Monday, 18th March 1996.

The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.

Prayers—Read by the Lord Bishop of Sheffield.

Whether a majority of any public representations they have received concerning recent changes to the National Health Service has supported those changes.

2.43 p.m.

Why they did not seek parliamentary approval of their decision to apply the decision of the European Court of Justice that the age of eligibility for free prescription drugs for men should be lowered to 60.

2.46 p.m.

How they will respond to the decision of the adjudicator in the case of Professor Muhammed al-Mas'ari announced on 5th March.

2.53 p.m.

Whether the effects on human health of chronic, low level exposure to organophosphate pesticides and veterinary medicines are recognised by the Department of Health.

2.59 p.m.

3.1 p.m.

Report received.

Clause 33 [ Annual reports by Secretary of State]:

The noble Lord said: My Lords, there is only one amendment down for today's proceedings and, therefore, we have a long day ahead of us! The amendment is tabled in my name and that of the noble Lord, Lord Redesdale. As noble Lords are aware, there is no basic dispute about the validity of the Chemical Weapons Bill or about,our great desire to see it on the statute book as soon as possible. The debates that we have had in your Lordships' House, both in Committee and today, concern detail and our hope to be able to improve it; or, as it has not been my desire in such matters to divide your Lordships' House, to get the Minister to place on record the Government's view on such matters which will then make the Bill more sensible without having to press amendments to a Division.

Frankly, the amendment arises out of a feeling of irritation as regards the Minister when we debated the matter earlier. That is most unusual for me in regard to my relationship with the noble and learned Lord. However, noble Lords will recall that the Government thought it important for there to be a report on how the Act, as it would then be, is working and whether it is achieving the ends that not only Her Majesty's Government but also the international community wish to see happen more generally in the area.

I agree that the noble Lord, Lord Redesdale, and I tabled a rather elaborate amendment on the matter on the last occasion. My feeling about the Minister's response at that time was that it was somewhat negative. I have tabled the current amendment in the hope that I shall be able to encourage the Minister to say something more positive in the area.

The report about which we are talking is meant to be useful. Indeed, the Government would not have agreed to having such a report if they did not think it would be useful. However, the word "useful" must certainly mean informative. As the amendment points out, there are at least two groups of people who need to be reassured about the chemical weapons convention and, therefore, the workings of the Chemical Weapons Bill. One is Parliament—that is, both the other place and indeed, more importantly, your Lordships' House; the second group is the public outside in all their different dimensions.

One aspect of the public interest was raised by the Daily Mail in its "Night and Day" section which seemed to find that it was altogether too easy to acquire chemicals which could be converted into lethal weapons. I shall not rehearse all the arguments regarding whether we should have a list which tells everyone what potentially dangerous chemicals are, so that they know what to go out and try to buy. We certainly agree that that would be going too far; but, on the other hand, one definitely needs a certain amount of transparency in the matter.

The noble Lord, Lord Redesdale, and I have rather changed tack here. Instead of putting down in detail exactly what ought to be in the annual report—largely we were right to do so, although not entirely—we have outlined the criteria by which the annual report would be judged. That is the exact purpose of the amendment. In particular, it refers to the point emphasised quite rightly by the Minister; namely, that in many of these cases we are dealing with matters of great commercial confidentiality. It certainly would not be my intention to undermine the economic viability of any business by revealing its legitimate commercial secrets. But, on the other hand, there is a public interest in transparency.

In that connection I am happy to say that the Royal Society of Chemistry which has advised me and the Chemical Industries Association, with which I have been in touch and which has sent me briefing material, both take my amendment to mean that the annual report should—and, implicitly, could—provide transparency while safeguarding commercial confidentiality. The Royal Society of Chemistry and the association recognise that the national authority is not expected to be the sole source of expert advice to the Secretary of State, which again confirms what the Minister said on the last occasion when we discussed the matter. Both the society and the association believe that there should be consultation with appropriate expertise, which should include trade associations and professional and learned bodies, together with individual industrial and academic expertise. The purpose of the amendment is to lead us to all those things.

In moving the amendment, what I most hope for is a more positive response on the part of the Minister, by which I mean more positive than he was able to be on the last occasion. That would certainly underline the importance which we all attach to the legislation and, as I said, it would reassure the relevant interested parties. I beg to move.

3.16 p.m.

Report received.

Clause 2 [ Scope of application of provisions]:

SCOPE OF APPLICATION OF PROVISIONS

(".—(1) The provisions of this Part apply where the seat of the arbitration is in England and Wales or Northern Ireland.

(2) The following sections apply even if the seat of the arbitration is outside England and Wales or Northern Ireland or no seat has been designated or determined—

(a) sections 9 to 1l (stay of legal proceedings, &c.), and

(b) section 66 (enforcement of arbitral awards).

(3) The powers conferred by the following sections apply even if the seat of the arbitration is outside England and Wales or Northern Ireland or no seat has been designated or determined—

(a) section 43 (securing the attendance of witnesses), and

(b) section 44 (court powers exercisable in support of arbitral proceedings);

but the court may refuse to exercise any such power if, in the opinion of the court, the fact that the seat of the arbitration is outside England and Wales or Northern Ireland, or that when designated or determined the seat is likely to be outside England and Wales or Northern Ireland, makes it inappropriate to do so.

(4) The court may exercise a power conferred by any provision of this Part not mentioned in subsection (2) or (3) for the purpose of supporting the arbitral process where—

(a) no seat of the arbitration has been designated or determined, and

(b) by reason of a connection with England and Wales or Northern Ireland the court is satisfied that it is appropriate to do so.

