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The second issue that I want to address is that of cloning, which has received the resilient response from the HFEA and others that it will be controlled by the unwillingness—that is quite proper—to transplant a cloned embryo into a living female surrogate, or woman capable of carrying that embryo to term. That is fine as far as it goes, but what bothers me is that in the emphasis that we place, and have placed, on the leading role of the United Kingdom in research, we have not so far mentioned that any attempt to try to ban the cloning of human beings by refusing to allow reproductive cloning takes no notice at all of the fact that we live not only in a global scientific community but one which is intensely competitive and driven to a great extent by profound commercial interests. That means quite simply that we need to hear—this is my second question to the Minister—exactly what position the United Kingdom Government take towards the United Nations’ attempt to get some form of global banning of reproductive cloning, because without that we all know perfectly well that rogue scientists will be perfectly happy to go round the back of their own national prohibitions in order to get the chance to carry out

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their research elsewhere. The reason is obviously that such research could be immensely valuable commercially. There will be people, driven either by egotism or by the desire to try to ensure that they can provide designer babies to those who have the ability to pay for them, who will be only too ready to put out their shingle and respond by providing the necessary technological knowledge. That is not science fiction. If you look at the way in which the disgraceful trade in organs has grown in our society in the past few years, you will see that what I am saying is not untrue. Ethical considerations may be overleaped by the personal hunger to deal with particular therapeutic and medical conditions. I understand that—we all do; we are all human beings—but it is an extremely dangerous road to go down. Will the Minister therefore say whether Her Majesty’s Government will support the United Nations in its effort to get some form of global ban? I recognise that this will be a long and hard struggle. In particular, will he say whether they share the view of Dr Zakri, who works for the United Nations University, that the crucial path to take is:

This, in his view, has the greatest possibility of being accepted by the United Nations.

Thirdly, and briefly, I strongly support what the noble Baroness, Lady Deech, had to say about retaining the original 1990 reference to the need of a child for a father. I recognise—I have some friends and relatives in this position—that a pair of men or women, or for that matter a woman on her own, can be marvellous parents. That is not my main concern at the moment. My main concern is that research shows conclusively in fields such as education and educational achievement that a child who has a male model as well as a female model is likely to do considerably better than one who does not have that male model, because, as the noble Baroness, Lady Deech, so rightly said, our society is made up of men and women. They often have rather different approaches, even rather different language: women’s language is much more often associational, and men’s language is more often directly related to a particular issue.

Be that as it may, I refer in this context to the very interesting research done by Professor Carol Gilligan in the United States and her book In a Different Voice. She goes at length into the ways in which little girls and little boys develop. In no sense is one more able than the other. Simply, one is rather different from the other, and a child will benefit from understanding from its babyhood what a man and a woman constitute and how they should complement each other. I have a deeper purpose, however. I believe that one of the ways forward for the family—it is no good thinking that we can go back to a traditional family structure of a very old fashioned kind—is that men and women alike have to bear a much greater part of the responsibility for raising children, for looking after elderly relatives, and for caring for those members of their family who are needy in one way or another. Traditionally, that has fallen largely to women, but it will be less true in future. Unless we give men a full sense of what it is to be a father, a member of a family, and a proud and in

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many ways very rich potential, we will simply find ourselves with more and more dysfunctional families, and, as the noble Baroness, Lady Deech, rightly said, with boys who do not quite see what their place is in society and the family. I strongly recommend to this House that we think very carefully about taking a step that looks trivial but could be serious in changing the atmosphere and the attitude towards fatherhood.

Finally, on abortion, I strongly support the argument that we should consider not amending this Bill but rather sending it to a bioethics committee along the lines suggested by the right reverend Prelate the Bishop of St Albans, as there is certainly something objectionable about using abortion as a form of contraception, and the price that we all pay in human and social terms is very grave indeed.

Baroness Royall of Blaisdon: My Lords, in view of the fact that the two opposition spokespeople are not here for the Statement, may I suggest that perhaps the noble Lord, Lord Hastings, would like to make his contribution to the current debate before we move on to the Statement?

4.49 pm

Lord Hastings of Scarisbrick: My Lords, I am delighted to take the opportunity to stand in for Northern Rock on this occasion and to provide, I hope, some useful insight in the light of the absence of the opposition spokesmen.

I am at the same time extremely delighted to see the Bill come to the House but also dismayed. I am delighted because, like all of us, I want to see effective, quality research that will alleviate the difficulties that many people suffer from Alzheimer’s disease, Parkinson’s disease, muscular dystrophy and many cancers. All of us wish to see effective research completed, conducted and foreseen for those who struggle, for there to be greater dignity in places of pain.

