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Lords Chamber

Volume 590: debated on Thursday 11 June 1998

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House Of Lords

Thursday, 11th June 1998.

The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Ripon.

Athens Olympic Games: Counter-Terrorism Measures

Whether, in view of the decision to hold the Olympic Games in Athens in 2004, they will ask the European Union to urge the Greek Government to take effective action against the "November 17th" group.

My Lords, Her Majesty's Government condemn terrorism wherever it occurs, including the activities of the "November 17th" group and other terrorist groups active in Greece. We discuss such matters regularly with the Greek authorities. We have made clear our willingness to assist them in promoting effective counter-terrorism measures. To that end, the Greek Minister of Public Order visited London in December last year.

My Lords, I am grateful to the Minister for that reply. Is he aware though that this group has in recent years killed more than 20 people in Greece and that its targets have included not only Greek property and Greek individuals but also American, French, German and British nationals? Is the Minister worried by the thought that militant groups traditionally use and exploit the Olympic Games for spectacular attempts to gain publicity? That being the case, and as this is now an international matter, will he advise his right honourable friend to raise this question in the margins of the Cardiff Summit?

My Lords, I am aware of the targets of the "November 17th" group and certain other terrorist organisations within Greece. They have encompassed businessmen, diplomats and other foreign nationals. We are deeply concerned. We have specifically offered assistance to Greece already in establishing effective security arrangements for the 2004 Athens Olympics. My right honourable friend the Home Secretary has offered the services of his department and police expertise in helping the Greeks in this area.

My Lords, as the Minister has said, terrorism always surrounds international sporting events but they are also of tremendous economic benefit. Will he indicate whether it is the intention of Her Majesty's Government to try to bring the Olympics to the United Kingdom at any time in the next 20 years?

My Lords, I am not immediately aware of a bid for the Olympics. I shall have to consult my colleagues in the Department for Culture, Media and Sport. We shall report to the House in due course.

My Lords, can the Minister kindly enlighten some of us as to exactly what the "November 17th" group is about?

My Lords, its basic ideology is a little obscure. It is an anarchist organisation which appears to have close links with some of the Kurdish terrorists who operate in the area.

My Lords, in the light of the decision to hold the Olympic Games in Athens, what offers of assistance—rather more specific than the Minister has already mentioned—and counter-terrorism assistance do the Government intend to make to the Greek Government? Furthermore, have the Government offered the Greek Government the assistance of the Directorate of Counter-Terrorist Expertise set up by the G7 countries under a British initiative of the previous government which enables expert help to be made available immediately to countries which need it?

My Lords, the UK and Greece work closely together to combat terrorism. The UK has provided technical assistance and advice to the Greek police on a number of occasions, most recently in February this year. As I indicated, the Greek Minister of Public Order visited us at the end of last year. In the European Union and elsewhere—for example in Interpol—the UK and Greece have, in common with other countries, established good police liaison for sharing intelligence in order to fight crime and terrorism. In relation to the G7 initiative, clearly that is available to Greece, as it is to other countries faced with terrorist problems.

Pensions: Administrative Costs

3.10 p.m.

My Lords, in the unavoidable absence of my noble friend Lady Castle of Blackburn owing to illness, at her request and with the permission of your Lordships, I ask the Question standing in her name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what percentage of the contributions paid for national insurance, pensions, occupational pension schemes and personal pensions goes on administrative costs.

My Lords, the administration costs charged to the National Insurance Fund for awarding and paying state retirement pension and collecting and maintaining records of national insurance contributions were some £622 million in the financial year 1996–97. This represents about 1.5 per cent. of the fund's income in that year.

Little information is currently available about the costs of running occupational pension schemes. The Government Actuary's Department has carried out a study and will shortly publish a report of findings in this area. The Government do not collect information on the cost of administering personal pensions.

My Lords, I thank my noble friend for that Answer. As I understand the matter, there may be a policy move towards encouraging personal pension schemes in the private sector. Will the Government at least pay some attention to the costs of such schemes in comparing them with the possible alternative of extending public sector schemes?

My Lords, personal pensions are a private contract between the pension provider and individuals. As we know, some charges attached to personal pensions are too high and inflexible. Individuals must therefore consider very carefully the charges that attach to personal pensions before entering into such contracts. The purpose of the stakeholder pension is to attempt to reduce some of those costs for people who cannot afford them.

My Lords, does the Minister agree that it is absolutely scandalous that the previous administration, in promoting personal pension schemes, did not set up a mechanism to monitor the administrative costs associated with their provision, which would have been available to the Government now?

My Lords, have the Government yet received any reliable estimates from the pensions industry or elsewhere as to the additional administrative costs which may be incurred when pensions come to be split on divorce?

My Lords, that will form part of a study that was announced last week by my right honourable friend into the whole matter of pensions splitting. Other matters enter into it. There may be single-sum payments, which would reduce administrative charges. The whole question of whether one or other spouse can afford their share of the split pension also has to be examined. It is quite an involved matter.

My Lords, the noble Baroness, Lady Castle of Blackburn, has put a remarkable series of questions over the past few days. Perhaps I may express a personal hope in that I trust she is well.

So far as concerns comparative administrative costs, presumably the ratio would be better, as regards the Government's proposals for a stakeholder pension or a second pension, if that is made compulsory rather than if it is not. Despite the delay in publishing the Government's Green Paper on pensions, presumably estimates have already been made as to the comparative figures. Will the noble Lord give them to the House?

My Lords, no estimates have been made. The study is still continuing. The whole purpose of the stakeholder pension is to reduce the costs below those of personal pensions, which are considered to be rather high and unaffordable by the low-paid, those in intermittent employment and some of the self-employed.

Nhs: Missed Hospital Appointments

3.15 p.m.

In how many cases a patient failed to attend a hospital appointment in 1996–97, and in 1997–98; and what proportion of total hospital appointments these absences represented in each year.

My Lords, the figures available are for 1996–97. During that period, more than 6 million clinic appointments were missed by patients in England, Wales and Northern Ireland. That represents roughly 12 per cent. of all appointments. In Scotland, the data available are for first clinic appointments only: 148,000 first appointments were missed, representing 11 per cent. of the total.

Figures for missed procedures, which might be operations or other procedures booked on a day case and normal admission basis, are only collected in this form in England. The latest figures indicate that 156,100 people failed to turn up. That represented 4.6 per cent. of the total.

My Lords, does my noble friend agree that a problem clearly continues? Does she further agree that it is a surprising problem, given the huge expansion of NHS bureaucracy under the previous administration? Since a large wastage of NHS resources clearly applies, would it not be advisable for good practice to be encouraged across the country in order to ensure that some of the criticisms offered by noble Lords no longer apply?

My Lords, I certainly agree with my noble friend that the figures I have mentioned represent a considerable waste of resources within the NHS. It is difficult to calculate why appointments are missed. It may be that people simply forget; or it may be for administrative reasons, as my noble friend suggests. Frankly, it is difficult to calculate precisely what loss of resources it represents. An out-patient appointment at a clinic may be for some very simple matter, or for a complicated procedure. If we take as an average £61 for each out-patient appointment, the NHS could be losing as much as £360 million a year on missed appointments. It is certainly a matter that needs to be actively considered.

My Lords, can the Minister confirm that many hospitals have taken into account the number of patients who fail to arrive? In my experience as chairman of the Royal Free, we found that 15 to 17 per cent. of out-patient appointments were not kept. Do other trusts, as we have done, factor that in, in the way in which airlines tend to over-book? Although that may represent a large saving to the National Health Service, it could present great difficulties if all the patients turned up. Is the Minister aware of that?

My Lords, I am aware, to use the noble Baroness's analogy, that some hospital trusts are "over-booking". Perhaps it would be even better if they offered people large sums of money to get off aeroplanes or out of health service clinics if they were there when there was a surplus! I understand that some trusts, including one in Burnley, have set up a reminder system for patients. Although it was concerned that that might lead to a rather unwelcome influx of people who had been, as it were, built into the system as not attending, in fact it was able to cut the rates of "do not appear" people, as they are called, in some clinics by one-third. So it was clearly worth doing.

My Lords, may we hear more about the £360 million lost by people missing appointments? It is a common experience—certainly it is mine—that, whatever the nature of the appointment, it always runs late because the staff concerned do not have a minute off between one appointment and the next. That being so, they are always, by definition, usefully employed. Where is the £360 million going?

My Lords, I cannot speak for the noble Lord's personal experience. It is calculated that the real wasted costs are in, for example, writing to patients who do not appear and rebooking their appointments, as well as the extremely important loss of time by highly paid and very highly skilled members of staff within the clinics who, contrary to the noble Lord's experience, are often sitting around waiting for people to appear. I spoke today to a consultant in what one would have thought was a very oversubscribed, busy London clinic who said that six of his 10 booked appointments in the previous clinic had just not turned up.

My Lords, does the Minister agree that it is possible that some patients who are to have an investigative procedure panic at the last minute? It might be helpful if the procedure and its importance were to be explained to them, either by the GP or in writing by the hospital.

My Lords, the noble Baroness has made an important and sympathetic point. A great deal can be done. I am looking at the issue carefully in terms of preparing people for appointments, as well as doing the simple, courteous, administrative things such as reminding people who may have been sent an appointment some weeks ahead and may therefore just forget it.

My Lords, does the Minister agree that, because of the length of time it takes to get appointments in some disciplines, a few of the no-shows that she mentioned may have died?

My Lords, that is always possible. But perhaps I may quote the latest figures for out-patient appointments in England for the last quarter, which show that 81 per cent. of those waiting for appointments waited under 13 weeks and 96 per cent. waited under 26 weeks. Those waiting times conform with the Patient's Charter standard set by the previous administration.

My Lords, does the Minister have any information on what happens to the patients who fall out of the system by not attending an appointment? Do they subsequently reappear for a later appointment—in which case they perhaps ought to have a black mark against their name—or do some fall out altogether and simply do a runner?

My Lords, I am afraid I cannot give the noble Lord a universal answer to that question, because I suspect there is not one. He talks about people having a black mark against their names. One has to remember that, as I said when replying to the noble Baroness, Lady Masham, people can genuinely forget an appointment. When we raised some concerns about this matter publicly a few months ago, I had several rather pathetic letters from people, particularly older people who had been waiting months for a cataract operation, who simply forgot on the day and then found themselves back again at the beginning of the queue. This is something that needs to be addressed, both sympathetically and administratively.

My Lords, does the Minister have figures for cancellations of appointments which had been organised—or disorganised—by the hospitals themselves and for the percentage of appointments that represents?

My Lords, the most recent figures show that there were 50,000 cancelled appointments in 1997–98, which is a lot; but that compares with the 156,100 patients who failed to turn up.

My Lords, can the Minister say whether there is any analogy in this matter with private healthcare and whether those who pay a higher premium for their healthcare turn up on a regular basis for treatment or appointments with doctors compared with those who pay through the National Health Service?

My Lords, I am afraid that I do not have any comparative figures with the private sector, but perhaps the noble Viscount has a point.

My Lords, will the Minister look into the matter of reminders for older people? I find that, at the age of 87, I cannot read my diary, anyway. I have several diaries and miss my appointments simply through inadvertence. Old people do need to be reminded.

My Lords, I am grateful to the noble Earl for reinforcing the point I made more generally in my earlier answer when I said that I had received some concerning letters from people who had had exactly that experience. It is clearly a matter which needs to be addressed. A possible solution is answering machines, which would enable people who found at the last minute that they could not attend to leave messages; but that would not address the noble Earl's problem.

My Lords, is it possible that, where a GP knows that a patient may forget or not understand an appointment, the hospital could also notify the GP of the appointment so that his staff could ring and remind the patient of it on the day beforehand or early on the day of the appointment?

My Lords, I am grateful to the noble Countess for that useful suggestion. With modern technology—and, after all, the telephone is not very modern—there must be systems to enable people to be reminded and prompted to take up appointments which may have been set some weeks or months in advance.

My Lords, has the Minister considered whether patients—apart from elderly, forgetful patients—who miss their appointments should have to pay some form of penalty before another appointment is granted?

Manufacturing Industry: Interest Rate Increase

3.25 p.m.

What estimate they have made of the effect on employment in the manufacturing sector of the Bank of England's decision to raise base rates to 7.5 per cent.

My Lords, the Monetary Policy Committee raised interest rates in order to ensure that the Government's inflation target is met. I am sure that the House, manufacturers and businesses generally will agree that we must avoid the boom and bust policies of the past, since higher inflation today results in fewer jobs, lower growth and higher interest rates tomorrow.

My Lords, in thanking my noble friend for that reply, I ask him to recall the period 1979 to 1982 when the then new Conservative Government, in pursuit of a high pound and high interest rate policy, destroyed huge tranches of Britain's industry and created mass unemployment, particularly in northern England. Is my noble friend aware that Labour Government supporters such as myself are becoming anxious that the present Government appear to be following a similar high pound and high interest rate policy and that manufacturing industry is again beginning to feel threatened? Can my noble friend give me an assurance that Her Majesty's Government will do their utmost to ensure that Britain's manufacturing base is protected and the jobs of workers in industry safeguarded?

My Lords, I am indeed old enough to recall the period to which my noble friend refers. I also recall the period between 1988 and 1993 when a million jobs in manufacturing were lost. The Government will always be very conscious of the risks involved in higher interest rates. The present evidence is that, although manufacturing industry is not expanding, it is not in recession, and the forecasts for next year are encouraging.

My Lords, does the Minister agree that one of the main factors in the strength of sterling is the high base rate? As has been said, that high rate is threatening our export markets because, as far as overseas buyers are concerned, our goods are more expensive. Does the Minister further agree that the role of the Chancellor of the Exchequer is to oversee the whole of the economy of the country and that it is quite wrong of him to shrug off responsibility for the base rate to the Bank of England?

My Lords, the noble Lord makes two points. On the first point, it is undeniable that there is interaction between exchange rates and export performance. On the second point, the Government maintain control over both fiscal and monetary policy in the economy. They have devolved decisions on short-term interest rates to the Bank of England.

My Lords, I thought my noble friend said in his first Answer that we were concerned about the level of inflation today. Was he suggesting that the most recent ¼ per cent. increase in interest rates would affect inflation today, or was he telling us that, in practice, for some reason the Monetary Policy Committee is able to forecast that in two years' time inflation would be lower if interest rates were increased today?

My Lords, I was not quite suggesting that. What I suggested in my first Answer was that the Monetary Policy Committee raised interest rates in order to ensure that the Government's target for inflation was met. We shall see whether or not I am right in five weeks' time.

My Lords, does the noble Lord agree that changes in interest rates are bound to affect many aspects of the economy which are controlled by the Chancellor of the Exchequer? Does he therefore regret the change which the Government made last May, or does he have no confidence in the ability of the Chancellor, if he had control of interest rates, to protect us against inflation?

My Lords, the noble Lord puts forward a false syllogism. Of course the Government have confidence in the Chancellor to maintain control of all aspects of fiscal and monetary policy. There is no derogation from that in the fact that there has been a devolution of decision making on short-term interest rates.

My Lords, will the Minister accept that, having listened both here and in another place to the points made on "boom and bust" when this question is asked and answered, the implication of the Government's statement is that they are simply leaving the effect of interest rates and fiscal policy on manufacturing industry to the operation of the markets? Is not that a surprising stance for new Labour to take?

My Lords, far from it. In many ways the Government have been directly active in helping manufacturing industry. Such policies as lowering corporation tax rates, easing regulatory burdens on businesses, extending first-year capital allowances and the creation of new venture capital funds are all directly designed to help manufacturing business.

My Lords, can my noble friend confirm that the Bank of England has knowledge of the condition of the manufacturing industry in mind when fixing interest rates and is not worried about inflation alone, which is distorted by the service sector?

My Lords, the Bank of England Act, which came into force on 1st June, specifically requires the Court of the Bank of England to ensure that the Monetary Policy Committee has available to it information on economic trends, both regionally and by sector, therefore including manufacturing business. I can therefore give my noble friend the assurance for which he asks.

My Lords, manufacturing business is one thing, but is the noble Lord aware that in the farming industry the pound is causing total chaos? Farming incomes are now zero and it will not be long before many farms are emptied because nobody will be able to afford to work them.

My Lords, the Government are aware of the difficulties caused to agriculture by a strong pound. Many of the actions I described in response to the question from the noble Lord, Lord Razzall, apply also to farming.

My Lords, does my noble friend agree that, on balance, nobody wants to see high interest rates? Does he agree also that this is a question of making the right short-term decisions to ensure that we get long-term stability in our economy, which is vital to investment, productivity and jobs?

My Lords, my noble friend puts the issue concisely and accurately. For over a year the Chancellor has been seeking to persuade the people of this country of that point, with a considerable degree of success.

My Lords, does the Minister join me in welcoming back to our midst my noble friend Lord Clark of Kempston?

My Lords, will the Minister take on board the anxiety raised by his noble friend—an anxiety shared by many of us? Big and small companies in Scotland are not facing a boom or bust; they are facing a bust. Perhaps I may highlight a tiny one. In a remote part of what used to be my constituency, a company called Mountain Technology was founded when I was a Member to manufacture ice axes. From that small company eight jobs have been lost in a new massacre of Glencoe—I have little doubt but that the noble Lord will remember Glencoe. According to the managing director on closing down the firm, apart from the mild winters—for which I cannot blame the Government—the problem has been that sales abroad have been non-existent for the past year.

Will the noble Lord take on board the concerns of manufacturing industry? Does he accept that there is a relationship between the difficulties manufacturing industry face with the high pound and high interest rates? Firms could perhaps cope with the high pound if they had low interest rates, but they cannot cope with both.

My Lords, I know which side my clan was on at Glencoe; I am not sure on which side was the noble Lord's clan, or indeed whether we were on the same side. Of course I have great sympathy for the eight people who lost their jobs at Glencoe. But the noble Lord is carrying his practice of arguing from the particular to the general to unprecedented extremes. It is true that the connections he suggests exist. But it is also true that the Government are aware of them and have been promulgating policies to deal with them ever since they came to office.

My Lords, is my noble friend as puzzled as I am by the comments of the spokesman for the Opposition? Does he recall that there was a time when the Conservative Party was in favour of sound money? One might have expected therefore that they would be in favour of giving operational independence to the Bank of England in order to pursue monetary policy in order to keep inflation under control. Is my noble friend as mystified as I am by the fact that they have adopted my role of old-fashioned Keynesianism, while I adopt what I take to be their role of old-fashioned monetarism?

My Lords, I try to keep to a minimum my comparisons between this Government and the previous administration. But my answer to my noble friend is that I am no longer surprised by anything that the Opposition Front Bench does.

My Lords, in view of the almost universal criticism of the Bank of England's Monetary Policy Committee increasing the base rate to 7.5 per cent., will he and his ministerial colleagues consider altering the balance of the committee by having more members with knowledge of industry and fewer academics on the committee?

My Lords, I shall cause great difficulty in the ranks of Government Back-Bench supporters if I take sides as between manufacturing industry and academics. Both have a role to play and the Chancellor is conscious of the importance of manufacturing industry when he makes appointments to the Monetary Policy Committee, just as he is when he insists that the Monetary Policy Committee should have proper information about developments in manufacturing industry.


3.36 p.m.

My Lords, after consideration of the Commons Reason on the European Communities (Amendment) Bill today, my noble friend Lord McIntosh of Haringey will, with the leave of the House, repeat a Statement that is to be made in another place on economic and fiscal strategy. I should like to take this opportunity to remind the House that the Companion indicates that discussion on a Statement following the end of the Minister's initial reply to the Opposition spokesmen should be confined to brief comments and questions for clarification. Peers who speak at length do so at the expense of others.

Business Of The House: Scotland Bill

My Lords, I hope that the Government Chief Whip will not see it as a discourtesy if I rise to ask for clarification, first, on some general points of business management and, secondly and more importantly, on the Second Reading of the Scotland Bill which is due to take place next week.

The House will remember that my noble friend Lord Cranborne and I both gave warnings last summer of the potential consequences in terms of pressure of business in this House if the government programme were too full and there was not a proper balance between the weight of legislation introduced in this House and in another place.

We said that this House could not and would not be held to account if, as a result of the way in which the Government packed and arranged the programme, we were forced into a very prolonged Session. Since then, and in many cases for good reasons, further government legislation has been added to the programme. However, most of the Government's main programme Bills were introduced in another place and the most far-reaching and complex of all its Bills, the Scotland Bill, is yet to receive a Second Reading.

In such a crowded programme it behoves the Government to assist us in scrutinising legislation. From the first, we have not always received that to which the House is entitled. I will not go through the sorry saga of the past 12 months—that will be well known throughout the Chamber—but we are seeing signs of increasing pressure and haste on the part of the Government at a time when the legislative programme is still growing. There is a risk of this House being pushed too far when there is plenty of time in the spillover to complete the programme with full and proper scrutiny.

The Government Chief Whip and the usual channels have not been entirely unsuccessful. I wish to put on record how grateful are the Opposition for the extra half-day that we received on the Wales Bill. But it should never have been envisaged that such a major constitutional Bill could have been settled in less time.

My specific point is on the Scotland Bill. It has been announced that that Bill will have its Second Reading next week. But in the first edition of Forthcoming Business it is believed by the Government that it can be completed within a single day. Over 60 speakers have put down their names to speak at Second Reading. Since then the Government have accepted that there should be a second day. They have simply put on the Forthcoming Business,
"It is expected that debate on the Second Reading of the Scotland Bill will be continued this day, as first business".
I welcome that.

However, I wish to have clarification as to how that will work in practice. When will Peers know whether they have been selected to speak on Wednesday or Thursday? Might it not be wiser to decide now to split the subjects for debate on the Scotland Bill? Having seen the list of speakers so far, might it not be appropriate to spend the first day dealing with the political issues of devolution and on the second to look more at the legal aspects? A number of speakers have already put their names down to speak on this matter.

I want to avoid any accusation that the Government wish to confuse this House in their approach to this important Second Reading and that they would like the debate to take place in the small hours of Thursday morning rather than on Thursday afternoon. I hope that the noble Lord the Government Chief Whip will be able to give clarification on that point.

The last time this subject was debated was 20 years ago. On that occasion the House was given two full days. There were some 60 to 65 speakers. Moreover, next Thursday is the day on which the Government have decided to have the debate of the noble Lord, Lord Barnett, the chairman of the European Union Committee, on the European central bank. I hope that the noble Lord will not accept having his debate pushed further into the night and that he will ask the Government for the debate to be rescheduled.

I fully understand the need to expedite business, particularly at this time of the year, but I believe that there is no need to hurry. There is plenty of time for this House to give full and effective scrutiny to this legislation. I very much hope that the Chief Whip will take this opportunity to clarify the situation.

