asked Her Majesty's Government:

My Lords, the number of married women on the reduced rate stamp, which was 3,500,000 in 1978 and is now 80,000, will be 3,000 in 2010. We have no plans at this stage to review the rates.

My Lords, I thank the Minister for that Answer, with which I have some sympathy, despite my former role with Age Concern. I think the Minister knows that. No one paying reduced contributions could expect to get the same benefits as people who paid the full stamp. It is not like the scandal that affected inherited SERPS in 1999–2000. However, many women probably did not fully understand the rules or their impact. After all, who does? Even the noble Lord, Lord Lawson of Blaby, a former Chancellor of the Exchequer, admitted that pensions were extremely complicated.

Is there any possibility that women adversely affected by ill informed decisions made prior to 1977 will be allowed to buy back their missing contribution record or, at least, part of it, given the 25 per cent rule? That would go some way to addressing their concerns and help with their problems.

My Lords, the noble Baroness has a proud record, particularly on issues such as inherited SERPS. However, I cannot help her on this issue. This is a pay-as-you-go scheme. Most married women who continued to enjoy the reduced stamp after 1977–78 did well financially out of it. Obviously, that was not the case for some individuals. To recalculate now on a PAYE basis and decide whether there were adverse consequences would be difficult practically, and I am not sure that it would be fair. It would be like saying that a married woman who opted to pay the full stamp in 1978 but who, over the next 25 years, had low or intermittent earnings—with the result that her state pension was no higher than she would have got on her husband's contribution—should also be allowed to revisit her choice. We cannot do that.

My Lords, is my noble friend the Minister aware that there are anomalies in the situation? For example, a woman can qualify for a pension on her husband's contributions. However, if she reaches 60 before he reaches 65, she will have no pension, as she must wait until he is 65. That leaves women with no pension at all.

My Lords, my noble friend is right. As your Lordships will understand, the problem is that the reduced married women's stamp dates back to 1948 when the presumption was that women were dependent on their husband's earnings and on his pension. The assumption behind the situation described by my noble friend is that, if the husband is under 65, he will still be in work and his wife will enjoy the support of his wages.

My Lords, can the Minister say what benefits, if any, were received by women who paid the reduced contribution after 1977? What was done to explain the situation after 1977 to women? Does the Minister accept that it is no excuse for not remedying an injustice to say that it is only a little one?

My Lords, I am not saying that it is an injustice. Most women who took the reduced married women's stamp saved thousands of pounds—something like £18,000 for someone on mean average earnings over that time. If such a sum had been invested, it would have produced an alternative return.

The noble Earl also asked what women knew. I have a copy of the leaflet that I had when I chose to continue with the reduced married women's stamp. It says, in bold type:

"The contribution choice… Why your choice is important".

It goes on to say:

"The choice you make about paying contributions can effect your future entitlement to benefits such as maternity allowance, sickness, invalidity and unemployment benefits and retirement pension. This is explained in paragraphs 12–21 of this leaflet and you should read these carefully before you make up your mind".

That is in the simplest conceivable English. It certainly allowed me to make an informed choice at the time.

The noble Earl's first question was about the benefits enjoyed by people who took the married women's reduced stamp. They receive statutory sick pay, statutory maternity pay, industrial injuries benefit and the 60 per cent of the pension that goes to the wife of a man who makes a full national insurance contribution.

My Lords, I was one of the people in the predicament of having to opt back in. Does the Minister agree that there was enormous publicity about the perils of not re-entering the full system, not only in leaflets, but in media of every description—newspapers, radio and so on? None of us was left in any doubt about the outcome.

My Lords, I am grateful to my noble friend for making that point. Women first entering the labour market in the 1960s and 1970s had to sign to elect to receive the reduced stamp; secondly, in 1977–78, they had all the information described by my noble friend; thirdly, they received further information in 1989; and, fourthly, they were given further information in 2000 associated with the changes in the lower earnings limit. So, on four occasions, married women paying the reduced stamp received fairly straightforward—I do not say that it was brilliant—accessible information on which to make an informed choice.

I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as chairman of governors of Bedford School.

My Lords, in her Statement of 27th September, the Secretary of State for Education and Skills announced that she had removed Sir William Stubbs from his post as chairman of the QCA. Since then, there have been no further changes in the membership of the senior management or the board as a consequence of the difficulties over A-level results.

My Lords, should not the whole educational team of Ministers resign—in recognition of the trauma, heart-searching and career stunting that this fiasco has caused for over 90,000 young people? Is not the real truth that it was Ministers' insistence on a new, unproven and untrialed examination that caused the fiasco? Rather than "Education, education, education", ought not the epitaph of this Government in this area to be: "Failure, failure, failure"?

My Lords, I do not recognise what the noble Lord has said. My answer is simply: no, they should not resign.

My Lords, will the Minister explain to the House on what grounds Sir William Stubbs was sacked?

My Lords, my right honourable friend the Secretary of State, in looking at what needed to be done to restore confidence in the A-level system, believed that it was appropriate to dismiss Sir William Stubbs.

My Lords, will the Minister confirm that during last summer a senior civil servant was acting chief executive of the QCA and that, currently, 22 per cent of DfES civil servants are seconded to other organisations? Will she accept that under such circumstances it is inappropriate to claim that the QCA is completely independent? Does not the whole thing smack of micro-management of the system by her department? Will the Minister agree with me that, for the sake of future A-level students, the QCA should be seen to be entirely independent?

My Lords, in answering Questions in this House last week, I made it clear that the QCA is an independent statutory body. No doubt noble Lords will look forward to the Statement that I shall repeat later today, when we shall discuss the issues that have arisen. It is common practice for secondments to take place both from the DfES and to the DfES. We believe—and previous governments employed this practice—that it is the best way of ensuring that we have the best possible knowledge. Mike Tomlinson's review was quite clear: there has not been government interference by any Minister.

My Lords, is the Minister confident that her officials and experts can produce an examination system—designed to deal with about 20 per cent of the ability range, now designed to deal with 50 per cent of the ability range—that will not give rise to the anomalies produced by the present system?

My Lords, I do not believe that the system that the noble Lord is looking for would produce the anomalies that he describes in these circumstances—the very particular circumstances, as the noble Lord will be aware from Mike Tomlinson's work, which arose in this case. It is the desire of government to make sure that students who are able to go to university have the opportunity to do so. We believe that it is important that students are given those opportunities. It is for the health and benefit not only of the students but of the economic life of this country.

My Lords, what leads the Government to suppose that academic standards in A-levels or anywhere else are a matter within their competence to judge?

My Lords, the Government do not necessarily believe that. We have academic institutions whose job it is to judge the academic standards of our students. I think that noble Lords will join me in supporting and congratulating the students who this year have done so well in their academic life.

My Lords, I, like many other parents, have children who are about to enter upon the A-level curriculum. What confident actions will the Government take to ensure that those students who are about to embark on a two-year preparation for an examination will not undergo the same fiasco as that suffered by students this year?

My Lords, Mike Tomlinson is continuing his work to ensure that we address the issue of standards for next year. In addition, Ken Boston has announced that he is setting up a task force. I have great confidence that, between the work of these two eminent gentlemen, we shall have in place a robust system in which we can all have the sense of security that the noble Lord has every right to expect for his children.

My Lords, does the Minister accept that many of us find it difficult to understand why Sir William Stubbs was dismissed before the Tomlinson inquiry had reported—the full consequences of which are apparent only today? While the Secretary of State seems to have acted speedily over that, she seems to have been extremely slow to take action over the clearance of staff for recruitment. There was considerable delay in reaching the obvious sensible decision to leave the matter to head teachers if they took on staff as yet uncleared. What is the number of staff still awaiting appointment to schools who have not yet been cleared?

My Lords, the noble Lord will understand that, as I am answering questions on the QCA, I do not have the precise figures. I shall be delighted to write to him with the exact figures for those still awaiting clearance. We were dealing with two entirely different situations. The noble Lord will recognise that, in the case of schools that were waiting for clearance, we took the decision that in the interests of all the children, we would allow those staff to be in schools. But that is always in the context of child protection, which, I am sure, is paramount to all noble Lords. I have already stressed that my right honourable friend took the decision that she did on Sir William Stubbs because she believed that, as there had been a loss of confidence, it was appropriate to make sure that it was restored. On that basis she dismissed him.

My Lords, let us suppose that schools continue to produce more and more highly successful A-level students. Does the Minister anticipate any difficulty in reconciling the number of students who get very good A-level results with the number of funded places available at universities?

My Lords, it is a problem that I would look forward to and relish, and it demonstrates the ability of our young people. We work very closely with Universities UK and universities in general to address the issues. The noble Baroness will be aware that many discussions on higher education are ongoing in order to ensure that we can accommodate students in a variety of ways, at different institutions and on different degree-level and other courses that they wish to take.

My Lords, can the noble Baroness give an assurance that the Government will bear any additional costs incurred by universities as a result of revised grades and the movement of students between universities or to different subjects?

My Lords, I shall say more about that in the Statement on A-level results later today. However, I assure the noble Lord that we are working with universities to ensure that no student suffers financial hardship and that every student goes to university. The Government will make sure that the appropriate finances are available.

My Lords, resignation, which the Minister ruled out, is a subjective matter. But, what is her response to the point by my noble friend Lord Naseby that the introduction of the new examination system was flawed in its conduct?

My Lords, as I said in your Lordships' House last week, there is evidence that perhaps we should have looked more carefully at the piloting of the A2. We are looking at what we can do to make sure that we learn from that. My right honourable friend has been very clear about accepting responsibilities and about learning from this. I shall leave the matter there.

asked Her Majesty's Government:

My Lords, the enforcement of the law is an operational matter for chief constables. A police officer will need to interpret and assess the particular circumstances of any one incident and apply his or her discretion in considering whether an offence has been committed and what action to take.

My Lords, I thank the Minister for that reply. Is he satisfied by the ability of the police to recover stolen vehicles and equipment that they know to be held at a travellers' encampment?

My Lords, if a vehicle is identifiably stolen, the police have entirely adequate powers to go in and recover that material, subject to the proper steps being taken. As to whether there are difficulties in relation to particular encampments of an operational sort, it is plainly a matter for individual chief constables in each police authority area to determine the appropriate steps, but they certainly have the powers to do so.

My Lords, does the Minister agree that, although the police have powers, in the counties around London in particular they do not have the manpower to follow up very many cases of theft and misappropriation? What is being done in Surrey, Thames Valley and Hertfordshire to overcome this great shortage of manpower as people transfer to other forces, including the Metropolitan Police? What is being done about the recruitment and payment of Specials, which the Government have been considering for as long as they have been in office?

