My Lords, the Government have welcomed the Competition Commission's report, the recommendations of which have been accepted by my right honourable friend the Secretary of State for Trade and Industry. We are keen to establish effective relationships within the supply chain and have pursued this aim as part of our long-term strategy for agriculture. We therefore attach particular importance to the development of a code of practice with suppliers.

My Lords, I thank the Minister for that Answer. I am pleased that her Ministry will attach particular importance to relationships with suppliers. Does she agree that one of the difficulties for the public is that they do not know what price farmers and growers receive from supermarkets and it is confusing for them to hear that farmers are receiving almost nothing for their produce when consumers are paying a fair price for it? Does she further agree that farmers' markets are popular because that link is obvious? Will she ensure that the code is drawn up in a way which helps small producers and co-operatives, and that it will include a requirement on supermarkets to publish figures of the amount of local and British produce sold and the percentage of the price that farmers receive for that produce? Does she further agree that it is very important that the code does not deter supermarkets from buying British produce by driving them to buy overseas?

My Lords, I agree with much of what the noble Baroness said, in particular with regard to the desire of consumers to have the opportunity to buy British food and local food, which has advantages for both the environment and local producers. The rise in the popularity of farmers' markets confirms that. As to the code, it will follow very closely the specific concerns about competitiveness identified in the commission's report. It will require that supermarkets' standard terms of business are available on request; that supermarkets do not delay payments to suppliers; it will outlaw retrospective price reductions and prevent supermarkets from seeking payments as a pre-condition of supply—many of the things that suppliers were concerned about. The OFT will seek the views of suppliers on the draft code when it has been drawn up.

My Lords, does my noble friend recall that the National Farmers Union told the Competition Commission that very few individual farmers were willing to give details of the bullying tactics to which they had been subjected by supermarkets because they feared reprisals? Bearing that in mind, does the Minister feel that a code of practice will be effective if it is dependent upon individual farmers and other producers making complaints to the Office of Fair Trading? Indeed, what will be the sanctions if supermarkets ignore the requirements laid down by the Competition Commission and the code?

My Lords, there are often difficulties in going from the anecdotal to the evidence. I have outlined the areas that the code will cover. They represent exactly the kinds of situations that one has heard farmers complaining about, such as retrospective price reductions and the imposition of unfair penalty payments and so on. I should make clear that the code of practice will be binding. The supermarkets will be expected to give legally binding undertakings to comply with these remedies, which will include provision for independent dispute resolution. So there will be legal remedies. The Secretary of State has made clear that he wants the code finalised quickly and has asked the Director-General of Fair Trading to report back to him on progress by mid-January.

My Lords, is the Minister aware that yesterday I received a reply from one of her colleagues saying that the age of the marketing board was over? Does she not agree that under the marketing board—and possibly subsequently under Milk Marque, which has now been broken up—the price of milk for consumers in this country was the lowest in Europe and the farmers got a fair return? Does she think that the new body will have any effect whatever?

My Lords, we are all aware—and the noble Lord, Lord Mackie of Benshie, will make sure that we remember—of the problems there have been recently in the dairy industry. We welcome the recent announcement of price increases for the autumn of around 2p per litre and that both the international commodity market and UK production point towards more optimism, in the short term at least. The noble Lord will also be pleased about the setting up of the Milk Task Force, announced on 23rd November, which has been welcomed by the NFU. Its membership will reflect the key areas of the dairy food chain, from production to retail. It will ensure greater efficiencies and greater long-term stability in the dairy industry.

My Lords, does the Minister agree with her noble friend Lord Borrie that some producers showed great hesitation in giving evidence to the commission? If she does agree, is she not equally concerned that they will also hesitate to report supermarkets to whom they are suppliers? This is part of the difficulty. Does she agree that it is important that we should revisit the issue of labelling? We currently have the "red tractor" promotion, but we are still unable to label our products as UK products. Now that our beef has to be labelled "UK" for French purposes, is it not high time that all UK-grown produce should be "UK" labelled as well?

My Lords, it is perfectly possible for people voluntarily to label produce with its country of origin. That can be done very distinctively. The red tractor mark, which covers a variety of issues about quality assurance, is important for consumers. As to the reluctance of people to give evidence, the importance of the code is that it will lay down that legal undertakings must be given by the supermarkets to abide by its terms. It will address the practices that have been of concern to suppliers and enable them to take action against supermarkets. It will also provide for independent arbitration, if necessary, when there are disputes.

My Lords, NHS bodies were asked to undertake a measure of pre-planning for possible UK entry to the single currency. This has been a limited management exercise and resources have not been diverted from patient care.

My Lords, can the Minister tell the House who authorised health authorities and trusts not to tell MPs how much money was being spent on this exercise, and why the instruction was given? Is this not taxpayers' money? Can he further inform the House of the volume of trade carried on by the NHS with the 11 countries mentioned by the noble Lord, Lord McIntosh of Haringey, during Questions on 25th October? Why is it thought that the NHS is incapable of carrying out currency conversions?

My Lords, we do not have specific information on trade with other countries. It is thought that most trade with such countries would be through wholesalers. I understand that the National Blood Authority mentions trade with foreign countries in its annual accounts.

As regards the implications of potential entry into the euro, if this were to happen the NHS could expect to receive euro invoices under the "no compulsion, no prohibition" rule and would need to be covered by a multi-currency financial system. However, I assure the noble Baroness that no expenditure has been diverted from patient care to undertake what has been a very limited pre-planning exercise. Information has been made available in Answers to parliamentary Questions, or could be made available centrally. Thus, we sought to ensure that 500 different NHS bodies did not have the bureaucratic burden of responding individually.

My Lords, perhaps I may help the House on this matter. Clearly, the National Health Service must import drugs and equipment from Asia and North America and from various parts of Europe, in and outside the European Union. Why should it have difficulty in adding one more currency to the large number in which it already deals?

My Lords, surely that is the whole point of a limited pre-planning exercise: to examine the implications for the National Health Service in the event that this country were to enter the euro. As I explained, if Britain were to enter, during any transition period the NHS could expect to receive euro invoices under the "no compulsion, no prohibition" rule.

So what?

My Lords, noble Lords say, "So what?". If that were to occur, the NHS would have to be geared up to be able to deal with it. That is the whole point of pre-planning—to see exactly what would be involved for the National Health Service.

My Lords, does my noble friend agree that, whether we are in or out of the single currency, wise preparation for the euro now will mean considerable savings of pounds for the NHS, which increasingly uses the euro base and the developing single European market in medical goods and pharmaceuticals? This is a sprat to catch a very considerable mackerel.

My Lords, my noble friend puts it very well. The National Health Service needs to develop the most up-to-date financial systems possible to ensure that its financial management procedures are as effective as they can be. If, as part of that process, multi-currency systems can be developed, the NHS will incur little extra cost, its financial systems will be better, and, in the event of this country entering the euro, it would be fully prepared.

My Lords, I wonder whether the Minister considers it good for the health of Members of the Official Opposition to continue to worry about this issue. Is this not a typical "euro-myth" over a matter of a few hundred pounds of expenditure?

My Lords, the health of the Opposition is a matter of great concern to all of us. Noble Lords are getting themselves unduly exercised in this area. Surely we want a National Health Service that is prepared for potential possible change. That is all that is happening. A very limited pre-planning exercise has taken place. I would rather have an NHS that looks to the future than one that might be caught out by change.

My Lords, without "getting myself unduly exercised", may I ask the noble Lord—who has twice told us that not a penny has been diverted from patient care—where the resources have been diverted from and how many pennies they amounted to?

My Lords, the great bulk of the pre-planning work has been done by serving administrative and financial officers within NHS organisations as part of their normal duties.

My Lords, may I put it to the noble Lord that he should cease to worry about the health of the Opposition—which is in a very fine state indeed? Will he please answer my question? I have in my hand a letter giving the instruction that MPs are not to be informed of these matters. If individual MPs cannot be informed, can we be told the total sum involved?

My Lords, as regards the health of the Opposition, I should have thought that the three by-elections last week told their own story. So far as concerns the advice given to the health service and the letter from Dr Liam Fox, Opposition spokesman on health in another place—and in response to the concerns of noble Lords opposite about bureaucracy in the NHS—we wanted to ensure that 500 different organisations were not unduly burdened by responding separately and individually to the honourable gentleman. As I have said to the noble Baroness, the information that Dr Fox sought has either been answered or could be answered through parliamentary Questions. Surely it is better that that is done. I have already responded by saying that the pre-planning exercise has cost very limited extra resources. To take the case of the Buckinghamshire health authority, a few weeks ago the noble Lord, Lord Tebbit, not letting facts get in the way of a good story, asserted that the authority was spending £1.5 million this year on pre-planning. As the statement issued by the Buckinghamshire health authority made clear, the amount of time and money taken up by this exercise so far has been a few days in each organisation and equates to a cost of several hundred pounds.

My Lords, the charter will be adopted as a political declaration. It establishes no new powers for the EU or the European Court of Justice. The Union is already obliged by Article 6(2) of the Treaty on the European Union to respect fundamental rights as general principles of Community law. The ECJ is responsible for ensuring this. In interpreting Article 6(2), the Court can have regard to any material it considers relevant. This may include the charter. But that does not make this declaratory charter legally binding.

My Lords, I thank the Minister for that reply. The Minister for Europe likened the charter to the Beano comic, and both the Prime Minister and the Foreign Secretary have said— as the Minister herself has told the House—that it is a mere political declaration and will not impact on national law. However, does he agree that the Commission, in an official communication, and the vice-president of the European Court of Human Rights have stated that the charter will become mandatory through the European Court's interpretation of it and that our judges will have to apply it? Who is right? Surely it is plainly wrong to assert, as the Government have, that the charter is a mere showcase of existing rights and will not affect member states. One has only to look at Article 19, which purports to restrict the right of member states to extradite criminals.

My Lords, I know that on this topic, too, noble Lords opposite have been exercised in a way similar to that just referred to by my noble friend. Perhaps I may speak plainly and assist the noble Lord in relation to the Commission's attitude to the charter. The Commission's press release of 12th September, regarding what the charter will not be, stated:

"It will not be a vehicle to extend or reduce the powers of the Union and the Community. Changes in any powers are a matter for the Intergovernmental Conference only, not for the Convention. As the discussions within the Convention have shown, it will not require any amendments to the Member States' constitutions. It will basically group together rights already existing in different documents and in the Treaties. It will have no impact on forms of court action or the court structure put in place by the Treaties, as it does not provide for new channels of access to Community courts. It neither requires nor precludes the European Union's accession to the European Convention on Human Rights. This matter does not fall within the remit of the Convention".

People have been very careful which quotations from the Commission they choose to adopt. The Commission has made it absolutely clear that the charter is not a binding document; it is declaratory. The courts can take it into account, but it is not legally binding. I invite the noble Lord's attention to the end of the charter, especially Articles 52 and 53. The House will find that that puts the matter very much in its proper context.

My Lords—

My Lords—

My Lords, in any event, does my noble friend agree that it is not desirable for this House to give instructions to the European Court of Justice, any more than it would through any avenue of law enforcement in this country? Indeed, the noble Lord is a Queen's Counsel and should know much better than that.

My Lords, I agree with my noble friend that it is an opportunity for us to exercise not only judgment but also moderation. As has been rightly said, the matter will be capable of being taken into account by the European Court of Justice. The Court has indicated that it understands that this is a political document, which is declaratory in nature, and, therefore, will have to be approached appropriately.

My Lords—

My Lords—

Lester!

My Lords, I believe that there is probably enough time for both noble Lords to put their questions, provided that they are reasonably brief.

My Lords, the Minister told us most eloquently everything that the new charter is not. We already have the European Convention on Human Rights, which our courts are seeking to assimilate, and our national rules governing people's rights. In addition, we are being threatened with a Commission document encapsulating the rights and aims of the European Union. If, on top of that, this new charter really does not add anything at all, what on earth is the point of the whole endeavour?

My Lords, I believe that I have answered that point on a number of occasions. However, I am quite happy to repeat my answer. Clarity is always of use—making visible those rights that we already have is a matter of real importance to the peoples of our countries. The charter will be a measure that can be used to good effect by ordinary men and women. Indeed, to highlight the issue raised in this House previously, perhaps the lawyers will not have it all their own way.

