asked Her Majesty's Government:

My Lords, as announced on 6th February, we will be asking our European partners to use the opportunity of the Inter-Governmental Conference to add a new protocol to the Treaty of Rome. That protocol would place a formal legal obligation on the Council of Ministers to give full regard to considerations of animal welfare in the exercise of its powers on agriculture, transport, research and the single market. Our proposals for the precise wording of the protocol are still under consideration.

My Lords, I thank my noble friend for that most encouraging reply. Will he agree that to include in the protocol or, better still, in the treaty a new classification for animals, from being "agricultural goods" to being what they are— living creatures which know fear and pain— would greatly hasten the move towards the elimination in the Community of many inhumane methods of production? Could it also mean the end to journeys for livestock which are far too long?

My Lords, a new protocol along the lines which we suggest would help. In a way it would mark the general progress towards better animal welfare throughout the Community, through the efforts of voluntary bodies and others. It would provide a basis on which the Community could not so much push forward in the vanguard but ensure that its regulations accord with how people in general in the Community are now wishing their food animals to be treated.

My Lords, will the Minister agree that animals should be treated as sentient beings? Alternatively, is he saying that the present classification can stand, that live animals are treated as being the same as the insides of animals? I believe that that is spelt out as guts, bladders and other pieces of animals. Should not the Government take a firm stand on the classification, whatever means they choose to reach their objectives?

My Lords, the question of the wording is difficult. In the dictionary definition, the word "sentient" means "possessed of senses". In other words, if something is capable of feeling touch, then it is sentient. However, the word has drifted a good deal to mean "possessed of emotions" and even "possessed of intelligence". It is a difficult word to define in English, let alone in the other Community languages.

My Lords, does the Minister agree that the Almighty created animals as well as human beings? Although animals have not eaten the fruits of the tree of good and evil, we who have should give due consideration to them.

Yes, my Lords.

My Lords, is the Minister aware that it is encouraging to hear the Government say that they are prepared to put forward a proposal amending the Treaty of Rome? Is he further aware that, notwithstanding anything that the Government ultimately succeed in incorporating in the treaty as a protocol, there will still have to be a proposal from the Commission in order for it to have any effect? What undertaking has the Minister received from the Commission that, if the protocol is inserted into the treaty, the Commission will bring forward a proposal? Otherwise, no action can be taken.

My Lords, I do not believe that we are talking about a proposal being imposed on the EU by Britain and then imposed on the EU by the Commission. It will happen because of the general will of the people of Europe and I am sure that the Commission will follow it.

My Lords, will the Minister take particular care and obtain advice from biologists as to the wording of the proposal? It ought not to be the case that if you swat a fly you are in breach of an international treaty.

My Lords, I absolutely agree. But not many of us think of flies as food animals.

My Lords, is my noble friend aware that we eat oysters alive? Would the proposal interfere with that?

My Lords, in the old and proper sense of the word, oysters are certainly sentient beings in that they have senses. I can remember my father teaching me that, "Any kind of noise annoys an oyster, but a noisy noise annoys an oyster most".

My Lords, on this side of the House we welcome the proposed protocol and recognise that both its enacting and its implementation will take some time. Meanwhile, can the Minister say whether United Kingdom meat exports on the hook are being vigorously promoted and will continue to be vigorously promoted? Will he also say where responsibility now rests for such promotion? We believe that it would make a major contribution towards the growing concern about the way in which animals are treated, once they are exported from this country.

My Lords, it is with great pleasure that I find myself in complete agreement with the Benches opposite. This is a very important matter to promote and the Government and the Meat and Livestock Commission are doing their best to push it. I believe that we now export 80 per cent. of our meat on the hook. The more butchering we do here, the more value we add in this country and the more jobs we provide, let alone the implications for animal welfare. We shall push to promote this and will give help, encouragement and advice in order to achieve it. We hope that we will continue to do better, as we have done in the past.

asked Her Majesty's Government:

My Lords, no.

My Lords, is the noble Lord aware that I am most disappointed by that reply, particularly in view of the flexibility of mind exhibited in answer to the previous Question? Is the noble Lord telling the House that Her Majesty's Government believe that the independence of a European Central Bank is equivalent to infallibility, or is the Minister telling the House that they do not trust the Council of Ministers to be able to exercise any effective political control— that degree of political control, incidentally, demanded by my own party?

My Lords, the Government's view is that many of these matters are still to be decided, hence the opt-out that we have. The position is that the European Central Bank, as currently proposed, would indeed be independent, and the governing council would be drawn from representatives of the central banks of all participating member states.

My Lords, does my noble friend share in the glow of satisfaction no doubt felt by his noble colleagues that the noble Lord opposite should prefer Ministers to bankers?

My Lords, I am interested in that fact. I understand that it is not a view shared by every member of the party opposite. As I understand it, some of them would like the Bank of England to be independent. I wonder what our interest rates might be like now were that the case.

My Lords, does the Minister accept that to have any serious prospect of influencing the constitution of the European Central Bank the Government must make our European allies feel that we have a fundamental, though not uncritical, commitment to the principle of a single European currency? Were that to be the case, would it not be so much easier to ensure the accountability my noble friend Lord Bruce of Donington advocates and which we endorse? Can the Minister not get his colleagues to understand that, in the words of President Theodore Roosevelt, the best policy in Europe would be "to talk softly and carry a big stick" rather than vice versa?

My Lords, I still do not understand what is the policy of the party opposite in regard to the opt-out. I do not know whether it would abandon the opt-out immediately just as it would hereditary Members of this House, or whether it approves of the opt-out. We are at this moment involved closely in the workings of the European Monetary Institute, the forerunner of the European Central Bank. It is our policy to be fully involved in all the work that goes on in order to protect the United Kingdom's interests whether we are in or out of the European Monetary Union.

My Lords, I am not quite sure whether the Government are in favour of the infallibility of Ministers— or at any rate, their wisdom— or whether they agree with the observation that fell from the lips of a senior French official yesterday that the council has ceased to be a place of negotiation and become a place where you drop in to sign a press release.

My Lords, I was not aware of that utterance by a French official. Those of my ministerial colleagues who attend the Council of Ministers certainly know that a great deal of hard work goes on there on the part of all the Ministers involved in order to try to advance the position of the European Union. Ministers from this Government who attend always ensure that they put British interests first.

Masked Her Majesty's Government:

My Lords, we are not yet satisfied with the proportion of Commission staff who are British. The Government are working both in the UK and in Brussels to rectify the shortfall. We are making good progress.

My Lords, I thank the Minister for that reply. Does she recall that it was the noble Baroness, Lady Thatcher, who, when she was Prime Minister, took the most decisive action to improve the level of recruitment of British citizens to the Commission, through the setting up of the European "fast stream". I understand that, since then, recruitment has improved very considerably. Can she assure the House that in current reviews of Civil Service procedures the European fast stream will be maintained, as this is a very long-term investment?

My Lords, I am very pleased to say that it was my noble friend Lady Thatcher who initiated the European fast stream. In case noble Lords are not aware, this provides a programme of training and placements in UK departments for young, high-flying civil servants to assist their preparation for EU competitions. It has been running for just over five years, and has proved very successful. Thirty-five UK European fast-streamers were successful in four Commission competitions in the first three years. They represented 30 per cent. of the total UK successes. We intend to continue with the programme; it is a very good system.

My Lords, I know that my noble friend the Minister is very committed to the European fast stream. Can she assure us that the obstacles that used to be placed in the way of re-entry into the Civil Service when people had been seconded have now been removed? Is it now possible for people not to lose promotion as they used to?

My Lords, I wish I could agree with my noble friend that the obstacles had been removed. However, I do not yet feel that they have been sufficiently removed. We do our best by ensuring that wherever we spot under-representation we can put somebody into a place. We have also helped by making sure that a member of the Cabinet Office is seconded to work in the Commission on this very issue. However, we do not yet have UK government departments offering a hand to welcome people back. Until that happens, I regret to say that a lesser number will be prepared to go if they know that they cannot return to the British Civil Service after a spell in the European Commission.

My Lords, it is very satisfactory to note that efforts are being made to increase the number of British nationals serving in the Commission. However, will the Minister agree that it is surprising that over the years we have fallen behind such countries as Germany, France and Italy? At the present time each of those countries has 2,000 or more nationals serving in the Commission, whereas the number of United Kingdom nationals is less than 1,500— only slightly higher than the number from Spain,which has a substantially smaller population than ours. What is the reason for our falling behind for so many years?

My Lords, I can tell the House the reason immediately. It is because we have not been so good at producing non-graduate linguists as have other countries. It is in the clerical, executive and secretarial grades that those other countries have a far higher proportion of good linguists. That is responsible for the high number from those countries which we cannot match. It is also the case that we now have a high proportion of secretaries who are bi-or tri-lingual. However, bi- and tri-lingual secretaries in this country normally have university degrees and are not then eligible for the secretarial grades within the European Commission. Therefore, we have to do something about non-graduate linguists, and a lot more, too.

My Lords, will my noble friend the Minister agree that when a well-qualified British member of the Commission staff is sacked for telling the truth about what goes on in the Commission, it is a disincentive to other British citizens to apply for positions in Brussels?

My Lords, my noble friend is well aware of the case— I believe he joined in the discussion the last time that this particular question arose. When one works either in the British Civil Service or in the Commission, one has to abide by the rules. If one does not, then the disciplinary procedures will take place.

My Lords, given the Minister's earlier statement that the problem in this country is partly due to a lack of language ability post-school, what steps is she taking to persuade her colleagues in the Department for Education and Employment that provision should be made for an increase in language teaching in our primary and secondary schools?

My Lords, the Secretary of State for Education, Mrs. Gillian Shephard, who is trilingual, needs no encouragement from me to ensure that more language teaching takes place in schools. Indeed, she has been doing that ever since she went to that department. But the problem is not a recent one. It dates back to the 1960s, when, if I remember rightly, many people on the opposite side of this House did not believe in Europe at all and certainly did not encourage language teaching.

My Lords, can the Minister confirm whether or not this Government deliberately opted out of the Lingua programme for schools which applies in other member countries?

My Lords, the questions asked of any programme provided by the European Commission must always be, "Is it good value for money?" or "Can we do it better at a national level?" That is subsidiarity. There are aspects of the Lingua programme which are good and other aspects which are not so good. I know that there has been a very special effort made to get on with the Lingua programme. But that does not have a direct relationship to the matter that we are discussing.

My Lords, did I understand the Minister to say that graduates were debarred from holding secretarial posts? Surely, that is a ludicrous situation. No wonder there is graduate unemployment when that is the case.

