asked Her Majesty's Government:

My Lords, performance indicators for higher education show a history of under-participation by some parts of the community. This must change. We have made widening participation central to our vision for the future of higher education. To this end, we recently announced the Excellence Challenge for a £150 programme to enable schools, colleges and universities to encourage applications from disadvantaged young people who have the potential for higher education. We have also put in place a substantial package of support for mature and part-time students.

My Lords, I thank my noble friend the Minister for that very encouraging reply. I declare my interest here as Chancellor of Wolverhampton University, which has an excellent record of widening participation and has exceeded all the bench-marks. Universities that provide opportunities for disadvantaged groups have experienced an increase in withdrawals, and students are suffering financial hardship. With the abolition of maintenance grants and the introduction of fees, many students, especially those from the minority communities, now combine full-time study with near full-time work, while others experience the burden of debts. Can my noble friend say whether these policies are consistent with the desire to provide equality of opportunity for all the benefits to be derived from higher education?

My Lords, I am well aware that Wolverhampton University has an excellent record of widening participation in this respect. Indeed, I congratulate the university on that fact. However, if we take universities as a whole, there has not actually been a deterrent effect: there has been an increase of over 6,000 students—nearly 2 per cent—being accepted for entry this autumn, as compared with last year. As far as concerns the effect of fees, my noble friend will be aware that we raised the threshold for relief from fees so that, now, 50 per cent of all students, including, I believe, all of those to whom he refers, do not pay fees.

My Lords, I am sure that the noble Lord will know that there has been a reduction in applications to Cambridge University this year, which may well be as a result of the remarks made last year by the Chancellor of the Exchequer. In response to a Question on 7th June of this year, the noble Baroness, Lady Blackstone, said that the Government had no intention whatever of using funding in order to interfere with admissions to university. Therefore, does the noble Lord agree that expecting universities to set targets for their admissions in return for funding is in fact illegal under the higher education legislation of 1992?

My Lords, on the noble Baroness's first point, I can say that there has been a reduction in admissions to Cambridge. However, there has been an increase in admissions to Oxford, which rather diminishes the value of the noble Baroness's point about the Chancellor of the Exchequer. As to the issue of interference in selection processes, there has never been—indeed, there is no intention—to interfere with the selection process. The Excellence Challenge programme has more than half of its expenditure in schools and FE colleges. It is designed to increase applications rather than to influence the selection procedure. Universities are happy with that and are content to collaborate with the system, because it is clearly to their advantage.

My Lords, we on these Benches should like to remark that inverted snobbery can be just as destructive as old-fashioned snobbery. The question here is more about Robbins' vision of helping to transmit a common culture in universities. In their possible review of these key performance indicators, which are not working as well as they should be, would the Government care to look at that original vision rather than at education as conveying a series of mechanical skills?

My Lords, I certainly agree with the right reverend Prelate about what Robbins said. Indeed, when I considered the way in which this Government are approaching the issue, I was reminded of Robbins' original words, which assumed, as an axiom, that courses of higher education should be available for all those who were qualified by ability and attainment to pursue them and who wished to do so. I believe that that expresses better than government these days the fundamental principle behind our approach to universities and to widening access to them.

My Lords, is the Minister aware that the two main deterrents to participation in higher education by those from less advantaged backgrounds are cost and lack of appropriate qualifications? Is he also aware that only 800 students from social class five acquired 21 A-level points last year? If the Government are really anxious to encourage participation by such people, is it really sensible for them, first, not to extend the right to free tuition up to A-level equivalent qualifications for 19 to 24 year-olds, instead of just up to the age of 19; and, secondly, is it right to exclude part-time students from most of the schemes aimed at helping mature students meet the cost of studying? Finally, are both sides of the DfEE really working to the same agenda?

My Lords, I thought that I had made it clear that a very substantial part of the Excellence Challenge programme is devoted to the exact aims that the noble Baroness wishes to promote. Indeed, we entirely agree with her. As for part-time students, when we introduced tuition fees in the first instance the House will recall that part of the deal was that there would be substantial additional funding for mature students and for part-time students. Both groups have been made eligible for loans as part of that deal.

My Lords, will the Minister confirm that in the past 10 years universities have dramatically increased the participation in higher education of mature and part-time students, as well as women and ethnic minorities? In declaring an interest as the chief executive of the Committee of Vice-Chancellors and Principals, I draw to the attention of the House the concordat recently signed between representative bodies of universities and schools. Does the Minister agree that one of the key issues is raising the aspirations of state educated children who currently do not apply?

My Lords, I entirely agree with my noble friend that one of the most important things—in fact, probably the most important thing—is to raise the aspirations of those in state schools who do not currently apply. I congratulate the noble Baroness and her organisation on the concordat. But we must get away from the idea that the Government are trying to impose targets. What we are doing is indicating bench marks against which the universities can judge their success in attracting applications from a wider range of potential students.

asked Her Majesty's Government:

My Lords, the noble Lord asks a timely and important Question on my current proposals for barristers' fees in two distinct categories of publicly funded work, family and criminal. As a distinguished solicitor, the noble Lord shows a commendable concern for barristers as distinct from the solicitor profession. My proposals have been the subject of extensive consultation from 4th July to 12th October. I shall be provided with a final analysis of responses this Friday. These I shall consider carefully, along with all the representations made to me. I would be concerned if I concluded that any significant drain of talent from these areas of practice was likely due to a new fee regime. However, because of current market circumstances, I am not presently persuaded that such a likelihood exists.

My Lords, I thank the noble and learned Lord the Lord Chancellor for that reply. Is he aware that solicitors have shown a commendable concern, equal to that of barristers, for the efficacy of the Legal Aid Fund? In view of the fact that the noble and learned Lord is to meet them either separately or together—preferably together—will he ensure that he represents fully in the discussions their vested interest in making the legal aid scheme work? Will he do what he can to bring together the viewpoint of the Law Society and of the Bar Council in that regard? It is important that they speak with a united voice.

My Lords, I believe that my noble friend asks whether I retain an open mind on the proposals and will be flexible in my approach. I certainly shall be. I aim for a fair playing field between solicitors and barristers. I shall meet the chairman of the Bar Council and the president of the Law Society at the end of November. I shall consider the representations they make with an open mind and will come to my decisions before Christmas.

My Lords, will my noble and learned friend the Lord Chancellor confirm—I am sure he will— that after prolonged negotiation between his department and the Bar Council there was agreed in 1997 and thereafter put into effect an agreed mechanism for remunerating criminal legal aid? Will he also confirm that this provided a complex formula for assessing fees and that there has been no uplift since 1997 despite the RPI increasing by over 10 per cent? My question is therefore this: is the noble and learned Lord the Lord Chancellor seeking to discredit this agreed mechanism by imposing punitive deductions in regard to the scale already agreed? If so, does he accept that there is truth in the old adage that if you pay peanuts you will ultimately get monkeys?

My Lords, the facts are that my proposals are confined to cases up to 10 days in length and they concern what we call "graduated fees". The noble and learned Lord is right that in criminal work graduated fees have applied to defence barristers for almost four years. These are acceptable as reasonable by the Bar. A graduated fee scheme sets fixed fees for different items of a case, including preparation and hearings, in place of the bad old system of brief fees, daily refreshers and ex post facto assessments of reasonableness.

My proposals are designed to remove an inequity under which prosecution counsel were paid much less than defence counsel to the prejudice of the CPS when engaging prosecuting counsel. The proposal therefore is that criminal graduated fees should be reduced by 10 per cent overall to pay for an increase in prosecution fees to bring about equality and to introduce a graduated fee system for prosecution counsel. The Bar should benefit overall and therefore I do not accept my noble and learned friend's strictures.

My Lords, bearing in mind the judicially reviewable duties of the noble and learned Lord the Lord Chancellor under Section 25(3) of the Access to Justice Act, noting that one of these duties is the obligation to secure family law services by a sufficient number of competent practitioners and taking into account the fact that the circumstances for a cost uplift are extremely constrained, how can the noble and learned Lord the Lord Chancellor fulfil this duty when the rates of pay for a senior junior counsel will be the same as for a second six month pupil?

My Lords, the criteria that I must apply are set out in different statutes. Of course, with the liability to judicial review I shall express myself with great care. But in both areas—family and crime—I shall want to ensure that a sufficient number of competent barristers are available to carry out the publicly funded work in question; and that will be achieved.

My Lords, will the noble and learned Lord admit that his plans involve a considerable reduction in legal aid fees paid to criminal law barristers and even more so to family law barristers? Will he accept that it is likely to be a serious deterrent to would-be young barristers who, among other things, know that they will leave university owing debts of up to £20,000?

My Lords, no, I do not accept that. I believe that all professionals must recognise that they are affected by market circumstances, the same as the rest of us. Those affecting the Bar are that the number of people entering the profession increased by 3 per cent last year and the amount of family work has fallen over the past two years so that there is increasing competition between a larger number of barristers for a similar amount of work. There is also evidence that some criminal law barristers work less than full time. But I am not presently persuaded that there is likely to be a lack of supply of competent barristers in either area to carry out publicly funded work to the extent required at remuneration the public would regard as fair.

asked Her Majesty's Government:

My Lords, in the past, local stations were not formally equipped to operate as telephone advisory services although some did provide information to callers upon request. Under British Rail, up-to-date information was available from 43 relatively small call centres all with different opening hours and telephone numbers. The creation of the National Rail Enquiry Scheme (NRES) outsourced call handling to modern, large call centres which have a single 24-hour telephone number which I am assured is deemed memorable. Noble Lords may judge for themselves: it is 08457 484950.

My Lords, does the Minister know that you can never get an answer when you ring that number? I do not know whether the noble Lord is an inveterate rail, car or executive jet man. However, in the days before privatisation if you woke up and could not see your before your face because of fog, or if there were leaves on the line, or if the IRA was "up to it" in the waiting rooms, you could ring the local railway station. I have rung hundreds. They were always manned. That disappeared on privatisation.

We now have the invisible National Rail Enquiry Scheme. When one occasionally manages to get through to the number, one is given the local customer services telephone number, but that too is often unobtainable. If one does get through, those individuals do not know what is happening in one's local railway station or the station to which one wishes to travel. If one presses the point, they ask, "Have you tried Ceefax?" The other day I was told, "You can always have a go at the Net". More often they say, "If I were you, I would try contacting your local railway station or local radio".

I do not understand why we got rid of those telephone services, or why we cannot have them back. Until we do so, the Government will be under continuing criticism because people do not know where they are going.

My Lords, my noble friend says that one can never get through. Knowing where he comes from, yesterday I telephoned NRES to ask about his local station, Oxford. I got through twice on two calls averaging one and a half minutes.

In the years when the noble Lord worked for British Rail, about 60 per cent of callers found that the telephone lines were engaged or that their calls were unanswered; 90 per cent of calls are now answered.

asked Her Majesty's Government:

My Lords, our intervention in June stabilised the security situation and helped prevent a descent into chaos. But many people in Sierra Leone still live under the threat of a brutal rebel minority. We shall not abandon Sierra Leone. We are determined to stand by its people, and to provide substantial practical support for their government and the United Nations. Our objectives remain to assist the Government of Sierra Leone and UNAMSIL to repel the rebels and restore the peace process.

My Lords, I thank the Minister for that reply and remind the House that I have a very peripheral interest. Our troops are doing a fabulous job all round the world. Is the Minister satisfied with the manning of UNAMSIL? Can the noble Baroness say why we are not within UNAMSIL rather than just alongside it?

My Lords, I thank the noble Earl for the compliments that he pays our troops, and join with him. UNAMSIL has been constructive. Noble Lords will know that we were not identified as being a country whose troops would participate in that regard. But we have a strong interest in Sierra Leone historically and now. We have great friendship with the people of Sierra Leone and would not stand idly by when assistance could be given. The noble Earl knows from Questions to and Answers from this Dispatch Box that our support has been sound in relation to training and other matters and is greatly valued by the people and the democratic government of Sierra Leone.

My Lords, perhaps we may congratulate Brigadier David Richards on the well-deserved honour of a CBE which was announced on Friday. It is a tribute not only to Brigadier Richards but to the wonderful way in which our forces in Sierra Leone have carried out their responsibilities.

What is the target strength of the Sierra Leone army which we are assisting to train? When does the Minister estimate that the Sierra Leone army will begin to restore government control over the vast majority of the territorial area of Sierra Leone which is occupied by the rebel forces? Can the noble Baroness say anything about the talks, announced for later this week, between the Government and the RUF; and whether it is still possible for RUF personnel to come back into the political process?

My Lords, I join with the complimentary sentiments expressed by the noble Lord in relation to the recent honour.

I cannot help the noble Lord in terms of the target strength of the army itself. But we have already trained 3,000 troops. It is hoped that the figure will be greater.

The talks between the Government and the RUF are very important indeed. But it will be a matter for them to discuss how they can fashion a way forward. I cannot give the noble Lord any guarantees about the outcomes of those talks. I hope he will understand that it would be quite precipitous and wrong of me to attempt to do so.

My Lords, what is the Government's exit strategy with regard to Sierra Leone?

