asked Her Majesty's Government:

Whether they consider that the three Baltic states are former Soviet Union states as is now claimed by the Russian Government.

My Lords, the United Kingdom Government never recognised de jure the annexation of the Baltic states in 1940, although de facto they were a part of the Soviet Union from 1940 until 1991. We welcomed the restoration of the independence of Estonia, Latvia and Lithuania in 1991 and considered them to be sovereign European states.

My Lords, I thank the noble Baroness for her unambivalent and unambiguous reply. It will give great comfort to all 5 million people living in the Baltic states, whatever their ethnic origin. During the interim period before the states are brought into the Western institutions, will Her Majesty's Government use their influence with their NATO allies to see in what way they can enhance the security of the states? I ask Her Majesty's Government not to leave the United States of America to take the lead in this most important task.

My Lords, Her Majesty's Government will certainly use what influence they have to ensure the security of the Baltic states. As the noble Earl knows, we already spend a great deal of money on the security of the Baltic states. At the Madrid Summit, NATO repeated its pledge that the door will remain open to further enlargement. Article 10 of the Washington Treaty states that the allies may, by unanimous agreement, decide to invite to join NATO any European country in a position to further NATO's principles and contribute to the security of the North Atlantic area.

My Lords, what help is being given by the Foreign and Commonwealth Office and what additional help will the Minister consider giving to the three Baltic states to build up their civil society, without which they will be prey to many of the people still interested in their future who now reside in Russia?

My Lords, the Baltic states are increasingly important partners to the United Kingdom both politically and commercially. Indeed, in 1996 United Kingdom exports to the Baltic states were £218 million—an increase of 83 per cent. on the previous year. Imports, at £606 million, rose by 33 per cent. on the previous year. In addition, the know-how fund has played an important role in the transition of the Baltic states and £7.3 million has been spent since the restoration of independence. The UK share of the EU PHARE spending is 16 per cent., £100 million being spent in 1995. The PHARE spending is, of course, the EU technical assistance programme.

My Lords, if the three states, as they obtain independence, are absorbed into NATO and NATO arms are stored there, will it not be the case that increasingly the view will be held in Russia that that is a threat and not an act of friendship?

My Lords, there is no question of Russia having a veto over the rights of the Baltic states, or any other European country, to join NATO. The right of states to choose the means to ensure their own security was acknowledged in the NATO Russian Founding Act.

My Lords, is it correct that people of Russian origin living in the Baltic states are deprived of the ability to stand for election and to vote in elections in those countries? What steps are the Government taking to ensure that all people living in those states are accorded the human right of standing for election and voting in elections?

My Lords, the Government are indeed concerned that all minorities should enjoy full civic rights. But we welcome the progress made by Estonia in addressing the concerns of the Russian minorities. The OSCE and Council of Europe have confirmed that the allegations that were made in some parts of Russia of massive human rights abuses are unfounded. We look forward to further progress on that issue. The OSCE mission in Estonia and the OSCE High Commissioner for Minorities is doing very valuable work in monitoring the treatment of the minorities in Estonia. Her Majesty's Government wish that valuable work to continue.

My Lords, what is the Government's reaction to the statement by Mr. Chernomyrdin last week that Russia wishes to join the European Union?

My Lords, I believe that there are a number of countries which have said that they wish to join the European Union. It is interesting if they embrace the Russian Government also. I am sure that in due course the United Kingdom Government will give their view on that matter.

My Lords, will the Government confirm that they support the Baltic battalion for peace-keeping purposes and will they confirm their commitment to that within the Strategic Defence Review?

My Lords, I am able to confirm the Government's commitment to the BaltBat arrangements.

asked Her Majesty's Government:

Whether they are satisfied with the arrangements being made by the BBC for the future of the World Service.

My Lords, we are monitoring the situation closely. As I believe the noble Lord is aware, the joint FCO-BBC World Service working group will reconvene in the autumn of this year to determine whether the measures it agreed last year to ensure the continued protection of World Service interests and the maintenance of its special character, style and ethos are functioning satisfactorily.

My Lords, I thank the Minister for that reply. Can she give an assurance that the views of a very distinguished media journalist and three former managing directors of the World Service which have recently appeared in the press will be taken fully into account when the working party prepares its report? In that context, what arrangements are being made to ensure that the grant-in-aid which the Foreign Office gives to the World Service is kept separate from the BBC's revenue through licence fees so that there is no danger or even possibility of cross-financing?

My Lords, I think we are all aware of some of the criticisms and worries that have arisen. I assure the noble Lord that all strands of argument about the World Service are being taken into account. As I said in my original Answer, we shall be looking at the 20 measures in concert with the committee of experts which is to reconvene in the autumn—I expect that it will be in October although no date has yet been set—to review the important points raised. On the noble Lord's second question, I can assure him that as far as I am aware there is no suggestion at all of the two sources of finance being brought together.

My Lords, it does seem rather odd that the three previous managing directors, who did so much to establish the success of the World Service, should have their opinions disregarded. Is the noble Baroness aware that there is a widespread fear, to which the director general of the BBC seems immune, that the quality of that service is in danger of being somehow swallowed up in the general digestive system of the corporation as a whole?

My Lords, of course I am aware of the particular criticism that was made. As I believe is widely known, the Foreign and Commonwealth Office was not consulted in advance and was given only 24 hours' notice of the reorganisation proposals announced on 6th June last year. Following the widespread criticisms to which the noble Lord refers, the joint FCO-BBC working party was set up to meet those points. It is only since April of this year that the reorganisation has been functioning and we believe that we should leave it a little longer—until the autumn of this year—before coming to any decisions. We should remember that the BBC World Service remains the most popular such service in the world. It is pre-eminent among international broadcasters. Indeed, it is twice the size, and growing, of its nearest competitor, the Voice of America.

My Lords, that being so, will my noble friend give the House an undertaking that notwithstanding any emanations which come from the director general of the BBC on this matter the Government will ensure that the service remains intact and as efficient as she described it?

My Lords, of course Her Majesty's Government wish to see the BBC World Service remain intact and listened to as widely as it is at present. Indeed, we wish to see the World Service grow and prosper. We are spending a great deal of money on it. Its audience is at a record figure of 143 million people throughout the world and, as I said, increasing.

My Lords, can the noble Baroness give an assurance about the grant-in-aid mentioned by the noble Lord, Lord Chalfont? Will it continue at a level which enables the World Service to plan ahead adequately bearing in mind the developing nature of technology in this area?

My Lords, I hope that I can give such an assurance. Of course, there are a number of different unknowns at the moment. I have referred to the review to take place later this year. The expansion in digital broadcasting must also be taken into account. But, as the House is aware, the Government are currently undertaking a comprehensive spending review of all government departments. That also affects the FCO. I am sure that that will have to be taken into account in assessing the future needs of the World Service. I assure your Lordships that this Government are fully seized of the importance of the World Service and its importance to people throughout the world as the voice of this country.

My Lords, can my noble friend the Minister reassure the House on the question of standards? Is there any danger that the World Service will follow Radio 4 in "dumbing down", which, I believe, is the correct technical term? Will the Government ensure that that does not happen to the World Service? The rest of the world at least needs to know that we try to maintain some standards in this country?

My Lords, I expect noble Lords throughout the House will have their own views on the "dumbing down", as my noble friend puts it, of Radio 4. The 20 measures which were agreed by the previous Secretary of State at the FCO and by the chairman of the BBC are designed to safeguard,

"the special character, style, ethos and quality of the World Service."

We shall see whether the working party believes that those features have been sustained when it reconvenes in the autumn.

My Lords, can the Minister assure the House that there will be a recording of these exchanges in "Today in Parliament" or "Yesterday in Parliament" before Mr. Birt gets down to abolishing those programmes?

My Lords, unfortunately I am not able to dictate what is broadcast on Radio 4's "Yesterday in Parliament" programme. I sometimes wish I could. I usually find that such programmes feature what the broadcasters consider to be particularly exciting or funny exchanges in this House which do not necessarily reflect the merits of the argument. If the latter were to prevail, I am sure that we would hear a great deal about this issue tomorrow.

My Lords, is the Minister aware—

My Lords, is my noble friend the Minister aware—

Order!

My Lords, I believe we have sufficient time to hear both the question of my noble friend Lady David and that of the noble Lord, Lord Wyatt. Perhaps my noble friend may go first.

My Lords, is my noble friend the Minister aware that Mr. Younger, who is at present in charge of the World Service, came to the Houses of Parliament last week to make himself available for questions? Indeed, a number of those who have asked questions today also put questions to Mr. Younger. I believe they received reassuring answers. I believe Mr. Younger is anxious that the funding and the freedom should continue. To judge from what my noble friend said, it seems that that will continue. Nevertheless, it would be very nice to have that reassurance.

My Lords, I am aware of that meeting. Indeed, there is a close day-to-day working relationship between the FCO and the staff of the World Service. We want that to continue and we want information to be readily available, not only to this House and to another place but also to the public.

My Lords, is the Minister aware that the reason for the World Service being so respected and valued throughout the world is that it is accurate and impartial, unlike the BBC at home which is both inaccurate and partial?

My Lords, I am not in a position to comment on the editorial policy of the BBC at home. Suffice it to say that the editorial independence of the World Service is guaranteed and will continue to be so.

asked Her Majesty's Government:

What is their policy towards private health insurance.

My Lords, private medical insurance is not a matter for government policy but of individual, personal choice. As an individual representing the Government in this House, I can say that I have complete confidence in the excellent care provided by the NHS.

My Lords, I thank the Minister for that rather short Answer. However, can she say how the first part of her answer squares with the announcements made by her right honourable friend the Secretary of State for Health that he intends to sack chairmen and non-executive directors of trusts and health authorities who have private health insurance? Further, can the Minister say how this Labour ideology leaves the 14,000 NHS doctors who have private health insurance? Are they also to be sacked and, if not, why not?

My Lords, the Government believe that those people in positions of responsibility for the governance of the health service should indeed put their faith in the health service, as I have done. The position of individual medical practitioners who are not employed by the health service may be different.

My Lords, as a former chairman of BUPA, perhaps I may ask the Minister whether she is aware—and I am sure she is—of the innumerable occasions over the years when the professionals, not the politicians, working in the NHS and the private sector have co-operated together extremely happily to the great benefit of patients in both sectors, which is an important consideration. Does the Minister agree that the Government would do well to promote similar co-operation in the future?

My Lords, I believe there has been effective co-operation between the NHS and private providers of healthcare, especially in some specialised areas such as, for example, long-term mental health problems. I believe that nothing I have said detracts from that.

My Lords, does my noble friend agree that one of the problems with private health insurance is that the companies concerned frequently cherry pick in that they actually insure those things which are most profitable for them? Secondly, will my noble friend also agree that such companies often renege on their agreements in advertising; for example, in one case BUPA is particularly misleading in suggesting that people can see the doctor of their choice when that is not actually true because it depends on the quality of the insurance?

My Lords, I thank my noble friend for drawing those problems to the attention of your Lordships. There have been particular concerns about elderly people and their problems with long-term medical conditions which, as my noble friend said, are sometimes not covered under their health insurance. They are, therefore, most worried when they find themselves afflicted with a long-term condition which is not adequately covered.

My Lords, although the Government are ideologically opposed to private health insurance, will the Minister agree that the people who take up private health insurance are relieving the responsibility on the NHS and thereby helping resources? Would it be possible for the Minister to make an estimate of how much additional funding would be required for the NHS if private health insurance were abolished? Further, can she say how much more would that mean in terms of income tax or, indeed, in terms of other financial measures such as, for example, the abolition of dividends on pension funds?

My Lords, with respect to the noble Baroness, perhaps I may, first, correct what she said at the beginning of her supplementary question; namely, that the Government are ideologically opposed to private medical insurance. As I said in my original Answer, we regard this as a matter of individual, personal choice. As to the calculation about what may or may not be the possible implications for the NHS, some rather alarming stories have been spread over the past few weeks about the impact on the NHS of, for example, removing tax relief. Of course, any additional expenditure would be dwarfed by the £1.2 billion extra given by my right honourable friend the Chancellor of the Exchequer in the Budget.

My Lords, will my noble friend agree that private healthcare has always been permissible even within the NHS? However, the fact is that the NHS is cast in the noblest mode of any party measure that has come before our Parliament; and, furthermore, our NHS is the envy of the world.

My Lords, I am very happy to endorse my noble friend's views and I accept exactly what he said.

asked Her Majesty's Government:

Whether, in view of the uncertainty about the nature of the treatment regimes followed by long-term HIV/AIDS survivors, and the importance of this information, they will fund a long-term study.

My Lords, the Medical Research Council is the main sponsor of medical research in the UK and would obviously consider proposals on their scientific merits in competition with other applications. However, the MRC has already funded research on people who, although they are HIV positive, have not, over a period of some years, gone on to develop AIDS. That research looked at lifestyle and behavioural factors. The noble Earl may be interested to know that it also included the use of complementary therapies, in addition to detailed laboratory studies. I understand that the published results of that research should be available within the next six months.

My Lords, in thanking the noble Baroness for that reply, perhaps I may also thank her for her detailed response to my letter, following my earlier Question of 19th June, which has only just arrived and which I have not had time to digest. Will the noble Baroness accept that I am not here seeking simply to bang a complementary medicine drum in attempting to follow up information which seems to suggest that patients survive by rejecting conventional treatment and embracing a wide range of alternatives?