(5) Section 7 (separability of arbitration agreement) and section 8 (death of a party) apply where the law applicable to the arbitration agreement is the law of England and Wales or Northern Ireland even if the seat of the arbitration is outside England and Wales or Northern Ireland or has not been designated or determined.").

The noble and learned Lord said: My Lords, this amendment will replace the existing text of Clause 2 in its entirety. Although the revision appears at first sight to be extensive, I hope that I can assure the House that what is intended is no more than a clarification of the original text. No essential change of policy or direction is either intended or achieved. The broad purpose of that clause is to define the circumstances in which Part I of the Bill has application so as to enable parties to international arbitrations readily to ascertain when they will and when they will not be affected by our law of arbitration and the jurisdiction of our courts. The clause as originally introduced was to have and, I think, substantially had that effect. However, it was perceived by some international jurists as purporting to have some extra-territorial effect, and therefore to confer jurisdiction on our courts which might in the case of an international arbitrate on cause conflict with the jurisdiction of foreign courts. This was never our intention and therefore we have redrafted the clause to clarify its meaning and to remove these unexpected doubts about its scope.

We have achieved this clarification largely by changing the basic principle in subsection (1), which was formerly expressed in terms of where our law applied, so that it will now be expressed in terms of the seat of the arbitration. Where the seat of the arbitration, which is defined in Clause 3, is here the whole of Part I will apply without exception. The remainder of the clause is concerned with cases where either the seat is not here or no seat has or has yet been designated or determined. The new subsection (2), which corresponds to the former subsections (3)(a) and (3)(c), ensures that our obligations under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, will always be fulfilled.

The new subsection (3), which corresponds to the former subsections (3)(b) and (4), ensures that our courts will have power to make orders in support of an arbitration with no seat here except where to do so would be inappropriate. Subsection (4) is new. It is necessary because the focus of the clause has now changed from what is the applicable law to where is the seat of the arbitration. It gives our courts all the powers they have over an arbitration with a seat here in a case where the court is satisfied, as a matter of English law, that there is no seat elsewhere. If there is no seat elsewhere, there could be no possible conflict with other jurisdictions. In addition, these powers are only exercisable where there is a domestic connection and where it is appropriate to exercise them. A good example would be a case where an extension of time is needed, under Clause 12, to commence arbitration proceedings which, when commenced, would be likely to have a seat in this country.

Subsection (5) is new and is also necessary because of this change in focus. Even if there is no seat here, the question whether the arbitration clause is separable from the contract containing it and the question of the consequences of the death of a party are both to be determined under the relevant clauses of the Bill where our law is applicable to the arbitration agreement.

I trust that this explanation will relieve any possible anxiety that anything more is intended by the amendment than a change in presentation and clarification of what, I am sure noble Lords will agree from that explanation, is necessarily a complex subject. I beg to move.

On Question, amendment agreed to.

Clause 38 [ General powers exercisable by the tribunal]:

The noble and learned Lord said: My Lords, noble Lords will recall that Clause 38(3), which deals with security for costs, was amended in Committee. In amending the subsection the term "party" was used to describe those against whom an order for security of costs could be made. It would be unjust to enable a tribunal to order security for costs against a respondent as the price for being allowed to defend himself. A defendant in litigation cannot be required to do so. Therefore we need to limit the subsection to the ordering of costs against a claimant which by virtue of Clause 82 includes a counterclaimant. I beg to move.

On Question, amendment agreed to.

Clause 57 [ Correction of award or additional award]:

The noble and learned Lord said: My Lords, this is a small drafting change. Unless any noble Lord wishes me to elaborate on it, I beg to move.

On Question, amendment agreed to.

Clause 61 [ Award of costs]:

AWARD OF COSTS

(".—(1) The parties are free to agree on the power of the tribunal as regards the award of costs.

(2) Subject to the agreement of the parties, the tribunal shall determine the costs of the arbitration and decide which of the parties should bear the costs and in which proportion between the parties the costs should be borne.").

The noble Lord said: My Lords, I spoke to a similar amendment in Committee, but in a divided army. As the Minister will recall, another solicitor of the Supreme Court—I cannot detect his presence in your Lordships' Chamber—the noble Lord, Lord Byron, argued to the contrary. I beg to move the amendment again on Report because I believe it to be an important matter.

I submit that the process of arbitration in which the parties consensually agree how to resolve their dispute should be different from the process of adjudication in the law courts. In the law courts the rule is that costs follow the event. As I argued at Second Reading and in Committee, that does not always produce a fair result. One can see that it produces a fair result in a simple dispute, perhaps as regards a road accident, when the issue is whether or not a defendant is at fault. If the defendant is at fault, the order of costs should clearly be against him. If he is not at fault, and therefore in the judgment of the court the plaintiff should not have brought proceedings, it is clear that the plaintiff should bear the costs of those proceedings.

However, the commercial world is much more complicated. As has been shown in a number of cases, in the more complex cases brought before the courts, the issues can be narrowly decided in favour of one party rather than another. It is not a world of black and white but of shades of grey. In those circumstances, the rule that costs follow the event operates in an unfair way.

Having identified that the rule of costs can produce an unfair result in the court process—I produced more detailed argument at Second Reading—it is of paramount importance that the arbitrator should be free to decide costs according to his best judgment. That is the law at present. That was the proposal in the draft Bill in July produced for consultation by the committee chaired by Lord Justice Saville. Only since then has the measure been introduced into the draft Bill that the arbitrator should start on the basis of applying the rule that costs follow the event.

