committee. I can assure him that it has had a big influence on the policies developed by my department. He is right to identify the problems with TB. Although notification has reached a relatively low level of around 7,000 cases a year from nearly 50,000 in 1950, that figure is higher than the 5,745 cases notified in 1987. The noble Lord's point is well taken.
Lord Ackner: My Lords, does the Minister agree that the figures mentioned today strengthen the need for compulsory medical examination of all those who enter this country? We were told that the Government were looking very seriously at the need for such medical examinations. How far have they got in reconsidering the matter?
Lord Hunt of Kings Heath: My Lords, the matter has been considered. The Cabinet Office is currently undertaking a comprehensive review of imported infections and immigration. I do not have a date for when the review will be completed.

Asylum Seekers
3.9 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
How many induction centres for asylum seekers are planned for the United Kingdom.
The Parliamentary Under-Secretary of State, Home Office (Lord Filkin): My Lords, as indicated in the White Paper, Secure Borders, Safe Haven, published last February, induction centres are an integral part of the Government's plans for a managed and robust asylum system. They will provide a comprehensive briefing service to asylum seekers on the asylum process and their rights and responsibilities within it. For those who need material support, they will also provide a briefing on the support system. Additionally, asylum seekers will be offered health screening and will receive a date for their asylum interview. We intend to create a national network of
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induction centres. Our current proposals are for six to eight induction centres in total across the United Kingdom.
Lord Campbell of Croy: My Lords, I thank the noble Lord for that reply. Is it proposed that these centres be situated in different parts of the United Kingdom so that the south-east of England does not have to bear the brunt? If so, are the Government consulting local representatives before decisions affecting location are made?
Lord Filkin: My Lords, the answer to both questions is yes. Some induction centres are being explored or provided in the South East for the good reason that that is where most asylum seekers enter the country and make their claims. However, later phases of the induction centre programme are likely to be sited in regional centres in the Midlands, the North West and the North East. Part of the aim of the induction centres is to ensure that Kent does not have to bear the whole burden of entry and that we have a much more managed process.
Turning to the question of consultation, the local authority is always consulted before a decision is taken, but we are also reviewing whether the consultation process should be strengthened.
Lord Dholakia: My Lords, I thank the Minister for clarifying the purpose of induction centres. He has provided the House with helpful information. In order to allay public fears, can he explain the Government's plans in relation to the dispersal of asylum seekers, bearing in mind that they do not remain in the induction centre for more than 10 days? What is the position with regard to accommodation centres, which were envisaged in the last immigration and asylum Bill?
Lord Filkin: My Lords, with regard to the powers in relation to dispersal, if an asylum seeker asks for support and is found to be destitute, then he must accept the offer of accommodation provided by the Government in a nominated location. That is not a process of choice, for good reason. Many asylum seekers would prefer to live in London, but that would be unreasonable and impracticable, given the burden on the London authorities.
With regard to accommodation centres, the Government are proceeding with their commitment to develop pilot accommodation centres because they will form part of a much more tightly managed process, right from entry through to, if an asylum seeker is not found to qualify, removal. The next two centres are going through their planning processes. Planning appeals are expected shortly.
Lord Burnham: My Lords, my noble friend asked how many induction centres are planned. What is the answer to that question?
Lord Filkin: My Lords, I apologise if I did not speak clearly, but I answered that point earlier by saying that six to eight centres are planned.
Lord Forsyth of Drumlean: My Lords, can the Minister reassure noble Lords that stories in the newspapers that former members of the Taliban are coming to this country claiming asylum on the grounds that they would not be safe under the present regime in Afghanistan are without foundation? If they are not, can he tell the House what measures are in place to ensure security in our country from people coming from that kind of background?
Lord Filkin: My Lords, to my knowledge, I am not aware that any member of the Taliban has sought to claim asylum in this country, but I shall check the position because I am not personally aware of every claimant for asylum. I do not make that remark flippantly; it is not possible to be certain.
The question of security has received a great deal of attention recently. When asylum claimants make their claim at the port of entry, as they should, they are then subject to a sequence of checks. Their details are taken and they are fingerprinted. The fingerprints are then checked against Home Office records and EURODAC. If any doubt arises over their identity, they are put through various levels of interviews subsequently at the port of entry. In some cases those interviews can be extensive.
The reality is that one can identify by such processes people who have a terrorism history, but it is unrealistic to think that it is possible to pick up those with no terrorism history and who do not present any characteristics. That is why we believe that the idea of locking up all asylum seekers as they enter the country is implausible. That is compounded by the fact that, unfortunately, terrorists can use many other ways to get into this country.
Lord Russell-Johnson: My Lords, in the Minister's response with regard to the location of induction centres, he referred to regions in England, but made no reference to Scotland, Wales or Northern Ireland. Are there to be no centres in those areas, or is it simply an oversight?
Lord Filkin: My Lords, as yet no decisions have been made as to where other induction centres will be sited. The Government have invited expressions of interest from regional consortia as to whether they would consider running and managing such centres. The consortia tend to be local authority-based. I believe that an expression of potential interest has been received from a Scottish consortia. However, no decisions have been made and the matter is still at an early stage of exploration.
Earl Ferrers: My Lords, can the noble Lord say whether the Government intend to commandeer empty houses? If so, does he think that that would be popular either with the owners or with the next-door neighbours?
Lord Filkin: My Lords, no and no.

Expert Witnesses
3.15 p.m.
Lord Mitchell: I beg leave to ask the Question standing in my name on the Order Paper. In so doing, I declare my interest as a friend of Mrs Clark's father.
The Question was as follows:
To ask Her Majesty's Government whether, following the release of Sally Clark from prison, they have any plans to review the giving of evidence by expert witnesses.
The Minister of State, Home Office (Lord Falconer of Thoroton): My Lords, this has been a tragic case and one over which Sally Clark and her family have every right to feel seriously let down by the criminal justice system. We need to look carefully at the detailed written judgment from the Court of Appeal, once we have received it, to determine what lessons can be learnt from this case with regard to those called to give expert evidence in other cases.
In the light of that, we need to examine existing procedures and, where necessary, take steps to strengthen them to ensure that in future we have confidence in how the evidence of specialist witnesses is presented and tested in the courts. In particular we need to be certain that the independence of such witnesses can be relied on.
Lord Mitchell: My Lords, I thank my noble and learned friend on the Front Bench for that helpful Answer. Sally Clark was convicted and sentenced to 15 years' imprisonment for the double murder of her two sons. At her trial the testimony of two eminent witnesses sealed her fate.
The first stated that the chances of two cot deaths in any family were one in 73 million, a powerful number that was simply wrong. The second, a pathologist, testified that the second birth—
Noble Lords: Question!
A noble Lord: Leave him alone.
Lord Mitchell: The second witness, a pathologist, testified that the second baby was healthy when he died, whereas recent and reluctantly released evidence now shows that the baby was fatally infected.
Mrs Clark was lucky in that she was a solicitor—
Noble Lords: Question!
Lord Mitchell: My Lords, I shall come to my question. What of those currently in prison, serving sentences for similar crimes; namely, where the prosecution has used identical expert witnesses, but who do not know how the system operates? Where is their justice?
Lord Falconer of Thoroton: My Lords, the Court of Appeal has decided that the conviction was unsafe on the basis that the original court was deprived of the opportunity to hear important medical evidence which the Court of Appeal stated might have affected the result. The court has not yet produced a detailed judgment. We need to consider the detailed judgment to see whether lessons need to be learnt from it. Furthermore, on the basis of that judgment, we need to examine what steps need to be taken. My noble friend has raised an extremely serious matter.
Lord Neill of Bladen: My Lords, when the Government address the questions that have arisen from this case, will they look also at the delay? Last summer the defence finally took possession of the medical examination reports and asked the prosecution to agree that the conviction must be unsafe and should be set aside at once. Nothing happened until a few days ago. We read in the newspapers that the prosecution crumbled at the end of the first day of the hearing.
Lord Falconer of Thoroton: My Lords, I believe that the vital material came to light at the end of November 2001. It is perfectly reasonable for the prosecution to be given a proper opportunity to consider the material before reaching a conclusion. The Criminal Cases Review Commission, which reviews cases in which there may be a miscarriage of justice, referred the matter to the Court of Appeal. That court then sets a reasonable timetable for the matter to be considered. Of course we need to look at the timetable, but a balance must be struck over the way such cases are dealt with so that they are given proper consideration.
Lord Carlisle of Bucklow: My Lords, does the noble and learned Lord agree that the vital point is that, when evidence is being given by an expert witness, the whole of that evidence is disclosed in advance to the other parties in the case?
Lord Falconer of Thoroton: My Lords, that relates not only to the evidence but also to the material that the expert witness might in his or her opinion regard as irrelevant but whose significance could be seen by other experts. The worry is always that either the competence or the arrogance of the experts deprives other parties of the opportunity of looking at the full case.
Lord Goodhart: My Lords, as the noble Lord, Lord Mitchell, said, Sally Clark was extremely fortunate in the work that her husband and the dedicated team of supporters did for her. Is the noble and learned Lord satisfied that adequate help will be available to ensure that the cases of those who are less fortunate in their friends and family are properly investigated before they are brought back to the Criminal Cases Review Commission?
Lord Falconer of Thoroton: My Lords, in many cases it is a matter for the solicitors to undertake the
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appropriate investigations. This case focuses in particular on the failure of a forensic pathologist to disclose material which underlay the conclusion that he had reached. What needs to be examined is whether the arrangements for disclosure not merely of the report but of the extraneous material was adequate. Again, I do not want to comment in detail on the matter until we have seen the full judgment of the Court of Appeal, which has not yet been published.
Lord Hodgson of Astley Abbotts: My Lords, in the light of the Question and the subsequent exchanges— and given that Clause 29 of the Criminal Justice Bill currently before another place requires the defence counsel to give notification of which defence witnesses will be called—would it not be a good idea if a similar situation applied to the prosecution and it, too, had to specify in advance which witnesses it intended to call?
Lord Falconer of Thoroton: My Lords, there is already an obligation on the prosecution to disclose any expert material that it has, even if it does not intend to use it, because it might be of value to the defence. The question in this particular case related to the extent to which that was complied with.
Lord Monson: My Lords, is Mrs Clark entitled to compensation?
Lord Falconer of Thoroton: My Lords, I do not know precisely what the position is. It is for her to make an application.
Baroness Masham of Ilton: My Lords, was it not MRSA in the spine of the second baby which caused its death? Is this not a very serious problem in our hospitals now?
Lord Falconer of Thoroton: My Lords, there is a real issue regarding the problems of MRSA. The health service has a strategy to deal with it, I do not want to comment on the detail of the case until the Court of Appeal has published its judgment.
Lord Wigoder: My Lords, is it not perfectly clear that this is not a case where the prosecution failed to disclose the evidence that it had before the trial, but one where the evidence never reached the prosecution at the proper time?
Lord Falconer of Thoroton: My Lords, again, I do not want to comment in detail in relation to that. We should wait until we see what the Court of Appeal says in detail.

Iran
3.22 p.m.
Lord Corbett of Castle Vale: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as chairman of the British Committee on Iran Freedom.

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The Question was as follows:
To ask Her Majesty's Government for what purpose the Prime Minister met Mr Kamal Kharrazi, the Foreign Minister of Iran, in London this week.
The Lord Privy Seal (Lord Williams of Mostyn): My Lords, the Iranian Foreign Minister, Dr Kamal Kharrazi, today had meetings with my right honourable friends the Prime Minister and the Foreign Secretary. In addition to the crisis over Iraq, the discussion covered other regional issues and the developing bilateral relationship, including the importance of maintaining frank dialogue on outstanding issues of concern.
Lord Corbett of Castle Vale: My Lords, I thank my noble and learned friend for that response, but is it not morally offensive for the UK to seek or accept assistance about Iraq from a regime that uses terror at home, sponsors it abroad and is developing nuclear and chemical weapons? Does my noble and learned friend share the revulsion of a majority of Members of both Houses at the mullahs' use of public executions, stonings and amputations against those demanding freedom and human rights?
Lord Williams of Mostyn: My Lords, I entirely endorse my noble friend's concluding remarks. The British Government have publicly, on several occasions, expressed their abhorrence at those practices.
Lord Wallace of Saltaire: My Lords, I understand that the question of Iran's civil nuclear programme is one that Mr Kharrazi hoped to raise while he was in London. We all hope to avoid any further nuclear proliferation. Was the subject discussed; and has it been made clear that the IAEA must have an active role in supervising the civil nuclear programme as it develops?
Lord Williams of Mostyn: My Lords, I cannot give a categoric answer to that question—the reason being that the meetings took place this morning and had not entirely concluded by the time I came to this House. If it is of assistance, and I am sure it will be, I will research the matter, write to the noble Lord and place a copy of the letter in the Library.
Lord Archer of Sandwell: My Lords, did my right honourable friend and the Prime Minister seize the opportunity to clarify the attitude of the regime to the fatwa against Salman Rushdie? Did Mr Kharrazi confirm that the regime is now opposed to the organising of murder in the territory of other countries?
Lord Williams of Mostyn: My Lords, when my right honourable friend the President of the Council was Foreign Secretary, several years ago, he obtained a
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public declaration on the Iranian Government's attitude to the unlawful, wholly unacceptable fatwa issued against a British subject.
Lord Howell of Guildford: My Lords, is not the most careful balance required? On the one hand, we surely do not want to be seen to be endorsing some of the revolting practices to which the noble Lord, Lord Corbett, has drawn attention, which have continued under the present clerical regime in Iran; on the other hand, we need the support of Iran both in Afghanistan and in the developing situation in Iraq. Will the noble and learned Lord ensure that in the present discussions and any future discussions, his colleagues bear in mind the need for that most careful balance?
Lord Williams of Mostyn: My Lords, the noble Lord is quite right. All that we are doing, particularly in the EU context, about trade and co-operation with Iran has been on the specific basis that binding commitments must be made by the Republic of Iran on various elements. We have made it absolutely plain that the practices referred to are simply not acceptable and should not be tolerated. We have made it plain that, if there are not binding agreements—for instance, on counter-terrorism—no trade and co-operation agreement will be entered into. I can assure the House and the noble Lord on that point. It is not quite a case of "across the wire the electric message came", but the diligence of the officials, as always, means that I do not need to write to the noble Lord. The matter was on the agenda for discussion.
Lord Clinton-Davis: My Lords, what response, if any, has been received from the Iranian Government to representations from the British Government?
Lord Williams of Mostyn: My Lords, there is a continuing dialogue. I return to the question put by the noble Lord, Lord Howell. We have an interest in the modernisation and reform of the regime in Iran. But, as the noble Lord, Lord Howell, implied, we cannot close our eyes to the matters that we find deeply objectionable. There are in some ways quite modest, encouraging signs of a degree of liberalisation within certain sections of the Iranian Government.
The Lord Bishop of Oxford: My Lords, was the question of the Kurds on the agenda this morning? In an interview on television about 10 or 15 minutes ago, Mr Kharrazi said that what concerned Iran as a neighbouring country was the territorial integrity of Iraq. One can understand that concern, because there is a Kurdish population in Iraq pressing for a greater degree of autonomy, as there is in Iran. That clearly affects not only the Kurds but the stability of the whole area.
Lord Williams of Mostyn: My Lords, the security of the whole area was under discussion. I remind the House that the Prime Minister's Statement that I repeated in this House earlier this week referred to the territorial integrity of Iraq.
Lord Avebury: My Lords, is the noble and learned Lord aware that many people are anxious about the

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fact that, although we have had what has been described as a constructive dialogue on human rights with Iran for some time, there is never any feedback about what the Iranian regime has undertaken to do? Should we not be using the reports of the Special Rapporteur on Iran, and those of the thematic rapporteurs such as the rapporteur on religious intolerance, to measure whether Iran has made any progress in meeting its human rights obligations?
Lord Williams of Mostyn: Yes, my Lords, we ought to use all reliable material to further the balance of judgment referred to by the noble Lord, Lord Howell. In some instances there has been progress. For instance, it is generally recognised that there is significantly enhanced freedom of press criticism in Iran compared with five or 10 years ago. I do not pretend that the Government do not remain deeply concerned about these matters, as I hope I have made plain.
Lord Clarke of Hampstead: My Lords, is my noble and learned friend aware of the demonstration by Iranian citizens in this country that took place this morning? Will he comment on the remarks made during the demonstration that a number of people coming to London from other parts of Europe had been detained at Dover in the public interest, and that phone calls were being made to the people across the road from here explaining that they thought they were being prevented from attending a peaceful and democratic demonstration?
Lord Williams of Mostyn: My Lords, I am sorry that, for the reasons I gave the noble Lord, Lord Wallace, I have no knowledge of the demonstration. If I can find out anything useful, of course I will write to my noble friend and put a copy in the Library. But I stress that, having been to Cabinet, I came over here to do other work.

Business
Lord Crocott: My Lords, with the leave of the House, immediately after the Motion in the name of the Chairman of Committees and the associated referrals to Grand Committee. my noble friend Lady Crawley will repeat a Statement which has been made in another place on Iraq: further contingency preparations.

Procedure of the House: Select Committee Report
3.31 p.m.
The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move the Motion standing in my name on the Order Paper.
This report deals with only one matter: namely, a proposal to create a Northern Ireland Orders Grand Committee. That would provide a forum, similar to
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the Grand Committees that consider other Bills, for the discussion of Northern Ireland orders. The orders concerned are those that would be dealt with by the Northern Ireland Assembly but come before the House while devolution in Northern Ireland is suspended. Each reference to the Committee would be the subject of a Motion in the House. I beg to move.
Moved, That the 2nd Report from the Select Committee be agreed to. (HL Paper 49)—(The Chairman of Committees.)
Following is the report referred to:
Proposal for a Northern Ireland Orders Grand Committee
The Committee has received from the Leader of the House a proposal for the establishment of a Committee to consider Northern Ireland Orders which come before the House while devolved government in Northern Ireland is suspended. The Leader's memorandum is printed as an Annex to this Report.
The Committee commends this proposal to the House. We propose that the Committee should be entitled the Northern Ireland Orders Grand Committee to reflect the fact that its procedures will be similar to those of other Grand Committees. As the Committee will have no fixed membership, there need be no formal motion of appointment and the House's agreement to this Report will provide authority for motions to be moved to apply, the new procedure to specific orders.

ANNEX
Northern Ireland Orders: memorandum by the Leader of the House
In the run-up to Christmas, Lords interested in Northern Ireland affairs complained that Orders in Council under paragraph 1 of the Schedule to the Northern Ireland Act 2000 were receiving inadequate scrutiny in the Lords. These are the Orders which do the work of NI Assembly Bills while the Assembly is suspended. I agreed at the Despatch Box on 16 December to the proposition that "the usual channels should look at this matter with a degree of urgency".
Having consulted the usual channels and other interested members, I now invite the Procedure Committee to recommend the creation of a "Northern Ireland Orders Committee".
The Committee would be of open membership, like a Grand Committee. If it was considered that a particular Order warranted its attention, then following discussion in the usual channels I would move a formal motion referring the Order to the Committee. The Committee would, I hope, be able to meet at any convenient time and at fairly short notice. I accept that resource constraints apply, and in particular that it should not meet at the same time as a Grand Committee. It would meet in the Moses Room if this was available.
The Committee's proceedings would be the same as in Grand Committee, with the Chairman of Committees or a Deputy in the Chair, a Minister speaking for the Government, and a section in Hansard. Its only business would be "to consider the So-and-So Order", and its report would say only that it had done so.
The motion to approve the Order would be taken on the Floor of the House, as at present. There would be no bar on further debate at this stage (and if necessary a division); but in most cases an Order considered in Committee might be expected to be approved without further extensive debate.
It is important that this initiative is not seen in any way as a signal for long-term suspension of the Assembly, By definition, Orders of this type are made only when the Assembly is suspended. When the Assembly is restored, which the Government hope will be soon, the new procedure would lapse.
On Question, Motion agreed to.

Education and Libraries (Northern Ireland) Order 2003
3.32 p.m.
Lord Williams of Mostyn: My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That the draft order be referred to the Northern Ireland Orders Grand Committee.—(Lord Williams of Mostyn.)
On Question, Motion agreed to.

Strategic Investment and Regeneration of Sites (Northern Ireland) Order 2003
Lord Williams of Mostyn: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the draft order be referred to the Northern Ireland Orders Grand Committee.—(Lord Williams of Mostyn.)
On Question, Motion agreed to.

Planning (Amendment) (Northern Ireland) Order 2003
Lord Williams of Mostyn: My Lords, I beg to move the third Motion standing in my name on the Order Paper.
Moved, That the draft order be referred to the Northern Ireland Orders Grand Committee.—(Lord Williams of Mostyn.)
On Question, Motion agreed to.

Housing (Northern Ireland) Order 2003
Lord Williams of Mostyn: My Lords, I beg to move the fourth Motion standing in my name on the Order Paper.
Moved, That the draft order be referred to the Northern Ireland Orders Grand Committee.—(Lord Williams of Mostyn.)
Lord Strathclyde: My Lords, I wonder whether the noble and learned Lord, Lord Williams, might consider having a referral made to the Procedure Committee so that such Motions could be taken en bloc in future, rather than the noble and learned Lord having to move them separately every time.
Lord Williams of Mostyn: My Lords, I agree and have nothing to add.
On Question, Motion agreed to.

Energy (Northern Ireland) Order 2003
Lord Williams of Mostyn: My Lords, I beg to move the fifth Motion standing in my name on the Order Paper.
Moved, That the draft order be referred to the Northern Ireland Orders Grand Committee.—(Lord Williams of Mostyn.)
On Question, Motion agreed to.

Budget (Northern Ireland) Order 2003
Lord Williams of Mostyn: My Lords, finally, I beg to move the sixth Motion standing in my name on the Order Paper.
Moved, That the draft order be referred to the Northern Ireland Orders Grand Committee.—(Lord Williams of Mostyn.)
Lord Renton: My Lords, bearing in mind that there is no Northern Ireland Assembly now, and that the budget of Northern Ireland deeply affects the lives of all the people there, is there no other way in which that budget can be approved by the Parliament of the United Kingdom except merely by our being asked to approve an order which does not enable the budget to be altered in any way?
Lord Williams of Mostyn: My Lords, I think that the noble Lord has mistaken the nature of the orders that I have been moving. On 16th December, a number of your Lordships, including the noble Lords, Lord Glentoran and Lord Smith of Clifton, raised the perfectly reasonable point that we needed a more expansive opportunity to discuss these orders for the reasons that the noble Lord, Lord Renton, gave. Accordingly, we have agreed—with remarkable speed, I think—to set up a new procedure, which is the Northern Ireland Orders Grand Committee procedure, which will give us our opportunity to discuss these orders. I stress that they then come back to the House for approval.
Lord Renton: My Lords, I thank the noble and learned Lord for that explanation. It will enable noble Lords to look forward to the occasion, even though it is mainly a responsibility of another place.
On Question, Motion agreed to.

