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Lord McCarthy: My Lords, before my noble friend sits down, does he agree that the difference between this decision and all others on which we must be certain is that in this case we cannot go back?

Lord Lea of Crondall: My Lords, there are many decisions in which we have been involved--joining NATO and the EU--where it is really only one-way. No doubt this is the greatest decision that we shall make in this Parliament, and that is why we must have the great debate. My main advocacy is that that debate should be brought forward now and when we make the decision it cannot be without some degree of ambiguity. That is real life, not life according to an economic textbook.

Baroness Noakes: My Lords, the gracious Speech rightly prioritised public services, such as education and health. Those are areas in which the Government have conspicuously failed to deliver on their promises over the past four years. Businesses which listened to the gracious Speech may well have concluded that the Government cared little about them. There was a reference to the introduction of legislation to encourage enterprise, but business people know that governments cannot legislate for enterprise but that they can and do legislate to introduce regulatory burdens. One of the glaring omissions from the gracious Speech was a reference to the burdens on business which threaten the entrepreneurial flair of this country.

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The Treasury and the DTI have recently set out the Government's strategy for enterprise and productivity for this Parliament. Much of this was welcome, in particular the lower taxes on capital gains and the modest expansion of share option scheme reliefs, but there was very little in the published document that could be interpreted as relieving burdens on business. The whole issue of regulatory burdens was largely side-stepped and treated as a non-issue. But regulatory burdens are not a non-issue for British business. All of the organisations which speak for the business community say the same thing: the regulatory burden is large, getting larger, and should be reduced if business is to prosper.

The total sums involved are increasing at a frightening rate. The British Chambers of Commerce have recently estimated that in the past year alone the cost of new regulations since 1997 increased by 50 per cent, to over £15 billion. That figure does not include the direct cost of implementing the national minimum wage, which is over £2 billion. It does not include the expected new rules on environmental liability or, for example, the EU's proposed directive on waste electrical equipment. Businesses fear that both of them will have very large price tags attached. It is that increase in burdens which has caused business so many concerns.

The financial impact has been concealed by the relative prosperity of British business over the past few years, but the costs are real and are increasing. It came as little surprise to British business that the UK's competitive position has been eroded since this Government came to power. We used to be fourth in the World Economic Forum's league table of competitive countries, but over the past three years we have slipped down to ninth place. Other league tables have us in an even worse position. The reason for that is explained partly by stealth taxes and our rising tax burden, but a very big cause is the increased labour market regulation that has been imposed.

Regulation hits big and small businesses. However, its impact is often disproportionately great for small and medium-sized enterprises. Noble Lords do not need reminding that SMEs employing fewer than 250 people account for 99 per cent of businesses in this country. They employ 12 million people--well over half of the workforce. They account for 40 per cent of GDP.

A number of organisations have tried to estimate the cost to individual businesses of the regulatory burdens. One example is the Institute of Chartered Accountants, which produces an annual survey. Its last estimate calculated that for a medium-sized business the annual increased burden of implementing the new regulations introduced in 1998-99 was £10,500.

But it is not just a question of money. The real cost is the effort that is diverted away from business. The Small Business Research Trust calculated that small businesses spend about 25 hours per month coping with the regulatory burdens imposed by government. That is over three working days. If that time was spent

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on developing new products or services, training staff, developing staff, cultivating new customers or markets or on anything that is designed to make the business more profitable, we would see a major upsurge in productivity in this country.

For some time the Chancellor has been fretting about the productivity gap between the UK and the US. We even lag behind France and Germany. There is a simple answer--and it does not lie in more legislation for enterprise or in more reforms of the competition regime. It lies in liberating our own entrepreneurs, letting them run their businesses instead of filling in forms or acting as unpaid tax collectors or distributors of welfare benefits.

There are many things that the Government could do without legislation, and I hope that the Government will consider at least some of them. The Government could, as we have proposed, introduce regulatory budgets so that individual government departments have a limit on the amount of regulatory burden they can impose on business. Even if those budgets were set at a standstill, that could have a major impact because it would stop the rising tide of the regulatory burden.