I submit that the arbitrator should be left free. He should not be restricted in his order for costs but should do what is fair between the parties. It may well be fair, for example, for him to make no order for costs, or to make an order for costs in certain circumstances against the winning party. He should not be tied down by the principle that costs follow the event.

It is because I feel strongly for the reasons I have advanced to your Lordships that I ask noble Lords to accept the amendment. In so doing it gives freedom to the arbitrator to award costs as he thinks fair and right.

3.30 p.m.

Clause 66 [ Enforcement of the award]:

The noble and learned Lord said: My Lords, the clause as drafted gives a non-exhaustive list of grounds on which leave to enforce an award in the same manner as a judgment shall not be given by the court. The list is non-exhaustive, but we see a danger in specifying only some of the relevant matters. Parties may be led astray by thinking that matters which are not mentioned are not covered. That is not the case.

We have given some thought to constructing an exhaustive list, but it would be difficult to be absolutely sure that all matters had been covered. On balance now we think it would be preferable to exclude the list altogether from the Bill. I beg to move.

On Question, amendment agreed to.

The noble and learned Lord said: My Lords, the clause deals with the enforcement by the court of the tribunal's award. Clause 66(5) saves the position of the recognition and enforcement of an award under other enactments or rules of law. The Geneva and New York Conventions are mentioned particularly, and we think that there is merit in making it clear that parties have a right also to recognition and enforcement by means of an action on the award. I beg to move.

On Question, amendment agreed to.

Clause 74 [ Immunity of arbitral institutions, &c.]:

The noble and learned Lord said: My Lords, noble Lords will be aware that Clause 74 introduces limited immunity for arbitral institutions. The purpose of subsection (2) is to prevent litigious parties who are prevented from suing an abitrator by virtue of the immunity conferred by Clause 29 from turning to the institution which appointed or nominated him.

As drafted, the clause could be interpreted to have a rather wider effect than we envisaged. The effect of the amendment is to limit the scope of the clause. We had in mind that the institution should be protected from the consequences of anything done or not done by the arbitrator simply because it had appointed or nominated him. The clause is not intended to protect the institution in a range of other circumstances. I beg to move.

On Question, amendment agreed to.

Clause 80 [ Notice and other requirements in connection with legal proceedings]:

The noble and learned Lord said: My Lords, the purpose of this clause is to tie together the rules of court and those provisions of the Bill which refer to legal proceedings. Certain provisions of the Bill require an application or appeal to be made to the court within a specified time. Subsection (5) makes it clear that the rules of court in relation to the reckoning of periods and the consequences of not taking a step within the period prescribed by the rules apply in such cases. The subsection also needs to cover rules of court on the extension and abridgement of periods of time. I beg to move.

On Question, amendment agreed to.

Clause 81 [ Saving for certain matters governed by common law]:

The noble and learned Lord said: My Lords, in speaking to Amendment No. 10, I wish to speak also to Amendment No. 11. These are simple amendments which are designed to change the particular rules of law which it has been decided are worthy of mention. I beg to move.

On Question, amendment agreed to.

On Question, amendment agreed to.

Clause 85 [ Modification of Part I in relation to domestic arbitration agreement]:

The noble Lord said: My Lords, in addressing your Lordships on Amendment No. 12, I wish also to address Amendments Nos. 13, 14 and 15. As will be recalled from Committee, all four amendments concern the same issue. It can be simply stated: should there be a single arbitration law which is equally applicable to domestic and international arbitrations or, as now, should there be a domestic arbitration law and a separate international arbitration law? It arises in three respects: first upon the court's power to stay proceedings; secondly upon the parties' rights to go to the Court on a preliminary point of law; and thirdly upon the parties' rights to go to the Court on a question of law.

The Minister will remember the arguments that I have been advancing while the Bill has been in the House and the words which I addressed to your Lordships at Second Reading, and in Committee. The starting position is that there is no logic in having two different forms of arbitration law. I cited to my noble and learned friend the situation where an international English-based construction company is in an arbitral dispute with another English-based international construction company. In that situation the two companies in arbitration would be covered by domestic arbitration law. But the English construction industry is successful and is involved in many contracts throughout Europe and the world. Therefore, the scenario can easily arise with an arbitration clause between an English-based construction company and an overseas-based construction company. That complexity can be furthered when there are two English-based international construction companies and one foreign one. There is no logic why there should be two forms of arbitration law in such disputes.

I am sorry that the noble Lord, Lord Lester, is not here since there is also the difficulty that in the Bill we may be contravening European law. We are not giving the same rights to nationals of other member states as we give to nationals of our own member state in the European Union. As noble Lords will recall, I previously advanced the argument that the matter should be addressed while the Bill is passing through the Houses of Parliament. Indeed it should be addressed while the Bill is before your Lordships.

The use of statutory instruments does not have a happy history in arbitration matters or other statutes. In reality, what happens is that, when a matter is left for a statutory instrument to be placed before Parliament at a later stage, it goes to the bottom drawer of the arbitration reform desk or the commercial consumers desk in one of the departments of state and is laid aside. I remind noble Lords of what happened last time in an arbitration matter where a right of statutory instrument was vested in the Minister to abolish the special category cases. After a few years it became plain that there was no justification for keeping the special category disputes. There was an intention to introduce a statutory instrument under the 1979 Act, but nothing was done. Seventeen years have gone by without the statutory instrument ever being introduced. I remember the Bill being in your Lordships' House in 1979, when the specific intention was to review the position within three years. But nothing was done for 17 years. That is why I say that the use of the statutory instrument is not satisfactory. In any event, it is a matter of primary law and should be dealt with by your Lordships, who should decide whether there should be a separate regime for domestic and international arbitrations.