My Lords does the Minister agree that it is desirable for the European Court of Justice to have regard in areas of EU competence to the charter and the European convention to protect the individual citizen against the misuse of power by EU institutions and officials? Taking the specific example given by the noble Lord, Lord Waddington, does the Minister also agree that Article 19 of the charter, to which he takes objection, is already in Article 3 of the European Convention on Human Rights, which forbids inhuman or degrading treatment, punishment or torture?

My Lords, the noble Lord is quite right. The ECJ will be able to take these measures into account, as is proper. However, as the noble Lord pointed out, a good basis for the upholding of those rights is already inherent in the current structure that we have. It is a persuasive document, but nothing more.

My Lords, the Government's strategy is to create a fairer, faster and firmer system under which genuine refugees are identified quickly; and we deal firmly with unfounded claims. The number of applications from central European countries, where the vast majority of applications prove to be unfounded, has dropped since April of this year.

My Lords, does the Minister agree that a policy of reducing the number of applications by deterrents can only be viable, first, if the undesirable features of the present treatment of asylum seekers are promulgated in the refugee-producing countries—for example on the streets of Baghdad—and, secondly, if the Minister can convince applicants that refugees are now worse treated than they were when Mr Michael Howard was in office? Can the noble Lord attempt to show the House that either of those factors is the case?

My Lords, I believe that I have made it plain on a number of occasions that our policy is to adopt a fair but firm approach to dealing with the matter of asylum applicants. That is the course that we have set for ourselves. We believe that we offer fair treatment. Indeed, when people, quite understandably, come to this country in fear of persecution in their home country, they will be given a fair hearing. That is the Government's policy and one that we have had for a long time. Moreover, it is a policy that has been shared by successive governments. We are fully committed to carrying out our obligations under the 1951 convention; and we shall continue to do so both fairly and firmly.

My Lords, at the risk of being a bore, can the Minister tell me what happens if an asylum seeker gives birth to a baby in this country? Will that baby automatically become British? If it is British, does that change the status of the asylum seeker?

My Lords, if a child is born in the United Kingdom, that does not necessarily mean that he or she will attract British nationality. Therefore, the child of an asylum seeker born in this country will not be deemed to be British. I should add that a multiplicity of factors, such as the nationality of ancestors, are required to qualify for British nationality, but being born in the UK is not the only relevant factor as far as concerns British nationality.

My Lords, I believe that we all respect the Government's wish to be fair. However, does the Minister agree that the factors controlling the volume of asylum applications are largely the number of dictatorial regimes, the number of countries with no effective government and the number of internal conflicts, all of which generate genuine fears of persecution?

My Lords, the circumstances described by the noble Lord have a bearing on the number of applications received for asylum status. However, we should also recognise the fact that there are many who seek to come to this country and claim asylum but who do so in a way that is entirely unfounded. We must have fair and firm procedures in place to deal with that situation. Since we were elected in May 1997, the Government have very successfully adopted that course.

My Lords, has the Minister observed that the number of applications still outstanding is roughly 11-times the increased number of applications made in the month of October alone? In view of that fact, will the noble Lord acknowledge that it is impossible for the Government to meet their target of making first decisions on all applications within two months by April 2001?

My Lords, I do not acknowledge the noble Lord's final point. The number of applications lodged in October was 6,970, which was a 7 per cent increase on the September figure. However, applications over the past three months—August to October 2000 averaged 6,610 per month, which is 5 per cent lower than the monthly average for the same period in 1999. We are on course: we shall reach our April 2001 target. As I understand it, we have substantially reduced the backlog of asylum applications down to some 89,000 at present. Our intention is to reduce those to fractional levels by April 2001.

My Lords, how can there be a deterrent to improper asylum applications when the Government's dispersal and support policies are collapsing and a high level of granting leave to remain is being given?

My Lords, it is not a question of deterrence; it is a question of having a firm, reasonable and fair policy. That is the policy of the Government. I contrast that with the absolute shambles of a policy we inherited and the absolute shambles that noble Lords opposite have got into with their current policy. On 18th April, William Hague said that the next Conservative government would detain all new applicants for asylum. This was echoed by Ann Widdecombe on 4th October when she said that the Conservatives would automatically house all new asylum applicants in secure reception centres. As of 27th November 2000, she changed her mind yet again—they would only lock up all new applicants from the so-called "white list" of third safe countries. Which policy are we to believe, William Hague's or Ann Widdecombe's, or which Ann Widdecombe policy do we now believe on Tory asylum policy?

My Lords, after consideration of Commons amendments to the Insolvency Bill my noble friend Lady Hollis of Heigham will, with the leave of the House, repeat a Statement which is being made in another place on inherited SERPs.

My Lords, I beg to move that the Commons amendments in lieu of Lords amendments be now considered.

Moved, That the Commons amendments in lieu of Lords amendments be considered forthwith.—(Lord Macdonald of Tradeston.)

On Question, Motion agreed to.

My Lords, I beg to move that the Commons amendments be now considered.

Moved, That the Commons amendments be now considered.—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

My Lords, I beg to move that this House do agree with the Commons in their Amendment No. 5.

Moved, That the House do agree with the Commons in their Amendment No. 5.—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 6. This amendment makes it explicit on the face of the Bill that Schedule AI will apply where there is or has been a moratorium in force. Previously, new Section 1A(2)(d) provided that the procedure would apply only while a moratorium was in force. However, the scheme set out in Schedule AI envisages that certain acts will necessarily take place after the moratorium has come to an end. This is because it relates not only to approval but also implementation of a voluntary arrangement which, by definition, takes place once a moratorium has ended.

Moved, That the House do agree with the Commons in their Amendment No. 6.—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 7. I should like to speak also to Amendments Nos. 8 to 11 and 14 to 16. These amendments will ensure that the company voluntary arrangement moratorium does not prejudice the existing modifications of insolvency law relating to "money market contracts", "money market charges" and "related contracts" as defined in the Financial Markets and Insolvency (Money Market) Regulations 1995, and "system-charges" as defined in the Financial Markets and Insolvency Regulations 1996. The amendments are necessary to protect the status quo and to enable financial markets to continue to function in the event of the insolvency of one of the market participants.

Moved, That the House do agree with the Commons in their Amendment No. 7.—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 8 to 11.

Moved, That the House do agree with the Commons in their Amendments Nos. 8 to 11.—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 12. I wish to speak also to Amendment No. 17. The amendments deal with an issue raised by the noble Baroness, Lady Buscombe, in Grand Committee on 15th June, on Report on 11th July and, I regret to say, also at Third Reading on 26th July. The noble Baroness was right to continue. The amendments will ensure that the wishes of the creditors' meeting to extend a moratorium will prevail in a situation where the company fails to hold a meeting. They also make it an express part of the nominee's duty to summon meetings of the company and its creditors to be held within the initial moratorium period. The moratorium will end at the end of that period if he does not. Currently, that period is 28 days but because it may be increased or reduced using the power in paragraph 8(7), the amendment does not specifically refer to the length of the moratorium period. I thank the noble Baroness, Lady Buscombe, for drawing this point to our attention. I urge the House to accept the amendment.

Moved, That the House do agree with the Commons in their Amendment No. 12.—(Lord McIntosh of Haringey.)

My Lords, I rise to speak to Amendment No. 12. I shall somewhat shorten my speech given that the Minister has been so gracious in saying that I was right to continue pressing the point. As he said, I began making the point in Grand Committee on 15th June. The amendment represents a complete U-turn by the Government. It has the desired effect that if the members of the company do not meet, the moratorium can still be extended by the creditors under paragraph 32. The government amendment meets all the criticisms which I made in Grand Committee and which were dismissed at that time. I am grateful for the amendment and I thank the Minister for it.

My Lords, I shall let the "U-turn" pass.

On Question, Motion agreed to.

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 13 to 17.

Moved, That the House do agree with the Commons in their Amendments Nos. 13 to 17.—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 18. I should like to speak also to Amendment No. 20. It is the turn of the noble Lord, Lord Kingsland. The amendments deal with an issue raised by the noble Lord in Committee. The amendments provide that there should be a time limit on the ability of a member of the company to go to court if particular decisions taken at the creditors' meeting, which take effect under paragraph 36 of Schedule Al or paragraph 5 of Schedule 2, differ from those made by the company meeting. While we believe that the timing of such an application will be largely self-regulating, we consider that there would be an advantage in there being a cut-off point of 28 days beyond which such applications cannot be made. With due deference to the noble Lord, Lord Kingsland, I commend the amendment to the House.

Moved, That the House do agree with the Commons in their Amendment No. 18.—(Lord McIntosh of Haringey.)

Lord Kingsland: My Lords, it falls to me to have the final gloat. As the noble Lord said, we first proposed a time limit to any application made by a member of a company as long ago as 15th June. After several months of cerebration, the noble Lord has finally come round to our point of view. I am very grateful to him for doing so.

My Lords, I shall let that "gloat" go by as well.

On Question, Motion agreed to.

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 19 to 24.

Moved, That the House do agree with the Commons in their Amendments Nos. 19 to 24—(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

My Lords, I would like to repeat a Statement on inherited SERPS. The Statement is as follows:

"In my Statement to the House of 15th March this year I explained how millions of people were given wrong, misleading or incomplete information about rule changes introduced by the last government in 1986 which were due to come into effect earlier this year. As I told the House then, as a matter of principle when someone loses out because they were given the wrong information by a government department, they are entitled to expect the Government to put it right.

"In March, I announced that we would defer any changes in the inheritance rules by two-and-a-half years until 6th October 2002. That remains the position. I also said that I would consult the ombudsman, the National Audit Office and others on a protected rights scheme which was designed to provide redress to people who were given wrong or incomplete information. I have received a range of helpful and constructive representations from Members of this House, Select Committees and others. I have also received the advice of the Social Security Advisory Committee, whose report I am publishing today. Copies will be available in the Library and the Vote Office.

"As I have said before, the solution to this problem has to be both fair and workable and, as the ombudsman has said, it must provide a global remedy. I am determined to make sure that we do that. Over the past few months, I have become increasingly convinced that a protected rights scheme would not work in the way intended and therefore would not provide a fair and just solution to this problem. It would not be fair because we cannot be sure that it would reach all those affected, particularly the very elderly and vulnerable. It would be very difficult to safeguard the scheme against fraud and abuse. Its operation would inevitably cause injustice, and on that basis I do not intend to pursue it.

"There were two key problems with the decisions taken 14 years ago by the last Conservative government. First, they decided to implement the changes without any transitional arrangements. What is worse, they continued for years to give out wrong, misleading and incomplete information about what they planned to do. We have already deferred the change in the inheritance rules until 6th October 2002. No one at all will be affected by the policy change before that date.

"The proposals I am making today are designed to give full protection to every pensioner; to give younger people adequate notice of the change to SERPS rules; and to provide transitional arrangements for those approaching retirement age. First, men and women who are already over the state pension age cannot do anything to restore their position. I have therefore decided that all men and women who are over state pension age on 5th October 2002 will be exempt from the changes. That means every pensioner will keep their existing entitlement.

"Secondly, proper notice has to be given to those who are planning for their retirement. So I am proposing that the new rules will only apply to men and women who are now 10 years or more: away from their state pension age.

"Thirdly, those people who are approaching state pension age will have less time to plan for their retirement. So for those who are within 10 years of their state pension age, we will phase in the changes. For example, people who reach state pension age between 2002 and 2004 will be able to pass on 90 per cent of their SERPS; those reaching pension age between 2004 and 2006 will pass on up to 30 per cent, and so on.

"We intend to bring forward regulations in the new year to implement these changes and we will consult on the draft regulations in the usual way. We will also write this week to all those people who have contacted us already to set out the position.

"There is of course a very small number of people who have evidence that they were clearly misinformed by the department. For example, they have a letter from the Benefits Agency containing the wrong information. This small group will have access to the usual departmental procedures that deal with cases of maladministration to the extent that the proposals I am announcing today do not fully compensate them already.

"I have already taken steps to prevent this happening again. As I told the House in March, I am reorganising the DSS so that it can better serve its key customer groups. I am bringing together policy and operational responsibility into a single organisation dedicated to pensioners.

"As part of that process, we have already tightened up the procedures for checking leaflets and guidance. I want to ensure that in future people are told about changes in pension policy so they can plan for their retirement in full knowledge of their position. That is why, next year, we will begin to send out combined pension statements giving people more comprehensive information on their entitlements.