My Lords, on the first question about the size of the police force, as the noble Lord, Lord Bradshaw, knows, the number of operational members of the police force is the highest that it has been since 1921 at just under 130,000. As the noble Lord also knows, we have committed ourselves to a further 2,500, which obviously will increase the figure yet further. The noble Lord will also know that we have committed ourselves to funding community support officers to whom the police will be able to leave certain tasks so that they can concentrate on mainstream policing activity. The noble Lord will also know that local authorities are funding significant numbers of street wardens, which will also help to reduce the burden on the police. Those are the steps that we are taking. It is plainly right that individual police constables must prioritise what goes on in their area. The Government are providing them with the support, money and manpower that they need to do the best job possible.

My Lords, can the Minister assure us that the police do not treat travellers' encampments as no-go areas, that it would be wrong for them to do so, and that if it is necessary to enter such encampments in furtherance of detecting crime they do not hesitate to do so?

My Lords, of course there are no no-go areas for law enforcement in this country. As to how individual encampments are approached and treated in the context of individual crimes, I must make it clear that it is a matter for individual chief constables to determine how best to deal with the matter. It is not for central Government to give direction in that respect.

My Lords, is the Minister aware that the Construction Plant-hire Association estimates that thefts of plant throughout the United Kingdom amount to about £600 million per annum, that frequently these are the work of organised crime through the theft to order of high-value equipment, and that the police recover only around 10 per cent of it? Does he agree with the public perception, as outlined by my noble friends Lord Attlee and Lord Waddington, that there is a lack of motivation by certain police forces to pursue this type of stolen equipment? Will he encourage chief officers to devote more resources to addressing this substantial problem?

My Lords, I was not aware of the precise figure until the noble Viscount said it. I am aware of the problem of plant theft. In different police force areas it is for the chief constable to determine priorities and how best to deploy manpower. The problem is serious, and its seriousness will vary between police areas. Again, I emphasise that it is for chief constables to determine their priorities.

My Lords, if the Government can lay down priorities for street crime, why cannot they do so for this sort of crime?

My Lords, in relation to street crime the Government identified that there was a significant increase in that type of crime and brought together those, including chief constables, who could best advise on how to deal with it. That led to greater co-operation. In the 10 areas where street crime was at its worst there was a 16 per cent drop, comparing the six months to the end of September 2002 with the previous parallel six-month period.

My Lords, the Minister introduced the figures for 1921, stating that we have the same number of police as we had in 1921. What was the population of this country in 1921, and what is it now?

My Lords, the number in the police force is the highest since 1921. Unfortunately, I do not have the population figures available. But I anticipate from the wily way in which the question was asked that the population might have been lower then.

My Lords, does the Minister believe that sufficient powers are now in place and that there is sufficient co-operation from banks, solicitors, accountants and other professions to provide a necessary response to enable the police to pursue money laundering and other white-collar crime involving the handling of stolen goods?

My Lords, in the Proceeds of Crime Act that was passed in the last Session, significant powers were given. We need to look to see how those powers work out before we answer the question of whether more powers are required. It is an incredibly important area of law enforcement that needs real concentration.

asked Her Majesty's Government:

My Lords, the proposals of the Mayor of London for the movement of both people and vehicles are his responsibility, not the Government's. However, Ministers have regular meetings with the Mayor at which a wide range of transport matters are discussed. The most recent of those was between the Secretary of State and the Mayor on 26th September.

My Lords, I would very much like to be present at one of those meetings. Is the Minister aware that there is general surprise and disappointment that the warmth and intimacy which one would expect in relationships between Ministers and the Mayor of London seem somehow to have evaporated? Is he also aware that the present operations of the Mayor on the roads of London have had the remarkable result of increasing the congestion while at the same time the traffic has been diminishing? Not everybody could do that.

My Lords, I shall see whether I can obtain an invitation for the noble Lord, Lord Peyton, to attend the next meeting. There are of course public meetings in which the Mayor is involved and I am sure that he would be happy to invite the noble Lord to them.

Yes, I am aware because I have read today's Evening Standard and I admire the noble Lord's self-publicity in advance of his Question. Of course these matters are serious, but they are devolved to the administration of London. I do not believe that the noble Lord, Lord Peyton, or anyone else would wish this House to become an urban district council.

My Lords, is the Minister aware of evidence regarding changes to the phasing of traffic lights in London? If so, under whose authority was that done? Is he also aware that the current congestion in London has caused a huge amount of extra energy to be wasted in the form of spent fuel; a vast amount of wasted man-hours at work because people are unable to travel to their workplace; and huge pollution of London's environment?

My Lords, the phasing of traffic lights is a matter for the Mayor of London. I understand that he is working within guidelines, which have been accepted for many years, on the balance between pedestrians and vehicles. Of course, my noble friend's remaining comments will be communicated to the Mayor, as always.

My Lords, does the Minister agree that many transport policies in Greater London have an impact on areas outside? If so, does he agree that the Greater London Authority Act gives the Secretary of State power, where the transport strategy is inconsistent with national policies and the inconsistency is detrimental to areas outside Greater London, to direct the Mayor to make revisions to his transport policies? It is hard to believe that the state of transport in London is consistent with any government objectives and it certainly affects areas outside Greater London. What action is the Secretary of State proposing to take under that section?

My Lords, I agree with the noble Lord, Lord Bowness, about the provisions of the Greater London Authority Act. These matters are discussed between Ministers and the Mayor when they meet and they were discussed by the Secretary of State when he met Ken Livingstone and Bob Kiley on 26th September. I do not accept that we are in a position in which the "reserve powers" in the Act need to be invoked.

My Lords, did I understand my noble friend to say that as regards traffic lights the Mayor is operating within well recognised guidelines? If so, and if that is what the Mayor has told the Government, my experience of driving around London is precisely the opposite. I recently found myself at a junction with the Vauxhall Bridge Road and Rochester Row where we had five seconds—five; I counted them—to get across Vauxhall Bridge Road. It was not that the traffic was moving down that road; it was stationary!

If and when these meetings take place, will my noble friend take back to the Mayor the thought that the obviously intentional way in which the congestion has been caused to London is irritating many normal, law-abiding citizens? He has gone over the top and he ought to be told so.

My Lords, I understand the temptation which noble Lords have to intervene in matters which have been devolved to the government of London. I share that temptation—I was chairman of the transport and planning central area board of the GLC in 1976 and I have my views, which have been boiling up inside me for 25 years. But I believe that we ought to behave as a second Chamber of Parliament and not as an urban district council. I will communicate my noble friend's views to the Mayor.

My Lords, the Government's plans suggest that 20 major towns and cities will introduce congestion charges. Many of them are awaiting the results of London's introduction. Are the Government still committed to the principle of congestion charges as a way of controlling traffic?

My Lords, yes, the Government have always been supportive of congestion charges and we have been supportive of the plans for congestion charges put forward by the Mayor of London. That matter was discussed with the Secretary of State on 26th September.

My Lords, I must—

My Lords, perhaps I may—

My Lords, the noble Lord, Lord Lloyd-Webber, has been trying to ask a question for some time.

My Lords, I must declare an interest in that I am co-owner of 13 West End theatres. I want to bring to your Lordships' attention the mood of despair that exists in the West End, with St Martin's Lane and Charing Cross Road closed southbound and the chaos that that is inducing.

Yesterday I had lunch with the coach operators who bring people to West End theatres and learnt that several of them have permanently abandoned using London as a theatre destination. The traffic and drug problems are rendering London a no-go area for theatre-goers. Will the Government urgently address the health of London as a major capital city and world destination?

My Lords, the noble Lord speaks with great authority and his views are taken seriously. If he would care to act as an intermediary for the coach operators and communicate with the Government and the Mayor, I have no doubt that those views will be taken extremely seriously.

My Lords, with the leave of the House, three Statements will be repeated from another place today. The first, on Bali, will be repeated by my noble and learned friend the Leader of the House at a convenient time after 3.30 p.m. The other two will be repeated at a convenient time after 6.30 p.m. The second Statement, on Northern Ireland, will be repeated by my noble and learned friend the Leader of the House, and the third Statement, on A-levels, will be repeated by my noble friend Lady Ashton.

It may be for the convenience of the House if I take this opportunity to mention that the date of the State Opening is to be Wednesday 13th November.

moved Amendment No. 1:

My Lords, I rise to oppose Amendment No. 1 and the consequential amendments grouped with it.

I need hardly refer to Amendment No. 3 because the noble Lord, Lord Hunt of Wirral, has already indicated that he does not expect it to be agreed to. That is right because it would be wholly undesirable, in this Bill and in relation to this particular post, if a broad change of that kind were made; it would involve making the appointment acceptable to a House of Commons Select Committee although no other appointment would be made on that basis. A much broader discussion across the general world of public appointments is needed before agreeing to that substantial change of principle, which I am sure fascinates all of us. We should consider the example of the United States, where Senate approval is needed. However, to introduce that concept in relation to one official in this country on this one occasion would be very odd; we should discuss the proposal on a much broader basis.

I turn to the main amendment. All of the noble Lord's points related to public limited companies. A discussion of corporate governance has been through all of the splendid committees to which he referred, including Cadbury, Hampel and Turnbull; all of them were concerned with the governance of public limited companies. There is no necessary read-across from the governance of public limited companies to government agencies, whether we are discussing the Office of Fair Trading or others. One must consider what is required of each of them. The noble Lord surely cannot argue that Cadbury, Hampel and the rest of them were thinking of bodies such as the OFT, the Office of Gas and Electricity Markets or the Financial Services Authority when it contemplated the problem of the governance of private and public limited companies.

In any case, the noble Lord completely omitted the point that there is no statutory requirement for public limited companies to have the posts of chairmanship and chief executive in separate hands. That is laid down as a recommendation in the combined code that followed Hampel. I have for some years been a sort of serial non-executive director of various companies and I fully agree with those proposals and with the idea that, normally speaking, companies should have a non-executive chairman and a chief executive and that those posts should be held by different persons. However, there is no statutory requirement, and rightly so. The noble Lord wants to introduce a statutory requirement that, irrespective of the particular needs of the moment—or, for that matter, the longer-term needs of the country in relation to the governance of the OFT—there should be a rigid requirement that the posts of chairman and a chief executive should be held by two persons.

The Bill as it stands does not have any rigid requirements to the contrary. It does not require that the posts of chief executive and chairman should be held by one person. The board is described in Schedule 1 and the advertisement for non-executives is part of the process of getting the other members of the board together. The Bill allows for the possibility of those two posts to be held by one person. As the noble Lord, Lord Hunt, accurately pointed out, the Government have indicated that they have it in mind that the first chairman should be not only chairman but also chief executive, and that it should be Mr John Vickers, the current Director-General of Fair Trading. The Bill leaves open the possibility that two persons should hold those two posts, as and when circumstances suggest that that would be better. That flexibility is much more desirable than the rigid requirement for which the noble Lord, Lord Hunt of Wirral, is asking in the amendment; that is, that once the Bill is enacted and without any question, two persons should hold those two separate posts.