I wish to go further and issue a specific invitation to my noble and learned friend. Will he be kind enough to agree to enter into a consultation period between now and Third Reading? I am very sorry that the noble and learned Lord, Lord Mustill, is not in his place and cannot speak on the results of his inquiries. It so happens that on the very night of the Committee stage the noble and learned Lord, Lord Mustill, in his much more revered position as President of the Chartered Institute of Arbitrators (an organisation about which I believe the noble Lord, Lord Peston, now knows) and I went as guests to a dinner there. Both of us made inquiries as to whether there was any opposition to having our arbitration law applying equally between domestic and international arbitrations. Certainly my inquiries, and I understand his also, produced the result that there was no opposition.

As my noble and learned friend will recall, this particular issue did not go out to consultation under Lord Justice Saville's committee. However, the committee applied its mind to the matter in Chapter 3 of its report in February this year. The committee found no justification. It examined the particular arguments advanced in favour of keeping the distinction and found them not to be well founded. I ask my noble and learned friend to take that matter also into account.

My noble and learned friend may be concerned about the impact of my amendment on current law, in so far as it might deprive parties of rights that they now have, and will not have if the Bill becomes law with the abolition of the distinction between domestic and arbitration law. Perhaps he will be kind enough to examine the facts. The facts concerning domestic arbitration are that, currently, under our law it is not possible to contract out of the three procedures I identified to the House. There is no valid domestic arbitration agreement that has the contracting out provisions. Under current law those involved in domestic arbitration are not entitled to contract out. As for depriving parties in the future, the same logic applies. The process in which the power of the courts is removed (and I shall deal in a moment with the stay of arbitration) under preliminary points of law and questions of law is a positive process in which the parties have to agree to contract out. Therefore, if that right does not already exist in agreements, no rights are being taken away from anybody.

I therefore ask the Minister to look at the logic of the position, and at the logic of my proposal that he should carry out a consultation process between now and Third Reading. I suggest that that allows plenty of time. No large group of persons would be at a disadvantage if this measure were to be brought forward. For all the reasons advanced, I venture to think that he would find no substantive opposition to this proposal. He would therefore be able at Third Reading to advise the House, following a consultation period, that the distinction is no longer sensible. In doing so, he would give 'our arbitration law the appearance of good sense, and make it marketable to the international community. That is of great importance. I beg to move.

3.45 p.m.

Clause 86 [ Staying of legal proceedings]:

[ Amendment No. 13 not moved.]

Clause 87 [ Effectiveness of agreement to exclude court's jurisdiction]:

[ Amendment No. 14 not moved.]

Clause 88 [ Power to repeal or amend ss. 85 to 87]:

[ Amendment No. 15 not moved.]

Clause 103 [ New York Convention awards]:

The noble and learned Lord said: My Lords, the effect of the amendment is to apply for the purposes of Part III of the Bill, which gives effect to the New York Convention, the definition of "in writing" and the concept of the award being treated as made at the seat of the arbitration, which are in Part I of the Bill. This will introduce a measure of consistency between Parts I and III of the Bill. I beg to move.

On Question, amendment agreed to.

Clause 105 [ Evidence to be produced by party seeking recognition or enforcements]:

The noble and learned Lord said: My Lords, this particular clause specifies what evidence a party must produce when seeking recognition or enforcement of a New York Convention award. We tried to be helpful by, for example, defining the term "duly authenticated". That is not part of the New York Convention. On reflection, we feel that it is best to stick with the convention wording. The amendment achieves that. I beg to move.

On Question, amendment agreed to.

Schedule 3 [ Consequential amendments]:

The noble and learned Lord said: My Lords, this is a consequential amendment which applies only to Northern Ireland. I beg to move.

On Question, amendment agreed to.

3.55 p.m.

The noble Lord said: My Lords, Sub-Committee D had a very short time in which to receive evidence and produce its report on the European Commission's proposal for reform of the fresh fruit and vegetable regime. We were told that the Spanish presidency intended to have the scheme put to the Agriculture Council for a vote on 18th December last. The sub-committee had to work on a draft text received at the end of October. We did not see an official text until the end of November. However, we were able to send a draft copy of our report to the Minister on 14th December.

That kind of delay in supplying documents from Brussels does not make it easy for the European committees of this House to perform their duty of parliamentary scrutiny. I am grateful to the Minister for taking up the matter with the Agriculture Commissioner, who has apologised. As it turned out, the proposed reforms were not considered in December. They are likely to come before the Agriculture Council for a vote next month. If, despite having been produced under pressure, our report has any merit, it is due to the help that we received from our witnesses—not least from MAFF—at short notice. I am grateful, too, for the work and support of my colleagues on the sub-committee and for the assistance of its specialist adviser, Mr. David Green.

The Agriculture Committee of another place carried out a most useful investigation into the fruit and vegetable sector last summer. That was before the reform proposals were adopted by the Commission in October. So our report starts where that one left off.

I have had the privilege of serving on Sub-Committee D for more than 10 years now. I do not believe that in that time it has produced a report for this House on a European common agriculture regime in terms so sharply critical as this one; nor one so unenthusiastic about reform proposals.