My Lords, I understand that that is the noble Earl's view, based on a number of learned papers which he was kind enough to send to me. The Department of Health and the Medical Research Council have no evidence of long-term survival among people who have deliberately avoided conventional therapies.

My Lords, has any research been carried out into the possible increase in HIV and AIDS among practising male homosexuals if the age of homosexual consent is reduced to 16—a step which the Government apparently support?

My Lords, that has certainly not been the subject of research. As my noble friend will know, there has been an increase in HIV positive status among young homosexual men. It is a matter for speculation what change would occur if there were a change in the law.

My Lords, will the noble Baroness explain why it is proposed that people should be sodomised at the age of 16 which will obviously greatly increase the number of people with AIDS? What is the sense in that policy?

My Lords, I can respond only as I did to my noble friend Lord Stoddart. Any relationship between a change in the law on homosexual consent and potential HIV infection is at this moment simply a matter of speculation.

My Lords, does the Minister agree that drug-based approaches have got almost nowhere in the past 10 years, and that the new protease inhibitors have not yet shown any actual survival benefit? In the light of that, are we not at risk of repeating earlier errors with AZT, as shown by the recent Concorde trial? I refer the Minister to col. 628 of the Official Report of 9th July when I asked a similar question about HIV and AIDS. I asked the Minister to write to me. I hope that I shall receive an answer in due course.

My Lords, I apologise. I thought I had given the information to the noble Earl. I shall of course pursue that matter with the Department of Health. I believe that the noble Earl is somewhat incorrect in his rather pessimistic analysis of what has happened in respect of these therapies. My understanding is that data from clinical trials such as the multinational Delta trial show a relative reduction of about 30 per cent. when the combination therapies are used. Of course we are still looking at the early data on the combination therapies using three different drugs, the so-called "cocktail" drugs, which have been in use in this country only for some 18 months to two years. At the moment the results are rather optimistic.

My Lords, is it the case that no government in recorded history have ever had a complete statistical base of the number of either heterosexual or homosexual sexual acts, and that therefore the statistical base for the research requested by the noble Lord, Lord Stoddart of Swindon, does not exist?

My Lords, as always, I defer to the noble Earl in any matter of historical comparisons.

My Lords, your Lordships will have seen in the press this afternoon the assessment that each case of AIDS in London costs £10,000 and that many foreigners come here to receive treatment at our expense whereas complementary medical treatment has negligible costs in many cases. We greatly look forward to the review of the Medical Research Council. If the MRC does not persist in its research in this field will the department consider funding research directly itself? I understand that the directly funded research budget is something of the order of £30 million.

My Lords, I am grateful to the noble Lord for that suggestion. It would be sensible for us to await the outcome of the research from the Medical Research Council which, as I said in answer to the original Question, should be within a matter of months. As regards overseas visitors being treated in London, I am glad to say for the record—because I know that there has been press speculation on this matter—that trusts should charge overseas visitors for their treatment. That charge can either be made against the individual concerned or, in the case of those countries which have a reciprocal agreement with the UK, with the bodies specified in that reciprocal agreement.

My Lords, is the noble Baroness aware that patients with AIDS and tuberculosis are becoming resistant to antibiotics? How much research is being done into this dangerous, worldwide condition?

My Lords, I am afraid I cannot tell the noble Baroness exactly what is being done on a worldwide basis to look into the relationship between TB and HIV infection. I am aware that it is a matter of concern to clinicians in this country. That may well be a sensible suggestion as regards future research.

My Lords, at a convenient moment after 3.30 p.m. 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 reform of the National Lottery.

My Lords, on behalf of my noble friend Lord Clinton-Davis, I beg to move that the Bill do now pass.

My Lords, I welcome this Bill on behalf of my noble friend Lord Inglewood and the Opposition. As my noble friend said at Second Reading, we would have introduced the Bill had we won the general election. We wish it well.

My Lords, it gives me great pleasure to be allowed to take part in the debate at this stage. This is a splendid Bill. We are grateful to the Government for accepting my amendment and others and for tabling one themselves. I hope that the Bill is well received in the other place.

My Lords, I thank noble Lords for their kind words. I thank all noble Lords who have participated in this Bill for their helpful contributions. It will lead to a more efficient use and better management of the radio spectrum.

moved Amendment No. 1:

Page 1, line 5, leave out ("Her Majesty may by Order in Council") and insert ("the Secretary of State may by order").

My Lords, I am grateful to the Minister for introducing the amendment, and for taking on board the suggestions I made at Committee stage. Perhaps that negates some of the more hysterical comments we have heard about the Upper House having no business to examine legislation and make its views known. We made our views known at Committee stage. The Government accepted them, and here we are with the results. I am glad that it was a convincing argument. The noble Lord was kind enough not to point out that it was a brief argument and to draw the conclusion that the shorter the argument the more chance I have of success. I am not entirely convinced. I believe that my chance of success was hugely enhanced by the fact that the proposal I made meant that this House and another place would not have to sit until 8th August and could rise at the end of next week.

Perhaps I may ask a few questions of the Minister. My first point relates to the statutory instrument under which the Secretary of State makes the order. I presume that it is by negative procedure; otherwise the device that I have chosen so that we shall not sit into August would not work. We would have to sit in order to go through the affirmative procedure. That was the problem with the route which the Government had originally set out.

The second point is more serious in many ways. I refer to Amendments Nos. 8 and 19. When I put down the amendment to the Bill at Committee stage, I chose a rather longer time period than 11 days. I decided to make the beginning of August the cut-off point. I did so because the constituency in which I live in Glasgow has had some controversy over the question of late additions to the register during the election held on 1st May. As I understand it, those controversial points have not yet been resolved. I do not wish to go into the detail because the matter is the subject of police inquiries. No doubt a report will go, if it has not already gone, to the noble and learned Lord the Lord Advocate, who I see sitting on the Government Bench. However, I believe that a little longer is needed for the authorities to make sure that the corrections and additions to the register are justified.

The issue may well go wider than just the referendum. Parliament may well have to consider the issue after we hear the results of the investigations at Govan. My recollection is that the procedure whereby people can register long after 10th October is of fairly recent date. The period for checking the register was towards the end of a year. Those dates are long gone. As I understand it, one can register in any month of the year if one were a qualifying elector on 10th October previously. That is what caused the difficulty in the constituency of Glasgow Govan. I hope that the Minister is right in choosing 11 days ending with the date of the referendum and that we do not have controversy about additions to the register during the month of August, with people claiming that they were in residence on 10th October last.

I invite the noble Lord to tell me whether there are any checks. I fear that he will tell me that there are none. Therefore, perhaps he will agree with me that it is a matter to which we should return in greater detail at a future date when we examine the Representation of the People Act.

My Lords, perhaps I may deal briefly with the points raised by the noble Lord. I think that I can give him the assurance that the order will be subject to the negative procedure. Therefore I believe that we can all go away safely.

I have some sympathy with the general point made about the 11 days. However, I heard arguments from the Benches opposite at an earlier stage that people should be allowed to register up until the last moment. I believe that that would have created havoc as regards proper regulation of the referendum.

On all the points covered by the amendments—they will incorporate the orders into the Bill—we have very much leant on the advice that we received from the electoral officers. We have to rest on their judgment and advice at this stage.

moved Amendment No. 2:

Page 1, line 5, at end insert (", but not less than eight weeks after publication of the White Paper detailing the Government's proposals,").

My Lords, it seems to me that what the Government have done in announcing the date of the Welsh referendum in the way they have is an affront to the other place as well as to your Lordships' House. How are the Government to know that their Back-Benchers will help them to have a majority on that amendment? How are they to know that those in the other place will think that the people of Wales deserve better than to have to have their referendum on the same day? Is it better than having to wait for their referendum that they will not be able to make up their minds on the same day? It seems an extraordinary thing to do.

Surely the announcement of the date should wait until the other place has decided what it wants to do. In addition, if the Bill is returned to this House, this House could decide to stand by its amendment. The Government should wait for that. The whole referendum could then be held up for more than a year. This is a very odd way to behave and, I suggest, a new example of extraordinary arrogance on the part of the Government.

I support the amendment because eight weeks seems to be the minimum time to enable people to consider this matter. I have discussed the matter with a number of people who are either on holiday now or will be going on holiday soon and they feel that the time allowed is very short. To give satisfaction to the voters in a referendum and to achieve a satisfactory result, this length of time is essential. This is a very good amendment.

My Lords, the noble Lord, Lord Mackay of Ardbrecknish, is entirely wrong when he suggests to your Lordships that we On these Benches are smiling weakly at the different dates for the two referendums; we are smiling broadly. We are smiling broadly because it is the fulfilment of an agreement made on 5th March 1997 prior to the election and very widely publicised in Wales. That agreement said that:

"Both Parties [the Liberal Democrats and the Labour Party] agree that a short time should be allowed to lapse after the Scottish referendum in order to ensure the debate in Wales, with its distinctive form of devolution, is not overshadowed by the process in Scotland".

We subscribed to that agreement; we hold the Labour Party to their part of the agreement and we expect the Members of Parliament in the other place who were elected on that platform to reverse the decision taken in your Lordships' House. We say that the choice should be before the Welsh people when they are fully informed and have had the opportunity for mature consideration of all the issues which arise in this referendum.

My Lords, I support the amendment, although I would prefer that it went further. I would rather have a 12-week period elapse between the publication of the White Papers and the date of the referendums or referenda—I do not know what they should be called; my Latin is a little rusty.

This is a much more important matter than a general election. This referendum concerns a grave constitutional change which may well affect the future of the United Kingdom. That is more than can be said for any general election. At Committee stage the Government compared the time that would be allowed to elapse between the publication of the White Paper and the date of the referendum to the length of time which must be allowed to elapse between the announcement of the date of the general election and that election taking place, which I believe is three weeks.

I have gone back to 1900 and have ascertained that no general election since then has ever taken place in the month of August and I do not think that any have taken place in the month of September. If my memory serves me correctly, I think that the earliest date of an election in the autumn was about 24th October. Why is that? It is because people are away on holiday and do not have an opportunity to read the papers describing what is on offer and to make up their minds. Why are we being pressed on this occasion to have a referendum in the middle of the month of September? What is all the hurry about? Can the Government give me a straight answer, please?

My Lords, perhaps I could begin by answering the last question: it is partly because it was a manifesto commitment that we should have the referendums by the autumn.

I have to congratulate the noble Lord, Lord Mackay of Ardbrecknish, on managing to speak at such length and with so many different flights of fancy; I had difficulty seeing that they had anything to do with the amendment. They included a great flight of speculation about the Scottish National Party and an invitation to us to go into psychoanalysis on the motivation of people who would vote "yes". It seemed to me that the noble Lord was inviting us to reject or repel voters who would vote for the "yes, yes" campaign because we might not approve of their motivation. That is a novel way of running any kind of election or referendum.

A lot has been said about why the Government did not wait until today to announce dates for the White Papers. I understood the Benches opposite to have been demanding on previous occasions that the Government should announce the dates as soon as possible—like the day before they were speaking. Then, when the dates are announced, people say that the Government should have waited until this afternoon to announce them. I do not see the logic of that.

I quite accept from the noble Lord, Lord Mackay of Ardbrecknish, that the old days of the industrial fortnights in Scotland, when the whole of Edinburgh, Glasgow and Aberdeen closed down, may have gone. But there is still a preponderance of Scottish holiday-taking earlier than in England because of the school holidays as well as the light nights and so on. It means that the balance in Scotland is more toward July, with life getting back to normal when the schools go back in August.

The noble Lord, Lord Mackay, cannot have it both ways. He cannot say on the one hand that everything has been changed and everyone staggers their holiday and at the same time seem to imply that the whole of Scotland is on holiday for all of August. That is not the Scotland I know.

So, if everyone is not on holiday for the whole of that time, it is quite possible to have a campaign when a fair proportion of the people are there for most of August. I do believe that we should get back to basics, if I dare use those words. By that, I mean that we should focus on the amendments. I understand that there will be a period of eight weeks in Wales and seven weeks in Scotland between the White Papers and the referendums. The amendment mentions eight weeks. The only difference is one week in Scotland. I cannot understand what all the fuss is about and why the amendment was moved in the first place.

My Lords, I support the amendment. Eight weeks is an absolute minimum when such an important constitutional issue is to be considered, especially during the holiday time.

My Lords, the Opposition well might like to take into account the fact that, since polls have been taken on the attitude of the Welsh people, the numbers have been doubling. The latest poll conducted over the weekend showed that the ratio was two to one in favour of the assembly proposals. If the period extends for 10 weeks, we might wipe out the opposition, as we did in the election.

My Lords, I am a Glaswegian and I am on holiday during the fair holiday at this very moment; that is, if one can describe being in your Lordships' House as being on holiday.

Let me return to the point about timing. The true reason and explanation of why the Government will not give a decent interval between the White Paper and the vote must be perfectly plain. Despite what we have just heard about the opinion polls being apparently two-to-one, yes-to-no, at the moment, they were, I remind your Lordships, two-to-one, yes-to-no, at the beginning of the referendum campaign in 1979.

The Government have learned their lesson from that campaign, which effectively lasted for three months. They noted that the more the Scots saw of devolution, the less they liked it. The "yes" vote shrank and the "no" vote increased inexorably in the opinion polls as the campaign went on until it was virtually a dead heat on the day. So the reason why a truncated campaign period is being foisted upon us is only too obvious.