My Lords, the Government have given a clear commitment to the people of Sierra Leone in relation to training. There has not been drift, as some have sought to suggest in the past. Our exit strategy is to assist the people of Sierra Leone to have a clear, strong army which is well trained and able to meet the needs of Sierra Leone in the future. I cannot give the noble Baroness a specific date but it will be done as soon as is reasonably practicable. I reassure the noble Baroness that our troops and this Government are extremely efficient and do indeed comply with our commitments.

My Lords, was the Minister told why other countries that originally came to the rescue of Sierra Leone and sent forces, such as India, withdrew?

My Lords, they have not yet withdrawn, but the commitments made by some other countries were time-limited. We ask all our partners to join together in support of the democratic government of Sierra Leone. The people of Sierra Leone need our support. My right honourable friend the Secretary of State said clearly how moved he was when he visited Sierra Leone by the plight of hundreds of thousands of people whose limbs had been amputated. That is an appalling situation and we hope that the international community will continue to support Sierra Leone and its democratic government.

My Lords, reverting to the Question asked by my noble friend Lord Attlee, I am sure that the Minister agrees that the key to ending the atrocities and defeating the RUF in Sierra Leone is the capture of the diamond fields that finance the rebels. Will she explain a little more clearly which force will do that? Will it be the retrained Sierra Leone army or armies, UNAMSIL, the British Army troops or the seaborne rapid deployment force that is now also involved? How will all those groups work together? Our troops deserve a bit more clarity about how the co-ordinated effort will be achieved to defeat those committing atrocities in Sierra Leone.

My Lords, all the efforts that the noble Lord has identified need to be employed to help in that task. The British troops have not been and will not be directly involved other than in the ways that have already been explained. Those who want to prolong the difficulties should be dissuaded from so doing. Co-ordination is under the control of UNAMSIL, which is doing well. We should not carp about its efforts. Instead, we should encourage it to do far better.

My Lords, we on these Benches strongly support the Government's action in Sierra Leone, in particular the recent appointment of Brigadier Alastair Duncan as Chief of Staff. Are those actions part of a wider strategy, given that we understand that the United States is committed to training Nigerian peacekeepers? Does the Minister believe that there are dangers beyond Sierra Leone to the order and safety of West African states?

My Lords, as usual, the noble Baroness has rightly highlighted a difficulty. The issues in West Africa are very complex and can be inter-dependent. It will be very important to re-establish security in a democratic Sierra Leone. That is bound to have a beneficial influence on the surrounding countries. Our strategy must be to look for security in that region. Our international partners are determined, as are we, to do everything reasonably possible to support democracy and good governance in the region.

My Lords, this is not intended as a critical question, but the Minister has referred to our policy and strategy. We know that the situation is not satisfactory. Are we to go it alone from now on?

My Lords, certainly not. UNAMSIL is playing a crucial active role. It is very important that the United Nations is seen to succeed in Sierra Leone, because that will send a message to the rest of the world about the unity of the international community and its effectiveness in facing such perilous situations. We do not stand alone. We should rejoice that we have so many good partners internationally who are standing with us.

My Lords, so often the presence of British and international forces overshadows what is happening among the regional armed forces. Will the Minister confirm that our Government are still supporting some of the regional forces in Africa, which will be well able to cope with the situation when the time comes?

My Lords, I am more than delighted to reaffirm that. The House rightly concentrates on what the British and Europeans are doing, but we should never underestimate the commitment given by other partners in Africa, Asia and elsewhere. Their efforts are as worthy of our support and praise as our own.

My Lords, I support what has been said about the contribution of African forces and I commend the appointment of a distinguished Kenyan officer as the force commander. Will the Minister say something about the deployment of the headquarters elements of British forces to support UNAMSIL, which the noble Baroness, Lady Symons, referred to in her Statement about a month ago?

My Lords, on 10th October my noble friend Lady Symons made it clear that under our memorandum of understanding with the United Nations we are ready to deploy a rapid reaction force in support of UN peacekeeping, including in Sierra Leone. The deployment of an amphibious ready group to Sierra Leone this month is an early demonstration of the seriousness of that commitment. The group comprises elements of our joint rapid reaction forces. It will be headed by HMS "Ocean" and will include troops from 42 Commando Group Royal Marines, as well as the Royal Fleet Auxiliaries "Argus", "Sir Bedivere", "Brambleleaf" and "Fort Austin". It is not a new commitment, as the noble Lord rightly said, but we are happy to take this opportunity to give support.

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 being made in another place on the Pre-Budget Report.

My Lords, I beg to introduce a Bill to confirm the Parliament Act 1949 and other Acts; and to amend the Parliament Act 1911. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.—(Lord Donaldson of Lymington.)

On Question, Bill read a first time, and to be printed.

moved Amendment No. 1:

Clause 2, page 2, line 3, after first ("local") insert ("probation").

My Lords, I thank the Minister for doing the work for me. He has tabled a formidable list of amendments consequential on the one passed on Report. I am grateful for that.

My Lords, we on these Benches also welcome the amendments.

moved Amendments Nos. 2 to 22:

• Clause 2, page 2, line 3, after second ("local") insert ("probation").
• Clause 4, page 2, line 33, after ("local") insert ("probation").
• Page 2, line 35, after ("local") insert ("probation").
• Page 2, line 37, after ("local") insert ("probation").
• Page 2, line 39, after ("local") insert ("probation").
• Clause 5, page 3, line 5, after ("local") insert ("probation").
• Page 3, line 16, after ("local") insert ("probation").
• Page 3, line 30, after ("local") insert ("probation").
• Page 3, line 33, after ("local") insert ("probation").
• Page 3, line 34, after ("local") insert ("probation").
• Page 3, line 35, after ("local") insert ("probation").
• Page 3, line 37, after ("local") insert ("probation").
• Page 3, line 38, after ("local") insert ("probation").
• Page 3, line 42, after ("local") insert ("probation").
• Page 3, line 45, after ("local") insert ("probation").
• Clause 7, page 4, line 22, after ("local") insert ("probation").
• Clause 8, page 4, line 42, after ("local") insert ("probation").
• Page 5, line 2, after ("local") insert ("probation").
• Page 5, line 7, after ("local") insert ("probation").
• Clause 10, page 5, line 24, after ("local") insert ("probation").
• Clause 18, page 9, line 1, after ("local") insert ("probation").

moved Amendment No. 23:

Clause 20, page 9, line 30, leave out subsection (2).

My Lords, we look forward to the noble Lord seeking to overturn the Government in another place.

moved Amendments Nos. 24 to 27:

• Page 9, line 35, leave out ("or persons so employed").
• Page 9, line 37, leave out ("or person so employed").
• Page 9, line 40, leave out ("and chief probation officers").
• Page 9, line 40, leave out ("or appointed").

moved Amendment No. 28:

Leave out Clause 22.

had given notice of her intention to move Amendment No. 29:

After Clause 32, insert the following new clause—

My Lords, with the leave of the House, I shall now repeat a Statement on the Pre-Budget Report which has been made in another place by the Chancellor of the Exchequer. The Statement is as follows:

"In 1997 Britain had rising inflation, a deficit of £28 billion, a national debt that had doubled and was at risk of repeating the old familiar stop-go cycle. So, in this Pre-Budget Report, which will address specific and immediate concerns, we will do nothing to put at risk the economic stability that has given us the lowest unemployment for 20 years, the lowest inflation for 30 years, mortgages at 4 per cent—£1,000—below the average of the previous 20 years, and a Budget discipline that has enabled us to cut borrowing and now invest more every year in hospitals, schools and public services.

"And this hard-won and newly-won stability now gives Britain an opportunity we can either seize or squander—the opportunity to achieve high and sustained levels of productivity growth, and so ensure long-term prosperity not just for some but for all.

"Yet every time the British economy has started to grow, as in the 1980s, governments have taken short-term decisions on tax and spending which have put inflation, interest rates and economic stability at risk. So, Britain has a choice—the choice that underlies this Pre-Budget Report.

"The risk for Britain is to repeat the 1980s' mistake of taking economic strength for granted even when we still have a large productivity gap with our competitors and trying to run the economy at a capacity not yet achieved. Our choice—the choice of the Pre-Budget Report—is that we build economic strength by investing and through tax incentives encouraging a new generation of entrepreneurs.

"The risk for Britain is a repeat of the late 1980s' mistake—claiming a surplus one year could fund tax cuts for every year and, by committing in tax what was yet to be earned, stoking up an unsustainable consumer boom, forcing interest and mortgage rates to rise. We will take no risks with stability. Our choice—the choice of the Pre-Budget Report—is to lock in stability by, as I shall announce today, prudently cutting debt and debt interest payments to keep inflation and interest rates low.

"The risk for Britain would be to cut investment in education and our infrastructure and perpetuate decades of neglect and undermine our economy. This Pre-Budget Report makes a different choice: to move forward with our three-year spending plans that will double public investment—from education and health, to transport, policing, and the environment—and by continuing to cut both debt interest and unemployment, combining public spending with targeted tax cuts to do more for pensioners and, as I shall show, give families the lowest direct tax burden for 30 years.

"So, this Pre-Budget Statement sets out a balanced approach: first, stability and prudence to keep interest rates low; secondly, tackling under-investment and then, when it is affordable to do so, targeted tax cuts for the nation's priorities. Let me turn, first, to the forecasts for the economy.

"Since 1997 our first and most fundamental economic choice has been, through Bank of England independence, tough controls on public spending and difficult decisions on tax, to build economic stability. There were those in this House who predicted that our policies would bring recession. I can report to the House that this year inflation is meeting its 2.5 per cent target and long-term interest rates are around the lowest for 30 years, the same as those in Germany and lower than in America.

"I can also report that the economy is forecast to grow by 3 per cent this year: manufacturing, despite its difficulties, by 1.25 per cent and exports growing by 8 per cent; consumer demand growing by 3.5 per cent with living standards rising; and business investment which has grown by 1.5 per cent as we lock in a higher level of investment as a share of our economy, 14.5 per cent, than at any time in 40 years, a bigger share of our economy than of the American economy; and in total, fixed investment has this year grown by 2.5 per cent. With 1.1 million more men and women in work than in 1997, Britain now has the lowest unemployment since 1979, the lowest long-term unemployment since 1978, the lowest youth unemployment since 1975; and the highest employment ever among women. Unemployment is now lower in every region, with today 1 million vacancies spread across the country. And this month we plan to reach our promised target: 250,000 young people moved from welfare to work.

"And it is precisely because we have taken the trouble to build the long-term foundation for success, and precisely because we have resisted short-termism that would threaten stability in interest rates that I can report that, even in times of uncertainty for the world economy over oil prices and exchange rates, the Treasury forecast for next year is that: inflation will meet its target of 2.5 per cent; manufacturing will grow by between 2 and 2.25 per cent; exports will grow by between 7 and 7.5 per cent; growth will range from 2.25 to 2.75 per cent; consumer demand will grow by 2.25 to 2.5 per cent; business investment by 1.5 to 2 per cent; and total investment by 4.25 to 4.5 per cent.

"There were those who predicted that our public spending plans would lead to higher inflation and that the economy would run out of control. Between 1979 and 1997, inflation averaged 6.2 per cent. Since 1997, it has been less than half as much—2.4 per cent. Interest rates from 1979 averaged 10 per cent; since 1997, 6 per cent. Mortgage rates from 1979— 11 per cent; since 1997, mortgage rates an average of 7 per cent. Growth from 1979 averaged 2 per cent; since 1997, it has been 2.7 per cent.

"We have steered a course of stability, but we are not satisfied. Long-term prosperity for all is our objective, achieving, in this decade, full employment, higher education for the majority of young people, sustained improvements in our public services and, with an end to child and pensioner poverty, not just some, but all citizens sharing in rising prosperity.

"Long-term prosperity for all depends upon us reaching American levels of productivity growth—and on removing the barriers—by tackling under-investment, skill deficiencies, resistance to new technology and restrictive practices wherever they arise; building a stronger enterprise culture open to all. Today, as part of the Government's contribution to a new and necessary drive for higher productivity, I am proposing to encourage entrepreneurship and expand investment.

"To make Britain the best place in the world for multinationals to locate, we will build upon our cut in corporation tax from 33p to 30p—the lowest of all major countries and the lowest in our history—by consulting on three major changes: to abolish from April 2001 the withholding tax, not only on international bonds, but normally on payments of interest and royalties between companies in the UK; to relieve tax on sales of subsequent substantial shareholdings by companies; and, in line with the needs of the new economy, tax relief for intellectual property and goodwill as we create the best modern environment for business in the world. I can tell the House that this year corporation tax revenues are £2.5 billion lower than forecast.

"While it has been put to me that North Sea oil companies, earning higher profits from higher oil prices should be subject to special taxes, I can tell the House that I am determined not to make short-term decisions based on short-term factors. The key issue is the level of long-term investment in the North Sea and this will be the approach that will guide budget decisions in the future.

"My second set of proposals help small businesses whose numbers have grown already by 150,000 since 1997. Last year we cut small company corporation tax, once 23p to 20p, and introduced a new 10p rate—an overall cut in small company tax bills of nearly 25 per cent. Today I am publishing for consultation with small businesses a set of proposals that simplify small business VAT and are of direct help to half a million small businesses.