I turn to the regime as it is now. The Community is the world's biggest producer of fruit. The regime covers all fruit and vegetables grown in the Community except potatoes, bananas, wine grapes and peas and beans grown for fodder. The regime was introduced in 1966. It was not reformed with the other regimes in 1992.

As regimes go, it is not the most expensive in budget terms. However, in 1994, it cost 1.5 billion ecus, 92 per cent. of all that expenditure being paid to Greece, Spain, France and Italy. That came to 1.4 billion ecus. I do not have to remind noble Lords that an ecu is worth between 80p and 85p. The external mechanisms provide protection of EU growers, first, by means of minimum import prices and, secondly, by export refunds. Internally, there are common quality standards and there is intervention in the form of payments for withdrawal of sound produce from the market. It is that withdrawal system and the way in which it is operated that attract our strongest criticism.

In the past two years, withdrawals have become the most expensive support measure. In 1993, 46 per cent. of the cost of the regime was spent on paying growers to take surplus produce off the market, chiefly citrus, peaches, apples and nectarines.

Withdrawal payments were originally intended to be a safety net in times of glut; but, lately, producers have seen it as a lucrative alternative market. As an example, which we quote, in 1993, 77 per cent. of all Greek nectarines and 62 per cent. of their peaches went for destruction—and were paid for.

The withdrawal system is condemned in the 1994 Court of Auditors' report in these words:

"the present costly system of withdrawals and destruction of surpluses, relieving the market of excess production and ensuring a minimum income for producers, encourages over-production, pollutes the environment and has a negative effect on public opinion".

Under the current regime it is the producer organisations who operate the system. They may withdraw their members' produce from the market and receive financial compensation from the Community at a price which is fixed as a percentage of the basic price. The quality and packaging of the produce withdrawn are also taken into account. Produce withdrawn may be disposed of to charities, hospitals, schools and in other ways. In practice most is destroyed.

The Commission's reform proposals are largely concerned with the structure and role of producer organisations and, to that end, they propose a complicated web of regulations and rules. The proposed reforms are described in paragraphs 9 to 13 of our report. Perhaps I may summarise them briefly: producer organisations would be given a much more prominent role in the organisation of the fresh fruit and vegetable market. Intervention payments would remain contingent upon membership of a producer organisation but the rules for membership are tightened. A producer must commit 90 per cent. of his whole produce to a producer organisation. Non-members could be compelled to market their produce through producer organisations. Each producer organisation would be required to contribute to and to set up an operational fund to finance an operational programme. Such a fund could even be used to extend the scope of withdrawal. Compensation payments are to be subject to a price reduction of 15 per cent. over five years. The quantity of produce that may be withdrawn would also be reduced over five years from 50 per cent. of a producer organisation's total production to 10 per cent. in year five.

The intention behind the Commission's proposal is no doubt admirable and, in an ideal world, the reforms might work. However, the suggested reforms are brought forward in the full knowledge on the part of the Commission that the current regime is not working satisfactorily in a far from ideal world.

Our view as to their likely effectiveness was coloured by two reports. First, by the Commission's own 1994 report on supervising the application of the Community rules in the fruit and vegetable sector, which was highly critical of the way in which the withdrawal system was monitored. That report describes the controls on withdrawal of produce, particularly in the southern Mediterranean member states, as excessively tolerant and negligent. To quote from its report:

"It can be said that the essential role of many of the Producer Organisations in certain Community regions (particularly Greece and Italy) is not that ascribed to them by Community rules".

We were influenced, secondly, by the 1994 Court of Auditors' report, which confirmed a picture of mismanagement and fraud.

We give our opinion on the detailed matters proposed in Part 4 of the report. In particular, and regretfully, we cannot see how a proposed corps of inspectors is going to perform satisfactorily in the current climate of muddle and dishonesty. We say that the regime can best be reformed by ending a withdrawal system which pays farmers to grow surplus produce for destruction. The sooner fruit and vegetable growing becomes progressively exposed to market forces, as it is in the UK, the better. That would take care of quality standards and consumers would benefit.

We have to conclude that if the current system is not workable, we cannot see how a more complicated one, as proposed, can work any better. There would simply be more regulations to be misunderstood and probably disregarded. That opinion of the Commission's proposals for reform of the fruit and vegetable regime is summarised in the last two paragraphs of the report under the heading "Fraud". As one of the members of the sub-committee said during our deliberations: "No doubt the farmers in the poorer Mediterranean countries need support; but, if they do, this is not the way to do it." I beg to move.

Moved, That this House takes note of the Report of the European Communities Committee on the Reform of the EC Fresh Fruit and Vegetable Regime [ First Report, HL Paper 18].—( Lord Middleton.)

4.6 p.m.

4.14 p.m.

4.19 p.m.

4.27 p.m.

4.33 p.m.

4.41 p.m.

4.50 p.m.

4.57 p.m.

5.6 p.m.

5.18 p.m.

5.34 p.m.

5.35 p.m.

The noble Earl said: My Lords, this is the third order of this nature to come before your Lordships. We have previously considered those relating to the Leeds and the Bristol development corporations.

This order is now required to wind up the Central Manchester Development Corporation. It revokes the 1988 order which designated the urban development area and which established the development corporation.

The order will take effect in two stages. The first is that that part of the order which designated the urban development area is to be revoked on 1st April 1996. The second is that that part of the order which established the corporation is to be revoked on 1st July 1996.