My Lords, it is always a pleasure to listen to the noble Lord, Lord Mackay of Ardbrecknish, making a fascinating series of Second Reading speeches on each of the amendments that he puts before us. We have had a re-run of one of the glittering Second Reading speeches that he made during Committee stage.

I understand that the argument is that it is entirely wrong for a government to indicate immediately that they do not propose to accept an amendment carried in the House of Lords. I was a little surprised to hear that argument. Those of us who had the pleasure of dealing with Home Office Bills when Mr. Michael Howard was Home Secretary became used to being told within 30 minutes that the Government would in no circumstances whatsoever accept the amendment. Therefore, I suggest to the noble Lord, Lord Mackay, that he might take an interest in the attitude of some of his Home Office colleagues in the late administration.

My Lords, I am grateful to the noble Lord for giving way. Does he not agree that we never pre-empted the outcome of what the other place would do in any vote? As the Minister responsible, I may have indicated that we would invite the other place to consider overturning a measure but no public statements were made which implied or pre-empted the outcome of a vote in the other place.

My Lords, the deputy Government Chief Whip and I spent many happy hours debating issues with the noble Baroness. I believe that both of us could recall with the greatest clarity what was said on Mr. Howard's behalf every time that he lost a vote in this Chamber. He lost quite a substantial number of votes in this House, I am glad to say. But I hope that the House will now move on a little more briskly.

My Lords, if the noble Lord—

Order!

There is no order involved. I shall gladly give way in a moment. I always do. I simply say that it would be a good idea if we moved rather more rapidly through the amendments; all the more so because the noble Viscount, Lord Cranborne, last week expressed his concern about the fact that we appear to have an overloaded legislative programme. One of the reasons why we are proceeding so slowly on this Bill, which has precisely six clauses, is the never-ending series of Second Reading speeches to which we are subjected. I note that the noble Viscount, Lord Cranborne, wishes to intervene.

My Lords, I am extremely grateful to the noble Lord and sorry that I even presumed to interrupt him in full flight. But I could not help wondering whether the noble Lord felt that the defeats that he rightly recalled that he and those whom he and his party adulate so greatly on the other side—the present Government Front Benches—inflicted were any more valid than the defeats which occasionally have been inflicted on the present Government since the general election.

My Lords, the difference between the defeats in the lifetime of the previous government and those in the very brief lifetime of this Government is, as noble Lords know, that the Conservative Party in this House has three times more representatives than the Labour and Liberal Democrat parties put together. Therefore, when they were defeated in this House, it demonstrated that they could not even obtain the support of their own colleagues.

My Lords, we have sat through the usual contribution from the noble Lord, Lord Mackay of Ardbrecknish, which was a wide-ranging, fascinating, colourful and predominantly irrelevant speech—perhaps more detached from relevancy than it was from reality, judging from parts of his speech, which I understand he obtained from a certain newspaper circulating in Scotland.

Let us look at what the amendment refers to rather than at cooked-up deals that are supposed to have been going on somewhere hither or thither. The amendment concerns the date of the referendum. Amendment No. 2 is intended to ensure that there are at least eight weeks between publication of the White Papers, which will be debated in both Houses, and the referendums in Scotland and Wales. As we heard, the purpose is to provide sufficient time for the people in Scotland and Wales adequately to examine the proposals contained in the White Paper before being asked to vote on them. Amendment No. 3 would prevent the referendums being held earlier than 18th September 1997.

We have already announced that we intend to publish the White Paper on the Scottish Parliament on Thursday of this week. We have also announced our intention to hold the Scottish referendum on 11th September. That provides a gap of seven weeks between publication of the White Paper and the referendum.

Is it seriously being argued by noble Lords opposite that the whole basis of democratic decision-making will come tumbling down because we have decided on seven weeks rather than eight weeks? Is it being suggested that somehow the people of Scotland can reach a mature, considered decision in a period of eight weeks but cannot make any reasonable, informed decision on the basis of seven weeks' consideration? That is absolute rot What we have seen today is pure opportunistic oppositionalism for the sake of it. It is nothing more and nothing less.

In Committee noble Lords opposite suggested a gap of six weeks. That is what they were arguing for. Moving the specific amendment, the noble Lord, Lord Crickhowell, said,

"This amendment merely seeks to ensure that there will he adequate time, and that sufficient detail will be contained to enable the electorate to take an informed decision".—[Official Report, 3/7/97; col. 391.]

The noble Lord was arguing for six weeks. We listened to him; we heard him; we have given the matter consideration. We are saying seven weeks. Of course, noble Lords opposite are upping the ante to eight weeks. How long does this dutch auction in reverse go on for?

I should also say that we intend to publish the White Paper for Wales tomorrow—Tuesday, 22nd July—and to hold the referendum on 18th September. That will give eight weeks between publication and the referendum. Your Lordships will also note that what I said confirms the Government's intention to seek to overturn in another place the amendment passed in this House requiring the referendums to be held on the same day.

We have had a lot of huff and puff, a lot of bluster about the way the Government announced their intention. We have been accused of pre-empting the decision of Parliament—something that Mr. Howard never did. I must have been listening to a completely different radio programme. Let us go back and see what words have been used to date. The authoritative words on the issue are contained in the Answer given by the Government to the Question of my noble friend Lord Merlyn-Rees. He asked Her Majesty's Government, on 17th July, when they expected to announce the date of the referendum to establish a Welsh assembly. My noble friend Lord Williams of Mostyn replied. The accusation is pre-empting; that is what we are accused of. My noble friend said:

"Subject to the approval of a Motion in another place, to disagree with the amendment on dates of referendums inserted into the Referendums (Scotland and Wales) Bill in this House, the agreement of this House and subject to Royal Assent, the referendum in Wales will he held on 18 September 1997".—[Official Report, 17/7/97: WA130.]

The words "subject to" are used so many times in that sentence that it is preposterous to say that we are pre-empting the decision of this House or the other place. We are not. We are going forward quite properly.

The point was made by the noble Lady, Lady Saltoun, that never could she remember an election being held in August or September. I hesitate to raise the historic point, but if my memory serves me correctly the 1945 election was held in July. In Scotland that was a much greater holiday month, and it still is. The 1945 election was a decisive victory; the referendum will be a decisive victory.

My Lords, it seems that I am not alone in making a Second Reading speech. The noble Lord, Lord Sewel, was making a good job of one towards the end. I am grateful to all noble Lords who have spoken. I am always amazed how many people can be drawn to the surface, especially from the Liberal Democrat Benches, when I cast my fly. Would that salmon were so obliging during August or any other month for that matter.

I was delighted that the noble Lord, Lord Harris, graced us with a Second Reading speech. He suggested we get on with it. I suggest to him that for the rest of the afternoon he goes to the Library and studies some of the Committee and Report stages of Bills that I debated from the Dispatch Box and asks himself the question whether Members then sitting on this side of the Chamber were getting on with it. Were they introducing new material? I suggest that he studies in particular the contributions of his noble friend Lord Russell who was a frequent participator in my debates. I always attempted to respond to his questions, whether or not they were germane to the amendment. That is the way your Lordships proceed.

Perhaps we are now seeing new rules as the House has changed position. I hope that the Government do not think that and that they believe it right and well within the rules to raise issues which come up on a day-to-day basis against the amendments that are in front of us. I should have thought that this morning's press reports were perfectly legitimate matters for me to raise. I am sorry that the noble Lord, Lord Harris, thinks otherwise.

I was not, as the noble Lord, Lord Thomas of Gresford, implied, arguing again the case for two days as against one day. I was simply pointing out—by quoting, for example, Lord Byers, Lady Birk and Lord Shinwell—that when the Conservative government did something similar there was a great deal of indignation from the then Labour Opposition Benches and the Liberal Democrat Benches. I am not entirely sure whether I should call them the "still opposition" Liberal Democrats". Perhaps not.

I was not arguing about one or two days and I do not disagree with the other place's right to reverse our position. I am simply saying that in 1980 the noble Lord's colleagues and the Labour Party made a great deal of fuss about a Conservative government making a statement in the other place that they intended to overturn the amendment. I was referring to that fact and the making of the statement in the other place last week. That is why I drew your Lordships' attention to the events of 1980.

I notice that no noble Lord who has sought to defend the position responded to my references to 1980. That is perhaps because your Lordships realise that the point made then was a legitimate point against government and the point I am making today is also a legitimate point against government.

The noble Lady, Lady Saltoun, mentioned the fact that we have not, by and large, had general elections in August and September, and that is right. It seems to me therefore that it would be better if the referendums were not held in holiday months. I know the noble Baroness, Lady Ramsay, has not lived in Scotland for some years. I can assure her that the position I portrayed is right; that is, that holidays are much more scattered. Indeed, the number of people who do not have children is increasing—either because they have all grown up or they do not yet have them—and they are taking their holidays well into August and September. That is greatly to the benefit of the tourist season but I shall cause a row with the Liberal Democrat Benches if I go into that.

The noble Lord, Lord Parry, smiles. It reminds me of his intervention when he said that in his view the Welsh referendum result prospect is becoming better by the day. Why then, if noble Lords are so confident, have two separate days? But that is the argument we have already resolved.

I am glad about seven weeks. I am sorry to hear that the Government intend to overturn the amendment passed in your Lordships' House that the referendums for Wales and Scotland should be held on the same day. The arguments given, to put it mildly, were weak, indeed, very weak. They deserved to be beaten, and the decision of this House merits being endorsed by the other place. I am not sure that that will happen. The imperative put forward by the noble Lord, Lord Thomas of Gresford, in Committee will be the one that rules; in other words, the only way to get a yes result, if that is possible at all in Wales, is to hold the referendum a week after the one held in Scotland. It will be the price of this little bit of gerrymandering if it does not work like that.

I am delighted that we are having seven and eight weeks. I would prefer the vote not to take place in August; that is a serious problem for all the campaigners. The noble Baroness, Lady Ramsay of Cartvale, will find, in trying to campaign for the yes vote, that many people are away in August and that many of those at home in rural Scotland will be too busy dealing with tourists who take their holidays in August to bother with referendums.

However, we have made some progress in your Lordships' House. We have ensured that the White Paper is published before Third Reading. That was not certain before the Report stage. We also ensured before Report stage that we knew the date of the referendums. With those two small thank your to the Government, I beg leave to withdraw the amendment.

moved Amendment No. 4:

Page I, line 6, after ("and") insert ("income").

My Lords, I am puzzled by this amendment. If you have the general statement "tax-varying powers" then any specific tax is included. Therefore, an income tax-varying power is covered by tax-varying powers in general. As an economist I have never understood the fuss people make about income tax. Why is there this great fuss about income tax? One can raise all kinds of taxes. The income tax bogey was raised by the noble Lord's colleague in another place when he was Secretary of State for Scotland. He went on calling it a "tartan tax". For a while he was worried about raising tax. Now, the penny has dropped that the tax could be reduced. What would be wrong if an airport tax were to be varied by the Scottish Parliament? If it were the wish of the Scottish people to give the Scottish Parliament tax-varying powers, so be it. It should be for the people to decide. The people of Scotland should be given a lot of choice. They should decide whether they want tax-raising powers for the parliament and then whoever is in charge in Scotland will decide which particular tax will be used because the circumstances may vary. Therefore, the broader interpretation is better than the narrower one.

My Lords, although a short amendment it is a very important one. Until we have the White Paper we have no idea what the legislative powers of a Scottish parliament may be. We have no idea what taxes it may be able to impose. They may include import taxes, excise duties, entertainment duties—all kinds of things. Surely, the main intention is that the parliament should have the power to vary income tax. If that is the main intention it should be stated in the question to be put to the people and in the Bill.

My noble friend Lord Mackay of Ardbrecknish has made out a very strong case indeed whether or not we have an idea of the content of the White Paper. Frankly, until we do know its content it is very difficult to exercise a judgment which is of sufficient interest to the Scottish people and which offers sufficient protection for them. I hope that we press the amendment.

My Lords, I intervene in this matter on the Welsh side although the amendment deals only with the Scottish side. My noble friend Lord Renton has taken the words out of my mouth. It is the problem of the vagueness on which we are being asked to try to decide. The Bill is enormously vague about what the Welsh assembly may or may not do. We hope that in the White Paper tomorrow we shall discover a little more. However, as I understand it, it may not contain what we get at the end of this legislation. The amendment illustrates exactly our situation. I live the whole time in Wales; there are many who do not. I want to know exactly what I am voting for. And the more we know that is precise, the more I will be prepared to vote for, or maybe against, a Welsh assembly.

My Lords, I believe that the noble Lord, Lord Mackay of Ardbrecknish, will get the chance to speak a second time and therefore I address him in the hope that he can clarify his position. First, can the noble Lord tell me whether his party's position is still that it opposes devolution? Secondly, if there is devolution, is it his party's view that the Scottish parliament should not have any tax-raising powers? And, thirdly, if there is to be devolution and there are to be tax-raising powers, does his party believe that those powers should be limited to income tax? In other words, the noble Lord has three positions, one following from the other. That is the only way in which I can make sense of the Opposition's position.

I remember raising this matter when we were in Opposition and the question of the tartan tax arose. If the Scots are to have their own parliament, is it not rational that they should be able to make up their minds about what to do when they have that devolved parliament? It seems to me not only logical, but a matter of Scots' pride, that if devolution goes ahead, the Scots themselves make up their own minds. That is why I am slightly lost by the noble Lord's position.