"Capital allowances and tax credits to encourage investment have already saved over £800 million to business since 1997; £0.3 billion to manufacturing. Because I understand the importance of manufacturing, I shall now examine for the Budget further incentives that help manufacturing, in particular the proposals from the CBI and the Engineering Employers Federation to extend the research and development tax credit.

"To help smaller high-risk and e-commerce companies recruit and retain the staff they need, we propose to expand tax relief for share options and make Britain the most attractive environment for e-commerce. In future, all employees can benefit from our enterprise management incentive scheme—up to a company limit of £2.5 million-worth of share options. For the period to May 2000, I propose to make provision for companies to limit and settle their liability for national insurance contributions on share options.

"Having cut capital gains tax from 40p to 10p for long-term investment, I now propose an even further widening of the scope for the 10p rate—to non-trading companies and to venture capital companies so that employees from all types of companies will benefit. To enhance the contribution of institutional investors, we will consult on the Myners Review proposals to reform the minimum funding requirement and to remove regulatory barriers to investing in venture capital.

"To expand savings generally and especially to double the number of low-income families who save, we will review all capital limits that deter savings. Already, 9 million ISA accounts have been opened and £3 billion more is being saved by low-income savers. The tax-free limit for ISA savers has been set for next year at £5,000. I propose once more to set it at £7,000, a figure 1 shall set for the next five years.

"To build enterprise and balanced economic development across all the regions, public investment, including public/private partnerships, we are proposing today that regional development agencies have greater freedom to decide locally how money is invested to meet local needs. The rate of small business creation in high unemployment communities is still one-sixth of the more prosperous areas and unemployment is still twice as high. Future jobs and long-term prosperity will come, not from benefit cheques or the old subsidies, but by a radically new approach, encouraging economic activity and business development along the lines proposed by the Rogers and Cohen reports.

"I now propose a radical reform of tax incentives designed to raise business investment in high unemployment areas by £1 billion. I propose to introduce stamp duty exemption for all properties in our most disadvantaged communities; accelerated tax relief for cleaning up contaminated land: VAT cuts to reduce the cost of residential property conversions; and tax relief to bring empty flats over shops back into use. I propose to consult on further business rate relief for small businesses in assisted areas; a new generous tax credit for community investment; and the creation of the first community development venture fund.

"To assist the upgrading of listed buildings central to community life in all parts of the country, I can also announce that we are today asking the European Commission to reduce VAT from 17.5 per cent to 5 per cent on repairs to churches.

"I have one further proposal for a special tax relief. We will not only continue to work for cuts in third world debt, but now plan to do more to meet the international targets of cutting world poverty by half and cut by two-thirds infant mortality, which, through preventable diseases, carries off one in seven of the world's children before the age of five. As one of a number of proposals that the International Development Secretary and I are working on to tackle child poverty, the Government will investigate a new tax incentive and spending measures to develop, cut the costs for and ensure the supply of anti-TB, anti-malaria and anti-AIDS drugs—drugs which could save lives, tragically still unavailable in the poorest countries, but with the potential that must now be realised to reduce avoidable suffering and unacceptable deaths.

"I turn to pre-Budget measures to meet our goal of full employment. In addition to making work pay through the lop income tax rate, the new working families' tax credit and the New Deal which some would abolish but which, as independent research shows, has cut youth unemployment by 40 per cent more than would have happened without it, the Secretary of State for Education and Employment and I will intensify coaching help for the 50,000 young people still out of work; consult on introducing a new service that will help redundant workers move quickly into new jobs; investigate how, with tax free and in some cases free adult learning, we can help to upgrade fast-changing workforce skills; extend the New Deal for lone parents with our nationwide programme of choices, starting next April, and extend to a further 150,000 lone parents not on income support the opportunity to get back to work; agree a new partnership with the voluntary sector to help those with disabilities who want work to get it, while with a £200 million a year additional package that the Secretary of State for Social Security will announce tomorrow, improving the living standards of those unable to work and carers; and, for each area, drawing up local full employment plans addressing all barriers to full employment in their local areas.

"Higher productivity and rising unemployment depends not just on ending decades of under-investment and targeting tax incentives on our priorities, but on entrenching a low inflation culture that prudently keeps interest rates and mortgage rates as low as possible. It is because we have learnt from the mistakes of the 1980s and before that I can tell the House that, in spite of the demands made to me, I have decided, in the interests of keeping interest rates and mortgage rates as low as possible, to lock-in over the coming years a fiscal stance that is the same or is tighter than we said at the time of the Budget.

"Let me give the House the background and the full financial figures. Our first fiscal rule—the golden rule: the first rule necessary to keep interest rates and mortgage rates as low as possible—is that over the cycle there must be a current surplus. So, however tempting it may be for some to identify large temporary surpluses as an excuse for permanent injections of resources into the economy, our golden rule demands constant prudence.

"In the Budget I forecast this year's current surplus at £14 billion. I now forecast this surplus to be £16.6 billion, and in the years from 2001–02 the current surpluses are forecast to be £16 billion, £14 billion, £8 billion and £8 billion—figures that ensure we remain on course to balance the current budget over the economic cycle, even on the most cautious of cases.

"Our second fiscal rule—the sustainable investment rule; a bulwark against short-termism that again helps keeps interest rates and mortgage rates as low as possible—is that while over the cycle we will borrow for investment, we do not borrow for consumption and we keep debt at a prudent and sustainable level below 40 per cent of national income.

"After a doubling of the national debt in the early 1990s, the ratio of debt to national income had by 1997 risen to 44 per cent. Having made the necessary difficult tax and spending decisions, we have in the three years since 1997 reduced the ratio of debt to national income from 44 per cent to 41.9 per cent, to 39.6 per cent, and to 36.8 per cent this April.

"I can report to the House that two decisions—first, the decision to use the proceeds from the spectrum auction to reduce our debt; and, second, to use this year's surplus to repay debt—now make possible a further and even more substantial reduction in debt that will keep interest payments low. Because we are, in total, cutting the stock of debt by as much as one-third, I can report to the House that the public sector net debt as a share of GDP will now fall from 36.8 per cent last year, to 32.3 per cent this year, to 30.9 per cent in 2001–02, and from what was a debt to GDP ratio as high as 44 per cent in 1997, I can report that this ratio is forecast to fall to 30 per cent and remain there in future years. With long-term interest rates lower and debt well within the 40 per cent ceiling, we are not only well placed to deal with the ups and downs of the economic cycle but have the best platform for years for sustained long-term growth.

"Our Budget forecast for net borrowing was a surplus of £6.5 billion this year. We now forecast the surplus to be £10 billion this year and £6 billion next. In future years the deficits will be £1 billion, £10 billion, £12 billion and £13 billion as we borrow to invest. In every one of the next five years, adjusting for the cycle a fiscal stance that is the same or is tighter than at the time of the Budget. And this year, with the spectrum proceeds, the net cash debt repayment will be £28 billion.

"So our approach is to reject the old vicious cycle of the 1980s—rising debt, higher long-term interest rates, higher debt repayment costs, lower growth, higher unemployment and enforced cuts in public spending—the old boom and bust. Instead, as we promised, we have by our decisions created a virtuous circle of falling debt, lower long-term interest rates, lower unemployment, lower debt payments and a stronger economy releasing more resources for public spending.

"I can report to the House that, because of this virtuous circle, lower unemployment has brought savings in social security which, compared with the Budget, provide an additional £1.5 billion next year and £2 billion and £2.5 billion in future years.

"In addition to higher government revenues this year from higher employment, higher earnings growth and steady growth, debt interest payments are now lower than we forecast at the time of the Budget, by £2.5 billion next year and £2 billion in the next two years.

"When we came into government we were paying out more in debt interest payments than we were spending on our schools. Soon, as a result of cutting debt payments, we will be able to spend 50 per cent more on our schools than we do on our debt interest.

"Over the past 20 years, 42 pence of every additional pound spent went to debt interest and social security. In the early 1990s it was 50 per cent of every pound. Debt and social security will now require only 17 pence of every pound, leaving more than 80 pence in every pound of additional spending for hospitals, schools and vital services, enabling us to tackle the long-term under-investment in Britain.

"It is therefore because we have cut the cost of debt and unemployment—now costing £5 billion less than in 1997—and because we have also secured sustainable growth, that we are able to lock-in a fiscal tightening, meet all our fiscal rules and, within this prudent framework, we are in an even stronger position than in July to tackle under-investment and target tax cuts on our nation's priorities.

"Since July I have received representations from people in this House about public spending, including representations which propose spending growth only in line with 2 per cent GDP growth per year. I have studied this proposal in detail. It would mean by year three, cuts in spending of £16 billion and after taking into account the measures that I will announce on pensions today, more than £16 billion.

"I have rejected these representations and, because the economy both needs and can afford—and cannot afford not to—to tackle the long-term under-investment, the Education Secretary will tomorrow, as part of allocating his annual 5 per cent real-term increase in education every year, announce resources for the new learning and skills council.

"And because investment is needed in our infrastructure, not just for social reasons but to build economic strength, the Minister for Transport will announce how every region, city and town will benefit from the new investment in roads; and, with new funds from the spending review allocated to each region for economic regeneration, the Deputy Prime Minister will shortly publish his rural and urban White Papers.

"As part of the 5.6 per cent real-terms rise in NHS spending each year for the next three years, the Secretary of State for Health will announce for each of the next three years his allocations to health authorities up to 2004.

"In addition to the Statement on pensions from my right honourable friend the Secretary of State for Social Security tomorrow, and the extra allocation we have made to improve flood defences, my right honourable friend the Secretary of State for Education and Employment is announcing today additional allocations to our schools.

"The windfall tax is money raised from the utilities specifically for the purpose of extending employment opportunity through the New Deal and educational opportunity, renovating so far 17,000 schools. Such has been the success of the New Deal in getting people back to work that the windfall levy account is underspent by £200 million. So the Secretary of State for Education and Employment and I have decided that, in addition to the rise in education spending this year, lower unemployment means that we can allocate new money for every school in every constituency in the country—-money to be available this year for repairs and improvements; money to be paid direct to the school. The head teacher of every primary school will receive a cheque for between £4,000 and £7,000. The head teacher of each secondary school will receive, for the smaller schools, £10,000; for the larger schools, £30,000. Prudence once again for a purpose, enabling us to target resources to our priorities and in a sustainable way.

"This prudence also allows us now to match public spending increases by tax cuts targeted on the country's priorities, including making reforms in the tax treatment of transport and the environment, to which I now turn.

"Between 1997 and 1999, retaining the fuel escalator introduced in 1993 helped to cut borrowing by £30 billion, helping to deliver lower interest rates and enabling us to begin the long-overdue investment in transport, the NHS and schools. And it will have brought about a cut in carbon dioxide pollution by an estimated 1 million to 2.5 million tonnes a year by 2010.

"But today, like all countries, we are having to deal with the rise in world oil prices from 11 dollars to 31 dollars. Because OPEC itself accepts that the world price is unacceptably high, our international efforts are geared to ensuring that production is raised and prices fall.

"So I recognise and understand the very genuine concerns that motorists and hauliers have, and it is because here in Britain we have already cut the deficit, already set aside £180 billion for the 10-year transport plan and already shown how we are meeting the Kyoto targets, that in the last Budget I removed the fuel escalator and made environmentally-based cuts in car and lorry licences and gave new incentives for environmentally efficient fuels.

"In line with the principles we have set down, I am now able today to show how we can complete these reforms and do more to meet people's concerns—without putting at risk either our economic stability, necessary investment in public services, or our environmental gains. Indeed, the reforms I now propose are tailor-made to meet our environmental obligations.

"The annual rise in the price of fuel that would automatically be introduced on Budget day would raise £560 million, putting petrol and diesel up by around 1½ pence a litre. I propose, at a cost of £560 million, a freeze in excise duties—an across-the-board duty freeze on all fuels that would initially last until April 2002—and, if the oil price remains at a high price between now and then, I can tell the House that there would be a duty freeze for a further year.

"I intend to go further in three vital respects. On top of the duty freeze—budgeted for in our fiscal arithmetic the first of the proposals I will consult on would itself involve additional expenditure of as much as £1,000 million and help to promote substantial benefit to the environment.

"Yesterday, we published a report showing the environmental benefits from the introduction of ultra low sulphur diesel in reducing local air pollution. As a result of cuts we made in excise duty on ultra low sulphur diesel, usage in Britain has risen from 20 per cent in 1997 to 40 per cent in 1998, to 100 per cent in 2000. It requires no change to be made in lorry and van engines and it now accounts for virtually 100 per cent of the market for diesel in Britain today. Britain is now leading in this cleaner diesel.

"We now need to build on that environmental achievement. The widespread use of ultra low sulphur petrol would further and significantly improve local air quality. Crucially, it would require no change to existing car engines.

"It is now time to make this cleaner fuel available in every petrol station of the United Kingdom and to make the use of this fuel, which requires no change in any car, cheaper for everyone.

"To do so, I propose to cut the excise duty for ultra low sulphur petrol so that it replaces unleaded petrol in every petrol station in Britain, and at a lower excise duty. On 1st October, we reduced the duty on ultra low sulphur petrol by 1p a litre. I propose, from Budget 2001, a further reduction of 2p a litre, making a cut of 3p in total on all ultra low sulphur petrol.