Transparency could be improved. The regulatory impact assessments that are produced with all new legislation could be independently audited and kept up to date, mapping the increases in costs. They could highlight not only the direct costs but also the opportunity costs to businesses as time and effort is diverted away from the real task of running profitable businesses.

When new regulatory burdens are introduced, the Government could do more to minimise the impact on the unfortunate businesses on which the burdens will fall. Ministers could help to ensure that guidelines which significantly increase the compliance burden on small and medium-sized enterprises do not see the light of day. I refer, for example, to the 112-page national minimum wage guidelines. I emphasise that Ministers can do these things without a single clause in legislation; it takes only the political will to achieve them.

However, there are some matters that require legislation. I take the example of the working families' tax credit, soon to be joined by an employment tax credit and a childcare tax credit. The burden of these credits, both in terms of administration and cash flow, is felt especially by SMEs which do not have abundant staff resources or financial capacity. Those schemes could be adapted relatively easily to make the Inland Revenue a direct payer. At a stroke that would remove many of the burdens from SMEs. If that is a bridge too far, the Government could consider a fair recompense to be paid to businesses, especially SMEs, for administering their tax and credit systems.

When legislation is brought forward imposing new burdens on business, the Government should make it the rule rather than the exception that such measures provide for businesses, or at least all SMEs, to be recompensed for the cost of complying with the

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provisions. Some legislation carries a huge regulatory price tag. Of course the Government can, by virtue of their legislative muscle, impose any burdens on businesses and citizens. My plea is that there should be a general presumption that if they do so, they should at the same time devise an appropriate recompense mechanism.

If the Government are serious about reducing the burdens on business, they need to think about removing some existing burdens. Perhaps the Regulatory Reform Act passed in the last Session of Parliament will allow some burdens to be reduced, but I suspect that specific legislative cover will be needed if significant progress is to be made.

Small and medium-sized enterprises feel most keenly the impact of employment regulations, which are a major factor in our diminishing international competitiveness. Every piece of new legislation creating new rights for employees also creates a burden on business. Exempting smaller businesses from the burden of employment legislation, as has been done in the US, would be a good start. Saying "Enough is enough" of the EU's social policy agenda would be a good second move.

The regulatory burdens on businesses are not trivial matters. It is a source of regret that nothing was said about this issue in either the gracious Speech or in other policy announcements made by the Government since the recent general election. But all is not lost. There are some ways in which Ministers can reduce the burdens on British businesses. I look forward to the Minister's response later this afternoon.

4.47 p.m.

The Lord Bishop of Southwark: My Lords, I am pleased to make a short contribution from these Benches to this important debate on the gracious Speech. First, I add our congratulations to the noble Baroness, Lady Hollis, on continuing in her office where she demonstrates such great expertise.

Perhaps I may focus on two or three of the proposed Bills. Last Thursday a homelessness Bill was given its First Reading in the other place. We had hoped that the provisions of the Bill would be similar to those in the Homes Bill which failed for lack of time in the previous Session of Parliament. The provisions commanded wide support from those involved in housing and homelessness. As churches, through our housing associations, our hostels and our drop-in centres, we have a direct interest in these matters. On a first glance at the new Bill, I am rather anxious that many of these important provisions seem to have disappeared. We shall be watching the Bill with great care. I realise that perhaps there will be more discussion on that matter tomorrow.

I should like to add our welcome to the proposed Bill to reform adoption law. We believe that the existing law on adoption is insufficiently child-centred. We hope that the new legislation will bring the law more into line with the Children Act 1989 principle of ensuring that the welfare of the child is the paramount consideration in any decision. That includes seeking

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the wishes and feelings of the child to any proposed adoption and establishing parity status of children and young people in their own adoption proceedings.