The noble Lord may well be right that if there is to be a tax the correct one for the Scottish parliament to impose is income tax. But that is not to be decided at the referendum. I apologise to the noble Lord, Lord Stanley, because I assume that we are discussing Wales as well, which I always forget when these issues arise. I am given to understand that the Welsh will not have tax raising powers, so we are not discussing Wales. If I were a Welshman I would probably want to have tax raising powers as well. I would be very proud if I were a Welshman. However, that is all irrelevant. Noble Lords opposite are well aware that I have no influence on any of these matters. Surely the central issue is: why not let the Scots trust themselves to do what they want? In that sense, surely this amendment is irrelevant.

My Lords, the position taken by the noble Lord, Lord Mackay, is entirely logical because he does not believe that the Scottish people have any judgment whatever. They threw out every Tory MP and therefore they must be wrong.

My Lords, it is not a question of what people on this side of the House think should be the tax-raising power for the Scottish parliament; it is about what the Government have confirmed over and over again as their intention, which is that tax-raising or tax-lowering should be on income tax. The Government have said that and they have ruled out everything else. I say that to the noble Lords, Lord Peston and Lord Desai. The noble Lord, Lord Desai, made the case for me as far as I am concerned because my suspicion is that the Government do not want the people of Scotland to vote for tax-raising powers. They want to scare them into thinking that the tax-raising power could be not only income tax but might be additionally VAT or a sales tax. There is a whole range of things which could be affected. People are extremely alarmed at that prospect.

The Scottish people need to know what precisely the tax raising power is to be. They will only understand it properly if it is on the ballot paper. That is a very serious point. Not everyone will study the summary of the White Paper that will be circulated; very few will study the White Paper itself. People want to know how the parliament is going to affect them before they vote in a consultative referendum.

The Minister said in Committee that we should concentrate on two simple principles; namely, whether a Scottish parliament is wanted and whether it should have tax-raising powers. It is only reasonable that people should know the form that that tax-raising power will take—income tax or all the other things. Noble Lords opposite who do not live in Scotland understandably have not followed everything the Government have said up to date. There is a wide range of options whereby the Scottish people can pay for their parliament. To make the matter simple, it should be put on the ballot paper. That is not a difficult thing for the Government to do unless they want people to vote against tax-raising powers.

My Lords, I was very glad to add my name in support of the amendment of the noble Lord, Lord Mackay. I recall at Committee stage many of us tried to clarify what was meant by tax-varying powers. We were not very successful. But when one reads the report of those discussions, the noble Lord, Lord Sewel, very helpfully indicated that if the tax-raising powers were three pence in the pound on income tax, that would yield £450 million. Incidentally, £450 million is a very large amount of money per head of population. It is £100 for each man, woman and child. The Scottish people should be made aware of that.

It may be that the White Paper will reveal all and that in a sense the amendment is unnecessary. We may find that the White Paper gives the clues we want. If that is not the case then I believe that the Scottish voters have the right to know just what is intended. It is all very well to say, "You must trust them in due time." They should know now what is meant.

That brings me to my second point. We need to clarify what all this is about, particularly when it comes to the tax-varying powers. Will the people realise that that may seriously endanger the economy in the sense that new businesses may well look to locate elsewhere. They may say, "If Scotland has tax-varying powers, we shall not know where we stand, so let's look elsewhere. Let's go to Wales or to England; we must be careful about coming to Scotland because we do not know its form of taxation". It would be helpful if those who want the Scottish parliament to have tax-varying powers could explain whether they are limiting those powers to income tax or whether they will affect VAT or any other tax.

I plead for postponement on this question. I know that in a sense I am making a Second Reading speech, but this is an absolutely vital matter for both Houses, for the Union and for its three constituent parts. So, if we hammer away once or twice—or perhaps three times—and repeat ourselves, I hope that noble Lords will forgive me and others for that. This issue is so important. Indeed, I cannot think of any other issue that is likely to come before us in the next Parliament which begins to compare with the possibility of the break-up of the Union by our getting this wrong as opposed to our getting it right.

I come now to why I plead for postponement. We do not know how the relationship between Westminster and the Scottish parliament will come out. We know that the Scottish parliament will have an opportunity to divide the block grant, which may be as much £15 billion. That is a huge responsibility with which suddenly to be confronted. It will take a long time to work it out in practice. But that is not all. In the early stages, all of the issues of which your Lordships are well aware, such as the West Lothian question and that of the exact relationship between the two parliaments, will come to the fore. Really and truly, the Scottish parliament will be fully occupied in its first session. Therefore, I plead that we agree that there should be a "No" vote on the second question on the basis that it is open to the Scottish parliament and to Westminster, if they find that there is a need for a taxing power, to introduce it in, say, the second or third Scottish parliament. What's the hurry?

My family motto happens to be "Gang warily". Noble Lords may say that that is rather a pawky motto, but I believe that in this case postponement is what is called for. Let us wait on this vital issue because if the provisions are accepted as they stand, it will be the beginning of the break-up of the Union—of that there can be no doubt—because as we all know, the power of the purse is what counts. If we ask the people of Scotland this second question and if we get the answer "Yes", which I deeply hope that we shall not, I can see many quarrels lying ahead of us. Indeed, the English may for a time—perhaps for the first time—say, "What's all this about? We have been very successful together. Over the past 300 years we have built up an empire such as has never been seen before in the history of the world and the Scots made a huge contribution to that". Are we to put all that in danger?

As it stands, the amendment to a degree limits and makes the position more easily understood by the people of Scotland. I do not want to say that the question will be more palatable to those who might say "Yes". I hope that they will not, but I believe that our amendment is just what is needed from all angles. Even so, I plead that we do not have any tax-varying powers in the first parliament, but that we look at the question again in the future.

My Lords, the tax-varying powers which have been put forward by the Government have always been presented, as my noble friend said when moving the amendment, as relating to income tax. The burden of that—or it might be the benefit—falls primarily on the people of Scotland. Much as we may like or dislike it, it is not of major concern to us as much as might be the case if there were a variation of other taxes. If we assume that other taxes can be varied under the Bill, let us consider what might happen if the Scottish parliament were able to reduce excise duty. Lorries would troop over the Scottish border in massive numbers, as happens on boats to France. Other taxes could also be varied. The impact on other parts of the United Kingdom could be severe. It is important that the power should be confined to income tax, as my noble friend suggested.

My Lords, I rise to speak briefly and hope to avoid falling into the trap of making a Second Reading speech such as we have heard during our discussion of this amendment. I say at once that I agree with the noble Lord, Lord Mackay of Ardbrecknish, on the position of the Scottish Constitutional Convention. What the convention has talked about is income tax. I agree with the noble Lord on the position of Donald Dewar, the Secretary of State for Scotland, who has made it clear time and time again that what the Government are talking about is income tax. I agree with the position of the junior Minister in the Scottish Office, Henry McLeish, in his article in the Financial Times that what the Government are talking about is income tax.

Where I part company with the noble Lord, Lord Mackay, is that when I am told something I innocently believe it. I do not have the kind of suspicious mind that the noble Lord has. My position on this is quite clear: this is not a matter for the referendum, but for the primary legislation when it comes before both Houses of Parliament following the outcome of the referendum on the one hand and following the consultation on the White Paper on the other hand.

Let me pose this question to the noble Lord, Lord Mackay. My noble friend Lord Peston has already asked him three or four questions, but perhaps I may add one. Why pick out taxation to appear in a definitive form on the ballot paper at the referendum? Why not ask the people of Scotland, "Are you in favour of a Scottish parliament with 190 Members?" Why not ask the people of Scotland, "Are you in favour of a Scottish parliament elected by proportional representation?" Why not ask the people of Scotland, "Are you in favour of a Scottish parliament that does not follow slavishly the Westminster role model and where we can have pre-legislative committees?" Why pick out the one issue of taxation?

Before the noble Lord, Lord Mackay, answers those questions, I shall answer them for him because my answer will be much more accurate than his. The answer is that the scare stories were started running by Sir Bruce Pattullo, the governor of the Bank of Scotland. In this debate noble Lords opposite are deliberately attempting to set that scare running so that if they cannot frustrate a "Yes, yes" vote, they will seek to obtain a "Yes, no" vote. That is what this is all about and in his honest moments the noble Lord, Lord Mackay, will confess that that is the true position.

There is no valid reason why one issue only—in this case, taxation—should be selected for presentation to the people of Scotland in order, as is claimed from the other side of your Lordships' House, to make the question more definitive. This is clearly a matter for the principal legislation. It is not a matter for the referendum. If it were a matter for the referendum, this question should not stand alone. We should ask those other questions about 190 Members, proportional representation and pre-legislative committees. There is no good reason for selecting this issue, except that it is a good frightener, and that is what it will be used for during the whole of the referendum campaign.

My Lords, I am pleased to be following the noble Lord, Lord Ewing, because I want to assist the noble Lord, Lord Peston. The noble Lord pointed out that the constitutional convention, of which he was co-chairman until he resigned on whether there should be a second proposition on taxation, recommended that it should be income tax only and that it could be varied up and down by 3p in the pound.

As far as I know, the Government confirmed that. What we have heard since is that the Government intend that the varying powers should affect income tax. If that is the case, it should be written into the Bill, as my noble friend Lord Mackay suggested. He will undoubtedly reply in full to the noble Lord, Lord Peston.

There is another point. I am not making a Second Reading speech, because I did so on Second Reading. I do not deal with Sir Bruce Pattullo's points about income tax, and the problem of dealing only with 3p on income tax where dividends and so on are concerned. We are not dealing with questions; they are propositions in the Bill, unlike previous referendums in this country. From all we understand, it was the Prime Minister, when he was Leader of the Opposition, who insisted that there should be a second proposition on tax varying powers in the referendum in Scotland.

Media rumours in Scotland now are that the Chancellor of the Exchequer will find that restricting, because he apparently has ideas about changing the income tax bands. If he does what one thinks that he has in mind, it would mean that the amount of money raised in Scotland—if the tax varying powers meant an increase—would be less than the sum that has been spoken about. There are problems, even if the matter is restricted to income tax.

My Lords, one of the most unpleasant taxes we have ever had was the selective employment tax which we had a few years ago. Whatever taxes are agreed, they should be specified. It should be made plain to the Scots people that the Parliament at Westminster will continue to have the final say.

My Lords, the Government are right to resist the amendment. What is the point of Scotland having its own parliament unless it is to be given as many powers overall as, let us say, Delaware or Rhode Island. The voters of Delaware and Rhode Island can opt for a sales tax or a tax on alcohol or tobacco which is 2 per cent. to 3 per cent. higher or, possibly, lower than those prevailing in New Jersey and Massachusetts. I agree with the noble Lord, Lord Desai. Why should not the people of Scotland be given the same options if—it is a big if—they choose to vote for them?

My Lords, perhaps another Englishman might be rash enough to intervene in the debate. I have just two points to make. The first, in answer to the noble Lord, Lord Ewing, is that I have always understood that the prime argument for devolution in Scotland—in principle I have no difficulty with that as a proposition—has always been that it will strengthen the unity of the UK. That then is something that we must consider.

In all my public life, the one factor that has mattered and counted has been money. It was the Government's decision when in opposition to have that question on the ballot paper. It is the Government's decision and not anyone else's. It is relevant. This is not a Second Reading speech; it is very much a Committee stage speech, because I am trying to answer points that have been made. If the assurances that we have from people such as Mr. Dewar and others that this is an income tax matter—I accept that it is a matter for the devolution Bill proper when we come to it—stand, that is fine. The difficulty is that the noble Lords, Lord Peston, Lord Desai and Lord Mackie, have raised an issue which is potentially divisive to the unity of the UK if one has a large number of varied tax rates across the whole spectrum.

It is one thing to quote experiences in the USA when one is dealing with one nation which has within it separate states with populations which are far larger than that of the whole of the UK, and distances that run in thousands of miles where we are accustomed to running in hundreds, but we are dealing with a small nation state. I have no difficulty with the proposition, if the proposition is income tax. If that is what it is going to be, I do not understand why there should be any difficulty in amending the question on the ballot paper. If that is what it is going to be, it would be simple to accept the point here and now and have it. It is noble Lords opposite who have raised the suspicions of ordinary people like me that it might mean something else.

My Lords, it is true that we have had some speeches that have verged on Second Reading speeches this afternoon and during the two days in Committee. The reason for that is not difficult to find. It is because the Government have approached this important piece of constitutional legislation from the wrong end. We are going to ask the residents of Scotland and Wales to approve of something which has not been carefully sifted and thought out in the UK legislature.

I appreciate that there has been a Scottish convention. However, not being a resident of Scotland I confess that I have not followed its debates as closely as perhaps I should have done. We have not had the advantage of a convention in Wales, and so perhaps the matter has not been sifted out as carefully there as it may have been in Scotland. Whether or not it has been sifted out in Scotland, some important issues appear to have escaped the Government's attention, and have not been offered to us for debate.

It is said, "Leave it to the good sense of the Scots". That is an attractive proposition to someone who had a Scots mother even though he is resident in Wales and not in Scotland. Then I paused to think. Let us consider whether the question of taxation is of supreme importance. As a general proposition, of course it is because it is the basis of so much of our legislation and so many of our debates in both Houses of Parliament. More than that, the Government have chosen to single out taxation as being a matter of supreme importance, to be approved or disapproved by the residents of Scotland, because, after all, it is in the schedule to the Bill.