"And because it is right to maintain the proper balance between petrol and diesel, I propose also from Budget day to match the cut in low sulphur petrol with a 3p cut in excise duties on ultra low sulphur diesel which will go to all diesel users. I expect ultra low sulphur diesel and petrol to account for 100 per cent of the market next year and, when the excise duty cut is introduced at Budget time, motorists using any petrol station in Britain to be able to benefit from this duty cut.

"It is by giving this incentive for cleaner fuels that we can both advance our environmental principles and ensure, with a 3p cut per litre in all ultra low sulphur duty, a cheaper, cleaner fuel available in every garage—a better deal for drivers and cleaner air across Britain.

"I can also announce that for all cars which still use lead replacement petrol—where there is no longer an environmental case for a higher duty rate—I propose from Budget day to end the differential and cut the excise duty by 2p per litre.

"I now intend to go further to help the haulage industry that is undergoing restructuring. I propose support for scrapping or converting older lorries with a £100 million investment fund, including help for buying the new lorries that meet the highest technological and environmental standards, and support for the introduction of logistics and computerisation. The Deputy Prime Minister will also announce help for an industry-wide training and retraining scheme.

"But we can do more. So that foreign lorries pay their share of the costs of using our roads, we intend to introduce in Britain a vignette system—a British disc, under which non-British companies and lorries pay their share to Britain for using British roads.

"The Government have considered an essential user rebate or blue diesel scheme for lorry diesel. Such a scheme would be administratively cumbersome, could be levied only on future purchases of diesel, and would have to be opened to foreign lorries using British roads. It would not help hauliers where their fuel prices are directly passed on to customers. It would have no environmental benefits.

"The scheme I am proposing is far better. Subject to consultation and legal clearance, I now propose to bring forward a much-needed reform begun last year in vehicle excise duty for lorries that will radically cu rates for larger lorries with traditionally high licence fees. The scheme will be implemented in Budget 2001—to sweep aside the 100 separate rates, consolidate them into only seven rate bands, linked to environmental standards, and cutting the rates to match the lowest in Europe.

"Lorries in the most competitive sector will save over £2,000. Over 250,000 lorries will each pay lower licence fees as a result of a £300 million annual cut in licence fees; 100,000 lorries will save over £1,000; the average saving per lorry will be £715 a year; and the cuts are the equivalent in value to a cut of 3p in the price of diesel for the haulage industry—and again, with environmental incentives built in.

"Our proposals for the detailed new scheme, and licence rates, are published today, and the Government are able to start the transitional arrangements to this new licence scheme immediately. I have allocated £265 million for this Financial year—half of the annual revenue raised from lorry vehicle excise duty—to be spent before March for a refund scheme that can repay lorry owners up to half of this year's licence fee; 250,000 lorries, and all large lorries, will benefit from the refunds. They will be worth, for some of the largest lorries paying the highest fees, £1,000 and up to £4,000 this year. Refunds will be paid from next month, payments to be completed by the end of January—the detailed arrangements to be announced by the Minister for Transport.

"To help restructuring and investment in farming, the Minister of Agriculture, Fisheries and Food announced last week, in addition to this year's £220 million package of measures, agri-money compensation for arable producers. In addition to freezing duty on red diesel at its current rate of 3p a litre, I also intend in Budget 2001 to abolish vehicle excise duty on tractors and agricultural vehicles completely.

"I now have a similar proposal for car licence fees. Consistent with our environmental principle that we tax vehicle ownership less, I want now to complete our environmentally based reform of vehicle excise duty for cars. The new licence fee we are introducing for new cars registered from March 2001 is linked to environmental efficiency. For all cars under 1200cc there is also now a lower rate licence fee with a £55 deduction on the standard licence. While this change has been welcomed, many, especially those in rural areas, have put it to me that greater choice would be available to rural motorists and motorists generally if the £55 deduction could be accessible for, not just cars under 1200cc but cars up to 1500cc, including, for example, the Focus, Golf, Astra, Escort and the Rover 214.

"So I propose to extend the lower rate licence fee, the £55 discount, to cars up to 1500cc, to be paid from July but to be backdated from today. So all those who have a car from 1200cc to 1500cc—an extra 5.4 million cars—will be entitled to £55 off their annual licence fee from today. So in total, over 8.5 million existing cars, one in every three, will now pay £55 below the standard fee.

"So for motorists as a whole, with the duty freeze and new reduced licence fee and the cut for ultra low sulphur diesel, the proposed Budget package makes changes worth the equivalent of a 4p a litre cut while meeting our environmental objectives.

"And by next year, for the haulage industry, changes that are worth the equivalent of a cut of 8p on a litre: in each case meeting our environmental obligations, not putting at risk public investment in vital services, nor the stability of the economy. Measures upon which Ministers are now inviting discussion in the pre-Budget consultation which will take place as Ministers visit every region of the country.

"I turn now to specific measures of benefit to families and to pensioners.

"Our aim is that not just some, but every child has the best start in life and that we halve child poverty in the coming decade.

"Families need help most at the time when parents are bringing up their children. As we extend our new integrated system of child support—from £15 a week child benefit for every child to a maximum of £50—our priority in the coming Budget is the new children's tax credit, a tax cut for families. This family tax cut, which replaces married couples' allowance, will be paid on top of child benefit to around 5 million families at £8.50 a week, and is worth £442 a year.

"On current figures, the proposals on which we are consulting would, if implemented, mean that overall the tax burden would not rise next year and I would achieve my aim of next year cutting the direct tax burden on the typical family below 20 per cent. It will fall from 20.3 per cent to 18.6 per cent, the lowest level since 1972.

"But I believe that in the coming Budget we can offer a larger tax cut for families. My aim is to increase the family tax cut to £10 a week, in total a £520-a-year tax cut, increasing families' income. And just as we are introducing a new system of child support based on the foundation of child benefit—but at the heart of which is the new working families' tax credit—so, too, it is now time, based on the same principle, to raise pensioner incomes by a tax and benefit reform that will have as its foundation the basic state pension, and will have as an essential building block, like the working families' tax credit, a new and generous pension credit.

"Our aim for pensions reform is both to end pensioner poverty and to ensure that all pensioners share in the rising prosperity of the nation. But in a new world of rapidly diverging pensioners' incomes—already 17 per cent of couples are retiring on more than £20,000 a year, and that percentage grows year on year—and where, as a result, inequalities between pensioner incomes are as great as inequalities within the population as a whole, we shall best meet our obligations to pensioners by a new approach.

"To plan for the future based on a flat rate earnings-linked rise paid to all, which would give exactly the same to those with incomes above £20,000 as to those on middle incomes and, because the income support system would do absolutely nothing for the poorest, would mean that by the time today's 45-year olds were retiring, for every £6 billion extra spent on an earnings link, £2 billion went to pensioners with incomes above £20,000 at today's prices. Thus less would be available for the middle and lower income pensioners, who are our first priority.

"So we need a policy that does most for those who need most and, at the same time, ensures that all pensioners—the very poor, those on modest incomes and the relatively comfortable—share in the rising prosperity of the nation.

"Perhaps I may tell the House what the new system, which will integrate tax and benefits and build upon the basic pension a new pension credit will look like in 2003. I shall then set out the transitional arrangements.

"First, for those in and at risk of poverty, we shall radically improve the minimum income guarantee. I can tell the House that the minimum income guarantee, which was £68.80 in 1997, is £78.45 today, and will be raised in April by £14 to £92.15. For thousands of our poorest pensioners, £700 extra a year.

"I can also tell the House today that when the new system is introduced in April 2003, the minimum income guarantee will be set not at £92, but at £100 a week—£22 a week more than today. For the first time a single pensioner will be guaranteed at least a £100 a week; and for couples, a rise from £106.60 in 1997 to £154. Every year after that I can tell the House that the minimum income guarantee will be raised in line with earnings.

"With the winter allowance there will be a 32 per cent increase in income even after inflation, demonstrating our determination that no pensioner is left behind as this Government work to ensure that pensioner poverty is a thing of the past. More than 2 million will benefit. People will be able to claim by phone. They will do so at the point of retirement and whatever adjustments thereafter would need to be made only when circumstances change.

"But we have a second obligation—to millions of pensioners who, after a lifetime of hard work, have modest occupational pensions and modest savings, but receive nothing from the system on top of their basic pension and have until now been penalised, not rewarded, for their savings; people whom we meet every week in our constituencies. This Government are determined that people who have worked hard and saved all their lives should now receive more.

"Tomorrow the Secretary of State for Social Security's Statement will outline the new integrated tax and benefit system—both the pension credit and the new pensioner tax arrangements.

"I said in the Budget that I wanted the beneficiaries of the new credit to be single pensioners with incomes up to £100 and pensioner couples with incomes up to £150. I can now tell the House that pensioner couples with incomes below £200, and single pensioners with incomes below £135—many millions of pensioners—will receive the new pension credit.

"I can tell the House that while the pension will rise in line with inflation, the new pension credit will itself rise in line with earnings every year. In this way, we shall give recipients of the pension credit more than even the earnings link in the basic state pension would give them.

"The pensioners tax allowance will be set at April 2003 at an even higher level—£6,560 for the single pensioner—and for the next Parliament we propose that the pensioners' tax allowance also rises in line with earnings. For the vast majority of pensioners, the middle and low income pensioners of Britain, the new system will provide extra cash on top of the basic pension: sums of between £1 and £23 a week.

"Achieving all our aims: for millions of the neediest pensioners relief from poverty; for those on modest incomes a reward for their savings and occupational pensions more than an earning link could offer them; and ensuring that all pensioners can enjoy a share in the rising standards of living of the country.

"As we move to this new and better system, the Social Security Secretary and I have decided that the transitional arrangements should ensure that over the next two years pensioner incomes should rise faster than inflation and indeed faster than earnings. So from April next year we propose that for the single pensioner there should be a cash increase of £5 a week and for a married couple a rise of £8 a week. I can tell the House that the following year we can also guarantee that the pension will rise well above prices. There will be a cash increase of £3 for single pensioners and £4.80 for married couples.

"Over two years, a cash rise of £8 a week for single pensioners and £12.80 a week for couples. For pensions £2.6 billion more each year, on top of more for health, education, transport policing and public services.

"Those who would spend this money on tax-cutting should now tell us which hospitals, which schools, which public services they would cut. We have made our choice—investment, targeted tax cuts, keeping mortgage rates low, and more for pensions and families: a stronger, fairer Britain.

"I have one final announcement. I have had representations to abolish the winter fuel allowance and indeed abolish the free TV licence for the over-75s. I have even received representations to abolish the Christmas bonus. I have rejected such options that would give with one hand and take with another.

"I can confirm that now and in future years the free TV licences will remain for the over-75s, as we have promised. The Christmas bonus will continue and the winter allowance will be paid at £150. But the transitional arrangements to our new pension reform will not start next year, but can start this year; indeed, they will start this week. I can confirm that cheques are being sent out from Monday that will be paid to every pensioner household in Britain.

"The winter allowance will not be paid at £150 this year; nor will it be abolished. For this year specially—the first year of the transitional arrangements—it will be paid not at £150, but at £200 to every pensioner household free of tax.

"I commend this Statement to the House".

My Lords, that concludes the Statement.

My Lords, perhaps I may, first, thank the Minister for giving your Lordships' House the opportunity to hear the Statement today and to comment on it.

When students of political history are examining the dramatic fall from grace of this Government—the fastest in the history of polling by Gallup—they will conclude that they fell because they underestimated the intelligence of the public. Your Lordships will recall that in Plato's allegory of the cave the people were tied to chains in a dark cave able to see a passing parade of objects that they thought were real, but which were in fact only the shadows cast by the objects.

As today's Statement shows, this Government's entire tax and spend strategy is built on shadows, on keeping people in the dark. They worked out that they could not win elections by offering to raise tax so they decided explicitly and consciously to cut visible taxes on voters while raising invisible taxes elsewhere. How else can one explain the words at the beginning of the Statement; namely, that the Pre-Budget Report would give families the lowest direct tax burden for 30 years? That statement, failing as it does to draw the distinction between direct and indirect taxes, is an insult to the intelligence of the public. It treats the public like morons.

However, the Government have overlooked the fact that the public are highly sophisticated and aware. Let us take two of the groups that the Government are trying to appease in the Statement: pensioners and fuel tax protesters. Why have these two groups been chosen? It is because they were early victims of the Government's strategy. Early on the Chancellor said that he would uprate pensions and fuel tax by the rate of inflation. It sounds reasonable—does it not?—except that he then used two different definitions of inflation, so pensioners ended up with an increase of 1.1 per cent in their income from the Government and fuel users with a 3.4 per cent increase in their tax payments to the Government. That is brilliant, except that an intelligent and well informed public saw through it, which led directly to the Chancellor's humiliating U-turns of today on those two areas.

Then, after weeks of saying that the Government could not possibly cut fuel tax to help hauliers and farmers, because that would mean cruel and heartless cuts to our schools and hospitals, they have in the Statement cut vehicle excise duty instead. They just changed the names and saved the hospitals.