Of course there are practical arguments for suggesting that the roles are different. That is shown by examples of the corporate governance of public limited companies. It could be desirable for the chairman to have someone else to take the full burden of administrative and managerial responsibility. There is nothing in the Bill to prevent a deputy from being appointed. The noble Lord will remember that the Minister said in Committee that one or more of the members of the board might be executive members of the board. One of those executives could be a deputy who could be given charge of administrative and managerial responsibilities, and the chairman and chief executive could take the broader role. That seems perfectly sensible.

In order to distinguish the OFT from public limited companies, in relation to which the principles of corporate governance suggest that normally speaking the two roles should be in separate hands, I point out that decision-making under the Bill—we will discuss such matters later—and, for that matter, decision-making under the Competition Act 1998, should be speedy and effective. I believe that the Government have indicated that it is likely that the board will need to delegate to the chairman many executive decisions about mergers and whether there should be an investigation of a particular industry; I support that. I should not like to see diffusion or confusion between two persons of equal authority. One can have a person in charge, of whom it can be said, "the buck stops here", and a deputy, but at this early stage, when the Bill will be beginning its operations, it is desirable, as the Government suggest, that the posts of chief executive and chairman should be held by one person.

My Lords, like many noble Lords, I have held a number of chairmanships. I have also held the post of chairman/chief executive and of full-time chairman with a chief executive. Moreover, I held that post of chairman with a chief executive in a non-public company. I am strongly of the view that the separation of the two posts should be maintained wherever possible.

The job to which I refer in particular was that of the chairmanship for some six years of the British Railways Board. There was a full-time chairman and a full-time chief executive and both of us would have claimed to be fully occupied, although I am sure that that was not always the view of the staff.

The two posts carry two clearly separate sets of responsibilities. A full-time chairman has a very close relationship with the board. That does not mean that he does not have a relationship with the executives; it means that he does not become involved in the detail of the business. He is basically concerned with strategy and the monitoring of progress. The chief executive has responsibility for the mechanics and motivation of the business. As a chief executive, he will spend his time in the guts of the organisation, ensuring that it is running properly. Of course, he will also be directly responsible to the board, but that is a different responsibility from that of the chairman.

Perhaps I may give a classic example of why I feel so strongly about this issue. Over the years, I have been involved with the removal of four chief executives or chairmen. In each case, the pattern was the same. Two or three of the non-executive directors talked to the chairmen, who then talked to the institutions or, in hard times, the bank. If the chief executive is also the chairman, there is no way that the executive directors will put their head on the line because their future employment will be in the hands of the chief executive. They will have nowhere else to go.

I do not believe that this is a deeply philosophical matter; it is an organisational and structural issue. Large companies do not necessarily have available to them supermen, and I include in that some of the signatories to some of the studies quoted. I believe that, wherever possible, the line should be clear, as should the responsibilities. Key organisations, such as institutions, should be able, for example, to talk freely and in confidence with the chairman without involving the chief executive.

My Lords, the noble Lord referred to the situation that is desirable "wherever possible". What would happen if it were undesirable? Would the noble Lord make an exception? Does he not recognise that in the amendment moved by the noble Lord, Lord Hunt, a chairman and chief executive should be appointed in all cases?

My Lords, I am bound to say that I start from the point that I cannot think of a strong argument against the proposition. I have seen it working. There is a long history of companies which do amazingly well, then suddenly a fashionable gladiator of the day begins to emerge and things begin to go wrong. We have seen that occur in some very well-known companies and very often when that situation arises, it does so where the chairman is also chief executive. There is no one else to talk to if one is an outsider. I find it difficult to envisage that a serious organisation would find that the ideal way to administer a company.

My Lords, I rise in support of the amendment moved by the noble Lord, Lord Hunt. I do not want to repeat the arguments that he made so eloquently and with which I entirely agree.

I turn to the remarks of the noble Lord, Lord Borrie. It is always difficult to argue with someone who has held with such distinction the position—or the equivalent position—that we are discussing. Indeed, I believe it is axiomatic among noble Lords that, were the noble Lord, Lord Borrie, in post and were it possible for him to be in post in perpetuity, the noble Lord, Lord Hunt, would not have tabled the amendment and I would not be supporting it. I do not want that to be taken as a criticism of John Vickers, but of course we are not talking about the experience of personalities. Indeed, we all recognise the enormous contribution that the noble Lord, Lord Borrie, made to the post without a separate chairman being in place.

I agree with part of the noble Lord's fundamental analysis, although I disagree with his conclusion. Those of us who argued this point during both the passage of this Bill and that of the previous Bill establishing the Financial Services Authority may perhaps have made a slight error in trying to establish a cross-over from Cadbury—from corporate governance—into this area. It is obvious that there is no exact parallel between the private sector and what we are discussing today in relation to government bodies and government regulators.

One fundamental reason for the current desired structure for chairmen and chief executives in publicly-owned companies is that the chairmen and non-executive directors have responsibility for the shareholders. In this case, no one is suggesting that there is a cross-over and no one is asking who the shareholders are of the Office of Fair Trading—whether they are the public or the Government. No one is suggesting that and I am not supporting the amendment of the noble Lord, Lord Hunt, in some strange quasi-shareholder way.

A fundamental point was made by the noble Lord, Lord Hunt, and it behoves the Minister to answer it. Let us forget the comparison with Cadbury. I believe that, to an extent, it has been a red herring that has led us down paths that have agitated the noble Lord, Lord Borrie, and we would always want his support on an issue such as this. The fundamental question raised by the noble Lord, Lord Hunt, is that of control of the regulators. Contrary to the concerns that existed in the days when the noble Lord, Lord Borrie, performed this function, a serious concern now exists as to the amount of power given to Sir Howard Davies and the Financial Services Authority and to John Vickers as Director-General of Fair Trading. There is a significant issue here which the Government must address. I hope that when the Minister responds, he does not simply demolish the Cadbury argument. Let us take it as accepted that this is not a cross-over from Cadbury into the Office of Fair Trading. I hope that the Minister examines the matter in the context to which I refer; that is, the control of the regulators.

When this issue was discussed in Committee, my noble friend Lord Sharman, who unfortunately cannot be here today, referred to the long-standing fight that the Conservative and Liberal Democrat opposition put up in relation to the creation of the Financial Services Authority. They tried to build into the legislation the split between chairman and chief executive but failed.

In Committee, my noble friend drew your Lordships' attention to the annual report of the Financial Services Authority. The report justified the combining of the titles of chairman and chief executive, now vested in Sir Howard Davies, by reference to the fact that executive responsibility is divided among other members of the board, including those who are managing directors. Contrary to the point that I have just made, the report of the Financial Services Authority went on to say that, as verified by the independent auditors of that body, it was in compliance with the Cadbury code, which recommends the division of those separate responsibilities.

The FSA report recognised the need for a division of those responsibilities. I suspect that the noble Lord, Lord Hunt, is leading the Minister to indicate that as and when Sir Howard Davies stands down, there might be a split in the FSA. The real issue is that to satisfy the Conservative and Liberal Democrat oppositions, the Bill must do that which the FSA requires—divide responsibility among other members of the board. We see no evidence of that in the Bill and if its structure does not provide for responsibility to be divided among other members, we would press the point that there needs to be a separate chairman and chief executive.

Let us accept that Cadbury does not apply—we are not considering a commercial enterprise. Take the BBC as an example. How would your Lordships feel if the suggestion were made in revising the BBC charter that Greg Dyke should run the lot—with no chairman of the governors—and that separation of the roles in a quasi-public body should not exist? Answer: your Lordships would be horrified. That is a fair analogy. When the Minister responds, he should not demolish the Cadbury argument because we can move on from that—but he ought to deal with the BBC argument. What is the difference, on this issue, between the Office of Fair Trading and the BBC?

My Lords, I am surprised that the Government have taken the position they have. We had an interesting debate in the summer, introduced by the noble Lord, Lord Brennan, on the Government Benches, on the subject of corporate governance. The emphasis placed by the Government on the Higgs committee as being the development of corporate governance makes a striking comparison with their proposals.

It is not just a question of public confidence, which requires that best practice is not just followed but seen to be followed. The noble Lord, Lord Borrie, said that there is not necessarily a read-across to public organisations from PLCs. He is absolutely right—but that does not mean that there cannot be a read-across. On this issue there is a read-across on the arguments powerfully made by the noble Lord, Lord Marsh, about the twin pressures at the top of an organisation or company. They are the strategy, which is the setting of the overarching approach that the organisation or company will follow, and the day-to-day implementation that requires the strategy to be carried through in the detail. Those are not separate roles but strategy and implementation do overlap,

It is easy within an organisation or company for one or the other to predominate. Either the company or organisation becomes obsessed with strategy and the big picture, without thinking about the detail, or the company becomes immersed in the detail and loses sight of the wood for the trees. My noble friend is right that each function needs its own champion. The structure of a board, whether of a company or of the OFT, demands two different people.

It might be unfair to say this but the suggestion originally that the two roles should be split was not in Hampel or Cadbury but in Greenbury. The chairman of that committee was of course the chairman and chief executive of Marks and Spencer. When Mr. Greenbury was asked the reason for making that recommendation when he held both roles, he replied, "This is a special case"—rather like the noble Lord, Lord Borrie, saying that this is a special case. The history of Marks and Spencer may have nothing to do with the combination but it is a warning that the Minister should bear in mind.

My Lords, I refer to the much quoted remark by the noble Lord, Lord Borrie, about there being no necessary read-across from a public limited company and a body such as that which we are debating. That is true but the role of the Office of Fair Trading—much expanded by this 500-page Bill—will make it a much more difficult organisation to run than the typical PLC. Its judgments will be highly sensitive, often contentious and always political. If ever there was a need for the extra resource that the twin-officer approach provides, it is here.

For the Minister to suggest that it will be sufficient to have a deputy director is so far wide of the mark that I beg him to reconsider. A deputy is a deputy—an inferior answerable to the person for whom he or she deputises. The post will have to minister to four constituencies—the consumer lobby, the business lobby, the government and political lobby, and the public at large. That will make the job hugely difficult and Amendment No. 1 seems to be common sense.

My Lords, I much appreciated the survey by the noble Lord, Lord Hunt, of the various reports on corporate governance and the views of the noble Lord, Lord Marsh. I totally agree, from my experience in industry, that it is entirely right that there should be a split and that is the best way to run companies.

However, the point made by the noble Lord, Lord Borrie—it was his argument as well as his great distinction in his former post that count on this occasion—was entirely right. There is no direct comparison to be made between how one runs a public limited company and a non-ministerial department. The issues are quite different. The reason for having the split between chairman and chief executive in a public company has to do with its relationship with shareholders, which is clearly different from the relationship between the head of a non-ministerial department and the Government. I agree with the noble Lord, Lord Razzall, that we should forget about that unrealistic comparison and look at the subject on its own merits.

