Commons Sitting of 2 February 1988

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS

  SOUTHERN WATER AUTHORITY BILL (By Order)
  Orders for Second Reading read.
  To be read a Second time upon Thursday 4 February.

Oral Answers to Questions
  EMPLOYMENT

    Young Persons (Training)
    Ms. Mowlam: To ask the Secretary of State for Employment what percentage of young people entering employment for the first time receive training from their employers.
    The Minister for Employment (Mr. John Cope): The latest evidence that we have on the training of 16-year-old school leavers in full-time employment shows that 65 per cent. receive training in their jobs. That figure comes from the 1986 youth cohort study.
    Ms. Mowlam: I thank the Minister for that information. Will he provide similar details for 16 to 18-year-olds starting in September? The Minister assured us that there would be sufficient places for 16 to 18-year-olds in Cleveland when I last asked this question in the House. What plans have been made to make those places available? If those places are not available—and we in Cleveland believe that they will not be available—will benefit be available to those youngsters if there is no training?
    Mr. Cope: The original question referred to young people entering employment. for the first time. I think that the hon. Lady is referring to the youth training scheme. At present there are more than 100,000 vacant places on the youth training scheme all over the country. With regard to the Christmas guarantee, well over 99 per cent. of young people who required a YTS place had one by last Christmas. We have every reason to suppose that we shall do better this year.
    Mr. Burns: Is my hon. Friend aware that business men in Chelmsford have a record second to none in training their young workers? Is he also aware that young people in Chelmsford warmly welcome YTS because it provides them with training and valuable work experience?
    Mr. Cope: Yes, and that is the experience of YTS trainees all over the country. More than 80 per cent. of them find it very worth while.
    Mr. Sheerman: Is the Minister not worried that, as some young people experience more employment opportunities, the bad old days are returning, because employers are taking 16-year-olds off YTS and offering them no training? If we have to make it compulsory for young people to enter youth training, is it not about time that we compelled employers to train every 16-year-old, at least until the age of 18? When will we enter that kind of league?
    Mr. Cope: I thought that the Opposition were against compulsory training. The number of 16 and 17-year-old unemployed school leavers is at its lowest level since 1974, and that is a good thing. As I have just told the hon. Member for Redcar (Ms. Mowlam), two thirds of those in employment are being trained.
    Mr. Devlin: Will my hon. Friend confirm that the proportion of young people receiving training in their first job is higher in the north of England than elsewhere? Will

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    he also confirm that the proportion of people on YTS who enter jobs, and so on, after leaving the scheme is about 75 per cent.?
    Mr. Cope: Yes, both those facts are correct.

    Job Training Scheme (Child Care)
    Mrs. Mahon: To ask the Secretary of State for Employment how many single parents are now receiving payments under the pilot job training scheme child care provisions.
    Mr. Cope: There are seven single parents on the new job training scheme who are receiving payments for child care provision under the pilot scheme.
    Mrs. Mahon: What does the Minister intend to do about this disgraceful con trick that has been perpetrated on single parents? He knows full well that to qualify and be available for work they must lose £9 in long-term benefit. Will he change that disgraceful situation?
    Mr. Cope: We shall review the pilot scheme when it ends later this month. I stress that it is only a pilot scheme at the moment. The hon. Lady's question relates to the eligibility for the new job training scheme. We have placed those who have been looking for work for six months or more at the head of our priorities. Those are the right priorities.
    Ms. Richardson: Why is it a pilot scheme? The pilot scheme is operating in 10 JTS areas. A large number of single parents and other single people are on JTS. What are the Minister and his Department doing to ensure that single parents, whether women or men, know about the availability of child care payments? Seven is an appallingly low figure. What will happen when JTS is merged with the community programme? The Minister said that he would not extend the payments. Does that mean that he is against helping single parents to work and train?
    Mr. Cope: I did not say that. I said that we will review the pilot scheme when it finishes at the end of this month, and look into the valid questions that the hon. Lady has asked. As for the new scheme, the hon. Lady must await the White Paper, which my right hon. Friend will publish shortly.

    Job Vacancies
    Mr. Patrick Thompson: To ask the Secretary of State for Employment if he will make a statement on the current level of job vacancies in England and Wales.
    The Secretary of State for Employment (Mr. Norman Fowler): On 4 December 1987 the number of unfilled vacancies registered at jobcentres in England and Wales was 219,100. That was an increase of 23 per cent. on the figure for December 1986. Vacancies notified to jobcentres have increased each year since 1981.
    Mr. Thompson: Bearing in mind that the substantial increase in job vacancies must demonstrate the success of the Government's economic policies, does my right hon. Friend agree that more people would find jobs, and more vacancies would be filled, if the Government and industry together took vigorous action to deal with skill shortages —particularly in areas such as Norwich, where they are a real problem?
    Mr. Fowler: I agree with my hon. Friend that there are still skill shortages in some areas, although they are not as bad as they were in the 1970s. I also agree that that shows the need for skills, particularly among the long-term unemployed, and underlines the importance of the new adult training programme that we are about to launch.
    Mr. Cryer: Are not the majority of vacancies in the service industries—in low-paid jobs—and does that not hide the fact that we have lost 2 million jobs in manufacturing industry since 1979, which accounts for the massive balance of trade deficit in manufactured goods that the country now faces as part of the current economic crisis?
    Mr. Fowler: The hon. Gentleman, not untypically, has got the position entirely wrong. Vacancies in manufacturing industry increased by 39 per cent. between November 1986 and November 1987. The equivalent increase for service sector vacancies was 23 per cent.
    Mr. William Powell: Will my right hon. Friend bear in mind that in Corby the number of job vacancies advertised each month is comfortably in excess of 500, which is more than 20 per cent. up on a year ago? Will he also bear in mind that virtually all those vacancies are in the manufacturing sector and carry high pay with good prospects? Will he do all that he can to see that what has happened in my constituency is extended to other areas?
    Mr. Fowler: I entirely agree with my hon. Friend. Vacancies have increased in the service industries —which, of course, are very important to the country—but they have also shown a welcome increase in manufacturing industry. The challenge now is to find the skilled people to fill those vacancies.
    Mr. Meacher: I wonder whether the House is aware that today is the Secretary of State's 50th birthday and that the Opposition offer him their congratulations on this important milestone on the way to his early retirement?
    Will the right hon. Gentleman confirm the story in The Guardian today that, in four inner London boroughs, if an unemployed person refuses a job, his benefit will be withdrawn? Does that not take us a big step further down the road towards American Workfare in Britain? Does that not indeed follow from the creeping compulsion that we have already seen over Restart, YTS benefit withdrawal and the powers in the current Employment Bill to force people on to the adult training programme? Will it not simply encourage the worst employers in the dregs of the market to offer skimpily-paid jobs with no prospects to a captive labour force?
    Mr. Fowler: I thank the hon. Gentleman for his good wishes. I have always regarded 50 as an age when young men have their careers entirely before them.
    It is sad that, even on my birthday, the hon. Gentleman is typically getting his facts entirely wrong again. The Guardian story that he has quoted is wrong. No instructions have been issued to compel people to take jobs in the boroughs of Camden, Kensington or Chelsea. There are no pilot schemes in operation and none is contemplated for those boroughs. The law has always provided that unemployed people may lose their benefit, or have it reduced, if they refuse a suitable job. That law was confirmed in the Social Security Act 1975, which was

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    passed by the previous Labour Government, in which the hon. Gentleman was a Parliamentary Under-Secretary of State for Health and Social Security.
    Mr. Marlow: Given the growing number of jobs available, and given that there are a large number of idle and indolent people who are not prepared to take those jobs, will my right hon. Friend make sure that the law that he has just announced to Parliament is more strictly and effectively put into effect?
    Mr. Fowler: The law on availability for work will be, and has been, enforced in the lifetime of this Government. I certainly agree with my hon. Friend and, indeed, with what the hon. Member for Oldham, West (Mr. Meacher) said. There can be no excuse for people who refuse jobs when jobs are available. Availability for work is a simple condition of benefit, and the Government will continue to enforce it. However, I deny the report in The Guardian, which is plainly wrong.

    Mines (Women)
    Mr. Rogers: To ask the Secretary of State for Employment how many responses to "Restrictions in Employment of Young People and the Removal of Sex Discrimination in Legislation" have called for the repeal of section 124(1) of the Mines and Quarries Act 1954 and section 21(1) of the Sex Discrimination Act 1975, which prohibits the employment of women below ground in mines.
    Ms. Walley: To ask the Secretary of State for Employment how many responses to "Restrictions in Employment of Young People and the Removal of Sex Discrimination in Legislation" have called for the repeal of section 4 of the Factories Act 1961, which prohibits the employment of women and young persons in certain processes connected wilth lead manufacture in factories.
    The Parliamentary Under-Secretary of State for Employment (Mr. Patrick Nicholls): No responses have been received to date concerning section 124(1) of the Mines and Quarries Act 1954 and section 21(1) of the Sex Discrimination Act 1975.
    The relevant section of the Factories Act 1961 is section 74. No responses have been received to date on this either. The closing date for comment on the consultative document is 29 February.
    Mr. Rogers: Is the Minister aware that the repeal of those sections, combined with the removal of the protective legislation in the Sex Discrimination Act 1986, could lead to women being employed underground again? We on the Labour Benches have grave fears that that might happen, especially in view of Mrs. Thatcher's espousal of—
    Mr. Speaker: Order. We refer to each other by our titles here.
    Mr. Rogers: We have grave fears that that might happen, in view of the Prime Minister's espousal of Victorian values and the obvious support of those wet-necked twits that the Minister has behind him.
    Mr. Speaker: Order. Not unparliamentary, but I think a sight unnecessary.
    Mr. Nicholls: The hon. Gentleman phrases his question with his usual elegance and charm. I am bound to tell him
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    that we are concerned only to ensure that the available protections are necessary and, fulfil the task that they set themselves to fulfil. If, at the end of the day, the representations that we receive on the consultative document show that there are no grounds, on the basis of health and safety, to prevent women from being employed underground, I would find it difficult to understand why the hon. Gentleman would deny to women the opportunities that he is prepared to concede to men.
    Ms. Walley: In view of the Minister's reply to that question, will he give an absolute assurance that women will not be required to work in areas where their health could be substantially put at risk?
    Mr. Nicholls: When we are considering the representations on the consultative document, what will guide us will be whether the exisiting legislation achieves the effect of protecting women. If we find that in particular cases it is necessary to retain legislation, because of the particular health considerations of women, such legislation will be retained. The point is to keep necessary legislation that does protect, not legislation that simply discriminates against women because they are women.
    Mr. Forth: Does my hon. Friend agree that we have now smoked out the Opposition? Their posturing in favour of equality for women is simply no longer true, if, indeed, it ever was. Does my hon. Friend also agree that they appear to want to deny to women the opportunities that are available to men? What does he propose to do about that?
    Mr. Nicholls: My hon. Friend asks what I shall do. To try to sort out the inconsistencies of the Labour party's position is beyond any of us. The hon. Member for Rhondda (Mr. Rogers) set out the position very fairly. I wondered whether he had cleared that line of question with the Valkyrie tendency in his party.
    Mr. McLoughlin: Will my hon. Friend confirm that no females will be required to work underground, unless they apply for the job? Should we assume, from the posturing of Labour Members, that the Labour party is against equal opportunities?
    Mr. Nicholls: My hon. Friend draws attention to a strange position. The Labour party has quite properly demanded that there should not be discrimination against women, but it is quite prepared to say, without advancing any evidence for the proposition, that opportunities to work underground will be an exclusively male preserve. It is extremely difficult to understand its attitude.