The reason for having two stages is that on 1st April the corporation will cease to exercise any operational functions. It is, therefore, proper that the urban development area status should be removed on that date. The corporation will then have three months in which to produce its annual report and accounts and to wind up its affairs. On 1st July the corporation will finally he dissolved.

All development corporations were intended from the outset to be bodies with a limited life. They were set up with the particular aim of helping the regeneration of certain run-down urban areas in order to give those areas a much needed boost after years of neglect. We are winding up the Central Manchester Development Corporation, therefore, precisely because it has successfully revived the fortunes of its designated area and because it has established a solid base from which regeneration can continue.

The corporation was set up in 1988. Its remit was to revitalise, and to bring private investment back, to an area of 187 hectares—an area which is immediately south of the city centre. This area was once the powerhouse of Manchester. But it had become run-down and neglected, with many under-used buildings and derelict sites.

This was a depressing and sad state of affairs for the centre of what was, and is, a magnificent and proud city. There was, therefore, a pressing need to tackle environmental decay, to promote jobs and tourism and to bring housing back to the city centre.

Anyone who has visited this area, as I have been privileged to do recently, cannot fail to be enormously impressed by the way in which the corporation has tackled these problems. It has transformed a once neglected area into a thriving, vibrant part of the city centre where developers are now keen to invest. It is wonderful not only to see what has been done but also to sense the enthusiasm, determination and pride of all those who have been involved and of all those who have been affected by what has been done.

An important part of the corporation's work has been to bring people and vitality back to the city centre. In 1988 the population of the urban development area was just 250. Now, eight years later, nearly 4,000 people live there. That is an astonishing change. Those people live in lively new communities with decent services and popular bars, pubs and restaurants.

The corporation has spent some £17 million on environmental improvements. These include such things as clearing canals, restoring towpaths and putting in new landscaping. Much of this work has been done in the Castlefield area, which is now a major leisure and tourist attraction and which is based around the historic canal network. These environmental improvement works have been vital ingredients in inspiring the confidence of investors and in creating an overall image of which local people can be proud.

The corporation has also succeeded in attracting new jobs and new businesses. Many under-used and neglected buildings have been converted into quality offices and hotels of varying sizes. New offices have also been built. Since the corporation started its work, over 98,000 square metres of offices have opened or are under way. That is a significant contribution.

In all, the corporation has attracted into its area private sector investment of £376 million. For every £1 of public money which has been invested by the corporation, nearly £4 will have been invested by the private sector. Noble Lords will agree that that is a remarkable achievement.

The corporation, though, has not achieved all this on its own. Underlying all its achievements have been the close and successful partnerships which it formed with the city council, with other public sector agencies and with the private sector. A splendid example of this spirit of co-operation can be seen in the new international concert hall, the Bridgewater Hall, which is due to open in the autumn. This was conceived and financed in partnership with the city council, with substantial backing from the European Regional Development Fund. It will be the centrepiece for the regeneration of an entire sector of the city.

There are many aspects of the achievements of the Central Manchester Development Corporation which deserve just recognition, but I fear that, were Ito mention them, I might weary your Lordships greatly, which would be distressing. The Central Manchester Development Corporation has, without doubt, been a great success story. Parts of central Manchester which were decaying are now no longer decaying but thriving due to the corporation's splendid efforts. It has restored the confidence of private sector investors. It has stimulated new jobs and homes. It has created a cleaner, safer environment. In partnership with the city council, it has laid a solid basis for continued regeneration in the future.

Now that that has been done, it is right to wind up the corporation. It is now for others, such as the council, to carry on the work and to build upon the corporation's achievements. The order is necessary to wind up the corporation, and I hope that I have managed to persuade your Lordships of the quite outstanding work which has been done by it. I commend the order to your Lordships. I beg to move.

Moved, That the draft order laid before the House on 13th February be approved [ 10th Report from the Joint Committee].—( Earl Ferrers.)

5.51 p.m.

6 p.m.

6.10 p.m.

6.15 p.m.

6.21 p.m.

Read a third time.

Clause 6 [ Exercise of clinical judgment]:

The noble Baroness said: My Lords, this amendment enables your Lordships to return to the vexed question of complaints about clinical judgment. At Second Reading and in Committee the Minister acknowledged—indeed, I think all of your Lordships who took part in the debates agreed with her—that it was extremely difficult to develop a precise definition of a clinical complaint, a precise definition which, if it were possible, would allow a positive description to be placed on the face of the Bill and would allow those practising the complaints procedure to distinguish a complaint about clinical care from one about maladministration.

We on these Benches were aware that the attempts we have made to suggest definitions by amendments, which have taken place both in your Lordships' House and in another place, have been inadequate. Amendment No. 1 therefore throws the responsibility on to the commissioner and would ensure that he makes national guidance available so that this very important additional category of complaint does not become discredited by misunderstandings and perhaps by local variations in practice.

Subsection (8) of Amendment No. 1 requires the commissioner to produce guidance about how to make such a complaint—a clinical judgment complaint—and to assist anyone who wishes to do so in assembling appropriate evidence to make his case. The clarity and accessibility which would be achieved would be of benefit both to the complainant and to those complained against. In the new and complicated area of clinical complaints to be considered by the ombudsman it seems to us particularly important that the scales of justice are seen to be clearly balanced and not weighed against a patient, a lay person, who may be questioning the professional judgment—indeed the competence—of doctors and other health service professionals.