My Lords, perhaps I may say a word before my noble friend replies. I have little or no sympathy for the Opposition Chief Whip, but I have sympathy for those who wish to participate in a major debate on the European central bank, including members of my committee. I would find it quite intolerable were the Chief Whip to tell us that that debate will take place after the second day of the debate on the Scotland Bill. That would be outrageous. Many noble Lords on all sides of the House wish to participate in the important debate on the European central bank. I hope that my noble friend is able to assure me and others in this House, regardless of what the Opposition Chief Whip wants, that we shall have a full day's debate early on another day rather than have it late at night on the day suggested.

My Lords, I understand the point made by the Opposition Chief Whip. But I recall that when the noble Lord, Lord Strathclyde, was Government Chief Whip in the last Parliament his attitude was remarkably different from the position he has set out this afternoon. I remember with great clarity the refusal of the then government to provide adequate time for a major Bill involving policy on criminal justice. But I do not propose to go down that particular avenue save to comment on the particular point made by the noble Lord, Lord Strathclyde, as regards the Scotland Bill.

Given the number of speakers, the Government have, as I understand it, agreed that part of the debate should spill over into Thursday. That is acceptable. I found it a little puzzling to hear the noble Lord, Lord Strathclyde, suggest that the Government were embarked on a policy of attempting to confuse the House. I suspect that his complaint would have been the intolerable arrogance of Ministers if the Government had not agreed to provide additional time for the Second Reading of the Scotland Bill. The noble Lord cannot have it both ways.

The position is quite clear. I do not think we can separate the debate on the Scotland Bill into two sections relating to different parts of the Bill. It would lead to a most confusing and unsatisfactory debate. That being so, I very much welcome what I understand the Government Chief Whip will say about the Scotland Bill. I very much hope that we have a valuable debate on this very important measure.

My Lords, I support what my noble friend Lord Strathclyde has said. In this Parliament there has been only one debate in this House on the Government's proposals in relation to Scotland and that was 10 months ago. That debate was on what had been described as a White Paper. It was published only five days before the debate. It was a very sketchy brochure containing meagre proposals and a scant outline of what they were. The debate took place on the day before the Recess, if my memory serves me correctly. It was time-limited and the speakers had only 10 minutes to speak on proposed major constitutional changes.

There is now a substantial Bill before us and the Government apparently intend to time-limit that debate. It is no surprise that so many speakers have put down their names because the constitutional effects go far wider than Scotland; they affect the whole of the United Kingdom. Therefore, I support what my noble friend has proposed.

My Lords, I support the noble Lord, Lord Strathclyde, on this matter. At the Cross-Bench meeting this afternoon I raised the matter that only one day was to be given to the issue. General support was given to the view that that was not enough. It is a vital issue not only for Scotland but also for England. The fact that there are no fewer than 60 speakers strongly supports the view that this measure is critical for all of us. If we are to prevail on the Act of Union we should have a proper debate on it, but not at two o'clock, three o'clock or four o'clock in the morning. I very much support urging the Government to divide the debate into two days.

My Lords, there is one fundamental point that I wish to raise. On the Opposition Benches in another place there are scarcely any Scottish Members. Indeed, there are no Conservative Scottish Members although there are still quite a lot of Conservatives in Scotland. In your Lordships' House we have a formidable array of Scottish Peers with wide experience. That is one of the main reasons why so many noble Lords wish to speak in the debate. Will the Government Chief Whip kindly bear that in mind?

My Lords, over 50 speakers have put down their names to speak in the debate and, obviously, they cannot be accommodated within the day or day-and-a-half proposed. It is a matter of vital importance constitutionally. But bearing in mind that many of the speakers will presumably travel from Scotland, with all the cost of overnight expenses, is it constitutionally possible to hold the Second Reading debate—there will be no vote anyway—in Scotland?

My Lords, I understand that this may be the last major Second Reading debate on Scotland. It is quite intolerable to think that so many Peers on both sides of the House, and former Scottish Ministers, will not have an opportunity to express their views within a reasonable timescale. To do so at three or four o'clock in the morning, or even late on the second day, is not acceptable. We simply must have two full days.

My Lords, on the question of timetabling generally, perhaps I may ask the noble Lord the Chief Whip to reconsider the apparent intention to set down on Thursday 25th June the Bill for the premature release of terrorists, which happens to be the day provided for, in legislation passed by this House, the all-important elections to the new Northern Ireland assembly.

My Lords, it is a little unusual to have a usual channels discussion on the Floor of the House. The one thing that I have learnt in this job is never to be surprised by the frailty of human nature. It is a little early to start the usual discussions about the date of the Summer Recess. In the usual way, we shall discuss that a little nearer the date.

I am grateful to the noble Lord the Opposition Chief Whip for his kind remarks about the Government of Wales Bill. Perhaps he will remember that there was first an unexpectedly long debate on the report from the Select Committee on Procedure. In my usual kindly way, I managed to find some more time, so everybody was happy.

On the point about this House not starting its fair ration of Bills, I remind your Lordships that we started the Crime and Disorder Bill and the Teaching and Higher Education Bill, together with other important Bills. In fact, we receive what we are entitled to. On the point raised by the noble Lord, Lord Molyneaux, the date of the Second Reading of that Northern Ireland Bill was agreed through the usual channels.

I turn now to Scotland. I am grateful to the noble Lord the Opposition Chief Whip for his remarks and I give him full marks for a good try. It had been the clear intention that the debate on the Second Reading of the Scotland Bill would be concluded in one day. However, when we saw the length of the list of speakers, we took our decision. When the number of speakers became clear this morning, after discussion through the usual channels, it was decided that the list of speakers had grown too long to allow the debate to be confined to a single day unless the House sat extremely late into the night. Therefore, time has been provided to allow that debate to spill over into a second day. It is hoped that it will be possible to do that without deleting the other business set down for Thursday 18th June although that business would then start later in the day. I shall certainly bear the remarks made by my noble friend Lord Barnett very much in mind.

All noble Lords who have already set down their names to speak will be assumed to be available on Wednesday, as that was the day for which the business was announced and, accordingly, it is the day for which they put down their names to speak. If any noble Lord whose name is already down will also be available on the Thursday, it would be helpful if that fact could be communicated to the Government Whips' Office to assist in the construction of the Speakers' List. I should stress that the procedure will be to have a single debate spread over two days rather than to have two days for separate debates. As always, the final list of speakers will be produced on the Wednesday morning in the usual way. I am not sure whether the Opposition Chief Whip was entirely serious when he suggested splitting the subjects. It will be the Second Reading of an important Bill and every noble Lord should be able to speak in his place on the list to every aspect of the Bill.

Regarding the question from the noble Lord, Lord Renton, the one thing for which I am not responsible is the lack of Scottish Opposition Members of Parliament in the other place.

I hope that your Lordships will be satisfied. As always, we have tried to be accommodating. We had to see how many names were put down to speak. When we saw the list, we realised that it was too long for one day so we have allowed a spill-over into the second day.

My Lords, before the Chief Whip sits down, may I ask him to reconsider the point made by my noble friend Lord Molyneaux about the debate on 25th June? This matter was not discussed with the Cross Benches and as two former Northern Ireland Members of Parliament sit on our Benches, it would have been courteous to discuss with us whether that was a convenient day. Northern Ireland Members will naturally wish to be in the Province at the time of the election.

My Lords, all I can say is that there was the usual discussion through the usual channels. I apologise to the noble Lord, Lord Weatherill, if he was excluded, but because of the very tight timetable, of which all your Lordships are aware, regarding the enactment of that legislation and relating to the agreement in Northern Ireland, it was agreed that that was the right day for that business. We discussed this through the usual channels and the business was agreed for that day.

My Lords, before the noble Lord comes to a final decision on this matter, may I urge the importance of the arguments put by my noble friend Lord Barnett concerning a debate on the European Central Bank? The debate on the European Central Bank, and in particular the comprehensive and authoritative contents of the report from Sub-committee A, make it indispensable that this House treats the matter very seriously. The events that may happen would have a profound effect, not only on the economy of the United Kingdom, but also on its political relationships with other countries.

I am sure the noble Lord agrees that it would be intolerable if such an important document did not have a full day allotted to it. It is inconceivable that the report could properly be discussed at the fag end of business—although I agree that that business is of considerable importance. Therefore, I implore the noble Lord, in both the short-term and the long-term interests of the country, to give a full and adequate opportunity to the whole House to discuss that report on the European Central Bank. I hope that wise and more considered counsels may ultimately prevail.

My Lords, is the Chief Whip suggesting that Northern Ireland Members of this House should be deprived of their democratic right to vote in the assembly elections in Northern Ireland because they have to stay here to suit his convenience to consider the Northern Ireland Bill to release terrorists?

My Lords, perhaps I may deal first with a point raised by my noble friend Lord Bruce. We are, of course, aware of the importance of that debate. The decision was taken only this morning that, because of the length of the list of speakers for the Second Reading of the Scotland Bill, we had to adjust the business. These are early days. I suggest that we wait until next week when we shall take a final decision on the shape of the day.

I return to the point about the Northern Ireland Bill. I repeat that the timetabling was agreed between the usual channels—between myself, the Opposition Chief Whip and the Chief Whip of the Liberal Democrat Party. The Belfast agreement states that we shall seek to enact the legislation by the end of June. If your Lordships will consider the timing of that Bill in the Commons, you will see that it is important that we now get on with the Bill. The usual channels decided not to put down the Bill for consideration before the election on 25th June, but on that day. On the point about voting in that election, I am sure that the noble Lord, Lord McConnell, will be able to vote in the morning and to take part in our debate in the afternoon.

My Lords, I am thankful that some aspects of this debate can return to the mystery of the usual channels. I am sure that that is where such discussions should be held. Perhaps I may clarify two points. First, there is no reason why this Session should necessarily end at the end of October. It could easily go into November. I refer to the point about there being plenty of time to complete the business when we return after the Summer Recess.

Secondly, and more specifically, I am still confused about how noble Lords who have put down their names to speak on the Scotland Bill on Wednesday will know whether they have been moved and are to speak on Thursday. I do not expect an answer to this now from the noble Lord the Chief Whip. It is important that not only my noble friends, but all Peers around the House, can adjust their diaries to deal with this. Will the Government Whips' Office telephone all those who have put down their names to speak to ask them on which day they wish to speak so that we can have a clear view of who will be speaking when?

My Lords, I hope that the Opposition Chief Whip, having agreed to the wish of the House for a debate lasting two days, is not now suggesting that not all noble Lords will be present on both days. I hope that he is not suggesting that. I do not think that we can telephone all noble Lords. If noble Lords can tell us that they are available on the Thursday as well as on the Wednesday because—I must make this clear—they were expected to speak on the Wednesday, that would be helpful. As to the dates of the Summer Recess and the spill-over, again, I give the noble Lord full marks for a good try, but it is very early in the season to be starting that debate.

My Lords, on the question of the Northern Ireland day, can the Chief Whip clarify to me whether he considers that the Cross Benchers in our House are not part of the usual channels?

My Lords, discussion of the Business of the House in the usual channels takes place among the three Chief Whips and always has done.

My Lords, as I understand what has been decided, we are to have two days, which was certainly the wish of the Cross Benches.

My Lords, I intervene briefly. I thank the Chief Whip for his constructive attitude. We all know that he is an extremely reasonable man both as a Member of this House and in his former profession. He is very professional. I hope that the Chief Whip will be able to give the House an assurance that when the usual channels resume their discussions on this matter he will take very carefully into account the points that have been made on all sides of the House this afternoon and that when he has addressed these points in his usual helpful fashion he may be able to report back to the House as to the detailed conclusions that have been reached.

My Lords, of course. The short debate that we have had illustrates what happens when the usual channels are invited to work across the Floor of the House and not outside the Chamber.

European Communities (Amendment) Bill

4 p.m.

Moved, That the Commons reason be now considered.—( Lord Whitty.)

On Question, Motion agreed to.

Commons Reason

[The page and line refer to HL Bill 62 as first printed for the Lords]

Lords Amendment

1 After Clause 1, insert the following new clause—


(". This Act shall come into force only when each House of Parliament has come to a resolution on a motion tabled by a Minister of the Crown considering the legal protection for British fishermen afforded by the Treaty of Amsterdam on the issue of quota-hopping.")

1A The Commons disagreed to this amendment for the following reason—

Because it would not be appropriate to restrict commencement of the Act in the way proposed.

My Lords, I beg to move that the House do not insist on their Amendment No. 1 to which the Commons have disagreed for the reason numbered 1A. I remind the House that the Bill received from another place, which would allow for ratification by the United Kingdom of the Treaty of Amsterdam, was approved without amendment to its central provisions by your Lordships' House. The amendment that this House passed and which another place, by a majority of 196, has not accepted was a delaying caveat that would not alter the substance of the Bill or the Treaty of Amsterdam. Indeed, it relates to an issue not covered by the changes made to the treaties at Amsterdam. However, the important issue before the House today is that if the amendment were to be reinstated by this House it could have disastrous repercussions by delaying ratification by all 15 member states. It could potentially destabilise relations with our partners and reverse all the painstaking progress made in our European policy since the advent of this Government.

I accept that the amendment was tabled by the Opposition on the supposed basis of seeking to help Britain's fishing communities. I must make clear to noble Lords that the amendment would not remove a single quota-hopper from the British register or help our British fishermen in any way whatever. Instead, it would delay or block ratification of a treaty that offers many benefits and advantages to this country. However, in no way does this mean that we do not share the very genuine concern of the Opposition and noble Lords generally about the plight of our fishing industry. We do. The exchange of letters between the Prime Minister and the President of the Commission at Amsterdam was a real step forward. That exchange recorded the Commission's interpretation of how a member state might, within the rules of the single market, require an economic link between fishing activity and fishing communities. Since Amsterdam we have taken this forward. We issued a consultation document last July, following which the Government had extensive meetings with representatives of the UK fishing industry to discuss implementation of the "economic link" licensing conditions that we proposed.

Following that consultation, we submitted draft proposals to the European Commission which incorporated contributions from the UK fishing industry. A copy of those proposals was placed in the Library of the House on 12th May. This is a substantive package of measures which will be both effective and compatible with the treaty. We intend that all vessels shall be required to comply with one of the following criteria: having to land 50 per cent. of their catch of quota species in the UK; or requiring 50 per cent. of the crew to be resident in UK coastal areas; or requiring a certain level of operational expenditure in UK coastal areas; or other measures which will provide sufficient economic benefit to populations in the UK which are dependent on fishing and related industries.

The process of putting flesh on the bones of the exchange of letters between ourselves and the Commission at Amsterdam is an important one. We await the Commission's final opinion on the proposals. Only last week my right honourable friend the Minister of Agriculture, Fisheries and Food discussed progress with Commissioner Bonino.

This subject affects a number of member states as well as ourselves and it will be discussed at official level in Brussels tomorrow. We have learnt that France and Belgium are already modelling an economic link for licence conditions in their countries based on our proposals. We understand that the Commission will soon present its opinion. We expect real progress from that opinion. We have made progress. These measures will ensure that in future real economic links exist between the UK's fishing fleet and our coastal communities. That is a significant improvement on the current situation in which many vessels bring little or no benefit to the UK. Vessels that fail to maintain an economic link with the UK will be unable to fish UK quota species until such time as they are able to demonstrate that satisfactory economic links have been established.

During debates on the Bill we ranged over a number of issues, but we passed only this amendment. It is only this amendment that the Commons has rejected. While no doubt on past form certain noble Lords will wish to range slightly wider than the amendment in the course of the debate, this is the issue before the House. The elected Members of another place have overwhelmingly made clear their collective view.

Perhaps I may provide some slight comfort to the Official Opposition in regard to their amendment. I can report that its passage through this House was noted to some extent in Europe. It impressed upon the Commission and our partners that fishing is an important issue for the UK. But it also alarmed them to see that it threatens ratification. Therefore, in one sense it has achieved an impact. Unfortunately, that impact is double edged. The other edge is that our partners fear that the UK, despite the achievements of this Government, is reverting to the negative table-thumping, Europhobic behaviour of earlier years. If they go on thinking that we shall again end up on the margins of Europe. Unfortunately, that second impact is already in danger of predominating. If we persist by restoring the amendment today it will predominate and the main losers will be the very fishing communities that the amendment purports to help.

While most of the debate on the treaty was conducted in good spirit, the noble Lord, Lord Moynihan, and I exchanged a few harsh words. I am sure that the noble Lord does not wish to see a negative impact on the fishing communities any more than I and other noble Lords do. I appeal to the noble Lord and other noble Lords not to oppose the Commons rejection of our amendment. What limited positive impact our discussion of the importance of the fishing industry may have had could be jeopardised by persistence in the amendment. I hope that neither the Official Opposition nor the House in general will oppose the elected House on this issue. I call upon the noble Lord and the House to accept the position adopted by the House of Commons.

Moved, That the House do not insist on their Amendment No. 1 to which the Commons have disagreed for the reason numbered 1A.—( Lord Whitty.)

My Lords, I am pleased to see the noble Lord, Lord Callaghan, in his place today. He was right yesterday to point out that the noble Baroness, Lady Symons, is a popular figure in your Lordships' House. However, I hope that noble Lords will understand if, in my opening remarks, I put any personal feelings of your Lordships aside and focus on the political judgment of a Foreign Office team that once again has determined that our final consideration of this Bill—the only Foreign Office legislation in this Session—apparently does not warrant the presence of the Minister.

Noble Lords will recall the importance that was attached to this matter by your Lordships' House at Second Reading. At that time my noble friend Lord Beloff begged to move that the debate be adjourned because of the absence of the Minister. Today the Minister is not with us again. I remind noble Lords of the speech of my noble friend Lord Beloff:
"It is the opinion of many noble Lords that this [Bill] is a matter of great constitutional importance and that there are precedents which show that, whenever a matter of constitutional importance is before your Lordships' House, the Bill is piloted on Second Reading and, even more importantly, in its later stages by a Minister from the department concerned".
He continued:
"The fact that this Bill is of constitutional importance hardly needs demonstrating by reference to its own clauses. In another place, it was taken through all its stages by the Prime Minister and the Foreign Secretary. Clearly, they thought that it was a matter of such constitutional importance that, in spite of their many other commitments, often airborne, they would have to devote the necessary time to dealing with it".—[Official Report, 16/2/98; cols. 25–26.]
The importance of the amendment is that it is constitutional, as was pointed out by the noble Lord, Lord Whitty, a moment ago. He said that it was of constitutional importance, and recognised as such in Europe.

On Tuesday night, when the amendment that we are considering was debated in another place, the subject was of sufficient importance to warrant the direct involvement of two Ministers in a discussion which lasted over three hours and saw no fewer than 468 Members of Parliament go through the Division Lobbies. But today, once again, we are presented with a Whip to mop up behind the absent Minister, albeit a very good Whip indeed.

My Lords, I have not often interrupted the noble Lord. I need to now. It was made clear in the exchange following my noble friend's intervention yesterday that my noble friend the Minister is carrying out important business in Canada and the US. It may have escaped the notice of some noble Lords that she is responsible in the Foreign Office for relations with Canada and the US. There was no earlier objection to her not dealing with this final stage of the Bill, which has been down in my name for at least one week and probably longer.

The noble Lord, Lord Beloff, on that occasion, rightly directed his criticism not to my noble friend but to the business managers. His procedural Motion was defeated by the House at that stage. Having taken account of views expressed during the debate, my noble friend participated fully in the debates on the Bill. She was present throughout the Committee and Report stages. She dealt with the central issues of common foreign and security policy, defence, sovereignty, human rights and many other issues. During those stages I dealt with quota hopping. There was no objection from the Official Opposition or any other quarter of this House to my doing that. My noble friend dealt with Third Reading in this House.

As I said yesterday, in my experience of this House no Minister has shown greater diligence in fulfilling her duties to this House. However, she has other duties which are vitally important to this country and to our relations with two of our greatest allies. It is trivial for the noble Lord to raise this issue, in this way, at this time. I hope that he will not persist in it, but will let us get on with debating the substance of the amendment.

My Lords, that is a wholly unacceptable response from the Government Front Bench. The first duty of any Minister in either House is to the House. That is a fundamental priority. Last night my noble friend Lady Young raised an important debate. The Minister was absent. Today, we have another important debate on a constitutional measure, and the Minister is absent. It is not unreasonable to point out that the Minister may, in any case, have felt compelled to return from the US to make a personal statement to the House in relation to her answers to your Lordships' House on the arms to Africa affair.

We have had three important foreign affairs issues this week. It has not been an average week in your Lordships' House for matters relating to foreign affairs. That warrants the presence of a Minister in your Lordships' House. It warrants it, as was proved on Tuesday night, when another House felt that it warranted two Ministers to appear at the Dispatch Box—two Ministers to answer in detail the points that were raised. I shall be more than happy to give way again if the noble Lord can say why it was necessary for two Ministers to be accountable to the other place where this issue had been rehearsed significantly during earlier stages of the Bill, and rightly so, whereas there is no Minister present in your Lordships' House today?

4.15 p.m.

My Lords, it may have escaped the noble Lord that this place operates differently from another place. It has long been recognised that Whips take on what, in another place, would be regarded as ministerial duties. We did not object to that when the noble Lord's party was in power. I am amazed that he does so now. If he objects to my dealing with the substance of the amendment, why did he not do so in Committee, on Report or at any other stage? If it was proper for me to deal with it then, why is it suddenly not proper for me to deal with it now? The noble Lord is making a meal of this. I hope that we can get on with the substance of the Bill, not just for the fishing communities of this country but for our future relations with Europe. None of this will be understood outside this House, and precious few people within the House will understand it.

My Lords, the noble Lord cannot lightly dismiss the importance of ministerial accountability. We will return to that point time and time again. I have made my point. I hope that I have made it clearly. I echoed the comments made by the noble Lord, Lord Callaghan of Cardiff. I highlighted the fact that on Second Reading this was a subject of considerable importance which was debated in full across the Chamber. I merely restate that point. I am not for a minute questioning the ability of the noble Lord, Lord Whitty, to respond to parts of this legislation. I have praised his ability on many occasions. Indeed I have done more than that.

As noble Lords will be aware, I have argued strongly that due to his regular presence at the Dispatch Box on matters regarding foreign affairs he should be made Minister in the Foreign Office and should be given the backing he deserves for his eloquence and attention to detail. It is a pity that he has had so many opportunities because his noble friend the Minister is so frequently absent from the House on important constitutional matters as at Second Reading and today.