    Job Vacancies
    Mr. Kirkhope: To ask the Secretary of State for Employment if he will make a statement on the current level of job vacancies in Yorkshire.
    The Parliamentary Under-Secretary of State for Employment (Mr. John Lee): On 4 December 1987 the number of unfilled vacancies registered at jobcentres in Yorkshire was 13,200—a 21 per cent. increase on the past year. However, only about one third of all vacancies are notified to jobcentres.
    Mr. Kirkhope: I thank my hon. Friend for that helpful reply. It clearly and conclusively shows that the Government's economic policy is having a strong effect

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    south of England but all over the country, and in particular in Yorkshire. Arising from that answer, will he advise us of its effect on the levels of employment in Yorkshire and in my constituency, Leeds, North-East.
    Mr. Lee: Unemployment in Leeds, North-East has fallen by about 700 in the past year.
    Mr. Duffy: Does the Minister agree that in the main those figures were registered in North Yorkshire and in the area in which the constituency of the hon. Member for Leeds, North-East (Mr. Kirkhope) is located, West Yorkshire? Unemployment remains well above the national average in South Yorkshire and on Humberside. Will the Minister say why, under the Government, South Yorkshire has received more money from Europe for infrastructure projects than it has received through its assisted area status?
    Mr. Lee: European funding is not a question for me. With regard to funding under the urban programme in 1987–88, Yorkshire and Humberside received £25 million in total. I acknowledge the hon. Gentleman's earlier point that the problems are worse in certain parts of Yorkshire than in others, but that is because of the decline in traditional industries.
    Mr. Jack: Does my hon. Friend agree that if those seeking to fill vacancies in Yorkshire do not find a job of their choice, over the border in Lancashire they would find an equally appetising array of vacancies and training available?
    Mr. Lee: My hon. Friend is correct. There are some vacancies in Lancashire, but we are aware of the problem of mobility in terms of house prices.
    Mr. Strang: Surely the Minister is aware that at present there are 250,000 unemployed people chasing 16,000 vacancies in the Yorkshire and Humberside region. Is he suggesting that that is a satisfactory state of affairs?
    Mr. Lee: I am suggesting that the position is steadily improving, and that over the past 18 months it has done so nationally as well as in Yorkshire.

    Confectionery Industry
    Mr. Gregory: To ask the Secretary of State for Employment if he will make a statement about the trend in the numbers of employees in the confectionery industry.
    Mr. Lee: Over the 12 months to September 1987 the number of employees in the confectionery industry fell by 1,000 to 180,000.
    Mr. Gregory: Will my hon. Friend confirm that the trend in employment was considerably higher when confectionery had the same VAT rating as other foods? Will he hold discussions with his right hon. Friend the Chancellor of the Exchequer before the Budget so that consideration might be given to rerating, especially as 6 or 7 per cent. more people could be taken on in the confectionery industry in efficient firms, such as Rowntree, Terry and Craven?
    Mr. Lee: I know how important the confectionery industry is to my hon. Friend's constituency. I am sure that Treasury Ministers will be made aware of the points that my hon. Friend has made about VAT.
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    I recently discussed with Rowntree its planned tourism attraction—the chocolate experience. I discovered that the industry is doing pretty well and that no fewer than 40 KitKats are consumed in Britain every second.

    School Leavers
    Mr. Roy Hughes: To ask the Secretary of State for Employment what are the latest unadjusted unemployment figures for school leavers; and if he will give the equivalent figure for 1979 on the most nearly comparable basis.
    Mr. Fowler: On 10 December 1987 the number of unemployed claimants aged under 18 who had not entered employment since leaving full-time education was 63,700. This is the lowest December figure since 1979, when it totalled some 30,500.
    Mr. Hughes: Does the Secretary of State appreciate that YTS places are not regarded as real jobs? The pay is certainly paltry and the places seem to be a mere device to keep young people off the unemployment register. In those circumstances, why threaten those same young people with loss of their supplementary benefit if they fail to take up the places?
    Mr. Fowler: Frankly, the hon. Gentleman is rather out of date in his view of YTS. YTS now leads to about 60 per cent. of people going into jobs and a further 15 per cent. are going into training and education. On supplementary benefit, the Government intend to guarantee that anyone leaving school can go into a job or have a YTS place. It seems to us that it is not realistic or sensible to allow supplementary benefit to be a further option.
    Mr. Simon Coombs: Will my right hon. Friend compare the figure that he has given to the House with the equivalent figure for 12 months earlier—December 1986 —and the corresponding figure of five years ago?
    Mr. Fowler: As I said, the figures have been coming down. In December 1986 the figure was 88,000 and five years before, in 1981, it was 122,000. The trend is unquestionably downwards.
    Ms. Short: Does the Secretary of State agree that there will be zero unemployed school leavers next year because, cynically and dishonestly, the Government are abolishing the right to benefit for 16 and 17-year-olds? Therefore, unemployment in that age group will disappear. Young people will be forced into YTS places which will sometimes be inappropriate. They will be unable to wait for a real job or choose to study for O and A-levels while on benefit, which 30,000 young people did last year. How can the Government possibly justify this crude abolition of freedom of choice in career and life for young people at the beginning of their working lives? Is it part of the Government's master plan to abolish unemployment by forcing the unemployed to work for their benefits?
    Mr. Fowler: The hon. Lady has been rehearsing those arguments in Committee for the past two months and she is being equally absurd this afternoon. The worst way of starting one's adult career is by going down to the supplementary benefit office and drawing social security.
    Mr. Wigley: Will the Secretary of State now give a guarantee to all young people on YTS that there will be a real job for them when they finish?
    Mr. Fowler: The hon. Gentleman knows that we can guarantee a place on YTS to every school leaver. He also knows that the number now going into jobs is increasing and that in many places it is now more than 80 per cent. That is the progress that is being made and that is the commitment to YTS.
    Mr. Bill Walker: Is my right hon. Friend aware that the Royal Air Force is taking many young boys on YTS? Thousands of them have been accepted. A substantial number of them would not normally have been up to the standard acceptable to the RAF, but events have shown that many of them reach the acceptable standard, get a good training and end up with real jobs.
    Mr. Fowler: Yes, that is a good scheme, and there are many other examples all round the country. We need to develop schemes in the public sector, but the armed forces scheme is already making substantial progress.

    Labour Statistics
    Mr. Hardy: To ask the Secretary of State for Employment what is the present rate of unemployment within the Rotherham-Mexborough travel-to-work area.
    Mr. Lee: On 10 December 1987 the number of unemployed claimants in the Rotherham and Mexborough travel-to-work area, expressed as a percentage of employees in employment plus the unemployed, was 18·9 per cent.
    Mr. Hardy: Given the deplorable situation in the area, the fact that official statistics seem particularly inaccurate or irrelevant in the Dearne valley area, the approach of further and horrendous job losses through colliery closures, and particularly through the deceitful and deplorable closure of the Canning Town glassworks at Swinton in my constituency, what action will the Minister take to ensure that the supposed economic miracle being experienced by Britain does not pass this area by entirely unremarked?
    Mr. Lee: I acknowledge that unemployment in the hon. Gentleman's travel-to-work area and constituency is worse than in the region generally. I acknowledged that when I replied to his recent Adjournment debate. Nevertheless, things are improving. There has been a fall in the number unemployed of 3,057 over the past 12 months, and there has also been a 30 per cent. rise in jobcentre vacancies. There have been several encouraging features in the area, such as the Rotherham enterprise zone, which has been a great success.

    Long-term Unemployment
    Mr. Kirkwood: To ask the Secretary of State for Employment what further steps he proposes to reduce the numbers of long-term unemployed.
    Dr. Godman: To ask the Secretary of State for Employment when he will next meet the chairman of the Manpower Services Commission to discuss programmes for the long-term unemployed.
    Mr. Fowler: In the 12 months to October 1987 there was a fall in long-term unemployment of 169,000, the biggest fall of long-term unemployment on record. The Government will continue to give high priority to helping the long-term unemployed and I plan to meet the
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    chairman of the Manpower Services Commission later this month to discuss the new adult training programme which will offer improved training opportunities to some 600,000 unemployed people each year.
    Mr. Kirkwood: Although these falls in unemployment are welcome, does the Secretary of State accept that the proportion of unemployed who have been unemployed for a long period is increasing and that something must be done about this in the longer term? Will his Department consider targeting long-term unemployment black spots, even on a pilot basis, by reducing national insurance contributions?
    Mr. Fowler: We have reduced national insurance contributions for the lower paid, but this is a matter for my right hon. Friend the Chancellor of the Exchequer. I accept the hon. Gentleman's concern about the long-term unemployed. I hope that he and his party will hack the new adult training programme, which aims to get the long-term unemployed back into work.
    Dr. Godman: At his proposed meeting with the chairman of the Manpower Services Commission later this month, will the Secretary of State discuss the case made by many community programme providers that there should be an increase in the average wage for those on community programme schemes? Is it not the case that, if these wages had risen at the rate of inflation, those on such schemes would be earning an average weekly wage of approximately £85, instead of the current wage of approximately £67?
    Mr. Fowler: The hon. Gentleman will understand that we are moving to a new system of payment in the adult training programme, which will come into being in the autumn. People will be paid a premium over and above their benefit entitlement, and for the first time, therefore, there will be an incentive to family men with children to come into the adult training programme.
    Mr. John Marshall: Does my right hon. Friend agree that the main hope for the long-term unemployed is an increase in job opportunities? Will he tell the House the increase in the number of people employed since 1983, and does he agree that one of the biggest menaces for job opportunities is unnecessary strikes in British industry?
    Mr. Fowler: Almost 1·5 million new jobs have been created. The House will agree with my hon. Friend's second point. A formidable industrial recovery has taken place in this country, but such advances will be put at risk if we go back to the appalling days of the 1970s when industrial strife reached its culmination in the winter of discontent of 1978–79.
    Mr. Boswell: Will my right hon. Friend assure the House that he will continue to refine the mechanisms for sorting out those who have genuine difficulty in finding work from those who are less intimately motivated to look for it?
    Mr. Fowler: As I said in reply to an earlier question, certainly in regard to availability for work, such checks will continue, but the purpose of the adult training programme is to provide good training opportunities for long-term unemployed people who, in many cases, have been out of work for many months and whom we want to bring back into work.
    Mr. Leighton: Has the Secretary of State yet had a chance to read the report of the Select Committee on Employment in the previous Parliament, which made recommendations which would have guaranteed a job to all long-term unemployed people?
    Mr. Fowler: I must confess that I have not gone through it in the detail that I would have liked, but, as I spent two hours with the Select Committee on Employment last week, I think that I am aware of the proposals that the Select Committee made then. I do not think that that particular proposal is practical. What is practical are the kind of opportunities that we shall be able to offer under the adult training programme. I hope that the Select Committee, of which the hon. Gentleman is Chairman, will give our adult training programme unanimous backing, just as the Manpower Services Commission did.
    Mr. Harry Greenway: How many of the long-term unemployed does my hon. Friend estimate to be virtually unemployable? Does he share my sense of congratulation that more of those eligible for employment are employed in Britain than in any other EEC country–66 per cent.?
    Mr. Fowler: It is extremely difficult, if not impossible, to make such an estimate, but, as my hon. Friend points out, it is certainly the case that in Britain a high percentage of the population are in work and that that bears good comparison with virtually all our European partners.
    Mr. Meacher: Is the Secretary of State aware that, contrary to the complacent assurances that he has given the House, the hard core of long-term unemployed who have been out of a job for over five years has trebled in the past three years and there are now well over 250,000 of them? Is he also aware that in the past year, when the number of short-term unemployed was falling, the number of long-term unemployed increased by over 20 per cent.? In view of that, since all else has failed, are the Government now proposing to use compulsion to take those people off the unemployment register?
    Mr. Fowler: We have already replied to the hon. Gentleman's point about compulsion, and we have emphasised that we have accepted the Manpower Services Commission's report on that. The number of those who have been unemployed for over five years has increased, and it is because of such developments that the new adult training programme is being put forward. I hope that the hon. Gentleman will recognise that unemployment in Britain has now come down dramatically, and it has come down in each of the past 18 months. The hon. Gentleman and the Opposition should acknowledge and praise that progress.