My Lords, the problem is that, although we may have very good secretaries, they are often graduate secretaries. In that case, there has been a rule in the Commission— which we have already tried to have changed— that those with degrees in languages cannot apply for secretarial posts, if that is what they wish. This would be thought by some other countries to be unfair to their secretaries who do not have a language degree but who speak foreign languages. That is yet another matter that has to be put right in Brussels.

My Lords, with regard to language education in schools, will the Minister speak to her noble friend Lord Henley about a scheme for teaching geography to GCSE level in the medium of Spanish— I wrote to him about the matter— where our own authorities are providing a block to that very worthwhile scheme in a boys' comprehensive school?

My Lords, obviously I do not know about the individual case mentioned by the noble Baroness. My noble friend Lord Henley reads Hansard avidly and I shall make sure that her remarks are noted by him.

My Lords, will the Minister give an assurance that, as the promotion of British citizens in the Commission is important to the maintenance of their morale, the British Government will give careful thought to encouraging promotions within the Commission to senior Al to A3 positions rather than parachuting in people from the outside?

My Lords, the noble Lord is absolutely right but, as he well knows, achieving promotions within the Commission is not so straightforward a situation as we should wish. There is now a member of the British Cabinet Office in the Commission specifically directing attention to these matters, and this will help us. There is no doubt that we are under-represented in the Al to A3 grades, as we are in some of the non-senior grades.

My Lords, is the noble Baroness aware that many people in this House may have been shocked at the reply given to the noble Lord, Lord Annan? Does that reply mean that in Europe and in the Commission there is discrimination against excellence?

No, my Lords, it does not mean that they discriminate against excellence. What has happened is that there are many people who, through their normal schooling in other countries of the European Union, grow up learning a number of languages and have perfectly good secretarial skills. It is obviously cheaper to employ somebody who has good secretarial skills and languages but who is not of graduate status, because that is the level at which they are paid. As I openly admitted to the noble Lord, there is a problem but we are trying to tackle it. It has been there for a very long time. Others have been unwilling to tackle it. We are willing to tackle it.

asked Her Majesty's Government:

My Lords, the Government are keen to promote all forms of private pension, both occupational and personal, including, where suitable, group schemes. We have produced a range of leaflets on private pension provision which includes information on group personal pensions. We are assisting the financial services regulators to develop suitable guidance on the sale of those products. We are also examining whether further steps are needed to promote the growth of group schemes among employers otherwise making no pension provision for employees.

My Lords, I thank my noble friend for that very encouraging reply. I congratulate him and his right honourable friend on the start that they have made with the group personal pensions. It is vitally important that employers should he encouraged to provide pensions for employees. In that respect, does he have any special plans, such as rebates on NICs, to encourage employers to start up such schemes? Secondly, in view of the fact that there is an upper limit to personal pension provision, does he agree that it might also be an advantage to indicate a basic minimum?

My Lords, I am grateful to my noble friend for his remarks about group personal pension schemes. Certainly they are very suitable for smaller and younger companies which do not have occupational pension schemes. They are a way of providing a scheme with reduced administrative costs and of facilitating an employer's contribution. If the scheme is approved, it will be eligible to receive the contracted-out rebate which is for both employers and employees. If I heard my noble friend aright, I must tell him that we have no plans to give employers a national insurance contributions rebate in order to encourage them.

On my noble friend's last point, it is an interesting idea that we should recommend a minimum payment. Of course there is a minimum payment which is compulsory and is, in fact, slightly under 5 per cent. It is the sum going to SERPS or to contracted-out provision for an appropriate scheme. I am not convinced that it would be appropriate to raise that figure and go for some kind of compulsory saving via a pension scheme.

My Lords, does the Minister recall that the last time that the Government became involved in promoting private pensions, it resulted in the misselling of pensions on a large scale'? Is he aware that the process of sorting out the problems associated with that have hardly made any progress at all? Does he agree that with such a record it is best for the Government to keep out of promoting anything to do with pension plans?

My Lords, I certainly do not agree with the noble Lord's last point. It is vitally important that we give every person in this country the opportunity to belong to a second, preferably funded, pension scheme. That was one of the principles behind the Pensions Act which I took through your Lordships' House last year. I believe that the misselling of personal pensions is now a matter largely in the past. Investors are now better able to make informed choices. There are new and tougher rules on disclosure of charges, commission and policy surrender values. Higher standards of training and competence set by the financial regulators will underpin those changes. One aspect to which I referred in my original Answer is that we must, of course, ensure via the Securities and Investments Board that any selling of group personal pensions is conducted in a rigorous manner as well.

My Lords, can my noble friend say how much has been put aside nationally to meet the future needs of pensions in this country? How does that record compare with the record of other countries?

My Lords, we have been extremely successful in this country in the build-up of funded pension schemes. In fact, on the last valuation, we had something like £600 billion of funded pension schemes set aside for retirement and future retirement. That is more funded pensions capital than the whole of the rest of the European Union put together. Indeed, a recent OECD report contrasted our position with that in many other developed countries. We were in an extremely favourable position. By the year 2030, our position would be hugely better than that of France, Germany and Japan, to name but three countries.

My Lords, will the Minister comment on the Government's decision in the light of his reply? Does he agree that they have accepted the need to tighten up and ensure that people are sold schemes which are genuinely in their interest and that they have changed the way in which that is done? Do the Government accept any responsibility for those people who under the previous lack of regulation were sold schemes which are not in their interest?

My Lords, the noble Baroness asks me about the present situation of those people who were missold pension schemes. As she is aware, the Securities and Investments Board introduced a programme to secure redress for investors who opted out of or transferred funds from occupational pension schemes and suffered loss as a result of advice which fell short of the regulatory standards then in force. We believe that the people who gave that advice should pay to redeem the position for those to whom they gave it.

My Lords, if, as the figures the Minister produced indicate, we are doing so well with our pension schemes, is there any chance of our subsidising other EC countries at a later date?

My Lords, I should jolly well hope not.

My Lords, can the Minister give an absolute assurance that, if we join a single European currency in the third stage of EMU, through taxation transfers we will not in fact be doing exactly what my noble friend suggested'?

My Lords, both noble Lords raise a serious point of which we arc well seized. We, as a government, will certainly guard against any proposition that would enable some of our European friends who have not the same sensible pension provision as ourselves to tap into our taxpayers to make up for their shortfalls.

My Lords, can the Minister tell us what progress has been made in sorting out the problems referred to by my noble friend Lady Farrington, rather than simply telling us what are the Government's intentions?

My Lords, as I said in response to the noble Baroness, Lady Farrington, the Securities and Investments Board introduced a programme; that programme is making progress. Certain problems arose involving insurance, but I understand that some of those have been resolved. Letters are going out and progress has been made.

It is worth underlining that not every personal pension was missold. For many people, unlike what the party opposite think, a personal pension was the only way for them to obtain a second pension. Either they were not employees or they were employees of companies which did not provide a personal pension. One wonders whether the Opposition would like people to have remained pensionless in those circumstances.

My Lords, at a convenient moment after 3.30 p.m. my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is to be made in another place on the Northern Ireland peace process.

moved Amendment No. 1:

Page 1, line 10, leave out from ("services,") to the end of line 12.

My Lords, briefly, Amendment No. 1 touches on one important fact. The noble Lord, Lord Rix, is talking about the rights of an individual, regardless of the label, to receive benefit and to direct that benefit to wherever he or she chooses to receive care and support.

It is true that the consultation period is not over; it is true also that we shall not be in a strong position at the end of that period to he able to make a realistic contribution to the Bill. Thus I recommend that the House listens to what is being said. All we are doing is trying to ensure that groups are not excluded. Surely that is something which is beneficial to all groups and will not be damaging to the general thrust of the Bill.

My Lords, the noble Lord, Lord Rix, was brief in his proposal of this amendment, as he had already spoken at Committee stage in like vein. I too hope to follow his excellent example.

We are seeing one of the inexorable laws of politics; that is, if a sensible, widely agreed and desirable reform is introduced, the Opposition could not possibly oppose it and say that either it was too little or too late. Indeed, the noble Lord, Lord Rix, used both arguments: "too little" because at the moment the scope of the Bill is limited, as we acknowledged when debating this matter at Committee stage; and, if the sort of group that he has particularly in mind comes in at a later stage as a result of consultation and fully in accordance with the provisions of the Bill which allow such extensions to take place, the "too late" argument is used.

I therefore reiterate that the Government have brought forward a useful and good piece of legislation. It would be right for us to give it a run as a new scheme, starting slowly in a modest and seemly fashion with proper monitoring. We should allow the monitoring to take place always with the possibility that, following on from the consultation and monitoring, the Government—without any primary legislation and within the provisions of the Bill—will be able to make provisions for the sort of extensions which the noble Lord, Lord Rix, has in mind. In those circumstances, the arguments are persuasive in supporting the Government, maintaining that flexibility and taking a sensible small step forward rather than perhaps trying to take too large a leap at this stage which could in the long run be against the interests of the Bill itself.

My Lords, I support the Government on the Bill, although in some ways I am sorry to oppose the noble Lord, Lord Rix, who does such splendid work for people with learning difficulties. With any new Bill, particularly a Bill like this which takes us into strange waters where we have not been before, there are bound to be difficulties. In fairness to those with learning difficulties, it is far better to know what those difficulties are so that people do not feel they have made a mistake in purchasing whatever it is they need and want. When working in a social services department I often found that someone with learning difficulties would come to me and say, "Why don't you help me?" One feels that one wants to help people with learning difficulties but one does not want them to make mistakes. There are bound to be mistakes at the beginning. It is far better for us to know what mistakes have occurred before giving them the opportunity to purchase these services.

My Lords, as the noble Lord, Lord Rix, said, the amendment seeks to avoid restricting the payment of money for the provision of services in advance and confining it exclusively, as the Government intend, to physically disabled people under the age of 65. That would mean that by category those with learning difficulties or adults over 65 with physical handicaps would be excluded from receiving direct payments. Whether they wished to or not, they would instead receive only services.

What is the nature of the Government's objection to the amendment? Local authorities, voluntary organisations and disabled people wish to see the possibility of direct payments being made to all disabled people. What is the nature of the Government's argument? It cannot be that the Government oppose the proposal on financial grounds. It is clear from all the research that for local authorities direct payments are cheaper than services. The average cost of direct payments is around £5 an hour; the cost of services, with overheads, is around £8 an hour. Direct payments are cost neutral and certainly far cheaper for local authorities than the alternative of offering residential care. So the Government cannot resist the proposal on financial grounds. Direct payments are likely to be cost neutral and may very well save us all money. So the argument is not one of cost.