Iraq: Further Contingency Preparations
3.35 p.m.
Baroness Crawley: My Lords, with the leave of the House, I will repeat a Statement that has been made by my right honourable friend the Secretary of State for Defence in another place. The Statement is as follows:
"I would like to make a Statement on further contingency preparations in relation to Iraq. In a Statement on 7th January, I announced the deployment of maritime forces including 3 Commando Brigade

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Royal Marines and a substantial naval task force. In a further Statement on 20th January, I announced the composition and deployment of land forces involving Headquarters 1 (UK) Armoured Division, 7th, Armoured Brigade, 16 Air Assault Brigade and 102 Logistics Brigade. Today, I would like to set out to the House our plans for the deployment of air forces.
"As with the Royal Navy, the Royal Air Force already maintains a significant presence in the Middle East region, routinely involving around 25 aircraft and 1,000 personnel. For more than a decade, the Royal Air Force has played an important part in patrolling and enforcing the northern and southern no-fly zones in Iraq, in support of UN Security Council Resolution 688, to provide the Iraqi people with some protection from Saddam Hussein's regime. In carrying out this task, they have on many occasions been attacked by Iraqi forces. I am sure that the House will join me in saluting their courage and professionalism.
"As part of our contingency planning over recent months, we have been considering carefully what additional air capabilities may be required in the event of operations against Iraq. The details of this planning will necessarily continue to evolve.
"It is in the nature of air forces that they can be deployed over long distances more rapidly than maritime or land forces. But we envisage that in the days and weeks ahead we will increase the Royal Air Force presence in the region to around 100 fixed-wing aircraft supported by around 7,000 personnel, including members of the Royal Auxiliary Air Force.
"This will be a balanced and highly capable force, including E3D Sentry aircraft for airborne command and control; Jaguar and Tornado aircraft in the reconnaissance role; VC 10 and Tristar air-to-air refuelling aircraft; Hercules transport aircraft; Tornado F3 aircraft with the newly integrated ASRAAM missile providing an air defence capability; and Tornado GR4 and Harrier GR7 aircraft providing an offensive capability should it be required, including precision-guided weapons. The RAF Regiment will protect the deployed forces.
"In addition, the Royal Air Force element of the Joint Helicopter Command will deploy a very substantial proportion of its equipment and personnel, providing helicopter support to other deployed forces. Its contribution will consist of 27 Puma and Chinook helicopters and about 1,100 personnel.
"I also take this opportunity to pay tribute to the work of the Royal Air Force's air transport squadrons who, in addition to operating in the region itself, will be working to maximise capability in deploying and sustaining forces of all three services, supplemented as necessary by civilian charter aircraft.
"As with the maritime and land forces that we are deploying, these air deployments will provide a balanced and flexible force package, bringing together a wide range of capabilities. I do not intend
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to discuss the specific tasks that might be undertaken. But it will be obvious to the House that this represents a very substantial contribution by the Royal Air Force to the building of a credible threat of force in support of the policy objectives which I have previously set out for the House.
"I have now announced the composition and deployment of forces from all three services. I recognise that this may tempt some people into speculation about the likelihood or timing of military action. But it is still possible for Saddam Hussein to change his behaviour, co-operate actively with the weapons inspectors and disarm by peaceful means.
"But as my right honourable friend the Foreign Secretary has said, time is running out. The Iraqi regime must decide whether it will comply with its obligations or face the consequences".
My Lords, that concludes the Statement.
3.41 p.m.
Lord Vivian: My Lords, I am most grateful to the Minister for repeating the Statement made by the Secretary of State in another place earlier today. From these Benches I once again assure Her Majesty's Government of our support on the situation in Iraq.
This is a helpful Statement. It leads to a number of queries. I cannot help feeling that although such Statements keep us up to date with the situation as it develops, the time has come when there should be a full debate in this House on the overall situation in Iraq, putting the whole matter into perspective. I believe there is a strong feeling in the House for holding that debate in the very near future. There have been two full debates on Iraq, the first on 24th September, when Parliament was recalled, and the second on 28th November. Will the Minister convey our request that there should be a full debate in the near future?
Turning to the Statement, the scale of deployment by the Royal Navy, the Army and the Royal Air Force, although absolutely necessary, is an exceptionally large commitment for all three armed services to take on and can only exacerbate dire overstretch. One hundred fixed-wing aircraft and 27 Puma and Chinook helicopters, supported by 8,100 RAF personnel, is a very major commitment which will strain the availability of pilots. The Minister will be aware that there is an overall 7 per cent shortage of combat pilots in the RAF. To sustain operational readiness, what steps are being taken to bring manning levels of combat pilots to the agreed establishment? Are reserve combat pilots being called up? It is noted that there is no mention of any provision of combat search and rescue facilities. Perhaps the Minister can comment on that.
There is also no mention of inter-operability with the United States air force. Can it be confirmed that our aircraft have the capability of inter-operability? It appears from the Statement that the FA2 Sea Harriers are not being deployed. They possess the outstanding Blue Vixen radar. They operate a superb advanced medium-range air-to-air missile, and the air

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temperatures at this time of year would not adversely affect the engines. Will the noble Baroness explain why they are not being deployed?
The Statement starts with the deployment of ground forces. In my reply to the Statement made on 20th January, I asked a number of questions that the Minister said he would write to me about. I have received no letter yet and I have written to him listing my questions again. I do not intend to repeat them. Will the noble Baroness say why the desertisation and the correct colour painting of Challenger 2 tanks cannot be completed at sea during the journey to Iraq? However, the news that new desert uniforms will be available for our troops in theatre before any conflict starts in the Gulf is most welcome.
Finally, I am unable to understand why the commander of British forces has not been publicly nominated for overall command in the Gulf. Perhaps the Minister can explain why the nomination has not yet been announced.
Our contribution to the Gulf is a very large commitment for British forces. We on these Benches have full confidence in the ability of our commanders and troops. They are highly skilled, devoted to duty and extremely well motivated. Their morale is high. Their courage and professionalism will ensure success and they will complete all their tasks in an exemplary manner.
3.46 p.m.
Lord Redesdale: My Lords, I thank the noble Baroness for repeating the Statement. Our thoughts on these Benches go out to those who will shortly be flying off to the Gulf. The noble Lord, Lord Vivian, referred to morale. I hope the Minister can say what actions are being taken to deal with morale problems among the troops. There seems to be a great deal of debate in this country over whether this is a justifiable action. Those questions will be reflected among the men who are going over to the Gulf at the moment.
Considering these large troop deployments, a question has to be raised about the sustainability of the process. We hope very much that the inspectors will be given the time and space to complete their job, because that will be the most effective way of bringing about disarmament. However, if so many troops are left there for a long period, is it realistic to believe that the Army can meet its other commitments?
Are the questions raised in the press about aircraft serviceability actual problems? There was a question about one quarter of the aircraft not being available for service at the moment. We have asked before but have not received an answer to the question: under whose command will the forces be? If action is undertaken, the first units to be involved in any action will be from the air force. Will the air force be directly under American command or under British command?
I have a couple of smaller questions. One that has obviously raised its head, although it could almost be seen as frivolous, is whether, considering the
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deployment of RAF personnel, the planners of any action will take significant steps to make sure that the historic heritage of Iraq is not destroyed in any air campaign. It has been damaged in the past. Iraq is incredibly well endowed with buildings from all periods of history.
Is the use of cluster bombs being considered? There are serious concerns about cluster bombs. We still have real concerns too about the use of depleted uranium. That is a particular concern if the current speculation about British forces being used in the long term to secure the peace in Iraq means that they will be dealing with decontamination after the use of depleted uranium rounds.
I conclude with the most important question. I should be happy if the Minister could answer this if not the others. Will the Government consider a debate on Iraq, as the noble Lord, Lord Vivian, flagged up? The UNMOVIC inspectors are giving their crucial report on 14th February. If a decision to take action were made on the back of that report it would be seen as almost irresponsible of the Government not to have brought forward a debate in this House. I say that specifically because time is short. Will the Government consider, if necessary, recalling the House of Commons from its short recess?
3.50 p.m.
Baroness Crawley: My Lords, I thank the noble Lords, Lord Vivian and Lord Redesdale. I am grateful for their support. I agree to take to the usual channels the request of the noble Lord, Lord Vivian, for a substantial debate. I am sure that we will get a positive response. I was asked to do the same by the noble Lord, Lord Redesdale, and I am happy to do so.
The noble Lord, Lord Vivian, referred to the scale of commitment. We are aware that this is a major commitment. It is extremely large, much larger than the deployment in the Gulf War in the early 1990s. We can say with full confidence that we are capable of undertaking this deployment while still providing the requisite number of personnel to support the home front and any operations required here. Early preparations and careful management have ensured that a commitment of forces on this scale is manageable. That was the concern expressed by the noble Lord, Lord Vivian. We are a flexible organisation, and we will continue to respond to new demands on our Armed Forces as they arrive.
I was asked about steps to bring forward reserve personnel. The noble Lord, Lord Vivian, will know that a call has gone out to reservists. We have 1,600 reservists from the Royal (Auxiliary) Air Force who will be deployed in that role. The noble Lord also asked about the way in which we are enforcing the no-fly zone operation. As he knows, we have a number of aircraft in the region on a key humanitarian mission, enforcing the Iraqi no-fly zones. Following that deployment, we will begin to increase the Royal Air Force deployment in the region to some 100 fixed-wing aircraft, supported by some 7,000 personnel.

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I was also asked why Sea Harriers were not being deployed. Without going into too much detail because of the need to ensure that there is security protection in all our plans, it is to do with the nature of the amphibious operation.
I am sorry that the noble Lord, Lord Vivian, has had no reply to his correspondence. I shall look into the matter and ensure that he does get one. He asked about paint for desert camouflage and equipment. We have ordered sufficient paint to apply desert camouflage to vehicles on Operation TELIC. Some vehicles will be painted before they are transported to the theatre and others when they arrive. The Government see no problem with painting on the ground as well as transporting to the theatre. I can also tell the noble Lord, Lord Vivian, that the announcement on senior commanders will be made today.
The noble Lord, Lord Redesdale, asked about the morale of our Armed Forces. I believe firmly that there is no doubting the commitment of our Armed Forces to the job should they be asked to take part in military action. We shall keep them informed so far as possible regarding their future in the coming days, weeks and months. The noble Lord will know that an operational welfare package is being rolled out as we speak, looking clearly at the operational welfare needs of our troops in the field.
I was asked whether the inspectors would be given time. They have been given eight weeks so far. We shall hear from Mr Blix next week when he reports back to the UN Security Council. The Iraqi regime has been given something like 800 weeks to comply with the UN resolution. The onus is on Saddam Hussein to prove that he has no weapons of mass destruction or, if he has, to disarm.
The noble Lord, Lord Redesdale, asked where the British forces would ultimately find their command and control. Ultimately, they come under the command of the British Government, as my right honourable friend Geoff Hoon said in another place today.
On historic heritage, I have no doubt that any action will be sensitive to the wonderful historic environment in Iraq. I shall write to the noble Lord, Lord Redesdale, on cluster bombs—I do not have any brief in front of me on that. I recognise his concern on the issue of depleted uranium, which has been raised several times in this House over the years. However, the Government do not believe that there is robust evidence that the amount of depleted uranium envisaged would be harmful.
On the matter of a parliamentary debate, I understand that Members are keen to have such a debate. That will depend on how we can ensure that Parliament is closely consulted on military action, should it come to military action, which we still hope it will not. One hopes that Parliament will be able to be consulted before military action takes place, but if the security of our troops is in question, Parliament will be consulted as soon after the start of military action as possible.
3.59 p.m.
Lord Bramall: My Lords, I assume that all these deployments have the full support of the Chiefs of Staff. If war is inevitable, as sadly now seems likely, can the Minister assure the House that British troops will not be committed to battle without the clearest of national political aims? Those must include not only the initial objectives but also, once the battle is won, the interim political arrangements in Iraq itself in view of the great risks of internal strife. There must also be a clear exit strategy. The last two will always be much more difficult than the first.
Baroness Crawley: My Lords, I agree very much with the noble and gallant Lord, Lord Bramall. I repeat that no decision has been taken to launch military action against Iraq. However, it would be quite wrong to take forward military contingency planning without taking into account the humanitarian and post-conflict considerations to which he referred. Any coalition force on the ground would bear responsibility for the immediate future and security of the country in the aftermath of any operation. We take very seriously our current and potential responsibilities towards the Iraqi people. In the aftermath of any conflict, Britain would remain at the forefront of efforts to help them.
Lord Jopling: My Lords, can the Minister give an assurance that when aircraft are deployed, they are properly prepared for combat in that region? We do not want a repeat of the situation in the previous Gulf War when deployed Tornado aircraft had to return to this country so that the cockpit warning lights—which negatived the crews' infra-red night flying facility— could be filtered. That situation should have been foreseen, but it was not. Can she give an assurance that such matters have been foreseen this time?
Baroness Crawley: Yes, my Lords, I can give that assurance. Preparatory steps to increase the readiness of air assets in the region through adjustments to existing deployments were announced on 22nd January. We take very seriously the points which the noble Lord makes, and we shall apply them to any future deployment.
Lord Hardy of Wath: My Lords, does my noble friend agree that if Saddam Hussein is able to maintain his current course much longer, it will represent an enormous international failure and the possible castration of the United Nations as the world authority? My noble friend's Statement today at least means that the finger of blame will not in future be directed at the United Kingdom. Despite the commitment from the United States and ourselves, there is still a risk that Saddam Hussein will pursue the same scorched earth policy that he pursued to great environmental damage and economic cost in the retreat from Kuwait. In order to deter such a development in Iraq should military conflict begin, would it not be appropriate for Iraq to be informed that any damage done in Iraq in pursuit of such a

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policy will mean that Saddam Hussein, his family and those responsible for the Baathist party will—down to the sixth cousin—be required to pay the appropriate compensation?
Baroness Crawley: My Lords, I agree very much with the first part of my noble friend's contribution. Should the decision be taken to instigate military action, I believe that Saddam Hussein will be dealt with very firmly.
Lord King of Bridgwater: My Lords, does the noble Baroness recall that perhaps the single most courageous contribution made at the start of the previous Gulf War was by the RAF pilots involved in the airfield denial programme to prevent the Iraqi air force flying? Today's announcement on similar aircraft and similar requirements is therefore all the more sombre and significant. Everyone hopes that that will not be necessary. However, the single most important contribution to the avoidance of war is the credibility of force so that Saddam Hussein knows that he has no way out.
Our military forces will provide that credibility on the ground. However, it is the duty of their political masters to ensure that there is credibility about the position of the Government, Parliament and people in support of the forces engaged in this undertaking. Saddam Hussein keeps himself very well informed about public opinion and western opinion by means of international television. I am concerned that the wrong signals will be sent. If there is not greater public conviction, which it is the Government's duty to try to achieve, there is a real risk that he will not get the message, perhaps making war inevitable.
Baroness Crawley: My Lords, I agree wholeheartedly with the comments of the noble Lord, Lord King, on the credibility of force. He speaks from great experience in these matters. The message that should be going out to Saddam Hussein is that Iraq has failed both tests of United Nations Resolution 1441 by failing to disclose and failing to co-operate, and is in material breach of the resolution. These deployments, with earlier deployments announced in both Houses, are in support of that resolution. Time is now running out for Saddam Hussein.
Lord Judd: My Lords, does my noble friend accept that the House has heard her comments today in the context of the Prime Minister's commitment to seek a second and specific resolution from the United Nations authorising the use of force? Does she also agree that concern about the political analysis and political objectives is not limited to the noble and gallant Lord, Lord Bramall, and the Cross Benches, but that, among all of us who are thinking about this desperate situation, there is a real anxiety to know the Government's analysis of the political aftermath in Iraq and in the region should force be used? To deploy men and women to fight on our behalf without being satisfied that that analysis has been thoroughly done would be unsatisfactory.
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Does my noble friend also agree that there is concern about the humanitarian dimension, not only on the Liberal Democrat Benches? We cannot have it both ways. We say that the people of Iraq are suffering under a tyrant. While the noble Lord, Lord King, is obviously right to talk about the credibility of possible force, there also has to be a credibility about our commitment to the people of Iraq. Can she assure us that in our preparations, strategic arrangements and tactical planning, the punishment to innocent civilians will be kept to an absolute minimum? It is not simply a matter of cluster bombs, although that is important, but of how the general campaign is conducted.
Baroness Crawley: My Lords, I acknowledge my noble friend's concern in these matters. I also pay tribute to his political work in promoting the route to peace. We are committed to going down the UN route, as we have been from the start. As my noble friend will know from Statements in this House and in another place, we would prefer to have a second resolution, and we are working hard towards having one. He asked about minimising damage. If military action has to take place, and we still hope that it will not, we will regard it as a damage limitation exercise. We are very aware of the problem of civilian casualties. We want to ensure that civilian casualties and infrastructure damage are kept to the minimum. I assure my noble friend of the Government's commitment, and the commitment of all partners in this endeavour, to the ultimate welfare and well-being of the Iraqi people.
Lord Elton: My Lords, the noble Baroness will recognise that an important part of getting the right signals to Saddam Hussein at the moment is securing the unequivocal support of Parliament and the public. Will she convey to the usual channels therefore that the wish for an early and full debate at the present time is not something merely expressed by Front Benchers but is also warmly felt by Back Benchers certainly on this side of the House and, I suspect, elsewhere?
Anti-personnel cluster bombs are among the most hideous of weapons as they are unreliable, a large percentage remain unexploded, and they look rather like things children wish to pick up. The results of doing so are perfectly horrific. We should like to hear something more on that matter than a letter from the noble Baroness to the Liberal Democrat spokesman. It should be the subject of an undertaking given in debate.
Nothing has been said about medical support. I believe that a field hospital has been sent out. Is there extra provision for the RAF? I always understood that British forces are under the command of Her Majesty's Government, but that where they assist other, larger forces, they are often under the command of those forces locally. I assume therefore that there is an American element intervening between Her Majesty's Government and the supreme commander of our forces in the area. The question that some of us would like answered is whether the British contingent as a

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whole is subordinate to the American commander, or whether it will be broken up. Will the air arm, for instance, be under a separate command?
Baroness Crawley: My Lords, the support of Parliament and the public is essential. Indeed, Parliament gave its overwhelming support in a vote on 24th November. It is essential in this whole process continually to involve Parliament. Not only Front Benchers but also Back Benchers in this House wish to have a substantial debate on this issue. I shall ensure that noble Lords who have spoken receive copies of any detailed response that I give today on the status of cluster bombs. We, as a country, are signed up to the Ottawa Convention. We take very seriously the fact that we are a signatory of the convention. We would not countenance having anti-personnel cluster bombs at any of our bases or using them in our UK operations.
The noble Lord asked about command and control. I can only repeat what the Secretary of State said earlier; namely, that the British forces will ultimately be under the command and control of the British Government. He does not want at this stage to go into any further detail on planning.
Lord Marlesford: My Lords, am I right in assuming that the Government would not have deployed forces on this scale without having estimated the financial cost of so doing and being satisfied that it is affordable in the present economic situation? If so, will the Minister share with us what that estimate of cost is at present'? Have the Government also estimated the cost of possibly committing all these forces to military action? Do the Government have it in mind that other countries which may not take part in the military action, or deploy forces at all, should be asked to contribute to the cost? I think particularly of countries in the Gulf, other members of the EU and other members of NATO.
Baroness Crawley: My Lords, financial estimates of the cost of the deployment are made on a continual basis. I cannot go into any detail but I can say that it will cost whatever it takes. We shall ensure that our forces are equipped to carry out their duties in this operation whatever the cost. I cannot go into further detail as regards obligations of other countries. As the noble Lord knows, many other countries are now considering deployment and are actually deploying.
Lord Glenarthur: My Lords, will the noble Baroness answer the question that my noble friend Lord Elton asked about medical reserves? I declare an interest as chairman of the National Employer Advisory Board for the reserve forces. Perhaps she will encompass in that answer whether or not today's announcement entails further deployment of more reserve medical forces.
Baroness Crawley: My Lords, I understand that the announcement today is additional to a call-out order that was made under Section 54(1) of the Reserve Forces Act 1996 on 7th January for possible operations against Iraq, following which call-out notices sufficient to ensure 1,500 reservists were sent out. In broad terms our requirement for the RAF is about 1,600 reservists. We are talking about 900 medical staff of whom 100 are doctors.
Earl Attlee: My Lords, I remind the House that I have a direct interest in this matter. My noble friends Lord Vivian and Lord Elton, and the noble Lord, Lord Redesdale, asked who would be in command. Is not the reality that a US commander will have operational control of our forces—what we call OPCON? Is that not a perfectly sensible arrangement? Is not one of the weaknesses of our European partners that they will not agree to such an arrangement and therefore are of far less utility to the US commanders? As regards the painting of vehicles, the infra red reflecting paint used on vehicles is highly toxic. Can I take it that we shall adhere to UK health and safety regulations when applying this paint in theatre?
Baroness Crawley: My Lords, I really cannot go any further this afternoon on the detail of command and control. All I can say is that, of course, we shall work closely with our American allies. Ultimately British forces will be under the control of the British Government. I can confirm that our health and safety regulations will be upheld.
Lord Mayhew of Twysden: My Lords, I did not hear the noble Baroness reply to the question asked by my noble friend Lord Vivian about the interoperability of our air component with American counterparts. I hope that it is not unfair to ask her to deal also with the matter of whether our front-line units on the ground will be equipped with communications that enable them to speak directly to their American counterparts.
Baroness Crawley: My Lords, the British Government are confident that there will be effective interoperability between our own troops and the United States forces. I believe that my noble friend Lord Bach talked about radio communications in a previous Statement on this issue.
The Earl of Liverpool: My Lords, when repeating the Statement the noble Baroness mentioned the deployment of 27 helicopters. I believe that those comprise Puma and Chinook helicopters. However, she did not say anything about the Apache helicopter. Will any of those be deployed and, if so, how many?
Baroness Crawley: My Lords, I do not know, but I will write to the noble Earl.

Welfare of Farmed Animals (England) (Amendment) Regulations 2003
4.20 p.m.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty)The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty) rose to move, That the draft regulations laid before the House on 14th January be approved [7th Report from, the Joint Committee].
The noble Lord said: My Lords, I will also speak briefly on the draft codes of recommendation for the welfare of pigs and cattle, which were laid on 9th January.
The regulations implement Council Directive 2001/ 88/EC and Commission Directive 2001/93/EC by amending the Welfare of Farmed Animals (England) Regulations 2000 as they apply to pigs. The key provision of the directives is an EU-wide ban on close-confinement sow stalls, to be in place by 1st January 2013. Noble Lords will be aware that that provision has already been implemented in the UK, not without some controversy, and sow stalls for housing dry sows have been banned in the UK from 1st January 1999. We are therefore ahead of that change. I will deal with the other main changes that will be brought about in the regulations, which are mainly to Schedule 6 to the 2000 regulations.
Schedule 6, Part II, covers general additional conditions. All animals must have permanent access to manipulable materials to enable investigation and manipulation activities. There are also detailed provisions for concrete slatted floors. Schedule 6, Part IV, on sows and gilts now contains a requirement to group-house sows and gilts, minimum space requirements, minimum pen-side lengths and a minimum continuous "solid" lying area for sows and gilts. Existing buildings have, again, until 1st January 2013 to comply. Part V of Schedule 6 concerns piglets and introduces an increase in the minimum weaning age from 21 to 28 days, with the exception of "all-in/ all-out" systems.
The pig directive will be subject to reviews in 2005 and 2008 that will cover other matters including castration, space allowances and floor types for weaners and rearing pigs. The 2008 review will also consider farrowing systems. Proposals to amend the directive will be based on Commission reports.
I shall turn briefly to the codes of recommendation for the welfare of pigs and cattle. In both cases, the existing codes date back to 1983. New codes have therefore been prepared in what I hope is a more user-friendly format, highlighting legal requirements alongside the advice sections. Welfare codes are made under Section 3 of the Agriculture (Miscellaneous Provisions) Act 1968. In the event that a livestock keeper is prosecuted for causing unnecessary pain or unnecessary distress or suffering, a breach of the code can be brought forward in evidence.
The pig welfare code provides guidance on the new regulations for farmers. The new cattle code is issued in the absence of specific EU legislation. However, it takes account of the recommendations in the
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independent Farm Animal Welfare Council's dairy cattle report, and the Council of Europe's recommendations on cattle.
I need to point out a couple of drafting errors in the version of the cattle welfare code before us today. The references to "pigs" in paragraphs 23 and 40 should, fairly obviously, read "cattle". Following this debate, the correct version will be the one used for guidance to cattle farmers.
The regulations and new codes apply to England only. All three have been subject to full public consultation. Similar regulations and codes are in the process of being produced in Scotland, Wales and Northern Ireland. The regulations and welfare codes are an important part of the Government's animal welfare strategy, and with that in mind I commend the draft regulations to the House.
Moved, That the draft regulations laid before the House on 14th January be approved [7th Report from the Joint Committee].—(Lord Whitty.)
4.24 p.m.
Baroness Byford: My Lords, before I go into the detail of the regulations, perhaps I may express my dismay to the Minister. I think that he is already aware of my concern, because he referred to the errors in the cattle code. At best, it is sloppy; if not sloppy, it is shoddy; if not shoddy, it is complacent. What is the department doing?
The NFU brief to my colleagues in another place for the debate that took place on Tuesday was dated 26th January, the date when the NFU picked up the errors. The matter was raised by my honourable friend Jonathan Sayeed when he referred to the mistake in his speech on Tuesday. I understand—I can only say that I understand, because no Hansard is available to us at all at this stage—that the Minister, Mr Morley, said that it was a typing error.
Erskine May and typing errors may be all right on Tuesday, but it is two days later, yet the House is asked to approve something that is not correct. The noble Lord may brush it off lightly, but it is not a light matter. I would like him, perhaps after my and any other comments, to come back to the issue of whether we should approve the cattle code in particular, in which the errors occur. It is very difficult when Hansard is not available to us, and I understand that it will not be available before Monday at the earliest. I do not know whether the Minister has a brief of what went on, but I cannot get one. I have tried here in the Printed Paper Office and through the Library in the Commons.
I also understand that in the debate that took place in another place on Tuesday the Minister implied that the copies ready to be sent out to farmers were correct, and said "cattle" and not "pigs" where they should say "cattle". If those copies were available, why on earth were they not made available to us? It seems nonsense to have a correct copy available and yet ask us to consider something incorrect. Perhaps the noble Lord will comment on that.