The Government say that they are presiding over "strong public finances". Those three words are repeated endlessly in government statements. The idea, I think, is that people then fall at the Government's feet in gratitude. But where did these "strong finances" come from? I refer to the £46 billion surpluses in four years, to which the noble Lord referred. Is it perhaps because of the strong economy? No, it is not that, because trend growth of GDP is only two and a quarter per cent which is half as fast as that of America and even slower than that of Euroland.

But out of this modestly growing economy there is one item which is miraculously growing much more rapidly: government tax receipts which are growing by over 6 per cent a year. That is three times the rate of growth in the economy. There lies the true economic miracle of this Government: taxes growing three times faster than GDP. Even the great economic experts of the land are unsure how this innocently named "fiscal buoyancy" has come about.

How has it happened? I think that the Government have taken full advantage of the complexities of the tax system, many parts of which we heard about in the Statement. First, Britain's tax and benefits system under this Government transfers each year £30 billion—that is, between 9 and 12 per cent of all government spending—in and out of the very same households because of the overlap between taxpayers and recipients of state-administered benefits and pensions. For example, there are 14.2 million people whose income is less than £10,00 a year, half the average. They pay tax to the Government, and also receive means-tested benefits from the Government; and there is a bizarre range of methods by which those benefits are assessed for tax. There is plenty of scope there to hide various accounting methods.

Secondly, under this Government there has been a staggering proliferation of tax rates. According to the latest figures from the House of Commons Library, even the number of basic tax rates has more than doubled from 15 to 38 under the present Government. Tolley's Standard Tax Manual, which I am told is the Bible of tax accountants, has increased from 2,529 to 3,293 pages under this Government. The Finance Bill has famously grown to a record 570 pages in two volumes.

The Institute of Chartered Accountants recently warned that the tax system under this Government was now so complicated that it had,

"spun out of democratic control".

The Institute for Fiscal Studies says that it is now "extremely difficult" for people to calculate how much tax they are due to pay.

There is now a mass of over 250 complex tax allowances, reliefs, exemptions, credits, indexations, tapers, disregards and so on which taxpayers have to navigate. Today the Government invited pensioners to navigate a new credit.

Through the gradual erosion of those allowances the Government could achieve EU average levels of taxation almost imperceptibly, which is exactly what they are doing. According to PricewaterhouseCoopers, your Lordships' House may as well stop debating the subject of tax harmonisation because the Government have already filled in two-thirds of the gap in the tax burden between the UK and Euroland. When they took office, we had a 6 per cent advantage; it is now 2 per cent. No wonder that the noble Lord said that, "We should not overestimate the importance of the tax burden". I think that I quote him correctly.

The result of complexity is lack of transparency. The concept of stealth tax is well known—a new tax in a disguised form. But the current system has spawned an even more effective form of taxation hidden in the morass—economists call it "fiscal drag". Most people believe that the tax system now takes around 38 per cent of GDP—the record that the Government have achieved—but that is just the net effect of the system. The gross system collects a staggering 53 per cent of GDP. The citizen is then obliged to claim back 16 per cent of GDP—that is, £150 billion—in complex allowances, exemptions, credits etc.

The charm of such a large gross tax system—from the Government's point of view—is the scope it allows for hidden tax increases via reduced allowances. Under this structure the Chancellor can, and does, increase tax without ever announcing a tax rise. People just wake up one day and find that they are in a higher tax bracket, with the result that tax as a percentage of GDP creeps up invisibly. For example, the Government's recent Budget changes to income tax rates—the famous 10p starting rate and the 22p band—were dealt with in two lines in the Budget Statement, whereas another 42 lines were required to explain changes to allowances, reliefs and exemptions.

So despite the new 10p tax band the personal income tax burden increased due to the erosion of the real value of tax allowances; that is, allowances growing more slowly than earnings, leaving a rising share of personal income liable to tax. That is how the UK's so-called "strong public finances" have come about under this Government, not because of the "strong economy", but because this is the third year in a row in which government tax receipts have risen by more than double GDP.

The Statement illustrates why someone needs to carry the torch for transparency, simplicity and openness in the tax system. Your Lordships are well aware that the Parliament Act 1911 deprived your Lordships' House of any role in financial scrutiny. However, study of Hansard of the passage of the then Parliament Bill reveals that its raison d'être was the hereditary nature of the House of Lords. However, as the Leader of the House, the noble Baroness, Lady Jay, said after the passage of the House of Lords Act 1999 and the removal of the hereditary Peers, Your Lordships' House has become more legitimate, more democratic, more authoritative.

Therefore, many of your Lordships on all sides of the House have asked whether it is time to reconsider the role of this House in the country's financial affairs. At the previous meeting of the Procedure Committee of your Lordships' House, the Leader of the House said that we have to deal with financial matters the way we always have because we have being doing it that way for centuries. However, I doubt that the noble Baroness, of all people, wants to uphold the merit of tradition and precedent as a basis for future policy.

My reaction to the Statement is to look forward to the day when all sides of your Lordships' House can bring their formidable talents to bear to achieve greater openness and transparency in the country's finances and to lead the people out of the darkness of Plato's cave where this Government are so determined that they should stay.

My Lords, I start with an apology to the House. I cannot begin to match the references to Plato by the noble Lord, Lord Saatchi. Without denigrating the noble Lord too much, perhaps I may say that it would do many of us more good to read Plato assiduously than to listen to the noble Lord's speeches on economics.

I, too, join him in welcoming the Government's decision to repeat this Statement to the House. There are individual measures within the Statement which we on these Benches welcome. First, on the business tax side, we welcome the decision to extend tax relief for share option schemes. It has been an issue for which these Benches have argued over many years. We are pleased that the Government are responding to the change in the economy, in particular the e-economy, by extending share option benefits in that area.

Secondly, we welcome the proposals to simplify VAT provisions for small businesses. When VAT was first introduced, it was done in a typical Customs and Excise manner, with huge detail making an administrative burden on small businesses. If the earlier leaks to the papers—not of this Statement—are correct, the Government are moving more towards the system which obtains for small businesses in France and elsewhere. It greatly reduces the amount of paperwork which small businesses have to undertake in respect of VAT, without undermining the tax take.

I must also declare a personal welcome for one small measure in the VAT package; namely, the proposal to reduce VAT on repairs to churches. As a clergy's spouse, I see this as relieving me of a considerable number of fund-raising events to repair the church roof, and that is a hugely welcome personal prospect.

I express support for the proposals in respect of cutting world poverty. The proposals are relatively shadowy but I am sure that the Minister and the Chancellor are only too well aware that the one way in which the Government can spend some of their £28 billion tax or debt repayment without incurring inflationary pressures in this country is to spend the money overseas. We look forward to ensuring that that increase is not the odd £10 million or £15 million, but a substantial sum devoted to the improvement of healthcare and the provision of medicine in the developing world.

We welcome the environmental bias of the Chancellor's proposals on fuel. I believe that his motivation in respect of low sulphur petrol has more to do with shooting a Conservative fox—if that is not a politically incorrect metaphor—than with environmental benefits. I have two questions in respect of fuel duty. First, I understand that to be compatible with EU law the vignette scheme must apply to all vehicles and not just to non-UK registered vehicles entering the UK. I am not clear from reading the Statement, but will the vignette scheme apply to all UK-based lorries? Will they pay it? If so, are the figures which the Minister gave in respect of the benefits accruing from the VED cuts net after the vignette has been paid or gross before the vignette kicks in?

Secondly, while welcoming the incentive to low sulphur petrol, as other and newer fuels are introduced which lead to lower levels of pollution—one thinks in particular of hydrogen to power non-polluting fuel cells—shall we have some commitment from the Chancellor that those new fuels will receive a substantial tax benefit compared with low sulphur petrol? That will kick-start those new technologies which are available and would make a huge difference to levels of pollution but which need further government support and incentives.

We on these Benches believe that before today the Government's policy on pensions was parsimony with no purpose. The 75p pension increase last year was an insult to pensioners. Although we are grateful that the Government are at long last beginning to redress the shortfall in pension payments that that represents, we believe that they are doing too little, too late. I did not have the benefit of seeing in printed form before the Minister's Statement the detail of the Chancellor's pension proposals. They are extremely complicated. I hope that the House will forgive me if I do not comment on them in greater detail.

Finally, the disappointment on this side of the House is that the big issue facing manufacturers and farmers—namely, the overvaluation of the pound—has not been mentioned by the Chancellor in this Statement. He has nothing to say on it and nothing to offer. Will the Minister accept that the incentives proposed for manufacturing are completely inadequate to counteract the effect on the bulk of manufacturing industry of the overvaluation of the pound?

After all the hype, and on his own figures, the Chancellor is still spending less of the national cake on schools and hospitals than did the Tories, because of implementing Conservative Budget cuts during his first three years. Bust for pensioners, schools and hospitals followed by an election boom is not a prudent way to run the country.

There is much that we welcome in the Statement, but there is still much more to be done to rebuild the public services on which the well-being of all our communities depend.

My Lords, perhaps I may check that I have only two minutes in which to respond. I shall do my best. If I have to, I shall shut up.

I do not have anything to reply to from the noble Lord, Lord Saatchi. He did not challenge any of the figures in the Pre-Budget Report. He did not challenge the analysis or the results of the analysis. He said that the only growth in the economy is in government tax receipts. He did not seem to recognise that the reason that there is a growth in government tax receipts is because we are paying less on social security and receiving more in taxes from those who have been put back to work. If that is not a fundamental misunderstanding, I do not know what is.

The noble Lord complained about the complex tax structure; and of course he is right. As the noble and learned Lord, Lord Howe of Aberavon, recognises, from time to time we have to do something about it. But when the election comes I do not think that he will be going to the electorate with the banner, "Simpler tax". I think that there will be rather more important matters to refer to.

The noble Lord's final point was about the House of Lords, which he claims to be more legitimate, in order that it may have more time to deal with financial matters. If that is the case, why did the Opposition not wish to have this Statement repeated in this House. The fact that this debate is taking place was dependent on the Liberal Democrat Party.

I can treat rather more seriously the remarks of the noble Lord, Lord Newby, although perhaps he will forgive me if, because of limits of time, I do not thank him for the praise which he gave to large parts of the Statement. However, he made some specific points to which I wish to respond.

On the question of the "Eurodisc"—the charge on lorries from other parts of Europe—applying on our roads, the noble Lord is correct: it will have to apply to UK lorries as well. But it is our intention to reduce vehicle excuse duties for UK lorries in order that they do not have any net increase in their burdens.

The noble Lord asked about newer fuels than ultra low sulphur petrol. I do not think that there is an official policy on the subject, but I am sure that he and I agree that it would be extraordinary and out of character if, having given tax benefits for environmentally beneficial fuels, we did not carry that policy on as new fuels are developed, although neither he nor I knows what they will be.

The noble Lord's final point was about the strong pound—or, as I think that he would agree, the weak euro. That is not an appropriate subject for the Pre-Budget Report, which is concerned mainly with the public finances. The Government agree with the European Central Bank that the euro is undervalued in relation to the pound. I think that the noble Lord draws the same conclusions from that as we do.

My Lords. I am grateful for this opportunity to give a particularly warm welcome to the Government's statement on VAT and church buildings. Church buildings are part of the nation's heritage. They are maintained and repaired by the Churches, in particular by the Church of England, on behalf of the whole community. The statement is welcome because, while the Churches currently receive about £20 million in public grants towards the maintenance and repair of those buildings, many of which are national architectural treasures, they have a current annual expenditure on VAT of more than £40 million, nearly £30 million of which is paid by the Church of England. In other words, the Churches currently have to pay in VAT more than double the amount that they receive in public grant.

That unsatisfactory situation was recognised in a debate in the House in 1995. It forms the substance of the Eckstein report to be published later this month and has prompted strong personal representations to the Government by my colleagues the most reverend Primate the Archbishop of Canterbury and the right reverend Prelate the Bishop of London on behalf of all the Churches.

After years of difficult dialogue on the issue with both Conservative and Labour Governments, it is good to hear today's announcement, as far as it goes. However, there is still some way to go, as the Minister has made clear. The Government still have to refer the matter to the European Union. What will be the timetable for that? We need a timetable, not least to help in planning budgets and appeals for major maintenance and repairs and to ease the burden of fund-raising, particularly on noble clergy spouses—or is it clergy spice in the plural?

Will the Minister also give an assurance that, in referring the matter to Europe, the Government will continue their present level of commitment and press the case with perseverance and vigour? I repeat that the announcement is most welcome and the Churches of all denominations will be grateful to the Government for it. Our welcome and gratitude will be even greater when the proposals are put into effect.

My Lords, I am grateful to the right reverend Prelate for his welcome. I hope that he will not be disappointed, but the Statement was slightly elliptical. I said that the measure would cover repairs to churches, but I meant only repairs to listed places of worship. I think that he expected that, but I wanted to set the record straight. As to the timetable for getting the agreement of the European Commission, I can say only that we shall make an immediate application. The Commission has said that it will make no revision to legislation covering reduced rates until after 2002, but it has confirmed that it plans to report on the scope of reduced rates later this year. That is why it is important that we put our views on record as soon as possible.

My Lords, in the light of the Minister's clarification, my warm welcome, though still genuine, is ever so slightly less warm than it was.