What is the next government argument? It appears to be the floodgates argument, on which the noble Lord, Lord Hayhoe, touched. The argument is that local authorities would be overwhelmed and that therefore we should start slowly and gradually build up. That assumes that all local authorities are coming new to the issue of direct payments. They are not. Some schemes have been in operation for 14 years and already extend to far wider groups of disabled people than the Bill envisages. Without the amendment, in some local authorities fewer people will he eligible for direct payments as a result of the Bill than they are today. That is what it means. Some people will lose direct payments which they are currently receiving through third-party agencies and may have to go back to residential care—certainly the evidence of Kingston suggests this—even though they arc currently enjoying and experiencing direct payments from a well-run and well-managed scheme funded by the local authority. Far from the noble Lord, Lord Hayhoe, being right, he is profoundly wrong. The Bill will narrow and take away opportunities which disabled people are currently enjoying.

Is it true, nonetheless, that if the amendment were passed the floodgates would open? All the research shows that only a small proportion of disabled people are likely to want and to take advantage of the scheme. The suggestion is that only around 100 of every thousand physically disabled people under 65 are likely to take up direct payments. The number could be more—I hope very much that it will be—but that is the evidence so far. Far from local authorities being overwhelmed, the problem is much more that unless we have adequate support and advice systems in place they will be underwhelmed and will need to build up the confidence of disabled people to take up these packages. The Government need not fear the floodgate factor any more than they need fear the cost factor.

The third argument the Government have adduced has been repeated by the Minister's supporters on the Back Benches. It is that local government must go slowly and build up confidence. Local authorities are already running such schemes. There are 60 in existence. Most have a remit to help far wider groups of people than the Bill envisages. I have every confidence that directors of social services who are starting direct payment schemes from scratch will not seek to extend them to people beyond the capacity of their authority to deliver them. The directors of social services are not stupid. They will not arouse expectations which they cannot deliver. They will not try to encourage demand which they cannot meet. Being professional, skilled and highly responsible people, they will want to ensure that people's needs and people's demands and authorities' ability to cope are aligned.

What does the Bill as it stands do? What it does is stereotype. The noble Lords, Lord Rix and Lord Addington, are exactly right. The Bill says that irrespective of the needs, the abilities, the desires or competences of the individual person, the Secretary of State will say, "Certain categories of disabled people will be discriminated against. They will not be eligible to receive direct payments even though some of them are receiving them now." That is ruling out direct payments, not by assessment, not by judgment, not by demand, not by need, but by category and by discrimination. That is not proper. It is right that the local authority should exercise its professional judgment in conjunction with the needs and views of the disabled person. We do not need the Secretary of State double thinking the local authority. Trained professional social workers are always making fine and difficult judgments on issues like child abuse. We trust a social worker to make a judgment about child abuse but the Bill is saying that we do not trust a social worker to make a judgment about direct payments to disabled people who may already be enjoying them. We do not need the Secretary of State to prejudge the situation in advance when local authorities wish to extend direct payments, when disabled people wish to receive them, and when it is at no additional cost and may very well save money for the taxpayer and council tax payer alike.

Let us not have discrimination by category. Let us recognise the human potential of every disabled person to be at the centre of the care system by organising services. Let us respect the local authority's professional judgment. Let us ensure that all disabled people who in the judgment of the local authority can benefit from direct payments and so take autonomy and control over their own lives are enabled to do so. Let us support the amendment today.

My Lords, I and I believe others understand the principle that the Government follow in introducing a totally new system, except in Scotland, and taking certain categories to start with: that is to say, they do it gradually. No doubt that is what my noble friend will say in reply.

The noble Baroness, Lady Hollis, has raised a point to which I hope my noble friend will reply. Unless I misunderstood her, she indicated that the present local authority schemes, which were carried out through third parties, would come to an end. My understanding is that during the introduction of the new system local authorities will not have to bring to an end schemes that they have operated up to now. I should be grateful if my noble friend could comment upon the point. Is the noble Baroness right to suggest that at a certain stage the existing schemes will have to come to an end or, as I had supposed, will they continue while the new direct payments schemes are brought into effect? If that is correct, there should not be a situation where there will be fewer disabled people who receive payments than there are now.

My Lords, I did not understand one point in the speech of the noble Baroness, Lady Hollis. She placed responsibility on directors of social services to decide whether or not somebody should have something because he fell into a certain category. Since this a new scheme, is it not rather unfair to place that responsibility on directors of social services?

My Lords, with the leave of the House, I should like to respond to the question put by the noble Baroness, Lady Faithfull. Local authorities will be in very different situations under the terms of this Bill. Many local authorities have no experience of direct payments; others have run schemes for up to 14 years for categories of people which are wider than those currently envisaged by the Bill. When directors of social services come to construct schemes for direct payments within the framework of the Bill, they will extend it to such categories as they believe their local authorities are competent to handle. If there are currently third party schemes that give direct payments to people with learning difficulties, or people over 65, there is absolutely no reason on this earth why they should not feel competent to continue to do so. But, if they are new to the area and this is the first time that they have put their feet into the water, they may well wish to start with a more narrowly focused scheme. That is a judgment that must be made locally in the light of local experience rather than predetermined at arm's length by the Secretary of State, who does not know what the local situation is.

My Lords, just as the noble Baroness, Lady Faithfull, has no wish to disagree with the noble Lord, Lord Rix, I have no wish to disagree with her, but I think I do. Quite rightly, she refers to protecting people from making mistakes. I do not suggest that she says that in any paternalistic fashion. I know that she has the best of intentions to help those individuals to progress. However, at the last stage your Lordships considered whether the provision in Clause 1(1) for local authorities to make payments should be discretionary or mandatory. It is discretionary. The amendments proposed by the noble Lord, Lord Rix, and later by my noble friend Lord Addington, will not affect the discretion of the local authority to judge the individual case. It deals with discrimination against groups of people, to which this amendment is addressed.

The noble Lord, Lord Campbell of Croy, makes an interesting point. If local authorities are able to continue their current payments to individuals who may not fall within the categories that are to be approved, is it not ironic that others who are within those categories cannot be paid, if by their current actions those local authorities have shown that they are capable of dealing with categories of that type?

My Lords, can we be assured that anyone who is currently in receipt of a direct payment can continue to receive it? Will that not cover the point raised by the noble Baroness, Lady Hollis? I believe it has been said that these people receive the money from third parties rather than from local authorities. That tends to complicate the issue. I am not sure how that will affect the position. It seems to me that in many situations in life to put in a "no worsening" provision would cover it.

My Lords, when we discussed this clause at Committee stage I suggested that it might be incompatible with the Disability Discrimination Act 1995. I am glad to say that my noble friend the Minister has written to say that expert opinion is that this Bill is compatible with that Act. Despite the legality of it, I have a feeling that the way in which this Bill is proposed to be put into effect is definitely against the spirit of the Disability Discrimination Act 1995. There will be discrimination if the payment of direct grant starts only for a certain category. What of the position of two cousins, one who receives a direct grant because he is just under the age of retirement and the other who will not receive it because he is just over the age of retirement, possibly by only a few days? I understand that once the grant has been agreed it will go on into the old age category. The Independent Living Fund and the Independent Living (Extension) Fund have operated for a number of years, and have given direct grants. The lessons have been learned and can quite easily be disseminated to local authorities without direct experience. Local authorities talk to each other. Social security directors are in constant touch and talk of different problems and ways to overcome them. They learn lessons from each other and from their authorities. I believe that it would be for the benefit of disabled people and those in receipt of community care as a whole if everyone were to be included at this stage. The Bill is discretionary. It is up to local authorities to decide whether or not to make grants. It is also up to the individual whether or not he or she wishes to accept the grant. I strongly support the amendment.

My Lords, this is an exciting new scheme. As the noble Lord, Lord Rix, has said, all of us are anxious to get it right. Many authorities have wide experience but others do not. There will be a need for monitoring, which can be very time consuming. Although my heart says that in due course I should go with the noble Lord, Lord Rix, my head tells me that I should support the Government now.

My Lords, I support what the noble Baroness, Lady Gardner of Parkes, has said. I hope that the Minister will answer her question.

My Lords, at the risk of boring your Lordships, I reiterate the views expressed by my noble friends today that direct payments are a new and a largely untested development. The Government want to see them introduced on a limited scale so they can see how they work and so local authorities have the best chance to make them a success. We propose to limit the scale by restricting the size of the potential client group. Amendment No. I would remove the power to do that.

The noble Baroness, Lady Hollis, said that some local authorities had been operating schemes through which payments were made to individuals and that they would find that experience useful. But the noble Baroness has also said that not all local authorities have that experience. Even those that do may find that the making of direct payments as part of mainstream community care brings new challenges for which they are not prepared. We cannot assume that local authorities are ready to hit the ground running. If we remove the power to limit eligibility, that is what we are asking them to do. I am concerned that by removing the ability to limit the eligible client group we shall actually hinder the implementation of direct payments. Some authorities which would be happy to offer direct payments on a limited scale may not feel ready to offer them to all client groups. They may then decide that they would prefer not to offer direct payments at all in order not to appear discriminatory.

My noble friend Lord Swinfen mentioned the Independent Living Fund. That experience is useful hut it is not directly applicable. The role of local authorities in relation to the Independent Living Fund is very different from the role they will be taking on in making direct payments. The Independent Living Fund fulfils a different role, with a different target population. By starting relatively small, we will enable local authorities to focus their attention on making direct payments work well. We are making no assumptions about whether people outside the initial eligible group would be able to manage direct payments, given the opportunity. That is why the client group we propose in the consultation paper does not exclude people with physical disabilities who also have learning disabilities. That is why if there is an age restriction we do not propose that people who have been receiving direct payments should cease to be eligible when they reach the age of 65. This is not about discrimination.

Our aim is to select a group of an appropriate size who are keen to take on this new freedom. Within the eligible group, the discretion over whether direct payments are appropriate for each individual remains with the local authority. Local authorities will be able to get used to direct payments with the limited group and the Government will be able to see clearly how they are working. As the noble Lord, Lord Carter, said in Committee, we are entering something of a minefield. We believe that by starting cautiously we shall build a firm foundation for the long-term future of this important new venture.

We are not suggesting, as I think the noble Lord, Lord Rix, believes, that making direct payments to a limited client group will give local authorities experience of every type of challenge they would face if eligibility were drawn more widely. But there are many aspects of managing direct payments which are the same whatever the particular needs or characteristics of the recipients. For example, local authorities will need to set up monitoring and accounting systems to keep track of the money. Limiting the client group will keep it on a manageable scale while people are getting used to the concept of direct payments.