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The noble Lord pointed out the two errors that were picked up in two paragraphs. However, paragraph 137 of the cattle code refers to "animals". Does that mean cattle, calves or something else? If it means calves, surely the provision should be in the section that starts at paragraph 95, which deals with calves. The cattle section also talks about electronic prods. Although we are all keen that those are used very sparingly and obviously not used on animals under six months of age, they are still a valuable way to try to get cattle to move forward if there is space when perhaps they are reluctant.
The National Pig Association raised several queries with the pig code. At the outset, I should say that obviously all farmers support and want to work towards high standards of animal welfare, something that we have traditionally always done and would continue to do. However, I want to ask several questions of the Minister.
Does the code of recommendations that deals with pigs apply equally to those pigs kept outdoors? That is not made clear. Obviously, some recommendations refer to indoor pigs, but I am not sure whether the code covers outdoor pigs.
What evidence do the Government have that the new welfare measures, for example, will be fully implemented in other member states? Do the measures mean that third-country imports that reach us will, also have been subject to the same animal welfare standards? If not, will the Government ban the importation of such meat? The Minister will know clearly—he has only to look at the figures on the production of sows in our sow-breeding units in this country—that we have already exported much of our pig trade.
It is totally unacceptable that we set standards and are within the EU, which also accepts those standards, if other countries can import into the EU and the UK meat produced to standards that we ban. All that is happening is that, in the first instance, we are putting our farmers out of business. Even more worryingly, we are exporting animal welfare problems. I am sure that the Government do not wish to do that.
Does the Minister accept that if such regulations and requirements are gold-plated in this country, that puts UK producers at a competitive disadvantage? What are the Government doing to encourage trade in Britain's high-welfare pigmeat at home and abroad to ensure sustainability in the industry? It is hard to see how the industry can be sustainable if additional requirements continue to be placed on it.
The number of UK sows has contracted by 40 per cent and has been replaced on the home market by cheaper imported products, which come from units that use lower standards. I understand that DEFRA's regulatory impact assessment puts the implementation costs of the proposed legislation at between £8 million and £14 million. Are the Government considering giving any aid to the industry to help with that, or do they expect the industry to absorb those costs?
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The code of conduct refers to sudden noise and continuous noise and suggests that that is not acceptable. I understand what "continuous noise" means but can the Minister explain what "sudden noise" means? How is that assessed and how can farmers avoid it?
I turn to the inspection and enforcement of the regulations. Will they be EU-wide or will it be up to each country to implement them? Other EU countries have sometimes borne the costs of additional legislation. Will that be the case with these new codes and, if so, which countries will adhere to them? Will the Minister confirm that the codes are suggestions and do not implicitly have legal status? Will all other countries implement them?
I turn to a matter that is not directly relevant to our debate. The House of Commons Library produced information about pig farrowing crates, in which a DEFRA official spokesman said:
"Indeed, in Britain we have some of the strictest legislation in the EU to protect the welfare of pigs … and in several respects these go beyond EU requirements, most notably by banning from the beginning of 1999 the use of closed confinement in stalls and tethers".
There are also pig welfare codes that encourage good husbandry. Failure to follow those codes of recommendation can be used in evidence in court to support welfare prosecutions. Will the Minister enlarge on that? Either a code is a code or it is a way of bringing evidence against someone. The situation needs to be clarified.
The code does not refer to the position of fallen stock. Why was it not included in the code? If it is included and I have overlooked it, I apologise to the Minister.
Finally, much though we encourage and welcome high standards of animal welfare—we are happy to pursue that, provided that other countries do the same—do the Government accept that what consumers buy is invariably determined by price rather than their hearts? While some people would like to buy British food, they often buy the cheaper food on offer.
I apologise to the House for taking so long. I hope that the Minister will return to my first complaint in particular, which was that the code of conduct is unacceptable as it is because it is still technically incorrect.
Lord Jopling: My Lords, I would like very much to—
Baroness Miller of Chilthorne Domer: My Lords—
Lord Jopling: My Lords, I am so sorry; do forgive me.
Baroness Miller of Chilthorne Domer: My Lords, from these Benches, I look forward to hearing from the noble Lord, Lord Jopling. However, I believe that it is my turn now.

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I want to make some brief points—if I do not make them briefly, I expect that the Conservative Front Bench will concede that there will be no time for the Minister to reply to the noble Baroness or myself.
Baroness Byford: My Lords, will the Minister clarify that this is not a time-limited debate?
Baroness Miller of Chilthorne Domer: My Lords, I apologise to the Front Bench; I understood that it was.
Baroness Byford: No.
Baroness Miller of Chilthorne Domer: My Lords, I apologise to the noble Baroness.
I, too, was surprised that no Official Report of the Commons debate on Tuesday was available to help me. I am afraid that not having Hansard means that we may duplicate some of the points that were made from our Benches in that debate. Those points may have received a reply but we have no official record of that, which is very unhelpful.
I turn to the substantive points of the new code. It is pleasant that we in this country are ahead of the game for once. We can rightly be proud of our standards of animal welfare. If as a society we have decided to eat meat, we have as a society a moral obligation to ensure that animal welfare standards are an important consideration.
The current supermarket consolidation issues mean that we have been bombarded by supermarkets telling us what a good job they are doing sourcing their fresh meat from British producers. That is increasingly the case with fresh meat but I fear that it is far from being the case with processed meat and ready meals. Considerably more can be done on that issue in terms of customer awareness, not least by the Government, to encourage further moves in terms of labelling. We have had several assurances that that will happen but the evidence in the freezers is still not there.
I agree with the Minister that the welfare codes are plainer, which I welcome. There is a list of publications at the back of the codes with which farmers must comply; it contains a frightening list of reading material that must be completed. Some of it relates to the new regulations and farmers' duties to themselves and their employees—they must ensure that employees are trained and knowledgeable about all the relevant issues. Those requirements are very complicated. What progress have the Government made in terms of DEFRA advisers helping farmers to work their way through that?
Has DEFRA made any forecasts about the effect of the cost of implementing the codes on a diminishing industry? I understood that the costs were just over £14 million. Does DEFRA intend to help in any way? The new regulations refer in a couple of places to energy issues, such as heating for piglets and lighting requirements. Is DEFRA doing any work on energy-saving plans for farmers and more innovative ways in which energy issues can be approached, such as heat exchanges and so on?
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I regret the fact that animal regulations were the subject of rather cheap jokes about pigs and football when serious matters were being raised. The debate should have offered a good opportunity to examine the issue of animals living as naturally as possible while under severe confinement.
I ask that the UK Government address the issue of electric goads, which, I understand, will continue to be permitted. However, we feel that if the training were sufficient, the use of such goads should diminish over time. Technology has enabled us to use them, but they are not used by the many very competent stock handlers with whom I am personally acquainted, who do not regard them as necessary.
I turn to two final small points. In reconsidering the code, I wonder whether the Government will concede that the section on injurious weeds needs to be reconsidered in view of the fact that many public agencies—for example, Network Rail, the Highways Agency and, indeed, local authorities— have a long way to go, particularly with regard to ragwort.
Finally, I turn to the new agri-environment schemes on which the Government are currently consulting. Paragraphs 79 and onwards of the cattle code set out a requirement for outdoor shelters, such as hedges and trees. Will that be read over into the type of agri-environment scheme help that farmers are considering grant-aiding?
Lord Tanlaw: My Lords, first. I declare an interest in that I have a family farm in the hills and uplands of Dumfriesshire. I wonder whether, for a good farmer, the regulations are necessary at all. Any good farmer carries out most of these tasks as a matter of course. Obviously, they are, and must be, approved to ensure that there is a general standard of good welfare in relation to contained animals.
I want to ask a simple question concerning the end of the chain of husbandry—that is, the slaughterhouse. Like other noble Lords who have complained, I asked at the end of last week for the two pamphlets from the noble Lord's department, but I received them only an hour or so before today's debate. I wonder whether any work is being carried out on the way that we slaughter animals as against the methods employed by other religions. Do we do so in a centralised slaughterhouse on the basis of hygiene? More and more animals are being sent to a central point and are having to wait for the end, so to speak. I believe that that period creates, or could create, a chemical change inside the body of the animal, similar to that which takes place in a fox when it is chased, as referred to in the Burns report.
There may be a simple answer to my question but it is an issue to which I cannot find a reference. There has been a great increase in the incidence of cancer in the western world—mainly intestinal cancer and so on. Has any research been carried out on people who eat red meat and on the rate of cancer that occurs following what I call the "Christian" way of slaughtering—that is, slaughter carried out under regulations governing the welfare of red meat animals at slaughter, those concerning pre-slaughter handling, and the stunning

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and sticking pocket guide that we use? I wonder whether a difference exists in the various methods of slaughter and whether any work has been done on that.
The idea of a centralised slaughterhouse may be based on hygiene, with the conditions laid down by the European Union being adhered to throughout Europe. But I am concerned that, because a larger number of animals now wait to be slaughtered, that may create a chemical change inside the body of the animal. I do not know what effects are brought about—I am not a doctor; nor am I a vet—but I suspect that a change may take place which has a consequent effect when the meat is consumed.
Perhaps I may return to the subject of the point of death in an animal, whether as a result of hunting, in a slaughterhouse, or by the Islamic or Jewish method of slaughter—when a man in holy orders is present and the moment is considered to be almost sacred. When we slaughter animals in this country, there is much noise, shouting and banging of steel, and one is aware of the terrified silence of the animals as they await their turn.
Has work been carried out on this matter? We have done a tremendous amount of work on the constitution of the fox when chased by hounds, but that meat does not go into the food chain. How much work has been done on the subject of the slaughterhouse and its possible effects on the high incidence of rectinal and stomach cancer? Do we experience a higher rate of cancers in this area than in areas where meat is slaughtered in a different way?
My point is that, if there is any risk that we are slaughtering animals in the wrong way, we should reconsider the regulations. Of course, I approve of them because they appear to be eminently sensible in terms of good husbandry. But are they sensible in governing the way that red meat enters the food chain? I cannot find any papers on the subject. I regret that I have not had time to prepare fully for this debate, but I have not read anything that gives me any comfort that our method of slaughtering animals is the correct one.
4.45 p.m.
Lord Jopling: My Lords, I want to ask about the propriety—a point raised by my noble friend on the Front Bench—of discussing a document which is clearly wrong. I begin by declaring an interest as a farmer, although at present I do not own either cattle or sheep and I have no plans to do so.
I believe that it is totally contrary to parliamentary practice knowingly to debate a document which is faulty. I quote in support of that argument an experience that I recall from many years ago when I was a government Whip in another place. There was a great panic within the Whips' Office at that time because, in transferring a Bill from Committee to Report stage—I cannot remember what the Bill was— there had been an error in transposing a comma. After a day or more had been spent on the Report stage, I remember very well the advice of the parliamentary draftsman that the Bill should not be proceeded with
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and that, strictly speaking, the Bill should be withdrawn because there was a wrongly transposed comma between the two versions of the Bill.
I recall the discussion in the Whips' Office at that time concerning the disruption that that might cause to the Government's programme. I believe that it was a controversial Bill. The conversation in the Whips' Office and the business managers' discussions went something like this: "Perhaps the Opposition won't notice it. Let us see if we can get away with it". On that occasion, we did get away with it because the Opposition did not notice.
On this occasion, the Opposition have noticed. As my noble friend said, the Opposition and other groups noticed some time ago. I received the NFU's brief some days ago and noticed that it claimed that there was an error in the drafting of the document dealing with cattle. I thought that, by the time we came to debate the matter, no doubt the document would have been rewritten and we would have the correct version before us. But that has not happened. As my noble friend said earlier, that was some time ago and has been known for some time.
Remembering the experience of the early 1970s, which I recounted, if the parliamentary practice was wrong then I am perfectly sure it is wrong now. I can imagine the discussions within the department and with the business managers over this document on cattle where an error in the drafting is pointed out and the advice is, "Well, let's go ahead with it. Let's pretend it was just a typist's error. Let's just pretend it's neither here nor there".
If it was wrong to proceed over a comma, certainly it is wrong to proceed over a matter of transposing cattle and pigs. I see an old friend of mine on the Government Front Bench who was, some years ago, associated with the Opposition Whips' Office in another place. Perhaps I may say to him that our old friend Sir Walter Harrison, who if there was any justice in the world would now be a Member of this House, would have made his teeth meet over this matter. The Government would have been kept up all tonight and probably all tomorrow in forcing the withdrawal of this document and urging that the matter be dealt with in the proper way.
I believe that we are proceeding in a totally improper way. The Government should withdraw this document and let us debate one which is correct.
Lord Marlesford: My Lords, I rise on a similar point to that raised by my noble friend Lord Jopling. I am not concerned with the substance or merit of the regulations. Nor indeed am I concerned with or surprised by the incompetence of DEFRA in supplying faulty documents. However, unless there are clear precedents which make it appropriate in parliamentary procedural terms—having had a cursory look in Erskine May, I have not found any— to state that Parliament may approve legislation in any form knowing that it is incorrectly drafted, in my view the Government should take away their regulations and bring them back when they are correctly drafted.

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If we were to accept this and there were no other precedents, we would be creating what I believe would be a most undesirable one.
Lord Beaumont of Whitley: My Lords, without commenting on the points which have just been raised, except to deplore the fact that we have been given this faulty legislation, I should like to comment on the substance of the regulations on behalf of the Green Party and Compassion in World Farming.
We welcome the implementation into English law of the 2001 EU directive on pig welfare, and it is about pigs which I shall speak. The directive and the English regulations will bring about many improvements to existing legislation. Sow stalls and tethers will be banned, as they have been in the UK since 1999, which I applaud. They will now be banned across the EU by 2013. That is most welcome. Sow stalls are so narrow that the sow cannot even turn around and is kept like that throughout her 16-week pregnancy. The tethering of sows was banned in the 1991 pigs directive. That ban comes into force in Europe from 2006.
We also welcome the ban on routine tail docking and the requirement that pigs be given straw or some similar material. Tail docking, if properly done, is something to which I have no personal objection. It is usually done without pain or trouble. However, the EU's own scientific veterinary committee has concluded that it sometimes leads to prolonged pain. Therefore, I believe it is a step forward to ban it with a ban which is rather more enforceable than the one we have.
That brings me to the splendid idea that we should give pigs toys to play with. I grudge pigs nothing. I am afraid that I like eating their flesh, when I can. I am a great pig lover from that point of view. I like to think that they will be well looked after when they are being farmed. But I doubt if even Lord Emsworth would have thought of giving them footballs to play with. Although I have no objection to that, it should not be an alternative to what they really need; that is, straw, hay, wood, sawdust, mushroom compost, peat or a mixture of such, which enables them to indulge in what are called "investigation and manipulation activities". Certainly, they should not be an alternative, as appears from the wording of the regulations. I should like an assurance on that from the Minister.
The directive is due to be reviewed partly in 2004 and partly in 2008. During that period the overcrowding of fattening pigs should be carefully considered. The majority of the EU fattening pigs are kept indoors throughout their lives in severely overcrowded, barren and often filthy sheds. It is right that we should consider the question of castration, which causes severe pain and distress. It is true that castration is not really needed in a country such as ours which kills its pigs at an early age so that the meat does not have boar taint. However, the whole question of the age at which pigs are killed is one which is constantly open to review. Therefore, I believe it is right that we should ban castration.
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Serious consideration must be given to banning farrowing crates. While sow stalls are to be banned under the directive, farrowing crates will remain in use during the few days before birth and for three to four weeks afterwards. We believe that they should be replaced by systems which allow the sow to move around and perform nesting behaviour, while at the same time giving proper protection to the piglets. I know that the pig industry believes that farrowing crates reduce the number of piglets crushed by the sow as she lies down. However, there is now research which demonstrates that well-designed and managed farrowing pens which allow the sow proper movement can lead to piglet mortality rates which are no higher than those found in crates, to put it at its mildest.
We urge the UK Government to take a lead within the EU, as we already have—more credit to the Ministers and governments concerned—to push for all of these changes when the pigs directive is reviewed. It introduces some welcome reforms. However, much needs to be done to ensure proper enforcement of the directive. Some of the key steps required to achieve pig husbandry in Europe which is truly humane remain outside of the directive and must be incorporated into the directive during the 2004 and 2008 reviews. With that, I offer a general welcome to the regulations before the House.
Earl Russell: My Lords, the noble Lord, Lord Marlesford, has properly demanded a precedent for what the House should do about the printing of these regulations. There is a precedent. This is not my business. It is not for me to say which way that precedent should be taken to point. However, noble Lords might like to have it before them.
The Education (Student Loans) Regulations 1990 came before the House, I believe in October, with a large number of last-minute corrections made in ink, tightly bound, consisting of several pages. They had been extremely imperfectly photocopied so that a number of the words were partially or totally illegible. The Minister did his best to explain what the meaning of those words was or should be.
The House fairly rapidly arrived at two principles for consideration. First, though correctitude is of great importance, one should not unnecessarily disrupt the business of the House if the meaning of the regulation is clear. That was the advice which I, from the Front Bench, gave to my Chief Whip. But it also took up another principle, which is that one should tolerate this kind of error only if—I repeat "if"—the department concerned has made every proper effort to put it right.
We were just about to bite on the bullet and pass the regulations, when Lady Young rose from her seat with clearly printed copies of the regulations which she had just obtained from the Minister's office. At that moment, the House decided that its patience was exhausted and it adjourned on the joint Motion of Lord Boyd-Carpenter and the noble Lord, Lord Callaghan of Cardiff, until correct regulations were provided. They were a formidable pair.

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I understand from my noble friend that the Minister has provided a correct version of what the regulations should have stated. Was that done with the case of Pepper v Hurt in mind? If so, one might argue that it is in law binding and clear and could be correctly interpreted by the courts. That is the key question.
The other question is: does there exist anywhere, as there did in 1990, a fully corrected text which has not been put before us? If so, it should be put before us. If not, and if the meaning is clear, I think the House should exercise a forbearance, however reluctantly, which is in its discretion.
5 p.m.
Earl Peel: My Lords, I do not wish to undermine in any way the points made by the noble Earl, Lord Russell, but I want to return to the main purpose of the regulations. My noble friend Lady Byford from the Front Bench has admirably covered the implications of these regulations. I feel very strongly that this country is rapidly descending into a situation in which some of these European regulations are becoming a farce.
Farmers are constantly being told that every regulation that emanates from Europe will be gold-plated. Yet time and again, when other countries do not do the same, the net result is that our farmers are undermined financially.
The noble Baroness, Lady Miller, said that we have moral—I think she used that word—obligations to ensure that animal welfare standards are high. I do not disagree with that. But we also have a moral obligation to ensure that our farmers are not put at a disadvantage.
Many noble Lords have made reference to the briefing produced by the National Pig Association. I draw your Lordships' attention to a previously clear example of such legislation; that is, the UK legislation which banned stalls in early 1999. That was an admirable objective. However, the EU stalls ban will not be fully implemented by other EU countries for another 10 years and during that process our farmers will continue to be undermined by it.
What assurances can the Minister give that these new regulations will be implemented by other European countries, so that our farmers will not be disadvantaged? Can the Government prevent meat being imported into this country by producers from European countries which have not implemented them? I do not know the answer to those questions. I say only—and I reiterate the point—that farmers in this country are heartily sick of being undermined by European regulations with which we must comply while other countries do not.
I ask a final brief question. How can farmers avoid what is described as "sudden noise" when, as in my part of the world, they are constantly being overflown by RAF jets? I simply ask the Minister whether the MoD has been consulted on the matter.
Baroness Blatch: My Lords, I intervene to respond to the point made by the noble Earl, Lord Russell. Although I was not the Minister at the time, I
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remember the occasion well and I think the outcome was the right one. It was important that there should have been an adjournment so that those who were voting on that day knew precisely the wording that they were approving in the Chamber. But there is a distinction between that example and what we are debating today.
My understanding is that Pepper v Hurt is used when there is ambiguity about an order; in other words, when there is a form of words in an order about which there are different interpretations. The Minister having put the Government's official view of what is meant by the words, the House takes its view. At any subsequent tribunal, the Minister's words as recorded in Hansard can be used by the defence or by the prosecution.
However, this situation is very different. This is a mistake. That was known before the issue came before your Lordships today. There has been time to correct the order. It has not been corrected. It would be wrong for the House to approve a word completely different from that which should be on the order.
The order that is approved by the House will contain the wording that currently appears on the page. The wording on the page is plainly wrong. Therefore, I think that it is incumbent on the Government, who have not taken action when they could have done so, to withdraw the order and not invite the House to approve an order which is incorrect.
Lord Marlesford: My Lords, before my noble friend sits down, perhaps I may make a point and then the noble Earl, Lord Russell, can respond further. The difference in the precedent he quoted—and that precedent does not necessarily indicate that we should accept the situation put forward by the Government— is that the wording was not wrong but it was illegible because of a had Xeroxing machine. We are faced with incorrect legislation. That is a material difference.
Earl Russell: My Lords, perhaps the House and the noble Baroness will permit me to intervene. In the absence of my noble friend Lord Lester of Herne Hill, who was the successful advocate in that case, I wonder whether it might be thought that the question, "What is the correct interpretation of the words?" might fall under the same principle as the question, "What are the correct words?". I should have thought that the answer to that question might be yes.
Lord Whitty: My Lords, I first deal with the procedural issue. Strictly speaking at this point we are debating the statutory instrument—the order. There is nothing wrong with the text of that order—or nothing has been pointed out to me as being wrong with it. So far as the Government are concerned, there are no mistakes in the text of that order. That will be put to the House first.
The issue of the wrong wording relates to the code of practice to which we shall turn next. Therefore, it would be sensible if I dealt with the order first. For the convenience of the House, I shall deal with the other matter separately at the end of my remarks.