    Job Clubs
    Mr. Sackville: To ask the Secretary of State for Employment how many job clubs are now open.
    Mr. Lee: At 20 January 1988 there were 1,159 job clubs in operation.
    Mr. Sackville: Does my hon. Friend share the encouraging impression that I have received in Bolton, where six such schemes are now in operation, that those entering job clubs, who have often lost all hope of obtaining a job, within a few weeks recover the confidence
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    and motivation that they need for success in the job market? How many people have been referred to jobs or training as a direct result of job clubs?
    Mr. Lee: I am delighted that my hon. Friend shares the experience that I have found in talking to those in individual job clubs, of which I have visited many throughout Britain. This has been one of our most successful programmes. About 72 per cent. of participants in internal job clubs that we run, and about 62 per cent. of participants in external job clubs, have gone into work or training or on the enterprise allowance scheme—an excellent overall figure.
    Mr. Corbett: What contribution does the Minister expect the job clubs to make to getting unemployment down to the level at which it was when the Government took office?
    Mr. Lee: The job clubs are playing a part. I gave my hon. Friend. the Member for Bolton, West (Mr. Sackville) percentages, but in terms of absolute numbers about 45,000 people have been through our internal job clubs and nearly 30,000 have been through the external clubs. The percentages of those going to training or work are, as I said, 72 per cent. from the internal job clubs and 62 per cent. from the external ones. That is a substantial contribution.
    Mr. Bowis: Does my hon. Friend accept that the job clubs are widely welcomed by all who are looking for work? To what extent can he speed up the establishment of new job clubs? Does he accept that if those seeking higher paid employment could receive assistance to travel to interviews for those jobs, the job clubs would be even more successful than he has said they are?
    Mr. Lee: We certainly have some schemes to enable people to travel to interview if they live further than a certain distance from the potential vacancy. Our plan is to increase the number of job clubs from the 1,159 that we now have.
    Mr. Pike: Will the Minister accept that job clubs do not create real new jobs, that their achievements are illusory and that they do not get people back into real jobs?
    Mr. Lee: They provide a real job for the job club leaders, but, of course the hon. Gentleman is not right. The whole point about job clubs is that they try to bring people who are unemployed into the jobs and vacancies that are available. The figures that I have given to the House are extremely good and show the success of the programme.

    Accidents at Work
    Mr. Madel: To ask the Secretary of State for Employment if he is considering any additional measures to try to reduce accidents at the place of work; and if he will make a statement.
    Mr. Nicholls: These are matters for the Health and Safety Commission and Executive. My right hon. Friend has made available to it an additional f6·7 million for next year, which it will apply as it thinks best to further improvements in work-related safety and health.
    Mr. Madel: When will new regulations come into force on the use of chemical compounds and the monitoring of dust and fumes in factories? Will regulations come in which will reduce permitted noise levels in factories, bringing them down from 90 to 85 decibels?
    Mr. Nicholls: A consultative document on the COSHH regulations is now with the Health and Safety Executive. It is considering its position on the matter and will shortly report to Ministers. The Health and Safety Executive published a consultative document on noise regulations on 15 December 1987. Representations can be made until 30 June. As my hon. Friend said, the effect of that will be to implement the European directive.
    Mr. Heffer: Does the Minister agree that the construction industry has one of the worst records of accidents and deaths at work? Does he further agree that that is due to the growth in self-employment of lump labour in the construction industry? Is it not time that the Government took some action about that and began to increase the number of factory inspectors, instead of reducing their numbers as they have done over the past few years?
    Mr. Nicholls: I cannot agree with the hon. Gentleman's view of the virtues of self-employment or otherwise. Fatalities among employees at work are at an all-time record low. Factory inspectors' numbers will be increased by 60 in the current year. The number of inspectors as against the number of those who are to be inspected has remained roughly constant under this Government, as it did under the previous one.

    Chemical Industry
    Mr. Stern: To ask the Secretary of State for Employment if he will make a statement on employment trends in the chemical industry.
    Mr. Lee: Over the 12 months to September 1987 the number of employees in the chemical industry was unchanged at 339,000.
    Mr. Stern: Does my hon. Friend agree that the prospects arising for exports in the chemical industry during 1987, together with the on-going investment in it — particularly in my constituency—hold out a strong prospect for a further fall in unemployment through the creation of jobs in that industry this year?
    Mr. Lee: I agree with the general comments of my hon. Friend about the chemical industry. It has achieved significant increases in output and is our fourth largest manufacturing industry. But I make a general point to my hon. Friend and to the House, that we increasingly have to differentiate between the prosperity of manufacturing industry and the numbers actually employed in manufacturing.

    AIDS
    Mr. Strang: To ask the Secretary of State for Employment whether he will introduce legislation to protect those people who are HIV positive from discrimination at work.
    Mr. Nicholls: I have no plans to do so.
    Mr. Strang: Is the Minister aware that there are a number of recent cases which make it clear that employees can be dismissed for being HIV positive? Will the Government consider this again?
    Mr. Nicholls: I understand the hon. Gentleman's concern, but the two cases to which I believe he is referring
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    were not directly concerned with that matter. Indeed, an industrial tribunal will take a decision on its review of the facts and it is not directly a matter for Government.

  PRIME MINISTER

    Engagements
    Mr. Ieuan Wyn Jones: To ask the Prime Minister if she will list her official engagements for Tuesday 2 February.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others, including one with Chancellor Kohl. In addition to my duties in the House I shall be having further meetings later today.
    Mr. Jones: Will the Prime Minister find time today to look at a report in The Liverpool Daily Post, which confirms that district nurses in my constituency are using their free time to organise fund-raising activities to purchase medical equipment for the use of patients in their homes? Does that not demonstrate to the Government that, far from moonlighting, as suggested by the right hon. Member for Chingford (Mr. Tebbitt), nurses are concerned about cuts in the Health Service?
    Mr. Speaker: Briefly.
    Mr. Jones: Will the right hon. Lady give an assurance to the House that the nurses' pay award to be announced by the review body will be funded in full by the Government, with no strings attached?
    The Prime Minister: I have no doubt that the nurses in the hon. Gentleman's constituency are doing extremely well and are carrying out their duties to their patients. With regard to revenue provision for the Health Service, in the hon. Member's constituency in 1978–79—[HON MEMBERS: "Here we go."] Yes, here we go with the facts. The hon. Gentleman was complaining about revenue provision. In 1978–79 it was £19 million; in 1988–89 it will be £,58·1 million; an increase in real terms of 45 per cent.
    Mr. Soames: Will my right hon. Friend commend those nurses who tomorrow will stay at their posts and do their duty? Does she agree that the suggestion that a strike will not gravely damage patient care is dangerous nonsense?
    The Prime Minister: A strike would gravely damage the patients and increase the waiting lists, which we have been strenuously trying to get down and for which, in this financial year, there has been some £25 million allocated specially to get them down. Another £30 million has been allocated for next year especially to get waiting lists down. A strike would increase waiting lists. It would also increase the burden on the nurses who would not dream of striking because they would never desert their patients.
    Mr. Kinnock: When Mr. Trevor Clay of the Royal College of Nursing left the meeting with the Secretary of State yesterday he clearly had a strong impression that this year's pay award to the nurses would be fully funded by the Government. Will the Prime Minister tell us whether that impression was accurate—yes or no?
    The Prime Minister: There has been a statement — [HON. MEMBERS: "Yes or no."] — issued since by the Royal College of Nursing. The position is as follows. The

    849
    implementation of the review body's award comes under an undertaking given by Lord Carr, when he was in this House, when the Top Salaries Review Body was set up, together with the review bodies for the armed forces and for doctors and dentists. Lord Carr announced to the House that the Government would not modify their recommendations
    "unless there are clear and compelling reasons for … doing so".—[Official Report, 2 November 1970; Vol. 805, c. 672.]
    That has remained the practice. That is quite different from the funding of the implementation. The press statement by the Royal College of Nursing consists of four paragraphs, and I am quite happy to read out the whole lot.
    Mr. Faulds: Yes or no.
    The Prime Minister: The hon. Member should listen to what the press notice said. I had better read out the whole press statement by the Royal College of Nursing:
    "During the meeting between the Royal College of Nursing and the Secretary of State, he stated clearly that the nurses' pay award would be fully implemented 'unless there were clear and compelling reasons for the Government not to do so'.
    This is the language which has been used in the past when the awards have been interfered with or underfunded.
    The Royal College of Nursing fully understands that the Secretary of State cannot give a firm assurance on implementation and funding. This view is clearly reflected in a number of newspaper reports.
    The Royal College of Nursing does not believe that there can be any clear and compelling reasons for not implementing or fully funding the award in 1988."
    That is the full statement by the Royal College of Nursing, and that is the answer to the right hon. Gentleman's question.
    Mr. Kinnock: Given the number of nurses leaving the Health Service, the widespread dissatisfaction and the wide scale of public support for proper pay for nurses and full funding, will the Prime Minister tell us what in her opinion would be the clear and compelling reasons for not paying the nurses properly?
    The Prime Minister: I stand by the comments, remarks and traditional practices that we have already adhered to. The pledge given by Lord Carr and the practice to which the Government have adhered, which has led to increases in pay for nurses of the order of 30 per cent. in real terms, is in contrast to the right hon. Gentleman's record. In the five pay years between 1974–75 and 1978–79 Labour cut nurses' pay in real terms in four of those years.
    Mr. Kinnock: Just to be absolutely clear, is the Prime Minister saying to the nurses today that she will not offer an undertaking to make full funding of the nurses' pay award this year, just as she has never made full funding of nurses' pay awards?
    The Prime Minister: The right hon. Gentleman has asked this question in different terms three times. The answer is the same: that we have never undertaken to fund in full a pay award before we know what it is and what the structure is. Nevertheless, our total record on nurses' pay —[HON. MEMBERS: "Oh".]—is absolutely excellent, as I might remind him.
    Mr. Speaker: Order.
    The Prime Minister: A ward sister on the maximum of the basic scale under the Labour Government was paid £4,900 and is now paid £12,000. That is the result of the Government's stewardship.
    Mr. Dykes: Now that my right hon. Friend has fully, comprehensively and satisfactorily answered those points, does she agree that we can use Prime Minister's Question Time for other important subjects? Bearing in mind the United States' position, announced last night, on the Security Council resolution, does she agree that this is a disappointing decision by the United States in view of the importance of that resolution and the gradual approach of the international peace conference in the middle east?
    The Prime Minister: My hon. Friend knows that we support the resolution. My hon. Friend is aware that we have quite clearly come out in favour of an international conference as a framework conference within which bilateral negotiations should take place between King Hussein of Jordan and Israel. I hope one day that other people will come round to that viewpoint and it will make possible further negotiations, which are urgent.
    Mr. McKay: To ask the Prime Minister if she will list her official engagements for Tuesday 2 February.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. McKay: Will the right hon. Lady take into consideration the fact that the nurses down from Yorkshire today will listen very carefully to her failure to give clear and compelling reasons for not funding their increase and increasing underfunding? Is it not, in fact, in line with the fiddling of the payment of £8 for welfare benefits, where people are paid a single payment and not on each welfare benefit? That must be taken into account too.
    The Prime Minister: May I assure the hon. Gentleman that any clear and compelling reasons would not consist of the prices and incomes policy which hon. Members at present in opposition used to depress nurses' and doctors' pay year after year and, because of their economic stewardship, used to cut the National Health Service.
    Mr. Redwood: Does the Prime Minister agree that the position of the Health Service would be greatly improved if the Leader of the Opposition would categorically condemn strike action in the Health Service before we see the recommendations of the pay review body? Would she agree, further—[Interruption.]
    Mr. Speaker: Order. The hon. Gentleman must ask a question of the Prime Minister for which she has responsibility.
    Mr. Redwood: Would the Prime Minister in the course of her busy day think of a way of persuading the Leader of the Opposition—[HON. MEMBERS: "NO."]
    The Prime Minister rose—
    Mr. Speaker: Order. The Prime Minister must be asked questions on matters which are her responsibility, and for that, I am afraid, she has no responsibility.