We do not propose to reach a final decision on the client group before we have considered the responses we receive to the consultation paper. We have already said that we will consider carefully whether all people with learning disabilities should be eligible. Specifying the client group in regulations means that it can be adjusted without the need to amend primary legislation. I have given your Lordships an undertaking that we will keep the position under review once direct payments are available.

The noble Baroness, Lady Hollis, suggested that people on current schemes may lose the direct payments that they receive now. That point was also raised by my noble friend Lord Campbell of Croy and by the noble Baroness, Lady Masham. The Bill will not make existing schemes illegal. Those that are there now can continue. Therefore, there is no need to follow the suggestion of my noble friend Lady Gardner of including a "no-worsening" clause.

My Lords, does that mean that the Minister accepts in principle the argument that it is right for many disabled people (who are excluded on the face of the Bill) to receive direct payments but that she is asking local authorities, which she is trying to protect from bureaucracy, to have the additional bureaucracy of not only running their own schemes but funding extra clients through third-party schemes because they cannot include them in their own scheme? Is that a wise way of helping local authorities by making them fund direct payments through two systems simultaneously?

My Lords, the purpose of the Bill is not necessarily to legalise existing ultra vires arrangements. That is not right. The purpose of the Bill is to lay down a practical framework for the future. It is for local authorities to ensure that their schemes operate within the law, but the Bill will not make existing schemes illegal. Those authorities which already operate such schemes can continue to do so.

I understand the desire of the noble Lords, Lord Rix and Lord Addington, to see direct payments being made available to everyone who wants to receive them and is able to manage them. Amendment No. 12 shows that those noble Lords do not want to see local authorities deciding not to offer someone direct payments on the basis of the nature or extent of their disability. In determining whether to offer someone direct payments, local authorities must take account of all relevant considerations. That would automatically include a person's wishes and ability to benefit from a direct payment. In addition, the Bill already explicitly requires that a direct payment can only be made with a person's consent. We must take great care when imposing restrictions of the kind set out in Amendment No. 12 on the way in which local authorities make those determinations. If the nature or extent of someone's disability is not relevant—

My Lords, I am sorry to have to interrupt the noble Baroness and I thank her for allowing me to do so. But does that mean that local authorities can make such payments to people with learning disabilities under the Bill when it becomes an Act?

My Lords, that depends on the responses that we receive to the consultation document. It would be very wrong of the Government to put out a document for consultation and to decide, prior to receiving responses, on the action that they wish to take. Sadly, the noble Lord will have to be patient a little longer.

If the nature or extent of someone's disability is not relevant to the authority's judgment of whether direct payments are appropriate for them, the authority could not take that into account in any case. But if those matters are relevant at all, authorities should be able to take them into account and it would be wrong to prevent them from doing so by this legislation. It is not a matter of discrimination but of common sense. Along with my noble friends Lord Hayhoe, Lord Campbell of Croy, Lady Faithfull and Lady Seccombe, I urge your Lordships to reject the amendment.

My Lords, I am very grateful to those of your Lordships who have supported the amendments and perhaps not quite so grateful to those who have not. Perhaps I may respond first to the noble Baroness, Lady Faithfull. As I said in my introductory speech, nobody is suggesting that people with learning disabilities do not receive support and advice, where appropriate, in pursuing the question of direct payments. The noble Lord, Lord Swinfen, said that he had wondered whether the provisions breach the Disability Discrimination Act which we passed only last November. He has been assured that that is not so, yet the Minister said that the Government will be limiting eligibility—I should have thought that that was discrimination; that people could be included who had physical as well as learning disabilities—I should have thought that that too was excluding people with learning disabilities alone; and that local authorities might well be able to make such payments in spite of the Bill going through in its current form—that seems slightly inexplicable.

In Committee I complained that the consultation period could extend beyond this Report stage and I asked whether the business managers could arrange for Report stage to take place after the consultation period; otherwise all of us are speaking in a vacuum. However, I received a very gentle rebuke from the Minister who said:

"That is a question for the business managers. I certainly would not dream of giving such an undertaking".—[Official Report, 15/1/96; col. 380.]

I am afraid that we have seen the result today. There is a fairly even split on both sides of the House as to whether people with learning disabilities should be included in the provisions right at the beginning. There is no compulsion on local authorities to make direct payments, but that group of people must be included. I am speaking on behalf of a constituency of 1.2 million people with learning disabilities. That is a lot of people. I am not suggesting for one moment that they would all be in receipt of direct payments, but it is a very large constituency. Therefore, in view of my constituency and of those who have supported me, I have no option but to seek the opinion of the House.

My Lords, with the leave of the House, I shall now repeat a Statement on the Northern Ireland peace process made in another place by my right honourable friend the Prime Minister. The Statement is as follows:

"With permission, I will make a Statement on the bomb explosion in the South Quay area of London last Friday, the declared end to the IRA ceasefire and the implications for security and the peace process in Northern Ireland.

"There is no doubt the evil act in London was the work of the IRA. It has all the hallmarks of their operations with the callous sacrifice of innocent lives. The bomb followed shortly after an IRA statement, given to the Irish broadcasting organisation on the evening of 9th February, that the complete cessation of hostilities ordered in August 1994 was now at an end. The IRA admitted its responsibility on 10th February.

"The facts of the incident are briefly these. Around 17.45 last Friday warning calls were made that a large bomb had been placed at South Quay Station, Marsh Wall in London. Local police arrived at the scene shortly after six o'clock, and anti-terrorist branch officers shortly after that. At around 18.30 a suspect vehicle, a Ford flat-backed lorry, was identified, and the immediate area cleared. While the area was being evacuated, the vehicle exploded, causing extensive . damage to buildings in the area, and a large number of casualties.

"Two people were killed, and 43 injured, two critically. Three police officers were among the casualties. The House will join me in extending our deepest sympathy to all the innocent victims and their families. It is little short of a miracle that the casualty list was not much longer. I would like to pay tribute to the efforts of the emergency services. Despite being hampered by a fractured gas main at the scene, they responded magnificently and they richly deserve all our thanks.

"This may not be the last such atrocity. More may follow, both here in the mainland and in Northern Ireland, if the IRA ceasefire is not renewed. We will do all we can to prevent them and to catch all those responsible. The protection of the public will be our first priority.

"In Great Britain, security has immediately returned to pre-ceasefire levels. In Northern Ireland itself, we had been careful from the very first moment of the ceasefire to take no irreversible steps to downgrade our security capability. All necessary measures to cope with the present situation are now in place. The RUC is on full alert. We have sought to make an appropriate and proportionate response to the increased threat without disrupting daily life more than necessary.

"The IRA has brought the 17 month-old ceasefire to an end. There is no shred of an excuse for this return to violence, least of all now, when all-party negotiations were clearly in sight.

"After the August 1994 ceasefire declaration, we called repeatedly on the IRA to make clear that it was permanent, despite criticism by some for doubting IRA good faith. We did doubt its good faith, and the IRA did not say it was permanent. Nonetheless, after a prudent period of time, in order to move the process forward, we were prepared to act on the working assumption that the ceasefire would last.

"In the months that followed we reduced the more visible and inconvenient aspects of security. We took soldiers off the streets and opened all the border crossing points. We did everything possible to create new jobs in Northern Ireland through renewed inward investment and helped to produce a remarkable economic upsurge. We talked to Sinn Fein leaders at official and ministerial level. We constantly sought to move the peace process on to the all-party negotiations that everyone agrees are necessary.

"No one—no one—took more risks for peace than this Government. But we never lost sight of the fact that the IRA commitment had not been made for good. No responsible government could have done otherwise. That was why we and others saw a start to the decommissioning of illegal arms as a way of creating confidence in Sinn Fein's acceptance of democratic peaceful methods, and showing that the violence really had ended.

"But all the time that Sinn Fein were calling for all-party talks, we knew that the IRA continued to train and plan for terrorist attacks. Punishment beatings and killings continued. It remained ready to resume full-scale terrorism at any time. We could never be confident that its behaviour was that of an organisation which had decided to renounce violence for ever. This was not a true peace.

"I regret to say that the events of last Friday showed that our caution about the IRA was only too justified. The timing of the return to violence may have been surprising. The fact that violence could resume was not.

"We must now continue the search for permanent peace and a comprehensive political settlement in Northern Ireland. Let there he no doubt that the Government's commitment to this is as strong as ever.

"We will work for peace with all the democratic political parties and with the Irish Government. But a huge question mark now hangs over the position of one of the parties: Sinn Fein. Its leaders have spoken often of their commitment to peace and peaceful methods. But they have always ducked and weaved when they have been questioned about the IRA and their methods. After the events of last Friday, their ambiguity stands out starkly.

"The test for eligibility to take part in all party negotiations was set by the British and Irish Governments in paragraph 10 of the Downing Street Declaration: they should be democratically mandated parties which establish a commitment to exclusively peaceful methods and which have shown that they abide by the democratic process.

"Sinn Fein's leaders claim that they did not know about the bomb at South Quay and the IRA's ceasefire statement. But they have refused either to condemn or to dissociate themselves from either. Sinn Fein must decide whether it is a front for the IRA or a democratic political party committed to the ballot not the bullet. Meanwhile, one thing is clear: in the absence of a genuine end to this renewed violence, meetings between British Ministers and Sinn Fein are not acceptable and cannot take place.

"That is also the position of the Irish Government. They have made it clear to Sinn Fein that their attitude and willingness to meet at political level will be determined by whether the IRA ceasefire is restored. We and the Irish Government are at one on this: the ball is in the court of Sinn Fein and the IRA, if indeed that distinction means anything. It is for them to show, through their words and actions, whether they have a part to play in the peace process or not. I am not in the business of slamming doors; but the British and Irish peoples need to know where Sinn Fein now stands.

"The people of a democracy are not passive spectators to events. They have the right to make their views clear on issues like this. The people of Northern Ireland, from both communities, have consistently done so. The popular will for peace has never been clearer. The peace process will go on. I commend all those who have had the courage and sense, in the face of this latest atrocity, to work to prevent a wider return to violence.

"My right honourable friend the Secretary of State for Northern Ireland and I have met all the parties in the last two weeks. This process will he intensified with those parties which have not, for the present, disqualified themselves. The aim is, as it has always been, to establish the necessary confidence to enable negotiations between all the parties to start.

"I want everyone to be absolutely clear on this point. The objective of all our actions and policies before and since the ceasefire has been to get to a position where all constitutional democratic parties can get round a table together. Everything else is a means to that essential end.

