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Lord McIntosh of Haringey: Yes, my Lords. It has been clear from the beginning that we have always given priority to older claimants and to the widows and beneficiaries of those claimants who have died. It is tragic that so many of the claims have been resolved by death rather than by payment in full. Widows have a high priority and interim payments are made to them even if the final claim has not been fully processed.

Baroness Miller of Hendon: My Lords, given the speed with which the Chancellor of the Exchequer is busily preparing a basket of goodies--or should I say bribes?--for the electorate in anticipation of the coming election, can the Minister say whether the Chancellor of the Exchequer is able to use all the power at his disposal, together with the generosity he is showing in other areas, to speed up this process? As the Minister said, the Government have decided to implement the compensation system in full, and, as the noble Lord, Lord Mason, said, many people are dying. Can the Chancellor not now get round the problem and deal with it once and for all, as it seems possible for him to do in many other areas?

Lord McIntosh of Haringey: My Lords, I wish it were only a question of money. As has been clear throughout these exchanges, the problem lies in the slowness of making claims, the lack of response to some of the offers that have been made, and, above all--this is the most difficult problem at the moment--the shortage of suitably qualified doctors. If it were simply a matter of money, the issue could have been dealt with a long time ago.

Church Building Repairs: VAT

3 p.m.

Lord Geddes asked Her Majesty's Government:

Lord McIntosh of Haringey: My Lords, the Government are continuing their discussions with the European Commission in relation to a reduced VAT rate for repairs to listed places of worship. A

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preliminary reply has indicated that the matter will be considered by the Commission in its general review of reduced rates, which will take place in 2003. In the interim period, the Government are considering special arrangements to help congregations to pay for repairs to listed places of worship.

Lord Geddes: My Lords, I thank the Minister for that reply. However, is he aware of not only the extreme distress but the grave financial situation in which parochial church councils find themselves, having relied on the autumn Statement of his right honourable friend the Chancellor? Those councils have spent, or have planned to spend, accordingly, but now find that they have not been given the reduction in VAT which they were promised. Supplementary to his Answer, can the noble Lord advise the House what the special arrangements are, from whom they emanate, and whether the money is merely going from one pot to another or whether it is new money that is being proposed?

Lord McIntosh of Haringey: My Lords, if the noble Lord, Lord Geddes, looks back at the pre-Budget report, he will find that the Chancellor's Statement was very cautious. He indicated that the Government were sympathetic and would put the case to the European Commission. He said no more than that. Under those circumstances, I believe that it would be unwise for people to spend money in advance of agreement on this matter.

As to the other special arrangements to which I referred in my original Answer, I do not believe that the noble Lord will expect me to give details in advance of the Budget, when it is likely that such special arrangements will be announced. However, I cannot even promise that that will be the case.

The Lord Bishop of Lincoln: My Lords, can the Minister comment on the accuracy of the report in last Saturday's Daily Telegraph, which said that the Chancellor of the Exchequer,

    "will shortly give churches grants worth about 20 million",

in order to deal with the problem of the time lag until European legislation on VAT changes becomes clearer?

Lord McIntosh of Haringey: My Lords, I am sorry to have to tell the right reverend Prelate that that report is pure speculation. However, I am interested in the figures which the Daily Telegraph gave because I, too, read the article. I believe that it is worth considering the matter in the context of the fact that English Heritage and the Heritage Lottery Fund are offering 25 million for the repair of historic churches in this financial year under the joint grant scheme; the Department for Culture, Media and Sport is offering 2.8 million--at least, it did last year--to the Churches Conservation Trust; and English Heritage has offered 3 million to cathedrals, totalling more than

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30 million of grants. On the other hand, the Church's own best estimate of the cost of VAT paid for historic churches is approximately 20 million.

Lord Ezra: My Lords, will the noble Lord indicate whether the Government are giving further thought to the reduction of VAT on house repairs in general? In that connection, is he aware that, with guidance from the Treasury, on the Isle of Man such VAT has been reduced to 5 per cent? When will the Treasury help us to do that on the mainland?

Lord McIntosh of Haringey: My Lords, I am entirely aware that there is a perverse incentive in the fact that repairs are standard-rated, whereas alterations are zero-rated. This problem arose because in 1984 the then Chancellor of the Exchequer withdrew relief for alterations without withdrawing it for repairs. As I believe the noble Lord, Lord Ezra, knows, since 1977 our powers to introduce new zero-rates are extremely limited.

Baroness Wilcox: My Lords, will the Minister acknowledge the extraordinary cost-effective contribution made by the Church of England to our national heritage? Does the Minister consider it equitable that the burden of maintenance of some of our country's wonderful jewels--our churches--should be borne heroically by the volunteers in our parishes and by our worshipping communities when elsewhere in the European Union we find that the state intervenes, as does the general public?

Lord McIntosh of Haringey: My Lords, I am happy to confirm that, as the noble Baroness, Lady Wilcox, says, some of the glories--in some parts of the country, the only glories--of our architectural heritage are our historic churches. I pay tribute to the volunteers and fund-raisers who help to keep them in order. However, I must remind the noble Baroness of the figures that I have already given: we are giving in the region of more than 30 million in grants to historic churches, while acknowledging that the churches are losing 20 million in VAT.