However, I am dismayed by the Bill because of a number of factors already referred to by the right reverend Prelate and because of some other matters which I will come to. One is the sense of rush, even super-urgency, about the legislation. I was deeply concerned to hear the right reverend Prelate who had taken part in the committee say that there had been a considerable lack of time to give proper scrutiny, even consideration, to ethical matters. He raised a number of points, he said, concerning the meaning of humanity, life, relationships and even power. I should like to add to that list a few other points which the Minister—and we as a House—might want to reflect on.

These points include the meaning of vulnerability and need in the cases of parents and of children from gestation onwards. What is common consent when it comes to partnering and support for children? What do we mean by a commitment to the undiminished support that we as a society say we wish to give for people who are weak, ill and suffering? Do we simply want to screen the problems out or to continue to support those who struggle with medical issues?

What about an intelligent approach to pro-life? I hate the fact that that term has been so closely associated only with those who are said to be anti-abortion. I cannot believe that any noble Lord is not pro-life. We

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are all pro-life because we all wish to see life supported, provided for, enhanced, enriched and bettered, whether by the resources of the state through medical services or the support of families. All of us must be by nature pro-life. I wish to recapture that phrase and not have it limited off only to those who are seen to be, as it were, anti-abortion. We also need, in ethical considerations, some clarity on when the period of gestation is effected. When is a child created and through which circumstances? All of those are ethical matters that the previous committee had not time to consider and that deserve consideration by this House and another place.

I think it also raises the question for all of us of whether, in the light of the absence of sufficient ethical consideration and of proper public understanding of these issues, the Bill is not simply jumping too far ahead for many of us. If one looks at the period separating the report of both Houses—published on 1 August, not only when both Houses had gone into recess but when, as many would see it, the silly season had begun—the government response, the Government’s publication of the legislation, and this debate today on Second Reading, one will see that it has been inordinately rushed.

I had the opportunity yesterday to discuss the issues raised by the Bill with some very good friends who are involved in charities working with seriously ill elderly people and who work also at the most senior levels of the National Health Service in the care of patients with cancer. I found among them—I am sure they will not mind my saying so—levels ignorance that even they felt embarrassed by, as did I. Given the seriousness of the issues raised, how could we believe that a Bill of this magnitude and significance, which does not have wide public understanding, should be rushed through this House or another place?

I hear many reacting by saying that detailed consideration has indeed been given, and I am sure that sure in many ways it has. However, I have read both the proposed legislation and the Explanatory Notes—which, although elegant and thoughtful, are in some ways very confusing. I shall refer simply to page 30 of the notes, on Clauses 36 and 37, which gives the definition of “fatherhood conditions”. If I read that definition to the House I am sure that bemused bewilderment would appear on the faces of many noble Lords. I urge noble Lords to read it. If those who are advising us cannot explain in plain English what the conditions of fatherhood mean, how can the public possibly understand the seriousness of this legislation? My first thought is to ask this House and the Minister not whether we should ditch the Bill but whether we should have a period to allow proper public understanding of the depth of these issues, the significance of the provisions that we are being asked to consider and whether we should take more cautious care. I agree that there should be a joint bioethics committee, but what a tragedy that it comes after the legislation has been developed, not in advance. Ethical considerations should be at the heart of how we think about all these vital life issues.

This week it is 16 years since the Government of this country ratified the UN Convention on the Rights of the Child. It is interesting that when that

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UN declaration was considered by the Government, discussed in public, signed and known about, it had a critical provision that the child has a right to know its parents and to be sustained by them. How does this legislation stack up with that commitment? The intention to remove the necessity in certain cases to name the father, in particular, is not consistent with other obligations.

In the light of that, I am drawn to the statement made in the Department of Health press release issued on 8 November. It is closely allied to what was said in the gracious Speech. It is that this legislation will place Britain at the forefront of scientific research. We would all welcome that, within limits. It also states that it would do that,

It is clear to me that society’s attitudes have moved towards a desperation, not just an understanding, for fathers to be consistently committed to the children whom they are responsible for creating in whatever form they are created. A recent survey indicated that 82 per cent of people think that children are adversely affected across between one and eight categories of well-being by the absence of a father and that 81 per cent of people aged between 18 and 24 and 80 per cent of women share that view. Society’s attitudes are increasingly in favour of acknowledging the power of fathers, of naming fathers and of fathers’ duties and responsibilities. If that is the case, some measures in the Bill seem to be inconsistent with society’s expectations and the changes that have taken place.