I hope that the Bill includes the provision of more information to potential adopters so that they can make informed and responsible decisions about their adequacy for any particular child or children. There are stories of people, including clergy, who have sought to adopt children on the basis of inadequate information, only to discover that the care required was far different from that which they expected. Neither children nor adults gain from finding themselves in that position.

We know too from the experience of such agencies as the Children Society that there is a real need for a national adoption register and some standardisation of practices and allowances across authorities and local authorities. At the moment the uncertainties caused by such variations deters some adopters and limits the chances of some young people to be adopted. It is crucial to establish which local authority has professional and financial responsibility for a young person placed for adoption. It is by no means unknown for children and young people to be disadvantaged by not receiving services due to them while two local authorities argue over who has responsibility for them.

In this increasingly complex world, the uncertainties caused by variation in adoption practices across the country is as nothing compared to those introduced when adoption is attempted across national frontiers. We have had highly publicised cases of babies being sought and bought by British prospective parents in countries suffering the ravages of war, poverty or social breakdown. We have even seen adoptions being attempted via the internet.

It will not be easy to negotiate the domestic and international controls which will bring some order into this chaos, but the principle is surely quite straightforward. The need welfare of the child must be paramount. No adult has an abolute right to adoption just as a parent does not have absolute control or indeed even absolute responsibility for their own children. We believe that children are a gift from God, not just to the parents or the adoptive parents, but to the whole community which, therefore, has a stake in assuring that the welfare of the child is paramount.

On a slightly different note, I for one am pleased to see the commitment to allow political parties to make positive moves to increase the representation of women in public life. As noble Lords will know, the Church of England has been ordaining women priests since 1994 and those who have experienced their ministry almost universally speak highly of them. I have just appointed a new senior cleric in my own diocese giving it its first woman archdeacon. I have no doubt that women should play their part in the most responsible positions of every part of public life.

The place of women, just as the place of those from ethnic minority communities, as full members of our society and of our parliamentary democracy is just one way in which we can help build a fuller, richer society.

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However, integration is not without its impact on existing structures, positions and those who occupy them. Whether we are talking about politicians, priests or other work in the public or private sector, we need to ensure that there is a coherent relationship between public and private life throughout our society. Sometimes the provision of a creche is more significant than a high salary and family friendly working hours are sometimes more significant than high office. I gently say that a good place to start might be here in the Palace of Westminster.

The foundation of the raft of new legislation in these and other fields, however, as the Minister made clear, lies in a sound economy. From these Benches we would not wish to disagree with that, nor with the attempt to bring more people into the dignity of work. We agree that work is the best form of welfare, yet there must always be a partnership between social justice and economic prosperity. I for one get a little anxious when politicians from all sides seem to be singing from the same economic hymn sheet.

The Government are to be congratulated on their determination to target those in need, particularly children and pensioners. But I do not believe that we should be complacent when the gap between rich and poor continues to grow. Economic inequality, when it is too great, invitably brings with it civil inequality and unrest. The great Thomas Acquinas maintained that civil disorder is an evil, usually damaging the weak more than the powerful and that, therefore, strange though it may seem, some injustice in society should be tolerated for the sake of stability. But, he maintained, there is a limit to the injustice which can be tolerated before it should be condemned.

This Bench would simply not wish to forget that there is such a limit, that the gap between rich and poor continues to grow; nor that the validity of the trickle-down theory of economic prosperity has yet to be demonstrated. On these Benches we were dubious of that theory when it was claimed by the Conservative administration of the 1980s and we see no reason to change our minds when the same is claimed by a new Labour Administration in this new millennium. Ghettos of social exclusion still seem to be impervious to the trickle-down of wealth. We know; we are there with our clergy and congregations.

We would agree that obligations as well as rights should be demanded of individuals, but we would also suggest that the same thing applies for corporations. We agree that obligations as well as rights should be demanded of the poor, but we also suggest that they must also be demanded of the rich.