"The proposals I am making today will clear up the mess we inherited. Everybody who has reached state pension age in October 2002 will be unaffected by the new rules. My announcement today will remove any worry for pensioners about providing for their spouse. For men and women who are more than 10 years away from state pension age we are giving them the proper notice to which they are entitled. For those within 10 years of their state pension age we will phase in the changes.

"Due to the timing of these changes the costs will be comparable over the next three years. The reforms I have announced today will cost around an extra £1.5 billion over 10 years and an extra £4 billion over 50 years.

"This problem should have been sorted out 14 years ago. What happened in the years after 1986 was a series of colossal blunders which were inexcusable and caused untold distress to millions of people. The then Conservative government have to take full responsibility for what happened. We are now taking the responsibility for sorting it out. I commend this statement to the House."

My Lords, that concludes the Statement.

My Lords, the House will be grateful to the Minister for repeating the Statement which was made in another place by the Secretary of State. This whole problem has been described as the most expensive act of maladministration since the war. I believe that it is probably true to say that it is the most expensive act of maladministration ever. It has been an extremely long-running saga. That saga is given in very great detail by the report of the Commons Select Committee on Public Administration entitled Administrative Failure: Inherited Serps published only a few days ago. When I first saw on the Annunciator that there was to be a Statement, I assumed that it would be a response by the Minister to that report. In fact, I now understand why it is not mentioned.

I very much regret the tone of the Minister's Statement in the other place; I do not refer to the Minister in this place. Discussions on this matter have shown that we on this side fully recognised responsibility for what happened in our period in office. But we have also recognised, as I believed the Minister had done, that there was a responsibility on the other side as well. That is set out very clearly indeed in the report to which I have just referred. It states:

"We believe that the failure of the department between 1996 and 1999 to take adequate action to inform their staff and the public perpetuated an already unsatisfactory situation".

So we do not accept what the Minister said in her final words, that then then Conservative government have to take full responsibility for what has happened.

Indeed, it is also the case that as regards responsibility, throughout there has been an appalling breakdown in communications, but that has not been deliberate. However, paragraph 17 of the report states:

"A Pensions Bulletin was issued in January 1999, which summarised the changes to inherited SERPS in four paragraphs. However, subsequent Bulletins only provided holding answers for staff to give to the public. Rachel Lomax [the Permanent secretary] told us that the failure to fully inform the public at this stage was a conscious ministerial decision".

There is a significant difference between a situation where there is an inadvertent breakdown in communications and one where there is a deliberate decision not to give the public full information.

I shall not detain the House by going into some of the other matters referred to by the Select Committee. This whole problem raises important issues as regards the relationship between officials and civil servants. I am glad that the report will do something to improve that because it is still impossible to find out who was responsible for what has happened. When I was the chairman of the Liaison Committee in another place, we dealt with this matter at great length. The report raises important questions—which I hope the Government will study carefully—as to the relationship in the House and in Parliament between officials and Ministers.

We spent many hours on previous Bills debating this issue. In particular, we commented on the ombudsman's report, which the Government said they accepted. The ombudsman recommended a global solution, which the Government's proposal for a protected rights scheme clearly was not. We now have a new situation which will, I hope, deal with the problems envisaged by the Select Committee.

The Select Committee was very concerned. It stated:

"Our fear is that the original maladministration in this case may well now be compounded by a redress scheme that has all the makings of an administrative disaster".

Given that the Select Committee expressed that fear, and given the matters that we raised during previous debates on this subject, I welcome what the Minister has now said.

This is certainly an improvement on the previous scheme, which clearly would not prove to be practical. It is extraordinary that it has taken the Government so long to realise that that is the case. None the less, what is now proposed is better than the procedures previously envisaged—on which the House spent so much time and which are now, willy-nilly, dropped at a moment's notice.

It is a complex proposal and it will take time to understand it. Therefore, other than saying it is better than the previous proposal, I should not like to comment in great detail until we have had an opportunity to study it.

Perhaps I may ask the Minister one or two specific questions. First, as to the question of cost, I am rather surprised that, given the Government's proposal, the cost is smaller—amounting only to billions and billions—than one might have expected. As a point of comparison, can the Minister tell the House how the costs now to be incurred compare with the costs of not going ahead with the proposal to reduce SERPS at all?

Secondly, the Minister referred to a very small group of people who have documentary evidence. So far as those matters are concerned, will it still be the case—as previously recommended by the ombudsman—that the onus of proof will rest with the Government and not, as now proposed, with the normal administrative procedures?

Finally, we welcome the statements made in regard to better information for pensioners. It has emerged clearly from this saga that private pension providers have onerous obligations to provide correct information. It appears still to be the case that the Government have only a duty of care to provide proper information. The two are very different. Are we to understand that the Government propose to strengthen that position and that there will be a more onerous obligation on them to provide correct information than has hitherto been the case?

My Lords, we welcome the Statement. The inherited SERPS disaster has been debated on several occasions in your Lordships' House, both in the present Session and in the previous one. This is clearly the most serious administrative failure for decades—although, in relation to its effect on pensioners, it is not as serious in the end as the disastrous pensions mis-selling scandal, which was introduced as a result of the unfortunate decision of the previous Conservative government to allow people in occupational schemes to opt out of them.

Any fair remedy for this disaster will be very expensive. The ultimate cost appears to be something of the order of £6.5 billion that is some £2.5 billion for the deferral to October 2002 and an additional £4 billion. The Government's preferred remedy before the Statement was made was deeply unsatisfactory. It proposed that compensation should be given only to those who had acted—or, more likely, failed to take action—in reliance on incorrect information.

The burden of disproving a claim, once made by a pensioner, was placed on the Government. This meant, first, that the burden of initiating the claim rested on the pensioner. Many pensioners were unlikely to make a claim; many would have failed to appreciate the need to take action at all; and many others would have been deterred by the consequent involvement in the bureaucracy of having to deal with the DSS. But, because the claim, once made, was difficult to disprove, the scheme could have been a charter for fraud, as the Select Committee on Public Administration pointed out.

The Government's new proposals are therefore a great improvement. We welcome the age-related exemption from the reduction in SERPS as a better solution than the further deferral of the change in the system. We also welcome the tapered exemption for those who will be within 10 years of the state pension age on 6th October 2002. We shall obviously want to look at the detail of the proposals, but we believe that, in principle, they are acceptable.

The only part of the Statement with which we disagree is the attempt to place full responsibility on the Conservative government. It took the present Government two years after they discovered the existence of this mess to sort it out, during which time serious distress was caused to many people because of uncertainty and the possible loss of an expected benefit.

The Statement is not the end of the matter. Two things need to be done. First, there is a need to ensure fair treatment for present and future pensioners; and, secondly, there is a need to prevent any similar disaster happening again. The Statement deals in a broadly satisfactory manner with the first of these issues; it does not deal at all with the second. That is not a criticism of the Statement. This is a wider issue. It is not a matter for the Department of Social Security alone; it concerns every government department.

This disaster may well have been due, as Sir Christopher France suggested in his answer to question 188, to something as elementary as a proofreading error. That should not have been possible. Plainly, the antiquated IT system in the DSS may well have played a part. Here I shall refer to the evidence of Mr Peter Mathison, who was the chief executive of the Benefits Agency from 1995 to 2000. At question 248 he stated:

"Most local offices, very few people in the local office network have access to the intranet or PC-based thing, it is all very old systems. When I came in, in August 1995, I had not seen a black and green screen for nearly eight or nine years. I could not believe the state of the IT support. In pensions, there are, I think it is, something like 14 guides of 50 volumes and they are all paper-based, and that is just on pensions. Across the whole range of benefit, there are 500 manuals and guides people need to refer to, to answer one of any million of questions, and all of them are paper-based".

Then he was asked:

"It must have depressed you enormously?".

He replied:

"And it depressed me that we could not get the investment to do something about it; and since I have been outside I would give my eye-teeth to have some of the stuff I have been using recently. I have got better IT support in the spare bedroom at home".

That is a devastating criticism of the failure of both the present and previous governments to invest properly in IT systems for the DSS.

Perhaps the most shocking passage in the Select Committee's report is the statement in paragraph 5 that,

"Government departments do not have a duty to provide information on changes in law".

We want an assurance from the Government that the whole system will be overhauled. We want an assurance that this and future governments will accept that they have a duty to provide full and accurate information on changes in law to anyone who may be affected by those changes. We also want an assurance that, so far as is humanly possible, this scandal will never be repeated.

My Lords, I am glad to receive the words of welcome for the Statement from the noble Lord, Lord Goodhart. I was a little disappointed at the tone of the response from he noble Lord, Lord Higgins. I thought it unusually grudging and half-hearted, and I was sorry about that. I am sure that he, the noble Lord, Lord Goodhart, and other noble Lords will accept that there is a very real difference between the position of the previous government and the present one. In 1986 the previous government took responsibility for making a variety of significant changes to SERPS. They included the 20 best years, the calculation in terms of annual, as opposed to incremental, changes in valuation, as well as the change in terms of inherited SERPS.

Any government who develop new policies have the responsibility at least to ensure that their literature is consistent with those policies. It was the then government's responsibility to ensure that the information that they gave out was accurate. They did not do so. That was a major failure on the part of the previous administration. I suggest in all modesty that that was rather different from the approach taken by the current Government who inherited the situation. As soon as they were aware of the problem, they took measures in the Bill that came before the House in the summer of 1999; they followed that with consultation; they came up with proposals in March this year, on which they subsequently consulted; and they are now responding. It has taken a fair amount of time, not only to consult properly, but to come up with proposals that the Government believe to be workable.

I remind noble Lords of our statement in July 1999 that,

"no one has suffered any financial loss as a result of these changes, because they do not take effect until 2000".

We also said that we were,

"considering which of those two routes is the better to follow or whether there is a third route which we have not yet explored. Several different responses have been given this evening and a variety of other suggestions have been made".—[Official Report, 6/7/99; col. 847.]

and that we were reviewing those suggestions. That was a proper, decent and honourable response. It suggests that the noble Lord, Lord Higgins, would be well advised to think again about such a churlish response. As soon as we were aware of the issue we took action; we came up with proposals; we consulted; and we have now changed those proposals in the light of further consultation. If only the noble Lord's own government had taken on the same degree of responsibility, we should not now be in the mess that we are in.

The difficulty for this Government is that when we realised the nature of the problem we thought that we could redress the grievance that lay at the heart of it; namely, that people were suffering, either from misinformation or from a failure of information, and that that had either added to their financial detriment or failed to act to their financial advantage. That was the problem that we sought to address. That was the basis of the protected rights scheme that we brought before the House in March 2000.

Having listened to people and taken part in consultation, we have now been persuaded that the problem is deeper and that we cannot merely redress grievances: we have to return to the drawing-board and redesign the scheme. I should have thought that the noble Lord, Lord Higgins, could have joined the noble Lord, Lord Goodhart, in welcoming the decency and propriety of our response, which I am proud to bring to this House.

Three specific questions have arisen, two of them shared by noble Lords. The first relates to costs. For the original scheme—the protected rights scheme—£2.7 billion was the cost of deferring any change until October 2002; there was to be a further £5.5 billion, making a total of £8.2 billion for the protected rights scheme. The scheme that we have now produced involves the same £2.7 billion through to October, and a further £9.5 billion, which brings the figure to £12 billion. I was asked what would be the cost of not going ahead at all. It would be £20 billion in total over 50 years.

The noble Lord, Lord Higgins, raised a point about remedy and maladministration. We shall now resort to the customary position of the DSS; namely, that if there is a case of maladministration the responsibility is on the DSS to ensure that the person is put back into the situation in which he or she would have been had the maladministration not occurred. That means that we are returning to a more conventional situation in which the person who is subject to the maladministration must show evidence to that effect.

My Lords, I am grateful to the Minister for giving way.

My Lords, I remind the noble Lord that I must finish my response to the Front Bench in two minutes.

My Lords, I am sorry. I should merely like to ask why the Minister in the House of Commons referred to the cost as an extra £4 billion, rather than the £9 billion that has been mentioned.

My Lords, it is an extra £4 billion in total on the £8 billion of the protected rights scheme. That is the difference between the two schemes over 50 years.