For example, it has been suggested that professional representative bodies may press the commissioner to set exacting and high standards of evidence from the complainant in a case of clinical judgment. It is very important that high standards are maintained. But in clinical judgment cases it seems that the type of evidence required may mean a level of scientific knowledge or perhaps technical expertise well beyond the capacity of the average complainant. That is the purpose of subsection (8)(b), to ensure that the commissioner's office takes the responsibility for ensuring that complainants understand how to find help so that the burden of assembling evidence will not fall inappropriately on them as individuals. Subsection (9) requires the commissioner to consult with appropriate outside bodies in creating the guidance. It is worth recording that the national consumer organisations and patients' representative bodies are anxious that the safeguards embodied in the amendment are included in the Bill.

The health commissioner himself has already emphasised in his useful background paper, which we have mentioned on several occasions in our deliberations on the Bill, that in his new responsibilities he will rely heavily on professional advice in the area of clinical judgment. That is what should be balanced by the requirements in the amendment. The Minister said in reply to my probing amendment on this subject in Committee that clinical judgment must be a developing concept. I agree with that. She also said:

"It will be for the commissioner to decide, with advice from his professional advisers, whether and which aspects of any given complaint concern clinical judgment".—[Official Report, 29/2/96; col. 1680.]

I agree with that also but I do not think it is fair, either to the health professionals concerned or to patients, to accept that each and every instance of clinical complaint will be decided ab initio by the health commissioner with his professional advisers.

That is why Amendment No. 1 asks the health commissioner to issue guidance which will be available to everyone. Obviously that would be appropriately circulated once he has had the opportunity to develop his thinking about this complicated area with both the appropriate professional and, importantly, the consumer representative bodies. I beg to move.

6.30 p.m.

Clause 10 [ Reports]:

The noble Baroness said: My Lords, this amendment and Amendment No. 3, are also intended to improve what one might call "the balance of power" under the new complaints system—that is to say, to increase public confidence that individual patients will have the same rights as individuals appearing before the ombudsman, as will health care professionals, who may be supported by the formidable resources both of their own professional organisations and perhaps from the NHS itself.

The purpose of Amendment No. 2 is obviously straightforward. It is to enable complainants to see the factual summary of the commissioner's draft report after the investigation is complete, so that they can comment on factual errors or omissions. At present the body or person complained about does have access to the draft report, but the complainant does not. Surely this practice is against the spirit of fairness and openness which is supposed to inform the new NHS complaints system right the way through, and particularly the work of the ombudsman.

After all, at the risk of opening old disputes, noble Lords will vividly remember the advantages that were supposed recently to accrue to those Ministers who had foresight of the recent report by Lord Justice Scott. On that occasion an enormous and, in my view, justified, public row ensued, about the rights of the Opposition to be able to see the report on an equivalent basis. No one is suggesting that the reports of the ombudsman in relation to health service complaints will be subject to that degree of partisan approval or disapproval. It is certainly unlikely that the clamour would occur about complainants within the health service. But it makes it even more important that the rights of the individual should be equated with the rights of the mighty machine of the ombudsman and the complaints committee—indeed, they must be ensured by statute.

This matter, as well as the previous one raised by Amendment No. I, have been mentioned at every stage of the passage of this Bill through another place and your Lordships' House. In another place amendments rather similar to Amendment No. 2 received wide, all-party support. At Report stage, the Minister, Mr. Horam, said in a positive reply to my honourable friend Mr. McLeish,

"I will ask the commissioner to consider further his practice and invite the Select Committee on the Parliamentary Commissioner for Administration to look into, not only the question of the health commissioner, but that of the parliamentary commissioner—perhaps as a larger part of the total framework—and decide whether it is fully satisfied that the procedures that the commissioner has outlined are totally correct, and whether it should seriously consider moving towards the hon. Gentleman's suggestions and those made in Committee".—[Official Report, Commons, 25/1/96; cols. 546–7.]

Those made in Committee, as I have indicated, were supported by honourable Members on the Government side.

Since then the chairman on the Select Committee on the Parliamentary Commissioner for Administration, Mr. James Pawsey, MP, has written to the National Consumer Council which has been championing amendments about complainants' access to draft reports. Mr. Pawsey agrees in the letter that this is a matter worthy of further investigation, which he intends to take forward in the forthcoming inquiry into the Parliamentary Commissioner's annual report for 1995. Given this favourable climate on all sides, it seems entirely appropriate to try to ensure that this generally acceptable purpose is included and now placed on the face of the Bill. I beg to move.

The noble Baroness said: My Lords, Amendment No. 3 is important in the context of previous discussion about not seeking to put some of my concerns into primary legislation. Amendment No. 3 is an attempt to increase the transparency and accessibility of the ombudsman's work and to establish an effective system for monitoring and evaluating his new activities in the early years of their operation. Those will include the details that we have discussed in earlier amendments.

The amendment is the result of discussions among my honourable friends in another place, myself and the National Consumers' Council. We all believe that the enlarged responsibilities of the Health Commissioner for NHS complaints are sufficiently radical to merit a special process of evaluation so that the famous level playing field is achieved. I believe that to be particularly important in view of the Minister's response to the two earlier amendments that we have discussed this evening, which she feels are inappropriate for primary legislation. I believe that the process of evaluation and monitoring becomes even more crucial.