My Lords, would the word "tepid" apply?

My Lords, to what extent is the prior consent of the European Community needed for the Government's proposals to be carried out, apart from the question of repairs to churches?

My Lords, it is implicit in what I have said that the agreement of the European Commission is required for the change that we propose. However, as I made clear in my answer to the right reverend Prelate the Bishop of Wakefield, the European Commission is already looking at revisions to legislation covering reduced rates. There is no question of the measure being ruled out from the start.

It is obvious to all of us that this complicated Statement will require careful study before we can assess exactly what it means. I shall give some examples, on which perhaps I shall get some enlightenment.

I welcome the Government's recognition of the strength of the argument that some of us have been advancing for some years on the disincentive nature of means-testing. It is right to show concern for those who have been grumbling for a long time because they find that, having been prudent, saved, bought a house and got another pension, they are worse off than if they had spent the lot. I am glad that the Government recognise that we were right, but I should like the Minister to make it clear whether the Government have simply raised the ceiling, in which case the principle of disincentive remains. The Government talk about people who have made modest savings and modest investments in second pensions. No doubt we shall get enlightenment. Can we have a clearer explanation of whether this complicated Statement has removed the ceiling of disincentive?

One other thing puzzles me. I should be glad if the Minister could alleviate my curiosity. If it is wrong in principle to give the benefits of an earnings link all the way up the line to everyone who has invested in the state insurance scheme because that would absorb resources that should go to the poor, why is it in principle right to increase the fuel allowance to £200 all the way up the line? Have I misunderstood? Will someone with £20,000 or £30,000 a year get the increased fuel allowance? If not, where will that contribution to income be cut off? I am sorry if I am being dense, but clearly stated principles help to ensure good government.

Perhaps the Government are finally acknowledging that we were right when we said that operating complicated means tests was much more expensive than just giving people a hand-out as of right. Presumably the Government's line of thought may have been, "Oh well, it would be terribly complicated. We would have to peer into people's coal scuttles and then ask them what their income was". Or the Government's argument may be that this fuel increase—this contribution all the way up the line—is only a little one. Therefore, their illegitimate child is only very small.

I should like to know what the Government's line of thought is. There are many other such queries that will have to be clarified and perhaps unearthed by questioning the Government before one can acclaim even the best parts of this Statement.

My Lords, I certainly welcome what my noble friend Lady Castle says about the need for further consideration and further discussion. Within the limits of the parliamentary time available, my noble friend Lady Hollis and I will be happy to participate in that.

I suppose that it would be too much for me to expect a welcome from my noble friend for the substantial changes that are being introduced to alleviate and eliminate pensioner poverty. It would not have been in keeping with the way in which she has approached these issues. However, I believed that we had moved beyond the earnings link argument. I believed that we had reached the stage of showing that an earnings link applied to the basic state pension, which would cost £6 billion and would give £2 billion to those with an income of more than £20,000 a year; in other words, those least in need. I also believed that we had shown that the extension of the earnings link to those in need, as set out in detail in this Statement, is the right way to proceed. I still hope that we may reach agreement on that.

As to whether that proposal is out of keeping with the £200 winter fuel allowance, I can only say to my noble friend what she very well knows: 30,000 pensioners die every year, partly because of lack of fuel. Pensioners tend to be at home more, they tend to live in less well insulated houses and, in humanitarian terms and in terms of social justice, this move seems to us to be the right way to proceed.

My Lords, in putting my question to the noble Lord, I declare that I am president of the National Home Improvement Council. In that capacity, I welcome the announcement that VAT cuts are to be made to reduce the cost of residential property conversions and that tax relief is to be given to bring empty flats over shops back into use. However, I wish to ask the noble Lord whether, in the pre-Budget consultation period, serious consideration will be given to extending VAT cuts to home improvement in general, bearing in mind that such improvements carry the full weight of VAT at 17.5 per cent, whereas new build carries no VAT and thus puts pressure on greenfield development, which I believe the Government wish to contain.

My Lords, the noble Lord, Lord Ezra, has made that case most effectively, not only now but over many years, and government must listen to him. He asked whether that case will be considered during the pre-Budget consultation period and the answer is certainly yes. However, the proposals put forward by the Government are as I have read out, and I am glad to have his modified welcome to them.

My Lords, declaring an interest as chairman of the St Albans Cathedral Trust, I wonder whether the Minister will accept the welcome that many of us feel for the measures in relation to listed church buildings. Does he also accept that it is very curious indeed for a sovereign parliament to have to ask permission from a foreign body before it can change taxation measures?

Secondly, does the noble Lord accept that, perhaps on reflection, he was a little cavalier in his dismissal of the complications which now beset every business, particularly small businesses? Does he accept that through the nature of this particular chancellorship it is becoming increasing clear that complication is an attraction in itself? Further, does he accept that increasingly not only are we small businessmen becoming tax gatherers for the Government but that disincentive to investment and, indeed, to investment in this country as opposed to other countries is now very powerful as a result of the extraordinary complexity in which the Treasury seems to revel in administering its relationships with small business?

My Lords. I am grateful for the welcome given by the noble Viscount, Lord Cranborne, to what is proposed for VAT on churches. He will know that VAT as a European tax stems back to the Treaty of Rome, which his government signed, and that it has been consistent over both governments ever since. He will also know of the strong resistance shown by this Government and of their preparedness to use their veto against tax harmonisation when it is undesirable. In that sense, on that issue there should be no difference between the parties.

I apologise if I appear to dismiss the importance of the complication of the tax system for small businesses. I did not mean to do so. As someone who spent 30 years running a small business, I recognise how difficult it is for people to keep up with the complicated system. However, I still insist that the VAT form is the worst part of that system and that, in comparison, everything else pales into insignificance. I was responding to the noble Lord, Lord Saatchi, who made a quite different point about the number of tax rates. However, that does not affect the problems for small businesses.

My Lords, with regard to the freeze on fuel duty, is my noble friend aware that many of us particularly welcome the principle set out by the Chancellor that, in relation to the OPEC increases, if the oil price remains high, the fuel duty freeze will continue not only until 2002 but until 2003? That will act as a type of automatic stabiliser and is a correct, coherent economic response to the problem of the large OPEC increase, side by side with our own fuel duty, earlier this year. It will enable us to meet our Kyoto commitment as regards the retail price of petrol and will smooth out the volatility in the Kyoto policy that would arise if there were to be disproportionate OPEC increases.

My Lords, my noble friend's comments, with which I agree, underline the importance of taking a longer-term view to these problems. He has emphasised what was said in the Statement: that, while problems in relation to high oil prices exist, the relief indicated in the Statement will continue, but not for longer. When the Statement referred to the representations made to the Chancellor, he, with his usual delicacy, avoided spelling out that those representations were being made by the Official Opposition and that they had changed somewhat over a number of weeks in September and October.

My Lords, the Minister will agree that the minimum income guarantee increase is welcome to those whom it will reach. However, I am sure that he understands that the problem is one of take-up. In that context, can he tell the House how much money has been budgeted as the cost of the increase in the minimum income guarantee?

Perhaps I may also welcome the passage on page 5 of the Statement which draws the Government's attention to areas of high unemployment. Will the Minister agree that, in putting a contrast between old subsidies and new enterprises, there is an undistributed middle; that is, the future of those areas depends also on services such as banks, post offices, shops and, above all, transport? Will he ask his noble friend the Minister for Transport to bear in mind the phrase of my right honourable friend Mr Ashdown about Bristol Hartcliffe, that even the act of mourning only requires four buses.

My Lords, the first question which the noble Earl asked is about the cost of the minimum income guarantee. He asked me to estimate its future take-up. Clearly, two factors will affect the take-up, neither of which we can fully assess. The first is that the increased generosity of the minimum income guarantee will encourage more people to take it up; the other is that any improvements which we can make in relation to simplicity—we referred in the Statement to being able to make an application by a phone call—also may increase the take-up. But we cannot say precisely how much that increase will be, so I am not able to answer that question at the moment.

I am afraid that I did not understand the noble Earl's second question at all.

My Lords—

My Lords, on a point of order, I think the government side has already had 10, if not 11, minutes of our time.

My Lords, we do not have points of order—and we do not have any time left on this business.

My Lords, in calling Amendment No. 1, I should point out to the House that if it is agreed to, I cannot call Amendment No. 2.

moved Amendment No. 1:

Clause 1, page 1, line 8, leave out from ("shall") to end of line 11 and insert ("be styled as "The Royal Ulster Constabulary—Police Service of Northern Ireland"").

My Lords, on 23rd October, on the first day of Committee on this Bill, the noble Lord, Lord Fitt, made a notable and courageous speech. In it he said that the debate on the precursor to Amendment No. 1 was really a debate about the constitution of Northern Ireland. He said that survey after survey showed that many Catholics support the constitutional position of Northern Ireland and that unionists now feel as he did when, in 1968, he marched in support of a campaign to secure civil rights for Northern Ireland under the Stormont regime. He spoke as one who still retained a bloodstained shirt from the blow that he received from the RUC on that occasion. He said that the unionists felt that their entire culture has been taken away from them; that pan-nationalism is ranged against them and that they have no one who can speak in their defence.

The noble Lord said that he spoke as a Catholic; that he spoke with a conscience, and he said,

"I support the retention of the name of the RUC'.—[Official Report, 23/10.00; col. 26.]

I recognise that there is a tendency among those of us who have lived for even a few years in Northern Ireland and sometimes less, to speak as though we know it all; and perhaps some of us know some of it. But none of us knows it as the noble Lord, Lord Fitt, and other Members of your Lordships' House know it who live and have always lived in the Province. I believe the noble Lord was right to say that this is essentially a debate about the constitution. No police service, in any democracy, can exercise authority save by virtue of the constitution of the state which it is there to serve. In the case of the RUC that state is, by consent, the United Kingdom.

The RUC therefore is a police service empowered by the Crown. So long as the Union persists, any police service in Northern Ireland, by whatever name we call it, will be and will remain a service empowered by the Crown. As the noble Lord, Lord Fitt, also said, there are also Catholics—no doubt they are in the majority—who are nationalists and object to any jurisdiction of the Crown in Northern Ireland. They continue to object to it notwithstanding the Belfast agreement, and that is their right. They will have nothing to do with the Crown in any of its manifestations.

So it follows that no police service in Northern Ireland empowered by the Crown will ever be seen by Catholics of that opinion as being "their" police service. I pick up the phrase the noble Lord, Lord Sheppard, made much of in his speech, when he spoke so helpfully last time about Liverpool; but nobody who feels like that will feel about any police service that derives its authority from the Crown that it is "their" police service. So they will not join it and in that regard the Government—I regret to say—are in pursuit of a chimera for so long as the Union persists.

Does that put paid to our efforts, which we all share, to add to the number of Catholics in the police? It does not. As the noble Lord, Lord Fitt, again pointed out, there are other powerful factors which inhibit Catholics from joining. The noble Lord, Lord Rogan, adverted to some of them. He cited hideous intimidation; the withholding of endorsement of that profession by the Catholic hierarchy and even by the constitutional nationalist party, the SDLP. He might have added the lack hitherto of the substantial improvements—they constitute about 85 per cent of the recommendations of the Patten report—which are now either already in place or provided for in the Bill. The noble Lord, Lord Fitt, in support of his argument, pointed to the surge in Catholic recruitment to the RUC which took place after the cease-fire of August 1994 and to its ebbing away when intimidation seemed to be sustained and much sectarian violence also continued.

On that occasion no answer was put forward from the Government Front Bench to the argument of the noble Lord, Lord Fitt, or other noble Lords who made similar points. I, from my slender experience in comparison with that of the noble Lord, Lord Fitt, believe that there is no answer. As yet we are still invited to adopt a name in which the words Royal Ulster Constabulary will, except in the most formal of legal contexts, by the Government's own design and desire, never be used. The sole purpose is the vain hope of getting more Catholics of a nationalist character, such as I have described, to join the police service, and they will not.

The recommendations of the Patten report have elevated the issue of the name into most dangerous prominence and significance, and I wish that it had not been so. But we are where we are. Like the noble Lord, Lord Fitt, I am deeply worried about the condition and state of the unionist community in Northern Ireland. And by that I do not mean the extremities of that community.

The ferocity with which a change of name is demanded, and with no promise of nationalist support at the end—there are only threats of regression if a change is not made—has reinforced the siege mentality with which so many unionists have for so long been cursed. They see the name of the RUC as an incident of the constitutional status of Northern Ireland, and I wish that it were otherwise. They see the pressure for change as a denial of that status. They see the implementation of a change as a harbinger of the further and worse inroads that they fear. And until there is some beginning to decommissioning, they feel that they have had enough. Those mounting perceptions, and especially the loss of the RUC name, are deeply dangerous to the position of Mr Trimble.

I have the utmost admiration for the courage, perception and wisdom of Mr Mallon in this long process. He is reported as saying that no one is indispensable to the political process in Northern Ireland. I fear that he is wrong. At least one man is and at this juncture it is Mr Trimble. It is now a political imperative that Mr Trimble remains in place. He could not be restored. I believe that that imperative now requires that the amendment be agreed to.

My Lords, I rise to oppose the amendment. In Committee I introduced several amendments which went in the Patten direction, but this amendment moves further away from Patten than even the Bill proposes.