Lord Faulkner of Worcester: My Lords, following on from the question of the noble Lord, Lord Ezra, is my noble friend aware that the French Government have reduced the rate of VAT on home improvements from 21.5 to 5 per cent? As a result, the take-up of work by reputable builders, who pay their taxes and whose customers pay their taxes, has increased by between 25 and 30 per cent. Did my noble friend see the report in the Sunday Times which stated that over the past few months alone members of the Federation of Master Builders have reported one MP, two Peers and a premiership football manager, all of whom have demanded illegal VAT-free cash refurbishment deals?

Lord McIntosh of Haringey: My Lords, I am shocked to hear what my noble friend said in his closing remarks. If he cares to give me further details, I shall see that, if they have done anything illegal,

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Members of Parliament and Peers are pursued properly under the law. However, I am aware of the reductions under Annex K of the 6th directive in relation to labour-intensive services. We did not take the view at the time, and we do not take the view now, that that is a particularly cost-effective way to encourage employment, even if it were on a permanent basis. Of course, as my noble friend Lord Faulkner knows, those reductions have been introduced only as an experiment for three years.

Wild Mammals (Protection) (Amendment) Bill [H.L.]

3.7 p.m.

Lord Donoughue: My Lords, I beg to introduce a Bill to amend the Wild Mammals (Protection) Act 1996. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.--(Lord Donoughue.)

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

Liaison: Select Committee Report

The Chairman of Committees (Lord Mackay of Ardbrecknish): My Lords, I beg to move the first Motion standing in my name on the Order Paper.

Perhaps I may detain your Lordships for a moment to explain briefly that this report proposes the speedy setting-up of the Select Committee on Human Cloning and Stem Cell Research, called for when the House approved the Human Fertilisation and Embryology (Research Purposes) Regulations 2000 on 22nd January. It also proposes the terms of reference for the committee and a timetable for the committee to report.

The report also proposes that the setting-up of the Select Committee to scrutinise treaties should be placed on hold until we see how the new arrangements in another place work with regard to the issue of scrutinising treaties.

Moved, That the First Report from the Select Committee (HL Paper 30) be agreed to.--(The Chairman of Committees.)

Following is the report referred to:

    A Select Committee on human cloning and stem cell research

    1. On 22 January 2001 the House approved the Human Fertilisation and Embryology (Research Purposes) Regulations 2000, and in doing so agreed "that this House calls on the Government to support the appointment of a Select Committee of the House to report on the issues connected with human cloning and stem cell research, and to undertake to review the regulations following the report of that Select Committee".

    2. We have accordingly considered how best to make available the necessary resources for such an ad hoc committee. In order to avoid undue delay in setting it up, we recommend that the Science and Technology Committee should be reduced from two units of activity to one for the duration of the existence of the new committee.

    3. The use of such a reduction in order to allow for other committee activity was first proposed in 1992 in the report of the Committee on the Committee Work of the House, under the

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    chairmanship of Earl Jellicoe: "If the House is to take on some other committee activity, priorities and the availability of resources will from time to time dictate that the Committee must operate through a single sub-committee, or itself conduct an inquiry in the absence of sub-committees." Hitherto this proposal has never been put into effect, but there are several reasons why it is appropriate now:

    (1) The new committee is on a scientific subject. So the balance of committee activity in the House will be broadly unaffected.

    (2) This arrangement will make it easier for members of the Science and Technology Committee to be chosen to serve on the new committee, should the Committee of Selection so wish, and will make available the resources of the Science and Technology Committee, in particular the services of its specialist assistant.

    (3) One of the two sub-committees of the Science and Technology Committee is currently undertaking a series of short inquiries and follow-ups, and therefore its work can be suspended quickly without curtailing any current inquiry.

    Terms of reference

    4. We propose that the new committee should have the following terms of reference:

    "To consider and report on the issues connected with human cloning and stem cell research arising from the Human Fertilisation and Embryology (Research Purposes) Regulations 2000."

    5. We also propose that the new committee should be asked to report by the end of 2001.

    A Select Committee to scrutinise treaties

    6. In our Third Report, Session 1999-2000, we reported as follows on the proposal, originally put to us in 1999, for the appointment of a Select Committee to scrutinise treaties:

    "The Royal Commission on Reform of the House of Lords recommended as follows: 'The Liaison Committee should consider the establishment of a Select Committee to scrutinise international treaties into which the Government proposed to enter' (Cm 4534, Recommendation 56). In February 2000 the House of Commons Procedure Committee began an inquiry into 'Parliamentary Scrutiny of Treaties and the Ponsonby Rule'. We propose to await the report of the House of Commons Procedure Committee before making a recommendation on this matter."

    7. The House of Commons Procedure Committee has now reported, recommending against the setting up of a Commons committee specifically to scrutinise treaties, and proposing that each treaty should be referred to the relevant departmental committee. The Government response to the report accepts this recommendation, and in particular accepts that the Foreign and Commonwealth Office "should send every treaty subject to ratification, along with its explanatory memorandum, to what it adjudges to be the relevant select committee. It would then be for that committee to decide whether to take further action on particular treaties, whether by holding informal discussions with the lead Department, consulting with other select committees, or taking formal evidence and reporting to the House."

    8. The House of Commons Procedure Committee, in rejecting the appointment of a Commons sifting committee for treaties, concluded: "We believe that Lord Wakeham's proposal of such a committee in the reformed House of Lords may have merit." The Government response to this recommendation was as follows: "This is primarily a matter for the House of Lords, but that House will doubtless wish to consider the arrangements for the scrutiny of treaties in the House of Commons when making any decision."

    9. We have concluded that we should wait to see how the new arrangements in the Commons develop before making any recommendation.

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