    Westland
    Mr. Dalyell: To ask the Prime Minister, pursuant to her answer of 3 December 1987, Official Report, column 1100, what representations she has received seeking an amendment of the Public Record Acts so as to facilitate the early release of non-classified material relating to the Westland affair.
    The Prime Minister: None, so far as I am aware.
    Mr. Dalyell: Who brings the greater dishonour on Parliament? A Back-Bench Member who resorts to unparliamentary language, or a Head of Government who misuses a Law Officer's letter and then displays a shameless lack of candour about what she has done?
    The Prime Minister: I totally reject what the hon. Gentleman has said. The many, many statements and speeches that I made on the subject were checked meticulously with the records.
    Mr. David Shaw: Would my right hon. Friend agree that the ferry workers of Dover should not be—
    Mr. Speaker: Order.

    Engagements
    Mr. Tim Smith: To ask the Prime Minister if she will list her official engagements for Tuesday 2 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Smith: Is my right hon. Friend aware that, according to Trevor Clay, RCN members are being manipulated and intimidated by extreme Left-wingers, that strike vote meetings are being held which have no constitutional basis inside a union, and that at University College hospital RCN members were challenged by pickets at the door to state their points of view? Does not this despicable behaviour on the part of the hard Left show that they have no interest in the welfare either of the nurses or of the patients, but are cynically using both to further their own political ends?
    The Prime Minister: I find it astonishing that some of the nurses' unions should attempt to use a strike weapon at a time when there is a pay review body—which was
    852
    given to the nurses because they did not go on strike—sitting to consider how much they should be paid. I find it even more astonishing that right hon. and hon. Members of the Opposition do not utterly condemn the intimidatory tactics that Mr. Trevor Clay reported upon.
    Mr. Beith: What was yesterday's half per cent. rise in interest rates meant to signal, and to whom? Was it a warning that the Budget is going to be highly inflationary rather than one that will tackle the problems that have occupied the House this afternoon?
    The Prime Minister: I think that, as usual, the hon. Gentleman has got his economics upside down. The half per cent. increase in interest rates was decided on because we are determined to keep inflation down and not let it go up, as did the Government whom he supported.
    Mr. Thorne: To ask the Prime Minister if she will list her official engagements for Tuesday 2 February.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Thorne: Does my right hon. Friend not consider it hypocritical of those trade union leaders in the National Health Service who have criticised waiting lists in the Health Service in the past to encourage their members to go on strike now, thereby considerably lengthen waiting lists, to the detriment of patients and everybody else?
    The Prime Minister: All those who are interested in giving a better service to patients and shortening waiting lists must condemn the strike activities that we are witnessing now. Not only will they increase waiting lists, but they will put an increasing burden on people in organisations such as the Royal College of Nursing, who will not leave their posts. We should all be very grateful to the nurses who put the patients first.

Racal-Tacticom (PLO Contract)
3.32 pm
Mr. Bryan Gould(by private notice): To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the granting of an export licence for Racal-Tacticom for the sale of military radio equipment to the PLO.
The Parliamentary Under-Secretary of State for Corporate and Consumer Affairs (Mr. Francis Maude): It is not the practice to comment in detail on individual cases, but I have no evidence from the Department's records to suggest that such equipment was licensed for export to the PLO. In view of the allegiations, however, the matter is under investigation by the various Departments concerned.
Mr. Gould: Will the Under-Secretary assure the House that he will return to the House to give an account of the outcome of those investigations? Will he further assure the House that there have been no similar instances in other cases, and that they will not occur again? The Minister must be aware of the great concern that equipment of this sort might reach armed forces in South Africa, Argentina, parties to the Gulf war, and especially the Contras in Nicaragua. Will he guarantee that none of those has benefited in the past, or will benefit from similar mistakes by his Department?
Mr. Maude: I do not accept for a moment that a mistake has been made by the DTI, but investigations are being carried out to find out exactly what, if anything, untoward has happened. It is not clear by any means that something untoward has occurred.
We have a very good system in this country for ensuring that any exports of sensitive material are cleared in relation to their ultimate destination. Great care is taken by all Departments concerned before granting export licences for sensitive equipment. I believe that our system is as good as any.
More than 100,000 applications for export licences are made every year. Clearly it has not been possible to check through every one of those to see what has been going on.
Mr. Dennis Walters: Is not the position with regard to the PLO as stated by my noble Friend Lord Carrington when he was Foreign Secretary when he said that Her Majesty's Government did not regard the PLO as a terrorist organisation? In the circumstances, what is all the fuss about? It is not as if we were supplying truncheons to Mr. Rabin to break the bones of Palestinian civilians.
Mr. Maude: I hear what my hon. Friend says, but clearly we would not do anything to enhance the capability of any element within the PLO to carry out acts of violence. I stress again that any application to export sensitive military equipment is cleared by all of the relevant Departments of Government, including the Foreign and Commonwealth Office and the Ministry of Defence.
Mr. Greville Janner: Does the Minister accept the accuracy of the statement that was put out by 10 Downing street on Sunday, that certain elements in the PLO have an appalling terrorist record? Bearing that in mind, and that there is an embargo on the sale of military equipment to Israel, which some of us deplore,
854
can he give an assurance that no arms or other military or sensitive equipment will go to the PLO with the knowledge and consent of Her Majesty's Government?
Mr. Maude: I can certainly give the hon. and learned Gentleman the assurance that we have no evidence from our records to suggest that any items of that sort have gone to the PLO. However, we need to continue our investigations because allegations have been made in pubic newspapers and we want to know exactly what lies behind them. If anyone has any papers which controvert what I have said to the House, I should be grateful if he would produce them.
Mr. Andrew MacKay: Is my hon. Friend aware that Racal, which has its headquarters in my constituency and has a distinguished record of exporting all over the world, has a clear policy of not selling to any overseas country or overseas political organisation without the full consent of Her Majesty's Government?
Mr. Maude: I hear what my hon. Friend says, and I am sure that that is right.
Mr. James Wallace: Will the Minister state what steps his Department takes to ensure that, as he said, the ultimate destination is properly and accurately recorded on applications and that the items subsequently go to that destination? Will he also state whether the equipment that we are discussing falls into the category of lethal or non-lethal equipment for those purposes?
Mr. Maude: The type of equipment that we are talking about has not been made absolutely clear. The sort of equipment that has been described in some of the newspaper reports is not the same as the broad description in the question put to me at the outset by the hon. Member for Dagenham (Mr. Gould). For sensitive military equipment, information of various sorts has to be provided about its ultimate destination and proposed use. The handling of export licence applications varies according to the type of goods and their proposed destination. Sensitive items are considered by all the relevant Departments, including the Ministry of Defence and the Foreign Office. It is not possible to have an absolutely foolproof system which makes it clear beyond the peradventure of a doubt that the items go to their stated destination. However, we do everything humanly possible to ensure that that is the case.
Mr. Tony Marlow: Given the level of state terrorism being meted out daily by the Israeli authorities on innocent Palestinians, and given the public perception that in current affairs in that part of the world the Israelis are very much cast in the role of the baddies, is there anything wrong in allowing the Palestinians to have equipment which we would allow the Israelis to have?
Mr. Maude: I hear what my hon. Friend says, but I cannot get involved in that. My Department is concerned solely with the granting of export licences and we clear those applications, through the Government, in the usual way in the appropriate Departments.
Mr. D. N. Campbell-Savours: What is the Government's attitude to Members of Parliament of all political persuasions, including Conservative Members and hon. Members who are now Ministers, who have made visits to the middle east that have been sponsored by the PLO—
Mr. Speaker: Order. That is very wide of this question which I should not have thought had anything to do with it.
Mr. Ivan Lawrence: Can my hon. Friend say unequivocally that there is no intention on the part of Her Majesty's Government to allow the sale of arms to the PLO?
Mr. Maude: I say what I said before—that we would do nothing that would enhance the capability of any element within the PLO to carry out acts of violence.
Mr. Andrew Faulds: If the proscription of such equipment being supplied to liberation movements such as the PLO, the ANC and SWAPO is to be morally valid, why should not the supply of such equipment to countries that practise state terrorism, such as Israel against the Palestinians, South Africa against her own people and the United States against Nicaraguans, be proscribed for those countries? In view of the appalling conduct of the Israeli Army, should not Israel's shameless apologists adopt a somewhat more contrite and lower profile on this issue?
Mr. Maude: The hon. Gentleman has raised a number of wide-ranging issues which are certainly beyond my responsibilities and those of my Department. If he pursues them in the usual way, no doubt he will receive a satisfactory answer.
Mr. Robert Adley: Can my hon. Friend explain the logic of those who oppose the supply of arms or anything else to the PLO, which is opposing the state terrorism of Israel in the middle east, while at the same time supporting the supply of arms to the Afghan rebels who are opposing the state terrorism of the Soviet Union in their country?
Mr. Maude: My hon. Friend airs his point of view. It is interesting and useful, but I cannot add to what I have said already.
Mr. Eric S. Heffer: I oppose the sale of arms by the British Government to any country. Is it not clear that there has been Israeli terrorism against Britain in the past, and that the real issue is whether we are in favour of the Palestinian people having their own homeland and their own state? Should not this Government, and every other progressive Government, be concentrating on that issue?
Mr. Speaker: Order. That is very wide of the question. This is a private notice question and not an extension of Question Time.

Sri Lankan Tamils (Deportation)
3.41 pm
Mr. Jeremy Corbyn: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the decision of the Home Secretary to deport six Sri Lankan Tamils from Britain."
This is a serious and important matter. Yesterday the Home Secretary sent a letter to the solicitors acting on behalf of six Sri Lankan Tamils who sought political asylum in Britain to the effect that he now intends to deport them back to Sri Lanka because he considers the situation there to be safe. The situation in Sri Lanka is not safe. Many Tamils are still being killed because of the communal disturbances there. Many Tamils have lost family. Many of my constituents have lost family in Sri Lanka.
An additional consequence of the Home Secretary's decision is that a further 2,300 Tamil people with temporary exceptional leave to remain in Britain are threatened with removal under his decision. It is wrong that such a decision should be made known only by letter and not by a statement to Parliament. It is doubly wrong because the organisations with the best knowledge and ability in regard to Sri Lanka are opposed to that decision. Amnesty International and the United Nations High Commissioner for Refugees are concerned about it.
The Home Secretary appears to be trying to run a regime that is the worst in Europe in regard to asylum applications. He is turning his back on the safety of those people and insisting that they be removed from Britain. The matter is urgent and important on humanitarian and legal grounds. It is incumbent on the House to discuss the plight of refugees and demand that the Home Secretary, instead of hiding behind his office and writing letters, comes clean and explains to the House why he has taken such an inhuman attitude towards these sad and desperate people.
Mr. Speaker: The hon. Member for Islington, North (Mr. Corbyn) seeks leave to move the Adjournment of the House, under Standing Order No. 20, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the decision of the Home Secretary to reject the asylum applications of six Sri Lankan Tamils."
I have listened with care to what the hon. Member has said, but I regret that I do not consider the matter that he has raised to be appropriate for discussion under Standing Order No. 20. I cannot therefore submit his application to the House. However, I hope that he may find other legitimate ways of raising the matter in the House.