The final Book in the Bible, and perhaps its most fearsome-- full of foreboding and judgment-- was directed to the complacent and well-to-do and in that context those well-to-do people of Asia Minor. Your Lordships' House should not be surprised if we on these Benches keep that judgment and complacency in mind as we, with your Lordships, give detailed examination to the Government Bills in the months ahead.

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4.57 p.m.

Lord Haskel: My Lords, despite the words of the noble Lord, Lord Saatchi, about the painful effects on noble Lords opposite, I would like to begin by referring to the election earlier this month. Lots of promises were made during the campaign, but one was made which I believe will be particularly difficult to keep. It is not the promise about tax or about the euro. It is not the promise about public services, although that is part of it. No. The most difficult promise to keep will be that of the Prime Minister to liberate the individual potential of every single person in this country.

What has inspired that promise is a belief in equal worth, which demands more than just recycling income from the haves to the have-nots to meet people's needs, temporary or permanent. The old idea of paying dole money certainly contributed to equality of outcome, but it did little to enhance people's life chances. Equal worth demands more than simply holding the ring and being a referee. It requires an active state which initiates counter-measures against inequality, which gets rid of the entrenched patterns of advantage and disadvantage and removes the deliberate favouring of one group over another.

It was this concept of equal worth which inspired the previous government to introduce a legal minimum wage, decent working conditions, tax and benefit reforms to abolish the poverty trap and make the return to work worthwhile, better pay for women, and a legal basis for fair trade unionism. As my noble friend Lady Hollis reminded us, there was also the system of family support. There is the recognition that free markets have losers as well as winners and that equal worth means that the losers have to have a second chance through training and life-long learning and indeed a second chance to benefit the economy.

Having done all that, how does the Prime Minister intend to keep his promise to liberate the individual potential of every person in this country? The answer lies in the opening statement of the gracious Speech quoted by the noble Lord, Lord Saatchi. It refers to empowering people with better public services and building an inclusive society through investing in social capital. It is the public services of health and education, security and justice, transport and regulation which will empower people to achieve their individual potential. That is why it was so important during the election campaign to win the argument for spending on public services over Tory tax cuts. We won that argument. And winning that argument was one of the most significant features of the election because winning that argument finally broke the ideological base of the Opposition.

During the election the argument revolved around how we were going to sustain the rise in public spending. Obviously, the public rejected the idea of simply putting up taxes. It would not be done by borrowing either, as was suggested by the noble Lord, Lord Saatchi. But we can increase the tax take by increasing the output per person. There is plenty of potential for that. We have to make the cake bigger.

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However one measures it, our output per worker is below that of our main competitors--France, Germany and the United States. Part of the Chancellor's answer to the problem of sustaining the rise of spending on public services while at the same time enabling people to become better off is to raise productivity.

Of course the Government cannot do this on their own. The noble Baroness, Lady Noakes, made that point. So the Chancellor is pinning his hopes and his reputation on a shared mission to raise productivity in the public and the private sector, in manufacturing and in services. How does he intend to play his part? The answer again lies in the gracious Speech when the Government say that they will introduce legislation to,

    "encourage enterprise, strengthen competition laws, and promote safeguards for consumers".

That means creating a wider and deeper enterprise culture open to all to make us more productive.

The proposed enterprise Bill contains a number of practical steps to do that. Thankfully, it gets the politics out of competition policy and encourages the Office of Fair Trading to promote competition and not just regulate it. Making price fixing a criminal offence is a real deterrent. Previously the deterrent was a company fine which in effect was a business expense mainly punishing the shareholders. The further encouragement for small businesses and the more favourable tax regime making it easier to start a business make a real contribution towards our enterprise economy being open to everyone. I was surprised that the noble Baroness, Lady Noakes--I am sorry that she is not in her place--did not welcome the proposals to reduce regulation on VAT and accounting. She grudgingly managed to mention the Regulatory Reform Act but, sadly, made no mention of the task force led by my noble friend Lord Haskins.