The noble Lord drew an interesting comparison with the BBC but again, that is a completely different situation. The BBC is a big organisation with large operations. Where there are large operations as well as a need for strategic thinking, the model is closer to a public company.

My Lords, I cannot follow the Minister's argument. There are numerous organisations in the public sector where the Government of the day—whatever the rules and regulations say—will wish to speak to someone in the organisation about the way it is managed. All of us who have been Ministers have done that sort of thing. There must be someone to whom Ministers can speak. To talk to the chap in charge of the organisation's management specifically and solely is not always productive and reliable. Over the years, Ministers, in my experience, have talked to the chairman.

My Lords, the situation does not parallel that of a public company. It is much easier for a Minister or someone else to discover what is thought about the performance of a public body. The Minister does not need the intermediary of a chairman who can be used to take action on the executive side. I do not believe that the situation is parallel to that or that one can make that comparison. All these situations must be considered on the basis of the particular kind of organisation and the job which it does. In that context I shall deal with the situation here.

Amendments Nos. 1, 4, 5 and 8 to 16 would create a separate post of chief executive of the OFT. At present the Bill provides for a chairman and no fewer than four other members appointed by the Secretary of State, with the Secretary of State consulting the chairman before appointing any other member.

We have taken account of the OFT's particular circumstances in deciding not to separate the roles of chairman and chief executive at this time. The Secretary of State will appoint John Vickers as chairman for the remainder of his current term as Director-General of Fair Trading, honouring the commitment made to him when he was appointed to that post. John Vickers will work together with the other members of the OFT. Given his position, and to provide for some continuity through this period of great change, I do not think that the OFT should necessarily separate the roles of chairman and chief executive at this time. However, while the Bill does not provide for a separate post of chief executive, nor does it preclude it. If at any time the OFT wished to go down that route, it could create a separate post of chief executive and select the appointee.

That raises another important point. The amendments would create a post of chief executive appointed by the Secretary of State. In contrast, the approach we propose, where the OFT could, if it wished, appoint a separate chief executive in the future, gives the board much more independence and discretion. It is also consistent with the approach taken throughout the Bill and with other regulators. The chief executive of Postcomm is appointed by the chairman, which is a Secretary of State appointment, and the chief executive of Ofcom will be appointed by the board.

Amendment No. 3 would require the appointments of chairman and chief executive to be approved by the Treasury Select Committee. I have already given my reasons for not creating a statutory post of chief executive in the Bill. As regards Select Committee approval of the post of chairman, I would point out that John Vickers was appointed as Director- General of Fair Trading in line with the Nolan principles, and through an open competition. He was appointed on the understanding that in due course he would become the first chairman of the OFT. His successors as chairman will similarly be appointed in accordance with the Nolan principles and after a fair and open competition. In my view giving a Select Committee the power to veto this appointment would serve to undermine the operation of the Nolan procedures. It would make a fair and open competition meaningless.

I would also point out that the OFT will be a non-ministerial government department; a part of the executive branch. It would introduce a wholly new constitutional principle for appointments in government departments to be subject to such scrutiny.

Amendment No. 2 would oblige the OFT to have regard to the generally accepted principles of good corporate governance in its affairs. We discussed that point in Committee. I said then that I would certainly expect the OFT to act in accordance with the principles of good governance insofar as they are relevant to the OFT, but that I considered that a matter of good administration rather than something to go on the face of the Bill. I remain of that view. The OFT is a government department, not a public limited company, and many of the principles of good corporate governance are aimed at business practices which do not have an obvious equivalent in government.

The OFT's strategy and activities will be set out publicly in its annual plan and annual report. Under Amendments Nos. 19 and 20, to which we shall come shortly, its draft proposals for the annual plan, which may take the form of a draft plan, will have to be consulted on publicly and laid before Parliament. The annual report must also be laid before Parliament. The combination of the plan and the report will ensure that both Parliament and the public are engaged in the OFT's work; that they can influence it and can monitor its performance. The chairman of the OFT, like the DGFT at present, will be accountable to Parliament through his appearances before Select Committees, especially the Trade and Industry Select Committee and the Public Accounts Select Committee.

The OFT will also publish other reports of its work (Clause 4) to keep the public informed of its activities. Indeed, currently the DGFT's office publishes decisions, advice and a range of materials on its website, which we expect the OFT will continue to do, as well as to run roadshows for consumers and business, and participate in outside events to get its message across.

To conclude on this group of amendments, I emphasise that we are already depersonalising competition and consumer regulation by creating a statutory authority with at least five members. We expect the board to have a majority of non-executives and we are giving the OFT significant independence from Ministers. With the appointment of John Vickers as chairman, we are providing some continuity, which in this case is enormously important. If in time the OFT should decide that it would prefer a separate post of chief executive, it will be able to select one. I believe that that is the best way forward. In the light of those arguments I invite the noble Lord to withdraw the amendment.

My Lords, before the noble Lord sits down, can he help as to the power under the Bill by which the Secretary of State has appointed a chief executive?

My Lords, if I understand the noble and learned Lord correctly, he is asking which power there is in the Bill?

My Lords, yes.

My Lords, I cannot answer that exactly, but if it is a matter of concern, I shall write to the noble and learned Lord and set that out.

My Lords, I am grateful to the Minister for his response. However, I believe that a question raised by the noble Lord, Lord Marsh, exposed a paradox in the Government's case. In response to the noble Lord the Minister stated that Ministers do not need an intermediary, as if the OFT was not an independent public body and the Minister would fulfil the role of being a recipient of representations, which would then be communicated to the chief executive or, as is proposed, the chairman and chief executive. I remind the Minister that the advertisement, which presumably he authorised, states clearly that the Office of Fair Trading is an independent public body.

In response to the noble Lord, Lord Razzall, who made an important point about Cadbury, perhaps I may say that my point is not to embrace Cadbury alone. I tried to combine it with the pamphlet on corporate governance produced by the Chartered Institute of Management Accountants (CIMA), which was responsible for the combined code. As the noble Lord, Lord Marsh, and my noble friend Lord Hodgson of Astley Abbotts pointed out, CIMA states that that should apply to all organisations. That is the intrinsic point I sought to make. I recognise that the noble Lord, Lord Borrie, belongs to that exclusive club of existing or past director generals of fair trading. I bow to his knowledge of the organisation. However, I believe that the noble Lord, Lord Razzall, made an important point. We are asking the question, "Who regulates the regulators?" Therefore, this has been an important debate on that subject.

As the noble Lord, Lord Phillips, stated, we are dealing with a highly sensitive, political and controversial body, which will have to make a whole range of decisions. Therefore, I urge the Government to practise what they preach and to have a separate chairman and chief executive. I recognise that the noble Lord, Lord Borrie, stated that they may do so at some stage in the future, and the Minister seemed to urge that. However, we are dealing with today. The Government made clear in an advertisement that the first chairman will also be chief executive. That is why I believe I should test the opinion of the House.

moved Amendment No. 2:

Amendment proposed: page 1, line 8 at end insert the words as printed on the Marshalled List. As many of that opinion will say, "Content". To the contrary, "Not-Content". Clear the Bar.

Division called.

Tellers for the Not-Contents have not been appointed pursuant to Standing Order 53. A Division therefore cannot take place, and I declare that the Contents have it.

My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Prime Minister. The Statement is as follows:

"With your permission, Mr Speaker, I should like to make a Statement on the bombings in Bali, Indonesia.

"Two bombs went off near the Sari club in Kuta, Bali, just after 11 p.m. Indonesian time on the night of 12th October. At the same time a bomb exploded in Denpasar, capital of Bali, near the United States consulate, and another at the Philippines consulate in Sulawesi. The Sari club was packed with people, mainly young, enjoying themselves on a Saturday night. The attacks appear to have been timed deliberately to cause the maximum possible injury and loss of life.

"First of all, I should like to express my deep sympathies and condolences to the families who have lost loved ones in this appalling terrorist outrage. The final toll of the dead and injured is unlikely to be confirmed for several weeks. But as of this morning, more than 180 people are confirmed dead, with hundreds more injured. Many of those who died were young Australians. Up to 30 British people may have died. Nine Britons are confirmed dead, with a further eight bodies yet to be identified, and 13 people still missing. Eight have been medically evacuated from Bali. Many more received hospital treatment at the scene. We are providing assistance, as we did after September 11th, to the relatives of British victims. This will enable those who wish to, to travel to Bali. We will provide help and support to them while they are there.

"This was an act of pure wickedness—horrific and brutal attacks which have left hundreds of families here and all around the world in shock and grieving. Last night the United Nations Security Council condemned the bombings in the strongest terms, calling them a threat to international peace and security. At the weekend I spoke to Prime Minister Howard and to the Premier of Western Australia to express my condolences, and I hope to speak to President Megawati later this week. I have also spoken to President Bush. My right honourable friend the Foreign Secretary spoke at the weekend to his Australian and Indonesian counterparts and is discussing the issues with Secretary of State Powell in Washington today.

"A team of specialist officers from the Metropolitan Police Service Anti-Terrorist Branch has already flown to Bali, and more are on their way. United States and Australian experts are also on the scene.

"I should also like to place on record the Government's gratitude for the help extended by both the Indonesian and Australian authorities to all those from the United Kingdom who have been caught up in these dreadful events.

"We had no specific intelligence relating to the attack in Bali. We do not yet know for certain who carried it out. But we do know that there are groups of extremists active in the region, some of which have strong links to Al'Qaeda. These groups have worked with Al'Qaeda on attack plans in the past. We know that they have tried before to carry out major terrorist atrocities in the region, including in Singapore last December, when a massive attack planned against targets including the British High Commission was thwarted by the Singaporean authorities. I discussed this with the Prime Minister of Singapore when he visited London in April this year. He told me that had the authorities not discovered those plans, hundreds of people could have died.

"The Indonesian authorities have been conscious for some time of the growing threat from extremists in the region. Indonesia is a secular country, with a tradition of tolerance and moderate Islam of which Indonesians are rightly proud. But prior to 11th September, and especially afterwards, we identified the south east Asian region, including Indonesia, as an area with a real and present threat from groups linked to Al'Qaeda. The most prominent is Jemaah Islamiyah, which has a network stretching across a number of countries in the region, and which has to be one of the groups under suspicion for this atrocity. We are urgently considering proscribing that organisation under the Terrorism Act 2000.

"Earlier this year we put in place an enhanced package of counter-terrorism assistance for Indonesia, including specific programmes on intelligence, crisis management and aviation security. We offered assistance with bomb disposal and bomb scene management training.