I thank the noble Lord for his brief response. Having read the proceedings in the other place on Tuesday night, his response was disappointing, although predictable. I regret the fact that the Government used their majority in the other place to overturn the amendment. I shall not rehearse all the key points. There were some interesting developments on Tuesday night which are worthy of further consideration in your Lordships' House.

The issue of quota hopping to which the amendment refers is a grievous example of a promise made and a promise broken. Before the election the Prime Minister told the country that the one thing he would ensure he delivered at Amsterdam—the top priority for British negotiators—was the resolution of this issue. He said that he would hold up IGC business to get the right changes to fishing policy in British interests.

The amendment clearly puts on the face of the Bill the Prime Minister's apparent intent when he made that promise. He did not say that about any other issue. He said it about fishing policy. He said it about British fishermen's interests. Yet the Government failed. They failed to achieve indisputable legal protection for British fishermen at Amsterdam. The Prime Minister returned with barely more than a confirmation of the status quo. At Second Reading, in Committee and on Report, despite our best efforts, we have been given no satisfactory explanation for that, let alone a compelling one.

Instead, we have had trotted out, time and time again, the same empty rhetoric in this House, and, two days ago, in another place while the Government attempt to hijack the high moral ground by savaging the previous administration's record. The logic of the argument seems to be that the provenance of any criticism is more relevant and more important than the objective validity of that criticism. In that way, attention can be neatly diverted from any governmental shortcomings.

For all the righteous sound and fury, the defence by the noble Lord, Lord Whitty, of the Government's record was flimsy to the point of threadbare. The intended effectiveness of his attack on the previous government's record throughout discussions on this issue was in inverse proportion to the weak defence of his Government's own record. As a result, we still do not know why the crucial opportunity to ensure that British fishermen were afforded legal protection—it is what they would have received—which was there to be grasped at Amsterdam, was lost.

It is with great interest that I note what the Minister responsible for quotas stated in another place. He argued surprisingly that when in government he realised that life was a little different from what it was when he was in Opposition; and because it was tough he simply did not push it, and that was that. On the one key issue on which the Prime Minister had said that they would hold up the IGC in order to get a deal, the junior Minister concerned suddenly realised the day after he was in government that life was different. And that despite the comprehensive and assiduous as ever contribution by the noble Lord, Lord Whitty, before the election which he told us on many occasions was a key mark to the work he was doing, and the effect of that work after the election.

It is fascinating to me now to question whether the whole manifesto, by virtue of being drawn up in Opposition, holds the same importance as we are regularly told it should once in government. It was a paltry excuse from the Front Bench in another House for failure to protect British fishermen's interests.

I make these comments because I see it as vital to recognise that, unless the Government go ahead, unless they push hard for changes on behalf of British fishermen, they will lose. The Government ducked this issue at the IGC because they did not have support; they saw opposition coming. We heard today about new initiatives that the Government were taking in this context. It is interesting to note what Patrick Nicholls, Member of Parliament, stated on those very proposals on Tuesday night. He asked:
"Where are we now? We have been told that some new proposals have been worked out, so where are they? Aficionados of such matters will have to find an obscure parliamentary question of 12 May saying in effect, 'These things are in the pipeline. We are waiting for Europe to tell us whether we can do what we want".—[Official Report, Commons, 2/6/98; col. 971.]
Europe has since spoken. The Spaniards have already said what they think about that. They have raised grave reservations and doubts about the revised version of the United Kingdom proposals. That is the status of those proposals for British fishermen and for the British Government in their attempt to get changes. I predict they will fail. I predict that they will not have the heart to fight for them, as was clearly displayed at the IGC and which led to the tabling of this amendment. From these Benches we have made our feelings very clear. The Government's approach to the whole subject has been regrettable; and I sincerely hope that it is not a harbinger of disappointments to come.

But it is not my intention to press the point today. We shall not oppose the decision of another place to remove the amendment from the Bill, but we shall leave on record our complete disappointment at the failure of the ministerial team to deliver what the Prime Minister said he would fight for; namely, the interests of British fishermen—interests which have been jettisoned, interests which were thrown away by this Government in their negotiations at the IGC.

My Lords, before the noble Lord sits down, will he explain his own government's part in this? Will he explain why they signed up to the Treaty of Corfu in 1957, and the circumstances in which the government spokesman from the Foreign and Commonwealth Office, Mr. David Davis, addressed himself to the chairman of the House of Commons Select Committee on European Legislation? He endeavoured to explain the circumstances in which the assent of the government to the Treaty of Corfu was obtained.

Will the noble Lord agree that, on reflection, the real treaty to be discussed in this connection is not the Treaty of Amsterdam, which was not about this subject, but the Treaty of Corfu which was? Can the noble Lord clarify that position? It may well be that his own government are not without blame in this for the ambiguities that have arisen in this matter.

My Lords, I am always willing to be as helpful as I can to the noble Lord in answering his questions. I recognise that the passage has been long and difficult, not just with regard to the implications of the Treaty of Corfu which the noble Lord rightly points out, but also the 1988 Merchant Shipping Act, the responses of the European Court of Justice, and the difficulties throughout the 1980s in resolving the question. All that led to the conclusion that the most effective way forward was to write a protocol which sought to deal with a quota-hopping problem once and for all by entrenching the condition that UK quotas must provide economic benefit to UK fishing communities and not to fishing interests in other member states.

Because of the history, the difficulties and the challenges, both parties recognise that the IGC and the Treaty of Amsterdam provided an opportunity to resolve that issue once and for all. It was because of my sincere disappointment that that opportunity was not taken to address the subject once and for all that I tabled the amendment that went to another place.

My Lords, this is hardly an appropriate subject for party polemics in however mild a form they may have been embarked upon. Rather, it is an occasion where, despite our being fairly hardened politicians, we should feel and express some collective shame for the state of our fishing industry and the way in which successive governments have failed to secure their minimum interests.

The issue does not arise just over Amsterdam, as we all well know. It arose in the beginning by the British government of the day abandoning the concept of British waters and accepting that the waters around our islands are a "Community" resource. Further to our great disadvantage was the imposition and acceptance of fishing quotas which enormously undervalued the previous British take from our waters, with the result that we have had a continuing contraction of the British fishing fleet. Indeed, when historians write about this period, one of the many subjects which they will find puzzling indeed is how a great maritime nation, with the debt it owed to its navy, its merchant navy and its fishermen, came to abandon what is a great national resource.

We now come to the present situation. What is there left for Parliament to do? It is not the best way to threaten to hold up the implementation of a treaty which has been broadly agreed and must clearly be brought into effect. But virtually every other sensible way of proceeding has been denied to us. There was the third great humiliation. Some years ago we passed the Merchant Shipping Act which would have excluded the Spaniards from quota-hopping as regards the British quota. That measure was struck down by the superior legislative and judicial powers of the European Court of Justice.

To add insult to injury, millions of pounds of compensation are now being paid to deprived Spaniards. If it comes off, the deal described by my noble friend would at least guarantee 50 per cent. of the British quota being landed in British ports and 50 per cent. of the ships which are not British, operating in our waters, would have to have some connection with the maritime interests of this country; and that is a hit of progress. But I have yet to be convinced that it will be achieved. What a miserable situation this is when we have to content ourselves with a mere 50 per cent. of what should lawfully be our own.

I cannot disagree with the course recommended by the noble Lord who speaks for the Opposition, but I do say to my noble friend that something has to be done. We are going to see a further dramatic contraction in the British fishing fleet unless we find a way of escaping from the trap into which successive European treaties have placed us.

4.30 p.m.

My Lords, there are, I fear, very few issues of European policy on which the noble Lord, Lord Shore, and I would agree. Nevertheless, I would like to say, on behalf of us all, how delighted we are to see him back among us after his absence through illness.

The only reason for my intervening is the extraordinary speech made by the noble Lord, Lord Moynihan, at the beginning of this debate. My noble friend Lord Wallace of Saltaire will apply himself to the situation as far as the fishing industry is concerned and the text of this amendment. But I do not think that it is right to let that extraordinary speech go by without some comment from these Benches.

I have rarely heard an exercise in synthetic indignation on quite such a scale. First of all, he was factually inaccurate, which perhaps is not altogether surprising. He seems to imagine that the Government Whips in this House are not Ministers. They are Ministers of the Crown, as the noble Lord, Lord Moynihan, will no doubt learn over a period of time in this House. If, in fact, his argument is to be taken seriously—namely, that it is some form of constitutional outrage that the noble Baroness, Lady Symons, is not with us—let me say this to him. The last Minister of State responsible for Foreign and Commonwealth Office business in this House, the noble Baroness, Lady Chalker, was often absent from the House because she was carrying out her ministerial responsibilities abroad. I cannot remember one occasion when anyone made the sort of trivial complaint which we heard from the noble Lord, Lord Moynihan. It really was dreadful stuff. I hope he is going to improve.

In a moment I shall gladly give way, but we had 14 minutes of the noble Lord, Lord Moynihan, on this narrow issue before he applied himself, in seven minutes, to the issue related to the fishing industry. That is a two-to-one ratio which, in itself, is remarkable.

I hope that ungracious attacks made on a Minister, who is carrying out public duties outside this country, will not be repeated on future occasions by the noble Lord.

My Lords, I am grateful to the noble Lord for giving way. I should like to point out to him that I am fully aware of the status of Government Whips. I was rather surprised by the tone of his intervention on that point.

Indeed, I went further than that, because as the noble Lord may know, there was a time when we understood that the noble Lord, Lord Whitty, had been made Minister with special responsibility for the EU presidency. Specific questions were tabled in another place by Mr. Michael Howard—I would be happy to give the noble Lord copies—which disprove his point. Sadly, in my view, the noble Lord, Lord Whitty, was not made Minister with special responsibility for the EU presidency, but was a Whip with special responsibility for FCO business.

As for the other points which the noble Lord raised, they were not trivial. They were important because they emphasised, as I would do once again, the importance of ministerial accountability to this House on legislation which has a far-reaching constitutional impact. That is the point I was making. It is an extremely serious point. I am surprised that the noble Lord, from his Benches, trivialises that. It is critical that on any major legislation the Minister responsible should come before the House. That is the first priority of the Minister.

That was the point I was making. It will be a point that I shall always make and it was a point that I made regularly when I was in another place. I believe that noble Lords on all sides of this House recognise the power of that argument. It is wholly reasonable for your Lordships to expect the Minister responsible to be present, especially when it is the only legislation in the whole Session, and indeed likely to be the only significant legislation during this Parliament, coming from the Foreign and Commonwealth Office.

My Lords, I apologise to the noble Lord, Lord Renton, but as I understand it, the noble Lord, Lord Moynihan, was intervening in my speech and I gave way to him. The noble Lord, Lord Moynihan, has sought to justify the point which he made earlier. In my view, the point that he made earlier was entirely unjustifiable. The noble Lord, Lord Whitty, gave him his answer. If it had been so wrong for anyone other than the Minister of State to address the House on this issue, why was that point not taken when the noble Lord, Lord Whitty, was addressing the issue during the earlier stages of this Bill?

When the noble Lord, Lord Moynihan, quoted the noble Lord, Lord Beloff, with warm approval, he omitted to point out that the amendment of the noble Lord, Lord Beloff, was rejected by this House, and by a substantial margin. He almost indicated to us that the words of the noble Lord, Lord Beloff, were rather like a judgment of the Lord Chief Justice in the Court of Criminal Appeal. I did not see that as a precise analogy, but having made the point which I have made, I propose to conclude my observations by repeating the point that I hope that we shall not have a repetition of such an ungracious statement from the Opposition Front Bench in future.

My Lords, perhaps I may descend from the great heights of ministerial responsibility and the interests of our fishing industry, to make a minor grammatical point about the Motion before us. I know it is a long time since I was at school, but I was taught to agree or disagree "with" things, not "to" them. We find on the Order Paper that we are asked to disagree to this amendment.

It may be that without my knowledge the use of our great language, which is now the language of the world, has changed. I hope not and I believe not. I hope that we can get this right in future.

My Lords, the Chairman frequently says "The Question is that this Motion be agreed to. As many as are of that opinion will say 'Content' or 'Not-Content'". Clearly, parliamentary usage is different from that which the noble Lord was taught at school.

My Lords, perhaps I may suggest that the Minister for Education should be called before the House.

My Lords, I feel that I should start by apologising for the fact that my noble friend Lady Williams is not able to be here today. She is in the United States on business.

My Lords, I gave way, but not with a view to terminating my speech. It may be that I have such a limited knowledge of our language, after so many years practising the law and 53 years in Parliament, that I am wrong, but I do not think that the word "to" in these circumstances is as good as the word "with"

Having made that minor point, I say that we were right to ask Members of another place to think again about ways in which the interests of our great fishing industry, which has declined, could be protected. The noble Lord, Lord Shore of Stepney, referred to matters long ago which were against the interests, as he maintains, of our fishing industry. On this occasion we gave the Government and Members of another place an opportunity to improve things, and regrettably they have rejected that opportunity.

Alas, the other place has the last word, but we have asked them to think again. As my noble friend Lord Moynihan said, we must leave the matter there; it is not one on which we can reject the whole Bill and have forced upon us the Parliament Act. I believe that my noble friend and the noble Lords, Lord Shore and Lord Bruce, were right to draw attention to a missed opportunity, which is regrettable.

My Lords, I apologise to the noble Lord, Lord Renton, for interrupting. I had not realised that he had not finished his speech. I was merely commenting that some of us who specialise in foreign affairs from time to time find it useful to go abroad. That unavoidably interferes with the business of this House.

I yield to no one in admiring the largely solo performance of the noble Lord, Lord Moynihan. On one or two occasions I wondered whether some members of the previous government who were experts on foreign affairs had gone abroad permanently and left him to handle so much.

I wish to make two further comments. We all agree that as regards fisheries, the issue is not only the British case but the conservation of fisheries in the North Sea and elsewhere. That is an extremely important issue on which the European Union as a whole needs to take further measures. We were not helped in particular by the Spanish, but the previous government cannot escape some of the blame. It was one of two cases when the Conservatives, driven by Treasury considerations, failed to provide full compensation for those who were asked to take vessels out of service. That encouraged British fishery owners to sell their boats to Spanish owners rather than accept full government compensation. The other case on which the previous government, on Treasury advice, thought it cheaper not to provide full compensation was in the early stages of BSE. That also had deleterious effects. I hope that the current Government, driven by a remarkably parsimonious Chancellor of the Exchequer, will not repeat that mistake in other matters.

My second point is the importance of the completion of the Bill. I and many others were ashamed that the previous government delayed ratification of the Maastricht Treaty for so long and waited until everyone else had done so. Today, we have a chance to complete ratification of the Amsterdam Treaty a good deal earlier than our partners and are demonstrating that it is not always the intention of the British Government to drag their feet on European issues. That is much the most important issue and I am glad that the Conservatives will not be insisting on the amendment and dividing the House.

My Lords, I was most surprised that there was no Motion on the Marshalled List that this House insists upon its amendment. That is what I really would like to have seen. If we want to put pressure on the European Commission and the other countries of Europe, we must show them that we are tough.

There was another way in which we could have shown that we are tough. We could have proposed another amendment and sent it back to the House of Commons for consideration. That really would have been putting pressure not only on our own Government but also on the other governments of the European Community. I believe that an opportunity has been missed.

Noble Lords might ask why on earth I did not table such a Motion. The fact is that if I had done so I would not have received support. However, if the Opposition were doing its job, if it were really on the ball, it would have played this for as long as it possibly could. I understood from yesterday's Daily Telegraph that the Conservative Opposition was to have a new lease of life and that it would oppose the Government whenever it could. Yet when the first opportunity arises it falls at the first fence.

I very much regret that, but the Conservatives have a bad history on that, as my noble friends pointed out. I wish to remind the noble Lord, Lord Moynihan, whom we all respect particularly for his operations on the Bill, which have been considerable and very effective, that it was under a Conservative Government that we had the spectacle—and I say that advisedly—of the unfortunate Mr. Jack being pelted with flour by British fishermen while they were feting the High Commissioner for Canada and flying not the Union Jack but the Canadian flag all over the south-west. If there ever were a failure over fishing policy it was a failure of the Conservative Government. I hope that my noble friends in the new Labour Government will be able to do far better.

I regret that today we are not to give more power to the Government's elbow because of the failure of this House yet again to do what it can, which is to put additional pressure on the House of Commons and on the Government. That failure is noted outside and it will do us no good. I must tell those hereditary Peers who believe that being gutless will save them that it will do nothing of the kind.

4.45 p.m.

My Lords, what the noble Lord has proposed would mean that the Bill might not come into operation for another year if we had successfully pressed the amendment. It could conceivably have come back to us from the House of Commons yet again, but that would be a most unusual procedure. I remember it being used only once, and then we did not resist. I believe that in the unfortunate circumstances we simply must accept it.

My Lords, I take that as an intervention. The noble Lord will know that I often put innovative ideas to the House but it does not appear to accept them, which is a great pity. He also knows that if we were prepared to insist on our amendment and that prevented the treaty from coming into operation for a year, I should be over the moon and delighted. Indeed, the country as a whole would benefit.

My Lords, as my noble friend Lord Shore of Stepney pointed out in most forthright terms, there can be little doubt that Parliament as a whole, comprising both parties, has let down the British fishing industry. No party can escape the blame for that. As my noble friend pointed out, the origin of the existing unsatisfactory position of our fishing industry arose from the deliberate deception—the deliberate deception—of the British public on the passing of the European Communities Act 1972. Then it was not revealed to the British public as anything worthy of their consideration that we were giving up our rights within the 200 mile limit. That was never explained and the approval of the British people and the British Parliament was obtained by deception. Of that there can be no doubt whatever.

The question is: what can we now do to redress the position? I suggest to your Lordships with the utmost respect, and as one who has spent the last portion of his life studying these matters, that the argument, "we must not be kept on the fringes of Europe" is a generality that is no longer acceptable at all. Every time any Member of your Lordships' House or of another place raises a question—even a question—about the validity of our existing arrangements within the European Community there is a jeer and a sneer that we must relegate ourselves to the outer regions of Europe. We must somehow conform in order to be admitted to the inner circle of Europe, which still remains, and will remain, France and Germany, whatever their temporary dislocations may be.

Every time an argument has been raised about the validity of our arrangements with Europe, of the economic benefits and otherwise to Europe, they are covered in these blanket terms, this miserable cowardice that we must agree with our European partners or we shall be relegated to the margins. I am sick of that argument as, I think, is the country as a whole.

What we need to address ourselves to, from the existing position, is how we can make amends to our own British fishing industry within the constraints under which we now labour. First, we must use our muscle. Sometimes one would think that the Government did not have any muscle despite their insistence on how important they are in Europe. We must determine what steps should be taken in order to redress the position of the British fishing industry. That requires thinking. It does not require slogans. It also requires reading through a host of regulations, decisions and directives inflicted upon this industry with the connivance or even through the ignorance of the Ministry of Agriculture not all of whose legislation in the form of regulations or even Acts of Parliament is thoroughly read by people in Parliament who should read and understand them.

It has become one of the defects of our democratic system that those responsible for the legislation know so damn little about what they are passing into enactment, let alone authoritatively argue about it. This must stop. The steps we need to take are firstly to apprise ourselves of the position. I was in general sympathy with the whole purpose of the amendment until I began to dig into the documents. Believe me, even working full-time it will take at least another three weeks or a month for me—and I am very familiar with European affairs—to ascertain precisely in European law and regulations, let alone in British regulations, exactly what the position of the industry is and what legal rights it has or does not have. That will take time. All of us who support the British fishing industry should undertake that task.

Clearly, it is insufficient and would be futile, other than as a gesture, to use the amendment to the Treaty of Amsterdam, or the British enactment of that treaty, as a vehicle in the argument for British fisheries. That is not a suitable vehicle. The matter requires far greater time. Therefore I shall not be insisting on our own amendment here. I shall support the Government if it comes to a vote. But I warn the Government that they should give these matters serious attention, and not just on a sloganised basis. They should endeavour to tackle the problems at base. That, after all, is why we are here. We are not here to mouth generalisations and make debating points.

We are here as part of Parliament. This is our job. Not all of us can do it; not all of us have the time to do it. But we should at least play our part. So in agreeing that the Government Motion should go forward I issue a warning. The Government should give the matter real and detailed attention and cease to heed ridiculous cries of, "We must not stay on the margin; we have to keep in with the boys in order to be recognised." Until they can ignore those arguments and deal with the facts, they will be faced with the shame of having ruined the British fishing industry.

Before the noble Lord sits down, may I say that I greatly respect his contribution to the House on these matters as a sort of in-house guru. Perhaps I may ask him whether he knows how we came to make the agreement ceding our shores to the Spaniards to come and fish and cause this distress? If the noble Lord knows, it may help if he can tell us. If we are to try to put things right would it not be helpful to know how it happened?

I am very pleased to answer the noble Lord. I do not yet know the steps to be taken. It will take weeks of study in order to piece the whole matter together within its correct context.

One matter to be borne in mind is the term "British fisherman". I am from the West Country. I was delighted to hear what the noble Lords, Lord Stoddart, and Lord Shore, had to say. I feel that possibly we shall be helped in the not-too-distant future if we are worried about the English and the Welsh. The English, certainly, are the West Countrymen. The Welsh may decide, as the Scottish have said they will decide as soon as they have their own parliament, what to do with the common fisheries policy. That matter was raised by myself and other noble Lords last year. It may be that everything which has been sorted out today, as we heard, will be thrown overboard by the Scots when they have their fishing fleet under their rules within the European Union, or without—but probably within because there is money involved. The same will apply if the ever-eager Welsh follow suit. It is only right for us to consider that it looks likely that whatever may be agreed today will be thrown overboard by what were initially parts of the United Kingdom.

My Lords, if there is one thing I can welcome in the speech of the noble Lord, Lord Moynihan, it is the indication that the Official Opposition will not be insisting on this amendment. I do not wish to raise the temperature any further at this stage. I do not wish to pursue the question of ministerial appearance here. The noble Lord, Lord Harris, expressed the views of many in this House more eloquently than I can.

Incidentally, I am gratified to note the change of policy on the Liberal Democrat Benches. It was a Liberal Foreign Secretary, Lord Grey, who prided himself on going abroad and we ended up with the First World War. It is possible to be a Foreign Office Minister and fulfil your obligations to this House and your diplomatic obligations also. My noble friend Lady Symons certainly does that.

The noble Lord, Lord Moynihan, referred to savaging the past government's record. I have tried to do that on previous occasions but have not really done so today. My noble friends Lord Shore, Lord Bruce and Lord Stoddart have done it for me. As noble Lords know, we have not always seen eye to eye during the passage of this Bill, but on that issue we do.