I cannot claim to have lived or to have worked in an administrative capacity in Northern Ireland. However, for the past 50 years, since I was a small child in India, I have read about Ireland and Northern Ireland. We forget that the entire issue should be seen against a background history of 80 years, not just the past 30. It is strange that a majority community which has all the instruments of power at its disposal has, after 30 years in an embattled state, achieved a good agreement—call it "Belfast" or "Good Friday"—but it is a compromise between the Republic, the United Kingdom and various communities in Northern Ireland.

Having achieved such a delicate compromise, people want to return to the status quo. But the old status quo did not work. It is not a question of whether the Royal Ulster Constabulary was a brave force of law. It was and it made many sacrifices. But, as Patten said, if the new police service is identified with the centre of political argument of Northern Ireland, there will be two consequences: first, whatever people say, there will be problems with recruitment; and, secondly, the service will not command the free support and loyalty of everyone in Northern Ireland.

It is not merely a matter of recruitment; people have to like their police service. Like it or not, the truth is that a substantial minority does not approve of the police service. They will if we move away from the past and rename the service "Police Service of Northern Ireland". I do not like the compromise of incorporation but I can live with it. We must compromise; we cannot return to the old position because that got us into all this trouble.

My Lords, I support the position which the Government have put to the House tonight. I do so recalling my maiden speech in this House. I said that I came from a mixed marriage of a Catholic and a Protestant. My late mother was from the west of Ireland and was an Irish speaker. On my father's side, my uncle died when serving in the RAF and my father served in the 8th Army. I said that you did riot have to hate one country because you loved another. The dilemma for the nationalist community in Northern Ireland is learning to love their police force; learning to like and love the institutions in Northern Ireland, as the noble Lord, Lord Desai, described.

In another place, I readily rose to support the then Northern Ireland Secretary, the noble and learned Lord, Lord Mayhew of Twysden. He performed an enormous service in bringing about reconciliation and progress in the north of Ireland and I rarely found myself in disagreement with him. However, I believe that on balance the expectation has been raised through Patten that there will be a change in name and ethos in the Royal Ulster Constabulary and that if that is not now delivered it will in turn endanger the peace process.

I agree with the noble and learned Lord that the position of David Trimble is crucial and that your Lordships and another place must do nothing whatever to undermine his position. He is crucial to facilitating the process. I also agreed with the noble and learned Lord that we must learn to place ourselves in the shoes of those on the other side of the community. After 70 years of, certainly perceived, discrimination and prejudice in Northern Ireland, it has been difficult for nationalists to make a transition and to understand that there is fear, but uncertainty, in the unionist community and that they must make that transition.

In 1985 I served as a member of the then Liberal/SDP Alliance commission which examined the politics of Northern Ireland. Another member of the group was the noble Lord, Lord Hunt, who had given distinguished service to the British military, had climbed Everest and had also written a significant report on the reform of the UDR. Lord Donaldson was also a member of the group. He had been a Minister in a previous Labour government and had served in Northern Ireland. We were given wide access to all the senior figures in the RUC and the military in Northern Ireland. Time and again, while we were able to see the work that was being done we could see the need for change. Even at that time our recommendations called for a change in the name of the RUC.

As the noble Lord, Lord Rogan, rightly told your Lordships, the number of applicants rose after the cease-fire but has since ebbed away, as the noble and learned Lord, Lord Mayhew, described. However, approximately 93 per cent of the RUC remains Protestant, despite the fact that in the general demography of the population of Northern Ireland 40 per cent are Catholic.

The noble Lord, Lord Rogan, said that many other institutions have the prefix "Royal" in their name and he gave as an example the Royal Yacht Club. However, I put it no higher than that to equate a yacht club with the police force in Northern Ireland is to misunderstand the depth of feeling. I do not believe that that will help to dispel the mistrust which many people in the north of Ireland still feel.

When I was in the Province last week, I made a point of speaking to a number of people in the nationalist community and in the Catholic hierarchy. I read the speech of the noble and learned Lord, Lord Mayhew, and felt that a number of points should be pursued. People in the nationalist community reiterated the kind of points made by the noble Lord, Lord Sheppard, in his first-class address in Committee. They said that the RUC did not represent or protect them and still believed that there was some collusion with Protestant paramilitaries. They still talked about the killings. They referred to the lawyer Rosemary Nelson, who was blown up as she drove to work last year, and said that despite all of the representations to provide her with greater protection none had been given.

Despite the bravery which the RUC has undoubtedly shown, not least at Drumcree and on many other occasions, and its commitment to duty and professionalism, the perception of that community is all. Until that changes it is difficult to see how we shall secure the four points referred to by the noble and learned Lord, Lord Mayhew, in Committee: political control, management, composition and conduct. It is difficult to see how one can properly and adequately bring those four points into perspective and ensure that the concerns which have always been raised become matters of the past.

My Lords, I am most grateful to the noble Lord for giving way. Can he explain why the views of the Catholic community that he reflects are not also reflected in public opinion polls run by any reputable newspaper in Northern Ireland or any other body?

My Lords, I hope that noble Lords understand that I do not seek to reflect the views of the Catholic community. I give my own views based on conversations last week in Northern Ireland. It was the noble Lord, Lord Rogan, who, from the same Benches, told Her Majesty's Government that since the peace process began the key issue was intimidation. If the noble Lord reads what I have said previously in your Lordships' House and in another place, he will see that I have regularly criticised the knee-capping and intimidation campaigns of organisations like the IRA to try to impose lynch-mob rule. That is wholly unacceptable. I passionately believe in upholding the law and a police force which does that by consent. I believe that that unites everybody in the Chamber today.

Last week I asked a Catholic bishop why the hierarchy had not urged members of its community to play a greater role in the police force. He said that the hierarchy had never asked people to join the Garda. I said that that was not in itself an adequate response, given the circumstances in Northern Ireland. I support the observations made last week that the hierarchy in Northern Ireland must do more to encourage members of the nationalist community to accept the police service and join it. They should be convinced that the service is there for all members of the Northern Ireland community and participate in it. Therefore, in these unique circumstances the Church has a duty to underline the necessity of policing by consent and encourage Catholics to play a full part in that service. Patten recommended a neutral name, badge and flag.

The Secretary of State made clear in his remarks on 15th June that those were issues upon which he would act. He said that he remained absolutely determined to implement the Patten recommendations and achieve an effective and representative policing service which was accepted by every part of Northern Ireland. He is right. I believe that the Government deserve our full support for the proposals that they have placed before your Lordships' House. In turn, they deserve the wholehearted support of the Catholic community and its hierarchy in the creation of a police force which can serve both traditions in Northern Ireland in a fair, impartial and scrupulous manner.

My Lords, before the noble Lord sits down perhaps I may put a question to him since he complained about the ethos of the RUC being unattractive to Roman Catholics. He advances that proposition as one of the reasons why proportionately there are too few Catholics on the force. Can the noble Lord tell the House what proportion of the Garda is made up of Protestants? Is it not less than 1 per cent, and should there not be some symmetry in these matters?

My Lords, there is certainly symmetry in the arguments which I have placed before your Lordships' House. I hope that, although there is a much smaller percentage of Protestants living in the Republic of Ireland than there are Catholics living in Northern Ireland, nevertheless they would join Garda Siochana in the same way as I argue that nationalists in Northern Ireland should join the police force there. I refer the noble Lord to paragraph 17.4 on page 98 of the Patten report where it is said:

"Many people in Northern Ireland from the Irish nationalist and republican tradition regard the name, badge and symbols of the Royal Ulster Constabulary as associating the police with the British constitution and state. This contributes to the perception that the police are not their police".

That is the issue before your Lordships' House.

My Lords, I rise to support these amendments. I say to both the noble Lords, Lord Alton and Lord Desai, and the Government that their arguments sound plausible but are based on one major assumption. They are wrong to assume that, having changed the name, there will be increased participation in, and enthusiasm for, the service by the Catholic Church, the SDLP and Sinn Fein. Many noble Lords and Members of another place have said that the price for future recognition of the police force by those communities is the change of name. I beg to differ. That is an incredibly naive attitude. People hide behind the Patten report and say that it says this or that. Many things have been written down on paper which do not take place. Patten assumed that that might be right before the proposals were put to those sections of the population. Those sections of the population have said categorically that, regardless of the change of name, they will not support the proposals. Therefore, this is not a compromise that is of benefit to our community in Northern Ireland and will get us nowhere.

Like the Patten report, the Bill is divided into two parts. One is concerned with operational reforms. We are entirely behind operational reforms which bring us up to date with other police forces in the United Kingdom and enable us to learn lessons from other nations. There are also cosmetic reforms. The alteration of the name, badge and so on are straightforward cosmetic changes as the price for the involvement of that community. One does not buy something like that if one receives nothing in return. There is no reason why these groups in our society should fail to come forward, except that the new beginning about which the Government and some noble Lords speak is not the same as the new beginning in the mind of some groups, especially Sinn Fein, which control through the intimidation that people agree exists.

Their new beginning, which is not ours, means the continuation of racketeering, beatings and other criminal activities. Such activity does not simply occur on the streets of Belfast on a day-to-day basis; it is deep-seated fraud which will require an extremely experienced unit of any police force to tackle. What they want is the police service as it is now out of the way. If they achieve that they will continue what they are doing now.

That is what is happening, and until we realise it we shall get nowhere. Even the amendment in the name of the noble Lord, Lord Rogan, envisages a change of name. But surely there should be a return from the other side for these cosmetic changes. We cannot see anything in the near future, and we are nowhere nearer to it than when we started. I shall not return to the release of prisoners. They have demanded this and that and have decided not to play a part in the law and order of their own society because, through their corrupt ways, they want to maintain a hold on it. I support the amendments.

My Lords, I was unable to take part in the earlier stages of the Bill but, as far as I could, I followed the written word. Sadly, the written word does not always give one quite the flavour of the occasion. I rise this evening to support this group of amendments. It seems to me that there are two or three points which may be worth making. I hate to differ from the noble Lord, Lord Desai, because I often find myself in a good deal of sympathy with what he says on other subjects. But I think the point which he neglects is that the function of a police service in the United Kingdom is to uphold the Queen's peace. That is what it is there for: the upholding of the Queen's peace. Unless and until Northern Ireland is transferred to another jurisdiction, it is the Queen's peace which must be upheld. It is a police force of the state of the United Kingdom. It is not surprising that it should expect to carry in its uniform and its title a recognition of that fact. I find that wholly unsurprising. I do not expect the Garda to do so. I fail to see why anyone should expect the police force in Northern Ireland not to carry those symbols in its work of upholding the Queen's peace.

I hate to disagree with the noble Lord, Lord Alton, but he spoke of the nationalists' expectations which had been aroused by the Patten report. Quite so, but unionist expectations were aroused by the Good Friday agreement; not least the expectation that violence would cease and that private armies would be dismantled and their weapons decommissioned. Those expectations were aroused; they have in no way been satisfied. To move on and say that because Patten has aroused expectations, we must give in, we must give something else, is a one-way traffic situation. Of course, in a rational world perhaps the unionist community and the police force in Northern Ireland could be generous and relaxed about losing some of these symbols had they received anything in exchange for what they have already given up under the Good Friday agreement.

The noble Lord, Lord Alton, like other noble Lords, spoke of the desirability of a police force which could police by consent. But he knows, as we all know, that there is a minority in Northern Ireland which will not consent to any police force which is under the jurisdiction of the British Crown and of this Parliament. It would not matter what one called the police force. It would not matter if we re-christened it the Garda. It would still not accept its jurisdiction and its authority while that authority came from Her Majesty and the constitutional monarchy and the Parliament of this Kingdom. Therefore, I fail to see any evidence from our experience of the past years since the Good Friday agreement that making this concession to the republicans will make any difference whatever to their conduct—none at all. What it will do will be once again to disappoint and to anger the majority community which feels that the Good Friday agreement has not been implemented by the republican and nationalist community in Northern Ireland.

When we talk of the desirability of sustaining Mr Trimble and his pivotal place in the peace process, surely we do not want to do something else which will put him into greater difficulty with the unionist community which rightly says, "Why have we been betrayed in this manner?".

My Lords, before the noble Lord sits down, will he not agree—to continue his argument a little further—that these terrorist crimes are not just committed in Northern Ireland in ignorance of the Northern Ireland police, but also in the Republic of Ireland where there is a police force which is loyal to the government there?

My Lords, the noble Viscount makes a good point. Indeed, the crimes are also committed on this side of the water.

My Lords, I want to support the Government's position on the Bill and to speak against this group of amendments.

I have spent much time over the past few years in Northern Ireland. It is a place I have learned to enjoy and its people are a people whose bravery I much admire. All my contact with the new generation of parliamentarians has shown me a generation of able politicians committed to making a real change. I have learned two things about the politics of Northern Ireland: first, things are rarely as they seem; and, secondly, there are no absolutes.

There is little we can do here to move the peace forward, but there is much we can do to undermine the process. If we load the Bill with unintended, unnegotiated amendments, we shall only upset this fragile process. We all share the outrage, anger and loathing at what sometimes goes on in the name of peace. But this peace process is just that—a process—and there are still important steps to take.