Too often we are aware that there is little evaluation in the health service. In this Bill we have the opportunity to achieve it at an initial stage and avoid subsequent contrary assertions about the success or failure of any particular change within the NHS. Amendment No. 3 proposes three specific initiatives: first, that in each of the first three years of operation the ombudsman should conduct at least one complainant satisfaction survey. Secondly, he should arrange a meeting in each of the first three years of the new system for relevant interests such as patient organisations, professional bodies, advisers and managers to evaluate and discuss developments and emerging issues. Thirdly, he should publish a report of these meetings, including the complainant surveys and resulting recommendations for amending the system. The Bill already requires the commissioner to place formal reports before Parliament. I believe that such monitoring would make it possible to make a proper assessment of how the process was working in practice. It would be very easy to include the two concerns which were the subject of my two earlier amendments this evening.

Too often one is told anecdotally that the complaints system is working satisfactorily, but on further investigation one finds that a patient or complainant has just given up rather than been satisfactorily dealt with. The whole object of the new NHS complaints system is to make the system much more user-friendly at every level. A more obviously open way of judging and evaluating it will enable one to be sure that patients are satisfied and not just exhausted. In addition, this system of evaluating and monitoring will give patients the confidence that the system is fair and open. It will extend their knowledge of the system, which appears to be complex, although it has been revised and made more user-friendly. It will increase access to information, including the new leaflet that the Minister has described this evening.

In another place the Minister, Mr. Horam, said that he would raise the issue with the commissioner. Before the Bill leaves your Lordships' House it is important that we know the outcome of those discussions and whether the process of monitoring is acceptable to the commissioner and will be included in his new arrangements. I beg to move.

6.55 p.m.

7 p.m.

7.2 p.m.

7.5 p.m.

7.7 p.m.

7.9 p.m.

7.11 p.m.

7.12 p.m.

7.15 p.m.

The noble Lord said: My Lords, in moving these regulations, I shall speak also to the Electricity Supply Industry and Water Undertakers (Rateable Values) Amendment Order 1996.

I deal first with the electricity and water order. Rateable values of large public utilities are set by order by the Secretary of State. Nuclear Electric plc is to split on 31st March. The order before the House today takes the rateable value in England of Nuclear Electric plc and splits it. Only the value in England is being split by this order. That is because property occupied by Nuclear Electric plc in Wales is to remain with that company under its new name of Magnox Electric plc. The new values and the changes to the order have been fully discussed with the companies concerned, which agree with the changes that we are proposing.

The order also changes the rateable value of Bournemouth and West Hampshire Water. The change is the result of the company convincing us that we did not give it equity of treatment with other water companies in 1994. We failed to take full account of property that it had vacated. Again, the change has been agreed with the company.

I turn now to the second order. The chargeable amounts regulations do not make provision for splits of property which appear in the central rating lists and have values prescribed by the Secretary of State. The split of Nuclear Electric means that these regulations also need to be amended. The regulations before the House today make such provision. They also make further changes to the transitional arrangements applying to local list property; that is, property which is valued by the valuation officer rather than by the Secretary of State. Those changes rectify anomalies in the original regulations which, if uncorrected, would unfairly increase the future rates bills of some ratepayers.

These anomalies have yet to affect any ratepayer. The changes that we propose are entirely and unambiguously in ratepayers' favour. If pressed, I have with me a long and involved explanation of them all that I still find hard to understand having read it slowly several times over. I am of course prepared to read this explanation into the record, but I hope that any noble Lord whose curiosity is purely personal will have mercy on other noble Lords and on the servants of this House and will content himself with asking me to write him a letter. I beg to move.

Moved, That the draft regulations laid before the House on 1st March be approved [ 13th Report from the Joint Committee].—( Lord Lucas.)

On Question, Motion agreed to.

7.18 p.m.

7.19 p.m.

The noble Lord said: My Lords, the draft order is designed to help schools change the length of the school day far more quickly than the statutory arrangements allow. The Government's proposals for change have already been scrutinised closely by the Deregulation Scrutiny Committee of this House and by the corresponding committee in another place. Both committees have given the proposals their approval without requiring any amendment. The Government's proposal has also been widely welcomed by schools and local education authorities.

This is a clear example of the Government's commitment to cut bureaucracy and red tape wherever they can. It is a modest but practical measure which will help schools to respond to requests for changes to the length of the school day. By using the provisions in the Deregulation and Contracting Out Act 1994, we are able to amend the primary legislation—that is, Section 21 of the Education (No. 2) Act 1986—which has proved most cumbersome for schools when changing school session times. In some cases schools have been taking 18 months to make even a small change to a school day.

The effect of the department's proposal will be to allow governing bodies to call a meeting with parents at any time in order to discuss changes to the school day. That will be subject to at least two weeks' notice. No longer will they have to wait for the annual parents' meeting to raise the subject. It is our intention that the new procedures should be available to help those schools which wish to change their school day in time from this September; for example, those schools which wish to provide more lesson time in response to an Ofsted inspection report or which feel that they are out of line with the practice of neighbouring schools.

I wish to assure the House that all other statutory protection associated with the legislation will remain in force. That includes consulting with parents and the LEA, giving three months' notice prior to any change and changing school times only at the start of an academic year. The order does not affect voluntary aided or grant-maintained schools. Those schools are not bound by the same statutory requirements but normally observe the principle of consultation and the giving of adequate notice before making changes.

Our proposed change to the current procedures of changing school session times is simple and will, I believe, be welcomed by schools. Once the order is made, my department will arrange for the decision to be widely publicised. That will include all those involved in the original consultation. The order has been agreed by another place. I beg to move.

Moved, That the draft order laid before the House on 15th January be approved [ 8th Report from the Delegated Powers Scrutiny Committee].—( Lord Henley.)