The Government are right to get on with this task with a sense of urgency. It will not be easy; nor will it be quick. Millions of people are going to have to feel that things have got better through their own individual experience that public services have become more responsive, that staff have become more thoughtful, that things happen more quickly, and that quality has improved. That is what will count, not whether the service is delivered through the public or the private sector. It will in the end come down to people and their skills. And we are going to need an awful lot more of them--people and skills. There is a shortage of doctors, nurses and teachers.

At Question Time the noble Lord, Lord Walton of Detchant, suggested that there is a shortage of 10,000 GPs. There is a shortage of fitters and engineers to improve our transport system and make it safer. There are shortages in both the public and the private sector. To counter those shortages, we are trying to attract people from developing countries. The cost is that they will remain just that--developing countries. If we are to seek these skills and talents from economic migrants and asylum seekers, it will mean that many of us will have to change our attitude towards them. Will the Government find these extra people among the 2.3 million men of working age, identified by the

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Centre for Economic Performance of my noble friend Lord Layard, who are listed as economically inactive? My noble friend Lady Hollis suggested that they may. If so, they will have to combat age discrimination and make the New Deal really effective for the over fifties.

Perhaps the most difficult task in this project is to bring back the pride, recognition and status associated with working in the public sector and delivering high quality public service. I agree with the noble Earl, Lord Russell. That means valuing people in public service and the work they do, rather than attacking them. As the noble Lord, Lord Roll, suggested, this means pay incentives and paying them what they would earn in the private sector. Quite simply, we are going to have to pay people more to fill the thousands of unfilled vacancies.

Extending the involvement of the private sector in delivering public services will not be simple for companies either. Those companies will have to change. They will have to adapt to the high level of exposure and to the scrutiny and openness which are essential in delivering public services. They will have to act in a socially responsive way that may not always be reflected in their share price. They will have to learn to ally social purpose to their corporate objectives--not an easy task. This kind of social change is a long-term business. For example, it will take 20 years before we see the benefit of Sure Start, by which time present Ministers will have departed their offices. But their legacy will be the social capital which this work is creating.

Some noble Lords opposite may feel that there is no such thing as society. Perhaps they will be more at home acknowledging that there is such a thing as social capital. The Prime Minister's promise to liberate the individual potential of every person in the country is part of building up the social capital of our country. It is a brave, bold and ambitious task which deserves the support of us all.

5.7 p.m.

Lord McCarthy: My Lords, I join the noble Earl, Lord Russell, the right reverend Prelate the Bishop of Southwark and other noble Lords in welcoming back the noble Baroness, Lady Hollis, to the Dispatch Box. It is better to have the noble Baroness looking after pensions than anyone else. I know that many in the pension organisations feel that way as well.

I welcome the noble Baroness's speech for two reasons. First, she told us that she has a good deal more welfare legislation in the box. Secondly, if I understood her correctly, it will be delivered in the traditional way, which contrasts with much of the rest of what is proposed for the social services, except that we do not know exactly what is proposed for the social services. That brings me to what I want to say. I want to ask the Government this question: what precisely are the implications of the changes they seem to be proposing in what, when I read economics many years ago, we used to call the public/private balance? Are they suggesting that we should significantly change the public/private balance by, in a curious way for this

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country, expanding public services by increasing the private sector's involvement in them? That would be an unusual thing to do.

If the Government want to do this, then my next comment would be: whatever you do, present a better argument than the one you have produced so far. The argument appears to be that, in the future, we shall have to avoid "ideology". But then, everyone says that. Everyone has always said it. When the Attlee government nationalised gas, electricity, the mines, the railways and so forth, they said that those actions had nothing to do with ideology. They trotted out a series of extremely distinguished Members of this House--Lord Reid, Lord Herbert, Lord Stanley and Lord Heyworth--all of whom had served on distinguished committees and said that something of this kind had to be done for those industries because they needed a great deal of money, they needed reorganisation and the government of the day naturally wanted a measure of parliamentary control.