"I told the House on 24th January that, if the paramilitaries would not start decommissioning their illegal arms, one alternative way forward was through elections to give the electoral mandates and confidence which could lead straight, and straightaway, to negotiations. As proposed by the Mitchell Report, decommissioning could go ahead in parallel with those negotiations.

"The proposal has been consistently misrepresented by Sinn Fein and misunderstood more widely. I repeat now that its purpose is to lead directly and speedily to negotiations between all parties committed to peaceful and democratic methods, aimed at reaching a comprehensive political settlement. An elected body would have to be broadly acceptable and would be strictly time limited. I am not proposing an assembly with legislative and administrative powers. Any suggestion of a return to old-style Stormont rule is manifest nonsense.

"The proposed elections are a door to full negotiations. I continue to believe that they provide the most promising opening available. We will pursue the proposal and seek to persuade all concerned that it is indeed a way forward, not a means of delaying progress.

"Our ideas are still in discussion with the parties; but I do want to assure the House that there are ways forward to negotiations with all the parties, and that these could include Sinn Fein but only, of course, if there is an unequivocal return to the ceasefire.

"Others have ideas too, including the Irish Government. Our minds are not closed. Nor, I know, are theirs. I have talked to the Taoiseach twice since the bombing. We plan to meet in London soon to discuss all the possibilities. I intend to find a way through to the negotiations with all those committed to democracy.

"The peace process in Northern Ireland has received a serious setback from the men of violence. But it is not over, not by any means. We have seen the benefits of what has been achieved since the ceasefire: the freedom to live and work normally, and to enjoy life; increased prosperity and new jobs; and new hope for the future. These must not be thrown away.

"This Government will not be deterred by terrorism. The people of Northern Ireland have tasted peace, a peace that changed their lives. I have told the House before that I will leave no stone unturned in the search for peace. That is true today and will remain true in the future. The people of Great Britain and Northern Ireland deserve no less".

My Lords, perhaps I may begin by thanking the noble Viscount the Leader of the House for repeating the Statement made by his right honourable friend the Prime Minister in another place. As the noble Viscount underlined, this is a sad day and a grave occasion. When we adjourned last Thursday, I do not believe that any of us could conceivably have expected that today we would have to listen to a Statement of this nature. Perhaps I may express once again—that is, if it needs repeating—our total condemnation of this unjustified and unjustifiable action by the IRA. I join the noble Viscount in expressing our deep sympathy and condolences to the families of those who were so tragically killed, and also to all those who were injured in the attack.

Listening to the Statement, I cannot help reflecting that it is fortuitous that the death toll was not a great deal higher. The fact that it was not was hardly due to any deliberate moderation on the part of the IRA. To explode a bomb of that size in such an area at 7 o'clock on a Friday evening, the intention must have been to cause casualties.

If we are all saddened by the ending of the ceasefire, we must now ask ourselves: where do we go to from here? The peace process has been gradual. Given the historical background, it could not have been otherwise. Indeed, getting the peace process off the ground in the first place was an historic achievement for all concerned. It is possible that progress has not been fast enough for some; perhaps a little too fast for others. However, there is no excuse for renewed violence by the IRA. As a matter of priority, Sinn Fein must give an unambiguous guarantee that it is committed to the peace process.

We on this side of the House have always supported the Government in their policies towards the peace process. That support is again forthcoming today. This is not the time to apportion political responsibility for the breakdown, and I do not intend to go down that particular road today. There will be plenty of time for analysis and consideration in the future. I merely express the hope that the Government will succeed in relaunching the peace process and that this severe setback will not prove fatal. It may require new thinking and a change of attitude by some of those most closely involved. If that is what is necessary, I hope it will be forthcoming.

The Government are consulting closely with the other parties involved. I reiterate our view that it is vital that the two governments proceed together. The co-operation and the co-ordination so far have on the whole been impressive. It is crucial that that should continue. Secondly, I re-emphasise—if it needs re-emphasising—that it is now for Sinn Fein to establish its commitment to a peaceful process for change. Thirdly, we should not forget the people of Northern Ireland. It is they who have suffered much in the past; it is they who are watching apprehensively the events taking place today with mounting concern as to what the future might bring. I believe that we owe it to them to use every endeavour to resume the search for peace.

My Lords, my experience in making statements after terrorist outrages—which, 20 years ago, I did with depressing frequency when dreadful incidents in Birmingham, Guildford and the Tower of London followed fast on each other's heels—has led me to the view that little constructive is likely to emerge from such aftermath exchanges. Indeed, they are liable to become almost a competitive exercise in expressions of the horror that we all feel. Therefore, I propose to be brief.

Friday night's bomb was a bitter disappointment, although not, perhaps, an entirely unexpected one. Even if it marks—which I hope it does not—the end of the phase of hope, 17 months without violence has been gained. That in itself fully justifies the effort. But those 17 months have also underlined just how heavy would be the price of returning to the old pattern of intermittent horror. The price for Belfast above all but also for London and other major English cities, and perhaps even for Dublin, would be very heavy. It is not just the threat of death and mutilation, but the return to a whole dreary regime of life under semi-siege, symbolised by the reappearance of armed check-points in the City of London.

I hope and believe that the Prime Minister will make every effort to put the peace process back on the rails. I welcome the assurances to that end in the Statement. However, I am disturbed by the gap which has opened between the British and the Irish governments. The Irish Government are clearly deeply affronted by what Sinn Fein/IRA have done. But that has not brought them closer to London.

When Mr. Major announced his attitude on the Mitchell Report on 24th January, I, together with nearly everyone else, endorsed his proposal for Northern Ireland elections. I believe that I was wrong to do so. At any rate I was wrong to endorse such an exclusive concentration on the electoral route. It was a mistake to single out that one aspect of the Mitchell package, particularly as the problem of Northern Ireland is not that of identifying the majority—everyone knows what the majority is—but the infinitely more subtle and historic problem of getting that majority to live in peace and mutual tolerance with the large minority, and indeed vice versa. In the peculiar circumstances of Ulster, just counting votes will not do that.

Finally, disunity between the Irish and the British governments could be just as damaging to the peace process as bombs and bullets, deplorable though they are and devoutly though I hope that the ceasefire will be renewed.

My Lords, I am extremely grateful to both noble Lords who have spoken for the spirit in which they have approached the tragic events of last Friday. The noble Lord, Lord Jenkins, doubted the value of what he called these aftermath exchanges. I have to admit to a degree of sympathy with what he said. Nevertheless, the fullhearted support which the noble Lord, Lord Richard, and, with one exception—to which I shall return in a minute—the noble Lord, Lord Jenkins, have given this afternoon is enormously helpful to Her Majesty's Government in expressing the united horror of the British people to terrorist methods which are wholly alien to the traditions of parliamentary government in this country.

I, of course, wholly endorse the condemnation that both noble Lords gave, and I need not report that. However, I wish to underline something which my right honourable friend said in his Statement and to which the noble Lord, Lord Richard, drew attention a moment ago. Someone up there was watching over the East End of London. It does not make it any better for the dead and the injured but we were extraordinarily lucky not to have suffered more severely than we did. I wish to emphasise how much we owe to the courage of the police and of the rescue services, particularly of the police who with reckless disregard for their own safety cleared the area and investigated it to discover where the bomb was.

Hear, hear!

My Lords, I am delighted to hear that the House wishes to be associated with those remarks. The noble Lord, Lord Richard, made an important point when he emphasised that it is for Sinn Fein to establish once again its commitment to peaceful methods. Bombs create a reaction. The danger always has to be that if one explodes a bomb one will ultimately encourage other people to start doing so in return. It is not only viciously dangerous for the victims but it is also viciously dangerous for the future of parliamentary government in our country. I am delighted to hear the noble Lord, Lord Richard, associate himself so eloquently with that principle this afternoon.

The other point the noble Lord made is one that I also wish to associate myself with. Anyone who has visited Northern Ireland since the declaration of the ceasefire will, I suspect, be more struck by one phenomenon than any other; and that is the extraordinary change of atmosphere that has taken place over the past 17 months. It is not only the remarkable economic changes that have begun to occur, many of which have been directly encouraged by my noble friend Lady Denton who is responsible for these matters in the Northern Ireland Office, but also the almost spontaneous way in which those who are responsible for domestic industry, commerce and inward investment have realised what an admirable place Northern Ireland is, without the bombs, for industry and commerce to flourish. It has taken little time for peace to enable that to happen.

The noble Lord, Lord Richard, emphasised that the two governments in Dublin and London should proceed together. It is clearly important that that should happen and I wholly endorse that wish. My right honourable friend in his Statement made it perfectly clear that he has been in contact with the Taoiseach since the explosion of the bomb. I can certainly undertake on behalf of my right honourable friend and on behalf of Her Majesty's Government that we shall endeavour, as best we can, to ensure that Dublin and London can proceed together and can promote the democratic principles which we both hold dear.

I return to the query of the noble Lord, Lord Jenkins, with regard to whether we were right to place so much emphasis on the electoral route. It might just be worth asking your Lordships what the practical consequences are of no talks happening at all. The practical consequences of no talks are a continuation of the horrors that the Province has endured since 1969. If talks are to happen, they have to include all parties who are committed to parliamentary government and democratic principles. It is no good for—to name names—the SDLP to be prepared to turn up under certain circumstances if the Unionist parties are not prepared to turn up. The same is true—if I may say so—vice versa.

How are we in practical terms to find a way for all-party talks to occur? There may be other ways than the electoral process. If there are other ways which can produce that result, we as the Government are entirely prepared to look at them in the most constructive way possible. As my right honourable friend constantly says, there is no question but that we are open to all suggestions. However, one thing is perfectly clear. If we are to produce a settlement, it must be a settlement which enjoys the consent of the people of Northern Ireland—the people of both main traditions. We have a way in this country by which we have managed in the past—not always perhaps elegantly, but on the whole successfully—to secure that consent by which governments have acquired the authority to govern, and that is through the ballot box.

If an elected body, which is elected through the ballot box, were to come into existence—as I made clear on the previous occasion that I stood at this Dispatch Box talking about Northern Ireland matters—and if options are open to negotiation about how we should proceed to negotiate from the existence of that body, and just supposing that the body itself agreed to mandate certain delegations from among its membership to take part in all-party talks, then at least those who negotiated would clearly have the consent of those who had elected them. I would merely say to your Lordships that that consent is one which I, for one, would be much happier to stay with than the consent which had been bludgeoned out of people by the explosion of bombs made of semtex.