If one asks, "Why not leave this to the Scots to decide if and when they have their own parliament?" the answer is that the Government say that they want a view from the residents of Scotland. We are bound to think a little bit about these matters. Unfortunately, we cannot escape doing so now, because the noble Lord, Lord Sewel, has told us that we must press forward with this matter and that the view of the residents of Scotland must be taken in September before the main devolution legislation has even been printed. Indeed, I believe that supreme pressure has been brought to bear on the noble Lord, Lord Sewel, who until today has treated our interventions with courtesy and almost with reason. He has been a little offensive, if he will allow me to say so, but I realise that he has been under intense pressure, as have his colleagues in Cabinet. He is having to defend the indefensible, which, as I found in government, is sometimes a difficult operation.

Let us return to the issue before us. Yes, we want to know the questions which will be asked of the residents of Scotland. The questions relate to taxation and the scope of the powers which may be conferred on a Scottish parliament. After all, we know nothing about the Bill which will be introduced—that is, if a Bill is to be introduced, and we must not anticipate the outcome of the referendums—and we will not see the White Paper until later this week. We will want to know the degree to which the Government will pay attention to the no doubt cogent points which will be made during the debate on the White Paper before we rise for the Summer Recess. Of course we must focus on that particular question.

The noble Lord, Lord Ewing, said that he was a trusting person. That is an admirable characteristic and we must all try to take at face value even our opponents across the Chamber. However, if all that is to be proposed in the White Paper and in any subsequent legislation relates to varying the powers to raise or to lower income tax, why not accept this simple amendment? On the other hand, the Government may wish to reserve their position to see exactly how things are taken north of the Border, or to see the problems which will no doubt be turned up by the Inland Revenue. My heart bleeds for the Chancellor of the Exchequer—it does not often do so—who must try to reconcile the propositions with the general framework of direct taxation in this country. Having once had the privilege of receiving advice while appearing in the other place on matters of taxation, I appreciate the kind of detail and well-thought-out advice which are no doubt being tendered to Treasury Ministers by the Inland Revenue.

If the matter is as simple as noble Lords opposite would have us believe and there is nothing more than marginal adjustments to income tax—although, as has emerged in the debate, the technical difficulties of that will be considerable—they should accept the amendment. If the matter is not so simple, we are right in ventilating the points today. We shall expect to consider the matter closely when we read the White Paper. We shall have to return to it on the Second Reading of the proposed legislation, and we must go back to substantive legislation if a proper devolution Bill is introduced.

Finally, this is not a matter only for our friends north of the Border. As was pointed out by my noble friend Lord Boardman and others, if we go a little further, and even if there are major adjustments to income tax north of the Border, that may have a considerable effect on residents south of the Border and in Wales. We operate in one economic entity. Our taxation system, which has been developed over a century but not always to our satisfaction, is highly complex. Once we start raking about into that structure there will be many side effects and I doubt whether the noble Lord, Lord Sewel, and his colleagues have yet bothered to think them through.

My Lords, the amendment is intended to clarify the nature of the tax-varying powers of a Scottish parliament, upon which the Scottish electorate will be invited to vote at a referendum. Its purpose is to change the references to tax-varying powers so that it refers specifically to income tax. In my contribution, I shall set myself two tasks. The first is to try to deal with as many of the points—some well made—as possible. The second is slightly more difficult; it is to remove the suspicions which lurk in the deeply suspicious mind of the noble Lord, Lord Mackay of Ardbrecknish. I do not wish to speculate upon whether that cast of mind is the product of his being a Minister for so long in the previous administration.

As regards my first task, I ask noble Lords to listen to what I say because the noble Lord, Lord Renton, and others raised the spectre of a whole series of taxes being introduced, raised or changed; for instance, excise duty and sales tax. I ask your Lordships to reflect on the fact that what has been said throughout the discussion in Scotland, the debate in the other place and the debate in this House has centred specifically and solely on income tax—

My Lords, if that is so, why not state it in the Bill?

My Lords, I shall come to that point later. It will be stated in the devolution Bill, but I shall come to the reason why it is not stated in this Bill. First, I wish to make it clear that we have said throughout that the powers to vary tax will relate to income tax. I do not believe that noble Lords opposite will be able to come forward with any contrary quotation from members of the Government. I am happy to repeat that and I hope that it clarifies the situation definitively.

Furthermore, that power will be to vary the basic rate of income tax set by the UK Parliament by up to 3p. That is an important constraint and an important factor. Liability for the varied tax rate will be determined by residence in Scotland. That is a second important factor. If that power were used, the resources available to the Scottish parliament would increase or decrease accordingly, as pointed out by the noble Lord, Lord Mackay of Ardbrecknish. I do not believe that there has ever been any secret about that.

Noble Lords opposite propose that the fact that the tax is income tax should be reflected in the Bill and I understand some of the arguments and intentions behind the amendment. However, not only is it unnecessary, but such an amendment, while appearing to offer precision and clarity, would actually deceive. The inclusion of the words "income tax" does not explain the Government's proposals in sufficient detail. The Government's proposals are limited to varying income tax by up to 3p. That is a variation of income tax paid by people in Scotland. If that range of explanation is not in the question, the statement "varying income tax" is a complete distortion. It removes two of the fundamentally important constraints around which the power to vary income tax is based.

We have adopted an approach which was well explained by my noble friend Lord Ewing. It is based on limiting the questions to the two matters of principle: "Do you want a Scottish parliament?"; "Do you want that parliament to have tax-varying powers?". We decided to adopt that approach for the reasons which my noble friend Lord Ewing identified.

Once we move away from principle into detail, we are not presenting the electorate with a question on the ballot paper; we are presenting it with an essay. It would go on and on, spelling out the precise detail of the composition and powers of the proposed Scottish parliament. It would spell out the precise limitations and reservations on tax varying. As I said in Committee, there would be a ballot paper which looks more like the ballot paper used in elections in the United States of America which go on and on. That is not the way forward. We must have simple, clear propositions of principle.

Let us return to the point made by the noble Lord, Lord Mackay of Ardbrecknish, that somehow lurking in the political undergrowth of Scotland or this Government—not that this Government have a political undergrowth—there is some deeply worked-out, conceived plot that at a certain time in the future we shall hold up a piece of paper which says, "Ah, the Scottish electorate voted for tax-varying powers. Okay boys, we will extend them. We will give them a whole raft of different tax-varying powers".

The way to deal with that particular question is to look at the ballot paper because the ballot paper, as contained in the schedule, refers specifically to the Government's proposals which are the proposals upon which the electorate, in the referendum, is being invited to vote. The Government's proposals in the White Paper will spell out their proposals in relation to income tax and the limitation to 3p. That is what the Government's proposals are all about. That is why it is unnecessary to have a spurious degree of detail in the question. But more important, that alleged detail will deceive and lead to imprecision and lack of clarity.

The way forward is to stick to the two propositions of principle. Assuming a positive outcome in the referendum, the details of how such a power will operate will be contained in the main devolution legislation.

Details about the tax-varying powers, the 3 pence in the pound variation and how it will operate, will be embedded obviously and necessarily in the main legislation. Therefore, there is no need for spurious amendments at this stage. On reflection, I hope that the noble Lord will withdraw the amendment.

My Lords, the longer the noble Lord, Lord Sewel, went on, the less I thought that my amendment was spurious. Indeed, as the debate went on, it became clear that the amendment is far from spurious.

Half way through, the noble Lord, Lord Ewing of Kirkford, intervened and asked me why I should select only taxation for a special position in the referendum. I have not chosen the questions for the referendum; I have not chosen a referendum; I have not even chosen that policy. That is the Government's policy and those are the Government's questions. They are not my questions at all.

I do not believe that there is a particularly compelling reason for having a second question. If the first question encompasses the whole of the White Paper, it seems to me that we do not need a second question.

The noble Lord, Lord Ewing of Kirkford, knows more about the referendum issue than most of your Lordships. I was intrigued by what I thought was his attempt to rewrite history. He said that the reason for the second question is because of some scare story by Sir Bruce Pattullo, the Governor of the Bank of Scotland, about the damage in relation to varying or increasing income tax.

My Lords, just before the noble Lord winds down his misleading path, perhaps I may clarify matters. The point that I was making was in relation not to the second question at all but in relation to the noble Lord's amendment. He latched on to Bruce Pattullo's coat-tails and I was hoping to prise him off them before he goes any further down that road.

My Lords, I am always glad of enlightenment and an indication that my understanding was not correct. I shall read the noble Lord's speech with some interest because I was sure that he was referring to the general question. But if he says it was only about my small addition to the general question, that saves the noble Lord being reminded that the voile face on having a referendum was performed by the Labour party in June 1996 and brought about the resignation of the noble Lord, Lord Ewing, from the joint convenorship or chairmanship of the Scottish Constitutional Convention. However, I should say to the noble Lord that I did not devise my amendment with Sir Bruce Pattullo's speech in mind, but that is an added argument to my case for looking specifically at what those tax-varying powers should be.

The noble Lord, Lord Sewel, should have listened—and I hope did listen—carefully to two of his noble friends and one noble Lord on the Cross-Benches who put forward the proposition, which is sensible in its own argument, that if tax-varying powers are given to a Parliament, why should that be limited to income tax? The noble Lord, Lord Monson, from the Cross Benches pointed out correctly that in Delaware and Rhode Island it is possible to do a good deal more than that; and asked why the Scottish Parliament should be any different.

The noble Lords, Lord Desai and Lord Peston, both distinguished economists, put forward an argument which, if this parliament comes about, the people in it will hear from Scottish economists, although none will hope to be as distinguished as the noble Lords, Lord Desai and Lord Peston, especially the noble Lord, Lord Desai. He had some interesting views on the economic policy of his own party when it was in opposition and very positive views on the economic policy of the then government. However, I shall be rebuked for straying from the narrow point in relation to the questions in the referendum.

The noble Lord, Lord Desai, rightly drew to the attention of the House the question as to whether this parliament should be tied down as to the kind of tax it is permitted to raise. He put forward the proposition that the broader the tax-raising base, the better. I believe that I have heard the noble Lord, Lord Desai, on that subject on a number of occasions in the UK context and I am not surprised that he made it in this context.

I assure the noble Lord, Lord Peston, that I still oppose devolution. I hope that the parliament does not have tax-raising powers because I believe, like Sir Bruce Pattullo, that it would be damaging to the Scottish economy and that it would put up taxes in Scotland. Frankly, I do not believe for a moment that the parliament would ever put the taxes down because I read the Scottish press and I see a litany of the words "under-funded" this and "under-funded" that and so on. Therefore, I believe that those of us who live in Scotland will have to face an increasing tax burden.

The noble Lord, Lord Peston, pointed out that the correct tax to raise may not be income tax. To some extent, the noble Lord, Lord Peston, and his noble friend Lord Desai have let the cat out of the bag and are endorsing my argument that if you have a parliament with tax raising powers, there may well be an argument that that should include a lot more than the variation of income tax. Therefore, I do not believe that the noble Lord, Lord Sewel, was helped in that regard by the interventions of his two noble friends. Nevertheless, what they said should carry a lot of weight when it comes to the general proposition as to why that question is drawn so broadly when the noble Lord, Lord Sewel, is so determined in his contributions both today and in Committee to define it very narrowly.

In Committee he said that the only tax varying powers that the Government have in mind for a Scottish Parliament relate to income tax, and that it would be confined to 3p in the pound. He seems to be worried that the insertion of the word "income" would still make it too broadly based. Therefore, I have devised another amendment and, if the noble Lord indicates that he would accept the amendment on Third Reading, I shall happily withdraw my amendment this afternoon and bring forward a different amendment on Third Reading. The question would then read:

"I agree that a Scottish Parliament should have the power to vary the basic rate of income tax upwards or downwards by up to 3p in the pound".

That is not dissimilar from the amendment tabled by the noble and learned Lord, Lord Simon of Glaisdale, who unfortunately cannot be here today but who indicated that had he been here, he would have been keen to discuss those issues. I grant your Lordships the fact that that amendment would add a few words, but it would not add significantly more words to the question than appear in the Welsh question, where, of course, the words are doubled because they are set out in both English and Welsh. So the Minister's argument is not a very good one. I had hoped that the noble Lord would indicate his willingness to accept that amendment on Third Reading, but, unfortunately, I see that he is not willing to do so.

I return, therefore, to my main point. I do not see why the words "income tax" should not be clear to the electorate in Scotland, myself included. It should be clear that people are voting for or against income tax being varied, and only income tax. Indeed, that could make a huge difference to the votes of people who do not pay income tax and who may be happy to vote for increasing income tax, but who would not be happy to vote for an increase in excise duty or VAT.

I am trying to be helpful to the Government in helping them honour their election pledges. They are having some difficulty in Scotland because everyone thought that there would be no tolls on Skye Bridge after the new dawn had come on 2nd May; but there are still tolls on that bridge. Moreover, no one thought that there would be any private prisons, but there are to be such prisons. I return again to the manifesto—I have almost reached the stage where I can remember it off by heart because I am so often reminded of it—which refers to law-making powers,

"including defined and limited financial powers to vary revenue".

As the question stands, I submit that it is very widely defined and that it certainly is not limited. It is not limited as to the scope of the kind of tax which may be imposed. I suggest that my word added to the question would improve the definition and the limitation of that financial power. It would, therefore, help the party opposite to fulfil their manifesto commitments. In that spirit, I should like to test the opinion of the House.

My Lords, with the leave of the House, I shall now repeat a Statement being made in the other place by my right honourable friend the Secretary of State for Culture, Media and Sport on reforming the National Lottery. The Statement is as follows:

"With permission, I should like to make a Statement about reforming the National Lottery. I am today publishing a White Paper, The People's Lottery. It will be available in the Vote Office when I have finished speaking.