"In June I met President Megawati in London to discuss how we could fight terrorism in Indonesia more effectively and we agreed to expand our existing programme further, drawing on the wide range of expertise in counter-terrorism that Britain can offer. We will do so in close co-operation with the United States and Australia as well as with the Indonesian authorities. We have set up programmes to help other governments in the region. In the Philippines we are training in counter-terrorism, hostage negotiation and police investigations. In Malaysia we are setting up training by Scotland Yard's anti-terrorism branch, and in bomb disposal. We fully support the tripartite counter-terrorism agreement signed by Malaysia, Indonesia and the Philippines earlier this year, which is designed to combat money laundering, illegal border crossing and the illegal trade in arms.

"Since 11th September, here in Britain we have enhanced our intelligence efforts, strengthened protection against rogue aircraft and shipping and clamped down on sources of terrorist financing. We have passed new anti-terrorist legislation. Internationally, we have put a new United Nations framework in place under United Kingdom chairmanship to ensure effective national and international action against terrorism and we have increased intelligence co-operation, strengthening existing partnerships and putting in place new ones across the world.

"So we have had a fresh reminder, if we needed one, that the war against terrorism is not over. During the past 10 days, there have been attacks in Kuwait and in Yemen. The threat to all people, at any time and at any place in the world is real.

"In the end, it is not just the families now grieving for their loved ones who suffer, but also the people of Indonesia, many of whom are already in poverty, who will have to face the devastating economic consequences of the attack. For the bombs and the fanatics who use them do not discriminate between young and old, East and West, black and white, Christian and Muslim. They will kill anyone of any race, creed or colour. They respect no frontier. They have no inhibitions in murdering the innocent; indeed, they rejoice in it. Because of the way in which they work, in small cells of fanatics; because their victims are the most vulnerable, people in a pub or a cafe, on a street or on holiday, discovering where and how they may strike next is hard.

"But the message that we send out is once again the same: one of total defiance—of determination, in the face of evil, to prosecute the fight against them the world over until, in time, they are defeated. Defeated, of course by intelligence, by police and even military action, but defeated also in the triumph of our values of tolerance, freedom and the rule of law over those of terror designed to produce bloodshed, fear and hatred.

"Some say that we should fight terrorism alone and that issues to do with weapons of mass destruction are a distraction. I reject that entirely. Although different in means, both are the same in nature. Both are the new threats facing the post-Cold War world. Both are threats from people or states who do not care about human life and who have no compunction about killing the innocent. Both represent the extreme replacing the rational; the fanatic driving out moderation. Both are intent on not letting people live in peace one with another; not letting us celebrate our diversity and work out our differences in an orderly way. They want to produce such disorder and chaos that from it comes a world in which religions, nations and peoples fight each other for supremacy. That is the true measure of what is at stake.

"The war on terrorism is indeed a war, but one of a different sort to the ones to which we are used. Its outcome, however, is as important as that of any that we have fought before".

My Lords, that concludes the Statement.

My Lords, I thank the noble and learned Lord the Leader of the House for repeating the Statement. It is indeed a sombre day when a Statement on such a terrorist atrocity abroad will be followed later by one about terrorist intransigence here at home.

As the Prime Minister said, never has vigilance and firmness of purpose been more needed. He is right to say that the threat is global, constant and urgent. However distant it is geographically, it is very near to us all.

I shall not seek to add to the words poured out in response to the massacre in Bali, but the hearts of all of us go out to the families and friends of those young British people who died—some of whom are to be found in this place. Our sympathy goes to those of all nations who have been struck down, but perhaps the noble and learned Lord might consider sending a particular message of sympathy and solidarity from this House to the Senate of the good and brave people of Australia—for so long our most close and trusted friends—who have been so brutally scarred. It must be our common resolve not to rest until we have seen the perpetrators of this crime brought to justice.

The nation expects unity at this time. It also deserves realism. I have been dismayed to hear certain voices say that the outrage in Bali somehow shows that we were wrong to be concerned about a threat from Iraq. As the noble and learned Lord mentioned during his repetition of the Prime Minister's Statement, the word "distraction" has been freely used by some here at home and by depressingly many in Europe. Like the Prime Minister, I repudiate that view. It fails to reflect the grim realities of the global challenge that we now face or the daily realities of what this country and the United States have been trying to do.

I see no evidence that a concern about weapons of mass destruction held by a dictator who has assaulted four of his neighbours and who rewards the families of suicide bombers is either ill-founded or a distraction. The Government are right to put pressure on Saddam Hussein to give up weapons of mass destruction and we on the Conservative Benches hope that they will maintain that pressure. Saddam Hussein knows all about terror. Bring together weapons of mass destruction and global terrorism and all mankind is threatened. So that is not a distraction; it is essential to our future security.

We must also have no illusions about the terrorist mentality. Terrorists do not read the manuals of human rights; for them, the sanctity of human life means less than nothing. Some laugh behind their sleeves at the idea of a war on terrorism. But it is a war. It is not a war that we declared; but it is a war that we must win. For if we do not win it, all the values in which we believe will be put in peril.

Perhaps I may ask some specific questions arising from the Statement that I hope that the noble and learned Lord will be able to answer, within the constraints of the need to protect our intelligence sources. Can he say more about the links between Al'Qaeda and Jemaah Islamiyah? Why was Jemaah Islamiyah not placed on the list of foreign terrorist organisations published by the United States' State Department, the European Union or, indeed, our Government? Should that not now be done urgently? What is the status of Jemaah Islamiyah today, according to the Government? What are we now doing to ensure that Indonesia deals with militant Islamic groups as effectively as have Singapore and Malaysia in recent years?

Does the noble and learned Lord know whether Jemaah Islamiyah has any resources in this country? If so, have its assets been frozen, before they are moved offshore? Finally, is he satisfied that organisations and agitators in Britain who declare the same support for the aims of Al'Qaeda pose no threat to our people?

We are again reminded by these events that the war on terrorism is a global war. It affects us all. We cannot dismiss it as some quaint American eccentricity—a view that itself is too often a by-product of anti-Americanism—because we must now believe that we are all targets. Scores of our citizens have already been made victims. We must fight back, and we must be ready to carry that fight to the enemy for as long as it takes to win. If the Government have the resolve for that, they may be sure that we on these Benches will not be found lacking.

My Lords, I, too, thank the Leader of the House for repeating a Statement made in another place by the Prime Minister on the terrible events in Bali. Perhaps I may also associate our party with the deep sympathy extended to the families and friends of those British citizens who lost their lives, but also of the many young Australians who lost their lives, and pay particular tribute to the courage of patients in the Darwin hospitals who cleared their beds to enable them to be used for casualties returning from the scene of the crime in Bali. Perhaps I may say a word about the Indonesians who lost their lives and, not least, the people of Bali itself, who will weep not just for the loss of paradise but the loss of their livelihoods.

In addition, I should add that this is not the first paradise that has been lost. Only a week ago I returned from Kashmir, another beautiful place that is being continually attacked by terrorists with help and support from outside. We would be very foolish not to recognise just how extensive is the terrorist network, and the way in which it particularly fastens itself upon those areas of the world that may well be the best hope for their citizens as regards moving out of a life of poverty. Indeed, both Bali and Kashmir are very good examples of the latter.

I believe that there was a strong indication that Indonesia was likely to become the scene of further terrorist activities. I should declare an interest as a member of the board of the International Crisis Group, which, on 8th August of this year, produced a study entitled, Al-Qaeda in Southeast Asia: The Case of the 'Ngruki Network' in Indonesia. The study sets out in great detail the way in which that network was created, and the way in which it has already been engaged over many months in terrorist activities, many of which were intended to create communal strife.

Literally thousands of Indonesians, both Muslim and Christian, have lost their lives in Aceh, in Kalamantan, in West Papua, and in Molucca, just to mention four of the islands that have virtually moved towards anarchy over the past few months. I believe that Western governments did not pay sufficient attention to the way in which this situation was building in Indonesia, not least because that country is now attempting, with great difficulty, to embark upon some necessary political reforms. The Prime Minister has let us know that he is in touch with President Megawati, the recently-elected president of Indonesia.

Can the Leader of the House say whether the Government still strongly support the attempts that President Megawati is making—for example, to establish civilian control over the police and to train the police to work with, not against, civilians, which is a very important part of dealing with terrorism? There is always a danger that we deal with terrorism by entirely military means and fail to recognise that cutting off the support on which it feeds is absolutely essential. Therefore, helping Indonesia towards political reform is an important part of that strategy.

When repeating the Prime Minister's Statement, the Leader of the House rightly said that Indonesia has been proud of being a tolerant and moderate Islamic country. It is vitally important that we do not lose the support of that moderate Muslim majority. I trust that the Government will identify with some of the aspirations of the democratically-elected Indonesian Government who are handling an extremely fragile and delicate situation. Can the noble and learned Lord assure us that careful attempts will be made to ensure that the paramilitaries in Indonesia, who have created tremendous opposition against the government of that country, will be reined in and not used as the major method of controlling terrorism? The paramilitaries in Indonesia have huge casualties among civilians to answer for.

Can the noble and learned Lord assure us that we shall continue to support, with aid, the efforts to train the Indonesian police in the proper handling of order? Can he also assure us that, as a crucial part of the second strategy against terrorism, we shall look again with our international partners at the disastrous consequences of reducing the help for education in that country that flowed from the economic crisis of 1998? That has led to a very substantial number of Indonesian Muslim children now being trained in what are known as madrasas in Pakistan and in Indonesia as pogroms—that is, religious fundamentalist schools—because they are free and there is often no secular educational alternative for these children to attend.

I have one further question for the noble and learned Lord with regard to the absolute importance of retaining the united support of the international community for the war on terrorism. The noble Lord the Leader of the Opposition in this House made reference to the comments made by my right honourable friend in another place about the distraction from the war on terrorism caused by the massive concentration on the issue of Iraq. I simply want to say that that concentration has been extreme. Although all of us agree that Iraq is an evil regime, this is a moment when we must use every last ounce of our effort and energy to try to get agreement in the Security Council on a common resolution to bring back the inspectors, without any conditions—a view that we all share. The alternative would be a divided international community and it is precisely on those divisions that terrorism most feeds.

Can the noble and learned Lord respond to a question about the Prime Minister's reference to the illegal trade in arms by telling us whether, following the outrage in Bali, Her Majesty's Government will now look again at the supply of legal arms to Indonesia because it is both legal and illegal arms that today feed so much of terrorism in South East Asia? We need to reconsider that extremely dangerous situation.

My Lords, I am grateful for the remarks made by the noble Lord, Lord Strathclyde, and the noble Baroness, Lady Williams. The noble Lord made a most graceful suggestion that I shall adopt. I shall, today, have a letter sent on behalf of all of us. I am most grateful to the noble Lord for his imaginative suggestion. The noble Lord was absolutely right to speak about the necessity for continuing constant vigilance and firmness. I have to agree with him that our focused concentration on Iraq has not been a distraction. Iraq and international terrorism are not alternatives; they are both common threats, not only to those countries immediately affected but also to the United Kingdom, which is the prime responsibility of Her Majesty's Government.