My Lords, I assure the House, in line with the Statement we have just heard and the comments from the noble Lords, that nowhere in the United Kingdom has the disgust, the anger and the frustration at the events of Friday been more obvious than in Northern Ireland. I wish to assure this House that from a Province which for 25 years has suffered the hardship, the cruelty and the unending hurt of terrorist attack, that is a sentiment which was spontaneous. It came from Roman Catholics, Protestants, nationalists and unionists, and it came from north and south of the border. I wish to assure the House that those who carried out the atrocity on Friday did not have the mandate of the vast majority of the people of Ireland.

Secondly, on behalf of so many to whom reference has been made perhaps I may use this opportunity to express feelings of sympathy and sorrow to the relatives of those who lost their lives and to those who were so horribly injured. However, as we were so rightly reminded a few minutes ago, we must look ahead. I do not believe that the peace process is dead. I base that remark not just on political niceties but on what I know from my day and night ministry in the Province to be the yearning and feeling of ordinary people who, for a considerable number of months, have enjoyed a sense of freedom that some of them had never known.

Behind the headlines so much that is good and worthwhile has been achieved across the traditional gaps in society. Many noble Lords who have served in Northern Ireland or who have had contact with it will know that incredible cross-community contacts have been made possible during the period of peace. Because of that and because of the overwhelming feeling of disgust and disappointment at this moment, I am absolutely convinced that the House must be reminded that there are two sides to the peace process. First, there is that referred to by the Prime Minister in terms of contacts between governments and political parties. Secondly, there is the ongoing battle for the hearts and minds of the people. To a large extent, that battle has been won. I plead with the House to give every encouragement to the peacemakers who, with great personal courage, have achieved so much.

I echo the plea that the British and Irish Governments do everything possible to ensure that they are perceived to be acting in concert. Nothing plays into the hands of those who wish to dissuade the process of peace so much as the perception of division. There will he differences of approach; I beg and pray that they are minimised.

As expressed so frequently in this House with compassion, knowledge and understanding, trust has been the real casualty of the past 25 years. I appeal to paramilitary organisations which have made certain statements, particularly over the weekend, not to be drawn into the trap that is being set for them of retaliation or of becoming involved in attacks elsewhere. Through their political representatives they have shown surprising political knowledge and foresight. I beg, on behalf of so many people in Northern Ireland, that they do not fall into that trap.

In thanking the Prime Minister for his Statement, perhaps I may ask that, if it turns out that an elected assembly or forum is the right process to adopt, the formula for it will be definite, clearly stated and full of reassurance to the nationalist community, and that it will be elected for a limited, set period to do its task.

My Lords, I do not believe that the House could have been treated to a more authoritative or respected voice on this occasion and we are indeed fortunate to have the noble Lord adding to our deliberations today. I must be brief because many noble Lords wish to speak. I wholly take on hoard what the noble Lord said about the entire population of the island of Ireland being disgusted. I wholly agree that we must look ahead. As my right honourable friend said, we do not believe that the peace process is dead. Indeed, it is important that we ensure that the terrorists should not be able to demonstrate that they have a veto on the peace process. A minority of the population of Northern Ireland should not be allowed to dictate to the majority by these unacceptable methods.

I too pay tribute to the cross-sectarian achievements which the noble Lord mentioned. That has been one of the most dramatic developments not only during the past 17 months but, in certain areas of the Province, well before the peace arrived. As we are all well aware the noble Lord, Lord Eames, has made his own contribution to that.

I accept, as did my right honourable friend, that it is absolutely essential that the two Governments should proceed in tandem. As I have made clear in previous Answers, we will do our utmost to make sure that we keep the Dublin Government as fully informed as we are able about what we intend to do and that there should be no surprises as far as they are concerned. I also associate myself with the noble Lord's comments about paramilitaries from the other side of the divide. I hope only that the restraint and wisdom that they have shown so far will continue.

My Lords, I too welcome the Statement and join in the condemnation of this most callous and brutal bombing which has taken place in the City of London. I join in paying tribute to the emergency services and extend condolences to the relatives of those who were killed and to those who were injured.

The one thing that we must be quite determined about is that the Government do not give way to violence. The proposal that there should be elections may be right or it may be wrong. Personally, I am convinced that they are right. However, no matter which, it would be a great weakness on the part of the Government to give way and to say, "We are not going to have elections as a result of this bomb". That would point out a way for the future; that if you really want something you plant a bomb or indeed several.

I was disappointed to hear the Prime Minister of the Irish Republic say that to proceed along the course of elections would be adding petrol to the flames. I hope that he will reconsider that comment because it means that one should give way to terrorism. One can give way to argument and to democratic voting but I hope that we shall never give way to terrorism. Therefore, I hope and trust that the Government will stand firm against any menaces of this kind which are meant to produce political ends. I was glad to hear the noble Viscount the Lord Privy Seal say that the Government would not negotiate with Sinn Fein until it is clear that it has given up violence for good.

My Lords, I am grateful to the noble Lord. I believe that perhaps the Provisional IRA is under the strong misapprehension that exploding bombs in London or in the Province of Northern Ireland will induce Her Majesty's Government to change their stance. I hope that the events of the coming days and weeks will disabuse it of that; and that it will realise that the only way in which it can participate in the government of the Province and of the political processes of the United Kingdom is through the use of the methods which we ourselves employ through the constitution of this country.

My Lords, while the Prime Minister's personal and passionate commitment to peace has been further underlined in the Statement read to this House, will my noble friend take this opportunity roundly to condemn the calumny which was given widespread currency over the weekend: that the Prime Minister had somehow devised a series of obstacles designed to hinder progress towards peace which in its turn justified the fiendish and cowardly action by the IRA?

My Lords, of course. We must be well aware in this House that there is only one organisation responsible for last Friday's outrage, and that is the IRA itself. No matter how many arguments others may have against the approach of this Government to the peace process, such arguments could never justify the use of bombs and bullets.

I must emphasise that if Sinn Fein were as truly committed as it claims to be to exclusively peaceful methods it would, after all, accept that and condemn the IRA for its actions on Friday and for calling an end to its ceasefire. I have yet to hear such a condemnation.

My Lords, the massive wave of revulsion which has swept these islands since last Friday must surely indicate to the IRA that however many bombs it lets off here or in Ireland, or however many people it kills, at the end of the day it cannot succeed in bludgeoning a democratic people to accept its demands.

However, I believe that that should be made clear, and as yet it has not been made clear. In his original comments on the Mitchell Report, the Prime Minister laid stress on the elective process. He should have laid even greater stress on the six principles enunciated by Senator Mitchell. Those principles make it very clear that anyone who does not accept a rejection of violence has no part in the democratic process.

I have fought many elections in Northern Ireland. While in this present atmosphere I have slight reservations, I am of the opinion that if an election were held, and every candidate had either to reject or accept those six democratic principles enunciated by Senator Mitchell, it would give a clear indication that the people of Northern Ireland either accepted or rejected violence. That is what the six principles are about.

It has been most importantly stated this afternoon that day in and day out it should be made clear to the Nationalist population in Northern Ireland that there is to be no return to Stormont. Those who are opposed to these elections—Sinn Fein and others—are stressing that that is the real purpose behind the process.

As regards the noble Viscount's remarks, Sinn Fein has said that it cannot condemn this atrocity because it would lose credibility with the IRA. If it does not condemn this atrocity, it will lose credibility with all free democratic people in these islands.

I freely support all those who say that the peace process is not ended. It will take a Herculean effort by all concerned to bring it back from the death throes in which it has been placed. But I believe that we can succeed in replacing it again.

My Lords, I am most grateful to the noble Lord. His personal experience of being a victim of terrorism is probably greater than any of us in this Chamber.

He is right about the six principles. They are six principles which the Government immediately accepted on publication of the Mitchell Report. I am happy to reiterate our commitment, and to draw the House's attention to Senator Mitchell's suggestion not only that all parties should sign up to those six principles but (and I quote the word he used) that they should also honour them. I believe that the noble Lord made his point far better than I could have done.

As the noble Lord will have noted, my right honourable friend emphasised—he said that we should all emphasise it and I am happy to repeat it now—that what is proposed in the possible elected body which is for discussion (which we do not insist on but it seems to be the only realistic possibility open to us at the moment in the absence of any other suggestion) does not mean a return to Stormont. It is a body whose purpose is clear: to form a basis for teams to negotiate on an all-party process. I am grateful to the noble Lord for giving me the opportunity of repeating that.

My Lords, the noble Viscount the Leader of the House rightly referred to public opinion in Northern Ireland. It is absolutely crucial in the coming hours, days and week or so, that the revulsion expressed in this House is expressed in every quarter in Northern Ireland, and that it finds a focus. The focus must be, "Give us back our peace". The focus must be a message to the IRA that the people of Northern Ireland will not tolerate a reversion to the dark ages through which they have lived.

In that context, will the noble Viscount refer to the constructive role that the President of the United States could play in that respect? Many fears have been expressed in this House and elsewhere that the role of the American Administration might not be constructive in Northern Ireland. I believe that it has been very constructive. The visit by President Clinton to Northern Ireland showed the most extraordinary outpouring of popular sentiment for the peace process. Are Her Majesty's Government working with the American Administration to make sure that in the days to come the White House will not return to any semi-flirtatious relationship with Sinn Fein but will focus all its efforts on trying to mobilise opinion in Northern Ireland behind a resumption of peace, let alone the peace process?

My Lords, I am most grateful to the noble Lord for enabling me to answer that point. Of course we welcome the constructive role that the United States has played and continues to play. Any further contribution that it can make along the same lines would he extremely welcome.

The main message that we need to get across is exactly the one that President Clinton expressed so eloquently to the men of violence when he was in Belfast. I believe that I quote him exactly in saying: "You are of the past. Your time is gone".

As the former most reverend Primate of all Ireland said a moment ago, the people of Northern Ireland, above all, can make it plain that this kind of behaviour is no longer acceptable to them.

My Lords, my noble friend referred to the undesirability of circulating reports which suggested that there could ever be any political reason for a resort to mass violence. Is the Minister aware that in the course of bulletins over the weekend the BBC consistently pressed people to give precisely that kind of answer? If he will not take my word for it, I am sure that a transcript of yesterday's lunch hour programme on Radio 4 would give him ample evidence.

My Lords, I was not fortunate enough to listen to that programme. However, I can give my noble friend the undertaking that I shall certainly examine what he said and write to him.

moved Amendment No. 2:

Page 1, line 12, at end insert ("or

( ) the Secretary of State agrees to a representation from an authority that it wishes to exercise its discretion to make payments under this section to any person or persons who are willing and able to secure the provision of their own services,").