I shall dwell briefly on the last passage of the previous government's performance in this area. The noble Lord said that there was an agreement to be gained in Amsterdam that was somehow better than that we managed to achieve. The real history is that the previous government submitted a memorandum to the Amsterdam process in July 1996. The following May, after we took over government, the Foreign Ministers of most major countries in Europe had not heard of it. Could it possibly be the case that the previous Foreign Secretary felt too diffident to approach his colleagues in the other chancelleries of Europe and tell them what a central part of the negotiating policy of the British Government this was? I really cannot believe that of Malcolm Rifkind. It is surely more likely that he realised that the domestic insistence that we should hold up the Treaty of Amsterdam if we did not achieve a legally binding deal at Amsterdam on the basis of a change in the treaty—which is what the last government claimed—was a piece of domestic politicking and therefore, obviously, of no concern to the Foreign Office.

I fear that that is what much of this debate has been about. But, as noble Lords have indicated, there is a serious situation behind it. To be fair to all noble Lords who have participated in the debate, I am sure we all recognise that the British fishing industry has suffered seriously since the advent of the common fisheries policy. We are all committed to trying to reverse that downward trend. I do not agree with my noble friend Lord Shore of Stepney that there is no way of doing that other than by seeking to block the treaty. It is wrong to dismiss the 50 per cent. linkages but I accept also that other steps need to be taken to improve the situation of the fisheries industry.

It would be extremely beneficial to the fishing communities of all parts of this kingdom to move on from debate on the Amsterdam Treaty to pursuing the discussions between my right honourable friend Jack Cunningham and the Commission in order to reach a positive conclusion for the fishing industry in an entirely different context. I believe that the exchange at Amsterdam gave us the basis for that and what we have done to pursue that has given us an even better basis.

My Lords, I may even elicit support from noble Lords on the Front Bench of the Liberal Democrats on this point. I know that the noble Lord, Lord Whitty, is a great admirer of my noble friend Lady Trumpington. It is fair to place on record—and she would be the first to do it if she were here—that back in June 1996 she began intensive work with regard to notification of the IGC, the Commission and member states on the tabling of proposals to deal with the problem of quota hopping. It was high on her agenda. It is historically rather inaccurate to say that the previous government and in particular my noble friend Lady Trumpington were not active on this point well before the IGC.

My Lords, I mean absolutely no disparagement of the commitment of the noble Baroness, Lady Trumpington. I am not in the habit of disparaging the noble Lord's colleagues. I was pointing out that the person who conducted the negotiations for Britain and who was therefore focused on the key points of our negotiating portfolio was not pushing this point with our allies. That is not to say that the Ministry of Agriculture at that time was not taking the matter seriously. But the treaty negotiators and those preparing for the Amsterdam conference, had the last administration been re-elected, did not take it seriously because it was not the way forward any more than boycotting and vetoing matters in the so-called beef war was the way forward. That set us back for months. It is a situation which my right honourable friend Jack Cunningham is only now beginning to rectify. The insistence on threatening the rest of Europe does not help our fisheries industry any more than it helped our beef industry.

I hope that in this House, from now on, we can move on to more constructive support of the fisheries industry. My noble friend Lord Bruce made some good points but I do not agree with his view that it is miserable cowardice for us to want to be at the heart of Europe. We should be there and we should use our negotiating strength to full effect on behalf of the fisheries industry and other British interests. The Amsterdam Treaty provides us with an opportunity to do that. We should now move on, and I ask the House not to insist on their amendment with which the Commons disagreed.

On Question, Motion agreed to.

Economic And Fiscal Strategy

5.5 p.m.

My Lords, with the leave of the House, I shall now repeat a Statement made by my right honourable friend the Chancellor of the Exchequer on the Economic and Fiscal Strategy Report. The Statement is as follows:

"The comprehensive spending review has been the most comprehensive and in-depth examination of government spending and priorities for many years. Its results will be announced in two stages. Today I will announce an entirely new regime to apply to public spending control, a fundamental reform of the rules that govern our public finances. Later next month I will set out the results of a wholesale revision of our spending priorities and the purposes of government support in each department. The central challenge is to combine prudence and stability in public finance with investment and reform in public services.

"There are four key elements to our reforms. First, the new regime must be consistently prudent and responsible. Strong public services cannot be sustained on weak public finances. The spending plans we set must ensure sustainable finances over the whole economic cycle, rigorous financial discipline that, together with monetary stability, ends once and for all the boom and bust that for 30 years has undermined stability, hindered long-term investment in our public services and prevented the country achieving its potential. That is why we will enforce two fiscal rules—the golden rule, that over the cycle current spending is covered by revenues, and the sustainable investment rule, that there must be a prudent debt to GDP ratio.

"Secondly, in each department we are assessing radically what government do, and how and where they spend their money. The comprehensive spending review results, when published, will not only show changes in priorities within and between departments but must redefine the role of government so that it is enabling and empowering, not centralising and controlling. Where government should be acting, we will do more; where government is unnecessary or restrictive, we should not act at all. And the results of the spending review will mean reform and modernisation.

"Thirdly, in respect of publicly-owned assets the essential test should be how to best meet the public interest and we will therefore propose a radical change in government policy towards investment and the assets government hold. Finally, where governments spend on public services they should link spending explicitly to modernisation and reform for each government department. Where there is extra money it will be tied to specific outputs. It will be investment for reform.

"So first the new framework for the future. For 30 years British public spending has been characterised by: an annual spending round rather than long-term planning; a year-to-year bidding culture, with all the problems of hurried end-of-year corrections, instead of strategic planning of resources; incremental bids not tied to outcomes, rather than spending to achieve defined results; too much attention to current spending and muddling through, too little attention to long-term investment and reform; too much focus on the public sector acting in isolation from the private sector and not enough long-term partnership with it.

"So to break decisively with this old-fashioned and short-termist culture, first, we will abolish the annual spending round. We will now set departments firm plans and fixed budgets for three years at a time. Secondly, to ensure our fiscal rules are met and to make possible long-term investment in our infrastructure, there will now be a separate current budget and a separate capital budget for each department. Thirdly, in place of incremental budgeting we will lay down new targets for efficiency and performance for every department. Fourthly, instead of the old sterile conflict between public and private sectors, we will promote new public/private partnerships. Fifthly, for the first time this Government are legislating for a code for fiscal stability which requires more open and comprehensive reporting of the public accounts. The key assumptions have been and will continue to be examined by the independent National Audit Office.

"The Chief Secretary and I are today publishing detailed figures both for the current balance and capital spending. We will set out not only the public sector's net cash requirement, the PSBR, but also the internationally accepted accruals measure of public sector net borrowing, which will provide a better guide to the underlying state of the public finances. Copies of the Economic and Fiscal Strategy Report will be available in the Vote Office.

"And all these changes—the end of the annual spending round, a long overdue distinction between investment and current spending, a new emphasis on outputs, more effective partnership between the public and private sectors and proper public scrutiny of how we are meeting our fiscal rules—make clear the importance the Government attach to reform and modernisation as the foundation for both sound finance and good public services.

"I turn now to the public finance plans that follow from our fiscal rules. The Government inherited a national debt which doubled in the early 1990s. And in the last economic cycle, debt as a proportion of GDP rose by 18 percentage points—and is now around £15,000 for every family in the country. As a result we are paying more in interest payments than we spend on schools or on housing and law and order put together.

"In addition, we inherited a level of annual public borrowing that was unacceptably high: in the final year of the last government, a public sector net cash requirement of £23 billion and public sector net borrowing of £27 billion.

"In the first year of the Labour Government, with the tough decisions we took in our first Budget, public sector net borrowing fell last year from £27 billion to £6 billion. We kept within the spending ceilings that we inherited in addition to a £400 million increase in the Budget for pensioners, £2 billion more on the NHS and £2.5 billion more on education.

"Those who said that we would fail to meet our targets and would fail to show the discipline necessary have been proved wrong. Indeed, over the first two years of our Government, through setting tough departmental limits, spending is within budget. But Britain must have sustainable public finances, not just for the odd year or two, but throughout the economic cycle. And British public spending, which has for decades been denied a long period of consistency and stability must now be subject not only to a framework for the future but also to clearly defined limits.

"As a result of the plans that I am announcing today, we will lock in the fiscal tightening that I announced in the March Budget not just for this financial year but for the next financial year as well. Over the three years from the time we came into Government—that is to say, 1999–2000—the fiscal tightening amounts to 2.75 per cent. of GDP measured by the public sector net cash requirement. It is 3.5 per cent. of GDP measured by public sector net borrowing, that is over £25 billion since 1996–97. This is the fiscal tightening from 1996–97 to 1999–2000 that we promised in the Budget.

"To meet our first rule, the golden rule, the Government will plan for a balance on the current budget over the economic cycle as a whole. For 35 years, current spending has grown by an average of nearly 3 per cent. a year in real terms. But within this average, annual changes have ranged from plus 11 per cent. to minus 3 per cent. From 1989–90 to 1993–94 a surplus on the current budget of over £10 billion was transformed into a deficit on the current budget of £38 billion. So in the same way that our economy has suffered from the instability of boom and bust, public spending has suffered the instability of stop and go. The uncertainties caused by this short-termist approach have frustrated the long-term planning of decent public services. Let us be clear who suffered first and worst: the vulnerable who depended most on public services. So imprudence in public spending is of no help to those who rely on public services being there when they need them.

"In the last economic cycle Britain ran an average deficit on the current budget of 1.5 per cent. of GDP, or the equivalent of an annual deficit of £12 billion pounds. By contrast the figures that we publish today will ensure that, over the full economic cycle, Britain will have a current budget balance—current expenditure will be covered by revenues over the cycle, something that other governments have promised but did not achieve.

"So that we can deliver sustainable public finances and thus sustainable public services over the whole cycle, the plans for current spending that I am announcing today deliberately take a more cautious approach than in the past to meeting the fiscal rules. That is why we need to plan for a surplus on the current budget over the next three years.

"The plans that we publish today are for a surplus on the current budget next year of £7 billion, in 2000–2001 £10 billion, and in 2001–2002 £13 billion. Within this new framework I can confirm that current spending will grow in line with our cautious estimate of the trend rate of growth of the economy, that is 2.25 per cent. in real terms a year over the next three years. Current spending is now planned to be 39.25 per cent. of GDP every year for the rest of the Parliament.

"It is because we are showing prudence in public finance, and because we are prepared to modernise in choosing our priorities, that we will be able to invest in long-term improvements in our key public services, education and health, and also fulfil our commitments to those, like the elderly, who depend upon public services.

"But as everyone knows the public will be better served if we also ensure the best value for money and the most efficient possible use of resources. Inefficiency in the public sector is a cost that could be afforded by a government who had a vested interest in proving the public sector could not work and believed in a philosophy of private good, public bad. But inefficiency will not be tolerated by a government who will modernise the public sector so that this country is better equipped for the future. That is why in our spending review there will be no place for new spending unless there is reform through clear targets, standards and rigour in the use of money.

"I can confirm, first, that as a result of our review each department will be set efficiency targets. Secondly, each department will be set new quality standards. I can confirm that as part of best value, we will introduce an inspectorate for housing that will help improve the management of council housing, set new standards for performance and guarantee high quality of investment. Thirdly, before allocations are made from the comprehensive spending review, departments will have to demonstrate how they propose to root out unjustified subsidies.

"So not only will we set fixed budgets for three years, but we are building in new disciplines to ensure that investment is conditional on reform. Just as new disciplines will apply to current spending, so they will also be applied to capital investment.

"Our second fiscal rule is to ensure a prudent and stable ratio of debt to national income. This is the sustainable investment rule, which is essential if we are to contain interest payments on the public debt. If this Government simply left the debt/GDP ratio at the level we inherited from the last government, we would be paying interest payments of £25 billion more over the Parliament, at a cost to public services.

"In the interests of greater stability, I propose to bear down on the debt/GDP ratio. Indeed, the plans that we are publishing this afternoon show the debt ratio falling from 45 per cent. when we came into government to 40.5 per cent. next year and in the following years down again to 39.5 per cent. and 38.25 per cent. The comparable figure in the European Union as a whole is 78 per cent. Britain will now plan on the basis that our debt/GDP ratio will be 40 per cent. or lower.

"For the first time for decades we are set over the cycle to have both a current budget in balance and a prudent debt/GDP ratio. As a result of our two fiscal rules public sector net borrowing, which was over 3 per cent. of GDP in the last cycle (1995–96 to 1996–97), will average 0.2 per cent. for the Parliament, 0.2 per cent. next year, 0 per cent. for the following two years and 0.1 per cent. the year after that. And we will meet the fiscal criteria laid down in the Maastricht Treaty.

"It is only because we have this tough framework, based on strict control of current spending, a prudent debt/GDP ratio and a fiscal tightening that it is possible to take the action necessary to reverse the chronic under-investment in our country's health, education and transport and housing infrastructure, and to re-equip Britain as a modern nation.

"Total investment, public and private, in Britain has in recent years fallen as a share of national income and is far behind our competitors, and far behind the rates that we achieved in the 30 years after the war. But if Britain is to renew its infrastructure, we must be prepared to break with old dogmas. We will not succeed simply by throwing money at problems or by privatising the responsibility for them. We must, therefore, be prepared to look at new ways of managing our assets and, if necessary, be prepared to redeploy them so that they serve the future, not reflect the past.

"The British Government have property, land and other assets worth hundreds of billions of pounds. But, as we discovered in the first register of national assets, Britain has an accumulation of unused or underused properties and holdings. We can no longer afford a surplus of holdings when we have a deficit in investment and there is no benefit to us in hoarding assets that do nothing to equip us for the future when we need to build a modern 21st century infrastructure. There is no public interest served by continuing to hold surplus land and building that are not needed.

"The fiscal projections set a new target for central government to realise for investment around £1 billion a year for each of the coming three years from the sale of surplus holdings that we no longer need. In the next financial year we will go ahead with the sale of all remaining debt held in British energy. So we will realise the value of what we do not need to invest in what we do need.

"The Deputy Prime Minister and I will propose a new long-term framework for investment by local authorities to release resources for new investment; and to co-ordinate the use of existing assets. Local authorities are now expected to realise at least £2.75 billion a year from property sales—again a sale of what we do not need to pay for investment in what we do need. To maximise investment in the renewal of our infrastructure, public and private sectors must work together in a more modern and effective partnership.

"In the past the private finance initiative was a means of substituting private investment for public investment and thus an excuse for abdicating responsibility for public investment. So there was no net gain to investment in our country. But as we have shown with our new deal for schools, public-private partnerships work best when public investment succeeds in levering, in addition, finance from the private sector. As the Deputy Prime Minister has shown in the planned multi-billion investment in the Channel Tunnel Rail Link and London Underground, private investment can be mobilised to serve the public interest.

"So this Government will apply a public interest test—what is the best means, whether through private or public investment, of securing the highest levels of investment in Britain's future and so ensuring the best public services; not demanding private ownership as a matter of dogma when it does not serve the public interest, nor maintaining state ownership when private and public partnership is the best way of advancing the public interest.

"It is obvious to the Deputy Prime Minister and me that the levels of investment and efficiency that we need in our National Air Traffic Services can be best achieved through a partnership between the public and private sector which will give the National Air Traffic Services the flexibility to plan and finance forward investment more effectively. Safety is paramount. The Government's proposals will ensure that air safety regulation is conducted independently from the National Air Traffic Services and is open and transparent. The regulator's remit will be to enforce the toughest safety standards in the world.

"My right honourable friend the Minister for Transport is making a separate announcement today on the future of air traffic control services. Our preference is that 49 per cent. of the shares, and a golden share, are held by the Government, and 51 per cent. by private investors including employees. We will consult on the details of the implementation of the proposals. This realisation of assets will enable us to invest more in our transport infrastructure, as will our proposals for greater commercial freedom for financially sound regional airports such as Manchester, Newcastle, Leeds-Bradford and Norwich.

"The same partnership approach is appropriate for the Commonwealth Development Corporation which needs new finance for higher investment in developing countries, and my right honourable friend the Secretary of State for International Development will bring forward proposals to sell a majority shareholding.

"We will also consider how to extend the existing public-private partnership in the Tote into a broader partnership with the private sector. I can also announce that we are agreed in principle that a new public-private partnership is the best way for the Royal Mint to take advantage of new commercial opportunities.

"These are four examples of new partnerships now being evolved that show we can make the long-term investment we need while protecting the public interest. But public investment in reform and modernisation is also a means by which the Government can help renew our country's infrastructure. Under the previous government public investment fell below 1 per cent. of national income and we now invest less than all our major European partners. This Government recognise that we must invest properly in our economic and social infrastructure; in our schools and our hospitals; our transport infrastructure; our science and technology base; and in building better housing and safer and stronger communities.

"To meet these challenges of the future we are therefore setting up a new programme, investing in Britain's future. So over this Parliament we will double the level of net public investment as a share of GDP by raising it from 0.75 per cent. up to 1.5 per cent. Through realising unused and underused assets we will plan to invest £29 billion a year by the end of the Parliament. In place of two decades of run-down in investment, Britain is investing in its own future. Our long-term aim will be to maintain the share of investment in national income, at this sustainable and prudent level. For years we have been told that prudence in public finances could only be achieved at the cost of running down public investment and neglecting public services, years that ended with neither good public services nor prudence.

"The framework I am announcing today means that with sensible and tough decisions about priorities in every department in our comprehensive spending review, which will report next month, this country will now be able to ensure that the necessary resources are available for health, education and essential public services. Because of our toughness to modernise and our discipline in reform, our prudence today provides the solid foundation to invest in better schools, hospitals and public services today and tomorrow. In place of short termism and the neglect of public services, we have a new long-term direction for the renewal of our public services and our country. Prudence and investment in reform are the way forward to create a Britain that is modern, strong and fair. I commend this Statement to the House".

My Lords, that concludes the Statement.

5.25 p.m.

My Lords, I start by thanking the noble Lord, Lord McIntosh, for repeating the Statement, and in particular for his courtesy in letting me have a copy of the Statement well before half-past three which has given me a chance to read it. I congratulate the noble Lord on coming to the House. That is in contrast to his noble friend in the Foreign Office who does not appear to be prepared to come to the House.

I am a little sorry for the noble Lord, Lord McIntosh, in having to repeat such a long Statement. Perhaps I should apologise on behalf of my fellow Scotsman, the Chancellor, who seems always to use 10 words when one would do. Perhaps if he had not gone to France yesterday to watch a certain football match, he might have had time to slim down the Statement and not give the noble Lord such a long read.

The first part of the Statement tells us how we have conducted public affairs in the Treasury and in government departments over the past 30 years. As the past 30 years includes the tenancy of the Treasury of some noble Lords opposite—for example, the noble Lord, Lord Barnett—we are all obviously reprimanded for the way in which we dealt with spending rounds in the past. For many years—certainly during the time I have been involved with these matters—there has been a three-year rolling programme. That has been reviewed each year. It seems sensible to consider new priorities and new demands; to work out what needs to be done as regards the economy; and to plan for the following year so that the programme rolls forward one year at a time. As I said, there has been a three-year rolling programme. When I read and hear the Statement I wonder what differences are proposed. If there is to be a system of three-year blocks—it could be read like that—does that mean that the next time the Government consider the whole question of spending will be in 2001 when they will plan another three-year block? I cannot believe that that is what they intend, but perhaps it is.

That certainly contrasts with the Monetary Policy Committee which meets every month to make sure it "fine tunes" monetary policy. It appears that the Government's spending plans do not need "fine tuning" at all. That is an interesting thought. I was interested in the idea that somehow in the past no distinction has ever been made between investment and current spending. That is another fiction rather like the description of the way governments of all parties have dealt with normal annual spending rounds. It will not be long before we see annual spending rounds reintroduced, although the Government will obviously have to find some other words to define them.

I was interested to hear of the Government's plans to pay off some of the national debt. My recollection is that when we paid off some of the national debt in the mid to late 1980s we were roundly criticised by the Labour Party for doing so. I welcome this conversion, along with the many others. There is a nice paragraph about the tough decisions the Government have taken in their first Budget. That is rapidly followed by the sentence,
"We kept within the spending ceilings that we inherited".
However, we took the tough decisions when we were in government and the party opposite simply carried on with them. It has only managed to carry on with them by fiddling some of the figures. That is the fact of the matter.

As regards spending plans and other such matters, the only reason that the noble Lord can come to this House and throw a few nuggets to his noble friends—and the Chancellor can throw a few nuggets to his honourable friends on his Back Benches—is because of the golden economic legacy that the party opposite inherited. That legacy was well underlined at the time by the noble Lord, Lord Healey. If I remember his words correctly, he said that no government had had such a good economic inheritance as the current one. They have us to thank for much of that.

I then turn to what the Government are going to do, and the quality standards that departments are to be set. I note one of them:
"we will introduce an inspectorate for housing that will help improve the management of council housing".
Most council housing in this country is run by Labour local authorities. That has been the case for years, and I welcome the admission that it is not very well run. I suppose the Government had no option. Up and down the country, the way in which Labour authorities have run their housing estate is being exposed. Nowhere is that more evident than in Scotland, where, one after another, Labour local authorities are having to own up to direct labour organisations which are a disgrace. I hope the inspector will be paid more than the plumbers who work for North Lanarkshire's DLO department, who receive £54,000 a year. Will the noble Lord assure me that the inspectorate will be better paid than the plumbers who work for that council? I welcome the proposal. However, it is rather late. The Secretary of State has had to send in a team of investigators to try to sort all these matters out. This is the Labour Party trying to sort out their own local government problems.

I could not help but notice an interesting sentence:
"And we will meet the fiscal criteria laid down in the Maastricht Treaty".
Why does that statement have to be there? The noble Lord knows that we on this side agree with the fiscal criteria that were laid down. We have always made that perfectly clear. It was sensible economics. Why does the Chancellor have to say it? Is he merely attempting once again to jump his neighbour, the Prime Minister, into joining the single currency? I wonder whether the Prime Minister, who seems to lack the Chancellor's convictions about the single currency, approved of this sentence and its meaning.

We then turn to the most amazing part of the Statement. I welcome it—I welcome the conversion of the Labour Party absolutely and wholeheartedly. However, that does not prevent me from being amazed. Perhaps I may read to your Lordships, slowly, what the noble Lord, Lord McIntosh, said. He said:
"There is no public interest served by continuing to hold surplus land and buildings that are not needed … £1 billion a year … from the sale of surplus holdings".
Do I hear something of an echo of the sale of the family silver coming from the Benches opposite? Do they regret, and will the noble Lord, Lord McIntosh, apologise for, the number of times from the Dispatch Box he poured derision on what we were doing, when it was exactly what he is now saying his party is going to do?