Her Majesty's Government keep under constant review the sale of arms, but I remind myself that it is not illegal arms of any sort that caused the death and destruction that we are discussing this afternoon; to the best of my knowledge, we are talking about manufactured bombs.

The noble Baroness, Lady Williams, asked a number of questions about whether or not we had recognised over the past year or so the threat from extreme terrorism in South East Asia. I can tell your Lordships that we have. Along with our colleagues in the United States, and others, we have encouraged all governments in that region to act against networks on their own territory. There was significant success in the disruption of planned attacks in Singapore, to which I referred earlier. We have strengthened intelligence co-operation on counter-terrorism with the key countries in the region, as well as with our allies active there. Indeed, to deal with a particular point raised by the noble Baroness, we have set up specific programmes to help governments in the region; for example, training in the Philippines on counter terrorism crisis management, hostage negotiations, and police investigations.

In Malaysia training courses are being organised by Scotland Yard's anti-terrorism branch, and there is also training in bomb disposal. In Indonesia we have planned aviation security training, crisis management training, and have offered bomb disposal and bomb-scene management training. In addition, officers from the Metropolitan Police have already arrived in Indonesia to offer their detailed, specialist expertise. So we have not been slow, though we have not been entirely successful because that is the nature of opportunistic terrorism.

As the Prime Minister indicated in his Statement, the Government are urgently considering the proscription of Jemaah Islamiyah under the Terrorism Act 2000, which is under active consideration. The noble Lord, Lord Strathclyde, asked about that organisation in this country. He was very scrupulous to advise me to keep within the limits of what might prudently be said about, for example, its assets. As on such occasions in the past, I am perfectly happy to have discussions on Privy Council terms with the noble Lord, Lord Strathclyde, the noble Baroness, and the noble and gallant Lord, Lord Craig of Radley, in which I shall give such information as I have.

I should point out to the House that we are in the very early stages of investigation. It is prudent sometimes not to jump to conclusions, which experience may sometimes show are not justified. I have information that there are connections and cross-connections between that organisation and Al-Qaeda, but I do not think it would be prudent of me to go further on this particular occasion.

I think that I have dealt with the questions put to me. I am deeply grateful to noble Lords on behalf of those who suffered. They are entirely innocent, young, carefree, guileless and guiltless. I echo what the noble Baroness said. We have to remember the terrible wounds which have been caused in Bali, a country, as many of us know, dependent on innocent tourism. The economic effects seem gloomy. We do not need to consider only death and injury but the wider ripples: the intended consequences of this mindless terrorism.

My Lords, I thank the noble and learned Lord for repeating the Statement. I am sure I can speak for my fellow bishops on these Benches in saying how much we deplore this barbaric and evil act of violence perpetrated on the island, its visitors and its people. There will be families throughout the United Kingdom—sadly, some are known already to us today—who will face the future with broken hearts but who, while in mourning, will long that the deaths of their loved ones should somehow be part of a new creation of meaning in our world. While feeling shock, anger and despair they will not want those who have been killed to have died in vain.

One of the awful paradoxes and ironies of the violence is that an extremist terrorist group may claim religious justification for its actions. If that happens, I earnestly hope and believe that the leaders of all religious faiths in this country, Christian, Muslim, Jewish, Hindu, Buddhist, Sikh and others, will want publicly and wholeheartedly to join in condemning this terrible act and this twisted abuse of the name of religion.

Terrorists want to blow us apart, literally and metaphorically. They want to injure, fragment and destroy. It seems to me, therefore, that it is the bounden duty of all religious and political leaders, and others, in our own country to make sure that those terrorists can never, ever achieve their aims. We do this not simply by condemnation but by doubling and redoubling our efforts to create just, peaceful and tolerant neighbourhoods in the UK and a just, peaceful and tolerant United Kingdom.

Evil—it is the only word that will do in these circumstances—thrives in darkness. To keep the light of truth, understanding and love burning—it requires much moral courage to be exhibited by believers and non-believers alike—is ultimately the only way to defeat evil. We on these Benches are totally committed to that way. Along with everyone else in this country, we would wish to extend our profoundest sympathy to all those who are bereaved and injured and offer them our heartfelt prayers.

My Lords, I am deeply grateful to the right reverend Prelate for those remarks. I am sure we all concur with the theme. He is right. The appetite for terror is insatiable. Religious motives are not the motive engine. It is hate and envy. It is hate of something better than terrorists can conceive of; and it is envy for innocent happiness.

My Lords, the appalling nature of the incident in Bali chills one when contemplating this latest development in the dispute relating to terrorism. I appreciate the somewhat measured references to Al'Qaeda by the noble and learned Lord the Lord Privy Seal. Is there not plenty of evidence that Indonesia has been suffering from great discontent and conflict stretching back over a number of years? The noble Baroness, Lady Williams, mentioned the disputes in Aceh, the Christian-Muslim conflict in Amboina, and the fighting in West Irian, all of which underline the fact that Indonesia is not a natural economic or political entity. It is a creation of western imperialism.

One of the underlying anxieties must be the inability of an Indonesian state to play its part in dealing sufficiently effectively with terrorism. Perhaps I may ask this of the noble and learned Lord the Lord Privy Seal. At some early date, perhaps we may be presented with an assessment of the underlying political and economic situation in Indonesia so that that may be taken into account as well as the specific tragedies in Bali.

My Lords, I shall give the most careful attention to the suggestion in the latter part of the noble Lord's remarks.

I have been deliberately cautious about attributing blame because blame needs to be attributed on the basis of evidence not speculation. The recent history of Indonesia, about which the noble Lord and the noble Baroness spoke, is a matter of fact, and not of comment from me. On these occasions, one should sometimes guard, and advise one's self, against the temptation to jump to conclusions. I am grateful.

My Lords, I want to look to the future rather than dwell on the immediate tragedy. When such an accident takes place, people are often advised not to go in future to that country for tourism purposes. While such caution may be right immediately after the event, I hope that we shall reverse the advice as soon as possible and ask people to go to Bali. One way to fight terrorists is not to be bullied by them and to continue to act normally. I hope that the Foreign Office will do that as soon as possible.

My Lords, because I know my noble friend so well, I know that he made a slip of the tongue when he referred to "accident". If he said "incident", I am grateful. It is murder, wilful murder carried out deliberately, of young people who happen to be enjoying themselves. At present the Foreign Secretary has to adopt an extremely prudent stance. He has a duty to British nationals. The Foreign Office advice at present must be to advise against all travel to Bali, and holiday and non-essential travel to Indonesia. Plainly our diplomatic representatives on the ground there are liaising closely with the business community derived from the United Kingdom. I am happy to reassure my noble friend that as a matter of policy the Foreign Office reviews and re-reviews constantly its advice to travellers. We have seen that recently, for example, in Pakistan and India. However, at the end of the day if our nationals ask the Foreign Office for advice we must err on the side of caution and prudence. I take my noble friend's longer term point. The importance of tourism as an industry to Bali, where the income is very modest indeed, cannot be overstated.

My Lords, I echo the expressions of horror and of sympathy conveyed already to the House. I hope that I shall not be misunderstood if I refer to one point which can give rise to anxiety. I refer to the risk of being confused or ill judged in our reaction to the complex of problems we are discussing. The threat posed by weapons of mass destruction is one important issue, not least in Iraq. Terrorism almost world-wide is a different threat. I hope that the noble and learned Lord will agree, in the calm, deliberate way in which he is responding to questions, that we must, at all costs, avoid confusion between those two components, which can—I do not mean to disturb my noble friend the Leader of the Opposition—be implicit, if we focus too much on the idea of a war against terror. They are two different problems, and we must avoid being provoked into any ill judgment on one side or the other by any possible confusion.

On the issue of weapons of mass destruction, we must, of course, unflinchingly sustain deliberate, well judged, united pressure along the lines already laid out, with as much support from the international community as possible.

On a longer timescale, the multi-headed hydra of terrorism will require co-operation on an even wider scale. I am particularly grateful for the sympathetic way in which the noble and learned Lord defined the way in which we are struggling to help Indonesia. I agree with everything that was said by my noble friend Lord Biffen about the difficulties that face that country. I am also glad that the international partnership against terrorism is embracing the wisdom that can be derived from a more stable society, such as Singapore. I had the opportunity of discussing some aspects of the situation with the chief minister there not long ago. He can give us enormous help, just as we can help a country such as Indonesia.

I urge the greatest possible caution. We must avoid confusion between the two problems in judging our reaction to each.

My Lords, I take the point made by the noble and learned Lord, Lord Howe of Aberavon. However, the noble Lord, Lord Strathclyde, did not exhibit confusion. The noble Lord said that vigilance must be determined, if we are to produce a proportionate response. I agreed with him on that. I also agree with the noble and learned Lord, Lord Howe of Aberavon, that that proportionate response will be different. It may, as the Prime Minister said in the Statement, involve a military response, or it may involve detailed, careful co-operation of the kind to which the noble Baroness, Lady Williams of Crosby, referred. I hope that I was able to fill in some of the picture.

It is essential that the approaches taken should be multilateral. It is in our interest that they should be so. We must co-operate not in a spirit of dictation but in a spirit of true understanding and give any logistic support that we can.

International terrorism—or internal Indonesian terrorism, if that is what it proves to be—must be discussed and deliberated on differently from the question of weapons of mass destruction. However, they may elide one into the other; we do not know. Although I can point to the success in Singapore, one of our difficulties is that the failures of our vigilance—to use the words of the noble Lord, Lord Strathclyde—exhibit themselves in the deaths and injuries that occurred in Bali. The successes of our intelligence efforts cannot, in the nature of things, be trumpeted, nor should they be.

My Lords, on behalf of all Cross-Benchers, I convey sympathy and condolences to the families of the victims of this appalling outrage. I also thank the noble and learned Lord the Leader of the House for his intention to include the Convenor in any extra briefing.

Can the noble and learned Lord reassure the House that the good relationship that we have had with the Indonesian authorities in the immediate aftermath of this appalling disaster will continue? Is he satisfied that there will be good relations in the future?

My Lords, I am grateful to the noble and gallant Lord, Lord Craig of Radley. I can confirm that we have had an increasingly productive relationship with the Government of Indonesia, particularly after 9th September. We are developing particular support by way of exchanges and training in areas in which the Metropolitan Police, in particular, are extremely well regarded all over the world. That is very useful.

My Lords, I am sure that noble Lords will agree that it is important that we do what we can to assess the extent to which Al'Qaeda is connected with the attacks that we have been discussing. My noble friend Lord Biffen referred to attacks in other parts of Indonesia. Do we have evidence to connect Al'Qaeda, in addition, to the foiled attempt in Singapore or with the attacks in Yemen and Kuwait?