My Lords, before the noble Baroness sits down after moving the amendment, perhaps she can answer a question. She said that, through the Secretary of State, the Government could reject every request. In those circumstances would all the decisions be subject to judicial review or application for judicial review?

My Lords, I shall have to take advice on that, I do not know.

My Lords, I warmly support the amendment and was delighted to add my name to it. I am not at all happy with the Government's proposals to limit direct payments to physically and sensorily disabled people under 65, nor am I happy with any other possible groupings in the consultation paper. They all have drawbacks. I voted for the amendment of my noble friend Lord Rix because it is hardly logical merely to include people with learning difficulties if they also have a physical and sensory impairment, as the Government propose. It would be difficult to justify that in practice when dealing with real people in their homes. I do not like the idea of distinguishing between physically and sensorily disabled people on the one hand and people with learning difficulties on the other, singling out one group for special treatment.

Ideally, direct payment should be payable to all adults who are willing and able to manage them, with help if necessary and with no age limit. Local authority staff who have direct contact with the individual people concerned are in the best position to decide whom to include. However, as the noble Baroness said, the amendment is a sensible half measure to allow the Government, in regulations, to limit direct payments but to allow local authorities to approach the Secretary of State to bring in others. Local authorities are to be allowed to refuse direct payments to individuals, provided they act responsibly and reasonably. So why not let the local authorities act responsibly and reasonably in deciding whom to include?

As the noble Baroness, Lady Hollis, said, the amendment of my noble friend Lord Rix was lost very narrowly. When the Minister replied to it I was cheered, in a way, because she said that local authorities who already issue direct payments to categories other than the ones which she plans to make eligible would be able to continue to do so. That is cheering in a sense, but in a way it is even battier because it means that in some areas a category will receive the payments whereas in other areas it will not. Even in the areas issuing direct payments to non-eligible categories, will authorities be able to bring in more or will they have to say "no" to new claimants? The present wording creates several anomalies.

I hope that the Minister will respond positively to the amendment or that she will agree to have a long, hard think before Third Reading. Local authorities already making payments to other groups would be put on a sound legal footing and it would act as a pilot study which could be of help to the Government. If the noble Baroness cannot give a faintly encouraging reply, or say that her door is at any rate open to discussions, I should have no hesitation in following the noble Baroness, Lady Hollis, into the Lobby if she decides to divide the House.

My Lords, the amendment is very reasonable and almost cautiously supportive of the Government's stance. It provides in certain situations, where there is the expertise available, for a scheme to be introduced to which the Secretary of State can give his approval. Where the Secretary of State and the powers-that-be think it appropriate a scheme could be brought in. Surely such a proposal cannot offend anyone. It cannot be suggested that it would cause overloading since by its very nature it safeguards against taking on too much. I hope that the Minister will be able to take the idea on board.

My Lords, this is purely an enabling amendment. It allows local authorities which feel capable of taking on a new category of direct payments to do so where they have the skills and where the need exists. The need will vary from area to area.

Under the amendment, the Secretary of State has a power of veto. He must satisfy himself that it is right and proper to agree to the local authority's request. It is a sensible amendment and one that allows different local authorities to proceed at different rates of learning. It would allow a group of authorities in different parts of the country to expand in slightly different sections so that there would be a much broader learning curve throughout the country as a whole. For instance, half a dozen local authorities might be given permission to make direct grants to those with mental disabilities. In other parts of the country another half dozen could be allowed to give grants to people over the age of 65. The knowledge acquired of how grants are best applied could be disseminated throughout all local authorities. It would be useful to learn how pitfalls were overcome. The amendment is eminently sensible; and I strongly approve of it.

My Lords, as I have said throughout the course of this Bill we are bringing a new way of ensuring that people's needs are met into the heart of community care. As the noble Baroness rightly said, that is what lies behind the Government's proposal to restrict eligibility.

We want to limit the scope of direct payments for two reasons. The first is to allow local authorities to focus on a relatively small group as they begin to make direct payments. We do not want to put at risk the long-term future of direct payments by being over-ambitious in the short term. The second reason is so that the Government can assess how direct payments are working. It is a completely new way to deliver community care. It is radically different from the way local authorities currently arrange community care services. In many respects it is far more revolutionary than were the community care reforms that we introduced in 1993.

The Government want to limit the scale of direct payments so that we can see how they work in practice on a controlled basis. We shall need to see whether the framework we have put in place is the right one. Of course the policy proposals are those which we believe are best. They create the environment which we believe is most likely to lead to successful implementation.

But we are moving into uncharted waters. Existing experience is limited. Direct payments have not previously been in the mainstream of community care. We want to see how things go, how this policy works. Then we shall be able to judge whether we need to adjust the national framework.

The amendment would clearly undermine our second aim in restricting eligibility. If we make exceptions for some local authorities then the national framework is haphazard and it becomes far more difficult to judge on a national basis how direct payments are working. I also find it difficult to see how the provision might work in practice. It would be extremely cumbersome and bureaucratic for the Secretary of State to have to review every application in order to exercise his discretion. A great deal of information would be needed to form a proper judgment as to whether each individual local authority is in a position to make direct payments to a wider population.

The new system has to be fair. It is essential that there is a criterion that can be used in order for the Secretary of State to make his judgments. This Bill, when enacted, has to be fair to local authorities, to those who might benefit, and also to the Secretary of State. It would be difficult for him to retain his control if, as my noble friend Lord Hayhoe suggested, every decision could he subject to judicial review. That would put the Secretary of State in an impossible position.

I return briefly to the third party schemes mentioned by the noble Baronesses, Lady Darcy (de Knayth) and Lady Hollis. As I said in the previous debate, people on existing schemes could continue to receive direct payments. To clarify that, it is up to local authorities to ensure that their schemes are legal. If schemes are currently legal this Bill will not make them illegal. If schemes are currently illegal, then they may or may not be legalised by the Bill. As I said, it cannot be the aim of the Bill to legalise ultra vires arrangements. We are setting the legal framework that we believe will work best. That must be our aim.

The amendment would increase the variation between local authorities in the way they implement the legislation. That would make it extremely difficult for the Government to see, on a national basis, how direct payments were working. I urge the House to reject the amendment.

My Lords, I was very surprised indeed at that reply. Given the discussions that have taken place, I really had hoped that the Minister would think this a sensible, modest, "compromise" way in which we could all benefit from the experience of local authorities acting, as it were, as a pilot scheme for the Minister.

When it suits the Government—as with in-work benefits for couples and single people without children—they are very happy to have pilot schemes. They do not refer back to the need to have all schemes nationally implemented across the board all at the same time. When it does not suit the Government, the opposite argument is used.

The Minister gave three arguments; first, that she wanted the scheme to focus on relatively small groups and not be over-ambitious; secondly, that she wished to see how it was first working; and, thirdly, that she did not want the national framework to become haphazard. I suggest that the amendment addresses all three concerns.

First, for virtually all local authorities, except where the Minister gives explicit consent to do otherwise, the scheme will focus on the relatively small group of physically disabled people under 65. It will not, in the Minister's words, be over-ambitious. It is probable that only those local authorities which already have experience of, and are implementing, a scheme will be given consent by the Secretary of State to continue it within the existing framework. Therefore, the argument of wanting to focus on a relatively small group remains unaffected.

Secondly, the Minister said that she wished to assess how the scheme was working. All the Minister will be doing is assessing how part of the scheme will be working—that part which applies to those who are physically handicapped. We offer the opportunity for the Minister to see, in selected areas where the Secretary of State has confidence in the local authorities, how an extension of the scheme might work and therefore to see whether, on that basis, it makes good sense to extend it to all local authorities.

Most governments would be delighted to have such an opportunity to learn from willing pilot pioneers on the ground. In that way, and only in that way, can we assess how the scheme is working and, equally importantly, how it would work were it to be extended. But the Minister refuses the opportunity to learn from the experience of local authorities willing to pioneer with the support of the Secretary of State.

Thirdly, the Minister said that she did not want the national framework to become haphazard. That argument does not hold up. First, the national scheme will already be haphazard since it is a discretionary scheme. A quarter of all local authorities could decide tomorrow not to implement the Bill. The scheme will remain discretionary. In that sense it will be haphazard by its very nature. For the Government to complain that the amendment makes a haphazard scheme haphazard is perverse. Secondly, the amendment will allow the Government to learn what would happen if the categories were extended to other local authorities—if one moved from a narrow minimum standard to a wider more comprehensive one. One cannot learn from experience if that experience is not permitted to be piloted. Of what are the Government frightened? Local authorities which are currently involved in running such schemes or have that kind of experience will seek consent. The Minister has to be persuaded that they are competent to accept those schemes and to run them. If the Minister is not so satisfied, he will say no. Why should the Minister deny herself the power to say yes or no to local authorities which believe that they are competent to extend this scheme? Why should she deny herself that power? It is absurd, particularly when in most other fields of social security legislation the Government say that they want pilot schemes in order to learn from them and understand in what ways it makes sense to apply a scheme nationally.

I truly believe that this is a win-win scheme; and a win-win amendment. It is a win-win for the Government as they can learn from experience; a win-win for those local authorities which are already supporting disabled people beyond the scope of the Bill; and a win-win for disabled people—all at no cost to public expense. I am so disappointed by the Minister's reply. I had hoped that she would accept the amendment or give us some encouragement. I shall test the opinion of the House.

My Lords, before the noble Baroness sits down, perhaps I may comment. She stressed the positive aspects of the amendment. In Clause 1(6) of the Bill there is a fair amount of discretion. All the good things of which she spoke that the Government should seek will surely be available to the Government under subsection (6). Therefore, I cannot see why she pushes the amendment, when the good things that she mentioned seem to me—in my limited judgment of reading legislation, and I always acknowledge that it is easy to misunderstand it—to be covered by subsection (6). That subsection allows regulations to be made to:

"make different provision for different cases, and … include such supplementary, incidental, consequential and transitional provisions".

That is a very wide power that is available. All the good things—I stress that, as indeed the noble Baroness stressed it when she spoke in favour of her amendment—could be done. Therefore, I cannot see why she should press her amendment. I hope that she has a response.

My Lords, I am delighted that the noble Lord—in a phrase often used from the Government Benches—is absolutely right. Clause 1(6) does by regulation what the amendment seeks to do by an individual local authority making application to the Secretary of State. The noble Lord does not need me to tell him that there is a world of difference between the Secretary of State having the power to respond to individual applications and requiring each application to be laid by regulatory process.