On the sale of British Energy, will the noble Lord tell the House how much he expects to raise from this interesting sale? Of course, it is marvellous, when I think of all the privatisations that had to be driven through this House and the other place in the teeth of the party opposite. I welcome this proposal. It is the Road to Damascus in spades.

Local authorities are also expected to sell property and to raise considerable amounts of money—much more than central government: £2¾ billion a year. In the other place I sat on the committee which put into place the legislation for the sale of council houses. The party opposite did not want to sell anything in those days. This is an amazing conversion. I say to noble Lords opposite: welcome to the real world.

But what are local authorities going to sell? Will it be their playing fields? That would be interesting. Some noble Lords used to get very worked up when they thought that my party was agreeing to too many sales of playing fields.

Then we come to the private finance initiative. Now it is a great thing. That is another great change. Again, welcome to the real world! It amazes me that one such initiative—I take an example in Scotland which is self-contained; namely, the private finance initiative that built the bridge over the sea to Skye—was attacked day after day and week after week by Members of the party opposite. It was campaigned against by them. The campaign was largely led by a Member who is now in the Scottish Office team. How they disapproved of using—I must not call it privatisation—a public/private partnership. What is better than that partnership? The bridge has been built; people are using it; and in 20 or 25 years' time it will revert to the Government and be free. That seems to me a good public/private partnership. Yet the party opposite attacked it. Amazing!

Then we come to national air traffic control. At the last election this was a very big issue in Scotland. Perhaps I may quote Mr. Gallie, the defeated Conservative Member of Parliament for Ayr, on the subject of NATS. My quote is taken from yesterday's Herald. He said:
"I made it clear I did not oppose privatisation, but when I gauged the feelings of my constituents who worked in the Scottish Air Traffic Control Centre at Prestwick it was clear they did not support these views. I respected their views and persuaded the Government to shelve any privatisation plans until after the General Election. I wonder after today's news from within the Cabinet"—
that was when it was just a rumour, an attempt on the part of spin doctors—
"whether the current crop of Ayrshire MPs will show the same loyalty to their constituents".
The press did not leave it at that. They went to Sandra Osborne, who is the Member of Parliament for Ayr. She said:
"I campaigned against privatisation of air traffic control and was unhappy when it appeared to remain on the agenda, however vaguely, after the election. I remain unconvinced".
Cunninghame South MP, Brian Donohoe, said:
"I firmly believe to put air traffic control into the hands of private industry would be a major step backwards in terms of safety and efficiency. This has come as a shock and I will be spending the next few days finding out the strength of feeling within Government for such a move. In the meantime I remain opposed to the principle".
An awful lot of humble pie is going to be eaten—certainly in Scottish politics—over this one, because it was made a major issue. Frankly, the Labour Party have now done a total about turn on the issue. I welcome the about turn, but I am appalled at the brazen way in which they have done this. I hope that some of those people will have the courage of the convictions they had last year in April and May when they were touting for votes around Scotland. On a general point, have the Government managed to square the difficulties of the Royal Air Force when it comes to the privatisation of NATS?

As to the other three—the Commonwealth Development corporation, the tote and the Royal Mint—my recollection is that the noble Lord, Lord Callaghan, is very keen on the Royal Mint. I am well inside what the noble Lord had to read out. There can be one verbose Scotsman, and there can be another verbose Scotsman. I wonder whether he is happy about the privatisation of the Royal Mint.

We then turn to what the Government intend to spend the money on. For a year they have frozen all spending on roads and new road projects. Some very important schemes have been frozen. We should therefore welcome the fact that they are unfreezing them.

What we see here is a tax-and-spend government, just as we said they would be. They have taxed companies and pension funds in this country. The noble Lord, Lord McIntosh, will expect me to remind noble Lords of the £5 billion a year in tax on pension funds. The tax equivalent is 5p in the basic rate. Now we are seeing the spending. So much for the Iron Chancellor!

In the Budget, Gordon Brown set out three possible scenarios for public spending. Today, he has announced that he is to follow the least disciplined option, with spending set to grow by 2¼ per cent. in real terms.

Labour promised so much. They promised to keep taxes low, to control inflation and to bear down on public spending. They have raised taxes 17 times. They have missed their inflation target 11 times out of 12. Interest rates have gone up and up, and with them mortgage rates for young people trying to buy their own homes. Today, they have even admitted that they cannot keep a tight control on spending. It is no wonder that the Chancellor tried to bury it all in a mountain of words.

5.38 p.m.

My Lords, it gives me great pleasure to respond to the Statement repeated by the Minister, because I know how much pleasure it gave him to deliver it. Indeed, in certain respects we welcome it. I should also welcome an assurance from him that, given the very broad nature of the Statement, we might have a rather longer opportunity to debate it than the limited time that is available this afternoon. There is a slight sense that the timing of the Statement was determined principally by the need of the Chancellor to make a Statement before he makes a speech, which he will do this evening, rather than for any other reason of timing. I should therefore welcome that assurance from the Minister.

In terms of the aspects of the Statement which we welcome, we believe that the introduction of a more transparent system of Government accounting and the concentration on outputs rather than simply cash is a welcome change. Anyone who attempts to make sense of the way in which the Government spend their money using current conventions finds it an extremely difficult task. I believe that the changes proposed in the Statement will help in that regard and also help to ensure that the Government can operate under the discipline that the noble Lord and the Chancellor wish it to operate under in the future.

Secondly, naturally, anyone will welcome the principle of planning for the longer term rather than planning simply year on year ahead, although, given the nature and scale of events, in the political process one cannot believe that it will be possible to continue for the whole of this Parliament without having some significant review of at least some aspects of these plans.

Thirdly, we welcome the Government's commitment to increasing levels of public investment. I am particularly pleased to see that housing is back on the list of desirable areas of public expenditure. "Housing" is a word that has for many years been lacking in government Statements when public investment has been mentioned. I should welcome anything further that the Minister could say about how increased expenditure on housing might be delivered in the future under these plans.

We find less acceptable the way in which the Government increasingly appear to consider a low level of current expenditure to be a virility symbol which they must worship. This seems to us to have echoes of some of the rhetoric of the early years of the previous administration, and we find it more than slightly disturbing, coming from this Government. We notice, for example, that levels of current expenditure of some of our key competitors are significantly greater than in this country—in Germany, for example, they are some 5 per cent. or more greater—without this having any deleterious effect on the efficiency of growth rate with which the economy is managed. I should welcome anything further that the Minister is able to say about the general proposition that a low and increasingly tight level of current expenditure is a good thing in itself. We find that a difficult contention to accept.

We are relieved to see that the freeze on current expenditure will be lifted from the next financial year. However, does the Minister agree that, given the freeze that we have seen in the previous and current financial years, and the announcement made today for future years during this Parliament, over the course of the Parliament as a whole the Government will preside over a lower level of expenditure growth than was the case over the entire period of Tory Government? If that is right, as I believe it to be, how does the Minister believe that will deliver the better public services on which the Government have placed so much store?

When the lottery was first introduced, there was tremendous enthusiasm because it was able to put capital into a range of tremendous projects which otherwise could not have been undertaken. However, with the passage of time, we have found that a significant number of projects have fallen by the wayside because there has not been adequate current expenditure to back them up and keep them going. In the policy that the Government have set out this afternoon, we see a danger that very little will be done to deal with under-funding of current expenditure and that ongoing current expenditure will not be provided for to enable the new facilities planned on the capital front to be fully utilised over the longer term.

Good schools and hospitals rely as much on first-class teachers and nurses as they do on first-class buildings. In general, while we welcome the new framework which the Government plan to introduce, we fear that the Chancellor has not delivered the cash injection necessary to create the first-class education and health services for which people thought they were voting a year ago.

5.45 p.m.

I am grateful to both noble Lords for their utterly different responses. The difference is that the noble Lord, Lord Newby, understood the Statement and the noble Lord. Lord Mackay, understood nothing of it. I have to apologise for the length of the Statement. I got it through in 21 minutes, whereas I believe that the Chancellor of the Exchequer took 25 minutes, so perhaps there is something in Londoners reading as opposed Scots reading which leads to some benefit to your Lordships' House.

As to the Chancellor's absence in France yesterday, I suspect that the noble Lord is just jealous. In fact, as he well knows, the Chancellor was there for business meetings with Dominique Strauss-Kahn, who just happened to invite him to the Scotland v. Brazil match at the same time. It sounds to me like an excellent use of valuable time resources, although personally I would not have given a thank-you for such an invitation—but that is my problem, not the Chancellor's.

I said that the noble Lord, Lord Mackay, understood nothing of the Statement. He is in good company. Mr Francis Maude, in another place, understood nothing of the Statement either. Both of them thought that it was fundamentally a statement about expenditure over the next two or three years—and, of course, that was an important element in the Statement—but neither of them seemed to understand the fundamental nature of the changes from cash accounting to resource accounting which lie behind the Statement and make it possible for the Government, over the rest of this Parliament, to make a sensible distinction between current expenditure and capital expenditure of the kind that all businesses have made since double-entry book-keeping was first invented several hundred years ago. This is the real impact of what the Chancellor announced today, and it is tragic that the Opposition do not show any understanding of it whatsoever.

There are individual aspects of which the noble Lord, Lord Mackay, has a legitimate opportunity to make fun. Let me try to deal with the particular secondary points that he raised. First, he asked about three-year blocks of expenditure and whether decisions will be taken only every three years. The important point here is that those who are responsible in spending departments should have the ability to look more than one year ahead. That is what a rolling three-year programme means. The next review of expenditure programmes will take place in the year 2000. The inestimably beneficial effect of all this will be that there will never be a period in which spending departments have less than two years in which to look ahead.

The noble Lord talked as though there was nothing new in the distinction between cash and resource accounting. This is the first Government to split the current and capital accounts and the first Government under which it has been possible to make the distinction with regard to what we call "investing in Britain", which is our capital expenditure targets over the next three years. If that happened under any previous government, I should like to hear about it.

That leads me to what the noble Lord said about the various public-private partnership proposals which the Chancellor announced and the disposal of surplus land and properties. As the noble Lord well knows, in the 18 years of the Conservative Government, privatisation produced something in the order of £65 billion. I am probably out of date and underestimating that figure. Where did that money go? It went straight into the current account. In other words, it went to reduce taxes for the less well off and to enable the Government to renege on their responsibilities for investment in our country's future.

The whole point about the disposals we are discussing, whether they are disposals of land and property from central Government or of assets from local government, is that they will not be allowed to go into the current account. They will be hypothecated into investment accounts. That is a profound difference and one which shows the complete contrast between what we are doing and the privatisation programme of the last government. If I am then teased about air traffic control and British Energy, I accept that teasing with equanimity. I know that what is being done is the right thing in order to encourage investment.

Did the noble Lord even recognise what was said in the Statement? We are proposing to double the rate of public investment from less than 0.75 per cent. up to 1.5 per cent. over the period of this Government. Did he recognise the profound significance of that for the infrastructure of our country? He said not a word in recognition.

The noble Lord, Lord Newby, looked for an opportunity to debate this matter and that message will go to the usual channels. He may find it better for us to have a debate on both parts of the package—both the Statement that is being made today and the comprehensive spending review which will be announced in July. I can say no more than that I would love to take part in such a debate and engage with the Official Opposition to see whether they understand the next part of the package.

The noble Lord accused us of treating a low level of current expenditure as a virility symbol. A low level of current expenditure is not a good thing in itself; nor is the opposite—tax and spend—as the noble Lord, Lord Mackay seemed to believe. The important point is that of course much current public expenditure is investment in the sense that investment in training and education or investment in proper pay to recruit teachers is investment. But under any acceptable statistical definition—we rely on the independent Office of National Statistics to do this for us—we have to include those elements as being current expenditure. That is why a significant increase in current expenditure was proposed in what we said this afternoon. Of the three options put forward at the time of the Budget, the option of 2.25 per cent. increase in real terms in each of the next three years is a significant increase in current expenditure in addition to the investment expenditure plans which we announced this afternoon.

The noble Lord, Lord Newby, is quite right. I take great pleasure in presenting this Statement to the House.

5.52 p.m.

My Lords, the noble Baroness looks so well that I will give way to her later. Is my noble friend aware that I agree with much that is contained in the Statement, particularly in relation to Maastricht? I do not even want to make fun of it. I do not object to the noble Lord, Lord Mackay of Ardbrecknish, having fun; he will be there a long time and I understand that only too well. He enjoys himself and is welcome to it.

I welcome much in the Statement. However, I know that my noble friend is aware that the Bank of England and the Monetary Policy Committee are obliged only to consider the Government's economic policy after bringing down the rate of inflation to 2.25 per cent. That is the priority. In those circumstances—I mention this as a possibility—what if those eight economists got the rate of inflation wrong?

I know that economists occasionally get things wrong; they could certainly have got it wrong in suggesting an increase in interest rates, with its impact in two years' time. However, given that, what are the Government's priorities, let alone the priorities of the Monetary Policy Committee? Is the policy to bring down inflation? Is it to bring down the borrowing requirement? Or is it to obtain the levels of growth that the Government require in order to meet the public expenditure figures that are included in the Statement? Which of those are the Government's criteria?

My Lords, my noble friend knows the answer to his question because we spent many happy hours debating it earlier this year during the passage of the Bank of England Bill.

The answer is that the primary target set for the Monetary Policy Committee is to adhere to a rate of inflation set by the Chancellor of the Exchequer and, subject to that, to promote the highest possible levels of growth and employment. The Monetary Policy Committee has adhered exactly to that remit. That means, in terms of what has been announced this afternoon, that in anticipating a real rate of growth in current public expenditure of 2.25 per cent. a year for the rest of this Parliament we are planning that public expenditure should benefit, as it can from the revenues available, from the growth which we expect in the economy. That means that public expenditure, both capital and current, will make its contribution to the regeneration of this country, the creation of jobs and assistance to growth which is the fundamental objective of all economic monetary and fiscal policy.

My Lords, at last! The noble Lord, Lord McIntosh, briefly mentioned the Tote in the Statement. Will he elaborate a little more on what he said? Is the object of the exercise to help racing? It is in a difficult position. Or is it simply to add to the list of bookmakers who do not put enough into racing and the Tote? To eliminate the bookmakers and give all that money to the Tote would be much better.

My Lords, I must confess that our plans on the Tote are not well advanced. As the noble Baroness knows, the Tote is already in a public-private financial partnership with Ladbrokes. However, the discussions that have taken place with the chairman of the Tote elicited the response that he believes that further public-private partnerships would be valuable and could increase the efficiency of the operation of the Tote and produce benefits for the public purse. We do not yet know how that will operate and I certainly do not understand how it relates to the private side of the betting industry.

My Lords, will the Minister expand on one specific aspect of the Statement which we on these Benches, as indicated by my noble friend Lord Newby, very much welcome? I refer to the long-overdue distinction between revenue and capital spending which, in my view, is the most significant aspect of the Statement today.

In the Statement which the Minister repeated, the following sentence appears:
"Total investment, public and private, in Britain has in recent years fallen, … and is far behind our competitors".
Those of us who have been arguing for the distinction to be made between capital and revenue spending by government would argue that one of the reasons that public sector capital spending has been so low is because capital spending has been aggregated with revenue spending and there has therefore been a significant reduction in public infrastructure spending, which it is to be hoped we will now see some movement to reform.

Perhaps I can probe a little on the impact of that decision on public-private partnerships and the private finance initiative. One of the reasons why the previous government, and indeed this Government, wished to try and encourage public-private partnerships and the private finance initiative is the absence of distinction between capital and revenue spending. There was significant pressure on the Government's resources and capital spending suffered.

If we now have the situation enshrined in the Statement in which we are to distinguish between capital and revenue spending; and if—as indicated on page 43 of the larger book—the public sector net borrowing requirements from 1998–99 onwards for the next five years will be negligible; will not the Government have to consider using the fact that they will be the keenest borrower and will be able to obtain the keenest rates in financial markets for capital spending? If they wish to encourage public-private partnerships, it is silly for the private sector to go into the markets and borrow at rates higher than the rates at which the Government can borrow. Will not the Government take into account the fact that, in those public-private partnerships and PFI initiatives, they ought to be in there as the borrower, if necessary, in respect of lending to the private sector vehicle? The overall cost of borrowing and the overall cost of the investment will then be lower.

My Lords, I am grateful to the noble Lord for those very thoughtful comments. I tend to over-simplify these matters. The Treasury hate it when I say that its traditional way of looking at these things is that £1 of capital and £1 of revenue equals £2 for cash accounting purposes. That is the truth of the matter and what we are getting away from. That is the value of the whole exercise.

Everything that we are doing in this regard must be constrained by the two basic framework statements that we have made. First, there is the golden rule and, secondly, the stable debt ratio. Having said that, what we shall get from resource accounting and budgeting is a clear structural distinction between current and capital expenditure so that they are no longer treated as though they were equivalent economic categories.

What we shall get in terms of value for money is twofold. First, we shall be focusing on capital as it is consumed rather than as it is financed. That puts the long-term investment implications of public capital on a more transparent footing similar to that in PFI at the moment. Secondly, there will be greater emphasis on the objectives to which departments devote taxpayers' money; namely, the outputs and, over a longer timescale, the outcomes produced and the trade-offs made. The noble Lord went further than that, but I have forgotten the final point that he made.

My Lords, it is the fact that the Government can borrow at the cheapest and keenest rates and that that should be put to use in the initiatives.

My Lords, there are a number of ways in which that can be achieved. Rather than bore the House with a long exposition, perhaps I may refer the noble Lord to the Deputy Prime Minister's Statement about the Channel Tunnel rail link. Under those proposals bonds will be raised which will be guaranteed by central government. I probably will not be thanked for this, but on that basis the effect will be that we are borrowing at below market rates because there is no risk involved. That is what we are trying to achieve.

My Lords, is my noble friend aware that the PSBR system that we have been operating in this country for many, many years has undermined our public services and seriously impeded investment? Does he agree with me that today's Statement takes a brand new approach to the management of capital expenditure and to our fiscal balances which will have a significant impact on productivity in this country both in terms of the economy, public services, jobs and, therefore, families?

My Lords, I am tempted to agree tout court. In earlier statements we indicated that we were proposing to move to resource accounts. We shall be publishing the first of them for the year 1999–2000. We shall be producing them parallel with the cash-based supply estimates and appropriation accounts until the years 2000 and 2001. I thank my noble friend for his congratulations. We are not abandoning entirely PSBR at the moment. It represents something real, which is cash coming in to government. When I say that we are producing, as private businesses do, balance sheets as well as income and expenditure accounts, we cannot neglect what private businesses also produce, which is cash-flow accounts.

My Lords, I share my noble friend's surprise at the somersault which the Government appear to have carried out in many parts of the Statement. In the interest of time I shall confine myself to one question. The noble Lord suggested that the separation of capital from revenue was a new inspiration by the Government. There has not been a Chief Secretary over the past 40 years who has not tried with the Treasury to get the separation of capital and income. The noble Lord will probably agree that the Treasury has a list which goes back to when chief ministers questioned whether there should be capital or income, starting with the battleship and turning down all kinds of things.

Has the noble Lord a clear definition of what is going to fall on the capital side and the income side? Does he accept that no doubt this has been gone over many times by governments in the past?

My Lords, the answer to the noble Lord's first question is that for 40 years Chief Secretaries have tried, but we have succeeded. The answer to the noble Lord's second question is as I acknowledged in responding to the noble Lord, Lord Newby; namely, that there are always going to be difficulties in the definition of what is capital and what is revenue. I gave the example of expenditure on human capital, which the Office of National Statistics will not allow us to count as capital. We are approximating as closely as we can to internationally recognised norms of accounting in both the public and private sector. As with employment statistics, I believe that that is the right way to go.

My Lords, can the Minister clarify the Government's thinking as regards best value in local government? I and others understood that the Government were still consulting on best value and that pilot projects were being set up. Can he also expand a little on how the Housing Inspectorate will work?

My Lords, the answer to the noble Baroness's first question is that we are consulting on that subject. As regards her second question, those matters will be covered in the publication next month of the comprehensive spending review. While I am on my feet, may I correct something that I said to the noble Lord, Lord Boardman? The resource accounting and budgeting system will be introduced from the year 2001–2002 and not a year earlier, as I suggested.

My Lords, I welcome the separation of capital and current accounts and the golden rule. Is the projection of 2.25 per cent. growth in real expenditure and output a pessimistic forecast of output? It is below the trend experienced by the economy over the past 40 years. The growth rate in expenditure is even lower than the quoted 3 per cent. per annum. Can my noble friend say whether it is just a cautious outcome or do the Government have genuine forecasts that the economy will grow more slowly than in the past?

Perhaps I may register one small disagreement about the debt-GDP ratio. I do not see how a low or high ratio is any indication of economic prosperity. Between the years 1970 to 1990 the debt-GDP ratio decreased from 70 per cent. to 27 per cent. They were not the happiest years for the British economy. We all complained how miserable we were. Does my noble friend agree that getting that ratio down should not be a primary objective?

My Lords, the projection of a 2.25 per cent. increase in current public expenditure is, as my noble friend said, a cautious figure. It is achievable within the constraints of the golden rule and the debt-GDP ratio. It is not necessarily the same as forecasts for output as a whole. It is designed to be not too far away from the figures for output as a whole.

My noble friend has a point about the debt-GDP ratios. They are not always associated historically and statistically with economic growth. That is true. However, when we are confronted with such wild accusations of tax and spend, it is important at the very least to be able to remind noble Lords opposite that this is not a Government who are moving rapidly towards a command economy.

My Lords, I certainly go along with the increased emphasis on output measures and on the move to accrual accounting, and particularly balance sheets, which is something that the House of Commons Select Committee on the Treasury has advocated for a long time. First, on balance sheets, is it the Government's objective that the government balance sheet should go up or down in value? Secondly, the noble Lord gave the impression that if the Government sold off assets and invested money, that would result in a net increase in investment. Perhaps the noble Lord will confirm that that is not so. It may be more efficient, but it does not change the amount of investment.

Following the point made a moment ago by the noble Lord, Lord Desai, perhaps I may express my grave concern about the way in which the Government's overall policy is developing, with an independent Bank of England which has a clear objective, largely relating to inflation, and now, apparently, with a fiscal strait-jacket with regards to public expenditure. There is an assumption that that means that the tax side will not change. Presumably, that is not the position. Therefore, at least at this stage, remarks about the PSBR or other surrogates for it are not helpful. I share the view of the noble Lord, Lord Desai. I suspect that the Government's forecasts show a low rate of economic growth compared with past history—and that is because of the way in which the Government's monetary and fiscal policies are interacting.