Points of Order
3.43 pm
Mrs. Alice Mahon rose—
Hon. Members: A point of order.
Mr. Speaker: Order. I can see without any help.
Mrs. Mahon: Today I was contacted by the parents of a two-month old constituent who was not able to have a vital heart operation at Killingbeck hospital.
Mr. Speaker: Order. It is a little unfair of the hon. Lady to raise this matter. She may have been informed about it today, but the event took place last Wednesday. The hon. Lady must find legitimate ways to bring the matter before the House, not by way of a point of order.
Ms. Joan Walley: On a point of order, Mr. Speaker. As a new Member of Parliament, I should be grateful if you could advise me on how it might be possible through parliamentary procedure to raise the important point that throughout the country there is support for an extra 2p on tax being put towards the National Health Service.
Mr. Speaker: If the hon. Lady would like to come and see me one evening with a friend, I should be delighted to tell her.
Mr. Eric S. Heifer: On a point of order, Mr. Speaker. My hon. Friend the Member for Halifax (Mrs. Mahon) had not progressed very far in her point before you intervened, Mr. Speaker. Would it not be right for you, Mr. Speaker, at least to hear my hon. Friend's point of order before intervening? My hon. Friend may have been asking whether she could raise a debate in the House and how should she do that. You did not give her that chance.
Mr. Speaker: I do know about this. Has the hon. Member for Liverpool, Walton (Mr. Heffer) asked his hon. Friend the Member for Halifax (Mrs. Mahon) whether she has received any advice about the matter?
Mrs. Mahon rose—
Mr. Dennis Skinner: Further to that point of order, Mr. Speaker. We have relatively new hon. Members in the Chamber who have been here for only six months, who have never raised a point of order—or very few—and certainly have never made a Standing Order No. 20 application. These matters can be more than a little difficult for such Members. Sometimes they make their representations to you, Mr. Speaker, and others to try to raise a matter. Some of us know that my hon. Friend the Member for Halifax (Mrs. Mahon) was concerned about the plight of a baby who had been in hospital and was subsequently refused admission—
Mr. Speaker: Order. I do not need any help. I know more about this matter than the hon. Member for Bolsover (Mr. Skinner). I accept that hon. Members who have not been Members for very long need a little guidance and advice. I am always willing and prepared to give it, and in this case I did give it.
Mrs. Mahon: On a point of order, Mr. Speaker.
Mr. Speaker: No.
Mrs. Mahon: Disgraceful.
Mr. Heffer: It is disgraceful.
Ms. Marjorie Mowlam: On a point of order, Mr. Speaker. As a new Member of Parliament, and without having an evening engagement with you, will you advise me about how to raise the question of the Confederation of Health Service Employees' National Health charter that was launched today?
Mr. Speaker: The hon. Lady does not need to seek advice from me on that matter.
Mrs. Mahon rose—
Mr. Speaker: Order. This is an abuse of our proceedings.
Mr. Heifer: It is your abuse.
Mr. Speaker: That is reprehensible of the hon. Gentleman, who knows nothing about the background to this matter—or perhaps he does.
Mrs. Mahon rose—
Mr. Speaker: Order. So that there will be no mystery about this, I must tell the hon. Lady that I was unable to accept her application for a Standing Order No. 20 debate because in her letter to me she said that she was raising the matter of an operation that was cancelled last Wednesday. If the hon. Lady consults Standing Order No. 20 —which binds me and all other hon. Members—she will discover that the matter to be raised must be urgent, specific and important and must be raised at the first opportunity. The hon. Lady may have only just heard about it, but the truth is that nearly a week has passed. I can only go by what the hon. Lady states in her application.
Mr. Jeremy Corbyn rose—
Mr. John Battle rose—
Mr. Speaker: Very well—
Mr. Corbyn: Him or me?
Mr. Speaker: Him.
Mr. Battle: Further to that point of order, Mr. Speaker. As a relatively new Member of Parliament, may I state that, as I have listened to you this afternoon, I have become increasingly confused about what Standing Order No. 20 refers to. If it is not urgent and specific to raise the case of a child needing an operation—
Mr. Speaker: Order. Let me say to the whole House that when I was chosen to be your Speaker I was expected to ensure that our Standing Orders were kept. I am doing that today. I do not think that the hon. Members who are rising now would wish the Speaker to bend the Standing Orders. I cannot do that.
I am afraid that I have said more than I wanted to say, but, as the matter has been raised in this way, let me repeat that the hon. Member for Halifax (Mrs. Mahon) has been to see me. The position has been fully explained to her, and she has been advised what she can do about it. I have sought to help her, but I cannot allow her to raise the matter by way of a point of order.
Several Hon. Members rose—
Mr. Speaker: Order. I am not prepared to take any more points of order on this matter.
Several Hon. Members rose—
Mr. Speaker: Order. I am not prepared to take any more points of order on this.

Personal Income (Ending of Higher Rate Taxation)
3.50 pm
Sir Brandon Rhys Williams: I beg to move,
That leave be given to bring in a Bill to end the taxation of personal income at higher than standard rate.
On a number of occasions the House has allowed me to introduce a Bill under our old-established First Reading procedure, which afterwards has been put into effect by the Government. I hope that this may be another such occasion.
At this time of year the attention of hon. Members is particularly directed to matters of taxation. It is the particular responsibility of the House of Commons to resist taxation which is arbitrary, unfair or adverse to the health of the economy.
I think that the House knows that I am concerned that we have so many millions of people at the lower end of the income scale who are inhibited from working and saving, for the good of themselves and the economy as a whole, by our obsolete and unpopular system of income support. I believe in Sir Winston Churchill's policy that we should ensure that every citizen has an adequate basic income, but that above that level every citizen—male and female—should be encouraged to rise as high as they can.
I believe that it is quite wrong to use the system of taxation and benefit in such a way as to inhibit effort and thrift at any level of society. I have accordingly written to my right hon. Friend the Chancellor to suggest that in his Budget he should end the long-term capital gains tax; that he should reform the transfer-and-inheritance tax so that no one incurs a capital levy at a higher rate than the standard rate of income tax; and, in particular, that he should take this opportunity to end the higher rate taxes on income altogether.
It is wrong in principle to use the tax system to punish success. The British economy is not so successful that we can afford to restrain our most active entrepreneurs, or to drive them offshore. The countries of the Pacific area are streaking ahead of us. We cannot allow that situation to continue; but we should ask ourselves why. It is not because the British people have become inert or incompetent, but we do have systems which are inhibiting the growth of the economy, and they need urgent attention.
Higher rate tax was introduced in 1909. The 80 years that have followed have been years of relative economic decline for this country. The yield of personal tax, if the higher rates were abolished, would soon increase to overcome the possible loss of 1 or 2 per cent. of total revenue which might occur in the first year. Everyone in Britain would stand to gain from the reform, from the highest to the lowest, if the economy were set free to grow faster.
I would not be seeking leave to bring in this Bill if there were anyone in Britain who would suffer from it —except, of course, the armies of professional people who advise on tax avoidance. They could well be turning their agile minds to something more constructive. The higher rate tax is a survival of class-war attitudes which have no place in modern Britain; the reform that I am suggesting is one from which everyone would gain and no one would lose.
860
We know what is needed to make a free enterprise capitalist economy really fruitful. All that we need is the will power to do it. I have written accordingly to my right hon. Friend the Chancellor of the Exchequer as follows:
"The vigour of the people who are capable of earning the highest incomes and the discernment of the most far-seeing investors are the most precious assets of the economy. It is senseless to weaken their motivation and diminish their effectiveness by incorporating a discriminatory punitive mechanism in the tax system. Even if the sole object were to raise revenue, it would in a short time prove to be better attained by removing the limitations on the most active entrepreneurs, rather than by forcing them to adopt time-consuming tax avoidance routines or to take their energies and fortunes abroad. Britain should be a tax haven for its own citizens and a magnet for the best brains of other countries."
I believe that the extreme simplification of the taxation and benefit system, for ease of comprehension and administration in the private as well as in the public sector, should be a major Treasury objective in its own right. Computers now make that possible, but I would prefer that everyone should be able to calculate their tax bill in their heads.
At present the national insurance contribution raises the marginal rate of tax for the majority of earners to 36 per cent. I would like therefore to suggest that the new standard rate of tax should include the national insurance contribution and should be set at not more than 35 per cent. I believe that that would be in line with other countries that are also contemplating considerable reductions in the higher rates of taxation for their citizens. There should be suitable exemptions to compensate those people whose investment income is not large enough to make them liable for higher rates of tax.
I hope that the House will see the logic of what I am suggesting and that my Bill will not be opposed. If there is a Division, I trust that there are enough true Thatcherites here to enable me to carry my Bill.
3.57 pm
Mr. John Battle: I do not really want to make a speech on this matter, but I wish to divide the House.
I find it strange that the hon. Member for Kensington (Sir B. Rhys Williams) is seeking to introduce this Bill yin the light of his previous comments on child benefit when there was some consensus.
I believe that the proposed Bill would clearly signal the time when the tax system increasingly favoured the rich. For those who have a good job the effect of the Bill wound be that they would be rewarded even more, but those with low-paid, part-time jobs would have to work even harder for even less. In other words, the tax system is clearly stacked in favour of the rich. The wealthier will get wealthier—as they do now—and the Bill will perpetuate that situation. Therefore, with the leave of the House, I seek to divide the House on this issue.
Question put, pursuant to Standing Order No. 19 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business)
The House divided: Ayes 58, Noes 180.

Division No. 160]

[4 pm

AYES

Alexander, Richard

Bevan, David Gilroy

Arbuthnot, James

Biggs-Davison, Sir John

Ashby, David

Blackburn, Dr John G.

Aspinwall, Jack

Bonsor, Sir Nicholas

Bennett, Nicholas (Pembroke)

Boswell, Tim

861

Boyson, Rt Hon Dr Sir Rhodes

Montgomery, Sir Fergus

Burns, Simon

Moss, Malcolm

Carrington, Matthew

Paice, James

Coombs, Anthony (Wyre F'rest)

Powell, William (Corby)

Coombs, Simon (Swindon)

Rathbone, Tim

Davies, Q. (Stamf'd & Spald'g)

Redwood, John

Dickens, Geoffrey

Riddick, Graham

Dicks, Terry

Rost, Peter

Dover, Den

Shaw, David (Dover)

Evans, David (Welwyn Hatf'd)

Skeet, Sir Trevor

Fookes, Miss Janet

Smith, Tim (Beaconsfield)

Gill, Christopher

Speed, Keith

Gorman, Mrs Teresa

Stanbrook, Ivor

Griffiths, Peter (Portsmouth N)

Stewart, Allan (Eastwood)

Hunter, Andrew

Taylor, Ian (Esher)

Janman, Timothy

Walker, Bill (T'side North)

Jones, Gwilym (Cardiff N)

Warren, Kenneth

Jones, Robert B (Herts W)

Wheeler, John

Kellett-Bowman, Dame Elaine

Widdecombe, Miss Ann

Kilfedder, James

Wiggin, Jerry

Knight, Dame Jill (Edgbaston)

Wilkinson, John

Lawrence, Ivan

Woodcock, Mike

Mans, Keith

Marlow, Tony

Tellers for the Ayes:

Marshall, John (Hendon S)

Sir Brandon Rhys Williams

Mitchell, Andrew (Gedling)

and Mr. Edward Leigh.

NOES

Abbott, Ms Diane

Cook, Frank (Stockton N)

Adams, Allen (Paisley N)

Corbett, Robin

Allen, Graham

Corbyn, Jeremy

Alton, David

Cox, Tom

Archer, Rt Hon Peter

Crowther, Stan

Armstrong, Ms Hilary

Cryer, Bob

Ashdown, Paddy

Cummings, J.

Ashton, Joe

Cunliffe, Lawrence

Banks, Tony (Newham NW)

Dalyell, Tam

Barron, Kevin

Davies, Ron (Caerphilly)

Battle, John

Day, Stephen

Beith, A. J.

Dewar, Donald

Benn, Rt Hon Tony

Dixon, Don

Bennett, A. F. (D'nt'n & R'dish)

Doran, Frank

Bermingham, Gerald

Duffy, A. E. P.

Blunkett, David

Dunnachie, James

Boyes, Roland

Dunwoody, Hon Mrs Gwyneth

Bradley, Keith

Eadie, Alexander

Brazier, Julian

Eastham, Ken

Brown, Nicholas (Newcastle E)

Ewing, Mrs Margaret (Moray)

Bruce, Malcolm (Gordon)

Fatchett, Derek

Buckley, George

Fearn, Ronald

Caborn, Richard

Fields, Terry (L'pool B G'n)

Callaghan, Jim

Fisher, Mark

Campbell, Menzies (Fife NE)

Flannery, Martin

Campbell, Ron (Blyth Valley)

Forth, Eric

Campbell-Savours, D. N.