Three points were raised about information. The first related to letters to individuals. As soon as the Secretary of State was aware of the problem early in 1999, he wrote further letters to people who had written to the department. The second question, raised by the noble Lord, Lord Goodhart, related to information for staff and the cascade of knowledge. The noble Lord was absolutely right; this has been a weakness within the DSS. We are strengthening the system as regards information: we have developed the IT system and it is being rolled out. However, the noble Lord is right—unless staff in local offices have the requisite information they cannot advise people accordingly. The third question associated with information was what knowledge would go to pensioners and prospective pensioners.

First, we are writing to all those who contacted us—some 20,000—and giving them information. We are developing a campaign to ensure more widely that those who are affected will know about it. We shall work with Age Concern and the relevant organisations to ensure that that knowledge is as widely dispersed as possible. Secondly, we shall be producing an integrated pension statement. From next year people will receive information about both their state retirement pension and their SERPS. We hope that from the following year we shall also be able to provide them with information about their private pension, so that they will be able to see what their future expectations may he and whether they want to take additional action in order to build up their pension rights.

I hope that with that response on cost, on the question of remedy and on information, noble Lords opposite will feel that I have answered their questions.

My Lords, I rose to make a premature contribution because I, too, was taken aback by what I felt was a churlish response from the Opposition Front Bench. I have been concerned over the past months at our inability to arrive at a full solution in terms of removing the fear on the part of innocent people who have been subject to maladministration through no fault of their own. I am delighted to congratulate the Minister on the Statement and on finding a solution. My only advice to those on the Opposition Benches is to remember the comments of the noble Lord, Lord Healey, some years ago: "When in a hole, stop digging".

My Lords, I thank the Minister for this welcome Statement. The Government have indeed listened to older people and to the organisations that work with them. This campaign has been hard-fought both for and by those people. I would mention in particular the All-Party Group on Ageing and Older People and the noble Lord. Lord Rix, who have done a great deal; as has my own organisation, Age Concern—both when I worked directly for it and since then.

I first wrote to the DSS in October 1998 and my letter set some alarm bells ringing. I am delighted that the new scheme is much more along the lines of what we suggested during debate on the Child Support, Pensions and Social Security Bill earlier this year. That is good news. I am very pleased that current pensions will be unaffected by the change to SERPS.

I hope that the Government will consider most carefully how the taper will work for new pensioners. Does the Minister agree that one of the most significant parts of the Statement relates to a point made by both noble Lords opposite who have spoken; namely, that future changes to state pensions will be better publicised. Changes to pensions are not the same as other changes to the law. I say that because they involve planning by people for their future. It is a long-term task. I believe that there is a moral, if not a legal, obligation to inform people about such changes.

Of course, it might also be necessary for it to be a legal requirement. It is terribly important that this point should be taken on board for the future.

Can the Minister tell me what consultation will now take place? Can she say specifically whether this House will still consider the proposed regulations in detail and, if so, can she also say within what sort of timescale that might happen?

My Lords, before my noble friend the Minister replies, perhaps I may remind the House that, in order to maximise the time available to deal with Statements, noble Lords should confine their remarks to questions rather than making general comments.

My Lords, I very much welcome the thanks and support expressed by my noble friend Lord Brett and, indeed, the generous welcome given to the Statement by the noble Baroness, Lady Greengross. I should like to pay tribute to the noble Baroness for her efforts in this respect. That applies also to the noble Lord, Lord Rix, who, I am sorry to say, is not present in the Chamber. I pay tribute to him for his supportive and constructive but, none the less, terrier-like campaign on these issues. As I say, I believe that we have achieved an outcome that is decent, honourable, fair and, above all, workable.

As the noble Baroness identified in her remarks, the advantage in our scheme is that there are no cliff edges; it is a taper. I am delighted about that. I can tell the noble Baroness that the regulations will be produced in draft form. They will, therefore, go to the Social Security Advisory Committee and be made available to the Select Committees, and so on. As a result, there will be ample opportunity for further consultation about the detail of this implementation.

My Lords, my noble friend asked the Minister whether the Government still have only the duty of care or whether there will now be greater responsibility placed upon them. Can the Minister say whether the issue of combined pensions statements mentioned in the Statement, which she subsequently explained and to which the noble Baroness, Lady Greengross, referred, mean that the Government are now taking greater responsibility in this respect?

My Lords, it is not so much a matter of responsibility; it is a question of providing information. In the light of available information, we are—absolutely rightly, in my view— trying to help people plan for their retirement by giving them the best forecast that we can as to what their contributions so far in a possible variety of pension schemes may produce for their future. We hope to start issuing such statements on an annual basis from next year for retirement pensions and SERPS. We shall also include information in that statement about occupational pensions. However, these are forecasts: they are future projections, with all the relevant health warnings attached. We are trying to ensure that people have the fullest possible knowledge to enable them to plan for their future old age.

My Lords, I thank my noble friend for repeating the Statement. As she knows, I have not always been fully supportive of the Government's policies on pensions. However, on this occasion, I welcome the Statement with great pleasure. As noble Lords know, I have been present in the Chamber on every occasion upon which there has been discussion about inherited SERPS and the problems that have arisen because of the failure of the previous government to see through the decision that they made in 1986. Indeed, reference has been made to the latter by noble Lords on this side of the House and by noble Lords opposite.

I am particularly glad that the position of present pensioners is to be fully safeguarded and that proper transitional arrangements are in place. An important consideration in pension matters is that people ought to know about their entitlements. They have to plan for their future and they must know about their pension provision. I was especially pleased to hear that it is intended to issue combined pension statements. That will serve to focus people's attention on pension provision. If this is to be done on an annual basis, with mention being made of occupational provision, as I believe my noble friend said, that will also be a very valuable aid to people when planning their pensions.

This is an excellent Statement. I am most grateful to my noble friend for the announcement. I am sure that she had a great deal to do with these measures behind the scenes. I thank my noble friend most sincerely for having secured such a satisfactory settlement.

rose to move, That this House takes note of the planning, management and operation of the Millennium Dome, and of its future.

My Lords, that was an amazing speech. I, too, shall take a great deal from the NAO report, described as a mine of factual information, rather than the Alice in Wonderland information which seems to be the noble and learned Lord's principal source.

Before I get to the meat of the matter I must declare not an interest but feelings of prejudice and irritation which arise from two episodes. The first was when the Millennium Commission took its deplorable decision to reject the bid of the Cardiff Bay Opera House Trust for what in comparison with the Dome expenditure was an almost ridiculously insignificant amount of money; and Jennie Page justified the decision on the ground that the commission did not have confidence in our business plan. The dome project then went ahead under Jennie Page's direction on the basis of a business plan that was deeply and fundamentally flawed from the outset.

The second episode began in July, when it appeared to me that the noble and learned Lord, Lord Falconer of Thoroton, had, at the very least, acted with an extreme lack of prudence when he repeatedly expressed confidence that the New Millennium Experience Company would deliver the project within its lifetime budget at precisely the moment when the company was warning in its annual report that there were significant risks that might prevent it from so doing and just after he had received a letter from the chairman advising him of a further deterioration in the company's finances. I had to wait two months for a reply to my letter on the subject, which, when it came, failed to answer my question.

We all know that the noble and learned Lord is a very nice man. I was going to say that, having put aside my irritation, it pained me to have to be critical of his role as a Minister and as the government shareholder of the New Millennium Experience Company. However, after hearing his speech, I feel much less embarrassed at my line of criticism.

I start with his defence that it was all just as much the fault of the previous Conservative Government because they began the project and gave it its initial structure. The noble and learned Lord is not only a very nice man, but, by all accounts, a very clever one. If he has a case, he ought to be able to do better than that.

Let me remind the House of the timetable. As the National Audit Office report says, in January 1997 the Millennium Commission offered £200 million,

"to enable further development of the business case and preliminary work, including the letting of major contracts".

In May 1997—the month of the general election—the company submitted a revised business plan to the Millennium Commission and the incoming Blair government. At that time, final decisions had not been taken on the Dome's content, on ticket prices, on marketing strategies and on whether there would be access by car.

The new Government reviewed the project thoroughly, so we have been told. That review went far beyond the details of the business plan to ask the fundamental question of whether to continue with the project. The issue went to the Cabinet, where some members apparently thought that the answer should be "no". However, the collective decision was an emphatic "yes". The project was to be a symbol of new Labour. There is a ring of truth about the reported comment of one senior Cabinet Minister: "If Tony has made a decision, we will all have to support it". Tony had made a decision and they did support it.

Presumably the Cabinet had before it the Millennium Commission's written appreciation of the business plan which said that it lacked detail on commercial, operational and pricing strategies and that it contained no information on the key drivers for the company's business—the contents of the Dome.

Having taken the decision, the Government had two-and-a-half years to make sure that the business plan was sensibly developed and workable strategies were put in place. That is a long time. Ministers can hardly argue that they simply left in place the very preliminary arrangements that had been barely sketched in when the previous government left office. On the contrary, Ministers involved themselves to an extraordinary extent—probably unprecedented in the history of non-departmental public bodies. The coordinating group, chaired by the shareholder, met regularly from June 1997 until the opening of the Dome. Throughout 1999, the shareholder met weekly with officials from the Dome and the company. The noble and learned Lord became the shareholder in January 1999.

The NAO report reminds us that the shareholder is responsible, among other things,

"for setting the strategic direction of the company and for monitoring its programme in terms of cost, content, national impact, legacy and effective management".

The noble and learned Lord attended 16 of the company's 22 board meetings held between April 1999 and 12th September 2000 and was represented at two that he could not attend. Once he had been given the thankless task of acting as shareholder by his old friend the Prime Minister, he was in it up to his neck. He is a nice man and a clever lawyer, but he appears to have been totally out of his depth.

The extent of the noble and learned Lord's involvement was extraordinary and most unusual. The normal—and very wise—practice is for Ministers to stand back from non-departmental public bodies. That prevents them from becoming party to the decisions taken and puts them in a position from which they can form a dispassionate judgment and, if necessary, take effective remedial action. To act otherwise obscures where responsibility lies. That is particularly likely to be the case when the structure is highly complex, as the NAO report confirms is the case here.

The confusion created by those arrangements is startlingly revealed by the correspondence reproduced in the NAO report. The noble and learned Lord had got himself into a position in which he appeared to be acting as chairman of the company—or at least as joint chairman.

The letters exchanged in February and March are remarkable. Chris Smith, as chairman of the Millennium Commission, wrote a highly critical letter, insisting that corporate governance at NMEC would have to improve. The letter was addressed not to Robert Ayling, but to "Dear Charlie". It said:

"The NMEC board does not appear to have played the role we would have expected in confronting the problems and providing leadership. This is disquieting on issues relating to commercial and operational strategy and media handling, and extremely serious when it comes to solvency and financial management. Either the Board did not see or it chose to discount the warning signs of the cash flow difficulties. As a result it seems possible that it failed to take decisions until after a date when the company became technically insolvent".

Chris Smith went on:

"The Board must be encouraged to take responsibility for overall stewardship of the company and provide the clarity of direction any good management team needs".

The noble and learned Lord, not the chairman, replied, to be followed a week later by a reply from Robert Ayling rejecting the concerns that had been raised.

Neither response satisfied the Millennium Commission, which remained so concerned that Chris Smith arranged a meeting with the noble and learned Lord in May to discuss his anxieties. By all normal conventions, it is odd that Chris Smith's original letter about board conduct did not go to the chairman, even if, by his attendance at the majority of the board meetings, the noble and learned Lord had inevitably become associated with and party to the failure to provide leadership, to take decisive action until after a date when the company was technically insolvent and to provide the clarity of direction needed. Has a Minister ever written more devastatingly critical and damaging comments about a colleague?

There was a second, and equally remarkable, exchange of letters in September, between the Earl of Dalkeith, writing on behalf of the Millennium Commission, and the noble and learned Lord. Lord Dalkeith said that the PricewaterhouseCoopers report made salutary reading, with its conclusions that there were serious financial weaknesses in NMEC, that budgeting was inadequate, that an exit plan had not been properly thought about, costed or resourced and that any further funds given to NMEC would be at risk without,

"substantially enhancing the skill and resources of the company".

The noble and learned Lord replied:

"Like you, I was shocked by what the PWC report implied about NMEC's financial management and corporate governance".