I asked about ethical thinking, the necessity for greater clarity on ethical questions, timing and whether we have not been too rushed on these matters, the necessity for redefinitions and an appreciation that pro-life is not anti anything but is in favour of all of us. I want to make one small point. It is not to raise the critical and complex issue of abortion—enough has been said about that—but in this House on 19 July I asked the Minister responsible at the time whether we should not give greater consideration to the importance of greater support for adoption in the light of the amendments to this legislation that also cover adoption law. At the time, I was given a dismissive, possibly even curt, response:

My point is very simple: given that the Bill will create new categories needing further requirements on adoption because of the way in which children may be brought to life, and given that there are amendments to adoption, is it not time that we are also very serious about talking up the options of positive adoption, not as a consequence of children brought into life that we must find some radical solution for but simply because it is another choice for another life already existing, a child who is already there for whom the state already pays? Therefore should it not be a more creative and positive approach to some of the options that should be provided?

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Northern Rock

4.59 pm

Lord Davies of Oldham: My Lords, I beg leave to repeat a Statement made by my right honourable friend the Chancellor in another place this afternoon. The Statement is as follows:

“With your permission, Mr Speaker, I should like to make a Statement to update the House on the current position with regard to Northern Rock.“The House will recall that last week I said during the Queen’s Speech debate that I would keep the House informed of developments. I also said that I expected to publish a statement of principles underpinning the Government’s approach to proposals received by Northern Rock with regard to its future. I published that statement this morning, prior to the markets opening, in the usual way. Copies are available in the Vote Office and the Library of the House. “It is important to be clear about the respective responsibilities of the Northern Rock board and the Government. The board is legally responsible to its shareholders for the future of the company. However, the Government have a wider public interest in maintaining financial stability, which is why we agreed to “lender of last resort” support in September and subsequent lending by the Bank of England. The Government also have an interest in protecting the interest of the taxpayer. Because of this, the Government have, as a major creditor, a very direct interest in the future of Northern Rock. Therefore, the Government have to agree to any proposals for the future of Northern Rock. “Before turning to our approach, let me first deal with the position with regard both to the guarantee arrangements to Northern Rock depositors provided by the Government, and to the loan facilities provided by the Bank of England to support Northern Rock and to maintain financial stability in general. “First, we have made it clear that the guarantee arrangements already announced for depositors to safeguard their position will remain in place during the current instability in the financial markets. Those guarantee arrangements were absolutely necessary. They have not had any cost to the taxpayer because these deposits, covered by the guarantee arrangements, remain in the bank. “As I have said before, savers are free to take their money out if that is what they want to do, but they have no need to do so. The guarantee arrangements ensure that savers’ deposits are safe. The guarantee will not be removed without proper notice being given to depositors. “Looking ahead, I have made it clear that the Government will legislate for a new regime for protecting bank depositors. As the House knows, we have published a discussion paper on this legislation. I welcome the offer of cross-party support for it, but it is important that we get it right. There are many examples, both here and in other countries, where legislation has been rushed only to be regretted later.

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“The current consultation finishes on 5 December. I will bring forward proposals in the new year when I have also had time to consider the outcome of the Treasury Select Committee’s work, as it has requested. “The second element of support is the Bank of England loan facilities. It is important to remind ourselves why that support was put in place in the first place. Northern Rock got into difficulties because it was almost totally reliant on getting very substantial sums from the securitisation and money markets on a continuous basis to do its business. When that lending became ever more difficult, it had no option other than to go to the Bank of England. Because of the possible impact on the stability of the wider financial system, it was right that I authorised the Bank of England to intervene, and that, too, had cross-party support. “While international financial markets have shown signs of improvement since the sharp credit squeeze in August and September, there clearly remains continued uncertainty in markets following the problems that arose in the American housing market in the summer. The rates at which banks are willing to lend to each other also remain high in all the major currencies. Therefore, it is vital that we do everything that we can to maintain stability internationally as well as here at home. “As the House knows, we are taking steps at an international and domestic level to improve the regulatory regime and to provide greater transparency. That was the subject of the discussions of the G20 Finance Ministers that I attended in Cape Town over the weekend. “The continuing support by the Bank of England has also given Northern Rock an opportunity to consider its strategic options. I am very clear that this is also the right thing to do, and indeed when I announced it to the House it enjoyed support from all parts of the House. “I know that there has been interest in how much support the Bank of England is giving. The Bank publishes its balance sheet every week. However, in common with other central banks, it does not provide details of any operations, because it believes that doing so would undermine its ability to provide such support. I understand the frustrations this can sometimes cause. However, to provide what would, in effect, be a running commentary on any operations would likely have adverse effects that none of us would want. “Having said that, I can tell the House that the Bank of England lending is secured against assets held by Northern Rock. These assets include high-quality mortgages with a significant protection margin built in and high-quality securities with the highest quality of credit rating. The Bank is the senior secured creditor. The FSA has said before, and continues to say, that Northern Rock’s main asset base—its mortgage book—is strong and sound. “Like any lender on this scale, we have ensured that the Bank’s lending is subject to significant conditions and controls to ensure that our interests are protected. In return for this facility, Northern