My Lords, the Government's forecasts of economic growth are publicly available. Anybody can produce projections on the Treasury model—and that frequently happens. I simply do not know the answer to the noble Lord's question about whether we expect the balance sheet to go up or down. We expect it to balance. Whether we expect it to go up or down in total depends largely on the way in which we value the fixed assets which are taken into account. Work on that is still developing.

The noble Lord is right in saying that the interaction of all those factors is extremely complex. I thought that by stating our objectives more clearly we would be increasing the transparency of government economic policy. I do not describe these as a "strait-jacket". It is much better to do what we are doing here and to make forecasts about what we hope to achieve through economic policy than to do what the previous government did, which was to set continuing targets for tax reductions regardless of, or without any conscious reference to, their effect on economic growth.

National Minimum Wage Bill

6.12 p.m.

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—( Lord Clinton-Davis.)

On Question, Motion agreed to.

House in Committee accordingly.

[The DEPUTY CHAIRMAN OF COMMITTEES (Viscount Allenby of Megiddo) in the Chair.]

Clause 1 [ Workers to be paid at least the national minimum wage]:

Page 1, line 7, leave out ("by his employer").

The noble Baroness said: When I first read the Bill and then saw this amendment, which looks very simple and which was proposed by my colleagues in the other place, I wondered why the Government were making such a fuss, but this amendment was debated at considerable length—for almost three hours—in Committee in the other place. It was described then as a "probing" amendment, but as no answer was given to the basic question, we have to take up the time of your Lordships' Committee by raising the matter again. The basic question is: why do the Government insist on the inclusion of the words, "by his employer", when to any dispassionate reader they seem to be mere verbosity? As long as the employee gets the minimum wage, why does it matter who pays him?

The debate in the other place largely revolved around the situation of catering and hairdressing staff, whose remuneration includes tips whether given directly to the employee or shared out in the tronc system. There are stories—perhaps apocryphal—that the doormen and cloakroom attendants at major London hotels, far from being paid any wages, used to pay the hotel for the concession. There are other examples. There used to be a system whereby taxi drivers kept a proportion of the fares and all the tips. Those drivers would not have regarded themselves as the employees of the vehicle owner but merely as hirers of it. However, under this Bill, it is likely that they will cease to be treated as self-employed and would be employees.

Then there is the situation where an employee is given a commission on what he takes in. I am not talking about ordinary commercial travellers and salesmen but about people such as seaside deckchair attendants who used to keep part of the ticket money as an incentive to be more assiduous. I doubt whether the unions permit local councils to operate that system these days.

I repeat my question: why do the Government insist on these three little words which do not add a single thing to the Bill and the exclusion of which will not detract from the clause by one iota? Is it because of some hidden agenda to abolish tipping, a long-held desire of old Labour, emulating the Soviet Union where it was impossible to get a taxi once the driver had performed his daily quota of rides?

Today I read a report in the Daily Telegraph—it was repeated many times on the radio—of a leak suggesting that the Low Pay Commission agrees with us. I shall be pleased if that report is correct. The question is: do the Government agree with the Low Pay Commission?

My other question is: when are the Government going to tell us what the Low Pay Commission's entire report says—or are the Government going to continue with their practice of treating Parliament with contempt and announce their policies to favoured journalists instead of to Members of both Houses, a practice for which Madam Speaker has reproved the Government on several occasions in the past few weeks?

In the light of the leaked report, will the Government undertake to accept and implement this amendment? I beg to move.

Perhaps I may respond to one point made by the noble Baroness when moving her amendment. I refer to her point about service charges and tipping. Before doing so, perhaps I may say how sorry I was not to be present in the House for the Second Reading of this Bill as I have spoken often in your Lordships' House in support of such provisions. I should very much have liked to be here to record my support then. My comments throughout this stage are intended to be helpful and constructive, even if a little probing.

It is important to understand that there are two kinds of service charge normally operating in hotels and restaurants. The first comprises tips which are left on the table by clients who have enjoyed a good meal and feel moved to leave something extra. Customarily, they are collected either by the waiter concerned or through something known as petit tronc. There is no involvement of the employer whatsoever. The sums are simply divided among the staff and very little, if any, record is kept of them. I hope that those payments are not swept up into any consideration of a minimum wage. That would clearly be quite wrong.

The other form of service charge is where a specific percentage is included on the bill by the establishment and where the patrons very often do not have any discretion about whether or not to pay it. That is called the tronc system and it is usually administered by the hotel or restaurant. The amount passes through the books and has PAYE and national insurance levied on it. When one is recruiting a member of staff, it is usual to say, "You will be paid such-and-such as a salary and you may expect to receive so-and-so from the service charge", of which usually a certain amount is considered guaranteed. In that instance, I believe that it is perfectly proper for that amount to be taken into consideration when looking at the minimum wage. However, I feel that that is encompassed within the words, "by his employer". As those amounts are dealt with by the proprietor of the restaurant or hotel and appear in the PAYE system and on the payroll, it seems to me that that situation would be covered by the words currently in the Bill.

Finally, I reassure the noble Baroness that the story about doormen is entirely apocryphal. I believe that that went out before the last war. In any hotel with which I have had anything to do doormen are gold dust and I do not believe that in London the minimum wage will affect any of them.

First, I welcome the noble Baroness to this debate, which of course will be very short. We shall finish at about half-past seven! I am sure that the noble Baroness will make a major contribution to that debate. I am not surprised that the Opposition took so long in Committee in another place. The noble Baroness said that it took three hours. If it relies on the argument that the Labour Party is emulating the Soviet Union, it is not surprising that it takes a long time. That is just verbiage, and the noble Baroness knows it.

I very much welcome the contribution of the noble Viscount, Lord Thurso. He has made a personal contribution to the principle of the national minimum wage. He has applied that in the hotels of which he has experience and in which he is involved. I congratulate him on applying the principle and not just talking about it.

There is a very good reason for opposing this amendment: it is against the whole thrust of what we seek to do. That is the simple answer to the points made by the noble Baroness. The amendment seeks to remove the requirement on employers to pay their workers at least the national minimum wage. It would make it very unclear where responsibility for payment rested. If there is no responsibility how can there be enforcement? The Bill makes it manifestly plain that the responsibility lies with the employer, and there is no alternative to that. The approach of the Bill, just as with other employment law, is based on the relationship between employer and worker. I do not see any difficulty in relation to that. The proposition is very simple. We are talking about a minimum wage, and wages are paid by employers. The amendment undermines the purpose of the Bill which requires employers to pay their workers at least the national minimum. How could a worker or enforcement officer press a claim if it was not abundantly clear who was responsible for paying the minimum wage? Our evidence is that business wants to see effective enforcement. Good companies do not want to be undercut by bad companies. Clause 54(4) of the Bill makes it very clear who is the employer.

The noble Baroness spoke about tips. I believe that the issue is rather more complex than she has credited. The Low Pay Commission will make a report on this matter. I am unable to set out the Government's detailed position on tips until they have responded to the whole issue in due course. What I can say is that customers in restaurants are not employers. Sometimes they treat employees as employers but they are not. They have no share in the responsibility to pay the staff the minimum wage. We shall deal with the whole area of performance bonuses, gratuities and tips when we come to make our Statement on the recommendations of the Low Pay Commission.

We shall consult very widely on the draft regulations which will take this issue into account. I do not want to go into the whole issue of tipping at this particular juncture. The noble Viscount, Lord Thurso, has drawn attention to some salient points. We shall return to that matter in due course. I believe that the Committee would be very unwise to support the amendment moved by the noble Baroness.

Before my noble friend determines how she responds to the Minister's reply, if the noble Lord opposite believes that the Committee will be finished by 7.30 p.m. he should advise us in which week it will reach that conclusion. I regard his response on the issue of tips as totally inadequate. I recognise well enough the very real difficulty in which he finds himself; namely, the Low Pay Commission has a report on which the Government have not yet reached a view. Clearly, the Government are trying not to reach a view upon it until this Bill has concluded its passage through this House and has been returned to another place. That is unsatisfactory. It is not simply a matter that affects the narrow point of tips in restaurants. I believe that the noble Earl, Lord Thurso, is correct.

I thank the noble and learned Lord for that promotion, but I remain simply a Viscount.

The noble Viscount may in any event enjoy that promotion for only a brief period. I believe that the noble Viscount was correct in saying that there were two types of tips. First, there are tips that are simply left on a plate or are passed directly to staff and the employer has no part in their distribution. Secondly, there are those which are collected and then divided up according to an agreed formula.

As I understand the proposal in the not particularly confidential report from the Low Pay Commission, it is recommended that all payments by result, commissions, bonuses, tips and gratuities paid through the payroll—which fall into the second category—should be included when calculating salary levels. If that is the only type of tip that is included when the calculation of the minimum wage is made, the difficulties may not be very significant. However, if what is proposed—I have not seen the confidential report—is that a wider category of tips should also be included, then some very fundamental questions arise on the whole structure of the Bill. The assumption that lies behind many of the ancillary provisions of the Bill is that of necessity the employer knows what has been paid over to the employee. For example, we find in Clause 28 that in any civil proceedings that arise over this issue there is to be a reversal of the ordinary burden of proof.

It is not difficult to understand why the Government may consider that to be an acceptable approach when the employer has full knowledge of all that is paid over to the employee. But in the circumstances that we are considering in which a restaurateur may be broadly aware that most of his clientele tend to leave tips, he may not know how much they leave or how often they leave them or whether any tips are left in any particular week. I believe that in those circumstances there is a very real argument that the onus of proof should not be reversed. For that reason I believe it is important to know at the outset exactly what is to be included and what is to be excluded. I believe that it would be in the Government's interests to give the Committee as clear an indication as possible of what is to be included; otherwise, we shall have to go through the Bill line by line assuming the worst and that even those tips which are not passed in any way through the books of the employer are to be included when calculating whether or not the minimum wage has been met. I hope that the noble Lord will at the outset give the Committee a rather fuller response than he has given so far.

I appreciate the difficulty. From reports that have appeared this morning in the media—in particular, the Daily Telegraph—Mr. John Monks of the Trades Union Congress has been writing to the Government about what is in the report. The Committee must know what is in the report and what the Government propose to accept at the earliest possible date; otherwise, it is not simply a matter of determining whether it is £3.60, £3.40 or £3.80. If one was concerned simply with the figure that might be one thing. It is now becoming clearer and clearer that the report contains a number of other issues that must be addressed within the whole framework of the Bill. If the Government were prepared to take a number of straightforward decisions we could deal with the scrutiny of the Bill much more simply and without the elaboration which I otherwise fear will prove to be necessary.

6.30 p.m.

It is nice to see the noble and learned Lord back. I welcome him back. His contribution is bewildering because, at one moment, he says that he understands the difficulties—the Low Pay Commission report has not been published, and the Government have not responded to it—then he says that he wants to know where the Government stand in relation to the report on this and that issue. I am not going to deal with Low Pay Commission report in dribs and drabs. He understands that.

The noble and learned Lord may want to have a debate on tipping now. I can assure him that it is a long and complex subject. It is not easy to deal with. We have the tronc system; questions of who controls it and how it is controlled; and service charge issues with which to deal. This place will have ample opportunity to discuss the matter in a more comprehensible way in due course, because it will then have before it the recommendations of the Low Pay Commission and the Government's response to those detailed matters. I shall not go into the issue in any further detail this evening, notwithstanding the noble and learned Lord's implied threats. I was only joking about 7.30 p.m. It is more like 7.40 p.m. after that intervention.

On the noble Baroness's own admission, there was considerable scrutiny of the Bill's principles in another place. We are going through a number of those debates again. This place is entitled to do that. I confess that when I was in opposition I did that on a number of occasions because it is appropriate for this place to go through such things again if it deems fit. We have reached certain agreements in that regard which necessarily mean that it is not always helpful to go through the fundamental points again.

I tried to make it clear in my first speech that in the amendment the Opposition are seeking to undermine the fundamental tenet of the Bill. I can add nothing more to what I said originally. I hope that the noble Baroness will withdraw the amendment.

I leave it to my noble friend to make up her own mind. It will not do: the Minister said on Second Reading that this place would see the report before the end of last month. I have not seen it. We do not yet have any government decisions on it. At the risk of repeating myself, if the only issue that this place needed to have brought to its attention was the level recommended by the commission—£3.60, £3.40 or £3.80—I could see that a final decision by the Government on that matter would not necessarily affect the detailed scrutiny of the Bill.

What is troubling about today's report is the revelation that there is to be an amendment on how tips are to be treated. There is an indication also in the press reports that the trade unions are profoundly unhappy about the recommendation. The Daily Telegraph claims that it is a recommendation which seems certain to be accepted by the Government.

That is our difficulty. I am sure that the Minister understands what I am driving at. Unless we know how that matter will be handled by the Government, the only way forward for us—I should prefer to avoid taking this way forward—would be to assume in every circumstance in the Bill, where there might be some impact on the drafting, if tipping on a wider basis is to be included, close scrutiny will be needed. Let us not be flippant about 7.30 p.m. or 8.20 p.m., I am more concerned that we will not do ourselves a great deal of good, in trying to scrutinise properly, if we have to make a broad range of assumptions, because, if only the Government would make up their mind, we could set them aside so that the range of scrutiny would be markedly restricted.

I appeal to the Minister again to give us some indication, if he can, of when we might know about these matters. We were promised the report by the end of May. As we understood it at the time, that meant that we would all have it available for this Committee stage. It would be helpful were we to know, at least before we reach the next stage, whether we shall see the report by then, and, equally importantly, whether there is any prospect of having the Government's decision on the acceptance or otherwise of those recommendations by that time.

I support the amendment, but I do not in any way anticipate a later amendment tabled by my noble friend Lady Miller. The Inland Revenue has, for many years, had to wrestle with the problem of tipping. At the later stages of the Bill, I hope that the Government will pay attention to the long-established practice which has been built up by the Inland Revenue in relation to tipping.

The noble and learned Lord has asked me to do what he used to rebuke me for suggesting, that titbits of information that he might read in the press should be the subject of considered debate here. I decline to do that. He has referred repeatedly to what he has read in the Daily Telegraph, based, of course, upon speculation.

We are dealing with the framework for the national minimum wage. It will be implemented through regulations which will be subject to the approval of both Houses of Parliament. The Bill establishes the principle of the national minimum wage and the regulations will define the detail.

When we come to debate those matters, many of the issues to which the noble and learned Lord has referred will be dealt with. I cannot continue the debate by going into further and better particulars, as the noble and learned Lord wishes. I have said that on a number of occasions, and repetition does not improve the argument. He then said that he would have to take us through the Bill step-by-step, no doubt threatening us with spending hours and hours on the Bill. That is for him to choose.

I have had detailed discussions with his Front Bench and with the Liberal Democrats. The noble Baroness will recognise that. We have tried to be as helpful as possible. I had not expected this kind of approach this evening. It is a matter for the noble and learned Lord. He is an experienced Member of this place and of the other place. It is for him to decide what he wants to do.

The commission's report and the Government's response will be before this place. I cannot say now when that will be. It is not just a question of choosing one item to discuss. The commission was asked to consider a number of complex items. It would be doing an injustice to it were we just to select, piecemeal, the matters that we were going to discuss, when the Government have not mind up their mind upon the entirety of the report. I cannot carry the matter any further.

I am becoming even more disappointed by the Minister's response. It has been indicated that the noble Lord's colleagues are having a reception this evening. If that were not so, I would be minded to go back on a promise that we would not have a Division on the matter. The noble Lord must appreciate how close he is getting to infuriating us seriously. The programme, the timetable for the publication of the report, and the timetable for securing decisions of the Government are not titbits. It was said at Second Reading that we would at least see the report before we reached this stage of the Bill. That does not seem to be a matter that should be caricatured as seeking titbits of information. The Government clearly regard it as extremely important to have the matter resolved as objectively as possible by passing it to the Low Pay Commission for a conclusion.

I shall not press the matter further on this amendment. However, if the noble Lord regards our seeking to discover the likely response of the Government to the report as a titbit, or something of inconsequence, it will not make for a measured, calculated consideration of amendments by the Opposition. I leave it to my noble friend to determine what she wishes to do.

I had no intention of upsetting the noble and learned Lord. I have done so on a previous occasion. I know how wrathful he can be. It was not my intention.

I am saying that at this stage I cannot give the noble and learned Lord a timetable. I can undertake to inform the House at the earliest opportunity what the timetable will be, and how it will fit into consideration of the further stages of the Bill, but I cannot do so tonight. The noble and learned Lord would be the first to rebuke me—he has done so in the past—for relying on speculative information in the press. The noble and learned Lord will recall that. If he cannot do so, my memory is better than his in that respect. Be that as it may, I wish to add that footnote to this debate.

The Minister will remember that on Second Reading I asked specifically when we were to receive the report from the Low Pay Commission. I recall the matter well because the noble Lord intervened, saying that he thought he had already addressed the matter. It is impressed upon my mind, since I thought that I must have misheard. Whether or not I misheard, it is troubling that when we seek to discuss the Bill all we have are leaks. The Daily Mail today had an article on tipping. A little while ago we heard that the proposed sum was £3.60. We heard that the Treasury was not pleased about that. Then we heard reference to the Board of Trade. We are entitled to ask when we are to receive the report from the Low Pay Commission and to be concerned that the House will not receive it first.

Having said that, I shall read carefully what the Minister said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.45 p.m.

Page 1, line 8, at end insert (", provided that such person has no other casual, part-time or permanent employment with another employer in respect of the same work.").

The noble Baroness said: The urgent need for this amendment arises from an ambiguity in the clause compounded by what was thought by one of my honourable friends to be an ill-considered throwaway remark by the Minister for Small Firms during the Committee stage in another place. It occurred not in relation to Clause 1 but on a totally different aspect of Clause 2. That is why I believe that the Minister did not realise the full implication of what she said.

The Minister began by saying:

"Under Clause 1 a worker is entitled to receive the national minimum wage from his or her employer. If the employee has two jobs, he or she is entitled to have the national minimum wage from each employer".

The honourable Member for Daventry asked:

"Is she saying that would apply if the employee was employed simultaneously?"

The Minister replied—and this is of vital significance:

"Absolutely. An employee who is working for more than one employer simultaneously would be entitled to receive the national minimum wage from each of his or her employers".

Let me stress the word "simultaneously" in that reply. The honourable Member for Buckingham then said:

"I think the Minister has just dropped a clanger, to judge by the expression on the faces of Labour Members at the back of the room. Am I correct in understanding that an employee would be entitled to claim the national minimum wage from more than one employer at one time for work in respect of the same period?"

The Minister replied:

"Yes, of course".

I stress the words, "in respect of the same period".

It seems to me that the honourable Member was being magnanimous and charitable, as is his wont, in assuming that the Minister had been guilty of a slip of the tongue. Not so; the Government really meant it. In the very next session of the Standing Committee that afternoon, the Minister of State said:

"If an individual has two employers for whom he works during the particular pay period, each employer has to pay the minimum wage irrespective of whether a worker has three, four, five or six employers".

I apologise for the lengthy quotations, but it was important for the Committee to hear exactly what the Government contend is the effect of the Bill.

As the Committee is aware, the courts may now adopt the practice of looking at what Parliament intended when interpreting the words of an Act. Perhaps I may give the Committee a couple of examples of the ludicrous results that follow from this incongruous interpretation of the Act.

Let us imagine that three brothers trade in partnership in a small factory unit manufacturing widgets. Their only employee is a secretary who answers the telephone, deals with a small amount of correspondence, issues the invoices and does other minor clerical jobs. For that she is currently paid £7 an hour or £280 a week. We understand that the Low Pay Commission has recommended a national minimum wage of £3.60. If the Minister's interpretation is correct, the result is that she would now have to be paid £432 per week because she was working for three employers, the three persons who owned the business in partnership. However, the paradox does not end there. Next door is a similar business, but it trades as a limited company, so its secretary has only one employer—the company. She therefore has the proper single market rate for the job.

In place of that hypothetical example, let me give one that would exist in real life. Let us consider a large firm of solicitors practising in the City, let us say in Gray's Inn Road. Part of the infrastructure of that firm is a catering staff of three or four people to supply tea, coffee and quantities of delicious sandwiches so that complicated negotiations do not have to be broken off for lunch and staff and visitors in meetings are sustained well into the night. Never mind the Minister's hypothetical three, four, five or six employers. Let us suppose that that firm had 54 partners who are the owners of the firm and the technical employers of the catering staff. It is by no means the largest of such firms; there are many larger firms with numbers of partners running into three figures.

If the Minister is right, it means that each member of the catering staff, receptionists, the four people employed in the print room (which churns out thousands of pages of documentation every day), and members of the typing pool, would be entitled to 54 times the national minimum wage. If it were 54 times £3.60, the figure would be £194 an hour, or £1,555 for an eight hour day, or £7,760 for a five-day week, or even £404,352 a year. Of course that is a perfectly preposterous proposition. I am certain that one result would be a mass exodus of your Lordships from this House to seek a job as a messenger boy or girl in such a firm.

By their injudicious remarks in another place, the Ministers have opened Pandora's box. Sure enough, someone will try it on and perhaps a judge will feel bound to adopt the two Ministers' interpretation. This simple amendment removes any possible ambiguity or doubt. Common sense tells us that if a person is working simultaneously for more than one person, then he or she gets paid for the hours he or she is working concurrently. For an eight-hour day the pay is for eight hours, not 16, 24 or 54 times eight which equals 432 hours.

Nobody can claim to be paid for a 432-hour day, but that is what the Ministers in the other place were suggesting. Even the planet Mercury only has a 59-hour day. What the Minister is suggesting is that the meaning of this Bill would introduce the mother of all Spanish practices.

I do not believe for one moment that the Government could possibly intend this utterly ridiculous interpretation to prevail. All they need to do, to put the issue beyond any doubt, is to adopt the eminently sensible amendment, which in no way detracts from the right of an employee to receive the minimum wage, whatever it turns out to be, for each actual hour worked. I beg to move.

The noble Baroness spoke of preposterous propositions and then went on to make a number of them, drawing inspiration from the planet Mercury in doing so.

Perhaps I may deal with the question of a partnership. I have been inured into this because I am a solicitor. All the noble Baroness has to do is to mention the word "solicitor" and I become ensnared. We are talking about one employer in that situation, in terms of a partnership.

One can rely on a whole set of hypothetical circumstances in order to try to undermine a principle. All these cases, if they fell to be dealt with, would have to be dealt with on the specific facts, on the particular contractual arrangements that existed between the parties. The responsibility for paying the minimum wage can depend on those particular circumstances, especially on whether the individual being paid is self-employed, or an employee or a worker.