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A number of questions were raised by the noble Baroness, Lady Byford, and subsequently by others. I shall try to deal with them in terms of fact. The new proposals from Europe are binding on all countries in Europe. There is no gold-plating in this statutory instrument. We are simply transposing what is required by European standards. The confusion, perhaps, is that much of the directive deals with matters that we had previously gold-plated, the cost of which British industry has already incurred. There are arguments on whether we should have done that, but we have. Therefore, the impact on the costs of the industry and its method of operating is now less for us than for other countries. In response to the noble Earl, Lord Peel, there is no gold-plating in that. One could argue that, given our position, we are at an advantage compared to the rest of Europe as regards costs.
The objective of the directive is to improve animal welfare. As the noble Baroness, Lady Miller, said, we should be proud of our welfare provision rather than defensive about tightening measures. It is often queried whether the directives are being transposed and enforced as effectively in other European countries as they are here. In most cases where we examine those measures, enforcement in other countries is just as tight. The Food and Veterinary Office of the European Union can carry out spot-checks.
I welcome the noble Baroness, Lady Byford, back to our proceedings. She has enlivened them no end and prolonged the debate beyond what I had expected. I am glad to see her back.
There is no causal relationship between the economic status of the pig industry, which, I accept, is not good, and the regulations. The pig sector in the UK has had bad economic times. We have seen an increase in imports; a decline in production; and a decline in pig numbers. But imports have come almost entirely from the rest of the European Union. One could argue that that partly reflects the differential regulatory situation on sow slaughters, but that is not the case with this directive. The European Food and Veterinary Office has the right to insist that standards should be the same for imported meat into Europe as they are within Europe. Europeans in the current WTO round are arguing strongly that they should retain that right. But, hitherto, the imports have been from within Europe, where everyone is bound by the same regulations.
The impact assessment projects costs of up to £14.5 million, based on the worst case assumption that every pig farm would have to implement all the measures. In reality, probably less than 10 per cent of the pig industry would have to implement all the measures. Most are already in place in large parts of the sector. The noble Baroness, Lady Byford, asked about the status of the codes of practice. They are governed by the Agriculture (Miscellaneous Provisions) Act 1968. She rightly described their status as statutory codes of practice, which can, therefore, be cited in court. But they are not directly enforceable as statutory instruments are. That is a common situation. The noble Baroness also asked
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whether the code covers fallen stock. It does not. It is dealt with through other activities, but not in this statutory instrument.
In response to the noble Earl, Lord Peel, the regulations deal with avoidable sudden noise. Farmers can take some steps, such as dampeners on gates, doors, and so on. Noises from the Armed Forces and elsewhere are not covered. The regulations refer to the farmer's responsibility only.
Large amounts of written material are referred to in the code, but it is intended to give clear guidance rather than go through all the literature. The noble Baroness, Lady Miller, said she thought it was a clearer effort to describe the situation.
The department is engaged in activity relating to heating and lighting to improve the energy efficiency of farming. The issue of toys, as described in much of the national press, has received the most public comment. The situation is much more straightforward than it seems. In good pig husbandry, animals must be diverted from tail-biting. Although tail-docking can be carried out effectively, the European Commission recommends that it should not be the routine reaction to tail-biting. It is far better to provide them with an alternative; namely, malleable straw or other materials, to divert them from attacking each other. The regulations do not include the word "toys". Although, there is a reference to "football" in the welfare code, it states that a football might be used but is unlikely to be a permanent feature. Therefore, if anything, the code discourages the use of footballs. Many pig farmers already observe the requirement to provide material to ensure that pigs do not engage in excessive tail-biting.
The noble Lord, Lord Beaumont, mentioned castration and farrowing, the consideration of which has been deferred by Europe. Europe will return to the issue of castration in 2005, and farrowing in 2008. In the mean time, more research is being done in those areas.
In response to the noble Lord, Lord Tanlaw, I am not aware of any medical evidence that answers his questions on different methods of slaughter. Although different methods are carried out by different people, it can be done on licensed premises only; therefore, equivalent conditions operate. I would be surprised if a difference existed, but I am not aware of any literature that proves the point one way or another.
I have answered most of the questions on the statutory instrument and the pig code of welfare. There has been more procedural controversy about the cattle code of welfare. The only substantive question was whether Paragraph 137 applies to calves. It is contained in the section on dairy cows, so it refers only to adult dairy cows.
In only two places in the code, the word "pigs" has been inserted instead of the word "cattle". It is an obvious error, which does not require several pages of annotated description as given in the precedent referred to by the noble Earl. It is therefore clear which amendment is needed. We laid the draft codes on 9th January. There is no procedure for altering the code before we debate it. In

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the Commons, such matters are dealt with in Standing Committees. It is not unusual for the Standing Committee minutes not to be available by the time the Lords discuss the matter. That happened in this case. A point of order was raised in the Commons Standing Committee. The Speaker and the Committee decided to proceed on the basis that the Minister —my colleague, Elliot Morley— indicated that in both Houses we would need to replace the word "pigs" with "cattle". In both cases, the Commons accepted that and proceeded accordingly.
The situation is therefore clear, and I am not sure that any of the precedents to which reference has been made apply in this case. First, it is a code of practice, rather than a statutory instrument; secondly, there is no question of it being illegible or unclear in its meaning; and, thirdly. the matter has been pointed out at the earliest possible parliamentary opportunity.
When I move the welfare of cattle code, I will do so subject to the two amendments. No one who has sat through this discussion will be in any doubt about what the amendments would mean.
Baroness Blatch: My Lords, it is not just a convention but part of the rules of the House that one cannot amend a code of practice. On these Benches, we have tried many times to amend codes of practice. In fact, I believe that there is a debate about whether this House should be free to amend secondary legislation and codes of practice that come before us under the affirmative resolution procedure. At present, they cannot be amended. The House is being invited to approve something that, by all the rules, cannot be amended, even though the Minister says that it will be amended at some time in the future.
Lord Whitty: My Lords, the rules are strictly enforced with regard to statutory instruments. In this case, we are dealing with a fairly clear change that everybody in the House understands and which, in a sense, derives from the title of the code of practice. It would not amend any of the other aspects of the code, and the code is not directly enforceable in law.
It would therefore be a commonsense approach for the House to accept the explanation offered, as the Standing Committee in another place was prepared to the other night. Were we not to do so, there would be a conflict between the two Houses. It would be desirable to avoid that.
Lord Skelmersdale: My Lords, I take the point made by my noble friend Lady Blatch: it is impossible to amend an order or to approve an order that is about to be amended. Can I have a cast-iron guarantee that, next week, the department will lay an order making the required amendments? Under those conditions, I would be happy to support the orders this afternoon.
Baroness Byford: My Lords, before the noble Lord responds to that point, I shall give him a little more time to think about it. I was going to propose that we should move ahead with the statutory instrument, which I think is acceptable, although I cannot speak for other noble Lords. The pig code should be
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accepted, but the one dealing with cattle should be held and re-laid at a date when it can be considered properly.
Lord Jopling: My Lords, if the Minister does not wish to follow the procedure suggested by my noble friend Lady Byford, he must tell us by what authority in law the Government can change the code of practice between the printed edition that we have been debating and the one that will be distributed to the industry. It is not sufficient just to say that the Minister said on the Floor of the House of Lords—or of the House of Commons—that he wanted to change some words. I speak as a former business manager, and I think that the neatest way would be to pass the code now, on the understanding that an amended version will be presented to the House in the next few days, with the words corrected. That need not take us long, as we have debated the code this afternoon. As an alternative, the Minister could decide not to move approval of the code now but move the amended version, say, next week. I, too, cannot speak for my colleagues, but I would be surprised if they wanted a prolonged debate.
It is important that the House approves a document that is correct in law, rather than one that has been varied by extremely vague precedents.
Lord Marlesford: My Lords, the Minister says that the code is not legislation. Statutory instruments are subordinate legislation. As the Minister said, the code is quotable and, in a sense, enforceable. It is subordinate legislation to subordinate legislation, as it were.
If it were not possible, for technical reasons, to amend the wording so that the incorrect document that we approved could be reprinted without being submitted to the House and sent out to the industry; or if it were possible only to have a note saying that there were mistakes in the document and what the right wording should have been, that would be unacceptable. It would set a serious precedent for sloppy legislation in many areas. Sooner or later, some government—not this Government or any government that I might support— might be tempted to use that precedent to slip things through.
Lord Whitty: My Lords, the best way to proceed, as the noble Baroness, Lady Byford, suggested, is to agree the statutory instrument and dispose of the code on pigs, about which I detect no controversy. I will then say a few words about what we should do about the other code. Can we dispose of the other two items, now that we have taken time to digest the advice offered by the noble Lord, Lord Jopling, who, these days, is more scrupulous than he was in the Whips' Office in the 1970s?
I will come back to the other code. Can we dispose of the other two first?
On Question, Motion agreed to.

Code of Recommendations for the Welfare of Livestock: Cattle
5.27 p.m.
Lord Whitty Lord Whitty had given notice of his intention to move, That the draft code of recommendations laid before the House on 9th January be approved [7th Report from the Joint Committee].
The noble Lord said: My Lords, having taken advice and considered what was said by the noble Lord, Lord Jopling, I think that the best way to proceed would be for us to pass the code today, on the understanding that, were the legal position to be as the noble Lord described, we would bring it back for support. I recommend that course of action. Is the House prepared to do that?
Noble Lords: No!
Lord Whitty: My Lords, in that case, I cannot move the Motion. That is unfortunate. We could have cooperated on this.
Baroness Byford: My Lords, I am grateful to the Minister. He has said continually this afternoon that people in the House understand what is meant. However, people outside the House have not gone through the deliberations that we have had. I thank the Minister and accept the withdrawal of the code.
Motion not moved.

Code of Recommendations for the Welfare of Livestock: Pigs
Lord Whitty: My Lords, I beg to move.
Moved, That the draft code of recommendations laid before the House on 9th January be approved [7th Report from the Joint Committee].—(Lord Whitty.)
On Question, Motion agreed to.

Industrial Training Levy (Construction Board) Order 2003
5.29 p.m.
Lord Davies of Oldham: My Lords, on behalf of my noble friend Lady Ashton of Upholland, I beg to move that the draft Industrial Training Levy (Construction Board) Order 2003 be approved. I shall speak also to the draft Industrial Training Levy (Engineering Construction Board) Order 2003.
The proposals seek authority for the Construction Industry Training Board and the Engineering Construction Industry Training Board to impose a levy on employers in the industries that they cover.
Industrial training boards—or ITBs as they are known—are non-departmental public bodies that operate under the provisions of the Industrial Training Act 1982. Their role is to ensure that the quantity and quality of training is adequate to meet the needs of the
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industries for which they are established. They provide a wide range of services, including setting occupational standards and developing vocational qualifications, delivering modern apprenticeships and paying direct grants to employers who carry out training to approved standards.
The Act contains provision for a levy on employers to finance an ITB's activities and to share the cost of training more evenly between the companies in an industry. It is for the employer members of a board to make proposals for the rate of levy for the industry it covers and for the Secretary of State to make an order giving effect to the proposals.
The orders before your Lordships give effect to proposals submitted by the CITB and the ECITB for their 2003 levy. Each proposal involves the imposition of a levy in excess of 1 per cent of payroll on some classes of employer. The Industrial Training Act 1982 requires such orders to be approved by affirmative resolution of both Houses. In each case, the levies are based on employers' payrolls and their use of sub-contract labour.
For both boards the proposals involve levy rates in excess of 0.2 per cent with no exemption other than for small firms. In such cases, a levy order can be made only if the proposals have the support of organisations representing the majority of those employers who pay most of the levy. It has been established through consultation with the main employer organisations in each industry that we are considering that the proposals have that support.
The Act requires ITBs to exclude small firms from the levy and each of these proposals does that. In setting the level at which the exemption takes effect, the boards have tried to strike a balance between helping small firms to grow and giving them unfair commercial advantage. However, both boards are committed to supporting the training efforts of small firms, whether or not they pay levy. All companies need a skilled, competent workforce if they are to be competitive. Small firms in these sectors are encouraged to take advantage of the services offered by the boards and to provide opportunities for trainees and apprentices.
In the construction industry, a higher levy rate is imposed on employers' use of sub-contract labour than on their direct workforce. This is because, according to the industry, the vast majority of training is carried out by those employers with a directly employed labour force. Employers who opt to use labour-only sub-contractors tend to have a transitory arrangement with the sub-contractors and are not normally involved in their training.
In the order before your Lordships, the CITB proposes that both its levy rates should stay the same as those approved by the House last year—namely, 0.5 per cent of payroll for direct employees and 1.5 per cent of net expenditure on sub-contract labour. Employers whose combined payroll and net expenditure on subcontract labour is less than £61,000 will not have to pay the levy. That equates to an employer who employs 3.5 persons full time throughout the year. It is estimated that the provision will exempt 40 per cent of employers.

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In the engineering and construction industry, head offices and engineering construction sites are levied at different rates to reflect the fact that head offices, where workforces are more stable, are able to plan and manage most of their training needs themselves.
The ECITB proposes that both its levy rates should stay the same as those approved by the House last year. They are as follows: 0.18 per cent of the total payroll and net expenditure on sub-contract labour for head offices. Head offices whose combined payroll and net expenditure on sub-contract labour is £1 million or less will not have to pay the levy. This equates to an employer who employs around 40 persons full time throughout the year. It is estimated that the provision will exempt 80 per cent of head offices.
There will also be a 1.5 per cent of the total of payroll and net expenditure on sub-contract labour for engineering construction sites. Sites whose combined payroll and net expenditure on sub-contract labour is £75,000 or less will not have to pay the levy. This equates to an employer who employs four persons full time throughout the year. It is estimated that the provision will exempt 32 per cent of sites. The proposals are expected to raise between £109 million and £113 million for the CITB and around £11 million for the ECITB.
Your Lordships will know from our annual debate that the CITB and the ECITB exist because of wide support from employers and employer interest groups in these sectors. There is a firm belief that without them there would be a serious deterioration of training in these cyclical, peripatetic and project-based industries, leading to a real fear that their skill needs would not be met.
The draft orders will enable the two hoards to carry out their vital training responsibilities in 2003. I believe it right that the House should approve them. I commend the orders to the House.
Moved, That the draft order laid before the House on 20th January be approved.—(Lord Davies of Oldham.)
Lord Skelmersdale: My Lords, as the Minister said, the Construction Industry Training Board provides grants to the construction industry for training related to that industry. The majority of its training courses are devised for qualifying a construction workforce. I have no complaint about the CITB, which I know does an excellent job for the construction industry in general.
However, I want to raise a matter which, arguably, should not have to be mentioned on the Floor of the House but in a statutory instruments policy committee, which still does not exist in either House. However, as we heard during Questions last week, a proposal for such a committee is in the pipeline and will go before your Lordships' Liaison Committee at its next meeting. Be that as it may, there is a clear problem regarding the Construction Industry Training Board levy—although I am sure to be told that it has nothing specifically to do with this order.
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In a nutshell, what should be the position of a firm or, indeed, a sector, that derives no benefit from the board's training activities? That is the position in which hire companies find themselves. There is a very limited number of training courses for them, yet they contributed a mammoth £2.7 million to the board last year. The modern hire and rental industry provides not only items such as concrete mixers and cranes, but marquees, mobile mortuaries, wedding dresses and speed cameras. All are covered by the board's activities.
It is therefore not surprising that during 2001, the Hire Association Europe—the trade body for the hire and rental industry—mounted a legal challenge to the levy in the Queen's Division at the High Court. On 23rd November 2001, Mr Justice Keith handed down his judgment on the argument mounted by the Hire Association Europe that one of its member firms, Gibbon Equipment Hire Limited, did not cierive any benefit from the training offered. He found that although he did not believe that this fact assisted in construing the legislation, he did believe that it would be a good argument for saying that the letting out on hire of plant equipment should not have been included in the list of activities covered by the board in the first place—in other words, it was not the then current CITB training levy order that was at fault but preceding legislation.
For some reason, which I do not know, it was not until a year later that a Member of another place took up the issue with the Minister, Mr Lewis, a colleague of the noble Lord on the Government Front Bench today. He pointed out, I am sure quite correctly. that levy orders did not specify who was to pay the levy, only how; and, as the Joint Committee on Statutory Instruments found out, a de minimis size of firm, not, I repeat, the type of firm, a matter to which the Minister referred in his opening remarks.
The Minister's colleague said that the types of firm are to be found in SI 1992 No. 3048. I regret to say that they are not. The 1992 order is merely an amending order relating to the construction of the board itself. The order he should have referred to in his letter is SI 1964 No. 1079, and specifically Schedule 1 thereto, which does list types of firm—interestingly, by the operations they conduct rather than by the type of firm per se.
Noble Lords may think, as I do, that the Minister's letter was less than helpful. Were it not for your Lordships' Library staff this morning, I would not have got to the bottom of all this. However, having now discovered what the Minister's letter should have said, I must be fair and concede that he went on to say:
"I am willing at any time to consider proposals from the construction industry or any sector of it, including the hire and rental sector, to change the definition".
I am informed that a meeting between departmental officials and a Mr Coyne of the Hire Association Europe was held on 27th November last. However, to my knowledge, the results of that meeting seem to have disappeared into what the space industry calls a black hole.

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Was the Minister briefed on the outcome of that meeting? What is his current thinking on the matter? Lastly, and most importantly, would the Minister be receptive to a meeting with me and officials of the Hire Association Europe in order that we may right a wrong which has persisted for many years?
Lord Puttnam: My Lords, I do not wish to delay the House—the debate of my noble friend Lord Plant is already much delayed—but each year I rise to make a point about this order, which I believe is one of the most important orders to pass through the House. To an extent, it is misunderstood and not sufficiently appreciated.
The order represents a triumph for two important industries which have organised themselves in such a way as to create adequate training resources for the reasons set out by the noble Lord. But that is only part of the story. In their manifesto, the Labour Government committed to reviewing the whole issue of training levies across the spectrum. Many industries conform to exactly the same conditions as the construction and engineering industries—that is, they are transient and cyclical—and, for the life of me, I cannot understand why the Government will not pay attention to this important issue. It is impossible to underestimate what damage would have been done to the construction industry and the engineering industry had the order not been in place originally.
I raise the question now because there will be an opportunity to take another look at this issue during the passage through the House of the Communications Bill. The draft Bill creates an opportunity for the film, television and communications industries to commission an audit of skills and to recommend industry training standards for the entire communications world.
I am seeking some kind of amendment under which Ofcom would have reserve powers to impose a levy in the event of the industry wilfully ignoring its self-imposed strategy. I do not believe that that is unreasonable.
The most important point made by the Minister is that this is an arrangement made by the majority in the engineering and construction industries. The biggest single problem in Britain, where there is an overwhelming skills deficit in many industries, is that those industries are forced to go ahead at the speed of the most reluctant and recalcitrant funders of training. That is bad for the economy, bad for Britain and bad for those industries.
I commend the order to the House as an example of what is possible when industries are far-sighted and have a full understanding of the long-term implications of their training requirements.
5.45 p.m.
Baroness Blatch: My Lords, I wish to preface my words by agreeing at least with the thrust of the remarks made by the noble Lord, Lord Puttnam, to the effect that the encouragement of training can only be a good thing. We shall debate how that should be
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achieved, but we shall argue about the means to the end rather than the principle itself. Like my noble friend Lord Skelmersdale, I have no difficulty in agreeing that the CITB does a good job and that it has served the construction industry extremely well.
However, I hope that the noble Lord, Lord Puttnam, will agree that certain questions must be raised. First, I believe that the whole policy needs to be revisited and I wish to put that question to the Minister tonight. Secondly, some form of redress must be provided for those concerns which feel hard done by. Each year the orders pass through the House almost on the nod. The industry itself determines the levy; noble Lords agree that it is a good thing and the orders are approved. But within the construction and engineering sectors some companies derive no benefit whatever from them. They face a compulsory tax which they have no option but to pay. Therefore there ought to be in place a mechanism for redress, but there is none. That appears to me to lead to compulsory pressure and punishment.
In paragraph 3 of the regulatory impact assessment it states that:
"An employer who provides no training will have to pay a levy but will get no grant from the Board".
It is possible for companies to pay the levy and then to provide training at their own expense, but still receive nothing from the board. The board reaches a decision based on criteria approved by itself on who should or should not receive grant-in-aid. The sum quoted by my noble friend in relation to hire companies is £2.7 million. That is a great deal of money for which the companies see no return.
I wish to raise one or two further important questions. The House has two choices before it: either to reject the order or to accept it. The noble Lord on the Front Bench opposite need not send messages to his colleagues outside because I shall support the second option, but I do so with a number of reservations. In advising acceptance of the second option, the regulatory impact assessment states that the consequence of approving the order would be that,
"with its operating income secured, the board would be able to continue to organise, manage and fund the range of training services that have been developed on the industry's behalf. The cost would be shared between firms".
Who monitors the process and who determines the quality? Given that this covers one of only two compulsory boards approved by the Government, how do they satisfy themselves that the proposal represents good value for money?
Secondly, a note in paragraph 20 of the regulatory impact assessment states that:
"The purpose of the Industrial Training Act is to encourage adequate training in any given industry"—
at this point the points made by the noble Lord, Lord Puttnam, are important—
"The cost of training itself cannot be quantified in the examples which follow".
I must ask why the cost cannot be quantified. The scheme has been running for so many years that it should be possible for the Government at least to have some form of quantification with regard to the cost.

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The assessment goes on to state:
"It is not possible to estimate the extent to which the imposition of a levy/grant mechanism induces employers to incur additional training costs to those which they might or might not already be incurring, particularly as many employers will have operated under these arrangements for a number of years".
Again, unless those estimates are made, how can anyone determine the value that is added by the system? I cannot believe that it is not possible to measure its value and I wish to press the Minister a little on the point. How can the House state that the system is good and is working well, providing high-quality and a sufficient quantity of training, when the Government are not in a position to know what is being delivered?
Paragraph 1 of the regulatory impact assessment states that,
"the Secretary of State [is empowered] to set up industrial training hoards to ensure that the quantity and quality of training are adequate to meet the needs of the industry for which they are established".
However, the document also makes it clear that the Government cannot measure the quantity and quality of the training provided. How can the Government come before Parliament and state that they are ensuring that the quality and quantity of training is adequate to meet the needs of the industry?
As I have said, I seek to make two important points. The first concerns redress for those companies within the sector which feel hard done by because they are paying a tax from which they derive no benefit. in his opening statement the noble Lord on the Front Bench opposite stated that all those involved in the sector agree with the scheme, but noble Lords on this side have mentioned at least one rather substantial part of the sector, one which deals with its own training requirements, that receives no benefit as a result of the levy.
My final point relates to the examples given in the impact assessment. We are given a list of five examples, but no scenario is set out for any single one. We are told that there will be costs of £30 for completing a levy return and £30 for processing a levy assessment: we do not even know whether that is good value for money. Huge sums of money are incurred in completing grant claims. In one case it is £23,926; in another only £90; in another nothing at all. There are further sums mentioned of £2,364 and £21,000. It would be helpful to know the scenario for each of these examples in order to judge whether particular areas of industry within the sector are receiving value for money.
I support what my noble friend Lord Skelmersdale said on behalf of the board. It is incumbent on the Minister to give us the outcome of the meeting with Mr Coyne when at least the possibility of revisiting the 1964 order was discussed. If the meeting did not produce a definitive outcome, I should like to place on record our belief that the 1964 order should be revisited and that there should be a further examination of the definition of companies that qualify to come within the terms of this compulsory order.
Baroness Sharp of Guildford: My Lords, I have very little to say about the order. It is the first time that we have had the impact assessment when debating these orders. It is an interesting document to have, but I echo the words of the noble Baroness, Lady Blatch. It would have been more interesting had we been given slightly more information, and if, as she says, scenarios had been included with the figures. Blankly setting out the figures leaves one wondering what firms are involved and why the figures are what they are.
To echo the words of the noble Lord, Lord Puttnam, this is a scheme that the industry wished upon itself of its own volition when it had the choice of whether to carry the levy forward. It has received quite wide support. In the building industry there is a problem of what is termed "the lump"—the self-employed who in many senses are exploited—and the problem of the lack of qualifications. One sees that particularly in the domestic sector. Small firms are exempted from this provision, and the problem of the "cowboys" in the domestic sector is a very real one. It is one of the reasons why training is necessary. The danger of allowing each firm to say whether it will opt in or opt out is that those firms that opt out do not train anyone. We see this time and again. They spend no money on training and then they poach from those who have spent a great deal of money on training. That is the whole concept behind the levy system— otherwise, one gets free riders in the system.
It was agreed at the time when the industrial training levy boards were undone that those industries that wanted a levy system would hold a ballot and would agree among themselves. This provision is supported by the large firms in the industry which are beginning to do a great deal of training. Some are now pursuing a policy of not employing people who are not qualified—an approach we want to endorse.
On the whole, we endorse these procedures. We should like to see the issue of small firms in the industry considered; and perhaps some form of regulation on small firms considered more widely.
Lord Davies of Oldham: My Lords, I am grateful for the extensive debate we have had on the order, an increase of at least 50 per cent in the length of time spent on it last year. Useful contributions have been made. I shall take them in order and seek to reply as accurately as I can.
I hear what the noble Lord, Lord Skelmersdale, says about the question of whether an accurate response was received in the letter—namely, as to which order we are talking about. He is right that the scope of the industry does not come under this order, which is about the levy to be imposed. As I indicated, it is the same figure as last year.
Baroness Sharp of Guildford: My Lords, the hire equipment industry covers such plant as large cranes, and it is very important that people who are properly qualified operate them.
Lord Davies of Oldham: My Lords. I accept that point entirely; indeed, I accepted the entire contribution of the

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noble Baroness, Lady Sharp, when she emphasised the virtue of this system with regard to training. I was not indicating a restriction on the scope of the two training boards; instead, I was pointing out that this was not the order under which to debate the scope of their activities. This order is about the levy to be raised.
We have a small dispute with the noble Lord, Lord Skelmersdale, about whether we have accurately defined the situation in terms of the statutory instruments we are talking about. I do not want to be pernickety. but as we have just had a debate on agriculture which went on for about 50 minutes and revolved around the accuracy of the documents, I should point out that the reason we referred to the 1992 order is that it amended the Industrial Training (Construction Board) Order 1964. Therefore, if we are to effect change along the lines advocated by the noble Lord, we will seek to amend the 1992 order, which is more recent. That is the area I am seeking to clarify.
The noble Lord also made a more substantial point, to which the noble Baroness, Lady Blatch, referred, regarding the representations made by the plant and tool hire sector about the CITB's scope and whether it should be included. The noble Lord was very fair in acknowledging that these discussions have been going on for some time and that a significant number of representations have been made to Members of both Houses of Parliament. The Minister is in listening mode with regard to these representations; one meeting has already taken place. However, I assure the noble Lord that if he and his colleagues wish to make additional representations, now is the time to do so. Consultation needs to take place for a period of time and the outcome will determine whether amendments to the order are effected. I am grateful to the noble Lord for making that point and assure him that the Minister in another place will be pleased to receive representations on this front.
My noble friend Lord Puttnam was as creative as ever about the effectiveness of training in an area that he knows well. I hear what he says about the potential of the Communications Bill. In my experience, the Communications Bill has almost limitless potential for everything to come within its scope. He will know that Ministers in another place are struggling to keep a grasp on that which has already been fully covered in the legislation. I have no doubt that my noble friend is encouraging the Government to take the issue on board as well as serving due notice that he intends to use the debate on that Bill, when it arrives in this House, to further the important cause that he addresses so well.
Broadcasting has precious little to do with this order, but my noble friend tempts me. We all know that, as the noble Baronesses, Lady Blatch and Lady Sharp, said, the media are important areas when it comes to the effectiveness of training. My noble friend will seize his opportunity and I will also ensure that Ministers responsible for the Communications Bill—I have a very small part to play in it—will take due cognisance of his representations this evening.
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I shall answer one or two specific points raised by the noble Baroness, Lady Blatch. There is a structure for appeals against payment of the levy. Employers can appeal if they believe that they do not fall within the scope of the ITB or if they think that their levy has been wrongly calculated. Appeal in the first instance is to the ITB.
Baroness Blatch: My Lords, that is the point I was making. As long as the employers were within the scope of the order, even the judge who was sympathetic to their case was unable to help them. Once within the scope of the order they cannot do anything about it and once the levy has been agreed by the industry and approved by Parliament, there is almost nothing on which they can seek redress. There needs to be a voice or some mechanism for them at least to ask for a reconsideration of the definition of whether they should be within the scope of the compulsory levy. That is why the 1964 order is relevant to this debate.
Lord Davies of Oldham: My Lords, I hear what the noble Baroness says, but let us be clear about the concept of both these boards. They reflect the wishes of employers on the operation of these issues.
The noble Baroness indicated earlier that some aspects of how the boards work can create controversy in the industry. She seems to be asking for much greater government direction and interference with the body. We are saying that the boards have proper responsibilities on behalf of the industry. They know what their training requirements are. As the noble Baroness, Lady Sharp, said, the levy is imposed on those who fall within the scope because of the range and scale of their activities, for the very proper reason that otherwise they would be poaching on those who contribute to the levy and do the training while they themselves were getting off scot-free of any such obligation. That is the philosophy behind the boards.
We recognise that the legislation has survived periods in office of governments of both parties and makes a valuable contribution to the development of training in this country—significantly and differentially so. After all, there are only two areas in which these training boards exist. In other areas other strategies are employed.
The noble Baroness also asked how the Government monitored the performance of the ITBs. They are required to submit an annual report of their activities together with a statement. A copy of the annual report is laid before Parliament. Officials from the department attend all ITB board meetings and receive copies of all committee papers and minutes. Information about the performance of the boards is kept and followed in departments.
We have had a range of questions today about the philosophy behind the board and about its scope. I emphasise again that the order is concerned solely with the levy, which is at the same level as was imposed last year. Accordingly, I commend the order to the House.
On Question. Motion agreed to.