Why was he shocked? He had attended 16 of the 22 board meetings and been represented at two others. He had been repeatedly warned by the Millennium Commission. He had the full resources of the Cabinet Office behind him. How could he possibly have failed to observe those shortcomings? Did he never inquire about the adequacy of the budget, the cash and solvency position of the company, whether it had a proper assets register and what were the contractual liabilities and those likely to arise from closure?

As the months and years passed after the Government had concluded their initial thorough— we have had confirmation from the noble and learned Lord that it was thorough—review of the business plan, did he and his colleagues—Peter Mandelson, who was the initial shareholder, and Chris Smith— never question the reality of a plan which meant that the Dome had to attract more than four times the number of visitors as the next most popular UK pay-to-visit attraction achieved in 1999? Did they never inquire whether there was a clear plan in advance of how the company would respond if visitor income fell significantly below the required levels? Surely that would have been an obvious question, particularly after it became clear quite early on that sponsorship income was also much less than originally planned.

With a business plan so obviously highly risky, was it wise of the Government to insist that up to 1 million schoolchildren should be admitted free, at a cost of at least £7 million? The noble and learned Lord said that the idea had come from the company. The NAO report is quite specific that, having considered the request, the company accepted the Government's view.

One would have expected that the noble and learned Lord would have asked all those questions and taken appropriate action. As I pointed out, from January 1999 he was responsible for monitoring progress in terms of cost, content, national impact, legacy and effective management. It is difficult to avoid the conclusion that he failed to carry out his responsibilities effectively. The failure to achieve visitor numbers was not, as he appeared to suggest, an act of God. It was the result of a business plan that was from the outset fatally flawed. And it was the result of the grave deficiencies of management exposed by the NAO report—grave deficiencies with which the noble and learned Lord was so closely associated.

My Lords, could the noble Lord confirm that the date of the business plan was April 1997?

My Lords, I have already gone through the history and pointed out that the revised business plan was considered and approved by the Government when they came into power.

My Lords, will the noble Lord confirm that the date of the business plan was April 1997?

My Lords, the date of the original business plan, which, as the NAO report concludes, was updated as time went on, was April 1997. As the NAO report makes perfectly clear, it was reviewed by the Government and it continued to be reviewed by the Millennium Commission at regular intervals thereafter.

My Lords, will the noble Lord confirm that the grant of £449 million was approved by the Millennium Commission on the basis of the April 1997 business plan, which estimated the number of visitors at 12 million?

My Lords, I am not arguing about that at all. I merely point out that the scheme did not go ahead until the Government had a chance to drop the whole project. They could have abandoned it. As the noble and learned Lord told us, they reviewed the business plan thoroughly and went ahead with it. The way in which the noble and learned Lord, who was in it up to his neck, tries to avoid taking any responsibility for his actions is quite extraordinary.

The noble and learned Lord then came to the House in late July and told us that he was confident that the NMEC would deliver the project within its lifetime budget of £758 million. He stuck to that assertion, even when I reminded him that the company's annual report clearly identified the substantial risk of failure and despite the fact that he had just received a letter from the chairman of the company pointing out that the financial situation was deteriorating. Indeed, the Millennium Commission then produced a review which stated that it might run out of money in the space of two or three weeks.

By September, the cost had become £793 million. On 15th November David James told the Public Accounts Committee that, if one took account of the cost of the two sponsored zones not included in the original plan, the true cost was now £834 million. Is that the final cost?

I shall leave others to raise questions about a possible sale. I use the word "possible" because there is no contract, and the last time that the noble and learned Lord announced a sale, it fell through. However, I want to ask what is the current estimate of the total cost of dismantling the contents of the Dome and whether that total cost is included in the overall total. On this occasion is there to be, as there was to be with Nomura, an early payment of £105 million, with £53 million of it going to NMEC, and, if so, when? I hope that I can have an answer to those questions before the debate ends.

I conclude by saying that I thought I had a good deal of sympathy for the noble and learned Lord—at least I did before the debate began. He was told by his friend the Prime Minister to do a job that he did not ask for, that I suspect he did not want and for which he was in no way qualified. However, Ministers must accept responsibility for the way in which they carry out the jobs that they have been given.

The noble and learned Lord acknowledges that all has not gone well but says that he wishes to see the project through to the end. On the basis of what has happened so far, it is hard to see why that would be of benefit to anyone. Would it not be better if he added to his considerable reputation as a man of integrity by acknowledging failure and going, leaving it to others who may well be better qualified to clear up the mess?

My Lords, I welcome the opportunity to debate the situation at the Dome. I begin by declaring both an interest and a prejudice. My interest is that for many years I was the financial adviser to the London Docklands Development Corporation where this site was manifestly evident as a dereliction that needed to be addressed. My prejudice is that I was never a supporter of the Dome as a millennium commemoration vehicle. I believed that other things could have been done. Indeed, when I was chairman of a company before I retired, on two separate occasions we were asked to contribute financially to the Dome. We declined to do so on both occasions.

Having said that, I recognise that the Dome has many, many supporters, who must be somewhat disappointed at the nature of the media attention which it has attracted. I also recognise clearly the regenerative effect that the project has had on Greenwich and the surrounding area.

Before going further into an examination of the planning, management, operation and future of the Dome, which this Motion invites us to consider, I say at the outset that I do not intend to spend my time singling out any individual to whom to ascribe blame for the events that have taken place. I am content to wait for the conclusions of the PAC to do that. In any event, in my opinion the cast of culpable characters in this tragedy is so large that I would spend all my time trying to ascribe blame rather than, I hope, trying to establish one or two lessons that we might learn from what has occurred.

First, let us consider the planning. As the Minister said, we should always remember that this started as a private sector project. The intention was that it would be delivered by the private sector and bids were invited. I believe it is fair to say that at the end of the day it came down to a two-horse race—Birmingham against Greenwich. In the end, for sensible reasons Greenwich was selected. However, when the Government tried to sell the project to the private sector, there were no takers. The private sector considered that the risk outranked the reward. Here, I believe, is lesson number one for the Government. If the private sector does not want to run a commercial venture, what business do government have trying to run it? That is the prime lesson which comes from this and I believe that the Minister acknowledged that.

Once it was constituted as a non-departmental public body, however dressed up as a limited company, with a separate board of directors and so on, it is my view that that decision resulted in a commitment to open-ended funding. The only issue once that decision was made was who was going to pick up the tab: was it going to be the Exchequer or the millennium commissioners? The indemnities which were taken later by the directors only formalised the position; they did not do anything about changing it.

It seems to me that the only point in time at which a credible decision could have been made as to whether or not to proceed was at the time of the review by this Government. In the in-depth review to which the noble and learned Lord referred, were the costs evaluated of cancellation of the project at that point in time? Was an evaluation made of what it would have cost to call it off in April/May of 1997? If so, what were those costs?

Following the decision to create this as a non-departmental public body, we have what the NAO describes in its report as "complex organisational arrangements". In my experience, these are not complex; they are positively Byzantine—three bodies, three accounting officers and two Ministers, one of whom reports to himself. I have been lectured by members of legislatures about conflicts of interest in the profession to which I belong and I have to say that I am breathless as regards what went on here.

That leads me on to the execution because I believe that the execution of the project has inevitably been hampered by this complex arrangement. It may be large-scale and complex in terms of what goes in it, but this is a relatively simple, single-purpose project. And yet we end up with a scheme of arrangements which is breathtaking.

The construction phase was completed on time and, when I first looked at it, I thought on-budget too. I was quite encouraged by that. But then I looked again and read the report in more depth and it seems to me that there is what we might call in accounting terms a dangling debit of about £40 million. So that when you compare apples with apples or pears with pears, it looks to me—and I should be grateful if the Minister will confirm whether or not this is so—as though there is a construction overrun of about £40 million which is covered by contributions in kind and it is offset in that way.

Even so, to construct the project on time, reasonably close to budget is good. And it seems to me that a great deal of time and effort was spent on that, so much so that the people involved took their eye off the ball in terms of having to run what had been constructed.

The NAO report lists four principal causes of failure: the failure to attract visitor numbers, a lack of operational expertise, poor marketing and weak financial management.

I deal first with the lack of operational expertise. In that regard, again, I believe there is a very important lesson for us. This project was to plan, build and operate an asset, exactly the same as we have in many PFI and public-private partnership initiatives. I repeat, plan, build and operate. It is no good planning it and building it extremely well if you then forget to put in place the appropriate provisions for operation. When you look at the different skill-sets which are needed for each of those, it is incredibly important to understand that you start to build the operational capability as soon as you start to plan and build the asset. I suspect that that was lost sight of in this case.

The Minister said that hindsight is a wonderful thing. It is wonderful, particularly when you are looking at forecasts. But if you look back to what was available at the time the business plan was constructed and look in particular at the consultants' reports that gave indications of the likely visitor numbers, the number that was selected for planning purposes was at the upper end of the parameter. In my experience, that is unusual to say the least. It is much more usual to have a greater degree of prudence.

It seems to me that you should be looking for the same degree of prudence in these forecasts as you would look for in a prospectus of a company issuing shares. In view of what was then available, particularly the lack of information with regard to the content of the Dome, there was no chance at that time that a sensible financial adviser would have signed off on that forecast had this been a public prospectus. In the future, we need to look for that degree of prudence in relation to such projects.

In terms of poor marketing, I was astonished to read that the marketing plan was initially based on the notion that the Dome would sell itself. I acknowledge that that was quickly overturned. But again, I fail to understand how anyone could construct a plan on the basis of something selling itself when it was not possible to sell it to the private sector in the first instance. It seems to me that that was naive at best.

As regards the weak financial management, yes, there is always a case for saying that with new, one-off projects, there are sometimes what I would describe as problems which arise by moving up the learning curve. But not tracking your liabilities and commitments on a major capital project is simply inexcusable. That should not have happened.

Before moving to the future, perhaps I may make one or two comments about the solvency issue because that has attracted a lot of attention. The PricewaterhouseCooper report commences its executive summary with the words, "The company is insolvent". It does not say that it might be or may be but that "the company is insolvent". In continuing to trade, the directors had to take account of the likelihood of future funds being available.

To me, the most worrying aspect of the whole solvency issue is not so much the failure to attract the visitors. It was known that that was happening and something was being done to try to address that matter. But there is the additional £30 million which was identified only by Price Waterhouse at the time of its review. In my judgment, competent financial management should have had that on the agenda.

And so to the future. We understand that there is a preferred buyer and that the project involves the creation of what may loosely be described as an indoor science park. I have absolutely no doubt that in David James, we have a chairman of this entity who is well equipped to see it through to completion. I hope that he will be successful because regeneration of that area of London is very important to our capital city.

However, I say from my experience of urban regeneration that a leverage of £1 billion on government expenditure, if I can describe it as that, of £600 million is not a very good leverage. We should be looking for much greater leverage in terms of the money that has been spent already. I hope that that will be pursued.

My Lords, we, too, on these Benches welcome this debate. The Dome lies in my diocese so I hope that your Lordships will forgive me if I share a few thoughts about its past, its present and its future.

The Dome was, of course, to be the statement of the millennium. The Minister has reminded us that millions of pounds of public money were spent on it. Businesses were sought as official sponsors. Advertising ran at a high level. The Queen would greet the new millennium under its roof; the Archbishop of Canterbury would pray it in. That all happened but with hardly the aplomb that was planned.

That is partly because of the power of the media. On 31st December it was not a good idea to keep newspaper editors, with their guests, standing in the drizzle at an Underground station so that they missed the Dome's opening party. After the debacle of that opening night the press never gave the Dome a chance. I feel that the media treatment of the Dome has ill served the public by seeking to persuade people that it was not worth visiting. I believe that those who have not visited the Dome have missed something significant. I have visited the Dome several times, usually in the company of children, who have never failed to enjoy it.

I first visited the Dome when it had just been completed. It was light, airy, a wonderful open space, a miracle of architectural grace. Then we spoiled it; we put things in it. Perhaps it is a perfect symbol of our times: we can do anything, we can build anything, we have the skills, the computing power and the imagination, but we do not know what it is for because we do not know what we are for and we do not know what we truly value.