At no point was it said that those nationalisations were undertaken for ideological reasons, because no one ever does say that. Indeed, when the Wilson government nationalised Rolls-Royce, British Leyland and Harland and Wolff, Mr Heath even agreed over the matter of Rolls-Royce. Wilson did not say that it was an "ideologically driven" policy. The government of the day pointed out that those organisations, though excellent, were on the point of collapse and were going bankrupt. An emergency flow of funds was to be put in place to help the companies get back on their feet. The move was to be an eminently practical one.

I suppose that the action taken then could have been described as what the Government now would call "pragmatic". But that is a terribly difficult word. I would prefer not to see it used. The word is a philosophical one with at least four different schools of opinion as to exactly what it means. The OED first defines pragmatism as "obstinacy and officiousness". Only its fourth definition suggests that it means "common sense", and we all know that that means absolutely nothing.

When Mrs Thatcher denationalised the buses, telecommunications and water, she insisted that it was not done for reasons of ideology. Even during the denationalisation of British Rail, I can recall Members of the previous administration telling us that, when they proposed to create over a hundred separate railway organisations alongside one monopoly in the form of Railtrack, it was not being done for ideological reasons. They were going to increase the efficiency of the railways. Indeed, they sat on those Benches and said that they would improve safety. It was supposed to be practical and sensible, but then everyone says that.

Thus, if something rather unusual is going to be done by this Government, for goodness sake, find a better justification than simply denying that it has nothing to do with ideology--"I have principles, you have half-baked ideas and they have ideologies". Ideology is a Janus-word. It conjures up images of

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what was done in Stalin's name, or Lenin, or Hitler, or Mussolini. For that reason, I ask the Government to think carefully about why they want to pursue this line and then to give us a sensible explanation. I do not ask for such an explanation today, although I hope that the Government will say something today. I ask Ministers to go away and think about this, and to read carefully the excellent IPPR report, which unfortunately was published only today, and consider whether it may be of some help to them.

I understand that then the Government want to introduce change in the public/private balance in three broad areas. I should like to say a few words about each of them and to explain what kind of tests could, in principle, be applied. First, I look at the injection of private money, although when one examines the matter closely, these projects do not always mean that much private money will be involved. A great deal of public money is usually required as well. Nevertheless, a public/private partnership is supposed to include an injection of at least some private money.

I should warn the Government that there is a deep scepticism on this subject felt by an enormous number of the general public. The problem is that members of the public cannot see how it can be cheaper, or from where the profits are going to come. They do not understand how it can be possible for the private sector to raise money more cheaply than the Government. Then again, over the weekend they will have read--and the IPPR has confirmed this--that the PPI does not work for the National Health Service or for schools.

Noble Lords knew of the problems when certain legislation went through this House. It was monstrous to suggest that a PPI would be the best way to deal with the London Underground; and it was even more ridiculous to suggest that air traffic control could be run in this manner. And, in the end, people noticed that it was not adopted for the Post Office.

If the public/private partnership is going to be pushed, I say again to the Government: present a better argument than the one you have presented so far. Face the fact that, as Mr Prescott admitted to Mr Humphrys a few days ago on Radio 4, it will often be more expensive, but the Treasury is not made of money. He said something along those lines. Given that, the Government should tell the people of this country how much more they would be prepared to pay if it were done privately. Would they pay 10 per cent more, 20 per cent more, or even 50 per cent? Could it ever become too expensive to have these things done in the private sector? These are the kinds of questions which I beg the Government to take away and think about.

I come now to the second way in which the private sector is going to help us. It will bring in private sector "entrepreneurial expertise". Sometimes I think that anyone who believes this has never employed a plumber. Has any noble Lord ever tried to hire a plumber from the Yellow Pages? If one wants to see private enterprise at work, the marketplace for plumbers is a perfect example: many buyers, many

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sellers and everyone knows what they want. However, it has always worked abominably. No one knows quite why that is; it is simply the way that marketplace works. Of course, some people are so elevated that they have butlers and so never have directly to seek to employ a plumber. They would not know about this kind of thing.