Industrial Training Levy (Engineering Construction Board) Order 2003
Lord Davies of Oldham: My Lords, on behalf of my noble friend Lady Ashton of Upholland, I beg to move the second Motion standing in her name on the Order Paper.
Moved, That the draft order laid before the House on 20th January be approved.—(Lord Davies of Oldham.)
On Question, Motion agreed to.

Regulatory Reform (Assured Periodic Tenancies) (Rent Increases) Order 2003
6.4 p.m.
Lord Evans of Temple Guiting Lord Evans of Temple Guiting rose to move, That the draft regulatory reform order laid before the House on 13th January be approved [8th Report from the Regulatory Reform Committee].
The noble Lord said: My Lords, this is the second order from the Office of the Deputy Prime Minister to be brought forward under the Regulatory Reform Act 2001.
The order proposes a small and quite detailed change to the procedure under Section 13 of the Housing Act 1988 for increasing rents for assured periodic tenancies. The change is small, but its potential impact is significant. It could change the timing of rent increases for over 1 million tenants in England and Wales. These are tenants of both private landlords and registered social landlords, commonly known as housing associations, with tenancies of less than one month.
First, I need to summarise for your Lordships the current ways in which rents are increased to set the context for the change that we are proposing. There are three ways in which rents for assured periodic tenancies can be raised. Landlords can include a provision in the tenancy agreement or come to a specific individual agreement with the tenant. By far the most common, however, is the notice procedure in Section 13 of the 1988 Act.
Section 13 contains three rules governing the timing of rent increases under this procedure. One is that the starting date for the proposed new rent must not be earlier than the first anniversary of the date on which the rent was last increased or, if the tenancy is new, the date on which it started. This "anniversary" rule was intended to provide what was regarded by Parliament as a reasonable annual period between rent increases. However, in combination with another rule—that increases can take place only at the start of the period of the tenancy—the anniversary rule has an unintended administrative consequence for tenancies of less than one month.
I shall explain with an example. In the case of a monthly, quarterly or annual tenancy starting, say, on Monday 1st April 2002, the timing rules enable subsequent rent increases to occur on the standard
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date of 1st April each year. For tenancies of less than one month—most commonly, weekly tenancies—the timing rules mean that the date of increase advances each year. For a weekly tenancy starting on Monday 1st April 2002, the earliest date for the first increase will be Monday 7th April 2003. For the second increase it will be Monday 12th April 2004, and so on.
For housing associations with many thousands of weekly tenants, this drift forward in rent increase dates is administratively inconvenient. For those with a mix of tenancies there may be the added administrative burden of having different and increasingly divergent rent increase dates for different types of tenancies. This drift forward of dates can be confusing to tenants.
The impetus for the order came from a number of housing associations and their professional representative body, the National Housing Federation, on their behalf. We know that many associations want to set a fixed day for increasing the rents for tenancies of less than one month. A fixed day is a day which, though it does not always fall on the same date, recurs predictably at the same point each year. Many associations wish to increase the rents for their weekly tenants on the first Monday in April each year. The order amends the existing rent increase procedure to allow this.
The order replaces the current anniversary rule with a provision that rent increases must take place at not less than 52 week intervals The provision is qualified by a condition that a minimum period of 53 weeks applies intermittently. The condition acts as a corrective mechanism to avoid the slight back ward drift in increase dates each year that would otherwise occur if landlords chose to increase rents at the first opportunity after 52 weeks. This prevents the cumulative drift back of rent increase dates, which would be to the detriment of tenants.
The order allows landlords to choose to set a fixed day for rent increases for tenancies of less than one month. It also allows landlords to continue to increase rents on a fixed date for tenancies of one month or more. We believe that the order removes or reduces the administrative burden imposed by the current timing rules. It also provides greater clarity and certainty for tenants because they would have a rent increase at the same time each year.
The Office of the Deputy Prime Minister consulted extensively on this proposal. The proposal received overwhelming support from both landlords and tenants, with over 90 per cent of respondents in favour. Many respondents thought that the proposal would be simpler to administer and make financial planning easier and that the incorporation of a fixed review day into a tenancy agreement would be easily understood by all parties. In addition, respondents said that the proposals would provide clarity for both parties and would be easier to explain to tenants.
The Select Committee on Delegated Powers and Regulatory Reform concluded that the proposal to allow landlords to set a fixed day for rent increases was appropriate within the meaning of the Regulatory Reform Act 2001 and that the order, as it now stands, is in a form satisfactory to be submitted to the House

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for affirmative resolution. I thank the members of the committee for the time they spent scrutinising the proposal and for recommending the proposal to the House.
The Regulatory Reform Committee in another place considered that the proposal reduced a burden imposed on landlords but that it also imposed a new burden on tenants. The new burden is that tenants may be required to pay increased rent at slightly less than full yearly intervals. However, the committee concluded that the new burden was proportionate to the benefit expected to result from its creation. The Office of the Deputy Prime Minister also provided an assurance to the satisfaction of the committee in another place that no landlords, or only very few landlords, are likely to apply the minimum 52/53 week period and increase rent at the first possible opportunity. We firmly believe that landlords will choose to set a fixed day for rent increases.
Finally, the committee in another place is satisfied with the guidance that the Office of the Deputy Prime Minister intends to give about the change in timing rules in the notes to the new prescribed forms for notifying rent increases. Those forms will come into effect the day after the order is made. The order was approved in another place. I now commend it to this House. It introduces a small but useful change of particular benefit to landlords with many weekly tenants. It also ensures that the rent increase notice procedure more closely reflects the original intention of Parliament. I beg to move.
Moved, That the draft regulatory reform order laid before the House on 13th January be approved [8th Report from the Regulatory Reform Committee].—(Lord Evans of Temple Guiting.)
Baroness Hanham: My Lords, I thank the Minister for that quite long but very welcome explanation of what this order is all about. Having heard the explanation, I understand why the lunar calendar was abandoned—it made life so complicated. I have only one question, on which he may already have touched, to which I should like a brief answer. What notification will be given to tenants in advance of these new changes taking effect?
Baroness Sharp of Guildford: My Lords, I, too, thank the Minister for his extensive explanation. We on these Benches agree that it is a small but useful reform. We, too, have just one question. We gather that the new order will require a new form, which is being prepared. Will the new form be ready at the same time as the order comes into force? If not, what will happen?
Lord Evans of Temple Guiting: My Lords, it might help the House if I explained how this new rule will be explained to tenants. The form will be available to be sent to tenants and to be put on the web almost immediately after the order is approved, if it is approved.
As regards what notification is given to tenants in advance of the change, the period of notice is likely to be—the one word that I cannot read is the final, all-important word. In the circumstances I shall have to
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write legibly to the noble Baroness. I apologise for not being able to answer what is a very obvious question. However, I am now informed that the relevant period is one month.
On Question, Motion agreed to.

Voluntary and Community Sector
6.15 p.m.
Lord Plant of Highfield Lord Plant of Highfield rose to call attention to the role of the voluntary and community sector in service delivery in the light of the report of the Strategy Unit Private Action, Public Benefit and the Treasury's crosscutting review; and to move for Papers.
The noble Lord said: My Lords, better very late than never. When my noble friend invoked the concept of backward drift in relation to rent increases, that well summarised our afternoon's experience!
I feel privileged to have the opportunity to move the Motion. The issues are very important for the health of our society, which depends upon a vibrant and diverse civil society of which the voluntary and community sectors are a part. The importance of the issues is attested by the number of speakers who have committed themselves to be here for a lengthy debate. I am grateful to all noble Lords who will take part.
I should begin by declaring a number of interests. I chair Centrepoint, the charity which provides accommodation and training to homeless young people in London and elsewhere. Centrepoint receives money from quite a number of statutory bodies. I also chair two other registered charities, although they are not service deliverers in the way that Centrepoint is; namely, Hope, which raises money for research in the University of Southampton Medical School and the Development Trust of the University of Southampton. I was until November 2002 the president of the National Council for Voluntary Organisations for the previous five years.
In an important speech given to the Social Market Foundation on Monday evening, my right honourable friend the Chancellor of the Exchequer made the point that we need to think very carefully about the precise relationship between the individual, the market, the state and the community in our society. While there may, of course, be political disagreement about his answer to the questions posed by this relationship, I am sure that all sides will agree that these are relationships of the utmost importance. That is part of the focus of this debate.
The market is indispensable for a free, productive and dynamic society, but it will not meet a whole range of needs of individuals and communities. At the same time, those of us on the Left—in the view of many rather belatedly—have become more and more aware of government failure as well as market failure. In that context it is natural enough that government should look to partnership with the voluntary sector to help in the delivery of services.
That is because, as the Treasury document makes clear, the voluntary and community sectors possess features which give service delivery by such groups an advantage—or an added advantage—over state delivery. As the document makes clear, these involve specialist knowledge and experience in—to take a couple of random examples—volunteer mentoring or using the experience of ex-addicts or ex-offenders to work with those at risk of becoming addicts or offenders. The voluntary sector can use that kind of experience, which would be much more difficult to replicate and use in the state sector.
Community groups and users of services are also involved in making an input into the planning and delivery of services which the voluntary sector can facilitate. That is important in the context of the Government's intention to maintain national standards while seeking local discretion on their implementation.
There is also the independence from traditional public sector agencies that enables services to be delivered in innovative ways. Along with that might go greater flexibility and less power for vested interests. There is also the possibility of access to the wider community, which might be greater than that available to representatives of statutory agencies. Many of those with whom the voluntary sector works may be very distrustful of most forms of officialdom, however well intentioned those officials may be.
Also, voluntary sector organisations are in many cases, although of course not in all, based in the communities that they try to serve. They will therefore be able to draw on a degree of dispersed, fragmented and local knowledge and understanding, which might prove difficult for statutory bodies and agencies to access.
Finally, the voluntary sector has a very important campaigning role. It not only draws attention to the most marginalised and powerless members of society, but through campaigns seeks to improve the delivery of collectively funded services.
Those are the features of the voluntary sector that we in it cherish, and that the Government want to mobilise in the interests of better service delivery for all our citizens. The central problem is how far it is possible for us to preserve those very features of autonomy, innovation, local knowledge and so forth if we are in increasing partnership with government. Also, how far can government, dispensing taxpayers' money to the sector, adopt a relationship with it that does not erode precisely the features on which they want to rely in order to improve service delivery?
We certainly need to avoid what the noble Lord, Lord Dahrendorf, recently called the nationalisation of the voluntary sector. That would be bad for service delivery. simply because it would drive out the distinctive features of the sector. At the same time, it would be bad for the culture of a free society, because a strong voluntary sector is important for such a society.
I am certain that the Government recognize—the two reports show that they do—not only the opportunities available to them, but the dangers. It is in that context that we need to consider how important are the reports.
It is an exciting and challenging time for those of us involved in the sector. In the past 10 years, for the reasons that I have given, we have seen a growing understanding of and work with the sector across government. Partnership has become a norm at least in intention, if not always in practice. Policy initiatives that are expected to impact on those in the voluntary sector are increasingly developed in consultation with it. The compact has embedded the role of the sector, its concerns and its legitimacy in government policy, and at the level of relationship between particular governmental departments and agencies and particular voluntary sector bodies.
In the past 18 months, the voluntary sector and the Government have worked together on the two important reviews, the Treasury review of the voluntary sector in public service delivery, published on 10th September 2002, and the Strategy Unit report on the legal and regulatory framework of the sector, published on 25th September. We have all committed a lot of time and effort to the reviews, and they offer an important opportunity to reform the environment within which we operate, which must not be lost.
To that end, it is crucial that all parties agree on the importance of introducing a charities Bill as soon as possible, to ensure that we can put in place a legal and regulatory framework to allow the charities and voluntary sector to thrive, preserve its distinctiveness and develop with confidence in future, as it has during the past four hundred years or so.
At the NCVO annual conference in 1999, my right honourable friend the Prime Minister said:
"History shows that the most successful societies are those that harness the energies of voluntary action, giving due recognition to the third sector of voluntary and community organisations".
The message was reinforced at the same conference the following year by the Chancellor, who said something very similar. Those speeches represented a step change in the way that the sector's role has been recognised at the highest levels of government. They signal that the Government have a clear commitment to the sector and its role.
Emphatically, however, the matter is not party political. At the charities break fast during the Conservative Party conference on 8th October last year, the Leader of the Opposition backed the need for a charities Bill. As I understand the development of Conservative social policy, the party certainly wants to place a great deal of emphasis on collaboration with voluntary sector delivery. Charles Kennedy, the leader of the Liberal Democrats, to whom I once had the pleasure of teaching philosophy—that shows how old I am getting—said at the Charities Aid Foundation annual conference:
"I believe that legislation is vital in the 2003–4 parliamentary session. If the Government misses this opportunity, the chance for change may be lost for a very long time".

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There is much cross-party agreement about how to move forward on these issues.
The delivery and reform of public services are clearly the biggest domestic political issues that we currently face. That is clearly a key issue for many voluntary organisations in their role either as service providers or representing service users. I briefly turn my attention to that.
I believe that there can and should be an important role for voluntary organisations and charities in the delivery of collectively funded services. Where they add value and distinctiveness, where they remove stigma and intolerance and where they are more flexible, innovative and personal than the state, they can and do make a significant difference to the most marginalised and disadvantaged in our society. Without that, millions of people would receive worse or even no support. Furthermore, I do not believe that that service delivery function need necessarily be corrosive of the values of such organisations. With strong governance and widespread use of the compact, organisations can retain their distinctiveness and deliver services.
The aim of the Treasury review was to consider the extent to which voluntary organisations already engage in public service delivery, the scope for greater involvement and what barriers might exist that government could remove or help the sector to overcome. We now have the outcome of that review and, on the whole, the voluntary and community sector has responded positively. However, it is clear that while the review and recommendations are welcome, their implementation is crucial. All of the consultation and partnership working will be in vain unless we ensure that at national and local levels the recommendations are made a reality.
The Government have recognized—this is very important—that they must pay a fair price for what they get from the sector. There is explicit recognition that government funding of the sector should include the relevant elements of an organisation's overhead costs. That is something for which the sector has long called and would make a significant improvement for many service delivery organisations. However, 70 per cent of voluntary sector activity takes place at a local level; how will that be implemented? How will local authorities be persuaded to regard the voluntary sector as a legitimate alternative provider of services? What levers have national Government identified to persuade or even force local government to take the sector seriously and to implement the letter and spirit of the cross-cutting review? There is recognition of the need to support the capacity of individual organisations. Investment must go into that capacity building, which is of crucial importance.
The report also includes extensive recommendations in relation to improving contracting and procurement processes in government. The Treasury is committed to producing new guidance, and there is also a commitment to develop a protocol on how government departments should engage the voluntary sector in programme development and service delivery.
We then come to the compact, which is pivotal in all of this. The Government have reinforced their commitment to the compact. That is extremely welcome, but it must be accepted that the compact is only an instrument for changing a wider culture in national and local government. There is still quite a long way for that cultural change to go. There is still too much of what one might regard as the principal/agent model, with the voluntary sector being seen as a kind of subordinate agent to the principal—namely, the local authority or government—rather than as a genuine partner. The compact is the best way of changing that culture, and I am pleased that the Government have reiterated their commitment to it.
In the short time remaining, I turn briefly to the issue of the reform of charity law. I do not believe that that is a side issue in terms of the delivery of services. We need a strong regulatory framework within which to operate. There has been strong support for the recommendation that all charities should be able to demonstrate that they provide a public benefit. It is a matter of simple logic and justice that any organisation wishing to have charitable status should be able to demonstrate that public benefit, as I am sure most of them will be able to do.
The proposals for new legal forms for charities and not-for-profit organisations are interesting. The report proposes the creation of community interest companies—a new form specifically to promote social enterprise. Will those be part of the sector or will they be in competition with it? That is an interesting development, but we do not yet know the answer to that. It will be important for those public interest companies to embody the values of the sector, despite the degree of professionalism, and so forth, that they will inevitably need to develop in order to be companies rather than straightforwardly voluntary organisations.
I believe that there is great support for the proposals aimed at reforming the Charity Commission—that is, that it should become a statutory body with clear objectives. We do not want more regulation but we do want the regulations currently in place to be properly implemented.
The tasks indicated in the two reports are important but delicate. We need community involvement and we need volunteering to develop active citizenship and the creation of communities which have a proper sense of responsibility for their own fortunes. At the same time, we need to ensure that the relationship with government is on a proper footing which does not threaten the very values for which the voluntary sector stands. Some people will think that the two are irreconcilable; I do not believe that they are. My Lords, I beg to move for Papers
6.31 p.m.
Baroness Howells of St Davids: My Lords, the report and the review we are discussing appear to have received strong support from both the London Voluntary Service Council and the National Council for Voluntary Organisations. I take heart from that. I know that the report will be discussed in general terms; I want therefore to use my privilege to call attention

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specifically to the role of the black voluntary sector in service delivery during the early years of the immigration of people from the Caribbean. It was the only means of getting services to the community.
It is no secret that I come from a background of community and voluntary service and that I did much to bring the black voluntary sector into the mainstream of the voluntary sector as it exists in the United Kingdom. I therefore declare an interest and thank my noble friend Lord Plant for moving the Motion.
The black voluntary sector, from meeting needs which manifested themselves in the early 1960s, has grown in strength and vibrancy in its contributions to welfare and in harnessing the energies of those least able to articulate their needs in a sophisticated society. There was no acknowledgement of, or provision made for, those from very small islands who responded to the call to rebuild a nation debilitated by the world war of 1939–45.
It took the energy of those more fortunate to unravel the complexities themselves and to harness the community to bring to the notice of the policymakers what was needed to encourage an almost trouble-free settlement. The organisations were formed around issues that affected the lives of the black community at that time. Many may recall the ancient "sus" law, which was used unreasonably by the police on black young men, and the voluntary action which led to it being removed from the statute book. Noble -Lords may also recall how the relevant Act of Parliament was modernised, making the law at least more just and fair.
Another area of concern was exclusion from schools. Voluntary action from the black community led to the establishment of the Saturday school, which grew into the now popular supplementary schools. These operate from church buildings and community centres. They have proved a motivation for many young people despite the attempts made by the system to label black children as educationally subnormal and to blame the victims for their failure rather than the system.
The black voluntary sector, with hard earned public and charitable grants, was at one time the main source of employment for the educated black community. It was the main seedbed for launching second-chance learners in youth work, social work, teaching and secretarial duties. Entering the voluntary sector as a volunteer led to career choices, job satisfaction and, above all, has provided much public benefit to the nation.
Organisations such as the Black Led Churches, Black Women Mean Business and the European Federation of Black Women Business Owners, to name just three, have all sprung from voluntary action on the part of those who saw a need and set out to fill it. The report deals with charitable status. The black voluntary sector regards charitable status as the single factor which has allowed the sector to raise much needed funds to carry out its work. Charitable status is seen as a green light to funders and must never be treated lightly. To the voluntary organisation it is
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recognition for the work it does. I ask the Minister to assure me that the goalposts will not be moved unnecessarily because the black sector has just about completed the work needed for charitable status.
I urge that charitable status should not be determined by reference to an organisation's activities or outcomes but by the objectives of the organisation. It is my belief that most, if not all, of the black voluntary sector will meet the test and achieve charitable status if its work is appraised. The introduction of the 10 charitable purposes should be seen as only the baseline as needs always change. They must be flexible enough to allow those at the forefront of the problem to take the necessary steps to deal with needs as they arise.
The proposed character test is troubling and leads me to ask who will set the test. Will it be ethnocentric or diversity intrinsic in its make up? How will preconceived prejudices be dealt with? I realise I have gone over my time. I have much to say on this subject, but I shall sit down.
6.38 p.m.
Baroness Miller of Hendon: My Lords, I have been chairman of the National Association of Hospital and Community Friends for the past five years. We are better known as the League of Friends. I speak tonight in that capacity. I thank the noble Lord, Lord Plant, for giving us all the opportunity to speak on this important subject.
I am continually impressed by the wonderful support of our 43,000 active volunteers, whose dedicated work and time given—indeed, at personal cost to themselves—adds so much to health and social care in this country. I often say that the health service would be in a much poorer state without their dedicated efforts.
As a national association, our role is to help and support individuals and leagues in their work and to welcome any developments that will assist in that. Recently, I have had to intervene in dealings with the Charity Commissioners and have been concerned by the time and expertise it has taken to achieve an answer, even to a relatively simple question.
We support the view, from our practical experience, that the Charity Commission should focus on its regulatory role—being responsible for registering charitable organisations, ensuring that these organisations still comply with charitable status and collecting annual reports and accounts. The advice and policy function of the commission should be limited to those activities.
We also support the concerns highlighted in the report as to the difficulties of challenging the decisions of the commission. Even as a large and mature national charity, we have found the systems both complex and frustrating and we would therefore welcome the proposal for an appeals tribunal. Cases could then be dealt with easily and with transparency.
We have 800 member leagues. The Strategy Unit's proposal to raise the registration threshold from £1,000 to £10,000 has been the issue that has caused