My Lords, I have no evidence that I can offer to your Lordships. The attacks in Kuwait and Yemen were very recent. There is a document, of which the noble Lord, Lord Blaker, will be aware, that purports to support the attack on the American marines in Kuwait and the attack on the French oil tanker in the Gulf of Yemen. I am always cautious. I do not regard such statements as being entirely based on truth. The statement may be an opportunistic attempt to muddy the waters; I do not know. I doubt that evidence will be forthcoming.

We must be cautious. In such murky waters, people play strange games, and, sometimes, it is foolish to be taken in by them.

My Lords, I support the suggestion made by my noble friend Lord Strathclyde about the message to be sent to the Australian Senate. In one report, I saw that many New Zealanders were involved as well. I hope that the Foreign Office will consider to whom the messages should be sent, so that they cover all our concerns.

I also support what the noble Lord, Lord Desai, said. The noble and learned Lord the Leader of the House gave the impeccable reply that it was a matter of balance, and I accept that, at this stage, the action of the Foreign Office is correct. However, one of the real tragedies that could emerge from this situation is the economic collapse of Bali. Nothing that we seek to address today will be made any easier by an economic disaster that would affect all the people in that beautiful territory. Obviously, it is a question of judgment, but I hope that the Foreign Office will listen to the representations made by two noble Lords—to which the noble and learned Lord the Leader of the House properly responded—and that it will, at the earliest possible date, give some permission and encouragement. The announcement made today has been shattering for the people in Bali.

My Lords, I am grateful, as always, to the noble Lord, Lord King of Bridgwater. He will remember that it was on the initiative of the noble Lord, Lord Strathclyde, that I sent a letter on behalf of the whole House to the Senate of the United States, immediately after 11th September. I know that it was well received. I will do as the noble Lord suggests and relate the message through my noble friend Lady Amos, who is in her place next to me. We shall see to that.

The issue of tourism does require a difficult balancing act. As it happens, I know Bali, having spent an extremely happy holiday there. One can see how important tourism is as one pays what are, in our context, relatively small sums to people whose daily life depends on it. I agree that, if one of the long-term consequences were to be economic collapse, it would be a firm victory for those who caused such wicked consequences.

Mayor Giuliani said that people in New York should go out and shop, go out and spend, go to the theatre and make New York what it was. We can learn from that.

My Lords, I do not intend to detract from the need to reinforce the war against terrorism. However, I must refer to the point made by the noble Baroness, Lady Williams of Crosby, about the training of fundamentalists, the lack of education and the way that, even in a democracy such as Pakistan is becoming, fundamentalists are winning increasing support. There are millions of hearts and minds that are not with us.

Does my noble and learned friend agree that, side by side with reinforcing the war against terrorism, we must consider what we must do in Yemen, Egypt, Pakistan, Indonesia, in parts of Africa and elsewhere to win over those hearts and minds? The incidents take place against a background in which—it is painful to say—millions are not with us.

My Lords, what my noble friend says is absolutely right. I tried to accept that in the propositions advanced by the noble Baroness. I can reassure my noble friend and the whole House that the Government's policy, through DfID and the FCO, is to stress the important factor that our aid must go in significant part to education, to take up the noble Baroness's point. So I do not dissent from what my noble friend said—although in the all countries he mentioned the problems are not uniform; they need to be dealt with in a subtle and discriminating way.

My Lords, does the Minister agree that, in its wickedness and lack of discrimination, this terrible act compares all too closely with the Omagh bomb of August 1998? By a horrible coincidence, it compares also in terms of the number of United Kingdom citizens killed. At Omagh, 28 were killed, including a pregnant woman and two small children; the figure in this case is apparently 30.

The Minister referred to the need to protect this country. I for one believe that the arrangements for immigration and passport control in this country leave a great deal to be desired. I have given details, but as yet have received no reply from the Home Office. I should like to have the opportunity at some stage of talking to the noble and learned Lord privately.

My Lords, I am not privy to the correspondence between the noble Lord and the Home Office. I can say truthfully and conscientiously that I try to reply to letters by return. If it takes more than a week, I regard that as a personal disgrace. I am more than happy to speak privately to the noble Lord.

As I said earlier, terror has an appetite which is both insatiable and irrational. I draw the noble Lord's parallel between Omagh and this incident. It is the slaughter of the innocents to make an allegedly political point. It is monstrous. We should be careful not to say in the press that "no one has claimed responsibility". I prefer the phrase: "No one has admitted these crimes".

moved Amendments Nos. 4 and 5:

moved Amendment No.6:

My Lords, I shall speak to Amendments Nos. 17 to 21. These amendments respond to points made by noble Lords in Committee and fulfil commitments I made to agree to consider these points further. I shall speak also to Amendments Nos. 6 and 7.

Amendments Nos. 17 and 18 require the OFT to publish a summary of its rules and procedures for dealing with conflicts of interest. The OFT is already required to consult the Secretary of State when drawing up these rules and procedures. The publication of a summary of them under this amendment will ensure transparency in how the OFT conducts itself in this important area. The amendments are in response to an amendment tabled in Committee by the noble Lord, Lord Kingsland, the noble Baroness, Lady Miller, and the noble Lord, Lord Hunt.

Amendments Nos. 19 and 20 require the OFT to lay the proposals for its annual plan, as well as the final version, before Parliament and to hold a public consultation on the proposals at least two months before the final version is published. This removes the discretion that the OFT currently has under the Bill to consult such persons "as it considers appropriate", and, I hope, satisfies noble Lords' concerns that the OFT should consult widely on the plan. These amendments respond to an amendment by the noble Lords, Lord Kingsland and Lord Hunt, and the noble Baroness, Lady Miller, in Committee.

Amendment No. 21 provides additional requirements for the content of the OFT's annual report. Noble Lords expressed concern in Committee that more detail should be placed on the face of the Bill. The amendment provides for significant new requirements covering the main activities and investigations over the year, the allocation of financial resources and enforcement practices and performance. This last requirement would include, for example, an assessment of how OFT has complied with the Enforcement Concordat, which I believe will be welcomed by business. This amendment responds to amendments tabled by my noble friend Lord Graham, the noble Lords, Lord Kingsland, Lord Hunt, Lord Razzall and Lord Sharman, and the noble Baroness, Lady Miller, in Committee.

Amendments Nos. 6 and 7, tabled by my noble friend Lord Graham, seek to ensure that the OFT board is made up of people who are representative of the key areas of OFT responsibility and that such people will not be disqualified from taking up board appointments on grounds of conflict of interest. We will be holding a fair and open competition for non-executive board posts in accordance with Nolan procedures. In answer to the points made by my noble friend, I hope very much that this will not consist of the great and the good but of people who can bring some real skills to this area.

The range of skills and qualities that we are looking for may mean that some members of the board will be drawn from, for example, competition, consumer or business backgrounds, and it is to be hoped that some will have experience of European matters. Our aim is to appoint the best candidates, not to have quotas or de facto appointments representing certain interests. Although board members are likely to have other outside interests, they will be appointed to the board in their own right, not as representatives of a particular interest. Their role on the board will be to see that the OFT takes the right strategic decisions to fulfil its functions effectively and to achieve its goal of making markets work for consumers.

We want to appoint the best people to give the OFT a strong and strategic board with a balance of skills, expertise and abilities. Experience of, for example, general management or strategic skills will be as valuable to the board as a wide-ranging and in-depth experience of competition and consumer issues, but not every candidate need necessarily have all these qualities, skills and expertise in all these areas.

I reassure my noble friend that candidates with backgrounds relevant to OFT's responsibility will not automatically be disqualified from taking up board appointments on grounds of conflict of interests. Provided that they comply with the OFT rules and procedures on conflicts of interest, which I mentioned, there is no need for them to be disqualified. It is unnecessary to set this out on the face of the Bill. If noble Lords agree with the amendments that I am moving in this group, the Bill will be clear that OFT will have published rules and procedures for dealing with conflicts of interest, and board members will have to act in accordance with these or face removal by the Secretary of State. I do not think that there is any need to add anything more to the Bill. In view of these arguments, I hope that my noble friend will feel able to withdraw his amendments.

My Lords, before the Minister sits down, can he make it clear that there is no intention to impose any kind of positive discrimination in the appointments, and that the best people for the job will be chosen, regardless of whether they are all men, all women, all black or all white?

My Lords, I can give the assurance that the best people for the job will be appointed.

My Lords, I am grateful to the Minister, in particular for moving his amendments, which go further along the road towards what I was asking for. I get the impression that he is looking for a balance in which there is not a predominance of those with experience in retailing, production, finance or any other field. I was heartened by his reference to the possibility that there would be someone, or perhaps more than one person, with experience of the European regulatory regime. The Minister can be satisfied that I intend to withdraw my amendments, and I am grateful to him for his comments on his own amendments.

moved Amendments Nos. 8 to 16:

moved Amendments Nos. 17 and 18:

moved Amendments Nos. 19 and 20:

moved Amendment No. 21:

moved Amendment No. 22:

My Lords, I apologise in advance to the noble Lord, Lord Phillips, if I sound churlish about the amendment. When I first looked at the amendment, I said to myself, "Oh dear". When I looked at it again, I said, "I absolutely hate this amendment".

At one time I had responsibility for these matters. In order to demonstrate to your Lordships how prejudiced I was in this respect—and the noble Lord, Lord Borrie, will remember it well—I confess that I used to complain bitterly about the public interest criteria in Monopolies and Mergers Commission findings. I felt that it was not narrow enough; I wanted, purely and simply, public interest struck out and the consumer interest put in.

To become too diverse in this matter is to take away from the consumer interest. It is a pure interest and one which is already covered well in the Bill, as quoted by the noble Lord. Employment legislation deals with a great deal of what he has said and other legislation deals with other factors he has raised. In my experience, it is difficult enough to teach children in schools their simple rights and obligations as consumers. So many people have tried to do it and I challenge the noble Lord to go into schools and to question children—even those in the upper classes—about their rights and obligations as consumers. Even today, with all the work that has been done, few will have the slightest idea. That is due in part to the fact that we have had a great deal of confusing legislation, but the fact remains. I would be against any amendment which in these matters sought in any way to mitigate against the pure consumer interest and which would go further than the other issues named in the Bill.

My Lords, I support the amendment tabled by the noble Lord, Lord Phillips, and I do so for two reasons. First, I declare an interest in that I chair a foundation for the environment which was set up some 10 years ago by BOC. We have funded the encouragement of the dissemination of information on the environment to schoolchildren. I therefore believe that this is an important area as regards good governance, social responsibility and the environment. I must also report that from everything the foundation has picked up subsequently we know that children and young people are far more alive to the benefits for the consumer of having such issues taken into account.

The second reason I support the amendment is the importance to competition. Without doubt, the bottom line benefits from the growing acknowledgement by companies that their customers, the citizens of their country, want them to be good corporate, community-involved bodies in the broad sense and to follow good environmental practices.

I therefore warmly support the amendment and I hope that if it is not accepted at least the OFT, with its new responsibilities in this regard, will take on board the aims behind it. I warmly approve of them.