The Bill is a further important step. It has been brought before us to implement the recommendations of the Patten commission. That commission was designed to bring forward proposals which would produce a police service capable of gaining sustained support across all communities in Northern Ireland. The Bill is important and complex. It sets out a whole series of changes which will transform the nature and culture of the police service in Northern Ireland; none more so than this change of name.

My right honourable friend the Secretary of State for Northern Ireland in another place said that while he was committed to implementing the full recommendations of the Patten report, he was willing to listen to any constructive comments on the Bill itself. He would make changes where constructive comments were made. I welcome the fact that he and the Government chose to accept the new clause moved by Ken McGuinness. Clause 1 provides that,

"the Royal Ulster Constabulary shall continue in being as the Police Service of Northern Ireland (incorporating the Royal Ulster Constabulary)".

But also allows that it,

"shall be styled for operational purposes the 'Police Service of Northern Ireland—.

The amended Bill now offers a less than perfect way forward, but none the less it is a way forward. The new name of the "Police Service" signals, one hopes, a new start, a new beginning. Yet the full name which will be in the title deeds of the service keeps a link with the Royal Ulster Constabulary and all those who fell in service during the Troubles.

I have said that we here at Westminster can do little practically to speed the peace process. In a very real sense it is the people's future and it is for them to make that future for themselves. However, tonight we have an opportunity to assist them in moving forward with a solution. We are—if noble Lords will pardon the expression—caught between a rock and a hard place. I am sure that all involved in the peace process will examine our comments and read Hansard with care. By the end of today we shall have put our advice and counsel on record. I believe that we shall have done our bit.

This may not be a perfect Bill. It may not even be a perfect peace. But we do not live in a perfect world. I urge noble Lords to support the speedy passage of the Bill and to leave it unencumbered so that those who are in the business of negotiating peace have all that they need to move forward. I wish them Godspeed in their endeavours.

My Lords, I am a great believer in the letter of the law and what governments officially say. Perhaps I may remind noble Lords that in the Belfast agreement it was agreed that,

"it would be wrong to make any change in the status of Northern Ireland save with the consent of a majority of its people".

It then went on to say that,

"the power of the sovereign government with jurisdiction there shall be exercised with rigorous impartiality".

What we are looking at is partiality; the tyranny of the minority; and the effort to give one more sop to terrorists.

I should like to quote also from the security statement in the Northern Ireland Office Departmental Report. It states that the objective is to,

"keep security policy … under continuous review in the light of changes in the level of threat from terrorism".

There have indeed been changes—for the worse. Therefore, to make this move and to ignore the feelings of the majority of the people and of the experienced officers of the RUC is very dangerous.

I remind the House that, pragmatically, we on this side of the water need an efficient and effective police force. Although the officers of the RUC are loyal and highly intelligent and wish largely to get on with their jobs, nevertheless this issue matters greatly to them. It matters also to the Catholics among them who are not deterred from joining and who wanted to join, as has been mentioned, in the face of intimidation. It is wrong that, for reasons of political correctness and to please the IRA—that is what it is—we are trying to do something but are once more ignoring another important aspect of the Belfast agreement with which we are so often inflicted. It states:

"All participants acknowledge the sensitivity of the use of symbols and emblems for public purposes, and the need … to ensure that such symbols and emblems are used in a manner which promotes mutual respect rather than division. Arrangements will be made to monitor this issue".

We are looking at a symbol which really matters to the people who are serving in the RUC. Even if this change goes ahead and the force is required to have a 50 per cent quota of Catholics, there is no certainty that the IRA will allow anyone to join the RUC. One will there fore see a drain of highly efficient and experienced officers, who will feel that they have been totally rejected and their interests set aside in favour of a very, very doubtful quota which may or may not come in, and, if it has Catholics at all, may well contain "sleepers" who are there for reasons which will not be helpful to security.

I remind the House that Gerry Adams has said many times that whatever is done to the RUC he and his supporters will not recognise it and will not support it. The noble Viscount, Lord Brookeborough, also made that point. If they will not support it and continue to make it extremely dangerous to join, except with special permission, I cannot see the point of hurting and insulting indeed the majority in favour of a tiny minority which is utterly convinced that it will not co-operate. Therefore, I strongly support the amendment.

My Lords, I wish to speak to my Amendments Nos. 2, 4 and 5, and to support Amendments Nos. 1 and 3 in the name of the noble Lord, Lord Rogan.

It has been a wide-ranging debate and we have heard most of the arguments before. What is sad is that progress is very slow. The situation does not change. Let us consider for a few moments the environment that pervades in Northern Ireland. How did we get to the peace agreement, the Good Friday agreement, the Belfast agreement, or whatever it is called? Why was it necessary? The main objective of the agreement was to stop Sinn Fein/IRA murdering people and to attempt to remove the motivation for loyalist terrorists to murder people. That is why we are there; let us be quite clear about that. Let us also be quite clear that this debate is not about one of the finest police forces in the world. It is about the name of a police force. Thanks to the Patten report, that proud name has been lifted from the force and put into the political arena as a football or rugby ball to be kicked around, unfortunately by politicians from all parties and several nations, with scant regard for the members of that proud force.

We need a police force in Northern Ireland. We have a serious crime situation. We have a serious terrorist situation, whether anyone likes it or not. It is vital that we have a fine, well-trained, well-equipped, loyal and neutral police force. That police force—what is today the RUC—has proved itself in recent years to be all of those things. I accept that in the days of my father and others in Stormont things were different. The noble Lord, Lord Alton, mentioned his maiden speech. I used Bernadette Devlin's maiden speech as a basis for my maiden speech in this House. I made the point then that she was right in most of what she said in her maiden speech. But the environment had changed. We had an equality commission and a fair employment commission. The environment over there had changed. There was not a need for that kind of uprising and trouble making. But, of course, the IRA jumped on the band wagon and attempted to pursue a campaign, which it did very successfully for 30 years, to unite Ireland by force. All sides have been protected and cared for by the Royal Ulster Constabulary.

The Good Friday agreement is about sharing. It is about an inclusive community. It is about bringing together various groupings who have been at war with one another and have been forced to create barriers between each other. It is about creating an all-inclusive society to live in this kingdom in a law-abiding manner. I suggest to the House that Her Majesty's Government, the Royal Ulster Constabulary, the Armed Forces and people in many walks of life, from those who work in industry, the Civil Service and quangos to those who serve in the police force, have worked extremely hard to bring about that society. Who has not played a part in bringing about that society? Who has so far given nothing? The answer is the IRA—the terrorists—and to a large extent, although I know that people will talk to me about Articles 2 and 3 of the Irish constitution, the Irish Government.

To return to my theme of sharing, surely to goodness, if we are to have an all-inclusive society, we must have one police force. And surely to goodness that one police force must consist of people from all the different quarters of the Province. We need people from Derry, West Belfast, Armagh, Enniskillen, South Tyrone and elsewhere to make that an inclusive police force. That is vital. What is stopping it? The noble Lord, Lord Rogan, made the point very clearly. It is the nationalist community and the Roman Catholic Church. I am delighted that many noble Lords and many people outside have, privately and publicly, put tremendous pressure on the Roman Catholic hierarchy in an attempt to get that changed.

However, the purpose of my comments tonight is this: the name of the Royal Ulster Constabulary will not make any difference to the content or the performance of that police force. If the nationalist and republican communities—who, as I have said already, have agreed to serve in one of Her Majesty's governments—are prepared to join in, why are they not prepared to share in the name? That is the nub of our amendment. A shared name allows those who attach memories to it, to whom it means a huge amount and who believe in it, to feel comfortable. Let us also incorporate another name, the "Northern Ireland Police Service", which is new and has been created in the new image of sharing and community spirit. Let the two names come together in agreement. Do not let them become belligerent, bitter, antagonistic and obstructive. That is of no use to anyone.

I do not believe that the total removal of the name of the Royal Ulster Constabulary is right A form of shared option is the correct course. In conclusion, perhaps I may lighten the tone of my speech by giving the Government a little piece of advice. Appeasement never won a race yet: "Bad horse, bred by good intentions, out of paralysis of will". The Irish people are a racing fraternity and they will understand that.

My Lords, it is clear that this debate goes to the heart of many of the issues affecting Northern Ireland. To me, it is a matter of great regret that in this House there is no voice to represent democratic constitutional nationalism for Northern Ireland. That would bring balance to our debate and would ensure that we were able to hear directly the voice of a large group of people in Northern Ireland who have serious concerns about the way in which their communities have been policed over the past 30 to 50 years.

If I were an officer in the RUC, my reaction to this debate would be, "For heaven's sake, get on with the Bill. Get it out of the way. We don't want to be a political football any more". The officers of the RUC, of whom I have met quite a few over the years, just want to be able to get on with their jobs. They do not want to become an element in party politics. They do not want to be kicked around by politicians, which has been going on since the Patten report was published; indeed, even before that. They simply want to do their jobs. However, as with all police officers everywhere, they want to be able to do their jobs knowing that they have the consent and support of the communities which they are policing. It seems to me as regards the average RUC officer, who is dedicated, brave and professional, that we are asking a great deal of them when we ask them to police areas of Northern Ireland where they are not operating with the consent of the people in the local community.

I understand that surveys have shown that Catholics are supportive of the RUC. However, they do not demonstrate support to the same extent as Protestants. Catholic communities do not have that bedrock of consent that ought to be in place in order to achieve good policing. Surely that is what Patten set out to put right and forms the basis of the Bill which the Government have put forward.

It was a great source of regret to me that, within hours of the Patten report being released—I was still a Minister in Northern Ireland at the time—shrieks and shouts of condemnation were aimed at it even before many people could have had a chance to do more than open the first page or two. That set the tone for a debate which has never been calm or sufficiently dispassionate to put first and foremost the interests of all the people of Northern Ireland. Set positions have made life in Northern Ireland difficult. They have also made policing in Northern Ireland very difficult indeed.

What matters here is this: so far as concerns policing, this is a battle for the hearts and minds of the vast majority of peaceful members of the national community. I do not believe that any Bill would persuade Sinn Fein or the IRA to say, "Wonderful. This is the best thing ever". But that is not the intention here. We need to address the constitutional nationalists; namely, the ordinary, decent, peace-loving members of the Catholic community. It is their support that we want for policing in Northern Ireland, because once their support has been secured, then the men of violence will be marginalised and those that do not like proper policing in Northern Ireland will also be marginalised.

I think that Patten addressed that intention very clearly and achieved a pretty good outcome. The Bill before the House is a reflection of it. What we want to see is a representative police service. As long as 93 per cent of police officers are Protestant, how can the average Catholic feel that this is, "our police force"? It is impossible to expect that.

No single proposal in the Patten report will change everything, and thus we have to consider all the detail. The right approach is to view the Patten proposals as a package. The different elements contained in the Patten report, as reflected in this legislation, can and will contribute to a successful conclusion. I believe that, once this legislation has been passed, it will send a clear signal to all the people of Northern Ireland that we are entering a new age when policing will be conducted with the consent of everyone. That will happen only when we get rid of the symbols, emblems and other items of a police force which indicate that it is not a force for the whole community. That is an important and worthwhile aim. A little vision is required in order to carry this through for the benefit of the people of Northern Ireland. That is why I feel that these amendments are wrong in principle and damaging in practice. I hope that the House will reject them.

My Lords, in speaking to the first group of amendments, and in opposing them, I shall begin with an observation. As the noble Lord, Lord Dubs, has pointed out, debates on Northern Ireland issues in your Lordships' House inevitably lack an important dimension. While the concerns of the Unionist community are given a full airing—and quite properly so—those of the nationalist community, almost axiomatically, are not so directly heard. The other place has at least the constitutional Nationalist opinion expressed by the three SDLP Members of Parliament. There is no authentic nationalist voice in our debates, in the same way that the British-Irish interparliamentary body is deprived of any direct unionist contribution to its debates because the unionists decline to participate in its activities.

I am neither pro-unionist nor pro-nationalist, but I think that it is important to stress the disadvantage under which noble Lords labour by not having nationalist opinion directly reflected in their debates in the same way as that of unionist opinion. As I have said, I am not in any way partisan as between any legitimate aspirations, be they unionist or nationalist, but I recognise the objective fact here; namely, the strength of nationalist feeling on the issues of policing in Northern Ireland.

In my time in Northern Ireland, I can honestly say that I never came across either a Catholic family or a Catholic authority that would encourage younger members of their community to consider a job in the RUC. I accept the fact of intimidation, but that is by no means the whole story. The name, with its distant historical legacy, is an impediment to Catholic recruitment. Members on all sides of your Lordships' House have expressed a strong wish to see Catholics serve in much greater numbers in the newly established police service—ultimately to the point where the number of Catholic police officers is proportional to the number of Catholics in the population as a whole. That will not happen, as Patten recognised, unless Catholic parents, Catholic political leaders and the Catholic hierarchy feel able to encourage Catholic recruitment to the police service.

A number of noble Lords have already said that a change of name is a necessary prerequisite for the new start for policing in Northern Ireland, based on the consent of both communities. Such a change need in no way detract from the achievements of the RUC in the recent past, but a change of name addresses the future purposefully and positively.