Amendment No. 2 would remove the entitlement to the minimum wage from any worker who works for more than one employer in respect of the same work. That is the purpose of it. I see that the noble Baroness nods in agreement.

It is worth mentioning that when the amendment was originally tabled on 30th March the words
"in respect of the same work"
were omitted. According to that version, the amendment would catch employees with a second job. We could certainly have a debate about that, if that occurred, when there was a debate in another place.

The situation would, in any case, be clear. The minimum wage would be payable for both jobs. After all, if a person has two jobs, no one expects his first employer to pay him less simply on account of the fact that he is earning two pay packets. That would be beyond the realms of imagination. So why should anybody with two jobs not be entitled to the minimum wage in respect of each employment?

The issue of second jobs does not appear to be the point that lies behind this amendment. The original amendment was changed and replaced on 21st April by the current version, which adds the words
"in respect of the same work".
Therefore, the situation which the amendment seems to envisage is one where a single person is being paid by two employers to do the same work. For the individual in question, that appears to be a very happy situation, because the person concerned would be receiving two salaries for carrying out a single piece of work.

With great respect, I do not believe that the amendment has anything to do with practical realities. Are there really individuals in this happy situation? Can the noble Baroness point to such cases? The noble Baroness sought to allude to solicitors' partnerships, which have nothing to do with this at all. Or, are there really employers who, between them, are content to pay the same individual twice over? Perhaps the noble Baroness can allude to certain factual situations. In any event, if she is able to, I do not see these situations being something that the Bill could or should be designed to prevent.

With the best will in the world, I believe that the revised amendment is meaningless. The situation is quite simple, despite this and other attempts to make it appear complex. If a worker has more than one employer and more than one job, each of those employers is responsible for paying the worker at least the rate of the minimum wage for the time during which that worker is working for him. I do not see the problem. If a person does two jobs as a worker, then he or she should get two wages, each underpinned by the minimum. That is our case. I believe it is a very sensible proposition.

I believe the Opposition have become somewhat confused by these hypothetical instances. I hope the noble Baroness will feel persuaded that this is not a matter which she would wish to press forward tonight.

Perhaps I may have some clarification. A number of people in this country act on a commission-only basis. How could they be described under these circumstances? Because they are responsible for the sale of a product, in the course of their work they may be employed by four or five employers. In that case, would they fall within this particular clause?

No, because they would be self-employed persons. They would be acting on a commission-only basis.

For the purposes of clarity and Hansard, I was not nodding at the Minister. I was smiling across the Despatch Box and I was not actually agreeing with what he was saying.

Turning to that particular point, I hesitate to argue a point of law with the Minister, who has been a member of the solicitors' branch of the legal profession for, I believe, something like 45 years. Indeed, I would not wish to argue a legal point with anyone on the Government Front Bench. As he said to me, with the greatest respect, that I was wrong, I would like to say, with the greatest respect, that I believe that the Minister is wrong.

A limited company is a legal entity. A corporation created by statute or Royal Charter, such as the BBC, is a legal entity. A partnership is not a separate legal entity, but a body made up of all its individual members. If one of them incurs a debt on behalf of the partnership, or injures someone in the course of the partnership's activities, or if someone simply falls down a defective staircase in their office, each partner is jointly and severally liable to the third party. In my opinion, it is not sufficient simply to exempt partnerships because there are other activities where a person can be working for more than one person simultaneously.

The Minister asked me to give some examples. It could be a joint venture or an unincorporated members' club. For example, I and some colleagues could get together to employ a researcher out of our meagre secretarial allowance, or 50 of us could decide to engage a trainer to conduct a keep fit class between Divisions during late sittings, and many of your Lordships might well appreciate that. The amendment that we are considering has been drafted so as to cover any eventuality that the most fertile imagination could conceive. The Minister suggested that the wording of the amendment had been changed. We have changed it in order that it will cover any example that anyone might like to think up.

The amendment is helpful and is intended to rescue the Government from the consequences of the very loose phraseology used by the draftsman, followed by the extravagant and ill-considered interpretation put on the clause by the two Ministers in the other place.

I have no intention of withdrawing the amendments at the moment. I wish to hear what the Minister has to say and I believe that my noble and learned friend has something to say, too. The Minister suggested that the amendment was irrelevant and that I did not know what I was talking about. I tried to point out to him that it was particularly relevant and that I should like to hear what he had to say.

I should never be so discourteous as to say that the noble Baroness did not know what she was talking about. I am grateful to her for her intention to be helpful, but it has not worked out that way. The partnership she referred to was a body. That is exactly what it is.

7 p.m.

Will the Minister look at Clause 54(4), which states:

"In this Act 'employer', in relation to an employee and a worker, means the person"?

It is not, normally speaking, a person, but in the context of this Bill that is how it is defined. Normally speaking, a partnership is not a person, but it depends on the context in which one is referring to it.

There will be some disagreement between my noble friend and myself because so far as I am concerned a partnership in Scotland, as even English lawyers know, enjoys a separate legal persona. Therefore, in the terms of that definition, I have no doubt that a Scottish partnership would be a person.

I am interested to know, and I should be grateful for elucidation before we reach Clause 54, whether a partnership in England is properly described as a person. If a partnership in England is described as a person, we wish to get the matter clarified before we reach Clause 54.

For the purpose of this Bill, a partnership is defined as a person. In other respects, it may not be. However, I do not wish to become involved in that debate, nor do I wish to become involved in the niceties of Scottish law, of which I know even less than English law.

The question about keep-fit classes is interesting, and I shall join. I am not suggesting that the noble Baroness is talking utter balderdash; I merely tried in a polite way to refute the argument from the Government's point of view. We do not see that she is seized of the proper point. I do not see that repetition adds anything to the argument; I clearly set out our case in this regard. We believe that the Opposition are wrong. The amendment, if agreed to, would do serious damage to the Bill and I do not want that to happen. I invite the noble Baroness to withdraw it.

Before the noble Baroness decides what to do, perhaps I may say with all respect that I do not believe that the noble Lord, Lord Clinton-Davis, has answered her point about people banding together to hire the services of a secretary or a personal trainer. We are not talking about partnerships, which may well be a grey area; what we are talking about is not a grey area.

If two people employ someone to do a job simultaneously for them the position is clear; the person concerned should receive two wages, each underpinned by the minimum. It is inconceivable that in the circumstances described by the noble Baroness and the noble Lord, Lord Monson, a typist would have a worker's contract with all three. It does not happen that way.

We are dealing with hypothetical situations. In reality, when considering the legal liabilities of particular circumstances, one would have to examine the contractual relationship which exists. One could dream up all kinds of hypothetical situations which will not advance the interests of addressing the principle. The Bill reflects employment law, all of which assumes that a worker cannot have more than one employer in relation to one job. He or she can of course have two jobs at the same time, one in the morning and one in the afternoon, but cannot do them simultaneously.

After that last remark, I am in a certain confusion. I would have thought—and the noble Lord, Lord Monson, made the point—that we could all join together and have a keep-fit class in the Royal Chamber. The question is whether each and every one of us would have to pay the minimum wage to the instructor for undertaking the same job at the same time. I have listened carefully to what the Minister said. Although I do not agree with him, I shall not press the matter to a Division tonight. We agreed not to do so because the Minister's colleagues were at a social gathering and it is not my intention to break such an agreement.

The Government need to look at the issue again and we wish to return to it. In no way does this simple amendment interfere with or alter any of the principles of the Bill. It clarifies the Bill and would get the Government out of certain trouble. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Page 1, line 14, at end insert (" or has reached the age of seventeen years, whichever is the later").

The noble Baroness said: In moving Amendment No. 3, I shall speak also to Amendments Nos. 4 and 5. Some parts of the Bill are defective because not all the effects of particular provisions have been fully considered. Clause 1 (2)(c) is one such provision. As drafted, the Bill provides for the start of an employee's entitlement to receive at least the national minimum wage to be when he or she reaches school-leaving age.

Perhaps I may say for the first time that, as the Minister knows, we on these Benches do not agree with the idea of a national minimum wage, although we certainly appreciate that it is a manifesto pledge. All we shall attempt to do is to make it a little easier and a little better for everyone to live with. I agree that if there has to be a national minimum wage there has to be a start-up date for it. However, basing it on something as flexible as the school-leaving age produces uncertainty and ambiguity.

The reason is simple. Within the United Kingdom there are three different school-leaving ages. England and Wales have a different age from Scotland, and Northern Ireland has yet a third. The differences are a matter of months, being based on how long after a child reaches his or her 16th birthday he or she is allowed to leave school. The details, even as set out in the normally helpful notes to the Bill, are extremely confusing. I have read them several times and, as the Minister will have done so, perhaps he can explain the differences. I found the matter extremely confusing, although in practically every other respect the notes on clauses were helpful.

No doubt they would be understood by an expert on education, which I certainly am not. But it is clear that children living within the four different areas will be able to leave school at ages different from others living in the same area. I agree that that problem cannot be avoided. However, as between the four areas, each using a different formula, there can be a difference of several months between the age at which a child is allowed to leave school. For example, as I understand the figures in the notes to the Bill, it means that a Scottish child may have to remain at school until he or she is about 16¾. According to this same note, in Northern Ireland a child may leave school in the same year as he or she attains the age of 16 on or before 1st July. Frankly, I am not sure what that means for Northern Irish children but it seems to me that a child born on 2nd July—which happens to be the birthday of one of my sons—would have to stay in school a whole year longer than one born on 1st July. If the proposed Scottish parliament has the power to do so, it could presumably alter the school leaving age north of the border to yet a different one, higher or lower, thus yet again introducing a different standard.

For the purpose of the present debate we do not have to concern ourselves with the precise effect of these arcane and convoluted regulations. It is sufficient to say that as between England and Wales on the one hand and Scotland on another hand and Northern Ireland on a third hand, children are treated differently. Using the term of art, "school-leaving age" means that distinctions will be made between children from different parts of the United Kingdom. That is, in effect, discrimination, not just on the grounds of age but also on the grounds of nationality. I believe that is totally unacceptable. I am amazed that the party opposite should continue to countenance it after it was drawn to their attention in the other place. But that is not the end of the anomaly.

In Committee in the other place, my honourable friend the Member for Daventry pointed out the situation of someone living on or close to the Scottish border; for example, in Berwick-on-Tweed. Would his entitlement to the national minimum wage depend on where he lived or where he took a job? Would a new school leaver from England be entitled to a different wage from a colleague working alongside him who lives in Scotland? That is not the end of the possible problems. What would happen if a young person from the EC came here from a country where, for example, the school leaving age is 18 or 15?

However, what I am addressing here is the differences in school-leaving ages between children living in different parts of the United Kingdom. The amendment we propose purely and simply provides a uniform base for all school-leavers irrespective of where they live or where they work. It is not designed to deprive them of any so-called benefit from an entitlement to a minimum wage, although I personally believe they will find themselves in severe competition with those still at school who are trying to secure the part-time and weekend jobs that so many young people are looking for.

The amendment removes the absurd geographical distinctions that I have drawn attention to. In the debate in the other place no satisfactory explanation was given by the Government for not agreeing to sort out this unnecessary problem. Now that they have time to reflect, I trust that they will agree to do so.

Before I speak to the next amendment I should like to mention a matter which comes back to our discussions much earlier on the Low Pay Commission. If rumour has it, and it is right, it may well be that young persons under 18 will not be entitled to the national minimum wage. Therefore, the whole of the argument which I have just proposed would be irrelevant. That is why I and my noble friend made the point that it is difficult for us to deal with all these matters in the dark because we do not actually know.

I turn to Amendment No. 4. This amendment does not seek to provide the facility to exploit with low wages senior citizens who have attained the age of 65 and who choose for whatever reason to remain at work full or part-time or even in some new occupation. I certainly would not wish to do that. I must declare an interest in that I will be joining that venerable group in just a few days' time, difficult as I find it to believe. Nevertheless, it is the truth.

The purpose of the amendment is to provide for the exclusion of those of pensionable age from what we believe may be the adverse effects of a national minimum wage. We believe that the effects of the Bill may be to harm many members of a particular group that the Government think it is intended to help. Elderly workers are indeed a vulnerable group. The same is true for those under the age of 26 where the Government have already taken permissive powers to make an exception. The amendment would not force pensioners to work for low wages; nor would the amendment to Clause 3, mirroring the exception for the under-26 year-olds.

The amendment recognises that they are a group who may have low productivity specifically related to their age or the lack of modern technological skills. I hasten to add that there will obviously be notable exceptions—myself included—who will continue to be able to work with undiminished vigour, as do many noble Lords in this House. Such persons should be allowed to price themselves into work if they choose to do so.

The Low Pay Commission should be empowered by the Secretary of State, after due consideration, to recommend a separate level of pay for pensioners. The Secretary of State has already given herself discretionary powers not to follow any recommendation of the commission if she chooses not to.

Pensioners are a large and growing proportion of our population. Out of 10 million pensioners in this country—almost 20 per cent. of the population—800,000 of them are economically active. Approximately 600,000 of those are employees. There was a dip in the number of employed pensioners during the economic downturn in the early 1990s. This emphatically proves the vulnerability of this group in times of economic and employment difficulty.

The Minister in the other place propounded the novel economic theory that higher wages result in higher employment. I shall not get into arguments about the reality of the so-called McCarthy curve. I am certainly not an economist but common sense makes it clear that some jobs will be lost if wages go up. Without special exemptions, jobs will be lost if wages are forced up. Those job losses will fall on the most marginal groups with the lowest productivity. At present, those liable to be low producers—those who want merely to work part-time and who may need more time off work for health, family or personal reasons—can price themselves back into the labour market by adjusting the price they charge for their labour.

Many of the over 65s are in possession of their state pension and occupational pensions. They may be happy to give a couple of hours a day for a nominal wage, possibly just to pass the time. They, as well as those who want to supplement their state pension, may make all the difference as to whether the village shop can stay open or have to close down. I well remember the example that my noble friend gave on Second Reading of such a case. They may be the means of enabling the local newsagent to continue with the delivery service and thus be able to compete with the big chains.

An unacceptable anomaly is created by the Government's refusal to exempt pensioners from the minimum wage. Pensioners do not pay employees' national insurance contributions. A pensioner will therefore be between 8 and 9 per cent. better off than a person below pensionable age doing the same work for the same wage. Is it not odd that a pensioner should have a higher take-home wage than his colleague working for the same employer? Similarly, in cases where an employer has a pension scheme, an employee over the age of 65 will not be able to join it. That will save the employer from making contributions, and also the employee, thus increasing his take-home pay still further.

The amendment will help to rescue from the margins of employment many of those who are currently unemployed solely on account of their age. The Government, albeit reluctantly, have given themselves flexibility to exempt the under-26 year-olds. I am at a complete loss to understand why they should be discriminating against older workers who are presumably old enough and wise enough to know whether it is worth their while taking a job or whether they are being exploited. The amendment seeks to end the inflexibility which has characterised the Government's approach to this Bill.

The last amendment in the group would exclude trainees on a recognised training programme from the national minimum wage. That is Amendment No. 5. There is a vast variety of training arrangements ranging from day release, instruction at the employee's place of work, study leave and so on. The Government have not only said that their priority is education, education and education, but in numerous policy statements and ministerial speeches, as well as those delivered before the election, they have stressed continually the need for a trained, skilled workforce. We entirely share that view.

What we find surprising in a party which also claims that it keeps its electoral promises is that it is placing a positive obstacle in the way of the unskilled improving their skills. It must be a disincentive, even to the most enthusiastic employer, not only to have to incur the disruption of giving a trainee time off work and/or to spend time giving him on-the-job-training but also to have to pay him a larger wage than his existing capabilities command.

The training of a new employee is not only an expense and a burden on the employer; it is a positive benefit to the employee and will later, one day, one hopes, result in enhanced earning capacity for the employee. In other words, paid training, albeit at a wage lower than the national minimum wage, is an investment being made by both sides. There must be a strong commitment to training on both sides and, indeed, by the unions as well. As my honourable friend the Member for Daventry pointed out in Committee in the other place, there are a number of cogent reasons why there should be an exemption in respect of trainees.

First, it is simply a matter of equity. There could be occasions when a skilled person and a trainee are working side by side. There is no reason why the skilled employee and the trainee should be subject to the same minimum wage. Of course, this is a matter of differentials which the party opposite fully understands.

But, secondly, there is the matter of incentives. Employers should be encouraged to provide training and the Government should be encouraged to live up to their rhetoric for training. Why should an employer take on a trainee with all the commitment that that entails when, for the same money, he may employ someone already possessing the necessary qualifications and experience? It must be economically better for an employer to take on someone who has already been trained, presumably at someone else's expense, rather than incur the commitment of training a raw recruit.

Then there is the matter of consistency. On the one hand, the Government are proposing, under their welfare to work scheme, to give employers incentives in the form of subsidies to take on new trainees. Yet here in this Bill they will impose disincentives by requiring those same employers to pay over the market rate for those same trainees.

In the other place on 28th July, the Secretary of State said:

"The national minimum wage will be introduced sensibly and will take account of the needs of young trainees and not penalise occupational training activity".

It is not only the CBI which supports the idea of different rates of pay for trainees and escalating rates of pay as an incentive as that training progresses. The GMB also says that there is a case for a lower training rate. The TUC itself stated:

"There is a case for trainees of any age to be entitled to a percentage of the full minimum wage while they attain the full level of competency required to undertake the full range of duties. However, this partial exemption must be properly regulated to prevent abuse".

We certainly agree with that.

We agree with the CBI, the GMB and the TUC on that point. We agree also with what the Secretary of State said in the other place. What is surprising is that the Government do not agree at least with the evidence of the unions and the TUC. What is even more surprising is that the Secretary of State no longer agrees with herself and what she said just 10 months ago. Why has she departed from her previous reasonable attitude and adopted the inflexible doctrine of universality?

There is then the aspect of ageism which I mentioned earlier. Why are the Government discriminating against older workers? They are giving themselves the option with no assurance at all that they will exercise it to provide exemptions for those under the age of 26. In view of the Secretary of State's apparent aversion to exemptions, I am by no means convinced that it is more than window dressing or that she will bring the provision into effect, at least in the foreseeable future. I say that because she could make it an immediate exemption, if she so wished, in the same way as share fishermen and the Armed Forces have already been exempted.

Be that as it may, older trainees need consideration as well and their potential employers need incentives. With many traditional jobs disappearing, the previous government encouraged retraining schemes. The mining and steel industries are cases in point. I do not suggest that the present Government are any less committed to the retraining of those who, for some reason or other, have become redundant—and what an ugly word "redundant" is. However, it is inconsistent and wrong for the Government to place that obstacle in their way simply for what appears to us to be nothing but the doctrinaire concept of universality. That doctrine is evidenced by the title that the Government have chosen to give the Bill; that is, the National Minimum Wage Bill.

In Committee in the other place, the Minister of State claimed that Clauses 3 and 4,

"give the Government maximum flexibility to take into account the Low Pay Commission's recommendations".

With all due respect, they most certainly do not. Clauses 3(3) and 4(2) are hedged around with the most severe limitations. It so happens that I hope to assist the Government to simplify the whole matter with the amendment that I shall propose to Clause 2 later. Therefore, I shall not take up the time of the Committee any further at this stage.

The object of the amendment is to stop the Bill moving in the wrong direction by making it more difficult for employers to take on genuine trainees of whatever age. I beg to move.

I should like to ask the Minister one question. Before doing so and speaking generally on training, I have always believed that the minimum wage is just that—a minimum wage—and that everyone employed should be entitled to it. Once people are trained, they should move on to higher rates of remuneration. Therefore, I do not quite support what the noble Baroness said. Indeed, in all the industries where I have been employed, we have tended to take the view that you take people on at the specific rate, you train them, and thereafter you receive the value of the training. In a later amendment we seek to reduce the age from 26 to 18, very much on that principle. It is in that regard that I should like to ask my question.

Colleges place people with businesses for work experience. Those people should be, although sometimes they are not, completely supplementary to the workforce. The employer takes them on specifically because of the co-operation that exists with the college in order to give work placement experience. In the hotel and catering industry, during a three-year degree course, students will typically spend six months on a practical experience split over several departments. In that circumstance they are not required by the business. I am fearful that if provision is not made, there will be a disincentive for employers to offer places to colleges. I am not sure whether that situation is covered later in the Bill. I should be grateful for the Minister's comments.

The noble Viscount, Lord Thurso, is perhaps too young to remember that there was a time not very long ago when student nurses, trainee accountants and so on, far from receiving a minimum wage, had to pay something towards their training.

The noble Baroness has made out an excellent case for all three of her amendments. I wish to comment in particular on Amendment No. 4. It was mentioned that exemption has already been made for the under-26 age group. That group already receives concessions on rail travel, both here and on the Continent. The over-65s receive many more concessions—free prescriptions, subsidised rail travel, and free bus, Underground and suburban rail travel—as well as a state pension and, in most cases, an occupational pension. Why on earth should they not be allowed to work for a lowish wage for fun, as it were, or just to keep their hand in or to give them contact with other people, if that is what they wish?

7.30 p.m.

I should like to speak to Amendment No. 5. I shall give the Committee a specific example of something that happened to me. When I left the sea with, I am glad to say, a master's certificate in my pocket, I wanted to get into another industry; namely, the manufacture of wire and wire ropes. It was arranged for me to go to America to learn that trade in a firm which was very friendly with a firm in Scotland. I went over there and worked in every department of the firm for about nine months, which enabled me to receive a thorough grounding in the trade. However, that was on the very clear understanding that I received no wages whatever. In fact, I was warned that if I did receive any wages it would very much upset the wire-drawers union and that I would also be in quite serious trouble with the US income tax authorities.

I have given the Committee that specific example, but a similar sort of case arose a while ago. I am now a farmer. The son of a very good friend of mine wanted to gain experience of farming on other farms and came to my farm to learn. He lived with me and my family but, again, for various tax reasons, he was paid not a single penny. In that respect, I feel that those people who want to receive a proper training could find themselves in difficulties under the provisions of this Bill.

I rise to offer a few additional comments on Amendment No. 3, which relates to the age of 17, or the compulsory school-leaving age. The Minister will be aware from previous exchanges that one of the matters that I believe that this Chamber ought legitimately to be exploring at this stage is the interrelationship between those pieces of legislation, which, even after constitutional change affecting the rest of the UK, will remain within the purview of this Parliament. It is absolutely clear that the issue of employment law generally—and certainly the national minimum wage—will remain within the purview of the Westminster Parliament.