However, the rest of us also read the newspapers. We know all about the scandals that have occurred after private sector enterprise has been introduced into the public sector. We know all about what has happened to National Health Service cleaning services. Some 12 months ago my wife underwent an operation. She stayed on a public ward, where she took a liking to a lump of dust underneath her bed. Five days later it was still there. She became rather fond of that little piece of dust. That happened in a fine public sector hospital. So everyone knows what has happened to cleaning services in the National Health Service, as well as what has happened to NHS wages as a result of privatisation.

Also we can cite examples of the conditions in some private old people's homes. We know how bad some of them can be. Then again, unless one wanted a passport, everyone has laughed at the farce created by computerisation at the Passport Office. Many of us know all about the painstakingly recruited and extremely expensive "knicker salesmen"--as they are known in the health service--these are people who come into the health service as chief executives. They last for six months and then depart with a substantial severance payment. We all know of the scandals which can ensue when the wrong kind of labour is imported into the public sector. I urge the Government to be careful and to work out how they will ensure that the relevant people know exactly what they are doing. Health service executives and prison service executives need to have relevant experience in their fields.

Thirdly, I come to the silliest reason of all: under-utilised facilities. I do not wish to take up too much of the time of the House, so I shall cite the most ridiculous example, that of the National Health Service. People pay into BUPA and other private health schemes because there is over-capacity. They pay to jump the queue. They pay for better food and to have the dirt cleaned out from under their beds. It is for those reasons that they pay the premia for private care. People do not want to pay all that money in private healthcare fees and then go into a private hospital, only to find lying in the next bed a person being cared for under the NHS who has also jumped the queue. Their healthcare is not costing them a farthing. Why on earth should people sign up to private organisations unless they were able to get an edge?

If great efficiencies are introduced so that there is no spare capacity, then the private sector in the NHS will be killed off. That is because it is based on privilege. It also exists by poaching labour from the NHS for which it does not have to pay, because it does not train anyone. It is parasitic. It can continue indefinitely in such a parasitic state, but changes will destroy it.

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I have a final comment that I wish to put to the Government. Over the past 18 years, since Mrs Thatcher shot Hugh Clegg in 1983, successive governments have systematically starved the public sector of funds. Starved of funds, not in terms of how much it got--I dare say the noble Lord over there can give me 1.8 per cent or 1.9 per cent increase per year--but in terms of what it was expected to do; what the public expected it to do; what medical science would have enabled it to do if it had had more money. In that sense it was starved of public funds. What it got in exchange was management consultants. It has been the most wonderful place for management consultants; they have expanded like wildfire. Many of them were in the public sector themselves and went out and made a lot of money--they are friends of mine; good luck to them--but the public sector has been starved of money and satiated with consultants and advisers.

Every conceivable gimmick has been put into the National Health Service. It has been restructured and restructured and restructured. But every time you introduce a major restructuring, half the people apply for their own job and sit around wondering whether they will get it, while the other half apply for another job, a better job, and if they do not get it their morale sinks. Everyone who gets a new job in a major restructuring is immediately dissolved from past responsibilities, because all the job descriptions are different. It is not your fault if it all goes wrong next year; you have got a different job description. That is not you down there; that is someone else.

So there is a considerable downside in major restructuring and a considerable downside in all major change. At last we have got some money. I say to the Government: think very carefully; think big. Suppose that you just throw the money at the social services and leave them alone to spend it. Of course, that is too shocking, and so you are bound to invent some new procedures and change a bit of structure. But do not expect that to do much good. It is your money that will do the good, and thank God you are at last going to spend some.

5.22 p.m.

Lord Skidelsky: My Lords, I am intrigued by the revelation of the noble Lord, Lord McCarthy, of the Government's diabolical plot to destroy the private health sector. I am sure that we will be able to make use of that in our forthcoming debates.

This has been an interesting debate and I am very pleased to be taking part in it. An intervention so early?

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