"The White Paper takes forward the plans outlined in our election manifesto and in the details we published in The People's Money on 23rd April. Both received the endorsement of the British people on 1st May.

"I believe the package of proposals we are publishing today will mark a turning point in the fortunes of our National Lottery. It will make it even more popular and even more relevant to people's daily lives. It is less than three years since the first tickets were sold. Yet in that short time the lottery has become a tremendous success. Nine out of 10 adults play at least occasionally. There have been 180 million winning tickets—360 of them for more than £1 million.

"The lottery has already raised over £3½ billion for good causes. By the time the current licence ends, we expect it will have raised £10 billion. Thanks to the initiative and hard work of those who have been involved in developing projects, and the lottery distribution bodies, funds have already been committed to over 24,000 projects throughout the United Kingdom. But I suspect it is the smaller proposals which make the most difference to many people's lives—like the grant of some £2,000, featured in the White Paper, for a summer arts festival for children predominantly from low income families in Norfolk. I welcome this success. The proposals in the White Paper are about building on it. We will be introducing the legislation needed to give effect to aspects of these proposals later this year.

"The proposals in the White Paper fall under four headings. First, we will set up a new good cause—the New Opportunities Fund. It will support specific initiatives, additional to core programmes funded through taxation, to support our priorities of health, education and the environment. Subject to Parliament, the fund will begin its work next year with three initiatives, two helping to raise standards in schools and one promoting better health. Other initiatives will follow—for the environment as well as for health and education.

"By 2001 the fund will be supporting programmes of activity outside the school day involving at least half of all secondary schools and a quarter of all primary schools. Activities will range from extra coaching in basic literacy and numeracy to new opportunities for creative and sporting education and structured play, fun as well as learning—helping parents who work as well as raising school standards. By 2001 the fund will also have trained some half a million teachers and 10,000 public librarians to help children and adults learn throughout their lives using new technologies.

"The new fund's health initiative will be a network of healthy living centres throughout the United Kingdom. They will provide a wide variety of facilities and services in different ways and to help different groups but all with the same fundamental aim of promoting good health. In designing the detail of these initiatives and delivering money to projects the new fund will work closely with bodies expert in the relevant fields in each part of the United Kingdom.

"The financial success of the lottery will enable us to set up the new fund alongside the existing good causes. In 1994 the lottery was forecast to raise £9 billion for good causes in the period up to 2001. We now expect it to raise £1 billion on top of that. It is from that extra £1 billion that we will find initial support for the New Opportunities Fund.

"We will continue to allocate the bulk of the proceeds of the lottery to the existing good causes. I pay tribute to the work the distributing bodies have already done—some fine examples are included in the White Paper—and I want them to build on their success. That is the second main theme of the White Paper.

"Excellent as the distributors' record has been, it has been limited by some aspects of the framework within which they have to operate. These constraints are at the root of the concerns expressed about lottery distribution—the lack of a clear overall strategy, the uneven geographical allocation of grants, the failure of some activities to get enough help from the lottery, and the feeling that decisions are remote and unaccountable.

"The Bill will contain measures to help us work with the distributors to tackle these constraints. I want to encourage a debate involving the distributors and everyone else with an interest in making a success of the lottery on the way distribution will work within the new framework—and on the extent to which we can make progress in the same direction before the legislation comes into force. Among the main issues on which I am consulting are how the existing distributors can provide even more support for our priorities of health, education and the environment; the contribution they can make to regeneration; how, through delegation and working together, they can meet needs better; and how they can bring decision-making closer to the grass roots.

"I now come to our third major proposal. It is a major part of our vision of a lottery for the people. We will use a part of the £ 1 billion of extra lottery money to establish NESTA—the National Endowment for Science, Technology and the Arts. NESTA will help ensure the fruits of the outstanding talents with which our nation is blessed and benefit our own country rather than others. It will encourage the development of an environment which fosters creative talent and innovation and allows it to flourish for the benefit of the country, its economy and its people. In doing so it will support my central objective of promoting the creative industries.

"NESTA will have three simple objectives: to help talented individuals to develop their full potential in the creative activities and industries, and in science and technology; to help to turn creativity and ideas into products or services which are effectively exploited with rights protected; and to contribute to the advancement of public education about, and awareness and appreciation of the areas with which NESTA is concerned.

"These objectives will be set out in the forthcoming Bill, but once established as a trust independent of Government, NESTA will determine for itself its priorities and activities. Its first task will be to map what support and provision already exists, so that its own activities complement existing publicly and privately funded programmes.

"Finally, the White Paper outlines our proposals to make the lottery itself a more efficient and transparent operation. In the White Paper we invite proposals to meet the twin objectives of maximising the return to good causes and removing unnecessary profit. Within the framework we set the licence will go to the bidder who will deliver the greatest return while running the lottery efficiently, transparently and with propriety. So that the selection of a new operator is seen to be independent and objective, we will appoint a panel to assist the director-general in his choice, including people with expertise in business, lottery distribution and the views of consumers.

"We want to ensure that the director-general has the full range of powers necessary to make sure that the operator complies with its licence. The Bill will therefore contain provision for him to fine the operator where serious licence breaches occur.

"I look forward to the widest possible consultation on our proposals, from right honourable and honourable Members, and everyone else with an interest in building on the lottery's success, in the consultation period which is now beginning. To help everyone participate, a summary of the proposals is available in a leaflet which will be distributed widely throughout the country in the coming weeks.

"A new good cause; a reform of lottery distribution; NESTA, to unlock people's potential; better operation and regulation—this White Paper sets out to enable the National Lottery to become even more successful and to become truly a people's lottery".

My Lords, from these Benches perhaps I may express my gratitude to the Minister for repeating the Statement on the reforms to the National Lottery in the White Paper.

During the week in which the National Lottery was launched, I said in my maiden speech that it was expected to provide huge additional resources for our national heritage, the arts, sports and charities, and that it could be the most important piece of legislation in the heritage field since the Second World War. Financially, it has proved exactly that.

Is it not churlish of the Government now not to congratulate John Major and the previous Conservative government who set up the largest, most successful lottery in the world, played by over 30 million and raising over £3.5 billion for good causes in two years? Why do the Government want to play killjoy, stopping people winning money and having a little fun? The lottery Bill was debated at length in both Houses. The outcome was that at all costs it should be independent of government interference. What we are now witnessing is blatant contravening of the spirit of the agreement by the party opposite.

Arising from what the Secretary of State said in another place, perhaps I may ask the noble Lord whether he can assure the House that funds raised by the National Lottery will not be used as a substitute for public spending but will be additional to government expenditure? Does he accept that lottery money spent on education and health projects violates the additionality principle? I am sure he would also agree that essential services like education, health and the environment cannot be properly funded by relying on the lottery because it is inherently an unreliable source of income. Vital public services should be financed from taxation and should not be dependent on the vagaries of the lottery.

The Statement is a little unclear as to where the fine money will come from in a non-profit organisation, as mentioned in the Labour Party's manifesto. In less than three months, the words "not for profit" do not even appear. The organisation can be fined as a result of the new powers of the director-general of Oflot. Will the Government raid the charities or good causes for money? Do we really need two operators and a panel of new businessmen? Is that not just another quango? What would be the costs?

I sympathise with the Secretary of State for having his chest raided by the Treasury. Only one person is smiling today—the Chancellor. Emptying community chests and depriving local projects enable him to balance the books. The lottery was meant to be kept at arm's length from government. Will the Government intervene next to nationalise what is already the people's lottery? Perhaps they would like to turn it into premium bonds. Is this the start of new Labour's nationalisation programme?

My Lords, we on these Benches thank the Minister for repeating the Statement and receive it with mixed feelings. We appreciate some of the thinking underlying the Statement and the White Paper; they appear almost simultaneously. I have been able only to glance over the White Paper.

At first sight the Government seem to take a curious view of the National Lottery which is rather removed from reality. When the issue was debated in your Lordships' House the main objection from the Opposition was that should funds become available in the amounts predicted—indeed, they far exceeded them—the Government of the time would be tempted to use them for purposes which should be met out of taxation. The present Government are doing just that by adding to the good causes the proposals in the White Paper.

While some of us had qualms about the wisdom of a national lottery and the effect that it would have on poor people's income and spare time, there is no doubt that the lottery has been extremely successful. I agree with the noble Baroness. It has been successful because it has been efficiently run. We are anxious to hear more, as we undoubtedly shall, about how the Government will approach the running of the lottery after Camelot's contract expires. The Government seem to have reversed somewhat on the proposal after many high moral words about "not-for-profit" lotteries rather than "non-profit" lotteries—a carefully worded phrase. They seem to accept that a profit is necessary. Calling it a people's lottery is rather good jargon. It is rather like talking about a fair profit or a just profit.

I hope that my noble friends on these Benches will agree that it is extremely unwise to tamper with something that is going so well. Often in a commercial company someone comes up with an idea, and you say, "We'll give you a commission for your idea", although you do not think much of it. Then that person starts to make more out of the commission on the idea than the chief executive. The accounts department always tries to knock down the commission. Because of the extreme success of the lottery and the agreement reached—after all, Camelot takes only 1p out for every card filled in—it has made extremely large amounts of what the Government term profit. That is profit, and profit well earned. I believe the Government will agree with me that there were some unseemly pictures of Camelot executives making V-signs for victory when they heard of their increased emoluments as a result of the success of the lottery. But that was the mistake of the company's public relations. I hope that the Minister can assure me that when the matter is fully examined, the Government will ensure that the criteria established by Camelot will be at least matched by those the Government propose to put in its place. Whatever else Camelot has done, it has made the lottery extremely attractive for those who buy tickets twice a week. If it had not been so efficient, we should have seen a marked drop-off in the turnover of the lottery.

Perhaps I may mention one or two other areas of anxiety which the noble Lord may be able to answer in some measure. I refer to the idea that now certain areas of health, education and environment will be given the chance to dip into the lottery pot. How are the Government able to justify amounts going to those areas which one would normally expect to be funded out of Treasury moneys, out of central taxation?

What is the difference, for example, between a teacher being trained to be more efficient and productive in his or her profession when that is paid for out of government initiatives through taxation and what is suggested in the White Paper? Is teacher education now to be subject to the fluctuations of a gambling activity? Surely, it should be treated as an activity with a certain, rather than uncertain, end. The lottery may not be as profitable in future as it has been.

There is another curious matter which we shall have the opportunity of discussing. The White Paper rightly points out the great blessings of talent in our country. No one would disagree with the conclusion that such talent exists. We are to dip into the lottery pot to make sure that what is produced and invented as a result of that talent will now be exploited and we shall be able to gather in more of the profits than we were previously required to do. As I am sure the noble Lord will agree, it has always been a cultural fact in this country that, for all our great talent, we often do not reap the rewards, from the film industry, the motor industry or whatever, because we do not apply long-term thinking in many areas. Sadly, in marketing and other areas, we are out-performed by other nations, notably the United States and Japan, closely followed by other areas of the Far East. I am therefore interested to know what impression the Minister believes taking money from the lottery fund will have on changing what is a cultural phenomenon in this country; namely, that the fruits of our many talented people are picked up and exploited by other countries, which often make the profits. We rightly begrudge them those profits, because they are based on our ideas. Is this an appropriate area in which to use these moneys?

Finally—I am sorry to be so tedious about this matter—does the Minister not agree that it would be better initially to attempt to continue with the way in which the lottery performs now and try to bring about a greater take-up of funds available in the five areas presently designated—in particular, charities, sports and the arts. Only about 25 per cent. in total of the funds available are taken up, and for all kinds of reasons. Some people are chary about applying, and in many cases there is difficulty in choosing. Mistakes have been made and always will be. How is it that the Government now propose to follow the very grandiose scheme in the White Paper when there is a sad need to make sure that the distribution of funds as already structured is more fully and completely achieved?

My Lords, I am grateful to the noble Baroness and to the noble Viscount for the way in which they responded to this admittedly complex Statement about what is an admittedly complex White Paper. I am happy to confirm at the outset that the noble Baroness's maiden speech at the time of the original establishment of the lottery was prophetic. She correctly anticipated the benefits that would come from the lottery. I am happy to join her in congratulating all those—it was not a party political matter—who supported and encouraged the establishment of the National Lottery and contributed to its success, acknowledged in the Statement and in the White Paper.

The noble Baroness rightly said that the principal point of the distribution of lottery funds to good causes was that it should be independent, that it should be at arm's length from government. The noble Viscount, Lord Falkland, made very much the same point. The noble Baroness rightly said that funds from the National Lottery should not be a substitute for public spending. I give the absolute assurance that that will not be the case. It is not our intention that funds, either from the existing distributors or from the new distributors—that is, the New Opportunities Fund and the National Endowment for Science, Technology and the Arts—should be under the control of government. The existing distributors have always worked, just as Camelot has worked, under direction and advice from government. That was not only established by the existing Act but was continued by subsequent directions. No one ever thought it improper for government to express their views, just as nobody thought it improper for the director-general of the lottery to express his views, where appropriate, on the activities of Camelot.