Foulkes, George

Canavan, Dennis

French, Douglas

Carlile, Alex (Mont'g)

Fyfe, Mrs Maria

Clark, Dr David (S Shields)

Galbraith, Samuel

Clarke, Tom (Monklands W)

Galloway, George

Clay, Bob

Garrett, John (Norwich South)

Clwyd, Mrs Ann

Garrett, Ted (Wallsend)

Coleman, Donald

Godman, Dr Norman A.

862

Golding, Mrs Llin

Mowlam, Marjorie

Gordon, Ms Mildred

Mullin, Chris

Gould, Bryan

Murphy, Paul

Graham, Thomas

Nellist, Dave

Grant, Bernie (Tottenham)

Nicholson, David (Taunton)

Griffiths, Win (Bridgend)

O'Brien, William

Grocott, Bruce

O'Neill, Martin

Hargreaves, A. (B'ham H'll Gr')

Parry, Robert

Harman, Ms Harriet

Patchett, Terry

Hattersley, Rt Hon Roy

Pendry, Tom

Haynes, Frank

Pike, Peter

Heffer, Eric S.

Powell, Ray (Ogmore)

Henderson, Douglas

Primarolo, Ms Dawn

Hinchliffe, David

Quin, Ms Joyce

Hood, James

Redmond, Martin

Howarth, George (Knowsley N)

Rees, Rt Hon Merlyn

Howells, Geraint

Richardson, Ms Jo

Hughes, John (Coventry NE)

Roberts, Allan (Bootle)

Hughes, Robert (Aberdeen N)

Rogers, Allan

Hughes, Roy (Newport E)

Ross, Ernie (Dundee W)

Hughes, Sean (Knowsley S)

Ruddock, Ms Joan

Hughes, Simon (Southwark)

Salmond, Alex

Illsley, Eric

Sedgemore, Brian

Ingram, Adam

Sheerman, Barry

Jack, Michael

Sheldon, Rt Hon Robert

Janner, Greville

Short, Clare

Jones, Martyn (Clwyd S W)

Skinner, Dennis

Kaufman, Rt Hon Gerald

Smith, Andrew (Oxford E)

Kirkwood, Archy

Smith, Cyril (Rochdale)

Lambie, David

Smith, Rt Hon J. (Monk'ds E)

Lamond, James

Soley, Clive

Leadbitter, Ted

Spearing, Nigel

Lewis, Terry

Steel, Rt Hon David

Litherland, Robert

Steinberg, Gerald

Livsey, Richard

Stott, Roger

Lloyd, Tony (Stratford)

Strang, Gavin

Lofthouse, Geoffrey

Straw, Jack

McAllion, John

Taylor, Mrs Ann (Dewsbury)

McAvoy, Tom

Taylor, Matthew (Truro)

McFall, John

Tredinnick, David

McGrady, E. K.

Turner, Dennis

McKay, Allen (Penistone)

Vaz, Keith

McKelvey, William

Wall, Pat

McTaggart, Bob

Wallace, James

Madden, Max

Walley, Ms Joan

Mahon, Mrs Alice

Wardell, Gareth (Gower)

Marek, Dr John

Welsh, Michael (Doncaster N)

Marshall, Jim (Leicester S)

Williams, Alan W. (Carm'then)

Martlew, Eric

Wilson, Brian

Meacher, Michael

Winnick, David

Meale, Alan

Wise, Mrs Audrey

Michael, Alun

Worthington, Anthony

Michie, Bill (Sheffield Heeley)

Wray, James

Michie, Mrs Ray (Arg'l & Bute)

Young, David (Bolton SE)

Millan, Rt Hon Bruce

Moonie, Dr Lewis

Tellers for the Noes:

Morgan, Rhodri

Mr. Harry Barnes and

Morley, Elliott

Mr. Harry Ewing.

Question accordingly negatived.

Public Utility Transfers and Water Charges Bill
As amended (in the Standing Committee), considered.
Public Utility Transfers and Water Charges Bill
  New Clause 1

    INTERESTS OF CONSUMERS PRIOR TO TRIALS
    '(1) Prior to the commencement of all water metering trials, representatives of water undertakers shall contact all households and explain to them the nature of the trials and the rights the household has under existing consumer law and any other matter determined by this Act.
    (2) The contact with the householder can be by telephone or visit.
    (3) Trials shall not commence until all households in the trial scheme have been contacted.
    (4) Should any household not have been contacted prior to the commencement of the trial, then that household shall have the right not to take part by notifying the water undertaker of their intention. This right shall be indicated to the households in writing one week before the trials commence and the householders shall be given one week to notify the water undertakers.'.
    Brought up, and read the First time—[Mr. Boyes.]
    Mr. Speaker: With this it will be convenient to take new clause 3—
    Provisions relating to redress for consumers etc.
    '(1) During the period of a metering trial scheme, a person subject to a charge from a water undertaker, under the latter's powers, conferred under this Act or under any other enactment shall be entitled to redress in the form of financial compensation if—

    (a) that person's water supply falls below the standard as set by the EEC;

    (b) the supply of water to that person is cut off for a period of a minimum of 12 hours resulting from circumstances which are in no way attributable to that person; and

    (c) the drainage of sewerage from the residence of that person is rendered inadequate so as to interfere with that person's enjoyment of his residence.';

    and amendment No. 4, in clause 4, page 5, line 34, at end insert
    'and consumer bodies representing their interests'.
    4.8 pm
    Mr. Roland Boyes: I beg to move, That the clause be read a Second time.
    We are now entering the final stages of a shoddy and undesirable Bill. It provides for trials to take place in the use of water meters so that water is charged for by consumption rather than by rateable value. The Bill has not provided for any consultation with the people who will take part in the trials; they will have no choice in the matter. Even if they do not consent to participate, the premises may he entered by force.
    For many years, it has been possible for households to opt freely for water meters. When requested, they are fitted by the water undertakers. However, the data available show that only 0·67 per cent of domestic users –126,000 out of 18,000,737 households—have taken the opportunity. That hardly proves that there is a demand for universal water metering. Furthermore, it shows that the Bill is unnecessary because the metering facility that it seeks to test is already available. In addition, a number of reports on the advantages and disadvantages of water metering have been prepared, both in this country and abroad. All this suggests that the further trials have nothing to do with the interests of the consumer.
    864
    Opposition Members have spoken to a number of people who have argued strongly against the introduction of meters, principally because it will result in increased water costs for many people on low incomes. Those particularly affected will be large families and those who work in dirty conditions and have abnormally large washing and laundry needs. People are also concerned about the group of people who will worry greatly about using water if it is metered. We all know of elderly people who sit in the dark or do not switch on their electric heaters because they fear large bills. Exactly the same people will worry about running the bath or flushing the lavatory.
    On 2 June 1986, Rosemary Collins reported in The Guardian on the national conference of water consumer consultative committees. She said that the delegates were almost unanimous in their dislike of compulsory metering. They thought that, in areas of high unemployment, metering would lead to a woman with six children bathing them all once a week and pulling the chain once every four days and that the implications for public health were frightening.
    That point of view was supported by an editorial in the Western Mail on 16 May 1986:
    "many large families, supported by only one income earner, are liable to be heavily hit badly if metering is made obligatory. This, along with the fear that pensioners would economise on the use of water to the detriment of health and hygiene, is one of the objections now advanced by the consumer council."
    It is clear that there is no interest in, or support for, the Bill among the consumer organisations.
    Normanton is one of the areas in which trials will take place. My hon. Friend the Member for Normanton (Mr. O'Brien) is the only hon. Member who served on the Standing Committe in whose patch a trial is due to take place. Not one of the 10 Conservative Members in whose constituencies trials are to take place saw his way to serving on the Committee. That is curious, and it is equally curious, given that the trials are supposed to be conducted scientifically, that 10 of the 11 constituencies to be used are Conservative constituencies. I presume that the Government wished to reduce the number of complaints from Members of Parliament. That is the only conclusion that we can draw.
    Midweek Extra, the local newspaper that circulates in the constituency of my hon. Friend the Member for Normanton, recently carried the headline:
    "Residents plan water 'lock-out'. Meter trials under threat."
    The article states:
    "Normanton residents are threatening to refuse Yorkshire Water Authority access to their homes to instal water meters.
    Around 750 homes in the Queen Elizabeth Drive and Warmfield areas of Normanton have been chosen to take part in water metering trials over an estimated three years.
    However local district councillor Paul Barrett claims people are talking among themselves about refusing workmen access to instal the necessary equipment."
    The interests of the consumer are not the interests of the Government. The Government are treating the consumer shoddily in peddling this Bill.
    4.15 pm
    In Committee, Opposition Members argued strenuously and at length on behalf of the consumer, who has been largely ignored by the Government. On all occasions, we showed that our amendments were designed to safeguard the interests of the consumer taking part in

    865
    water trials and, in the longer term, of all those who may be subject to the introduction of compulsory water metering.
    We know that the real purpose of the trials has nothing to do with the interests of consumers. They are designed to determine and establish the conditions that will prevent consumers from opting out. We spent 75 hours or more in Committee questioning the Minister about how he would measure the results and what result would lead the Government to make a firm decision to introduce compulsory metering or abandon the idea completely. At this last opportunity, I ask him that question again. Perhaps he will come up with a comprehensive reply. If the experiment cannot fail, it is not an experiment.
    The new clauses and the amendment are an extension of our argument for more consumer rights. That means rights before, during and after the trials take place. Incidentally, it also means rights for Members of Parliament. Before the Committee stage the Water Companies Association circulated an astonishing letter, and it is important that its contents should be on the record. It was dated 21 August 1987 and was marked "confidential":
    "It is understood that Ministers are nervous about the passage of the Public Utility Transfers and Water Charges Bill through Parliament (especially through the Lords). As a result you are asked in particular not to give MPs, the press or the public the impression that:

    (a) it is a foregone conclusion that compulsory trials will take place;

    (b) the areas have already been selected and cannot be altered; and

    (c) whatever the outcome of the trials, universal metering will be introduced."

    I am sure that you, Mr. Speaker, as the guardian of this House, will agree that it is drastically wrong, and undesirable, for people to write letters which say that hon. Members must be denied information.
    Opposition Members believe that every household taking part in the trials should be aware of its rights under existing consumer law before the trials begin. This should be achieved by the water undertakers contacting the consumer directly — preferably by visit or, if that is inconvenient for the consumer, by telephone. The right of the consumer to question the water undertaker, to have the meter explained in detail and to express an opinion should be fundamental to the trial process. That is vital because many people cannot understand, and are frightened by, the mumbo jumbo of official letters. Equally, the small print of the exclusion clauses must be carefully explained because they are worded in jargon understandable only to a small number of specialists.
    We believe that an exercise of properly informing consumers before the trials begin is an absolute necessity. New clause 1 prevents trials from taking place until every household has been fully informed and its members have had their rights explained to them. The very least that the Government can do is to promise to instruct water undertakers involved in the trials to ensure that every household taking part knows its rights. Until that has been done, the trials have no right to start and they should be delayed until that exercise has been completed. If a householder is not contacted, he should have the legal right to opt out of these squalid, unnecessary, undesirable and unwanted trials.
    Ms. Joan Walley: I rise in support of new clause 1. The main purpose of the new clause is to make it clear that water is basic to public health and that, for far too long, we have taken water supplies for granted. In view of the proposed poll tax, there is an urgent need to provide an alternative way of charging for water and metering appears to have become that alternative.
    The Bill proposes to introduce compulsory water metering in selected areas. We have considered the Bill over the past few weeks and it has become clear that consumer protection and consumer rights will not be safeguarded when compulsory meters are installed. The money which will be invested in water meters could be much better invested in ensuring safer and purer water supplies and in dealing with nitrate and nitrite problems. Although water meters will be compulsorily introduced only in experimental areas, when the proposals for privatisation, rather than nationalisation, of the water industry come before the House, consumer rights will become a much more important issue as water consumers will have to pay much higher charges on the basis of volume of water used.
    For all these reasons, it is more important than ever to have a proper consumers' charter. Under the provisions of new clause 1, consumers will be better safeguarded and will have a better chance to ensure that the amount they pay for their water is correct. It will also give them the right to check on the quality of the water coming through the taps into their homes.
    My hon. Friend the Member for Houghton and Washington (Mr. Boyes) drew attention to the many families who will be seriously affected because they will be unable to afford baths and to use all the water facilities in their homes. Like many gas and electricity consumers, water consumers, without proper safeguards, will not get proper service. We should support the new clauses in the hope of safeguarding consumer interests.
    Mr. Doug Henderson: I am grateful for the opportunity to endorse the comments of my hon. Friends the Members for Houghton and Washington (Mr. Boyes) and for Stoke-on-Trent, North (Ms. Walley).
    In Committee, the Minister was at pains to show how open and informative he wanted to be in presenting his case for selling off the water industry. I hope that he will recall that and will accept that new clause 1 can add to the coherence of the Bill. I hope that he will recognise that it is unreasonable to make major changes to an essential household utility without fully informing the residents of the household. I hope that he will understand that it is natural for people to worry about changes that might be made to their domestic set-up. It is a worrying prospect for people to have a meter installed in their homes. Like me, I am sure that the Minister and Conservative Members have constituents who will fret for weeks at the prospect of having their water cut off while a meter is installed, perhaps in a very cold part of the winter.
    There was a recent case of this in my constituency concerning the residents of Westwood road in the Brunton park estate. Those residents got in touch with me to express their concern about matters involving the water board. According to street gossip, the street and gardens would be dug up and water would be cut off in the middle of winter. Some residents claimed that they did not know