However, as Clause 55(4) makes clear:
"For the purposes of this Act, a person ceases to be of compulsory school age in Scotland when he ceases to be of school age in accordance with sections 31 and 33 of the England (Scotland) Act 1980".
As I understand such matters, following on from Royal Assent and the establishment of the Scottish parliament, it is proposed that that 1980 Act is one which it would be for the Scottish parliament to amend, if it so desired. I want to be absolutely clear about that point. The difficulty lies in the relationship between devolved matters, such as education, and matters of employment, such as the national minimum wage. If the Scottish parliament were significantly to alter the school-leaving age, that would carry with it the potential for a significant change as regards those to whom the national minimum wage would apply.

I would be grateful if the Minister could confirm whether that is the case. If the Scottish parliament were to change the provisions within the 1980 Act from, let us say, the age of 16 to the age of 18, would it mean that no one in Scotland would come within the national minimum wage until he or she reached the age of 18? Alternatively, is this one of those rather grey areas where the purpose of the reserved matter is effectively being defeated and where accordingly, in such circumstances, there is the potential for an override of what the Scottish parliament would do?

My understanding is that there is such a risk attached. If that is the case, then, for the purpose of clarity and indeed for the purpose of uniformity, across the United Kingdom, which my noble friend highlighted, perhaps I may suggest to the Minister that a preferable way to deal with the matter would be to do so within employment law to establish a single age. It would mean that the age limit would not suffer the risk of fluctuation in different parts of the UK and would, within employment law, be applied uniformly across the country. For that reason, at least part of Amendment No. 3 would seem to me to have a value as regards securing such uniformity.

This has been a somewhat long debate thus far. The remarkable and astonishing fact that has emerged from it is the revelation by the noble Baroness that she is approaching the age of 65. Indeed, I cannot believe it. I thought that she was about 33, but there we are. I have no doubt that the noble Baroness will continue with the undiminished vigour to which she referred.

In essence, the minimum wage will apply when a person has left school. The amendment would include on the face of the Bill a much more rigid situation—that is to say, a starting point of 17 years—from which entitlement to the national minimum wage would start. In replying to this series of amendments, it is important for me to point out the need to distinguish between the primary legislation and how it is framed and the flexibility which the Bill provides under secondary legislation, especially under Clause 3.

As far as concerns the Bill's framing, I suggest that the most logical place to draw a line for eligibility in principle for the minimum wage is as set out in the Bill; that is to say, at the age when a person no longer has to attend school and may enter full-time work. Therefore, on that basis, there is a clear dividing line between the world of education and the world of work for the purposes of the Bill.

However, there is a difference between the framing of the Bill and how it is to be implemented in detail. Here I refer to the power available to apply exemption or a different rate to those under the age of 26, and to the Government's particular request to the Low Pay Commission to consider whether, and if so how, that power might be used. It is true that there was a considerable amount of discussion in the other place about the possible consequences as regards the variation of ages in England, Wales, Scotland and Northern Ireland at which young people can leave school; and that, under the Bill as drafted, this would introduce an unfairness in entitlement to the national minimum wage.

If there were anomalies, I submit that they would arise as a result of the different education systems in the United Kingdom. They would have nothing to do with the minimum wage as such. In practice, I do not believe that such anomalies would amount to very much. However, even if they did, there is no need to change the primary legislation as suggested by the amendment. Instead, we could simply make use of the powers available under Clause 3 to set the entitlement according to a strict age limit rather than school-leaving status. We shall certainly be consulting when we come to frame the draft regulations in this regard. Therefore, when Parliament comes to consider those issues, noble Lords will be able to embark upon a full debate on age exemptions. I submit that the amendment is unnecessary.

I turn now to the point made by the noble Viscount, Lord Thurso. Many people on what is called work experience will not have contracts of employment or other kinds of employment contracts. Therefore they will be completely outside the scope of the Bill. Some who are engaged on work experience may be trainees or apprentices with contracts of employment. We have asked the Low Pay Commission to make recommendations on this point. We believe that Clause 4 deals with that issue. However, I am grateful to the noble Viscount for having raised that important matter.

The experiences of the noble Earl, Lord Balfour, are interesting but I am not sure that they are germane to the issues that we are considering here. In those days the situation was completely different from the position with which we are currently dealing, and will deal with when this Bill is enacted. The noble and learned Lord, Lord Fraser, raised a point which I hope I have dealt with in the remarks I have just made. I notice that he nods his head in agreement.

I turn now to Amendment No. 4 which would have the effect of removing people of pensionable age from the scope of the Bill altogether. It would take away their right to the national minimum wage. I do not know whether that was intended but in our view that is what the effect would be. Certainly I agree with the contention made by the noble Baroness that those who acquire a certain age are still able to make a contribution. I declare my interest without revealing my age, which is a very great one. As far as I can see, the amendment would remove the right to a decent minimum from workers who have retired from their main jobs but who want to supplement their pensions by working, for example, at a local shop. It would also affect those who had not retired but who continued in their original job after attaining the age of 65. Why should employers be allowed to pay less than the national minimum wage to those older workers who have gained a lifetime of skills and expertise and who can still be of great benefit to firms for whom they work? Many pensioners would be excluded by this amendment. Our calculation is about 272,000 men over 65 and 504,000 women over 60 are in work.

The amendment would not only deprive those aged 65 and over of the right to a decent wage, but it would also encourage job substitution. That point was not taken up by the noble Baroness. I refer to the replacement of younger workers by older workers. That is not the outcome that we intend to produce under the Bill. The Committee will be aware that Clause 3 provides for a single exception on grounds of age for young people below 26. There are complex issues involved here. That is why we have asked the Low Pay Commission to look at the position of young people and to make recommendations. However, the issues are different as regards those aged 65 and over. Many will have retired from their main job but others will still continue in their main job. Whatever the case, they still have skill and expertise to offer. They deserve the rate for the job, and the rate for the job should be at least the national minimum wage. We do not need to provide for different treatment of those aged 65 and over. I hope that the noble Baroness will withdraw her amendment.

Amendment No. 5 effectively addresses the issue of how we should deal with people who are in training, or, more particularly, workers who are working only as part of a recognised training programme. The amendment would have the effect of removing entitlement to the minimum wage from people within this classification. We want a well trained, adaptable, motivated workforce. Certainly rapid staff turnover is not something that we aim at. We do not want employers to lose the incentive to offer training. We asked the Low Pay Commission to consider particularly the position of young people, many of whom will be learning a job and will be willing to undergo training to improve their opportunities. That is to be encouraged. It is not something that we would wish to discourage.

The commission was also given the task of considering and recommending a different rate for trainees. Clauses 3 and 4 of the Bill have made provision to enable the Government to respond—if we agree—to any recommendations which are made by the commission in this area. I think it is right to frame the primary legislation in the way that we did. These situations can then he adjusted by the secondary legislation which, I repeat, Parliament will have a full opportunity to consider. The amendment would provide a great deal of unnecessary detail on the face of the Bill which would be unhelpful.

Perhaps this is a suitable moment for me to make my next point as it applies to much else in the Bill. We intend to consult by circulating draft regulations covering the regulations which the commission proposed on these issues, and no doubt on others. They will be subject to affirmative resolution.

In more technical terms it could be said that the amendment would go too far because it would take the trainees in question outside the entitlement to the national minimum wage altogether, whether that is the standard rate or, if that is decided, a modified rate. I believe that would give entirely the wrong message to employers and workers. After all, trainees are an important part of the workforce. Their training will make them more valuable to a company and will have a great effect on their future working lives. For all those reasons I hope that the noble Baroness will withdraw the amendment.

7.45 p.m.

Before the noble Lord sits down, I point out that in the example I gave I tried to illustrate that for various reasons I was not allowed to earn any money at that time. I think particularly of a student who comes to this country and who wants to study textiles but for technical reasons he is not allowed to earn money in this country. That is exactly what happened to me. We are now in the common market but during the period to which I referred a Dutch student could have got into trouble if he had earned money and then crossed borders.

If we brought that situation into the current considerations, there would need to be an examination of the contractual relationship that exists in the circumstances. I cannot respond to a hypothetical instance of that kind because all kinds of considerations would be brought into play. I see that the noble Earl agrees.

Before my noble friend decides what to do with the amendment, the noble Lord correctly recorded that I nodded as he provided me with an answer. I certainly now understand the route to an answer which he has offered me in terms of regulations under Clause 3. However, I think the noble Lord will recognise that I do not readily accept that such a route to achieve an answer by way of regulation is necessarily desirable.

I have listened carefully to what the Minister has said. As regards Amendment No. 3, there is another point I can make with regard to the Low Pay Commission. If the rumours are correct, and if people under 17 were exempted, it would not matter whether the age limit was school-leaving age or 17. However, that is another issue.

I was interested to hear the Minister's remarks in relation to Amendment No. 4. He made no mention of the position of pensioners; namely, that they would not pay national insurance and would therefore be 8 per cent. better off anyway. So a pensioner might want only a small job helping out at a corner shop and would perhaps find great difficulty.

I now turn to the question of training raised in Amendment No. 5. The Minister referred to Clause 3, which relates to the under-26s. There are many people over 26 who change careers and who need training. However, having made those comments, I shall reflect carefully on the matter. I believe that these points are fundamental and we may wish to return to them. However, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[ Amendments Nos. 4 and 5 not moved.]

I beg to move that the House do now resume. In doing so I suggest that the Committee stage begin again not before ten minutes to nine.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

Royal Assent

My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

  • Petroleum Act,
  • Audit Commission Act,
  • Community Care (Residential Accommodation) Act,
  • Late Payment of Commercial Debts (Interest) Act,
  • European Communities (Amendment) Act.

Tamar Bridge Bill

7.52 p.m.

My Lords, I beg to move that this Bill be now read a second time.

I hope that some noble Lords will know of the Tamar bridge, a graceful suspension bridge which links the city of Plymouth and south-west Devon with Saltash and Cornwall. Beside it runs the older, historic railway bridge built by Brunel. This bridge is the main road link in that part of the country and, as such, is of very great importance to the local population, who rely on it to get them from one side to the other. The bridge is looked after by a joint committee composed of representatives from Plymouth City Council and the Cornwall county council. It is they who are promoting this Private Bill.

I see the purpose of the Bill as threefold. First, it is necessary to strengthen the bridge. That is of the greatest practical importance. It has taken a lot of traffic, much more than could have been anticipated when it was opened in 1961. Furthermore, the regulations relating to standards have quite properly been increased. And we have the prospect, after a decision taken some eight or nine years ago, of lorries of 40 tonnes being permitted to run on the roads of this country. Therefore, it is essential to strengthen the bridge. If that does not happen, the restrictions on the bridge for traffic will be very great indeed.

The committee looked at the various engineering options. It decided that the best method was to replace the concrete deck over which the roadway itself goes with a steel deck. That is not the cheapest option, but is considered by far the most satisfactory from an engineering point of view and in terms of future maintenance. If it were to be replaced by concrete, as it is at present, we could expect in another 20 years, or possibly less, a further major repair job, with all the inconvenience that that causes, and so on every 20-odd years. With a steel deck—and I asked particularly about this—one could expect a life of 120 years plus. All it would require by way of maintenance would be painting from time to time. So that seems a very good option.

The second purpose is to widen the bridge by building two cantilevers, one on the north side and one on the south side. I should perhaps explain carefully why that was thought to be a wise move. The bridge currently carries three lanes which operate on a tidal principle, so that there are always two lanes operating when the traffic is flowing strongly in a particular direction. That would continue. However, the cantilever lane on the north side would take the local traffic which currently joins the bridge in a very awkward and at times quite dangerous way. There are a number of accidents. Instead, it would kept quite separate from the main flow over the bridge. As a bonus, it is intended that buses should have priority on that local lane. Bearing in mind the increased interest in public transport as opposed to private cars, I am sure noble Lords will agree that that is a wise move.

The cantilever on the south side of the bridge will be solely for pedestrians and cyclists. At present, cyclists find it quite tricky and dangerous, because they are mingling with heavy vehicular traffic. They tend to use the footways that are intended for pedestrians, which leads to undesirable disputes and difficulties. With this arrangement, they will have their own paths and cycleways, quite separate from the rest of the traffic and from each other. I am sure noble Lords will agree that that, too, is a good and wise move when we are trying to encourage people not to use their cars.

I can tell the House from my own experience that the traffic that comes in locally, and at present joins in, can be very trying indeed. Only last Friday I came back from Liskeard to Plymouth and saw the full force of the flow of local traffic blending in rather unhappily with the main through traffic. I therefore believe that this widening of the bridge will be a very good move.

There is a third purpose. It is a financial one. Currently, the tolls that are used to maintain the bridge can be used only for the purposes of the bridge itself. Under Clause 31 of the Bill, it is intended that wider powers will be taken to enable the joint committee to aid good traffic management schemes on the bridge and beyond it. One particular item that it has in mind to support is a park-and-ride scheme on the Cornwall side of the bridge. That will be of great value in trying to prevent too much road traffic going over into Plymouth. The point has been reached at which the committee has said it will allow £300,000 to be set aside to help with the construction of such a park-and-ride facility. The promoters themselves are not in a position to guarantee dates as to when that might happen because there are factors that are totally beyond their control. However, there is already a site which looks likely, and there could be others if that one falls through.

I know that both Cornwall county council and Plymouth City Council are very keen on a park-and-ride scheme. It already features in the Plymouth transportation package, which also has the support of other local authorities. That would add greatly to the traffic management that we all want to see in every part of the country. It would be particularly useful in this instance.

I should add that extensive consultations have taken place, both with the local authorities involved and with the general population. The scheme has been widely supported. I believe that the promoters have been very forward-looking in seeking not only to strengthen the bridge but to make it more useful in traffic management terms. They are seeking to promote the use of transport other than cars by giving priority to buses, by giving greater encouragement to pedestrians and cyclists and by their financial support, if the Bill goes through, for a park-and-ride scheme. I therefore hope that your Lordships' will feel that this Private Bill is worthy of support. I was discussing it the other night with a colleague in the other place, the Member for Salisbury. He told me that in 1961, when the bridge was opened, his father, then Bishop of Truro, blessed the bridge. I hope tonight for your Lordships' blessing upon this Bill.

Moved, That the Bill be now read a second time.—( Baroness Fookes.)

8 p.m.

My Lords, I rise to speak about the Bill in general terms and, for the convenience of the House, to speak to the Motion standing in my name on the Order Paper, which seeks to ensure that, if a Select Committee of this House is appointed to hear the one petition, it will take into account an alternative and cheaper way of strengthening the bridge, which I shall discuss briefly.

Noble Lords may wonder why I should speak on the Bill at all. I have no known connections with the south-west. I am a civil engineer and I am keen on public transport. My interest stems from discussions I had with the petitioner, the Transport 2000 Plymouth group, which caused me to look at the provisions of the Bill and seek to relate them as a local issue to present government transport policy and, in particular, to the Road Traffic Reduction Act and the more general exhortation to reduce emissions. The noble Baroness, Lady Fookes, eloquently outlined the local issues, and I congratulate her on her very clear exposition of the objectives of the Bill.

As the noble Baroness told us, the Bill seeks powers to strengthen the bridge. I support that objective, and I commend the promoters on deciding on a steel deck as opposed to a concrete one, which I sure was an excellent decision. I have a few questions with regard to the widening of the bridge from its present three lanes to five lanes, four of which would be in use initially. It is good to hear that one would be a bus priority lane. The fifth lane would be a cycle path and footpath.

I am sure that the promoters are clear about what they want to do. However, with this design, there is nothing to stop someone saying, in a generation or two: "Let us have five lanes. All we have to do is put a different colour paint on the road and the bridge will take the heaviest lorry traffic". I have some concern about that, which I shall come to later.

I had the pleasure of meeting the promoters and the petitioner, and I am grateful to them for the information that they gave me. The first point to discuss is the traffic on this bridge. As the noble Baroness said, it is tidal-flow traffic. I understand that something like 75 per cent. or 80 per cent. is commuter traffic into Plymouth. Therefore, although this is a trunk road, not much of the traffic is long-distance traffic.

I understand that the promoters believe that the strengthening can be done only by adding lanes on the outside first and then closing the middle three lanes for reconstruction. A cynic would say that that was wonderful; they kept the traffic going during construction, which is very important, and increased the traffic capacity across the bridge by, say, 50 per cent. at a stroke, depending on the lane directions used.

I am sure that the intention to keep the traffic going is perfectly laudable. However, having heard the costs of what one might call the two options, I have to query it. I am informed by the promoters that, if they were able to strengthen just the middle three lanes of the bridge, the cost would be about £10 million, whereas the cost of adding the side lanes as well will be somewhere between £25 million and £31 million. My first question is therefore: can the traffic be kept moving during construction without adding lanes on the outside at an additional cost of about £20 million?

I believe there are two possible options, and maybe the promoters have looked at them. I believe that, with modern construction techniques, it would be possible to keep one lane operational in the centre of the bridge and carry out work on the other half of the bridge. That would allow reasonable safe construction space for the workforce. It would, of course, require traffic lights for one-way working, but, sadly or not, that is quite common on trunk roads today. We are not talking of traffic lights over a bridge as long as the Severn Bridge. The Tamar Bridge is quite short compared with many other bridges. I believe that that could be done safely and at a cost considerably less than the cost of what is proposed in the Bill.

An alternative would be to divert some of the traffic across the ferry. I believe that the promoters intend to buy some new ferries to increase the capacity, which would help mitigate the effects.

I am not persuaded that spending an extra £20 million pounds to keep one lane open for, say, two years is justified simply to keep commuter traffic moving. In addition, I wonder whether that complies with the Government's current transport policy. There is a similar example closer to home on the A.40 Western Avenue. It was planned by the previous government to widen that road and to build flyovers, but this Government cancelled that project soon after coming into office. I regard that as a similar problem. It is a piece of road which it might have been good to widen. The scheme involved the demolition of a large number of houses. However, the Government decided not to do it.

Does the project comply with the draft guidance to local traffic authorities on the Road Traffic Reduction Act 1997? That is not the Bill we were discussing last week, but the Act, which refers to local authorities. I refer to the draft guidance published for consultation by the Department of the Environment, Transport and the Regions, on which comments had to be in by 20th April. The guidance suggests that the first plans for all authorities must be submitted by July 1999. All local authorities have about a year to do this, if it is accepted. The guidance requires local traffic authorities to produce a report containing an assessment of existing levels of traffic and a forecast of expected growth. It should also contain targets for reducing the level of local road traffic; and, if the authorities cannot produce such targets, they must give reasons. The guidance continues:
"The Government will, of course, want to satisfy itself that authorities are giving proper regard to their obligations under the Act, and to this guidance".
Where the capacity of the bridge is increased by 50 per cent., I find it difficult to see how these local authorities will comply with this guidance. We shall have to wait and see.

I now come to the park-and-ride scheme, with which I believe there are two problems. It was good to hear what the noble Baroness said about the promoters' intentions and wishes and the constraints that they are under. One problem is the permissions and the other is finance. It is good to hear that Plymouth already has a successful park-and-ride scheme at the other end of the town.

Turning to finance, there cannot be any excuse that money cannot be found from local authorities in the area. When £31 million is available for widening the bridge, if that cost were reduced to £10 million, there must be some left for a park-and-ride scheme. I know that the same authority is not involved, and I know it is difficult, but I am sure a solution could be found. There are probably precedents in many other parts of the country. I know that at the moment they do not have provision to provide the money, and the agent for the promoters made that quite clear to me in a copy of a letter. Nevertheless, the two promoters are transport authorities. If they had pursued the park-and-ride scheme in the early days with the same commitment that they have now and with which they pursued the bridge, we might well have been a bit further on.

The second comment applies to the permission for the park-and-ride. That is a separate issue because I gather that the two authorities are not the planning authorities. Again, if there is a delay with a public inquiry—as seems likely—on their preferred site, I suggest that they look for a temporary site for however long the inquiry is likely to take. If they cannot get to this stage with a park-and-ride scheme, the argument against widening is extremely strong. I believe that they should bring in the park-and-ride scheme at an early stage, even if they merely strengthen the bridge without widening it.

The promoters have a year and a bit to go before they have to submit proposals for reducing traffic and emissions. I shall be interested to see—I am sure that the Minister will be equally interested—what happens and whether they are able to follow the guidance. Page 16 states:
"submit 6 copies — by 31 July,"
which will then be made public. It will be an extremely interesting document.

I conclude by again congratulating the noble Baroness on her explanation of the Bill in relation to how the promoters intend to go forward. I hope that the promoters will consider carefully the points I made and that the Select Committee, when appointed by the House, will accept the instruction in my name. I have no wish to stop the Bill proceeding, the Select Committee from going ahead or the construction going forward in some shape or form. The strengthening is absolutely essential. However, I hope that some of my remarks are taken into consideration in the ongoing discussion.

8.11 p.m.

My Lords, my noble friend Lord Berkeley has drawn attention to various matters so effectively that he has stolen my thunder. I shall, therefore, only rumble gently.

The petitioners against this Bill are seeking two objectives. The first is that a park-and-ride facility be established that operates within certain constraints. The second is that there should be a safe footway across the bridge at all times during construction—and I am led to understand that the promoters of the Bill have agreed to providing a minibus service in lieu of the footpath.

I cannot see anything unreasonable in either of those objectives. After all, as your Lordships know, the vast majority of traffic currently using the bridge is commuter traffic. If the bridge is comparatively empty outside rush hours, what is the reason for widening it? If the widening is being done to attract more traffic to Plymouth, then that is contrary to this, and the previous, Government's policy. It seems to me that the only effect would be for traffic jams to build up more rapidly in Plymouth during peak periods due to the funnel effect. However, if, as the petitioners seek, a park-and-ride scheme is put into operation, at reasonable cost, that will not only reduce traffic levels and congestion in the city, it will also obviate the necessity—in the eyes of the Cornwall County Council and the Plymouth City Council—to widen the bridge.

I can understand the need to strengthen the bridge to take the new lorry weight limit but, when bearing in mind government policy, I fail to see why the bridge should be widened in order to, in effect, create more traffic and traffic related chaos in Plymouth—and at a very much larger cost than that required for strengthening alone. There will, without doubt, be traffic congestion during construction or strengthening work and, to me, it makes sense for a park-and-ride scheme to operate, thereby greatly increasing vehicle occupancy during peak periods and reducing the number of vehicles crossing the bridge. And if commuter traffic was reduced by the effect of a successful park-and-ride scheme, this would allow the A.38 traffic to continue without undue hindrance.

As I mentioned, I am convinced of the need to strengthen the bridge, but I am not convinced of the need to widen it.

8.14 p.m.

Baroness Fookes