My Lords, my Amendment No. 23 is in this group. I have a great deal of sympathy with what the noble Lord, Lord Phillips, is trying to achieve. I do not want to go over issues debated in Committee, but I have read carefully what the Minister said on that occasion. I did not find his words convincing.

The amendment refers to Clause 6, the heading of which is,

"Provision of information etc. to the public".

It is not the provision of information; it is the provision of one side of the argument. Therefore, the heading of the clause is misleading in terms of what is contained in the clause. My amendment seeks to remove the word "benefit" and insert the word "effect", which is a more even-handed way of dealing with the issue.

The OFT is a regulatory body; it holds the reins. It needs to be seen to be even-handed, not a propagandist for one side of the argument. That is not to say that the operation of the market is not important and is not supported by me and all other noble Lords in the House. It is an educational role, but not a propagandist role. Let the public know about competition. In Committee, replying to the noble Lord, Lord Phillips of Sudbury, the Minister said:

"Quite simply, I believe that we should require the OFT to concentrate and focus on its primary task; namely, the promotion of competition. We should have the confidence to let it promote the benefits of competition, because that is its role".—[Official Report 16/7/02; col. 1159.]

The Minister, however, has given only half its role. The OFT's role is actually to hold the ring, not to speak in that particular way.

We have already referred today to the Financial Services and Markets Act 2000. As I was a member of one of the regulatory bodies—the Securities and Futures Authority—subsumed under the FSMA, I learned a little about the discussions in your Lordships' House, before I became a Member, about the roles given to the Financial Services Authority. Section 2(2)(b) of the Act states that one of the FSA's regulatory objectives is to promote "public awareness", which is a perfectly fair objective. The Act goes on, in Section 4, to explain what is meant by "public awareness". It states:

"The public awareness is: promoting public understanding of the financial system… It includes, in particular—promoting awareness of the benefits and risks associated with different kinds of investment or other financial dealings".

The duty to inform and educate the public and to help them understand what happens in the financial services arena is therefore absolutely fairly and squarely defined and imposed on the Financial Services Authority. It is Clause 6 of the Bill that is lopsided and should be made much more even-handed.

My Lords, I rise with some trepidation because I think that I am about to disagree for the first time with my noble friend Lady Oppenheim-Barnes. I feel trepidation because, in 1979, as Parliamentary Private Secretary to the then Secretary of State, I was one of my noble friend's very junior administration members when she took through, against all the odds, the Price Commission (Amendment) Act 1979 which abolished the Price Commission. I have always had the profoundest respect for all that she utters—at least until today when she said that she did not agree with these amendments, particularly Amendment No. 22. I agree with her on the issue of consumers, but I think that the attraction of this amendment is that it seeks to put competition itself in a context of responsibility as expressed by the noble Lord, Lord Phillips of Sudbury.

I listened to my noble friend Lord Hodgson of Astley Abbots when we debated this issue in Committee. Now that we have had some tautological discussion about "affect" or "effect", I think that it is entirely apposite to insert the word "affect" in place of "benefit". I agree with the noble Baroness, Lady Howe of Idlicote, that these two amendments would be beneficial to the way in which the OFT will perform its functions. I hope that the Minister will see the amendments as genuine attempts to try to present a balanced approach. As my noble friend Lord Hodgson of Astley Abbots put it, we have to try to strike a proper balance between competition per se for its own sake and the more interesting discussion of ways in which it can affect consumers either positively or negatively.

While I am on my feet—I wanted to do this in our debate on an earlier group of amendments—I should like to thank the Minister for listening in Committee to my noble friends and to other noble Lords We are grateful to him for having listened and coming forward with those amendments on Report. I hope that he will listen and be as positive about these two amendments as well.

My Lords, I have rather enjoyed the intra-party disagreement on the other side of the Chamber. I come down on the side of the noble Baroness, Lady Oppenheim-Barnes. I thought that the noble Lord, Lord Hodgson of Astley Abbots, was quite wrong to say that, in either the past or the future, it is intended that the OFT should "hold the ring". The OFT is a partisan body which determines whether there is a prima facie case that a matter requires investigation. Subsequently, someone else will do the balancing and hold the ring and reach a conclusion. In this Bill, for the very first time, there is even provision for something called a "cartel offence" in which the OFT, with the Serious Fraud Office, will be the prosecutor. It will be the courts, however, that determine whether that case is justified.

My Lords, I understand the noble Lord's point about holding the ring. He will appreciate, however, that the Financial Services Authority is also a prosecuting authority.

Indeed, my Lords. However, my point is to undermine the argument of the noble Lord, Lord Hodgson, and indeed that of the noble Lord, Lord Phillips of Sudbury. I do not disagree at all with the type of educational materials that the noble Lord, Lord Phillips, would like school children and even adults to receive; what I dispute is whether the OFT—with its partisan role, as I said, in the sphere of consumer and competition affairs—is the appropriate body to fill that role. I do not think that it is. To include the type of words that the amendment seeks to introduce would be to ask the OFT to fill a role that is not really apt for that body to perform.

My Lords, Amendments Nos. 22 and 23 seek to amend the Office of Fair Trading's function of making the public aware of the ways in which competition may benefit consumers and the economy. I begin by reminding noble Lords of the purpose of Clause 6. A key role of the OFT is to make markets work for consumers. This is reflected in the clause which gives the OFT the function of promoting to the public the benefits that competition has for consumers and the economy and providing the public with information or advice on matters relating to its functions.

Competition does indeed benefit consumers: the best form of consumer protection is choice. The aim of the clause is to help to create assertive and knowledgeable consumers who are aware of the importance of competition. There is much to be done in this sphere. The DTI peer review of the UK's competition regime showed that while more than 83 per cent of respondents in the United States thought that competition policy was important to the US public, the equivalent figure in the UK was just 10 per cent. So there is a very substantial job to be done.

I turn to the two amendments. I have great sympathy with Amendment No. 22, but rather little sympathy with Amendment No. 23. Amendment No. 23 proposes that the OFT should have the function of making the public aware of the ways in which competition may affect, rather than benefit, consumers and the economy. I find that an extraordinary statement. We are establishing this body because we believe that competition is a good thing. The alternative would be to say that we do not think that competition is a good thing—that we think that some monopolies and a few cartels would be an excellent thing. In establishing this body, we are clearly making the judgment that competition is a good thing.

To ask the body established to make that statement to express the view that competition is other than a good thing would be to make an extraordinary assumption. We did not, for example, establish the Equal Opportunities Commission and tell it, "By the way, you should put forward a balanced view about equal opportunities. Perhaps equal opportunity is not always a good thing". Rather, we said to the EOC: "We expect you to promote equal opportunities". The same applies to the treatment of racial discrimination. I do not know what we are doing in this legislation if we are not starting with the assumption that competition is a good thing. We should therefore refer to the "benefits" and not just the "affect" of competition.

When consumers understand the benefits of competition—which include quality, choice and accessibility as well as price—I believe that they become more powerful, more confident of their rights and more demanding. I understand from what the noble Lord, Lord Phillips, said in Committee that he believes that competition may have adverse consequences for consumers. I beg to differ. Of course, competition can be abused but that does not alter the fact that, overall, competition is a good thing. Anti-competitive behaviour constitutes abuse but competition does not. Anti-competitive behaviour harms consumers. However, competition benefits consumers and the clause should reflect that.

Amendment No. 22 falls into a different category. I have a great deal of sympathy with it, particularly as regards the context of school education. However, I wish to explain why the Government do not want to accept the amendment. It seeks to amend Clause 6 to give the OFT the function of making the public aware of the role of competition within a context of social community and environmental responsibility. As I am sure the House is aware, I certainly accept the importance of social community and environmental responsibility. Indeed, those are matters which the Government actively promote. I also accept that consumer and competition policy must function within the broader framework of social welfare. We are not saying that competition which in any way detracts from legislative, social or environmental frameworks should be excused or condoned. However, I do not believe that it is right to broaden the specific focus of the OFT which is rightly focused on making markets work for consumers. To broaden the OFT's general function as proposed in the amendment would seem to be a rather arbitrary choice.

My Lords, does not the argument that has been made fit well with what is in the Bill which does not merely mention competition but also the economy of the United Kingdom of which the environment is an important part?

My Lords, I totally agree with the noble Lord. The economic framework is important. However, the point I am trying to make is that if one singles out particular aspects of the social and economic contexts in which competition policy operates and states that the OFT must also focus on those matters, an almost endless list arises of other issues of which it must take account: for example, health and safety issues, employment law and all the other contexts within which competition policy operates.

My Lords, I am obliged to the Minister for giving way. There is, of course, a big difference here in that employment law and health and safety issues constitute laws. However, we are talking about a moral framework which is never susceptible to legal intervention within which this matter should be addressed. The Minister makes his own point that a great deal of industrial business and service activity, whilst being competitive and lawful, can be deleterious in other respects.

My Lords, that leads me to my next point. If one refers to a moral framework, one should ask what is the competence of the OFT to give views or, indeed, materials on a whole range of other issues. I should place the matter in a realistic context in terms of how it would operate in schools. I believe that our main concern is similar in that context. Citizenship is already taught in schools. It is for schools to decide what materials they use in educating their pupils and the appropriate context for those materials. The noble Lord, Lord Phillips of Sudbury, commented that citizenship covers a much broader area than simply competition. The noble Lord should not worry that this matter will be placed within an inappropriate framework. It is not envisaged that the OFT will allocate significant resources to providing educational materials specifically aimed at schoolchildren. Its efforts will be aimed principally at educating the public at large.

Although I have great sympathy with the viewpoint that has been expressed, if we introduce the other matters that are proposed, we distract the OFT from the job that it is competent to perform and from its important focus; namely, to inform the public with regard to competition. We risk taking the OFT into other waters. I accept that it is proposed that that should be done within a certain framework. However, the OFT should focus on informing the public of the benefits of competition as that is what it is set up to do.

My Lords, I am grateful for the Minister's response. I believe that there is a difference here. I believe that a great deal of the value judgments that have to be made even within the framework of the Bill involve decisions that are not purely economic. The notion of fair trade, for example, is not based on a purely economic concept but on the concept of what is fair. There is no way round that problem. The Minister suggests that by introducing concepts of social community and environmental awareness, one is opening a Pandora's box. First, that is not the case as I have used only those three adjectives in the amendment. Secondly, I agree with the noble Baroness, Lady Howe, that any education, whether offered by the OFT or anyone else, that disregards that matrix of considerations is doomed to failure because it will not achieve its purpose.

I am a little surprised that the Government are not happy to accept the amendment as I believe that it would enforce the work of the OFT. Finally, it does not extend the scope of the OFT; it simply states that if the OFT is to engage in education as opposed to giving information or advice, it must do so in a broader context. Therefore, I wish to seek the opinion of the House.