When the other great dome of London, St Paul's Cathedral, was built it was an equal miracle of architecture. The cathedral is a wonderful open space, but the builders knew what it was for: the honour and worship of God. They also knew what to put in it: the finest music and art to lift hearts and souls to the wonder of heaven. There is nowhere near the same coherence of purpose in the contents of the Dome.

Of course, there are some magnificent zones, but overall the quality is pretty mixed. I believe that even the spirit zone was at its best during its creation, when people of all faiths worked together in a way that had never been seen in Britain before. In my view, even the result of their labours was worthy rather than exhilarating. Nevertheless, there have been spin-offs from that co-operation. The inter-faith network has been greatly strengthened and has helped to launch and set up the great inter-faith celebration that launched the millennium in the Palace of Westminster.

Surely that is the point. Now is the time to turn the legacy around and get things right for the future. So far I have been a little disappointed that the focus of the debate has been almost totally on the past rather than on the future. The Dome could still be a major flagship building. In that part of London we need a flagship use for that flagship building on its flagship site. After all, there has already been much gain in the locality. Industrial land has been decontaminated; we have new transport systems, new highways, a new pier, a riverside walk and 50 acres of new parkland. There are arguments about whether the site would be more valuable with or without the Dome, but I believe that that is a little like saying that land in Sydney would be more valuable without the Opera House. True, not everybody likes the Dome, but in 1900 not everybody liked the Eiffel Tower. I still experience a thrill when I see the Dome from either side of the river.

What of the future use of the Dome? The borough has always believed that the Legacy plc bid is the one worth pursuing. The leader of the council has said so publicly. What do the local people think? As a diocesan bishop I have the advantage of being able to consult clergy in every area to find out what the local people are saying. In Greenwich I hear that the local people are mostly concerned about what the future proposals may mean in relation to jobs and housing. We are told that the Legacy plc proposal may create about 10,000 new jobs, which would be a great gain.

We are told that a major advantage of the bid is that it would create better quality jobs. If so, perhaps lessons can be learned from what has happened previously at the Dome, where whatever else they have done or not done, the New Millennium Experience Company has made every effort to employ local people. A policy was worked out and well implemented between the borough and the company so that a local skills base could be developed to match the skills levels required at the Dome.

If the bid of Legacy plc is the preferred bid, I believe that it should be a condition of the bid that every effort must be made to put in programmes of skills training in collaboration with local universities and colleges, so that Greenwich people can gain maximum benefits from the developments.

New jobs would bring new prosperity and a need for new housing, and it is vital that a good proportion of those are affordable, particularly for local young people and key workers. I know that the borough is trying to insist that at least a quarter of available accommodation must be affordable housing. It is hoped that what is being proposed will add to the energy of regeneration not only in the Dome peninsula but throughout the Thames gateway.

South London is changing rapidly. Recently, I held a brief staff meeting of my bishops and archdeacons in a pod of the London Eye, the wheel just across the river. Each of the pods has a guide assigned to it, and our guide was a young woman from Australia who knew her London, at least she knew her north London. As we faced south and kept asking questions, she eventually became irritated by us and said, "Why do you keep asking questions about south London? Nobody is interested in south London". We are and the people of south London are and people of London in general are increasingly interested in south London because they see the possibilities for developments south of the river.

However, that must not be at the expense of the local people or their environment. I am alarmed, for example, at Railtrack's plans for driving a new railway viaduct across the Borough market conservation zone, demolishing listed buildings as it goes and passing within yards of the most ancient cathedral church in London. South London needs regeneration but not at the expense of its communities and heritage.

That need not be the story of the Dome. Indeed, already badly polluted land has been cleaned up. Lasting improvements have been made to transport links. In the millennium year the Dome has provided much needed local employment and it has given millions of people something to remember. South London is proud of its Dome, but it will be prouder of it still if it can become a true sign of regeneration and hope for the future. There is no reason why it should not.

My Lords, I am grateful to my noble and learned friend Lord Falconer for initiating this debate. I start by declaring a long-time interest, indeed a passionate enthusiasm for the Dome. I also remain unashamedly and unequivocally proud of my own contribution to a project which I believe, if treated constructively, could still come to be seen as a significant national asset.

Funded largely by lottery money, derided in the national media as "a disintegrating circus tent" and as "the joke of the century", it has an interior that is as unremarkable as the outside is remarkable; its costs have repeatedly spiralled out of control; its design has been praised and excoriated in roughly equal measure; there are constant rumours of insolvency; endless arguments about its future with some serious suggestions that it should be abandoned as a "romantic ruin" and, in short, it is a public laughing stock.

I refer of course, not to our Millennium Dome, but to the Sydney Opera House, or at least to the opera house as it was perceived in the mid-1960s. A generation later, it is widely acknowledged as one of the great architectural and artistic triumphs of the 20th century. Known locally as the "Eighth Wonder", it has become a potent symbol of Australian confidence and courage, the same confidence and courage that in recent years has brought about a brilliantly mounted Olympic Games, a thorough-going cultural renaissance and the ability to thrash us, and most other nations, at just about any sport you care to mention. In short, the once-derided Sydney Opera House is now a national icon of modernity, recognised across the world. Did ever an ugly duckling turn into such a swan?

It is difficult, if not impossible, to imagine such a transformation taking place in this country, for the simple reason that in our national pastime we have developed a culture of blame, with quite devastating consequences to our collective self-confidence. Given the traditions of this House, it would be generous and accurate to acknowledge that everyone involved with this most challenging and complex modern day project threw every scrap of their energy into trying hard to make it a success. It is to their enormous credit that the Dome opened on time and almost on budget, albeit somewhat on its knees, the victim of a dozen mutually contradictory agendas.

The genuinely unique structure has been widely and rightly celebrated as one of the great architectural achievements of our time—one that can truly rival the grands projets so beloved of the French. Many of my generation spent years gazing across the Channel, bemoaning what we regarded as a national lack of vision. Now that we, thanks to revenues from the National Lottery, have finally realised some sense of national ambition, what do we do? We fall back on what we know best—our bizarre affection for self-flagellation.

Overseas cultural and business delegations visiting the Dome, especially from the "can do" culture of the United States, are truly amazed at the way in which we obsessively seek scapegoats for what they regard as a quite remarkable achievement. In my judgment, we may well come to be proud of the Dome in a number of ways. First, the project's contribution to London's future development will, unquestionably, come to be perceived as of immense and enduring significance. Here was a vast tract of land that had been left literally contaminated and dying, the victim of an age when industrial efficiency was measured by the sheer volume of polluting smoke that belched from our factory chimneys. Thanks to English Partnerships, 300 acres of land have been reclaimed, over a thousand homes will be built, a new primary school, a health centre and a hotel have been opened. It is forecast that, together with other developments, these projects will eventually create over 30,000 jobs. Much of the credit for this physical regeneration must go to my admirable acquaintance in another place, Michael Heseltine, who at an early stage had the energy, vision and imagination to understand the potential for this all but forgotten corner of south-east London.

Anyone in this Chamber who has visited it must admit that that once benighted peninsula has been utterly transformed. I sometimes wonder how many of the more critical voices on the Benches opposite and elsewhere have visited the Dome. I surmise that the answer is remarkably few. Your Lordships may have noticed that the most extraordinary polarisation exists between those who have visited the Dome, the vast majority of whom have enjoyed it immensely, and those who have yet to "find the time", defending their apathy or their ignorance by the sheer volume of their lacerating criticism. The unpleasant smell that used to seep from the gas works across the Greenwich peninsula has been replaced by the unmistakable stench of schadenfreude. It is a stench that has drifted across from the other side of the River Thames, from a not wholly unexpected source—the printing presses of Wapping, West Ferry and well beyond. While almost 6 million people will have enthusiastically strolled through the gates of the Dome by the year end, much of our national press still prefer to gloat and pick over the failures and the disappointments. I wonder how many million more visitors have been deterred by this obsessive negativity?

There have undoubtedly been failures and disappointments. Some aspects of the Dome were hopelessly over ambitious, others not ambitious enough. The decision to accept approximately £160 million from the private sector removed any possibility of the contents having an overall coherence. But even that decision was just an unfortunate consequence of earlier public squabbling, which in turn led to an ill-fated mismatch between private and public objectives. An uncomfortable hybrid was created and the overall quality of the experience undoubtedly suffered accordingly.

However, some of the contents have unquestionably been triumphs. Consider Our Town Story, which has generated wonderfully imaginative grassroots activity in 250 communities across the country, engaging an incredible array of schools, youth groups and pensioners. For all of them, the Dome is now a part of their collective memory. Earlier this month the Dome's national programme produced a quite extraordinary Remembrance Day ceremony, involving thousands of children, which successfully reinterpreted that occasion in a way that made it relevant to children who knew nothing of either of the two great world wars. The Tesco SchoolNet 2000 project, associated with the Learning Zone, now holds the world record for the largest school internet site, with over 134,000 pupils having actively taken part.

In one very crucial respect, the Dome continues to represent a defining moment for this country. Do we wish to present ourselves as a nation that has the courage to take risks and the intelligence calmly to assess what went wrong, and even to learn from it, or do we simply wish to cut and run, preferring to avoid any possibility of risk or embarrassment? We should remember that this nation created the Industrial Revolution through daring and lengthy processes of trial and error.

The idea that "fitting up" a culprit, tearing down or even blowing up the Dome will somehow wipe the slate clean is simply fatuous. It represents either wilful stupidity or serious ignorance of the way in which, through the global media, we are perceived by other nations. As the right reverend Prelate has suggested, we must approach the future with the same boldness of conviction as we unquestionably displayed in the past. If not, we shall become mere spectators, condemned to stand by and watch as other nations, such as Australia, sail past us—young, energetic, confident nations sailing past a timid, geriatric Britain. If, through our neurotic attachment to blame, we allow that to happen, the joke of the century will most certainly be on us. Our entire nation, irrespective of the Dome, will risk becoming a romantic ruin, fit only for its role as a heritage trail of faded glories.

I do not know how long it will take for the Millennium Dome to find its justified place in history. But I do not for a moment apologise for my belief that the Dome will be remembered as one of the defining projects of our age. It is now entirely up to us either to roll up our sleeves, assess the damage and set out to make a success of it, or to carve its failure on the epitaph of a nation that has lost its way and could appear to have lost its will and its nerve. I find it very difficult to believe that that is what the party opposite wants. By their present actions, that is what they are in real danger of achieving.

My Lords, it is not disputed that the Dome enterprise has been a financial disaster. It was almost admitted by the noble and learned Lord, Lord Falconer; it was brilliantly demonstrated by the forensic skills of my noble friend Lord Crickhowell. That it has been inexcusably badly managed has been demonstrated, equally skilfully, by the noble Lord, Lord Sharman.

I want to suggest why it went wrong. We all know that the word "hubris" means "an excess of ambition, pride—ultimately leading to the transgressor's ruin". It is a word that might have been invented for the conception and birth of the Dome. I do not disagree with the description of the building given by the noble Lord, Lord Puttnam. However, the construction of such a gigantic edifice, however splendid, without the slightest idea of what to put in it, is a folly worthy of any Greek tragedy. I remember that in the early days of its gestation we were told that what it was to contain was so exciting that it could not yet be revealed. I am reminded of the South Sea Bubble of 1720. Your Lordships will recall from your history books that this culminated in one particular investment prospectus for, "a company for carrying on an undertaking of great advantage but nobody to know what it is"—not so very different from the words of the Prime Minister about the Dome, that, "it will be the envy of the world".

The idea of celebration was fine. The idea of developing Greenwich was fine. Indeed, the idea of developing the River Thames through London would have been even finer. Before I come to the Dome itself, I should like to express my profound regret that so little has been done in recent years to make the beauty of the Thames available to the people. Indeed, far from developing it in such a way as to emulate the beauty of the Seine in Paris, we are at this moment allowing a fresh generation of utterly undistinguished buildings to be erected on both banks.

Just to give one example, there have already been constructed on the north bank of the Thames between Vauxhall and Chelsea Bridges private palaces of supreme vulgarity—others are under construction—in some cases commissioned and paid for by minor foreign potentates. They will wall off the Thames from the people for the next 100 years. In the meanwhile, the river continues to flow virtually empty of all passenger traffic, while the roads on either side every day are a scene of extreme and polluting congestion. What a missed opportunity. And yet even today, in their recent urban White Paper, the Government do not seem to regard the Thames in London as even worth mentioning in its own right.