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most concern. Charitable status, as the noble Baroness, Lady Howells, said, is absolutely necessary in order to get the support of the public, to attract volunteers and when fund raising. We would also welcome any proposal that makes that registration easier and less time consuming.
In conclusion, we generally welcome the results of the report and commend the developments on the level of consultation and the quality of the conclusions. However, we believe that the number of proposals before us will certainly be a challenge for us all to achieve.
6.41 p.m.
Lord Dahrendorf: My Lords,
"This Government is passionately committed to the work of the voluntary sector".
Those are the words with which the Chief Secretary to the Treasury, Mr Paul Boateng, introduces the mysteriously named "cross cutting review" of the role of the voluntary sector in service delivery. I share that interest, as do many of your Lordships, and not least my fellow combatant for the cause, the noble Lord, Lord Plant, who brought about the debate. In my case, I should declare the fact that I am chairman of the Council for Charitable Support as well as a trustee of the recently founded Charity Bank, which, while both solvent and beneficial, is of course not allowed to be profitable by usual standards.
Behind the Government's commitment is a philosophy, which I should have liked to discuss given a little more time. It is most evident in the attempts first to link the state and the market—as in PPPs, public private partnerships—and now to add the link between public services and voluntary organisations (PVP).
The two papers which we are debating spell out the implications of such thinking. The Strategy Unit report on Private Action, Public Benefit provides the general framework. The Treasury's cross cutting review adds an "action plan for implementation". Important budget measures over the past few years and the setting up of The Giving Campaign chaired by the noble Lord, Lord Joffe, furnish the wherewithal for an approach that is identified above all with the Chancellor of the Exchequer, Mr Gordon Brown.
All that is highly laudable. I strongly support and commend it. However, I start from different premises; and while I enjoyed and continue to enjoy occasional exchanges with the Chancellor, I reach a different conclusion.
The state, the market and civil society are all needed in their own right. Trying to bring them too close may rob them of their innate strengths. I am not sure that the private forces of the market flourish in public/private partnerships. And I am sure that the deliberate marshalling of voluntary and community organisations for public purposes does something to civil society that is not altogether desirable.
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The Treasury review makes it clear at many points what it does. An example is:
"The Best Value Inspectorate should report on whether the full spectrum of options for involving the [Voluntary and Community Sector] in service delivery has been explored and this should form part of the comprehensive performance assessment being developed by the Audit Commission".
That has become familiar language. But is it how those of us of a more liberal persuasion envisage civil society? Would Alexis de Tocqueville have praised the United States of America for a "best value inspectorate" and "comprehensive performance assessments"?
For us as legislators the relevant issue in this context is the definition of charities. The other report discussed today—that by the Strategy Unit—suggests a "new definition of charity" to be embodied in statute law. Its key concept is that of public benefit:
"A charity should be defined as an organisation which provides public benefit".
The purposes are then spelt out. Even the miscellaneous option at the end of the list speaks of,
"other purposes beneficial to the community".
What about an association of stamp collectors, or other more esoteric combinations of people? More relevant, perhaps, what about private schools? And what about foundations whose purposes please one group but not many others?
This is my question to the Government: in practical terms, I wonder whether it would not be preferable to keep the notion of charity and voluntary association much more open? Would it not be better to abstain from any attempt at detailed definition and to leave discretion within certain formal limits to a body such as the Charity Commission. By the same token, would it not be right to free not only "small charities", as they are called in the Strategy Unit report, from many of the obligations that are appropriate only when charities become a partner in public service delivery?
Behind those questions is a philosophy somewhat different from that which informs government thinking. There is a case for public services publicly delivered. There is a case for market forces set free to create wealth. There is a strong case for associations of civil society that are not turned into instruments of "service delivery". When legislation based on the reports comes before us, I, for one, shall defend with vigour the case for liberty.
6.47 p.m.
Baroness Thornton: My Lords, I thank my noble friend Lord Plant for placing this debate on the agenda. As chairperson of the Coalition for Social Enterprise, I have been actively interested in the document Private Action, Public Benefit through its long gestation and in the discussions since its publication last Autumn. I declare also my longstanding association and work with the Co-operative movement.
The Coalition for Social Enterprise is a relatively new organisation, established to provide a voice for social enterprise across the UK. Its membership includes a wide range of organisations such as the

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Development Trust Association, the Community Action Network, the Co-operative Union, Social Firms UK, the Furniture Resource Centre, the Social Enterprise in Liverpool, the Big Issue, the Credit Union and many others, including regional social enterprise networks such as Social Enterprise London and Social Enterprise East Midlands.
Noble Lords will appreciate, therefore, that section five of Private Action, Public Benefit is of particular interest to the Coalition for Social Enterprise. It addresses the range of legal forms enabling not-for-profit organisations to thrive. In that context, the term "not-for-profit" is misleading. Social enterprises are definitely not not-for-profit. They trade for a social purpose. It is what they do with the surplus that distinguishes them from traditional businesses.
The proposals in the document are very welcome. Section 5 identifies the legal issues that the social enterprise sector needed to resolve. It has been clear for some time that the current legal forms available for social enterprise do not recognise the sector's fundamentally different ethos.
There are two measures which are needed to provide a modern, flexible and accessible form of incorporation for the fast-growing social enterprise sector. The first is the creation of a new legal form drawing, as appropriate, on company legislation—the community interest company. It would serve to protect assets against distribution to members or shareholders and would create a new strong brand for small-scale community based social entrepreneurs.
The second proposal is the modernisation of industrial and provident society legislation. Noble Lords will be aware that it can take as little as 24 hours to set up a company in the United Kingdom and cost as little as £90—something of which we should be proud. However, if one wants to establish a co-operative, a mutual or a social enterprise, the I&PS legislation to be used is 19th century and very out-dated. Therefore, it is no surprise that only 200 such companies are registered each year, compared with 6,000 charities, more than 5,000 companies limited by guarantee and well over 200,000 companies limited by shares. They are expensive, complicated to establish and not straightforward to administer. The I&PS legislation has not kept pace with changes in company law. A fundamental overhaul of the structure is long overdue.
The problem is not only that the legislative framework is difficult to access but, in modern parlance, industrial and provident society legislation does not describe the sector or any of its businesses anyway. Therefore, not only does the legislation need to be updated but there also needs to be a re-branding exercise that changes the name to co-operative; and community benefit societies. The document suggests that also.
I believe that both those proposals are great. It is a sign that at a top level social enterprise is being taken seriously. I am keen that legislation should be introduced to create the community interest company as soon as possible. It is equally important that reforms to the I&PS regime should go ahead at the same time.
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I am therefore seeking reassurance from my noble friend that that is what will happen. I am concerned that this is about a level playing field for different forms of social enterprise and to have a variety of legal forms which are equally accessible.
There are more questions that need to be addressed in the lead up to bringing legislation forward. Given the time available, I shall limit myself to just two. First, the report does not address itself to how long-term patient capital will be attracted into the community interest company without diluting its social aims. Secondly, the document is silent on how the community interest company will be regulated. I&PS societies are regulated by the Financial Services Authority; companies are regulated by Companies House; and charities by the Charity Commission. So there is a serious issue to be addressed here.
I am not expecting my noble friend to give definitive answers to these questions. However, I should like assurance that they will be addressed before legislation is brought forward.
6.53 p.m.
Lord Phillips of Sudbury: My Lords, I, too, would like to thank the noble Lord, Lord Plant of Highfield, for initiating this debate. It is an honour to be in such a glare of voluntary sector talent. In declaring my own interest, I am happy to say that I have acted for more than half the speakers in the course of my 20 plus years as a charity law hack. I am pleased still to be retaining that role.
I shall make a number of brief points in the very short time available. First, I should like to assure my noble friend Lord Dahrendorf that the British Philately Society is a charity—therefore, collect on.
The Charity Commission must retain its dual role of both policeman and friend of charity. That is an excellent and important synergy. I believe that the proposal that it should be re-named the "Charity Regulation Authority" has precisely the wrong ring to it. As regards the two new company formats, the noble Baroness, Lady Thornton, referred to the community interest company. I agree; it is a useful prospect. The other proposal is the "Charity Incorporated Organisation"—the CIO—on which I shall make two points. First, it must be shaped in a way that will be of use to small charities because companies limited by guarantee and so forth are available for the large complex charities. I suggest that it should use a great deal of the uncomplicated machinery of the law on friendly societies and industrial and provident societies. What it must not do, under any circumstances, is lead in three years' time, as the report conjectures, to a situation where only the charity incorporated organisation will be available for charities which wish to have limited liability.
If the public benefit test is introduced, as I believe it will and should be—I pay tribute to the NCVO for launching the idea in its report—the Charity Commission must be bold in applying it, particularly in regard to independent schools and hospitals. Noble Lords may be surprised to learn that the London Clinic and many of the big hospitals are charities.

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I was a little disappointed that the report seemed to show a little of the politics between its seams when, in regard to the public interest and schools, it stated that,
"to maintain their charitable status, independent schools which charge high fees have to make significant provision for those who cannot pay full fees and the majority probably do so already".
Those last words are superfluous and pre-judge the issues. If the public benefit test is introduced, there will be an opportunity for our great independent schools to throw open their gates and to extend the scope of their activities in a way that the best of them want.
When I was a trustee of a local comprehensive school, I remember the chair of one well-known public school saying to me, "As far as the governors are concerned, we would love to do things with you, but the parents will not have it. They have not spent all this money to send little Johnny here merely to play and engage with the yobs down the road". Provided that the Charity Commission is hold, this is a great opportunity for schools and a great opportunity for hospitals.
The proposals vis-à-vis trade are contained in the one part of the report that is plumb wrong. Under the unsuitable heading "Encouraging entrepreneurialism", the report suggests that any charity should be able to involve itself in any trade—including trades wholly unrelated to its purposes—to an unlimited extent, subject only to a statutory duty of care. As one who has acted for charities for many years and seen the mess they make of their arm's-length trading companies, I shudder. It would take only a few well-publicised disasters to destroy the magic of charity and to undermine the public trust which, the report states, is one of its principal purposes. It would be wholly inconsistent with the altruism which is the legal core of charity, not only its sentimental core; it would distract the boards of charities from focusing exclusively on their charitable purposes; it would expose the charitable assets to trading disasters; it would tilt the composition of trustee bodies even more towards dominance by business people, which may be becoming a problem; there would be no arm's-length relationship with the trade; and the resentment of private competitors would grow by steps because the charities would use tactics and assets to support their trade.
Finally, as regards independence, the Government, however well intentioned, are apt to behave like a bull in a china shop towards the charity sector. Indeed, it would probably be better to say that they are apt to behave like a combined harvester in a cottage garden. The charity world is a cottage garden—wonderfully organic, variegated, chaotically harmonious, evolutionary—all of the things that government is not. So, please, let us keep it independent, as my noble friend Lord Dahrendorf said. It is voluntary and must be unconstrained by legislation unless it is absolutely essential.
6.59 p.m.
Lord Warner: My Lords, I, too, welcome the opportunity that the noble Lord, Lord Plant, has presented to us to discuss the role of the voluntary and community sector in service delivery. I declare an
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interest as chairman of the National Council of Voluntary Organisations, which represents nearly 3,000 voluntary and community organisations in England. Indeed, I had the privilege and pleasure of working with the noble Lord, Lord Plant, when he was the president of the NCVO.
I want to confine myself to two key issues: the development of the capacity of the voluntary sector to play a full part in the development of communities and public services; and, secondly, the need the reform the regulatory framework for the charitable sector.
I begin by paying tribute to the way in which the Government have recognised the need to strengthen the capacity and infrastructure of the sector. However, I am not sure that I wish to go too far down the track taken by the noble Lord, Lord Phillips, in describing its chaotic nature. That does not appear to fit with the approach I have seen from many members of the NCVO. The Prime Minister and other government Ministers have consistently recognised the greater role that the voluntary sector could play in public service delivery, something that many in the sector wish to do without any sense of compulsion.
The Treasury's cross cutting report—not "cost cutting report", as one or two commentators have described it—for the recent spending review sets out a challenging agenda for change. The £.125 million future builders fund is welcomed by the sector as a genuine commitment to help it modernise and overcome obstacles to playing a fuller part in service delivery. But in deploying the extra money, the Government must distribute it on the basis of full consultation with the sector.
As the noble Lord, Lord Plant, pointed out, the compact between the Government and the sector is vital to its playing a fuller role. At the local level, dare I say that some local authorities and health bodies have to operate more in line with the spirit and the letter of the compact. They must not regard voluntary organisations as cheap alternatives that can be taken for granted, to be picked up and put down as the mood takes. Having compact champions at a senior level in all government departments should help to improve the way the voluntary sector can work with public agencies. What is critical now is that the sector's infrastructure is strengthened without damaging its independence.
It is also critical that the sector's overheads are properly met through sustained funding streams. To get the best from the voluntary sector and to play to its strengths in helping communities, we need intelligent local and national purchasers of services who build lasting and sustained partnerships with it.
That brings me to my other key point, the regulatory framework for the sector. With considerable courage the Government commissioned and published the report of the Strategy Unit, Private Action, Public Benefit. This sets out a well-argued case for major reform and modernisation of voluntary sector law and regulation. Following consultation with its membership, the NCVO welcomed the report. We believe that the recommendations will create

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a system of charity law fit for the 21st century and offer an opportunity to ensure that the public continues to have high confidence in charities and charity itself.
The proposal to extend a "public benefit" test to all charities is widely welcomed across the sector. In particular, the support of major charities such as Cancer Research UK and the British Heart Foundation is most welcome. Surely it is right that any organisation wishing to gain the benefits of charitable status should be operating for the public benefit.
Over the past 50 years there have been a number of reviews of charity law, but little more than changes at the margin. The challenge for the Government is to maintain momentum. There is a clear level of support for change across the sector and beyond it. NCVO polling indicates that nine out of 10 people believe that charities should be able to demonstrate that they provide public benefit. Furthermore, the need for change must embrace reform of the regulator, the Charity Commission, through it concentrating on its regulatory function rather than trying to combine it with an advisory role.
Momentum in this area is important. Some will argue for delay. Let us consider more. Let us have a Green Paper; let us have a White Paper; let us have a long public debate. Of course we want considered responses from the Government and well-drafted legislation. But over recent years we have used the draft Bill approach to iron out snags in legislation and to consolidate support for change in a given area of public policy. The vast majority of NCVO members and opinion in the sector favour a prompt move towards legislation. It appears to have cross-party support. I urge the Government to begin work on a draft Bill that could perhaps see the light of day in the next parliamentary Session and to plan to pass legislation in the Session after that. I am sure that any endorsement of that kind of timetable by Ministers would be warmly welcomed across the sector.
7.5 p.m.
Baroness Pitkeathley: My Lords, it is entirely appropriate that my noble friend Lord Plant should lead this important debate. He has a most distinguished record as president of the NCVO and it has been my privilege to work with him in that capacity for a number of years. Like many other speakers, I have spent a very large part of my life working either in the voluntary sector or in close connection with it. It would take up too much of your Lordships' time were I to give a list of the voluntary and community organisations with which I am connected, but I must declare an interest as chair of the New Opportunities Fund and as president of the National Centre for Volunteering.
Like other noble Lords, I am extremely grateful for the opportunity not only to discuss the role of the sector in service delivery but also to praise it for its record and for the vital contribution that it has always made to our national life. It seems to me that the emphasis on partnership working that now exists is the firmest possible basis for building on the strengths of the sector.
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The reports that we are discussing contain excellent proposals. But in my view it would be regrettable if the sector became just another service provider, indistinguishable from others. What we must do is to allow the sector to become as effective and efficient a provider of services as possible, while at the same time preserving its unique contribution.
The sector has a wonderful record as innovator and pioneer, and as the voice of the consumer. Many of the services in health and social care which we now take for granted started in this sector. That pioneering work continues—pushing out the frontiers of how services are provided, piloting new services, taking risks, proving that new ways are possible. The statutory sector can and does learn a great deal from how this is done, and we must preserve these pioneering approaches at all costs, ensuring that they are funded and properly evaluated and that the lessons learnt about good practice—and perhaps even more importantly about bad practice—are spread.
Perhaps the most important lesson that our society as a whole has learnt from the voluntary and community sectors is the importance of involving the consumer in deciding the shape and appropriateness of services. User controlled boards, patients' organisations and consumer and citizen panels are now an essential part of policies at local and national level. That this approach has been embraced so enthusiastically by this Government is almost entirely due to the pioneering work of the voluntary sector. It is not easy—it is much easier to provide services that fit the convenience of the provider—but it is vital. User controlled organizations—I speak as one who has been a chief executive in one—are notoriously difficult to manage. But the rewards for the consumer are great and the way this movement has shaped and goes on shaping our public services is something of which we should be enormously proud.
Nor should we forget that a very large part of the work of the voluntary sector is not about providing services at all, but, as my noble friend reminded us, about campaigning—the area in which I have spent a large part of my working life.
Some organisations manage successfully to combine the roles of service providing and campaigning, and we must always ensure that the service provision does not impede their ability to campaign. The United Kingdom has a proud record of funding organisations to campaign against governments—I have found it to be the envy of the world. We must ensure that it continues.
I turn to my specific role as a funder of the voluntary and community sectors. The New Opportunities Fund gives 40 per cent of the half billion that it distributes each year to this sector—about £600 million so far. I hope that we give this funding in ways that are not just about money but also about improving the status, the clout and the power of the sector.
Perhaps I may give an example. Our Healthy Living Centre programme has £300 million attached to it, 50 per cent of which has gone to voluntary organisations as lead partners. What has happened is that these organisations

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have led partnerships of statutory and voluntary, health and social services and environmental organisations. Often, these organisations have not been talking to each other and have had no tradition of working together to deliver services. The voluntary sector organisations have enabled these relationships to develop in ways which have wide significance. As one said to me, "We usually go cap in hand. Now we are in charge and it is wonderful how our input, our power at the table as leader partner, has shaped programmes and services which are of real benefit to our community".
Noble Lords would expect me to mention the possible merger of the New Opportunities Fund with the Community Fund, and I do so in conclusion. The Community Fund has a proud record of funding voluntary and community organisations. Indeed, I have myself been a recipient of major grants when working with carers. It is important that the stream of money that goes to the sector is preserved and that its independence is protected if any new organisation is created. The New Opportunities Fund is as concerned about this as the Community Fund. I am glad to say that we have repeatedly received reassurances about this from the Government.
We must, however, look at the facts. The receipts for good causes are possibly falling and the costs of administration are possibly rising. We must consider other options, and if we can move forward in a spirit of partnership the new body has, I believe, the potential to build on the strengths of the existing organisations to deliver added value, to make funding more accessible, to be more effective and efficient, and to target more money at deprived communities. I do not want to overstate this—only 7 per cent of funding for the voluntary sector comes from the Lottery, after all—but I know that it is important. No one is more committed than I to seeing that the sector and, most importantly, the individuals and the communities that it represents so effectively, are the final beneficiaries.
7.10 p.m.
Baroness Seccombe: My Lords, I add my thanks to the noble Lord, Lord Plant, for initiating this debate.
When people say that they work in the voluntary sector, it can mean different things to different people. To some, it can mean running an international charity, while to others it can mean rattling a tin for a couple of hours once a year. To my utter amazement, one eminent captain of industry even suggested that all his employees were volunteers because no one forced them to work for him.
I am often asked what my background was before I entered your Lordships' House. If the questioner is a distinguished high flyer, I feel pretty much a wimp when I say that I was working in the voluntary sector and was not involved in the struggle to reach the top of some profession or employment. I have, however, been on the board of one of the largest charities, I have been a vice-chairman of the Conservative Party and, yes, I have rattled many a tin and worked on jumble sales on too many occasions to mention.
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My experience has taught me that there is a great difference between being a paid executive of a charity and doing unpaid work for a charity. Both are essential for large charities to survive. I know, as I have a son who works for one, and I am conscious and very proud of his and his colleagues' dedicated contribution and of the importance of running an efficient and worthwhile organisation.
During my time as vice-chairman of the Conservative Party, I had the privilege of visiting Conservative women's groups in rural and urban areas. I always came away uplifted, marvelling at the wonderful amount of work done for love by these splendid people. Some were county councillors, district councillors, parish councillors, school governors and magistrates. Others were active with the CAB, meals on wheels, the Red Cross, the WRVS, the NSPCC—I could go on and on. And one only had to be there a short time before being caught up in the latest topical local concern. I always left feeling that I had been at the hub of the neighbourhood among those who knew exactly what was going on. I am sure that many noble Lords could tell a similar story.
Another group of volunteers that I must not leave out are the massive army engaged in amateur sport. Most villages have their football team, their cricket team and all the other sports that are the trendy fashion of the moment. The nation would be the poorer and, indeed, less healthy, without the enthusiastic leadership of these impressive people.
Much as I admire those who earn their living working for others, I must pay an enormous tribute to those who just give themselves for love. These are the people who make a difference to lives, not just to their own families but all those around them. However, I see an increasing problem. For my generation, it was far easier to get involved in local matters, as many of us did not have paid employment. Today it is quite different, with most young women working at least part time, and a large number full time. They often juggle their working life with bringing up a family, with all the pressures and, indeed, the pleasures, that that brings. As a consequence, life can be so hectic that issues outside the home have to take a back seat. It is interesting to note, however, that if a busy person gets caught up in a local problem, they can be tenacious and find the time from somewhere to fight their cause.
I was very heartened to read in the foreword of the Treasury publication The Role of the Voluntary and Community Sector in Service Delivery, quoted by the noble Lord, Lord Dahrendorf, that the Government are passionately committed to the work of the voluntary sector, and so they should be. These people—the true volunteers—should be cherished and have the way eased for them. This debate gives us the opportunity to salute them and to show that we really value all that they do and understand that without their good will many charities would grind to a halt.
Volunteers certainly are the cornerstone of the community. Without their outstanding contribution, life would be much more dreary and monotonous and less caring for literally millions of people.
7.15 p.m.
Baroness Howe of Idlicote: My Lords, I, too, very much welcome this opportunity to discuss voluntary organisations. I thank and congratulate the noble Lord, Lord Plant, for making it possible. It is clear from the long list of speakers that your Lordships should debate the subject more often.
My interest stems from a lifelong involvement with the voluntary sector at all three levels—grassroots, national and international. Currently I am also proud to serve on the advisory committee to the NCVO. Noble Lords have already spelt out the scale of the voluntary sector. It is not just a matter of the huge numbers involved and their considerable financial contribution. Even more importantly, voluntary and community organisations are an invaluable part of our inherited culture. I am sure that the Good Samaritan had his equivalent even in Roman Britain. I suspect that many of us still look back to the 19th century for our charitable role models. In those days, most of the effort was directed at relieving extreme poverty, which is now accepted as the responsibility of the public sector. But the private voluntary sector remains crucial.
New Labour is to be congratulated on its continuing commitment to the voluntary principle—all the more so because in the 1960s, when I was involved in care committee work in the East End of London, a surprising number of old Labour supporters had very ambivalent attitudes towards volunteers who were seen more often than I care to remember as scabs. How attitudes have changed. And thank heavens for that.
So it is no surprise to me that in this exceedingly comprehensive review two Ministers describe their own and the Government's commitment to the voluntary principle as passionate. The personal satisfaction that each volunteer gets from their work is an important aspect of what they do. I emphasise that the voluntary sector has distinct values: independence, leadership and, above all, an innovative approach.
Essentially, the review sees the role of government as an enabler to help voluntary organisations grow, where they want to, into even stronger partners in the vital task of service delivery. As the review says, there is a limit to what the Government can seek to do on their own. The voluntary sector's input is rightly seen as delivering truly unique added value.
That is particularly so at local level. It is there, in local communities, that volunteer leaders are often the first to spot new emerging problems and to set about trying to tackle them. The achievements of the preschool playgroup movement in the 1950s and 1960s and what it got going come to mind.
In my remaining time, I shall mention a few aspects of the complex reforms proposed. First, there are important changes to charity law. Many are welcome. The 10 new purposes in place of the existing four for determining whether a charity is providing public benefit are for the most part acceptable. Although the declared intention is not to deprive current charities of
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their charitable status, the exact words will need careful scrutiny. For example, the proposed review by the Charity Commissioners to,
"check the public character of charities which charge fees",
looks disturbingly like yet another threat to the independent school sector as well as to some universities and possibly a wide range of other service delivery charities. I hope that that will not be the result, and I look to the Minister for reassurance.
On the other hand, changes in the law which enable more flexible use of capital assets to meet voluntary organisations' primary aims are long overdue. I welcome, too, the prospect of an easier legal and financial route for charities that wish to merge. Secondly, on practical issues, there is the promise to move to longer term funding agreements. I well remember from my time on NACRO how we could get no decision of a continuing grant for a project right up to the very last moment. Your Lordships can imagine the effect that that had on staff morale.
I am pleased, too, by the decision to allow an appropriate proportion of overhead costs to be included in voluntary organisation submissions—to be extended, one hopes, to the business world. Sadly, the value added tax relief appears finally to have been ruled out. That is a considerable disappointment.
Finally, voluntary organisations are often wary of too close a relationship with government, as the noble Lord, Lord Dahrendorf, said. Some do not want any relationship at all but simply want to be left to get on with what they believe they do well. Those seeking a relationship want realistic government grants and sympathetic backing for their objectives and projects. But they do not want to be drawn too completely into delivering the agenda of the government of the day. Governments never to forget that. It is vital to retain the independence and innovative spirit of the voluntary sector, which we all value so highly.
7.21 p.m.
Lord Judd: My Lords, I, too, thank most warmly my noble friend Lord Plant for giving us this opportunity this evening. I also declare an interest as a past director of Voluntary Service Overseas and Oxfam and, in an earlier stage of my life, as Secretary General of International Voluntary Service. I am currently a trustee of several charities and honorary president of YMCA England.
Like other noble Lords, I congratulate the Government on two challenging and exciting reports. There is much to be discussed, but in the short time available I shall share five reflections with the House.
First, charities have grown up. They now frequently have staff, volunteers and trustees of the highest calibre, matching the best in the private and public sectors. They are increasingly very professional and are not content to treat only the symptoms of what is wrong in society, alleviating the pain, although that is still vital. They want to address the causes. They do not want to be industries dependent on the failures of society but catalysts of social success. That is why the recognition in Private Action, Public Benefit of the