    867
    why the the water board wanted to do that. They were not sure whether special arrangements had been made to provide water storage or supplies on very cold days. I contacted the Newcastle and Gateshead Water Company which told me that, because of corrosion in pipes, 100m. sections had to be removed before a new lining could be installed, and that this process could take up to 30 hours.
    The water company also confirmed that residents would be warned in advance. It confirmed that special arrangements could be made to advise people how to store water and that board personnel would be available to assist elderly residents who could not carry water to the place where it was needed or prepare for water storage before the water was cut off. I do not know whether the Newcastle and Gateshead Water Company publicised properly what it intended to do in this case. I suspect that it did its best to advise people, but it has emerged from my investigation that the residents did not understand what was about to happen. No matter how hard the water board had tried to inform people, the message had not got across.
    It would be most alarming if a similar situation were to arise when water meter trials take place. The example I have cited and other examples which my hon. Friends will be able to cite show the need for individual contact with consumers. I relate my remarks specifically to new clause 1(2) where we refer to telephone contact or individual contact. I should prefer individual contact. I am not sure whether it is proper to pick up the phone and get in touch with people throughout an area. Some people may be alarmed by that approach. It would be better to have individual contact via a water board officer.
    Consumers will want to know how long they will be without water when the meters are installed. They will want to know where the meters will be fitted. We heard in Committee that there are several options and that meters can be fixed at the gate or at least two other places in domestic premises. Many consumers will say, "The water board may know where it wants to install the meter, but will I have a choice?" Consumers will also want to know what happens if their decorations are damaged when the meter is installed. Who would be responsible for putting right the damage? Would the water board be responsible or would people be expected to do it themselves?
    We have heard from my hon. Friend the Member for Houghton and Washington about some consumers in Normanton being so much in the dark that they might refuse access to board officials. Whatever our views on the desirability of installing water meters, no hon. Member would want that to happen. Consumers will inevitably want to ask whether there will be a mess. I must be careful not to make a sexist point, but we all have mothers and grandmothers who will want a cast-iron guarantee from the water board, as they would from the gas board, the electricity board or painters and decorators, that there will be no mess before giving free access to their homes. Those who face the prospect of the installation of a water meter have the right to be told by the water board whether there will be a mess in their homes.
    4.30 pm
    Those Conservative Members whose constituencies are involved have not taken the time to be with us this afternoon. I wish that they had because if the Government do not accept the new clause they will be inundated by demands from constituents who want the answers to such questions. I see the Minister checking the Opposition
    868
    Benches, but we are all here. Hon. Members will all have been shown the mess left by council officials and others. I have visited attics, cellars, under the stairs and rooftops to see the mess that has been left. Conservative Members will be inundated with such requests and the Government would be wise to accept the new clause.
    Consumers will also want to know when the job will be started, how long it will take and who will pay for it. They will want to know whether their water bill will be affected after the meter is installed, who will take the readings, when they will be taken, and so on. Consumers will also want to know what will happen if the trial is a flop. They will rightly want to know the answer to such questions and to many others.
    If the Government can spend £23 million advertising the sale of British Petroleum, surely they can provide the finance necessary to enable the water board to approach directly every consumer faced with the prospect of the compulsory installation of a water meter.
    People have a right to know. Two weeks ago the Government whipped Conservative Members to curtail the public's right to know what was happening in government under the Protection of Official Information Bill prepared by the hon. Member for Aldridge-Brownhills is (Mr. Shepherd). I appeal to the Minister to refrain from whipping Conservative Members this afternoon to prevent water consumers having the right to know.
    Mrs. Virginia Bottomley: It is an example of the unreconstructed, blinkered, backward-looking attitude of the Labour party that the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) should refer to only mothers and grandmothers being so worried about the mess. We all know where the Labour party stands on the roles of men and women in the household. If he were worried about the mess, he should be just as worried about the attitude of fathers and grandfathers. I take that as a basis upon which to respond to the new clause.
    To hear the comments from Labour Members, anyone would think that we had not had meters for electricity and gas for many years. It is ludicrous to suggest that meters are an alien and new way of measuring supplies of vital necessities. Furthermore, most European countries meter their water.
    I speak as a director of a water company in whose area one of the trials is to take place and I would respond with some amusement to the reaction of Labour Members to the cynical attitude of the hon. Member for Houghton and Washington (Mr. Boyes) to those who are volunteering for the trials. I had no idea that hon. Members were thought to have been press-ganged where there might be some difficulty with the public. With the Local Government Finance Bill and a fairer system for paying for local government, it is right to find a fairer, more appropriate and modern way to pay for water.
    It is also important to move on with the trials with some speed. Before long-term solutions are found for the paying for water locally, we need to learn the lessons of the trials. Therefore, I urge my hon. Friend the Minister to take no notice of the new clause, which will lead to greater delays, bureaucracy and difficulty. The water company of which I have the privilege to be a director takes great trouble over its customer relations, as I am sure do all the others. If there are any difficulties with people's uncertainty about

    869
    what is involved in the metering trials, I am sure that they will have no difficulty in explaining it. I urge my hon. Friend to reject the new clause hastily.
    Ms. Joyce Quin: I want to address my remarks specifically to new clause 3. However, before doing so I want to support my hon. Friends in the arguments that they have been putting forward in seeking to amend the Bill, which, as my hon. Friend the Member for Houghton and Washington (Mr. Boyes) pointed out, is a shoddy, ill-thought-out piece of legislation—perhaps the most madcap privatisation of all. Not surprisingly, a recent opinion poll has shown that the public oppose more Government sell-offs. I am sure that the prospect of the privatisation of the water industry was uppermost in their minds when they were asked to participate in that particular poll.
    I agree with my hon. Friends that new clauses 1 and 3 show that throughout our discussions the interests of the consumers have been paramount for us. Consumers have not been taken much into account in the Bill. I do not know whether the water company that was referred to by the hon. Member for Surrey, South-West (Mrs. Bottomley) consulted the consumers in its trial area, or how many questions it asked them about whether they wanted to be involved in such a trial, but the information that we have, in particular from the area represented by my hon. Friend the Member for Normanton (Mr. O'Brien), is that the public strongly oppose being dragooned into a trial in which they do not wish to participate. The general public are worried not only about the principle of water metering but about many of the practical issues relating to the installation of meters, and so on, which were referred to by my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson).
    New clause 3 specifically lists various conditions under which a customer in the metering trial areas can have redress and financial compensation. That is important. New clause 3(1)(a) refers to the fact that such compensation shall be given if a
    "person's water supply falls below the standard as set by the EEC".
    The Government have freely agreed to implement that standard but have been slow to do so in practice. There is much public concern about that and the European Commission is considering many cases concerning various parts of Britain where our water quality does not meet EEC standards. We do not want to see people pay more for inferior water, and that point needs to be made clearly.
    The cost of complying with the EEC directive has not been clarified during the long hours we have spent on the issue in Committee. It has been claimed that it will cost about £6 billion to ensure that our water quality comes up to the required standard. That figure has been disputed by the Government, but so far we have no clear figure that we can tell people is the right one. Nor do we have a figure for the different water authorities, some of which will be involved in the metering trial schemes.
    New clause 3(1)(b) refers to the fact that we believe that consumers in the trial areas will think that they have already been put to considerable inconvenience, and we want to ensure that we do not inconvenience them even more—hence the specific points of redress in the new
    870
    clause, especially in the eventuality of the water supply being cut off during the trial period. New clause 3(1)(c) also gives consumers the possibility of redress if problems are experienced with drainage and sewerage in the trial period.
    Amendment No. 4 is part and parcel of our concern for the consumer. In it, we refer to the consumer bodies that may represent the consumer. That is important, because it is likely that consumers in the trial areas will be worried about the trial but may not have the time to write letters and make telephone calls and all the other sorts of representations that they might otherwise want to make. That is why groups formed to represent their interests need to be taken into account. So far, we have had no clear evidence from the Minister that he has engaged in in-depth consultations with such consumer bodies, or that he has even made an effort to contact them. We recommend that he does; otherwise, there is no doubt that public discontent in the trial areas may become great, as has already happened in Normanton.
    The amendments are important. They would bring in an element of safeguarding the interests of the consumer. They form part of the background of our discontent with the Bill. We think that the priority now should be to bring our water up to EEC standards and to ensure that the infrastructure is of a good quality throughout the country, so that consumers receive the clean and safe water supplies that they need. Then, and only then, if the Government still insist on embarking on privatisation, should they do so. Privatisation is not the priority; even the Government should not consider it as such now.
    Mr. Tom Pendry: I had intended to begin by congratulating the hon. Member for Surrey, South-West (Mrs. Bottomley) on putting her head above the parapet and making a contribution. She declared her interest; no doubt she has a vested interest in the legislation. She did her two minutes and vanished from the Chamber, so perhaps I should not dwell on my congratulations to her.
    I want to speak mostly to new clause 3 and amendment No. 4. Throughout the Committee stage of the Bill my hon. Friends and I have been concerned with consumers' interests. We have battled for them, but we have not had too much to show for our pains, for the Minister has not responded positively. We are anxious to ensure that those who must take part in compulsory trials are not significantly inconvenienced. They should be protected, not least because, as has already been said, the trial areas have been selected in constituencies represented by Conservative Members, with the exception of Normanton. It was explained, and not refuted, in Committee that that was a mistake by the Government. They thought that they were getting another Member of Parliament, but it turned out to be my hon. Friend the Member for Normanton (Mr. O'Brien), who is clearly an expert on these matters. The Government must have regretted that mistake.
    4.45 pm
    We have no faith that hon. Members representing these constituencies, with the exception of my hon. Friend, will actively represent their consumers' interests. So we think we should take time on Report to speak up once more for those consumers. It is axiomatic to us that any householder who finds that the quality of water supplied has deteriorated to below the EEC standards mentioned