However, to return to the Dome, it is the ultimate and most costly victim of political correctness. The presentation, let alone the celebration, of Britain's history over the past 1,000 years was considered far too excluding, far too divisive; indeed, far too shameful to be allowed to be under starter's orders as a theme for what was to go into the Dome.

Instead, such is the arrogance of our ruling establishment—I direct this attack to the chattering classes of all three of the major political parties and of none—that they presumed to use our money (that is, the £628 million from all of us who take a flutter on the National Lottery) to reveal their vision of our future. Was it surprising that they could not come up with the goods?

I have of course been to the Dome. In January, along with several hundred other parliamentarians, I went by kind invitation of British Telecom. I was appalled at the vacuity of what I saw in the Dome. By far the best part of the day was the trip there by river; the general impression of the site, which is very good indeed; and the journey back by the new Jubilee Line. By far the most striking exhibit in the Dome was the purely commercial celebration in the De Beers Diamond Pavilion. Its contents were indeed thrilling, and they appear to have been the only things that anybody has made a serious attempt to take away.

The Black Adder film, to which we were subjected as the introduction to our heritage, was hugely embarrassing. It might just have justified an hour of TV viewing on a dull winter evening after supper. The money zone, with its tunnel of £1 million in £50 notes, was a vulgar gimmick. The talk zone, until one could escape from it, was a torture tunnel. The actor who cycled round the Dome dressed as a pastiche of an RAF pilot from the Battle of Britain might have been an amusing contribution at a village fete, but in the context of the Dome it was an insult to the recollection of "our finest hour". Much of the science section fell well short of what is now on view in the Science and Natural History Museums in South Kensington. Quite frankly, in some ways when I visited the Dome before they started putting in exhibits, I thought it was much more impressive than when up and running.

Those are the reasons it has not succeeded. Those are the reasons it failed every financial test set for it by this governing body. Like the game of Old Maid, the responsibility for the Dome has been shuffled from hand to hand and for the present has ended up in the hands of the noble and learned Lord, Lord Falconer. I wonder whether he is proud of it. We shall see whether he adds it to his Who's Who entry. He has some sympathy from me and today I seek to help him. I want to make a specific proposal for the rebirth of the Dome.

To illustrate what we should have had in the Dome, I refer to the tiny former Portuguese colony of Macao, a pimple on the coast of southern China. Before they left, the Portuguese created a small museum to illustrate the social, political and cultural history of Macao since earliest times. I visited it this year and it is superb. It relates the history of Macao to the history of the world at the same time, in that case over several millennia. It thus gives a perspective of great educational value to children of all ages, including myself. I strongly recommend those noble Lords, and particularly the noble and learned Lord, Lord Falconer, who are visiting Hong Kong or China to go to Macao and look at it.

It is not too late to do the same sort of thing in the Dome. Of course, it would be a year or two later than it might have been. But to illustrate Britain's role in the world from the time of the last invasion of these islands by Europeans from the mainland to the prospect—like it or not—of ever closer European Union would, I believe, draw millions. It would become an essential part of the educational programme for school children and students of all ages from all over the United Kingdom, and of course a "must" for tourists. In short, it could become as great an innovation and opportunity for the people of this country as has been the Open University, which is still flourishing after 30 years.

My Lords, before the noble Lord sits down, he opened his remarks by a rather unfair reference to a lack of focus on the Thames. Does he agree that various offshoots of the Millennium Commission or the Lottery Fund have regenerated Somerset House, the Globe, Bankside, Southwark Cathedral, the "Wobbly Bridge" and Hungerford Bridge all in the course of this year? Many millions have been spent in enhancing those buildings on the Thames.

My Lords, I am happy to agree in relation to Somerset House and many of the other fine buildings. But we should be doing much more. I am complaining that this Government, above all governments—rather like the failure of Melina Mercouri, the Greek Minister for Culture, who allowed so many awful things to happen in Greece— to protect the Thames and make full use of it throughout its length in London. That is my complaint.

My Lords, as has been said by a number of noble Lords, hindsight is a useful forensic tool. Indeed, the noble Lord, Lord Sharman, made a distinguished professional career almost exclusively based upon making himself an expert on the subject. It enables the investigator, with the benefit of perfect vision, to examine the relevant sequence of events and then to provide an expert opinion as to what went wrong.

In relation to the Dome, hindsight has taught us a number of important lessons. First, the successes of the Great Exhibition of 1851 and the Festival of Britain of 1951 were entirely irrelevant precedents. In those days there was no competition for a pay-to-visit attraction. Today the public have extremely sophisticated requirements.

People have been to Disney in Paris, Florida and California. If they want to, and I have no doubt a number of noble Lords have done so and will continue to do so on a daily basis, they can play console games such as Nintendo 64 and Playstation. They can play Internet games with limitless numbers of players or opponents. That is the reason why it has proved so difficult to create the so-called "Wow!" factor; or the notion in the minds of the public that the Dome is a "must-see" attraction.

Secondly—and on this point I entirely agree with what was said by the noble Lord, Lord Sharman—we now know for sure that if the private sector will not touch a proposition, then it should not be touched by governments with a barge pole. Certainly, they would be well advised to tread with great caution.

In the case of the Dome, it was plain as early as June 1996 that the private sector would not accept the risks. Nevertheless, in January 1997 the then Conservative government decided to deliver the project in the public sector using the vehicle of a limited liability company whose sole shareholder would be a government Minister accountable to Parliament. I am confident that we shall never see such an absurd and (to borrow the noble Lord's expression) Byzantine structure again.

Thirdly, this is not a case of serious miscalculation on the expenditure side. The current forecast is that expenditure will be about 5 per cent over budget. The real problem is that all the sums and the key decision to award a lottery grant of £449 million in 1997 were done, or made, on the basis of 12 million visitors to the Dome in the year 2000. We now know that the actual figure will be about 6 million. It is the shortfall in visitor numbers which has given rise to the problem.

I should like to deal with the target of 12 million. The facts are that in January 1997 the Millennium Commission adopted a plan with a visitor target of 10 million. In May 1997, just five months later, the New Millennium Experience Company produced a business plan which assumed that there would be 12 million visitors and that the budget would balance with about 11 million visitors. The commission promptly asked Deloitte & Touche Consulting Group to review the figures which had been forecast by the company. It concluded that 12 million was at the upper end of the range and, as the noble Lord, Lord Sharman, rightly pointed out, that the worst case scenario was 8 million. The noble Lord did not refer to that figure specifically, but that was the range anticipated by the experts. In the event, the company stood by its target of 12 million. That was the basis of the business plan and budget which were duly approved by the commissioners. With hindsight, we know that there were not enough visitors, which turned out to be the critical point.

The Dome is the most successful pay-to-visit attraction that we have ever had. It has easily beaten the previous record set in 1999 by Alton Towers. Further, in exit polls the overwhelming majority of visitors said that it was a satisfactory experience. Mr Gore may have his own views about exit polls, but that is another matter.

There are one or two other aspects of the story which need to be emphasised because they are of importance in arriving at an overall judgment about the whole episode. First, the site at Greenwich was selected as long ago as March 1996. The choice of Greenwich was in part driven by its historic association with time. It was also chosen because it was recognised as an area badly in need of economic regeneration. It had previously been the site of a gasworks: it was derelict and contaminated. The strategic objective of the commission was the regeneration of the whole of what became known as the Greenwich peninsula.

The site was duly purchased for £20 million in February 1997 and the structure was completed in February 1999. I have seen figures to suggest that over the next seven years approximately 30,000 new jobs will be created as a direct result of the Dome project. Perhaps when he comes to reply my noble and learned friend Lord Falconer can confirm the accuracy of that prediction and tell us something about it. I believe that the regeneration of Greenwich and the new jobs represent real social gains with which we should all be pleased.

I should like to comment on the involvement of my noble and learned friend Lord Falconer. My noble and learned friend has been the target of some criticism by the noble Lord, Lord Crickhowell, who I note is not in his place. My noble and learned friend became the shareholder in January 1999. He specifically did not have responsibility for the day-to-day management of the Dome, and paragraph 26b of the report of the National Audit Office is to that effect.

There are two important sentences in the report of the Comptroller and Auditor General which bear directly on this part of the story. The first is as follows:

"19. Once the Dome had been constructed and much of the project cost already incurred, the room for manoeuvre in the face of low visitor numbers was very restricted".

The second states:

"20. As the financial situation deteriorated the only options, short of closing the Dome and liquidating the company, which in the light of knowledge about the company's commitments would not have made financial sense during the year of operation, were to rely on receipts from the planned sale of the Dome and further grant from the commission".

Next, reference has been made to solvency. I leave aside the technical point that my noble and learned friend was not a director but shareholder and so had no day-to-day responsibilities for the affairs of the company. However, on four occasions in the course of this year additional awards totalling £179 million were made by the commission to support the project. The accounts were regularly and independently audited, insolvency practitioners were retained and the commission's own auditors were sent into the company. My noble and learned friend was at all times in receipt of advice from outside professionals. I believe that he was perfectly entitled to conclude that the money would be forthcoming, and it was. I also note that no criticism is made of my noble and learned friend in the report of the Comptroller and Auditor General.

What emerges from all of this? I believe that I can summarise it in three short propositions. First, it should be borne in mind that we now have the benefit of hindsight. It is very easy to be judgmental after the event, especially when the critical events cover a very short and fast-moving period of time, as was the case here. Secondly, this was a cross-party initiative and attempts to point the finger at my noble and learned friend in order to make him a scapegoat are entirely misguided and utterly unfair. Thirdly, the report of the National Audit Office makes it quite plain that by the time my noble and learned friend became the shareholder in January 1999 the die was cast and there was little or nothing that he could have done about it.

My Lords, we must all acknowledge that there have been failures and disappointments with regard to the Dome. Certainly, the Dome has not met our very high expectations, some of which may have been unrealistic in terms of visitor numbers. That was a mistake. I should like to underline the importance of regeneration, to which several noble Lords have already referred. We are all aware of the dire consequences of urban decay and neglect and what happens to very unfortunate members of society who live in such areas. We have already heard about the number of jobs which have already been created and are predicted. For once, we got the infrastructure right with the introduction of a very good transport system that will be of immense benefit to the whole of London and beyond.

There are other important points about the site. The site provides excellent access for disabled and older people. Such access has been neglected in the past. The Dome also provides a very good example of what may be called customer care. The mainly young people looking after visitors to the Dome have been exceptionally good at caring for people who are sometimes marginalised. I hope the future will provide opportunities for many of those marginalised people to benefit from the experience and that new avenues of employment and entrepreunership will include them in the future business park and development site. It is terribly important that they are included. In IT development it is especially important that the over-fifties and disabled people are targeted to benefit from the development.

The opportunities that are available, and will become more available as the years go by, would not have existed without the decision to go ahead with the Dome.

My Lords, two years ago the TUC—of which I was then an official—decided to join with Tesco's and others in the creation of the learning zone. The TUC has no hesitation in saying that it is very glad to have been involved.

Three main points have emerged from the debate. First, April and May 1997 was just about the worst time to have received a carefully considered answer to the strategic question. But that is how the cards were dealt. Secondly, it is clear that the National Audit Office is far from lending support to the idea that the Government should have pulled the plug on the Dome half-way through the year. My noble and learned friend in paragraph 20 stated:

"Closing the Dome and liquidating the company would not have made financial sense during the year of operation".

Some of us who have not been the greatest enthusiasts for the Dome and all its works have concluded that the attacks on the handling of it in recent months—in particular on the actions of my noble and learned friend the Minister—have been way over the top.

The third point is to refute the fallacy that 12 million as a visitor plan assumption is a recent act of madness. Even today we have heard the noble Lord, Lord Crickhowell, saying that, with the logic of hindsight, the figure is four times higher than any other visitor attraction, as if any fool could have seen that the figure of 12 million was wrong. But, going back to April 1997, if that figure was then a "tent of fools", we were all of us in the same tent.

Talking of tents—big tents in particular—it is the Labour Party which has found itself occupying this big tent, but it does not mean that the Conservative Party would not have happily occupied it themselves. Indeed, at the present time I suggest that if the Conservative Party could find any big tent to get into they would be in it like a flash.