When we talk about initiatives in health, education and environment as being the first activities of concentration of the New Opportunities Fund, I confirm that these are not, and never were intended to be, core expenditure items from taxation. The provision of schools and buildings, the funding of teachers and education, is the role of taxation and of the Chancellor. I do not think that the Chancellor will in any way be smiling at what is proposed today. The specific example of teacher training was raised. What is proposed is a one-off attempt to deal with the problem that something like 40 per cent. of existing teachers have never received any training in information technology other than at a very basic level. This one-off attempt is necessary to bring them up to scratch in order that all children in all schools can benefit from teachers who understand information technology.

The same is true of the health centres that are proposed. Those do not come within the ordinary remit of the National Health Service and never have done. Some have been provided by local authorities and some by private initiatives, but it has never been a priority for the National Health Service to do what is proposed in the White Paper. I repeat, with all the strength at my command, that it is not our intention to depart from the principle of additionality which says that proceeds for good causes from the lottery should be in addition to those provided by public expenditure.

The noble Baroness questioned the idea of fining the lottery company in the case of serious breaches of the rules. The legislative framework proposed will be designed to ensure that the regulator has a range of sanctions available according to the nature of the operator and according to any breach of licence conditions. It will be up to him to choose the appropriate sanction. If he operates effectively, as I am sure he will, he will make sure that any fines come from the operator's income rather than from good causes.

I was slightly puzzled by the noble Baroness's reference to a panel of new businessmen. There will of course be distributors, both for NESTA and for the New Opportunities Fund. Indeed, the arm's-length nature of NESTA will be even greater than for the other funds. The intention is that the distributors will have an amount of capital and freedom to use the income from that capital as they think fit within the guidelines set down, and the amounts they have will be dependent upon the returns from that capital.

I apologise to the noble Viscount, Lord Falkland, for the short time he has had to study the papers. It was my experience over many years that this has always been a difficulty for those in opposition. However, it has led him into error in thinking that we have succumbed to the temptation to use the National Lottery for purposes which would otherwise properly be met from taxation.

The noble Viscount is correct in saying that the National Lottery is efficient because it has been efficiently run; I certainly acknowledge that. But that does not mean that it is not possible to improve the efficiency of the National Lottery, the directions which are given to it and the way in which an operator is chosen.

Our primary concern in the choice of a new operator will be to maximise the return to good causes. We believe that the public will prefer to see that objective achieved by a not-for-profit operator; but, if we cannot have that within the primary objective of maximising income to good causes, then so be it. All we are ruling out at this stage is the two extremes, one, a state-run lottery run in effect by civil servants, which we do not think would be appropriate, and the other, a lottery with an open-ended profit commitment, which is what we have now. Camelot will, of course, be welcome to submit proposals within our guidelines to become the new operator after 2001.

I understand the thoughtful points which the noble Viscount makes about NESTA and about reaping rewards from our own skills and scientific, technical and artistic achievements. It is true that there are a number of organisations in the field, including particularly the higher education system, which already touch on the fringes of what we are trying to do with NESTA; but I believe that NESTA will be able to meet needs which other organisations cannot reach and bring together our effort in this area, as some other countries have succeeded in doing.

The final question which the noble Viscount asked was whether it would not be better to continue with the existing lottery system. I hope I have shown in my replies that what we are proposing will be an improvement which is possible because of the success of the existing lottery.

My Lords, the Statement made by my noble friend certainly impresses, but I regret that I cannot share his enthusiasm. The test of the lottery is being judged purely in financial terms.

I should like to ask my noble friend whether, in pursuit of its policies, new Labour looked at the social consequences of the lottery and questioned whether they were consistent with our general view of the nature of the society we are creating. We are creating a nation of gamblers, a culture which thinks that there is easy money and success to be gained by gambling and buying tickets, whereas I assume that the Labour Party's new philosophy is to encourage initiative and energy. Was any analysis made of the people who buy lottery tickets and of the social consequences for those who are accumulating poverty and debt as a result of the new habit of buying tickets in the hope of success?

I believe that the nature of our society and the consequences of the lottery should be questioned before we embark on this widespread enthusiasm for getting money for nothing.

My Lords, my noble friend's attitude towards the lottery is well known and well respected. It is a view expressed not just by him but by many sincere people who feel very profoundly that even a lottery which contributes as much as this one does to good causes is somehow immoral and an attack on the fabric of our society. I respect that view without sharing it.

My noble friend asks whether there has been research on the effect of the National Lottery upon individuals who take part in it. The cant word is "invest" but I think it right to call it gambling because that is really what it is. The answer is that research has indeed been carried on through the Office for National Statistics and on the effect on other charities in collaboration with the National Council of Voluntary Organisations. That research is continuing.

Compared to some other forms of gambling, the National Lottery is very soft gambling. In most cases it is not the kind of gambling where the return is immediate, except for the relatively minor scratch cards. The amount of expenditure on the National Lottery per household per week is of the order of £2, which is not earth-shattering when compared to something like £9 spent on cigarettes and £15 on alcohol. It is not really a destruction of the fabric of our society. On the whole, provided we keep the National Lottery to soft gambling, as it is at the moment, I do not think that my noble friend's most dramatic fears are likely to be realised.

My Lords, I find the Statement made by the Minister very puzzling. If Camelot had not been a success and if the National Lottery had failed to meet the targets which the previous Conservative government had in mind for it of revenue of about £2 billion a year and perhaps £100 million or £150 million going to each of the five good causes, then there might have been good reason for change. In fact, the lottery and Camelot have exceeded all the hopes that we had when the project was started by the Conservative government four years ago. So if it ain't broke, why fix it?

My fear is that what the noble Lord has told us this afternoon is the thin end of the wedge. It is ministerial hands getting on the funds produced by the lottery in order to direct them into ideas and conceptions which are appealing to the Secretaries of State for the Environment, Health or Education. I do not blame them for that: every Secretary of State worth his salt should have his own ideas. But surely the last thing that your Lordships would wish to see is the money generated by the lottery, which was intended to go to causes such as arts, sports and heritage, which were not getting government money, being diverted into pet schemes of Ministers?

It seems to me that what we are seeing today is the first signs of the lottery being treated as another windfall tax, a means of Ministers finding additional money for their own ideas and conceptions. However good those ideas may be in themselves, they should not be funded by the lottery. I would remind the noble Lord that ministerial hands on the neck of the marvellous goose that the lottery has turned out to be could very quickly lead to the death of the goose and no more golden eggs.

My Lords, the noble Lord, Lord Renton of Mount Harry, made two generic comments. Perhaps I may encapsulate his arguments into the two most important points. The first was: if it ain't broke, don't fix it. We acknowledge the success of the lottery and pay tribute to all who contributed to it. But the allocation of the licence to the operator for the first time was made in a very considerable spirit of insecurity. We did not know how successful the lottery would be. Camelot did not know, and Oflot did not know. Therefore, perhaps there was an undue degree of caution in the extent to which profits were allowed to be taken out of the lottery.

We have the advantage now. I acknowledge the justice of some of the noble Lord's comments. But we know much more about the success of the lottery. Nothing is secure in gambling, but at least we have experience of success and may be able to achieve a better bargain on the next occasion in four years' time when the licence is awarded. It would be foolish and irresponsible for the Government not to take advantage of that knowledge to secure the best deal for the taxpayer and, above all, for the good causes.

The noble Lord's second point concerned the pet schemes of Ministers. I recall that the first award made by the heritage lottery fund was an award of £13 million not for the acquisition of the Churchill papers and not even for the copyright of the Churchill papers, but for a certain degree of access to the Churchill papers. We must recognise that there is a great deal of public concern about the extent to which lottery funds, paid for by all sections of the population, have gone to elitist organisations. That was recognised by Lord Rothschild when he chaired the Royal Commission on gambling in the first instance in 1978.

We recognise that public concern and the fact that the public have an interest in more local, targeted, universal and popular causes than some—I shall not go further than that—of the causes to which money has been given in the past. We reflect public opinion as we expressed it in our manifesto, our policy document, and as it was recognised in the election.

My Lords, if I were to take a snap show of hands, I wonder how many Members of your Lordships' House would be found to buy lottery tickets. I would be among those who do not buy them. We sit in this Chamber patting one another on the back and congratulating ourselves on the success of the National Lottery. However, I join my noble friend Lord Taylor of Gryfe in asking whether there is anything in the White Paper that will deal with the problem of addiction to gambling. Contrary to what my noble friend the Minister said, in a supermarket on Saturday morning or just before the closing time for buying tickets, one can see young couples—sometimes, just a young mother with three children—buying not £2 worth of tickets but spending £4 or £5 on tickets and sometimes buying scratch cards as well. Is my noble friend aware of the social damage that that is doing to less well-off families who can ill afford to gamble but who are seduced by the constant promise that on Saturday night by eight o'clock they will be multimillionaires—a forlorn hope?

Finally, just as the drinks industry contributes substantial sums of money to investigations into the problem of alcoholism and just as the tobacco industry contributes substantial sums to investigations into the relationship between cancer and smoking, so, I ask, why should not the gambling industry, led by the National Lottery, contribute substantial funds to investigate the social evil of gambling?

My Lords, my noble friend is one of the 10 per cent. of adults who have never taken part in the National Lottery. Let me confess that I equally am an oddball in that I have not taken part. But, then, I have never done the pools, either. I have most of the vices but gambling is not one of them. In that sense, he and I are on the same side.

In answer to my noble friend Lord Taylor of Gryfe, I hope I made the point that whatever may be the evils of gambling—I do not deny that excessive gambling in particular is very much an evil; I do not look at the noble Viscount, Lord Falkland, as we had his confessions on the subject some months ago—the National Lottery, compared with some other forms of gambling, is a relatively soft form of gambling. It does not have the same immediate pay-off and the amounts of money put in from the average family in the course of a week are rather low. I cannot, however, resist the thrust of my noble friend's question about whether there should not be greater research into addiction for gambling. I shall consult on that matter and write to him.

My Lords, there is much in the Statement that I instinctively feel able to support. However, I share many of the reservations enumerated by my noble friend. Therefore, would it be possible for the Government to consider whether the House should be given an early opportunity to have a fuller debate on what is clearly a complex and large subject?

My Lords, the proper answer to that question is that it is a matter for the usual channels. Personally, I would welcome such an opportunity. When the noble Viscount has had an opportunity to read the White paper he will see that its whole emphasis is on public consultation. That is why I referred to the free leaflet which will be made very widely available, with the help of Camelot, in the outlets for lottery tickets. We hope that the general public as well as Parliament will feel able to comment on the proposals in the White Paper.

My Lords, I thank my noble friend for repeating the Statement. But perhaps I may associate myself with the remarks made by my noble friend Lord Ewing of Kirkford on the problems of poorer members of our society in relation to the lottery. In that sense, I wonder whether the Minister is prepared to comment on the response from the other side of the Chamber which seemed to be that the National Lottery is a success and that nothing should be done to change it. Let us consider their criteria of success. Are they saying that it is successful to take money from poor people? Are they saying that success is when rich and powerful people have the ability to determine where the lottery proceeds are spent? Is it a criterion of success that money should go in matching funds to organisations which presumably have recourse to other funds in order to match that money? Surely part of the thrust of the Government's White Paper is intended to detract from those criteria of success and use the proceeds of the National Lottery in areas that strike a much greater resonance with the ordinary people in our society.

With regard to disbursement being judged by what I describe as relatively rich and powerful people—the great and the good in our society—would not it be a better way of determining where lottery funds are disbursed to ask local councillors to judge where the money should be spent? Also, bearing in mind that every lottery ticket bought is bought in a specific geographical area and therefore in a local council area, surely we should be able to find some way of ensuring that the money spent by people in a local area goes directly back to that area and is spent in good causes within that area.

My Lords, it would be quite impertinent of me to attempt to analyse the motivation of noble Lords opposite in putting their questions. With regard to my noble friend's questions about distribution and consultation, in the White Paper there is quite extensive coverage of the requirement to ensure that the geographical distribution of lottery receipts is in accordance with need and the recognition that there should be far more people, including local people—why not councillors as well?—involved in the way in which funds are distributed. There will also be a serious attempt to make sure that the hurdles that have to be cleared before a person can put forward a lottery fund application are as low as possible.

My Lords, will the noble Lord, who is a civilised man, refrain from the too-common current practice of amending and distorting the English language by always assuming that "élitism" is a word that describes something that is unsatisfactory and to be avoided? It can simply mean excellence in the arts, culture and history and those matters which the lottery ought to be supporting.

My Lords, I acknowledge the noble Lord's correct representation of dictionary definitions. He will notice that when I used the word "élitism", I was not describing my own reaction, but the public reaction to some of the awards that have been made.

My Lords, is the Minister able to acknowledge that Camelot, who set up the National Lottery, has been praised worldwide for the competent way in which it did so? Will he also acknowledge that the sums raised were far higher than expected? We on this side of the House will have every right to be angry if the contract is given to someone claiming to make no profit and at the end of the day the sums fall considerably lower than they are at the moment through sheer inefficiency. I hope that the Minister will not allow the contract to go to someone on those grounds alone. Camelot should be respected for its amazing achievements in launching the lottery.

My Lords, not only do I acknowledge the first two points made by the noble Lord, but I also acknowledged them in advance. In other words, I made those points in my speech. I acknowledged that the lottery is successful and that Camelot deserves a considerable part of the credit for that. It is an efficient operation.

That is not to say that it cannot be improved by an operator who is judged by those best qualified to judge—in this case the director general of Oflot—as being that which is most conducive to maximise the revenue for good causes. That is the fine criterion with which we shall be concerned. That may or may not mean a not-for-profit operator. The objective of maximising the return for good causes is consistent with the noble Lord's wish to have an efficient and effective lottery.

moved Amendment No. 5:

Page 1, line 7, at end insert ("in accordance with proposals set out in a White Paper to be laid before Parliament before this Act is brought into force").