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place of human rights, conflict resolution, reconciliation, environmental protection and improvement, revitalising communities, empowering citizens and campaigning for social change is so important. Open, free democracy must have, to succeed, a thriving civil society.
When speaking of empowering, there is a potential paradox, of which charities and not-for-profit organisations have constantly to be aware. Empowering should surely start within the organisations themselves. There is a debilitating contradiction, when in an organisation working for empowerment, volunteers and supporters are merely used or treated as customers and not themselves empowered. That relates to accountability. However civilised and refined, there is still a tendency for the governance of organisations in this sector to be a closed process. Too often, trustees in effect appoint both new trustees and their own successors. Remarkable work has been done by organisations governed on that basis, but I am not sure that it is altogether healthy, and I am fairly certain that it is not a system equipped to meet the challenges of enlightenment in the century ahead. There needs to be a lot of thought about that.
Thirdly, there is the staff/trustee issue. Organisations in this sector were frequently brought into existence because a group of people felt passionately for a cause and came together to do something about it. Soon they find that they need support staff to help. Success breeds more success and staff numbers grow. In the end, there is a highly professional and dedicated staff in a big organisation setting the pace with trustees desperately trying to keep up with the activities for which they are responsible. I am sure that many noble Lords recognise that situation.
To some extent, there may be an inevitability about that. However, it is not a good guarantee of accountability. One of the special professional requirements of staff in this sector should, I suggest, be the responsibility of keeping trustees effectively briefed in a way that enables them to discharge their responsibilities. It may be argued that that is onerous to staff. However, if well done, it is invariably an investment in an ongoing, dynamic and challenging interface between trustees and staff and in an effective programme.
Fourthly, in their campaigning, organisations in this sector have a vital contribution to make to the evolution of public policy. But their special asset is that they can speak with the authority of engagement and experience and of their high-quality research. They deploy that asset best if people are in effect saying of them with admiration that, "They are doing this and doing that—and, oh, have you heard what they are advocating?" They diminish their special influence if people begin to say of them that, "They are campaigning for this and campaigning for that—but what on earth are they doing these days?"
It is also essential to ensure that when the public hear that an organisation is standing for something, they can have confidence that that stand is the result of
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serious deliberation and evaluation within the organisation and represents a position positively endorsed by trustees and is not just the strong view of a talented, highly committed member or group of staff.
Finally, while partnership with government in delivering services can be an excellent method of ensuring committed, sensitive, people-orientated quality services, there is a danger in organisations going down the subcontracting road. There could be a tendency to begin to look for where or on what the next contract can be found rather than at what needs to be done. That would be—and I choose my word carefully—a betrayal of their role. The creative culture should be one of vision and purpose—as catalyst, pioneer and challenger—and not just an extension of public service.
7.27 p.m.
Lord Bhatia: My Lords, I thank the noble Lord, Lord Plant of Highfield, for initiating this debate. I also declare my interest as the chairman of the Ethnic Minority Foundation and the Council for Ethnic Minority Voluntary Sector Organisations.
I welcome this review by the Strategy Unit which highlights the size and scale of this very important sector and makes a number of recommendations. One of the major recommendations is for reform of the Charity Commission, which will be renamed the charity regulation authority. The aim of the review has been to have a regulator that is independent and transparent.
During the consultation period, I understand that 1,100 submissions were made by the sector. That alone shows the vibrancy of the sector. I hope that the Government will bring forward the necessary legislation as soon as possible. As such a review has not, as I understand it, been held for the past 50 years or so, the vigorous consultation programme comprising 50 consultation meetings is indeed praiseworthy. I hope that the Government will listen carefully to the views of the sector, particularly the concerns of the small charities which are largely involved in service delivery. There will be great distress if the legislation entails the withdrawal of the registration of charities with income under £10,000. I hope that the Government will agree to a limit of £1,000.
Within the charity sector, a distinct sub-sector has emerged from the ethnic minority communities in recent years. This sub-sector is substantially involved in service delivery to its communities. I am part of this sector and work in it extensively. I should like to take this opportunity to share some of the issues that confront the ethnic minority voluntary and community sector.
The ethnic minority communities form about 6 per cent of the population of Britain and are concentrated in some of its largest cities. They form about 28 per cent of the population of London, and it is said that over the next 10 years over 50 per cent of the new entrants to the workforce of London will come from these communities. It is also a very young community.

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Many of these communities live in the inner cities, in some of the most deprived areas of Britain. If one looks at the indexes of unemployment, bad housing, health, education, social welfare, and so on, one finds the ethnic minority communities at the wrong end of the spectrum.
Experience has shown me that the voluntary sector, particularly in service delivery, stands between the community and the state. Community needs are usually articulated by the sector and the policy makers and funders try to respond to these needs. My experience also tells me that if the voluntary sector is weak, the community it serves will also be weak, and this is precisely the current status of the ethnic minority communities and their voluntary sector.
I am not saying anything new in stating that a large part of the ethnic minority community finds itself in difficulties, whether in the area of education, employment, health or housing. The young people in these communities are increasingly finding themselves excluded from the civil society. They do not feel included.
As today's debate is on the voluntary sector and service delivery, I wish to concentrate on what can be done to help the ethnic minority communities through their voluntary sector, comprising some 10,000 voluntary organisations across the country. These are very small organisations and that is why it is important that the new legislation does not end up withdrawing their charitable status.
The ethnic minority voluntary sector is a relatively new phenomenon. The bulk of the ethnic minority community arrived in this country in the past 40 years or so, and its voluntary sector is even younger— spanning no more than 25 to 30 years. From the seventies the sector has started to build up to meet the specific needs of its communities by delivering specific services.
These are small new organisations with insufficient understanding of the way the charity sector works, how policies are formulated and how resources are obtained to deliver services. There are cultural and language problems. There is in some places also prejudice and ignorance about the needs of these communities on the part of the policy makers and the funders.
But, above all, the newly emerging ethnic minority voluntary sector is expected to follow the same regime of rules of the funders as are applied to the wider and more mature voluntary sector which has been around for over 150 years. This is where the "one-size-fits-all" phenomenon causes hindrance to the sector's progress. It is analogous to subjecting a child to the same rules that apply to adults.
Is it any wonder that the ethnic minority voluntary sector is so weak and the community behind it even weaker? If we want the weakest in society to grow, we need to create different sets of rules and support structures for them. The support should be in the form of capacity building, long-term core funding and other such mechanisms to build up these communities. Unless there is a long-term strategy to build up these
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communities and their organisations, we shall all be talking about inner city problems and community tensions for another 20 years, and by that time the problems will be much bigger.
The Active Community Unit of the Home Office, various trusts and foundations and the Charity Commission are doing their best, but all of them and all of us who are in the sector should consider providing the extra support and resource necessary to enable these communities to come out from the margins of society to the mainstream. The proposed changes by the Strategy Unit will certainly help greatly in that process.
7.34 p.m.
Lord Turnberg: My Lords, I, too, am grateful to my noble friend Lord Plant for introducing the debate and for laying out its importance so clearly. I should like to focus on the particular case of those charities which support medical research. Here I declare an interest as scientific adviser to the Association of Medical Research Charities. That group is an umbrella body of over 100 charities supporting research including, for example, the British Heart Foundation, various cancer charities, the Arthritis Research Campaign, the Wellcome Trust and so on. Between them they provide more than £500 million-worth of support for research each year. That is somewhat more than the Government provide for medical research through the Medical Research Council, so it is an important discipline.
Overall, I welcome the Strategy Unit's report and its commitment to encouraging public support for volunteering and giving. I also welcome its general thrust to enhance efficiency and effectiveness, and to ensure best practice. That is after all what the AMRC would like to see.
I would be worried if the Government rushed into speedy legislation, however, before rather more work was done on clarifying what the law will mean and how it will be applied. For example, it is quite unclear at the moment where medical research fits into the list of nine public benefit purposes that will be used to assess charities. On that I resonate very much the comments of the noble Lord, Lord Dahrendorf. If medical research is a public benefit—I obviously believe that it is—where does it fit legally within the list? It might be thought, for example, to fit into such purposes as "advancement of health" or "advancement of education".
The problem is that while some research is directly beneficial to patients' health, much is of a more basic kind. An example is much of the human genome project, which the Wellcome Trust has played such a major part in supporting. Where does that fit into the definitions provided? We need to think through a little more carefully where the categories of public benefit will take us if we are to understand the implications.
By all means, let us see some clarity in charity law. There is clearly much to do, but let us make sure that we get it right before we rush along that route. Again, I welcome the need to clarify the role of the charity

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regulator, and the statement that its purpose will include some strategic objectives. Some increased accountability is welcome. However, I would also like to see a separation between the regulatory role and the advisory role of the current Charity Commission. I am not at all convinced that advice on best practice to charities sits easily with regulation.
Finally, with regard to regulation, I am concerned about the inequality between the regulated and exempt charities. In medical research, the exempt charities are largely the NHS and the universities' own charities. They cannot easily be expected to regulate themselves and be answerable to no obvious single regulatory agency for that activity. That again needs more consideration, and there are a number of other uncertainties that I will not have time to discuss.
Although medical research charities are very supportive of many of the principles outlined in the report, they are not yet convinced that the thinking behind them is sufficiently well developed for legislation to be rushed through. My own view is that it would be much better for more thought to be given, so that all the issues could be teased out, perhaps in a White Paper, before we rush into partly digested legislation. I am afraid that I am less convinced than my noble friend Lord Warner of the need for speed.
7.38 p.m.
Baroness Finlay of Llandaff: My Lords, like others. I am most grateful to the noble Lord, Lord Plant, for having introduced the debate. I endorse the comments made by the noble Lord, Lord Turnberg, in relation to medical research. I must declare an interest, having worked for Marie Curie Cancer Care for many years, and as a patron of St David's Hospice in west Wales. I am also a patron of Coping and Living In Pain, a very small charity set up by patients who have chronic pain. Also, I am a governor of Howell's School, Llandaff.
I want simply to address the duty of the statutory sector in relation to the charitable sector providers. The statutory sector is becoming increasingly dependent on the charitable sector providers for support in carrying out essential tasks just as medical research is now completely dependent on the medical research charities for world-breaking and groundbreaking research. The problem is that there are now many providers with charitable sets of funding in healthcare. For example, in Cardiff the average cancer patient will encounter at least three charitable sector providers on their cancer journey. There are problems in getting all those charitable sector workers to work together. I sometimes say that we need something resembling a rugby shirt, with all of the sponsors down one sleeve. The biggest problem involves fundraisers, who are not able, because of current legislation, to run joint fundraising projects. Although healthcare professionals will begin to come together, there are managerial pressures pulling them apart. I am glad that there is some attempt to address that, although it is not as complete as I should like.
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Another problem of the charitable sector working with the NHS involves integrating information systems and computer systems. The charitable sector sits outside the firewall, so it often cannot access in a timely way the information that is available to NHS providers. When public money is given in a contract, that contract must spell out exactly what is expected of the charitable sector provider and it must be embedded in the long term; otherwise, there is tremendous financial insecurity for the charitable sector provider. The charitable sector must be involved in the planning process from the outset, not just once the planning process is under way. People in that sector have a great deal to contribute at the brainstorming stage of planning, but their voices are often not brought in until later stages. A huge amount of intelligence from the people whom they purport to represent is not available within that sector. As the noble Baroness, Lady Pitkeathley, said so eloquently, the charitable sector has been particularly good at representing the needs of patients and carers in the community, whoever they purport to represent.
Finally, I turn to staff development and the responsibilities of the statutory sector to the voluntary sector. The voluntary sector is particularly good at using volunteers and bringing people—those who may have been out of work for some time—back into the workplace. They are gradually reintroduced through voluntary work to paid employment. The sector is particularly good at creating flexible work opportunities for those with a degree of disability or social problems for whatever reason. In such staff development, there must be movement between the two sectors. Currently, the voluntary sector is having to pay for education that is routinely provided to those in the statutory sector in healthcare and education. That means that voluntary sector workers are effectively locked out from the advantages available to others. That excludes rather than creates inclusiveness. It also means that movement between the two sectors is not as easy as it should be. In the long term, the statutory sector may miss out on high-calibre people who have come up through the voluntary sector and who can contribute much but who have not been able to access the educational courses they need to take up senior positions.
7.43 p.m.
Lord Brooke of Alverthorpe: My Lords, I, too, am grateful to my noble friend Lord Plant of Highfield for promoting this important debate. I declare an interest as a trustee and patron of a number of voluntary organisations and charities. They are listed in my formal public declaration of interests. I speak today primarily from the perspective of volunteering and as a trustee for CSV—Community Services Volunteers.
I want to make some general points on the government reports, which I genuinely welcome. While most in the voluntary and community sector acknowledge the importance of accountability and transparency in gaining public confidence, they will be keen to see evidence of the Government's stated commitment to maintain the independence of the

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sector. As the voluntary and community sector works alongside the state and the market, it is important that it retains its independence to initiate, advocate, challenge and—very importantly—take risks. We must continue to look to voluntary and community groups to set aside self-interest and draw attention to matters that were previously kept from the public gaze, by highlighting the plight of the abused, the homeless or refugees. I strongly share the views expressed by the noble Baroness, Lady Pitkenthley, on maintaining firm and strong campaigning.
In modernising the framework for charities, I believe that we need to respect the diversity and acknowledge that there is no model voluntary or community organisation in this sector. We should refrain from seeking to bureaucratise the sector with an over-emphasis on targets and processes. In that context, I welcome the acknowledgement in the Treasury cross-cutting review of the need for improved consultation and procurement arrangements between the Government and the sector.
Those, I suggest, are important issues. Currently one does not have to search far to hear criticism about consultation time-scales and dissatisfaction with the contracting and payment arrangements between government departments and voluntary organisations.
However, there is one aspect of the relationship between the sector and government that remains a challenge. It is one that is not susceptible to a quick fix. For government, it is the problem of whom to consult; for those in the sector, it is a question of how much time it is reasonable to allocate to meetings and consultations with government and agencies, which, increasingly, we are called upon to undertake.
A distinctive feature of many voluntary and community organisations is the involvement of volunteers in the organisation and the delivery of services and support. Within CSV, we have volunteers at the end of help-lines; in our schools, they are engaged in raising literacy levels; they support refugee settlement or learning; they mentor excluded school pupils and offenders; or they assist the frail and disadvantaged. They are from all age groups and backgrounds. By their actions, they promote citizenship, helping to re-establish a sense of community and making a crucial contribution to our shared aim of a just and inclusive society.
The contribution of volunteers to community and civil life is invaluable and irreplaceable. We must do what we can to encourage more. For me, a test of these welcome government initiatives is whether they enable those in the voluntary and community sector to face new challenges and involve more of our citizens. We need to ensure that the voluntary and community sector has adequate capacity to realise delivery objectives and an operating context that is less bureaucratic. It should be a sector where application forms and guidance notes are streamlined; where accessibility is easier and made easy to use; and where any requests for information are truly essential for decision-making purposes within government.
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What government need, and must do, is to harness the energy, knowledge and wealth of experience of the voluntary and community sector to make life better. An important part of that is the recognition of freedom and independence for this sector if it is to continue to grow and flourish.
7.47 p.m.
Lord Joffe: My Lords, I, too, am grateful to the noble Lord, Lord Plant, for creating the opportunity to comment upon the two excellent reviews which form the subject of this debate. The commitment of the Government to the work of the voluntary sector is, indeed, quite exceptional, and both reviews mirror that commitment.
Having been involved in the voluntary sector in this country for more than 30 years with large, medium-sized and small charities, it is clear to me that most of the issues that have been a matter of concern have been addressed. With the exception of the Government's approach to VAT for charities, there is virtually nothing in the two reports which I do not welcome.
I share to an extent the concerns of the noble Lord, Lord Dahrendorf, about government being involved too deeply with charities and about charities, in turn, relying too much upon government However, in my recent dealings with government, I have found that they are alert and sensitive to this issue. It is pleasing that the reviews explicitly recognise that many charities will not want to become involved in the delivery of public services and will prefer to focus on campaigning, or whatever their purpose may be. In that regard, I particularly support what the noble Baroness, Lady Howe, said so eloquently.
I want to touch upon two tangential issues as the substantial issues have been dealt with so fully by other noble Lords. It is self-evident that the voluntary sector cannot rely exclusively on the Government for its funding and that it must raise most of its funds through voluntary donations from the public. Sadly, however, in the past decade the donations made by the public to charity have not kept pace with the growth in earnings and wealth in the United Kingdom and in some periods have fallen so that, measured in real terms, donations today are not a great deal more than in 1992. What is equally disturbing is that the percentage of the population giving to charity has fallen during that period.
It is of critical importance to the voluntary sector that there should be a significant and ongoing change in these trends so that more people give and those who give, give more. That applies particularly to the more affluent in our society, who on average—happily, there are many individual exceptions—are far from generous.
The initiatives which the Government have already taken to promote the volunteering of time and money are important. It is to be hoped that they will continue to support such initiatives. In that regard I declare an interest as chair of the Giving Campaign, supported by the voluntary sector and government, which seeks to develop a culture of giving in the UK where it is

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natural for everyone able to do so to give money and time to improve the quality of life for others in our society. I also declare an interest in a number of other smaller charities.
The Strategy Unit also draws attention to the need for better information about the performance of charities. We have found from our own experience of the Giving Campaign that there is no reliable statistical information about levels of giving in the country. It is important for the future of the voluntary sector that such information becomes available. In the USA a public charity called Philanthropic Research has set up a website called GuideStar, which contains detailed information about 850,000 charities. The UK Institute for Philanthropy, in conjunction with GuideStar, has after completing a feasibility study, recommended the setting up of a similar website, which would be a positive first stage to providing information about what charities do and their financial position. I hope that the Government will support that initiative.
Finally, I turn to the implementation of the two reports. The cross-cutting review sets out a clear implementation strategy aiming at full implementation by April 2006. The Strategy Unit report envisages a Home Office Bill and that it will publish a detailed timetable for the preparation for legislation in due course. Against the background of it having taken almost 400 years for government to propose a new definition of "charity", it is important that the pace of change should not falter. With that in mind, the Queen's Speech in November this year will provide the natural opportunity for a charities Bill to be introduced.
7.52 p.m.
Baroness Prashar: My Lords, there is now a growing recognition in Government that the voluntary and community sector plays a significant role in the structure and aspirations of our society. I am, therefore, grateful to the noble Lord, Lord Plant, for securing this debate, thus providing an opportunity to discuss some of the crucial issues raised by the report of the Strategy Unit and the cross-cutting review.
In making my contribution to the debate, I declare that my involvement in this sector has been and continues to be extensive. From 1986 to 1991 I was Director of the National Council for Voluntary Organisations. Currently I chair the National Literacy Trust—which ran the Government's national year of reading—and the Royal Commonwealth Society, and I am trustee of a couple of other charities. In the late seventies and early eighties I directed the Runnymede Trust.
So, issues such as the legal framework governing the sector, its effectiveness, accountability and independence have been central to my concerns. I have a certain sense of déjà vu. Over the past four decades there have been several reviews of charity law and many papers written about its relationship with the Government. But the two reports under consideration provide a real opportunity for change and action, which is long overdue.
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As we have already heard, there is wide support for change and for developing the real potential of what is called in the report,
"the charitable and wider not-for-profit sector".
However, in implementing the change we need to be mindful of certain factors. There are some issues which deserve further consideration and others which need to be strongly underlined.
I turn first to reform of the charity law and shall highlight the areas which I believe need to be underlined. Any reform must recognise that charitable organisations exist for public benefit and public interest and must safeguard their independence. While the introduction of the 10 charitable purposes will give the necessary flexibility, it is important that these purposes are broad and objective and not linked in any way to specific policy objectives of the government of the day.
Secondly, I strongly welcome the proposal to revise and relax the right of charities to campaign. This has been a controversial area over the past decade. Attempts have been made to inhibit the ability of charities to campaign. Responsible campaigning based on experience and expertise is an integral part of the activities of charities, because campaigns inform, raise awareness, benefit service delivery and influence change for the public benefit. That is quite important in the context of service delivery. So the positive recognition of that activity is indeed encouraging.
An area which needs further discussion and thought is the balance between regulation and self-regulation. Refocusing and reshaping the Charity Commission as a regulatory body responsible for determining public benefit, registering charities and so on, is right. But issues such as management and performance of charitable organisations should be a matter for the sector itself. Stewardship of charities is dependent on their governance arrangements and the role of charity trustees. This is an area where there can be a genuine partnership between the sector and government in providing support for training, development and capacity building. It is a matter of recognising not only the independence of the sector but also the interdependence of both.
The rules of engagement, therefore, need to enable productive partnerships without inhibiting independence. Take for instance the question of mergers. Mergers and strategic alliances in the voluntary sector should not be a matter for government to determine or to encourage but for the organisations themselves. The Government's role should be to provide support and advice.
As I said earlier, all these matters will be discussed in detail, but action is paramount. It would, therefore, be helpful to know what timescale the noble Lord envisages for taking the charity law reform forward.
As for the role of the sector in delivering services, the single most important factor which will influence success is the commitment within departments to learn to work with the sector. That will require a vast change in the culture and the way in which departments operate. Government departments will require an

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engagement in the sector which should encourage brokerage, support innovation and negotiation and recognise diverse ways of delivering services. Risk averse and regulatory relationship will not unleash the potential envisaged in the cross-cutting review. The objective, I am sure, is not to turn the voluntary sector into a pale replica of the public sector, but to harness the strength of the sector in order to deliver services which are relevant and appropriate. Therefore, getting this relationship right will be crucial. Equally important will be how maturely the sector itself behaves.
The virtues and the strength of the sector have been well rehearsed this afternoon. The sector is rich because of its diversity and its independence. It will therefore be equally important to ensure that inadvertently we do not nurture and harness only those organisations which provide services. The sector as a whole needs to develop. In its totality, the sector is a vital part of civil society.
It would therefore be helpful to hear from the Minister what kind of expanded role is envisaged for this sector and what the implications will be for the voluntary sector as a whole.
7.58 p.m.
Lord Best: My Lords, in thanking the noble Lord, Lord Plant, for raising this issue, I would like to tell the story of the move from the public sector to the voluntary sector of delivery of an important mainstream service—social or subsidised housing. Thirty years ago the voluntary housing sector was a very small enterprise and supplied far fewer homes than local councils. Today, the voluntary housing bodies—housing trusts, housing societies, housing cooperatives, together called housing associations—are more than 10 times bigger. They now provide all the new social housing. Existing council housing is also being transferred to those voluntary-sector bodies.
I declare an interest as director of the National Federation of Housing Associations for 15 years of the past 30. For the other 15 years of that period, I was the chief executive of the major housing association in York, the Joseph Rowntree Housing Trust. Perhaps I can draw out possible lessons to inform the Government's plans for expanding other parts of the voluntary sector.
How come the housing associations have grown so dramatically since the early 1970s? First, they have enjoyed the cross-party support of central government, giving them continuity and security from political change. Secondly, that political consensus has maintained a flow of public funding from a national body—the Housing Corporation. That has liberated housing associations from, on the one hand, a precarious dependency on time-consuming and unpredictable charitable fundraising, and, on the other hand, dependency on the benevolence of local authorities, which, for reasons of financial shortages, local politics or self-interest, cannot be relied upon as the sole funding agencies. Thirdly, the performance and reputation of this part of the voluntary sector has
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been sustained and protected by a national regulator—again, the Housing Corporation—which gives confidence to donors, investors and the public; protects the investment of public money; and can set and enforce standards, stepping in when things go wrong.
Importantly, consumer protection is also enhanced by a dedicated ombudsman service. But are there lessons on how not to expand voluntary activity, and on the dangers of a switch from public- to voluntary-sector provision? In considering lessons from the voluntary housing sector, the Government and all interested parties should consider how to avoid the availability of full funding and full cost-recovery compromising the independence and autonomy of voluntary bodies. They should also consider how to prevent central regulation emasculating voluntary organisations, leading to their nationalisation, with their paid employees simply delivering central government's agenda.
The voluntary housing sector has largely avoided those dangers. It has been safeguarded in two important ways. First, the Government have supported a wide variety of voluntary bodies—big and small; old and young; specialist and general: linked to other charities and free-standing; based in communities and more widespread. That measure of anarchy in the diversity of voluntary housing organisations has been a great protection. Secondly, the real independence of volunteers on their management committees—the boards of housing associations—means that the organisations can ultimately say no. Those individuals can bring their own ideas and expertise from other fields but can take their bat and ball and go home if the Government become too bossy.
I am very hesitant at suggestions that housing association board members should be paid like members of quangos, company directors or even councillors who collect attendance allowances. The independence of freethinking voluntary bodies is greatly assisted by control being vested in truly voluntary board members. I strongly support the growth of the voluntary sector in providing key services. I hope that the story of housing associations will provide lessons and warnings to those responsible for pursuing the exciting new opportunities for the wider voluntary sector.
8.4 p.m.
Lord Smith of Clifton: My Lords, I declare an interest as a trustee of three trusts, which are recorded in the register of interests.
The noble Lord, Lord Plant, brings a wealth of both pondering and practice as regards the world of charities. Noble Lords have all said how grateful they are to him for initiating the debate. The debate has been extensive, revealing noble Lords' rich experience of a variety of charities. If one strong theme emerged, it was to stress the independence and spontaneity of charities. Although some noble Lords welcome the two reports more than others, even those who