It is a well-known phenomenon to all noble Lords who have tried to run a village fete when not enough people have turned up and one has spent £400 to hire the marquee. Many people around the country can identify rather precisely with this situation at a number of levels. The British people will not have much difficulty in seeing that there is an upside to the matter. The local village fête does not give one the immense spin-offs that we are now realising will come out of this.

Let us go back to the beginning, to Michael Heseltine. He was the one who supported—I come from the north of England originally—the idea that Liverpool and many other places should have a regeneration idea on which to work. It is very important that they do. I should be happy on a different occasion to argue—I have argued this before—that there is a regional question here. Let us stick to the Thames gateway for a moment. It was Michael Heseltine's imagination that led to the London Docklands Development Corporation and the emerging new reality of the Thames gateway for the whole of the estuarial area. We must give credit where it is due.

Perhaps I may also say in a non-partisan spirit that some of the Labour local authorities in east London, and to some extent in south London at that time, were rather parochial in not accepting the need for strategic growth points in the whole of east London. We need strategic growth points in London. The same argument would apply with west London, if Brent, or some area like it, could pose itself as an alternative to the Heathrow airport economy for the west London corridor.

The aim of the project partners, with the full backing of the Government, has been to ensure that the regeneration of the peninsula delivers a high quality environment that is suited to people's needs and which is innovative and sustainable, both environmentally and commercially. Construction contracts worth £300 million have been awarded as a result of the Dome. The vast majority of those have been to UK companies: 13,000 employees have gained work in construction and the operation of projects on the Greenwich peninsula. There has been a boost to the UK economy which has benefited the whole country.

The transport strategy has been very important. The transport access to the Dome is a model of integrated public transport. These days that is something that is not often said. It provides access to the Dome via a variety of public transport. The North Greenwich Underground station adjacent to the Dome—one of nine new stations on the new Jubilee Line extension—has not only encouraged the use of public transport to the Dome but also provides a major boost for east London as a whole. There is the Millennium transit link which was constructed to take state of the art guided buses from Charlton and Greenwich mainline railway stations to the Dome. Finally, there is the new £2 million pier to the east of the Dome, helping to bring the Thames back to life and become one of London's main transport arteries again. There has also been the construction of a river walk and cycle way right the way around the peninsula which links into the existing river walkway and the expanding national network for cyclists.

We can look forward with confidence. We can look to the news, which we hope will come to fruition, that Legacy plc is at an advanced stage of negotiation. We can look to an exciting future for the Dome, with £1 billion investment expected in the area as a whole. That will further change the mindset. That is why public investments are not the same as private sector economics. We have changed the whole mindset towards the Thames gateway. That is not something one can measure on a narrow private sector accountancy approach. I see that the noble Lord, Lord Sharman, is nodding in agreement.

Just as when we rescued Canary Wharf—I say "we" because it was the public sector, through the diversion of the London Transport investment plan towards building the extension of the Jubilee Line in preference to CrossRail, which had the greater return—I predict that north Greenwich too will join Canary Wharf as a £400 million jewel in the Thames gateway corridor.

My Lords, I intend to keep my remarks brief not least because, at this stage in the debate when so much of substance has been said, it is difficult to avoid the possibility of repetition. I hope I will be forgiven if some of what I say has already been said by other noble Lords.

From its inception, the Dome was always liable to be controversial because new and interesting things very often are, as my noble friend Lord Puttnam eloquently pointed out. The Government have, as is proper, accepted responsibility for what has been by common consent a complex and difficult project. My noble and learned friend the Minister is the man left holding the parcel when the music stops. That is usually a winning position, but I hope he will not mind if I suggest that on this occasion it has been something of a mixed blessing. Let us not forget that there were a number of others in this game when it began back in 1996 and decisions taken then are still reverberating.

Unlike other noble Lords, I can claim no expertise in project management on this scale. But I do know a little about the entertainment industry and from that perspective I want to make two points about, as it were, putting on a show. First, making an accurate and robust assessment of the likely capital costs of a major creative enterprise is exceptionally difficult. I spend a good deal of my life trying to do that in a small way. Getting the project within 5 per cent of original estimates and on time, as has been achieved with the Dome, is fairly sharp shooting, as any producer of a big West End musical will testify.

Secondly, a great deal has been made in the press and in the House of the fact that 12 million visitors were predicted and only 5 million will have been. Five million sounds like a hell of a lot to me. I am sure that I would be grateful for that number of visitors. The most vexed issue with regard to putting on any entertainment, regardless of the kind and scale of that entertainment, is whether anyone will come. Almost everyone in the theatre business would admit to having occasionally miscalculated—sometimes quite significantly—the likely appeal of something which they believed on quite reasonable grounds would be popular. Initial estimates of potential visitor numbers to the Dome were clearly optimistic, but they were not imprudently so, as my noble friend Lord Lea of Crondall pointed out.

The implication lurking behind a good deal of the discussion on this issue—that any fool could have predicted that 12 million was an unachievable target and that no one in his right mind could have imagined that 12 million people would want to see what the Dome had to offer—is misguided. It is really not that simple. An audience of any kind for any event is a strange and recalcitrant beast, as I know to my cost. It sometimes resists what it has liked before and often goes where no one has tried to lead it. The gift of discerning accurately in advance what will please is given only intermittently even to the most successful of cultural entrepreneurs. The fact that well over 5 million people, many of them young, will have been to the Dome by the end of the year is a major achievement, particularly in view of the relentless negativity of the press comment about the Dome. The great majority of those who go like what they see. That is a lot of satisfied customers, something of which everyone concerned should be proud.

Finally, I join those who have already called attention to the remarkable qualities of the building itself. It is architecturally and aesthetically innovative and very beautiful, particularly at night. In fact, it is beautiful at all times of the day. It makes a distinguished and distinctive contribution to our urban landscape and it has brought in its wake the regeneration of a formerly blighted tract of land. I hope we can agree that at the very least the vision it represents and the courage of those of all persuasions who backed it deserve to be celebrated and built upon.

My Lords, like many noble Lords, I came to the debate with a considerable degree of sympathy for the position of the noble and learned Lord, Lord Falconer. Many of us have been in the position of receiving a constant barrage of criticism for some task that we have undertaken in public life. The noble and learned Lord said that he had been asked 1,100 parliamentary Questions on this matter. I remember receiving 650 parliamentary Questions on one defence procurement project from one Member of the other place, who is now a distinguished Member of your Lordships' House and sits on these Benches. Answering those Questions involved a great deal of work and I dare say that the noble and learned Lord has been similarly preoccupied.

However, I must confess that my sympathy for the noble and learned Lord began to evaporate as I listened to his speech, which, frankly, was a little OTT. The speech of the noble Lord, Lord Puttnam, was slightly in the same vein. Perhaps one point has been overlooked. Whatever may have been the inspiration behind the project—no doubt well intentioned inspiration—the plain fact is that public money was being used. Some people say that it was not public money; that it all came from the lottery and that is not public money. It is public money. It is subscribed by the public. I agree that a certain amount of corporate money was used to support some of the attractions inside the Dome, but basically it was a public money project. That is why the criticism has been so intense, and rightly so.

I intend to moderate my criticism on this matter and deal with just four points. First, the estimate of 12 million visitors was by any standards optimistic. When intervening towards the end of the speech of my noble friend Lord Crickhowell, the noble and learned Lord, Lord Falconer, said that the estimate came from the business plan of April 1997. That is not so.

Paragraphs 1.30 and 1.31 of the NAO report state that the business plan was approved in the following month.

My Lords, in April 1997 the business plan was approved by the hoard of the New Millennium Experience Company. The noble Lord, Lord Crickhowell, is shaking his head. The facts are that in April 1997 the business plan was approved by the New Millennium Experience Company If the noble Lords, Lord Trefgarne and Lord Crickhowell, have any evidence to the contrary, I should be glad to hear it.

My Lords, all I can do is read from paragraph 1.31 of the NAO report, where the company's May 1997 business plan is referred to. The month is May, not April, by which time a different party had come into government.

It is the case that when in power both parties have given a degree of approval to the estimate of 12 million. Sadly, it has proved to be an overestimate. But it is no good the noble and learned Lord saying that it was entirely the construction of his predecessors that caused the plan to be agreed. That is not so. The noble and learned Lord is just as much in it up to his neck, as my noble friend Lord Crickhowell said, as anyone else.

I turn to my second point. Another area of disappointment was the creation of all the internal attractions. I have been to the Dome on three or four occasions and I must say that they are really very, very disappointing. I am told that the gentleman who was principally responsible for them has a name which will be familiar to noble Lords because his mother sits on the Government Front Bench in your Lordships' House. So perhaps he will take the view that his career has not been advanced by the project.

My Lords, I worked with Ben Evans. He was responsible for three of the zones. That is far from being the majority.

My Lords, I am grateful for that clarification. I understand that he was the so-called "editor" of the attractions. I am not quite sure what that means.

My Lords, he was one of four editors.

My Lords, I am glad to hear that he was not exclusively to blame for all the problems that have emanated from those attractions. But I do not think that anyone seriously claims that, taken together, the attractions have not been a considerable disappointment.

The next point that needs to be dealt with is that the noble and learned Lord has not sufficiently answered the questions raised, particularly those put to him by my noble friend Lord Crickhowell both in the form of parliamentary Questions, letters and in his speech today. I refer to the noble and learned Lord's responses to the allegation that at various points during the programme, and particularly in July of this year, the project was seriously insolvent and by any standards unable to meet its future debts.

I have to accept that the legal position in these matters is almost certainly not as simple as many people would have us believe. I wonder whether the noble and learned Lord had received some assurances from sources other than the Lottery Fund—for example, from the Government— that they would stand by the debts if the need arose. That would not be a disreputable thing for the Government to do, but they must tell us whether that was the case. I do not know whether it was or not and perhaps the noble and learned Lord will say whether he received at the time any assurances from the Government in that regard.

I have addressed these questions to the noble and learned Lord as the principal shareholder in the project. Like my noble friend Lord Crickhowell, I am puzzled that questions were not more frequently asked and answered by the board of the company itself. Although we know that the noble and learned Lord attended many of the board meetings, it was the duty of the directors of the company, presided over by the chairman, to address these matters and to answer these questions. But they seem to have been extraordinarily silent leaving the noble and learned Lord to take the criticism and the flak.

I come to what I consider to be the most serious allegation; namely, that it is clear that there has been almost a complete failure by the New Millennium Experience Company to keep proper books of account. The plain fact is that throughout the time it has been conducting this programme, not only after the disastrous opening at the turn of the millennium, but also in the run up to that time, it is clear that it has not kept proper books and records of the money received and going out and also of the various contractual arrangements that have been put in place. I am not saying that there has been misappropriation of funds; I am not aware of any evidence of that. But it really is a disgrace that this vast sum of public money approaching, we are told, £800 million, has not been properly accounted for—not yet, anyway—and was being spent with gay abandon at a time when—

My Lords, I am grateful to the noble Lord for giving way. It would be very interesting to see any passage in the report of the Comptroller and Auditor General which supports the proposition that the company did not keep proper books, which I believe is the allegation that the noble Lord makes.

My Lords, the allegation has been made quite widely, not only in this report, but elsewhere. If the noble Lord would like to study that document and others with a little more care, I believe he will find the difficulties to which I have referred.

The noble and learned Lord said that this matter is now being put right. I welcome that assurance. It is rather late in the day. What a pity that it was not done earlier. So much for the criticisms.

I turn now to the final matter that I wish to address; namely, the future use of the Dome itself. Nobody doubts that it is a great building. I readily accept that. As I have said, I have visited it on several occasions and I am easily persuaded that that is the case. I am sorry that it is to be something modest in the form of a business park. Perhaps that is not modest. No doubt the noble and learned Lord would welcome any financially sound proposal that is put to him or anyone with a cheque for £100 million or more. I wonder whether the Dome could not be better used as a centre for international trade fairs. London is singularly lacking in such facility. We have Earls Court and Olympia, but they are both very old and in many ways unsatisfactory by modern standards. I believe that the Millennium Dome would be an admirable venue for activity of that kind.

I am glad to hear from the noble and learned Lord that the books of account at least are now being put in order. It is about time, too. I am sorry that the noble and learned Lord has suffered so much criticism and attack during the time he has held responsibility in this matter. Let us hope that it can all now be brought to a glorious conclusion as the noble learned Lord hopes.