My Lords, I listened carefully to what my noble friend said. It is important that we have further definition of the phrase that appears in the schedule,

"to consult people in Wales on the Government's proposals for a Welsh Assembly".

We need to know exactly to what proposals they are referring.

I thought that my noble friend was rather generous in his remarks about the publication, and the timing of the publication, of the White Papers. It seems to me that if it was possible for the Government to publish the White Papers for Wales and Scotland this week, it might have been courteous to Parliament to have ensured that they were published today so that they were available for the whole of the Report stage of the Bill. I understand that the Welsh White Paper is to be published tomorrow—at least the press in Wales seems to be under that impression. I hope that it will not be produced outside this House and kept from those of us who are here to debate the Report stage this afternoon. I hope that the noble Lord will be able to assure us that when we come here tomorrow copies will be available in the Printed Paper Office so that we can be as well informed about what is in the White Paper as the Scotsman appears to be already as the result of leaks. That seems to be the very least we can ask for.

I shall return to the question of what is in the White Paper on later amendments. However, two comments appearing in the South Wales press prompt me to add something to what has already been said. We are told in the press that the White Paper is to be made widely available in Wales. We are told that a cheap copy, or a cheaper than normal copy—at £3—will be available at distribution points so that it can be easily bought by the people of Wales. We are also told that there will be a telephone hotline so that people can obtain information about what is in the White Paper. With all this information being provided, I think that the Welsh people should know whether what they are voting for is only what is in the White Paper and not something that might be significantly different.

I am also prompted to carry the argument a little further by a report that appeared extensively in the Welsh press over the weekend that, when the Prime Minister visited South Wales last week, he proceeded to inform the people of Caerphilly on two separate occasions that one of the advantages of voting for the assembly in Wales would be that decisions,

"about schools, hospitals and law and order in Wales can he taken here by the people of Wales".

On another occasion he referred to control of the police. That simply may have been ignorance by the Prime Minister about what is going to appear in the White Paper which is being published this week. It is extraordinary that the Prime Minister should go to answer public questioning in Wales and not know what is in his Government's White Paper, but I suppose it may mean that there will be a sudden change in what the Government intend to do and that they will suddenly transfer responsibility for the police and law and order.

The very fact that the Prime Minister can go to Wales and make such a substantial announcement of the intent of government, even if it was incorrect on this occasion, suggests that there may be fairly good reasons for us confining the freedom of government to act in the future by a specific reference to the White Paper; so that the people of Wales when they vote will broadly know what they are voting about and that we shall not suddenly be told when we come back with the Scotland and Wales Bill, or the Wales Bill if there are to be separate Bills, that we have to vote for anything they like to put into the Bill because the people of Wales have voted for an assembly and we are not allowed to argue about the detail. We must have some definition and, at the very least, some clear statement from the noble Lord about what the Government's intentions are.

My Lords, further to everything that has already been said from these Benches, which I shall not repeat—I agree with every word of it—I would ask the noble Lord whether he would consider that in one sense—because we do not have the information—the debate is premature and we may have to come back to this matter at Third Reading. I say that because a principle of the utmost importance is involved. By no stretch of the imagination could this group of amendments be considered wrecking amendments. They are amendments which are, and are intended to be, in implementation of the principle of the Bill. It is our right—furthermore to our right, it is our duty—if insufficient time has been provided to anyone inside or outside Parliament to consider measures of great importance, even if they are briefly referred to in an election manifesto, to delay by amending as is proposed in this group of amendments.

If the noble Lord would care to look at Hansard of 19th May 1993 (cols. 1787–8 of Volume 545) he might appreciate the force of what I am seeking to ask him respectfully to consider.

My Lords, perhaps I may raise one brief question. I am disturbed to hear the news of the possible leak in the Scotsman on Wednesday of the Scottish White Paper. The Government had, to my mind very wisely, organised that the Welsh White Paper would come out two days early and that we would, as we urged in Committee, have a space in which the Welsh matters could be considered before the tumult of the Scottish debate began. If the Scotsman is to print this matter on Wednesday it will extinguish the very brief period in which the spotlight can be on Wales. If there is truth in this rumour, is there anything the Government can do to restore some primacy to Wales? If they have leaked the Scottish White Paper, perhaps they can leak the Welsh one tonight.

My Lords, when I was a small child I was always taught never to believe what I read in the newspapers. Therefore, I am not inclined to believe something that I have not read in the newspapers. I do not know what will be in the Scotsman. I have had much more amusing and interesting things to do this afternoon and this evening; namely, sitting in your Lordships' House. I do not know what is in the Welsh newspapers. I have no particular interest in what may or may not be rumours. I do know, on the steadfast authority of my noble friend Lord Parry, that in one newspaper in Wales over the weekend there was a careful and considered article about me, describing me as Lord Williams of Elvel, with a photograph of the noble Lord, Lord Williams of Elvel. So they seem to have got it comprehensively wrong.

This Government do not believe in leaks. We do not act on the basis of leaks. As is well known, we propose to publish the White Paper on Wales on 22nd July and that on Scotland on 24th July. That is entirely consistent—indeed, rather more generously consistent—with the undertakings which my noble friend Lord Sewel and I have given to your Lordships on a number of occasions. We promised to deliver and we have.

The noble Lord, Lord Crickhowell, observed that the Welsh people and the Scottish people are entitled broadly to know what they are voting about. I respectfully agree. That is the purpose of the White Papers. There is nothing between us on that. He specifically asked about copies of the Welsh White Paper. I can assure the House that copies of the White Paper will be available to Members of both Houses in the usual way. I hope that is helpful.

I think I have been the object of an attempted seduction—although I was asleep at the time and missed it—in wanting me to say that there would be a second referendum. My Lords, no. The first referendum, as has been said ad nauseam, is intended to be advisory and for guidance. The proposals to which the question on the referendum ballot refers are quite plainly the Government's proposals. Those proposals will be set out in the White Papers. There is no benefit in inserting a specific reference to the White Papers.

In respect of Amendments Nos. 5 and 15, they are technically incompetent because they imply that part of the Referendums (Scotland and Wales) Act would have to come into effect and have effect before the Act itself came into force.

Obviously these are going to be important matters. The White Papers will be available. The electorate in both Wales and Scotland will come to their own conclusion, not entirely on the White Papers; but those are the broad thrust of the Government's proposals. I imagine that the electorate will listen to contributions from your Lordships' House, from the "Yes" and the "No" campaigns or sub-variants of each campaign. We want the public to come to their own conclusion. This is a device which is not common in our country's constitutional regime, but we believe it to be an important one. On that basis I believe that we are going the right way about it.

Answering hypothetical questions is arid enough at the best of times. We are putting forward our proposals for the judgment of the people of Wales and Scotland respectively. Their judgment will be advisory and is intended to guide the Government. Having listened to the voice of the people in both Scotland and Wales we shall bring forward our proposals for full scrutiny in both Houses of Parliament. On that basis I invite the noble Lord to withdraw his amendment.

My Lords, I am grateful to noble Lords who took part in this short debate. I am not in the least surprised that the noble Lord, Lord Williams of Mostyn, said that the Government do not operate on leaks. No government does that, but his party was pretty good at operating on leaks when it was in opposition. So when the position in your Lordships' House and down the corridor changes, one's view on leaks changes. I fully accept that the Government will not be very happy if there is a leak in the Scotsman, unless it is deliberate. Those are not unknown. I can see the merit in one such deliberate leak on Wednesday, but we shall wait to see. The noble Lord, Lord Williams of Mostyn, will either be able to tell me that I should not believe what I read in the newspapers next week—I was going to say that I should not believe what I read in the Scotsman, but I might never appear in it again if I said that—or alternatively I may be able to say to the noble Lord, "Occasionally, you should believe what you read in the newspapers".

However, the point really is whether or not somehow we should tie the Government down as to how the legislation will relate to the White Paper and how closely they must follow it. I said that they should follow it, but I have no doubt that the Government will attempt to do so as best they can. But I do not believe that with a subject as complex as this issues will not arise which will mean that the Government will change their view. They will find that there are different ways to do what they want and perhaps sometimes that there are even better ways. They will want to take these matters on board, and that is the whole purpose of legislation. I am simply putting the question as to what extent the Government are going to be tied by the White Paper or to what extent they will be able to move from that. If that move is significant, however one defines "significant", should we then have a second referendum, or what?

The noble Lord said that he did not like answering hypothetical questions. If he is to be a government Minister he will have to learn that he will have to answer such questions. I shall send him some summer reading on some of the Bills of the past few Sessions where hypothetical questions from some of his noble friends formed a fair portion of the questioning of government Ministers both at Committee and Report stages. One of the problems of legislation is that one has to try to work out how it will affect people in different circumstances, and that is what we are attempting to do here.

I am grateful for at least one point of clarification. The noble Lord has not made any attempt to say otherwise, but it is interesting to have it on record that the Government's proposals, as spelt out in the preamble, are the ones in the White Paper, so that everything else that we read that comes from the Government, even their manifesto, will be subsumed by the proposals in the White Paper. As I have been invited continually to wait for the White Paper before I make up my mind one way or the other, I must now start the wait. I beg leave to withdraw the amendment.

moved Amendment No. 6:

Page I, line 13, after ("government") insert ("or parliamentary").

My Lords, I support the amendment and I hope that we shall not be told that there will be any kind of administrative problem or delay. Not all noble Lords would remember it, but in 1945 there was an interval of three weeks between polling day and the declaration of the poll in each constituency so that service votes could be brought in from all over the world. It worked perfectly smoothly. This is a minute administrative effort compared with that. Indeed, the procedure happens anyway in parliamentary elections. I hope that the Government will realise that we owe it to those men who are serving perhaps overseas or, indeed, in this country in our Armed Forces. They should have the right to determine what is to happen.

My Lords, with all respect to the noble Lord, Lord Renton, I believe that the final thrust of his remarks relates to subsequent amendments, not the present one. The noble Lord has been dealing with the armed services, but that is not the purpose of our present amendment. The noble Lord will therefore acquit me of discourtesy if I do not deal with that particular aspect—

My Lords, I apologise and I thank the noble Lord for his courtesy.

My Lords, not at all; there are so many amendments that it is often difficult to distinguish one from the other.

Perhaps I may say to the noble Lord, Lord Mackay of Ardbrecknish, that I think that I can accept the noble Lord's assurance of "consensus and all that", which was the phrase that he used. Even the noble Lord could not continue beyond "consensus and all that".

The difference here is one of approach in principle. We believe—we have made this clear beyond doubt—that the clear criterion for deciding who should vote on the proposals should be residency in the country concerned. It is right in principle; it is workable in practice; and we have chosen the local government franchise because it most closely accords with the residency test. We do not believe that it is appropriate for an overseas elector—that is, someone who is not resident in the United Kingdom—to be entitled to a vote on a referendum concerning the arrangements for devolution to Wales and to Scotland. If overseas electors were to be included, it would mean, as my noble friend Lord Sewel pointed out on an earlier occasion, that if a Scotsman lived in Benidorm and a Scotswoman lived in Blackpool, the Scotsman living in Benidorm would be able to vote on devolution whereas the Scotswoman living in Blackpool would not. I suggest that that is not entirely intellectually consistent or coherent.

suppose that this difference of approach is not capable of being reconciled. We do not believe that overseas electors ought to be able to vote in a referendum on the constitutional arrangements for Welsh or Scottish devolution. I know that the noble Lord will not think that I am being discourteous, but I believe that the difference between us is as simple and as short as that.

My Lords, I am grateful to the noble Lord for giving way. He is making his position clear. May I ask him whether he envisages that overseas voters would be allowed to vote in the elections for the Scottish assembly, if it comes about?

My Lords, that is not the point that we are dealing with at the moment. The noble Lord has great experience of being able to answer hypothetical questions, but I am much too young to have fallen into his bad ways.

My Lords, I am sure that some of your Lordships will realise the truth of what I am about to say because if I had tried to give such an answer during our long hours on many social security Bills, "uproar" might have been a mild description of what would have happened in your Lordships' House. Indeed, "histrionics" might have been nearer the mark for the Opposition spokesperson if I had failed to answer the kind of question that I have just posed to the noble Lord.

I am disappointed because I had thought that I had found a way to accommodate the desires of the party of government to allow EU citizens (and some of your Lordships) to vote, while accepting that people appear on the parliamentary register for the perfectly good reason that they may be working overseas for our country. Of course, some of those people on the register will have retired abroad and others will be working in other operations. It seems to me that if we have allowed those people to appear on our parliamentary register, it is illogical not to allow them a vote in the referendum.

As I pointed out at Second Reading and in Committee, I have a particular interest in this because my daughter is an overseas elector in Northern Italy. She will not be able to vote in a referendum affecting the future of her country and yet an Italian waiter working in the famous icecream parlour, Nardini's in Largs, who has been resident in this country for a little while will be able to have a vote. Interestingly enough, there is such a person, although not from Bosisio Perini, where my daughter lives.

I find that arrangement fundamentally unfair, and despite, as always, the eloquence of the noble Lord, Lord Williams, I do not think that he has come any way towards meeting me, although I have come quite a long way to meet him by tabling this amendment which I believed would bridge the gap. I am sorry that the gap cannot be bridged, but I feel so strongly about this that I shall seek your Lordships' opinion.