Whether that is done by the negative procedure or the affirmative, it may take up time in both Houses for a judgment which I believe is very properly exercised by the Minister or Secretary of State in a professional capacity. The Minister will have to make that judgment anyway before laying a regulation. Why do we need to check that in Parliament? So there is not only a local authority making a decision about whether it wishes to empower a disabled person and the Secretary of State confirming the judgment of the local authority, but now Parliament has to confirm the judgment of the Secretary of State to confirm the judgment of the local authority. That is infinitely too cumbersome for what is suggested. The spirit of the noble Lord's remarks will best be met by this amendment. I hope that he will support it.

My Lords, before the noble Baroness sits down perhaps I may just ask her—she has clearly thought through the amendment carefully—what criteria she would expect the Secretary of State to use when making a judgment as to whether a local authority was or was not able to implement the scheme broadly.

My Lords, I should expect the Minister to seek discussions with the ADSS—the Association of Directors of Social Services—and agree the common criteria. That would be the right way to proceed, following the response from the consultation documents. The kind of experience that I should expect the Secretary of State to take into account is, for example, whether an authority—such as, say, Kingston or Hampshire County Council—is currently running a third party direct payments scheme in which, for example, people who have learning disabilities or who are, say, over 65 are currently receiving payment. On that basis, the Secretary of State may well be satisfied that those authorities have that experience, are competent and should be encouraged to act as pilot schemes. That is the kind of consideration involved. There may well be others. They will be drawn up in discussion with the Association of Directors of Social Services, but those are the kind of criteria that I have in mind.

moved Amendment No. 3:

Page 1, line 15, at end insert—

("( ) An authority shall not unreasonably refuse a disabled person access to direct payments from a scheme for the making of such payments to which subsection (1) above refers.").

My Lords, I added my name to the amendment because I felt that it would be useful to have this message spelt out on the face of the Bill. As the noble Baroness, Lady Hollis, reminded us, in Committee the Minister said that an aggrieved person would be able to seek redress from the local authorities' complaints procedure, the ombudsman, judicial review or a combination of all three. But none of that is well known to the public at large.

I am sure that none of us, including the Minister, wants disabled people to go through such lengthy and difficult procedures. Therefore, while there may not be a strict legal requirement to repeat the need for reasonableness on the face of the Bill, there are good reasons for doing so. It will remind local authorities of their obligations in respect of direct payments and inform disabled people of their right to be treated reasonably. It will also remove any doubt that may arise in future, through some legalistic quirk of fate, that local authorities may not unreasonably withhold direct payments from an otherwise qualified person. I hope therefore that the Minister feels able either to accept the amendment or to table something similar to go on to the face of the Bill.

My Lords, if we are to state that people who are qualified to receive direct payments should receive them if they so choose, and there is a legal requirement for them so to do, why not say it as loudly and clearly as possible? The best way of doing that is to include the requirement on the face of the Bill. If it does not change anything, it will at least ensure that the message is unambiguous. I support the amendment.

My Lords, Amendment No. 3 is word for word the same as an amendment moved at Committee stage. I do not believe that much has changed since then. At that time my noble friend Lady Cumberlege convincingly pointed out that the amendment was not necessary. Why, therefore, is it suddenly felt to be necessary?

I do not believe that while Bills are progressing through Parliament one should keep inserting statements that local authorities or other bodies should not act unreasonably. As my noble friend said at the last stage, it would he illegal for a local authority to act unreasonably, and nothing has changed since then.

My Lords, local authorities already have a responsibility to act reasonably. No amendment to the Bill is needed to prevent local authorities from exercising their discretion unreasonably. In any case, local authorities should not make whimsical decisions. They should consider whether direct payments are appropriate for someone who wishes to receive them, taking into account all relevant matters. That includes a person's wishes and ability to benefit from direct payment, as well as other considerations. We would normally expect that to mean that like clients are treated in like ways. Local authorities should not treat clients with similar needs and a similar ability to manage direct payments differently unless they have good reason to do so. If there is a good reason, we should not legislate to prevent them from taking it into account. They cannot treat like clients differently unless it is reasonable to do so.

My noble friend Lord Campbell of Croy said that a similar amendment was moved at Committee stage. That is correct. In her speech at that stage the noble Baroness, Lady Hollis, said that the exercise of a local authority's discretion must be capable of being reviewed against a test of reasonableness in the appeals procedure. That is already the case without this amendment, since local authorities must exercise their discretion reasonably. As the noble Baroness said, people can use the complaints procedure to challenge the local authority's decision not to offer them direct payments. They can expect to be told the reasons for the local authority's decision. If anyone is dissatisfied with the outcome, he or she may ask the local government ombudsman to investigate or apply to the courts for judicial review.

To go any further would effectively limit local authorities' discretion to decide whether direct payments are appropriate in each individual case. Local authorities must have discretion to base their decisions on the wider interests of the local population—for instance, taxpayers and other service users—and not just on the interests of the particular individual concerned. They have a responsibility to obtain value for money and to use their resources to meet the needs of all people in need of assistance in their locality, not just one individual.

Local authorities must act reasonably. It would not be appropriate to restrict their discretion further. I urge your Lordships not to support the amendment.

My Lords, the noble Lord, Lord Campbell of Croy, and the Minister have basically said the same thing—that the amendment is unnecessary because local authorities already have to act reasonably. When moving the amendment, I tried to say, although obviously I was unclear, that the current test of reasonableness embedded in local authorities' procedures is a high standard of proof—that only if no reasonable authority could have acted in such a way would a test of unreasonableness be upheld. That is quite tough compared with what the wording in the amendment would ensure. It requires that local authorities may not unreasonably withhold their consent.

However, the Minister's words are in Hansard and they do enlarge on the issue. Given the time and the discussion we have had, I have no wish to press the House for a view on the matter. With the leave of the House, I beg leave to withdraw the amendment.

moved Amendment No. 4:

Page 1, line 18, leave out from ("authority") to end of line 19 and insert ("shall, in determining how much to pay a person under that subsection, not require him to contribute more than it appears to the authority that it is reasonably practicable for him to contribute").

My Lords, I should like briefly to support the amendment which the noble Baroness has moved so clearly and comprehensively. In Committee I moved an amendment which sought identical means tests. I accept now that the word "identical" could present practical difficulties so I have now joined forces with the noble Baroness, Lady Hollis. I accept that we and the Government are at one in not wanting the means tests for services and for direct payments to allow a local authority to influence the decision either towards in-house services or towards private arrangements. The amendment seems to be a practical way of achieving that. I hope the Minister will agree to it.

My Lords, we share the concern, as the noble Baroness, Lady Darcy (de Knayth), has said, that neither people who receive services nor those who receive direct payments should be treated more favourably than the other. On the question of the financial contribution which each is expected to make towards the cost of their care, they should be treated alike.

The Bill gives local authorities the discretion, when calculating the amount of direct payments, as to whether they require the person concerned to make a financial contribution. It does not require authorities to do so. If a local authority considers that an individual should contribute to the cost of his care, it would be unreasonable for the authority to expect him to contribute more than he can afford. The Bill also gives local authorities discretion on how they take someone's financial circumstances into account. This is intended to mirror the situation which currently exists in relation to charges for non-residential care where local authorities can decide whether to charge and how much to charge.

The Government's aim is to avoid perverse financial incentives in agreeing or refusing direct payments. As the noble Baroness, Lady Hollis, said, we believe that the best way to ensure equivalent treatment is to issue guidance under Section 7 of the Local Authority Social Services Act 1970. The guidance will stress that local authorities must treat people fairly and should treat both those who receive services and those who receive direct payments in an equivalent manner—that is, when considering the financial contribution that people make towards the cost of their care, those receiving direct payments will be treated in the same way under the authority's charging policy as they would have been had they been receiving the equivalent services. Of course, that still gives the local authority discretion over what charging policy is.

The Government have considered carefully the alternative of introducing language similar to that in existing legislation on charging, as is suggested in the amendment of the noble Baroness. However, to reproduce the words in existing legislation will not change the effect of Clause 1(2). We would still need to issue statutory guidance to ensure that direct payment recipients and service recipients received equivalent treatment. We have considered all of the options and do not see a need to amend the wording of the Bill. We believe that this amendment would have no effect. I urge your Lordships not to support it.

My Lords, before the noble Baroness sits down, even if she believes that additional guidance will have to be offered, will she explain the objection to the use of the same words? The Minister has assured us that the aim is to avoid unfairness and that guidance will still need to be issued so that the effect is the same, but what is wrong with using the same words?

My Lords, we simply do not believe that it is necessary. The amendment as it is set out will have no effect, and therefore we believe that it is pointless to put it on the face of the Bill.

My Lords, the Minister says that the amendment is not necessary and that it will have no effect, but she has to have some words on the face of the Bill. Why do we not have the same words on the face of the Bill for direct payments as for services? That will make the situation unambiguous as far as local authorities and disabled people are concerned. The Minister may argue that it is not necessary, but she has not said why the same words should not be on the face of the Bill. What is wrong with having the same words?

My Lords, I believe that I have made the situation perfectly plain. We do not want to clutter up the legislation with additional information that is not necessary. The amendment as set out here will have absolutely no effect. Therefore, we believe that it is ridiculous for the Government to accept it.

My Lords, I have not carried out a word count to see whether very many more words will be added, but I am convinced that this amendment will add considerable clarity to the intention of the Government. We agree with everything that the Minister has proposed. We want a level playing field. We do not want perverse incentives for people to move from charges to services, or hack to charges, because there are different financial implications in terms of what they have to pay. The easiest and most straightforward way to avoid any such misunderstanding is to use the same words on the face of this Bill as in the existing Act of 1983. I have not heard the Minister give a single reason why the words cannot simply be changed, because the 1983 words can replace the words in this Bill. If they need a little tidying up we have plenty of time to do it. We have all the Commons stage for that purpose. At least it will make clear what the Minister has in mind, instead of the Minister having to resort to guidance to explain what is in her mind.

I thought that legislation should be clear, simple and understandable. Our amendment would do precisely that on the issue of financial arrangements. I remain baffled. I understand why most of the time the Government do not accept our amendments: they cost money; they are ideologically unacceptable; they are administratively unworkable, or whatever. But I believe that as to a proportion of the amendments—perhaps 5 or 10 per cent.—if the Government had thought of them they would have proposed or accepted them. However, because they come from these Benches there is a knee-jerk reaction to resist, resist, resist. Here is an amendment that does everything that the Minister says she wants to do. It establishes a level playing field on the face of the Bill by repeating the wording used in the previous Act to establish the charging pattern for services. The Minister has not given one good reason why the words should not be changed, except that it is not necessary because we all know that it means the same thing anyway. If it means the same thing, why not use the same words?

Although I had not intended to do so, I seek the opinion of the House on this amendment.