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Rock has agreed a number of controls, including not declaring, making or paying any dividend without the prior written consent of the Bank of England and not making any substantial change to the nature of its business. “I now turn to the next stage. It is in the interests of everyone that the situation with regard to Northern Rock is resolved as soon as possible. That is why Northern Rock asked for expressions of interest in purchasing the business. As the company has announced earlier today, as part of its review of its strategic options, it has received indicative expressions of interest covering a range of options for the business. It currently expects to receive further expressions of interest in the next few days. “It is essential that public interest here is protected. That is why today I have published the principles that will underpin the Government’s approach when assessing proposals from Northern Rock regarding its future. As I said, the Government have to agree any such proposals. “These principles make it clear that the Government have a clear duty to protect the public interest, and we will do that. However, I think the whole House, and particularly those honourable Members representing constituencies in the north-east, will want us to do everything we can within the constraints upon us to resolve a very difficult position for Northern Rock. So let me set out our approach. “First, we will protect the interests of the taxpayer. Substantial sums have been lent and this money has to be repaid at an appropriate time and rate. The Government will consider proposals with a view to reaching the best outcome for the public purse. Secondly, we will protect depositors. It is essential to do everything we can both to safeguard their interest and to maintain the service provided to them. Thirdly, we will maintain wider financial stability. “As I have made clear all along, the Government will now assess proposals from the company consistent with the approach I have set out here, and we remain closely engaged with the company as the best outcome for the future is assessed. “As the company has acknowledged today, any proposals would have to be approved by the Government, and, importantly, any proposal can be vetoed by the Government. In that way, the Government can ensure that the public interest is safeguarded. As I told the House, any outcome must meet EU state aid rules. “It would be quite wrong to dismiss any option now without proper consideration, as some suggest. I continue to believe it is right to use this time to explore the best outcome for the company and the public interest. I agreed to Bank of England support because I believed it was right to do so. I agreed to continuing support to allow Northern Rock the time it needs to consider its strategic options because it was right to do so. And I have today set out the approach the Government will take as they assess proposals from the company to ensure that we will

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only approve a solution that safeguards both the public interest and the specific interests of the taxpayer. That work is being done now and will be concluded as quickly as possible. I will, of course, continue to keep the House informed in the coming weeks. I commend this Statement to the House”.

My Lords, that concludes the Statement.

5.09 pm

Baroness Noakes: My Lords, I thank the Minister for repeating the Statement made in another place. It is plain that the mess that is Northern Rock is the result of bungling of the very highest order. Northern Rock's board must certainly take the blame for a business model that did not withstand the liquidity squeeze. It is right and proper that several members—executive and non-executive—have now quit office. The problems faced by Northern Rock were magnified by the inadequacy of the tripartite arrangements which oversaw the government response to the situation. I remind the House that this resulted in the first run on a bank in the United Kingdom for 140 years and did considerable damage, not only to Northern Rock but to our financial services sector overall.

The tripartite arrangements were invented by the Prime Minister when he was Chancellor and they failed their first big test. The Government still have not said anything about changes to the tripartite arrangements and I ask the Minister what the Government intend to do about them. I hope that they will not be needed again, but we cannot be sure about that. We need to be sure that they will work better next time.

The Governor of the Bank of England was very clear when he gave evidence to the Treasury Select Committee in another place that various legislative changes were needed. We know that there will be a depositor protection Bill some time this Session but there has been silence from the Government about the other legislative changes. When do the Government intend to address those issues? They seem at least as important as sorting out depositor protection, especially given the fact that the Government have already created the precedent of underwriting the whole of Northern Rock's liabilities.

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