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Lord Barnett: My Lords, I thank my noble friend for that Answer. In case some people outside do not have the intellectual capacity of your Lordships, perhaps I may ask him whether it would be better to express it more simply and to concede, honestly, that borrowing off-balance sheet is likely to be more expensive than borrowing on-balance sheet? Does he agree that, equally, it would be perfectly honourable for the Government to say conclusively that the reason they are borrowing in this way is that the Treasury understandably wants to take the percentage of borrowing as a percentage of GDP to a lower level than the Chancellor would otherwise like to do? Is that not the case and does my noble friend agree with that?
Lord McIntosh of Haringey: My Lords, I do not believe that the House would thank me for giving simplistic rather than accurate and detailed Answers. As to the question of the difference in private sector interest rates and their increased cost, our calculation is that the additional interest cost involved in going to the private sector is approximately 0.25 per cent of the total cost of construction and maintenance in PFI projects. I entirely resist the notion that the Government have any incentive to take liabilities off-balance sheet. We have no need to do so. Our only criterion in these matters is value for money.
Lord Blackwell: My Lords, does the Minister's acceptance of generally accepted accounting principles for liabilities also apply to FRS 17, which applies to pension liabilities? Does he accept that last year the Government Actuary estimated the liability for future payment of the standard pension to be more than £1,000 billion? In accordance with accepted accounting principles, will the Minister be willing to include that in the Government's financial report and, indeed, to update the nation every year on how much it has increased?
Lord McIntosh of Haringey: My Lords, behind the question posed by the noble Lord, Lord Blackwell, is a good but rather shocking revelation that the amount being put into private pension funds is not as great as we had believed. We thought that the figure was higher than it actually is and we are grateful to Mr David Willetts for pointing that out. As for FRS 17, I do not believe that we have a formal view on it, but my personal view is that it would be a great mistake for companies to make a precipitate judgment on the change in their balance sheet in any year when they have no urgent need to realise the assets concerned.
Lord Oakeshott of Seagrove Bay: My Lords, the Minister speaks of minuscule extra costs, but have the Government made any calculation of what the costs would be if one of the PFI contractors went bust? Is he aware of the widely reported concern about the
financial standing of Amey plc; which is one of the largest off-balance-sheet contractors for the Government in health, education, defence and transport? On the London Underground PPP, is it now prudent to sign a 30-year contract with the tube lines consortium, in which Amey has a one-third share, to modernise and to upgrade the Piccadilly, Jubilee and Northern lines?
Lord McIntosh of Haringey: My Lords, it would be entirely inappropriate for me to comment on the finances of an individual contractor.
Earl Ferrers: My Lords, is the Captain of the Queen's Body Guard aware that people of limited intellectual capacity are not confined to those outside the House, as the noble Lord, Lord Barnett, said, but can also refer to some inside it? When the Minister is kind enough to provide answers it would be helpful, while not compromising accuracy, if they were phrased so that some of us could understand them.
Lord McIntosh of Haringey: My Lords, I was asked a precise and serious Question by the noble Lord, Lord Barnett, which I do the House credit by taking seriously. I answered with facts, not with speculation and I answered with detail, not with generalisation. I hope that that is what the House wants.
Lord Saatchi: My Lords, does the Minister appreciate the extreme sensitivity of the Question posed by the noble Lord, Lord Barnett? Is it not the case that in a few weeks' time the Minister will come before your Lordships' House to explain that the Government's figures for the public finances are wrong? He will go on to say that the Government will borrow more and add that as they are well within their borrowing limits they can afford to do so. If the line of questioning of the noble Lord, Lord Barnett, is correct—it usually is—he is driving at the fact that the level of borrowing stated in the public accounts is inaccurate because it is understated. The Minister will be well aware that there are many critics, apart from the noble Lord, Lord Barnett, who take that view.
To settle the matter between the critics and the Government, ahead of probably the most sensitive economic announcement for years, will the Minister undertake to publish on that day, or before it, a full analysis of the Government's liabilities in relation to PFIs, PPPs or other allegedly understated liabilities in the public accounts, so that when the Chancellor describes the Government's debt situation people will know that the figures at which they are looking are correct?
Lord McIntosh of Haringey: My Lords, the noble Lord, Lord Saatchi, would hardly expect me to anticipate the Pre-Budget Report. In regard to what we publish, perhaps I may take the example of the Strategic Rail Authority (SRA), which is one of the most controversial. The credit facilities given to the SRA are reported to Parliament as contingent liabilities and they are listed in statements of the
Consolidated Fund and the National Loans Fund accounts. Those matters are reported fully. There is no concealment.
Lord Barnett: My Lords, while helping the noble Earl, Lord Ferrers, with his intellectual capacity in these matters, perhaps my noble friend can tell the House how much of the off-balance-sheet borrowings are fully guaranteed rather than effectively guaranteed?
Lord McIntosh of Haringey: My Lords, I may be able to give a precise answer, but not within the time-scale available for Starred Questions. The figures are certainly available. Taking the example of London Underground, the guarantees given for that public/private partnership are the guarantees of third-party debt rather than of shareholders' funds. That is a characteristic of the private finance initiative and reflects the proper transfer of risk that is an essential feature of such initiatives.
Lord Mackie of Benshie: My Lords, perhaps the Minister can help those in this House who cannot believe that it is cheaper to give a company profit rather than to borrow on bonds at 6 or 7 per cent. Can he place in the Library a detailed analysis of one of those schemes, say, a hospital?
Lord McIntosh of Haringey: My Lords, I shall see whether that can be done. There are very detailed reports of PFIs. The PFI accounts are analysed by the National Audit Office. All those matters are in the public domain. There has been no concealment of them at all.
Adoption and Children Bill
3.5 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be now further considered on Report.—(Lord Hunt of Kings Heath.)
On Question, Motion agreed to.
Schedule 2 [Disclosure of Birth Records by Registrar General]:
Baroness Noakes moved Amendment No. 89:
- Page 91, line 42, leave out paragraph 4.
In the bad old days, before 1975, adopted people had no right to their birth records. That was put right in the 1976 Adoption Act but Parliament decided then that applicants adopted before the Act should undergo compulsory counselling before receiving the information. That contrasts with people adopted after 1975 who have merely been informed of counselling services and have not been required to use them.
I want to be clear about one thing: counselling for adopted people when they search for their birth relatives is undeniably a good thing. It should be strongly recommended to anyone embarking on a search. During the summer I read a book, Adoption, Search and Reunion, published by the Children's Society. That outlined the very different motivations of searchers and the many potential outcomes from search and reunion underline how difficult the territory is. For most it is a positive experience, although not necessarily, or even often, in terms of achieving a close family relationship in the end. The road is certainly rocky and it is important that searchers are aware of the possible problems that can arise.
Having said all of that, I might be expected to support compulsory counselling, but I cannot. It is a remnant of the nanny state. Compulsion is an intrusion into private life. What might have seemed right and cautious in 1975 now simply looks outdated.
By taking this opportunity to update the law we would reflect that the world has moved on. The people affected by the compulsion rule must by definition be at least 27 years old and are very likely to be much older. The stigma of illegitimacy may still have hung over our legislators in 1975 but no one can claim that it does now. If the law does not insist on intruding into the lives of today's adoptees, why should it continue to do so for yesterday's adoptees?
There is a good framework for counselling information being made available. The adoption agencies have a wealth of experience in counselling. Let us not continue to treat those adopted adults as though they are children, incapable of responding to good advice. I beg to move.
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