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welcomed them did so with the caveat that the Government should not attempt to become too tentacular in their approach to charities.
The two reports endeavour to introduce greater order and system into the tangled, complex and obscure relationships that have developed between charities and government over the years. Almost exclusively, the reports deal with those charities which raise money by way of legacies, flag days, collections, seeking donations and so forth, in order to fund the cash and kind succour to those in need on which they are particularly focused.
There remains a great lacuna in the reviews—the flip-side of the type of charities that we have been discussing—namely, the well-endowed, philanthropic foundations which frequently assist charities concerned with service delivery. The noble Lord, Lord Turnberg, made reference to such charities and I shall concentrate on them.
They have been a neglected subject of debate for most of the past century and need to be reviewed at least as much as the other forms of charity. Aware of this neglect, the Joseph Rowntree Reform Trust Limited—a foundation which is not a charity and of which I am a director; I declare that interest— commissioned a scoping study from the Centre for Civil Society at the London School of Economics on the contemporary state of philanthropic foundations in Britain. It is entitled From Charity to Creativity. A copy has been placed in the Library. I suggest that it should be read alongside Private Action, Public Benefit.
Its authors, Dr Helmut Anheier and Diana Leat, review the history in Britain from the creation of the 19th century charities to the philanthropic foundations established mostly in the 20th century. They call for a further major transformation to meet the needs of the 21st century which they term "creative foundations". They make many suggestions as to how this could be induced. Although I draw upon their work, the views I express are my own. Largely, I expressed them in the preface that I wrote to their study.
First, compared to the United States, relatively little is known about British trusts and foundations, their modes of operation or any measured outcomes stemming from their largesse. The milieu in which they operate is cosy enough and allows them as much anonymity as they wish. Things have not altered noticeably for the past 100 years. Governing bodies— the noble Lord, Lord Judd, made reference to trustees generally—are self-perpetuating oligarchies serviced by tenured staff, although more recently consultants of one variety or another have advised on specific areas or topics.
Sometimes, some foundations have in some of their work been genuinely innovative. Those new developments derive usually from their staff and occasionally from the prompting of trustees—that bears on the relationship between staff and trustees. However, more often they carry on their business
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much as always. Frankly, there is a good deal of complacency in the world of philanthropic foundations. They carry on beyond the gaze of public scrutiny or periodic formal review.
Too often, foundations have become overly complacent and insufficiently innovative. The role of the Charity Commission—many noble Lords have remarked on this—has not helped, seeking merely to police the law and detect, usually very few, minor frauds. The Charity Commission has been prevented by statute from being proactive in any way so as to prod foundations into being more adventurous and pioneering—for example, by addressing the needs of clients and constituencies that have emerged more recently.
As an index of complacency, it is staggering to find in the Anheier and Leat study just how England-oriented are UK foundations. Northern Ireland, Scotland and Wales scarcely get a look in. The overwhelming bulk of activity and expenditure is grotesquely skewed in favour of England. Similarly, it appears that the transformation of this country into a multi-cultural society—noted by the noble Baroness, Lady Howells of St Davids and the noble Lord, Lord Bhatia—has largely passed by those foundations. Only a relatively small amount of funding is allocated to the needs and aspirations of ethnic groups.
Foundations seem to be locked in a time warp, increasingly lagging behind modern developments. Bearing in mind that 40 per cent of their income derives directly, by way of exemption, from the taxpayer, it is legitimate to ask questions about how they operate and how their missions might be rendered more relevant and creative to the needs of contemporary society.
Two new developments can be discerned which raise concern. First, there is the advent of "new" philanthropic money deriving from the vast fortunes of self-made multi-billionaire entrepreneurs. That will inject much-needed new ideas and map new directions while their buccaneering founders are at the helm, and that is to be welcomed. A caveat, however, must be entered. As large corporate business is increasingly influencing the shape of public policy, so new charitable largesse may also seek to be another conduit of covert influence. We should be on our guard.
Secondly—my noble friend Lord Dahrendorf alluded to this—there has arisen a related, almost reciprocal, problem emanating from the state. Over the past decade or so, the practice whereby governments seek to finance specific public projects or programmes by inviting funds—sometimes from business but also from foundations—to contribute to the overall costs in some form of partnership has become established. The principles and motives behind PFI/PPP are encroaching on and infecting the world of philanthropy.
An exacerbating factor in this trend has been the creation of the National Lottery. When launched, government solemnly undertook that lottery moneys would not be used to finance projects that were previously regarded as the sole province of the state

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and the public purse. That promise was soon and cynically forsaken. Lottery funds, though not formally government-controlled in the way they are disbursed, are clearly heavily government-influenced, as in the case of the costly and ill-fated Millennium Dome and many other similar projects.
If this trend towards partnership funding gathers momentum, philanthropy. hitherto independent, will be in danger of being co-opted, if not corrupted, by the state—a theme referred to by many noble Lords. The boundaries that have hitherto demarcated civil society from the state will be eroded, philanthropic independence will become compromised and agendas politicised.
It is time for a wake-up call. Like long-established businesses that have failed to adapt with the times, many foundations are equally vulnerable to take over, in effect, by government co-option. If foundations are insufficiently innovative and responsive, initiatives will come—indeed. they are coming—from elsewhere.
A renaissance in philanthropy is long overdue, otherwise the foundations, hitherto a bastion of civil society, will be overwhelmed and engulfed, forming yet another first steps agency of government. As Anheier and Leat state, they must change direction to locate themselves,
"at the crossroads of society rather than at its centre".
They must think the unthinkable.
If there is to be a new charity law, it must embrace the philanthropic foundations. A debate is long overdue and we should examine their work in contemporary society as we have the two papers that we are considering.
This has been an extensive debate. I congratulate your Lordships on your self-discipline. I was watching closely with a stop-watch; only two noble Lords overran their time, and then only slightly.
8.14 p.m.
Lord Hodgson of Astley Abbotts: My Lords, I, too, thank the noble Lord, Lord Plant of Highfield, for giving us the opportunity to have this important discussion and for introducing the debate in such an experienced and able way. The fact that, despite some late scratches, some 20 noble Lords have spoken in the debate, allied to the strong response to the debate on the Unstarred Question about a charities ombudsman tabled by my noble friend Lord Patten on 20th January, is evidence of the high and expert level of interest in your Lordships' House.
On these Benches we have never doubted the value and importance of the voluntary sector. As lain Duncan Smith said in a speech last June:
"The voluntary sector should not just be another branch of central government. For us the sector is part of a new political settlement, one which stresses the local over the central, diversity over uniformity and innovation over control".
As a party we are pledged to breaking down constraints on the sector. We intend to build solutions into a voluntary society Bill which we shall lay before Parliament in the first Queen's Speech of the next Conservative government.
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We therefore very much appreciate the Labour Government's new-found enthusiasm for the voluntary sector. However, when I was a Member of the other place a few years ago, it was all Labour Members of Parliament could do to bring themselves even to mention the words "charity" or "voluntary groups". For them—here I echo the words of the noble Baroness, Lady Howe—"charity" was a dirty word and the man from Whitehall or the town hall always knew best. Let us hope that this is a permanent conversion.
The village of Astley Abbotts from which I take my title lies just outside Bridgnorth in south Shropshire. It has 200 inhabitants. In 1815, Hannah Philips, spinster of the parish, left £300 to be invested in government stock, the interest of which was to be split and paid, first, to each of,
"the most distressed widows in the parish",
and secondly,
"in the purchase of suitable books for the use of poor children to be instructed as hereafter mentioned".
The words may be a little brutal for modern sensitivities, but the sentiment behind them remains a fine one: the wish of someone who had been lucky in life to provide money to help her less fortunate fellow parishioners.
The history of that educational trust over the past 25 years has signposted and reflected many of the issues raised by noble Lords in the debate. First, I cite the ease, or lack of ease, when restructuring to reflect modern conditions. The trust wanted to combine the two parts and, like my noble friend Lady Miller of Hendon, found dealing with the Charity Commission complicated, time-consuming and costly. Secondly, the trust wished to take advice as to how it might expand the original objectives of Hannah Philips. Getting advice out of the Charity Commission also proved extremely difficult. I support the view expressed by the noble Lord, Lord Turnberg, that a friendly adviser and a regulator do not sit happily together. Although the noble Lord, Lord Phillips, does not agree with that view—no doubt it is one that we shall debate in the future—I must say that I think the roles are very different and not easily combined.
The third issue which has concerned the trust, and one which I do not think has been raised in the debate, is the protection of trustees who have acted properly. All the work is done by trustees who live in the parish and give of their time freely and unpaid. However, they are becoming increasingly anxious about their legal exposure and responsibility in a litigious age for a fund that now approaches £40,000.
As I read through the two reports, I thought about the impact on those huge charities which do such tremendous work. However, as my noble friend Lady Seccombe also pointed out, I was concerned lest we forget or overlook the impact on the thousands of Hannah Philips-type charities which do such valuable work, unsung and unnoticed, across the length and breadth of the country. They too need encouragement and support.

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Like the noble Lord, Lord Warner, perhaps I may congratulate the Strategy Unit on the quality of its report, Private Action, Public Benefit. One may not agree with all the proposals, but the report is clear, logical and well written. The fact that it was able to achieve that in fewer than 100 pages is an object lesson in itself.
The cross-cutting review has many positive and interesting recommendations, but I found certain parts where management consultant-speak appeared to have taken over. I quote only one example from Section 8.9:
"It will harness the vision, specialist knowledge and expertise of service providers to transform their capability, push out the boundaries and, most importantly, improve service outcomes".
Pass me another platitude. However, as many noble Lords have pointed out, it is in this report that we come to the heart of the challenge. It is easy to recommend, as in Section 8.4, involving,
"the VCS actively in the planning as well as delivery of services"
but it is pushing that through in spirit as well as in the letter across departments as well as at national and local level that will be the challenge; and to do so, as pointed out by the noble Lord, Lord Dahrendorf, and many others, without smothering the distinctive features of private sector charities.
For the glory of the voluntary and community sector is its responsiveness; and that, in turn, is bound to make it, by government standards at least, less predictable. I note, nevertheless, the implementation timetable in the report, which is clearly an honest endeavour to monitor progress.
Recommendation 24 of the implementation plan is that the Inland Revenue,
"should work with Customs & Excise to establish a single, integrated help-line service, to provide charities with a single point of contact".
The suggested action is that a help-line will be established by January 2003—a small step, but a worthwhile one. Yet when I rang the Inland Revenue's general inquiry number yesterday—6th February—no one was able to redirect me to this help-line. Perhaps the Minister will let us know whether this first small deadline has in fact been met.
The review is concerned with service providers. But there are many charities that do not wish to be service providers—that does not make them any the less worthwhile as charities. They are concerned that they may be viewed less favourably—organisationally, financially or structurally—than service providing charities. As the noble Baroness, Lady Thornton, said, that means that there needs to be a commensurate, measured and fair regulatory system and a light regulatory touch.
Of course we have to maintain public confidence in the sector, and that requires that information should be made available. But some charities are concerned at the proposal in paragraph 6.1 of the report for a "standard information return". Can one standard return ever sensibly cover the huge range of charities? Moreover, if the information were to become generally
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available, one can envisage journalists and others constructing league tables which could be misleading and could lead to value judgments. It could even serve to undermine public confidence—the precise reverse of what is being sought.
Perhaps I may give a simple example. A charity holds an event at a leading London hotel for 750 people. The net sum raised is £75,000, but the cost of putting the event on could equally be £75,000, so the fund-raising cost is 50 per cent of the gross raised. By contrast, a private party for 50 people in a venue lent free of charge might raise £50,000, with a fund-raising cost of nil. Which is the better function? Which will appear better in any return? Which actually energises the most people to help raise money for a worthy cause?
This has been a fascinating debate. It has shown care and concern about the sector and a widespread view that there is a need for a new legislative framework. But, inevitably, this can be only an appetiser. The main course will be served when the Government's legislative intentions become clear. I hope that we shall hear more about this in the Minister's reply.
8.23 p.m.
Lord Filkin: My Lords, I was delighted when I saw that my noble friend Lord Plant of Highfield had proposed this topic for debate. The debate is timely and important. It provides me with a rare chance to speak at the Dispatch Box about a matter for which I am responsible.
Perhaps I may signal what I can do in the limited time available to me. I shall not be able to respond in 20 minutes to all the points of detail that have been raised. To do so would mean that I should not be able to respond to the points of principle that have been raised. Therefore, with the House's blessing, I shall create more work for my civil servants by responding directly with a sequence of letters.
Perhaps I may seek to respond to the big picture and to some of the questions raised. There is general recognition that there is enormous potential. We have had a sequence of major reviews. It is clear that there is a commitment within government—and a commitment across parties— to moving forward; and there is a general recognition that one wants to explore how. Through a positive partnership between government and the sector, one can deliver more for the public. That is the essential focus underlying the debate. How can we make this work better for the public?
We are talking about three issues: the voluntary sector, which has been the main subject of the debate; the community sector, which is slightly different— significantly different in some ways; and volunteering. The debate is about how these intersect in terms of potentially delivering more value for the public.
I shall put the Government's position clearly on the record. Our focus is on how the voluntary sector can help to improve the quality of society in ways that are seen by a diversity of people, not necessarily only by government. We affirm the importance of campaigning, which is often, although not always, against the Government. Secondly, we recognise that the sector has the potential

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to meet needs in different ways and to meet needs that the Government do not think, or do not yet think, are a priority. That may connect back to campaigning. For a healthy civil society, this is crucial, which is why the independence of the sector has to be the lodestone for all of us. Independence, however, does not imply being dormant or quiescent. We want an independent sector that is innovative, active and, at times, challenging.
However, because independence implies that at times there are differences, one should not take that to the other extreme and assume that the sector and public fenders are always in conflict. That is nonsense. There are many examples of a similarity of goal and objective between a charitable organisation and public policy—not always, but often.
I wish I had more time to engage with the noble Lord. Lord Dahrendorf, on the issues that he raised in a good radical speech. There is clearly a case for non-state involvement of the voluntary sector, if by that he means not having state dominance. But if he is arguing for no state funding in the voluntary sector, I question that, because I think the public would lose out. It is the terms of that relationship that we are trying to tease out and get right.
So why does this matter? It is potentially because we are looking for the public to gain more and to get added value. Let me rattle off some points. It is clear that a world in which the state tries to do everything to deliver outcomes that the public want is a horrific monster. We have all moved away from that thinking. The state has some defects when it seeks to do things itself. It is clumsy, it cannot possibly go with the fine grain of issues, and it is not always as responsive to innovation as it should be.
We want things done in society that the state does not want or does not think a priority. That is healthy for society, and government must have the maturity to recognise that and not take a monolithic view of the world.
Last on the agenda is the renewal of civil society, the promotion of the growth of social capital, which some of us have talked about recently. We have not touched on that much, although I think my noble friend Lord Judd mentioned it. It is clearly massively important to many of us, and there are interconnections between the agendas. They are not the same, but there are linkages between them.
What are we looking for? We want greater impact, greater contribution by the sector in terms of more innovation and greater ability to identify outcomes that work better when others have failed. We want potentially more scale, because scale is not a dirty word. In other words, if things are good and are done well by the sector, we want more of them. We also want the opportunity for more choice, either in terms of the public getting the outcome they want or a public or charitable funder being able to look at various ways of getting outcomes. That would be my agenda of what our high level objectives would be in terms of the sector having massive potential and importance with regard to the quality of our society.
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The Strategy Unit report, the cross-cutting review and, before that, the compact, signalled that there were some pretty major problems in fulfilling that vision. A number of noble Lords have spoken eloquently about the scale of the challenge facing government and the sector in fulfilling a vision which I think we broadly share. In response to the anxiety about the dominance of state funding or a state funding relationship which is clumsy, skewed or lopsided, we must bear in mind that other funding mechanisms are crucial. The noble Lords, Lord Joffe and Lord Smith of Clifton, spoke helpfully in marking the importance of philanthropic foundations, a topic for debate another time. The work of the noble Lord, Lord Joffe, is extremely important in this regard and is another area for discussion. We can perhaps debate those three areas as potential sources of alternative funding which most of us wish to see expand rather than diminish.
On the tighter topic of service delivery and the Government's approach to the potential contribution of the sector, at one level we are just looking for greater opportunities. We are looking for the sector to be given a level playing field so that it can engage if it wants to. That does not imply that it is second class if it does not want to engage and wants' o do other things or does not want to have a relationship on service delivery with central or local government. If it wants to do so, we shall not achieve the potential unless government shift their behaviour. The noble Baroness, Lady Prashar, and the noble Lord, Lord Hodgson, were both clear and challenging about how government have to move their behaviour if we are to unleash the potential.
Let me illustrate some of the things that the Government are doing to try to start the exploration of how to achieve that. I have started a sequence of discussions with Ministers in the Home Office and elsewhere. I talk to Ministers and their officials. We outline the outcomes that they want to achieve—less drug taking or offending from a Home Office perspective, or healthier living—and ask if they would like to start a discussion with us and others on three questions: how the public, if they were liberated, could make a greater contribution to tackling those problems; how the voluntary sector could make a greater contribution; and how volunteers could make a greater contribution. Those three obviously overlap.
We want a sequence of discussions with colleague Ministers, with the voluntary sector and civil servants present, in which we explore those three questions, starting from the question of where we could do things better for the public and what that would then imply for the relationship between a government department and the sector to promote innovation and the development of its capacity.
The response from Ministers I have talked to so far has been excellent, but we have not yet put that into practice. In a sense, it is a process of exploring potential, almost exploring market-making and market development, and trying to develop a partnership relationship rather than the dreadful procurement relationships we have seen in the past.

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The second issue is the need to knock on the head antiquated bad procurement practice by central or local government, with a crude, short-term, adversarial contracting relationship. That is a hopeless way of stimulating innovation or getting value out of any supplier, let alone out of the voluntary sector.
Thirdly, there is clearly a need to look at what can be done to support the development of the sector's capacity. Economists would call it the supply side, but that sounds too technocratic. The good news is that there are two major funds—the Futurebuilders fund and a major fund held by the Active Community Unit—which need to be developed in a harmonious partnership with the sector focusing on how best to stimulate the sector's capacity for more. That thinking is being developed actively with the sector. It gives us a lot of scope to move forward.
We also have to be aware of sectoral issues. The noble Baroness, Lady Howells, and the noble Lord, Lord Bhatia, reminded us of the importance of looking at the contribution of the black and minority ethnic voluntary sector to meeting race equality outcomes in society. Clearly, the Race Relations (Amendment) Act 2000 is a powerful lever to public bodies and to the voluntary sector, even though it does not apply strictly to it.
Lastly, the compact has been around for a year or two. The challenge now is to make people take notice of it and move it forward. We are not giving up on it because we think it is crucial. It has been well developed and now it has to be driven in. I am delighted that Sir Michael Bichard, whom many will know from local government or DfEE days, has taken over the role of independent champion of that. He and I will be fronting the big debate with the sector, with a whole range of Ministers, I hope. I think that is in March and April. We intend to use the annual event as a powerful celebration and calling to account of central government departments, local government or even the sector itself, so that we try to make the spirit of the compact driven and lived more actively.
Although I am being rapid, the nature of all these relationships is one of partnership. We hope that central and local government recognise that they have to approach the issue with some humility rather than just as a dominant purchaser.
I have not said much about local government. Some 40 per cent of the sector's funding on service delivery comes from local government. We are already in discussion with the LGA and will be in discussion with local authorities over at least the next 18 months about how to promote better practice and retail it across others. It is crucial that they are with us as well.
I shall leave service delivery and give a few words on volunteering, as it is germane to the discussion. The noble Lord, Lord Joffe, and others were at the breakfast launch with the Chancellor and Home Secretary when Next Steps on Volunteering was publicised. That is an important document and I am
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keen to work with my colleagues in the Treasury on driving it forward, so that we actually get some action out of it.
In the Home Office, we are asking ourselves what, if anything, the Government could do to stimulate an environment in which more volunteering is likely to happen. I do not mean tax breaks, because that is a Treasury issue. We already put in money here and there to stimulate initiatives. However, we need to think about what sort of support structures at national and local level might most help to promote more volunteering. We should not aim for a central Government, Baldrick-type plan. It should not be like that; there should be some conceptual thinking about what architecture of support would be most helpful.
Lastly, I turn to the issue of regulation and legislation, which in many ways has, rightly, been a dominant theme of the debate. I have at least 40 questions to answer and, given the time, noble Lords would not thank me if I tried to answer them all at this point.
I turn to the Strategy Unit report, and mark that three pieces of legislation are needed to take it forward into practice. We are currently considering the 1,100 responses to the consultation process. We were pleased with both the quality and the volume of those responses. We shall also take this debate as part of the response to that process. The director of the ACU and I will study the debate to see if it informs our thinking, as I am sure it will. In the spring, we will publish our response to the consultation. In time, it will lead to three separate pieces of legislation.
First, there will be a Bill that will be led by the Department of Trade and Industry, although the Home Office and the DTI are working actively in partnership on it now and considering the issue of community interest companies. The noble Baroness, Lady Thornton, is right. The potential for social enterprise is to contribute to social good. These are not profit distributing organisations but, like the noble Baroness, I hope that they are making a profit or they will not last long. It is the distribution that is the defining issue. The noble Baroness, Lady Thornton, referred to a whole string of issues on which there will be consultation in the spring. We are considering those issues, and she will see them at least teased out for discussion in the consultation document.
The noble Baroness also raised the issue of the industrial and providence societies. The Treasury shares our keenness to move forward on that, and we will be looking for a suitable opportunity to do so. The Treasury will be the lead department in that regard.
Lastly, the charities Bill: it would fall to the Home Office to lead on that. The noble Lord, Lord Turnberg, has cautioned us not to be too rapid. I believe that one could argue the 400-year point either way. There will be a serious process of technical work as well as complicated policy issues to address. It is not a simple piece of legislation in terms of getting the detail right and thinking through some of the principles that we have marked. That will have to be done as soon as possible.

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That Bill is a classic sort of Bill for pre-legislative scrutiny and being published as a draft Bill, and I am sure that we will want to do so. Noble Lords will not be surprised to hear that I am not in a position to divulge when it will be in the Queen's Speech. However, I hope that it will be an early one, when we have got it right after a vigorous process of consultation.
There are other issues that I could mention, but that would be diving into detail, which would weary noble Lords. I can promise individual letters.
In conclusion, the commitment is there in government and on a cross-party basis to make this work. I also sense that commitment in the sector.
The challenge for all of us is to be quite mature about how we drive this forward over at least the next three years. I am delighted to have the opportunity to work on the issue within government and with the sector. Government and the sector will themselves need to change if they are to capitalise on the potential opportunity to do much more for the public. We need to get this right over the next few years.
8.40 p.m.
Lord Plant of Highfield: My Lords, there are some very big issues here, as we have seen during the course of the debate. It has been an excellent debate in which we have had a wide range of very good speeches by noble Lords with great expertise and experience. If I may say so without appearing too sycophantic, I thought that the final speech of my noble friend the Minister was a terrific synopsis of the debate and. was quite informative on government thinking. I thank him very much for that. I thank all noble Lords who have taken part in the debate. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Electricity (Miscellaneous Provisions) Bill
Brought from the Commons; read a first time, and to be printed.
House adjourned at eighteen minutes before nine o'clock.

  A14: Litter
  A14: Litter
  Northern Ireland Multi-Party Talks, 19 December 2002
  Northern Ireland Multi-Party Talks, 19 December 2002
  Northern Ireland: Republic of Ireland Civil Servants
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  Irish Government: Respect for Traditions
  Irish Government: Respect for Traditions
  North/South Ministerial Council: Equality Scheme
  North/South Ministerial Council: Equality Scheme
  Ulster-Scots Agency
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  Northern Ireland Department of Culture, Arts and Leisure: Linguistic Diversity Branch
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  RSPCA: Comments on BBC Coventry, 13 March 2002
  RSPCA: Comments on BBC Coventry, 13 March 2002
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  Department for Environment, Food and Rural Affairs Industry Working Group for Animal Disease Insurance
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