    871
    by my hon. Friend the Member for Gateshead, East (Ms. Quin) should receive compensation, and we say so in new clause 3.
    The quality of water is, more than ever before, a real issue today. We want to ensure that the Government do not use the trials as an excuse to squeeze money out of consumers while failing to supply them with a quality product. The purpose of the standards set by the EEC is to provide a decent quality of water nationwide. Yet it was only in 1987 that the Government accepted the 1985 directive on water standards. That is disgraceful testimony to the Government's regard for water quality.
    My hon. Friends the Members for Stoke-on-Trent, North (Ms. Walley) and for Gateshead, East spent a great deal of time in Committee explaining the problems of nitrates in our water. The Government did not respond positively to ensure that the levels would be eliminated in the short term.
    We are also concerned about the problem of the cowboy contractors. It is a pity that the plumber's mate, the hon. Member for Hornchurch (Mr. Squire), is not here today. It was bad enough that Conservative Members in Committee said nothing, but now they seem to have deserted the Minister completley on Report, and are not to be seen—except, I suppose, in the Division Lobbies tonight. We know that the hon. Member for Hornchurch represents plumbers in the House and he should be here to take part in the debate, because he intervened shortly in Committee to say that he was concerned that the Minister was not doing enough. We are worried that the cowboy contractors will get into the act as a result of the Bill.
    The water industry does not have the sort of safeguards that the gas industry has, and I asked the Minister a question about that in Committee, to which he promised to respond. Perhaps he will do so tonight. The gas suppliers have CORGI — the Confederation for the Registration of Gas Installers —to maintain standards. The water industry should have such a safeguard, because many authorities, including mine in the north-west, have sent out leaflets to alert consumers to the dangers of certain private contractors who are not qualified. Now, when the water meters are installed, things will be far worse, and people will use anyone who can thread a pipe—or conduit or whatever—or work with lead piping. Anyone who can do so will be allowed, if the Bill is passed, to install meters. The Minister has a responsibility to guarantee to us and people in the water meter areas that their meters will be installed by registered plumbers of an acceptable calibre.
    Amendment No. 4 has been referred to by my hon. Friend the Member for Gateshead, East. The Government cannot ride roughshod over reputable consumer bodies. The National Consumer Council has said clearly through the redoubtable champion of consumer rights, Miss Day, to whom I referred many times in Committee:
    "The first thing we noted about the study was that it was a report whose members were drawn entirely from the industry itself. There was no consumer representation or participation, and it shows."
    I am glad that the hon. Member for Surrey, South-West is back in her place. That was the point that she missed. There has been no consumer representation. Consumers have not been asked for their views and they have not
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    participated in the thinking. We understand that the hon. Lady has a vested interest; least she was brave enough to say so.
    Mrs. Virginia Bottomley: It would be improper for me not to say so. As to service to the consumer, I want to point out that trials are a good idea before moving forward generally. I have established in regard to the water company with which I am associated that letters have already gone out to every consumer in the area. Public meetings have been offered. Even a mini survey has been embarked on to test how people are reacting to the prospect of metering trials. Visits have taken place in the evenings and at other times, if necessary. I have every reason to believe that the other companies and authorities have behaved in the same way. The hon. Gentleman should think again before suggesting that there is not the highest standard of service to customers and concern for their interest.
    Mr. Pendry: It is clear that the hon. Lady's company has done something to bridge the gap. It is a pity that she and other Conservative Members did not press the Government to do a similar exercise throughout the trial areas. The Government and the Minister stand condemned. The hon. Lady should have spoken up loudly in the past and should, with other hon. Members, have pressurised the Government. Representatives of consumers need to be involved in the decisions or at least in the discussions. We urge the Government, even at this late stage, to state clearly that they will be involved from now on.
    Mr. Matthew Taylor: The amendments concentrate precisely on the area that has been most neglected by the Government—the rights of consumers, consultations with consumers and ensuring that the best interests of consumers are defended. That was evident throughout the proceedings in Committee from what the Minister said, or, rather, from what he did not say. We did not get long speeches about how much the consumer would benefit from metering. We did not get long explanations about the benefits to consumers of the privatisation that the metering scheme presages. What we got was a series of detailed and not very stimulating speeches from the Minister about the specifics of metering trials, whether a certain type of meter was the most appropriate, and so on. The interests of the consumer did not feature, except in reply to detailed questions as to whether the best specifics were being adopted.
    In new clause 1 we have the first essential —consultation with consumers to make sure that they are fully involved and aware of what is going on. I can cite an example of a similar problem that happened to one of my constituents in dealing with the Inland Revenue. The Inland Revenue said that it had written to him, giving him the necessary details to make a return. He said that he had never received the letter. All the evidence is that he did not receive the letter because, as a result of not having responded to it, he lost many thousands of pounds. He now finds it impossible to get the money back because the Inland Revenue says that he never replied to a letter which he says he did not receive.
    That is precisely the kind of concern that I have about the proposals in the Bill. There may be better consultation in some trial areas, but that provision should be written into the Bill. New clause 1 is one way of doing it. It is not

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    necessarily the best or the most adequate way, but the proposal that is before the House would ensure that there is consultation.
    I should have thought that new clause 3 was self-evidently desirable and the right way to approach things. If someone does not get a service for which he is expected to pay, he should not have to pay for it. That is what one would expect to happen in the private sector. As the metering trials are the forerunners of the privatisation of water, it makes sense that the consumer should be protected financially. It is a basic principle, after consultation, to have a system of redress, not through the courts, or with extreme difficulty, but as an automatic right for the consumer. Had the Minister presented in Committee detailed and convincing arguments on how consumers would benefit from the proposals, it might be argued that, as they were benefiting so much from metering, they did not need such protection, although I do not think that would wash well with any other private industry. As he did not even attempt to do that, I hope that he, and the House, will see the logic of accepting the new clause.
    Amendment No. 4 seeks to involve consumer groups to represent the interests of consumers. I do not understand why the Government oppose the amendment. It is logical and clear. I am sure that the Minister hopes that that would happen, so it should be written into the Bill. Perhaps the Minister will accept it.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan): Perhaps I will.
    Mr. Taylor: "Perhaps I will," says the Minister. This could be an almost unique occasion in the passage of the Bill. It may just be that the Minister is about to accept something. I hope so, because I think that there is no reason to reject it. It would be beneficial to the people involved in the trials if they were represented in the drawing up of schemes.
    Mr. William O'Brien: It is clear from the contributions from the Opposition side of the House that there is intense interest in the consumer. This is in line with the information and declarations that we had in Committee, that the Secretary of State for the Environment has the interests of consumers at heart and that at all times their interests should be paramount. Those words were used in the explanatory notes that were issued to hon. Members in Committee by the Department of the Environment. On the very question of the interests of the consumer being paramount, the Minister should accept the new clauses that we have proposed, because they would carry out the Secretary of State's intention that the interests of consumers should be looked after and defended.
    My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) referred to standards of metering and of services, Again, we must ensure that any services provided to consumers under the metering schemes are at all times of the highest possible standard.
    5 pm
    The hon. Member for Surrey, South-West (Mrs. Bottomley) explained that the company in which she has an interest has contacted consumers, made representations to them in some detail and offered to hold public meetings.
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    Many other companies that are contemplating introducing trial metering schemes would have contacted their customers. That being so, I put to the hon. Member for Surrey, South-West some questions that I have been asked by my constituents who are involved in a trial scheme; questions that I have put to the Yorkshire water authority, to which I am still awaiting a reply; and questions that have been put to the Minister in Committee, which are still awaiting a reply.
    Will the hon. Member advise the House and her constituents of the tariffs that will be applied by the water company in which she has an interest? What will the tariff procedure be? Will the North West Surrey water company introduce the scheme in the area? How will people be charged for water following the trials? What standing charges will be attached to the scheme? What will be the increase in standing charges for water supply and sewage disposal? Those questions are relevant to the new clauses that we are proposing. I am prepared to give way to the hon. Member if she will explain to the House and to the people involved in trials what the tariff structure will be and how standing charges will be affected for metering of water and disposal of sewage.
    Mrs. Virginia Bottomley: I will not respond at length because the debate is about the principle of having metering trials and how they should be conducted. I drew upon the company with which I am associated as an example, but I do not want to turn the debate into a discussion of its practices, good though they are. I say only that people want information, but that there is no anxiety. People are used to electricity and gas charges based on metering, so there should be no paranoia that there is a conspiracy against the consumer. In fact, many people have requested that their supplies be metered. The purpose of having consultation and a public meeting is that all those matters can be clarified.
    Mr. O'Brien: It is clear to hon. Members that the North West Surrey water company has not yet decided how to charge consumers when it introduces metering trials. The purpose of the new clauses is to ensure that people involved in metering trials will be given all the information well in advance of the trials, so that they can ask further questions if they are dissatisfied with the tariffs of the various water companies and authorities.
    The document that we received in Committee states:
    "The Government intend to monitor each trial very carefully and in particular will be looking at the nature of complaints from customers and how they are dealt with."
    If customers are not advised of the charges, how the tariffs will apply and how standing charges will be influenced by the metering trials, how will they be able to make representations to the Secretary of State in line with the directive issued by him? Labour Members consider that it is unfair, unjust and unreal to bring in legislation that does not explain in detail the consequences to consumers involved in trials.
    The hon. Member for Surrey, South-West has compared water metering with gas and electricity metering. The difference is that, unlike water, people can choose between gas and electricity, but there is no alternative to water. People can manage without gas and electricity but they cannot manage without water, so we should not compare gas and electricity with water.
    Ms. Walley: Will my hon. Friend comment on the information that 80 per cent. of gas and electricity bills

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    relate to the volume of gas and electricity used, whereas only 20 per cent. of a water bill applies to the water used? That raises the question: how much of a bill relates to the infrastructure and standing charges which must be paid?
    Mr. O'Brien: My hon. Friend the Member for Stoke-on-Trent, North (Ms. Walley) introduces an important and pertinent point. Furthermore, the tariff structure is causing concern among people, because every water authority offers people the right to have water meters if they wish. Meters are available to domestic consumers if they want to take advantage of them. Water companies are dragooning people into water meter trials, and that is unfair, undemocratic and alien to what we believe.
    Mr. Eric S. Heffer: In relation to people having heating or water, I give the example of a working-class family with four children. The family may spend the entire evening in the same room to cut down heating costs, but when it comes to bathing those children, unless they are put into one bath, the family will have to pay more for water. That is the essence of the issue. It is a matter of principle. I shall do very well out of water metering, because I do not always live at my home, but if I had five children I would do very badly out of it. Water metering will cause more burdens to be put on to the shoulders of ordinary working people. That is exactly why we should oppose it.
    Mr. O'Brien: The point made by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) was dealt with at length in Committee. In my constituency, where a trial is taking place, people are afraid of the results of the trial. Some people are refusing to take up tenancies in council houses in the trial area because they are afraid of the consequences. I have received a report concerning council houses, but there could be a blight on private houses. Owners may have difficulty in selling houses in the metering area, because people will not know what is involved in the meter trial areas.
    The real issue with which we are concerned is what the tariffs and cost will be to the consumer. In the Yorkshire water authority area people have been advised that the rising block tariff will be used, but no one is prepared to explain how it will apply to them. We are making the point in new clause I that, prior to the commencement of a water metering trial, representatives of the water undertakers should contact my constituents, and every other person involved, to explain what the cost and charges will be when the meters are installed. Failing that, my constituents cannot make representations to the Secretary of State before the metering trial starts; therefore, their views cannot be taken into consideration. The aim of the new clause is that, before trials start, contact should be made with the people concerned. They should have the right to make representations through the consumer organisations, or through the local authority, if they are council tenants, or direct to the Secretary of State or the Minister. If consumers do not have that right and are contacted before the metering trials start, they should not be included in the metering trial areas. That is the point that we are making in the new clause.
    Finally, as has been explained on more than one occasion, different water companies and authorities are planning different ways of applying the metering trials. I understand that in my area all the meters will be installed in the properties. We have been advised that in other areas
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    meters will be fixed to a stop tap either in the curtilage of the property or on the footpath. If properties and households are going to be disturbed by tradesmen entering to fit the meters, examine the plumbing and perhaps install new pipes to ensure that the meters can work, it is important that this exercise of informing people of the consequences and of the action to be undertaken is carried out. It is important that the people affected should be informed at every stage on what is to take place. That is the purpose of the new clause.
    We put it to the Minister and his supporters that the new clause is constructive. It is there to help the people who are going to be compulsorily involved in the meter trial areas. I hope that we shall have their co-operation this afternoon.
    I made the point in Committee—and the Minister said that he would look into it—that if consultations are to be effective and constructive they must apply to everyone. When the first scheme was planned the geographical area in my constituency included a large industrial opencast coal working. A few weeks after the declaration by the Yorkshire water authority that the scheme would be carried out, it was found that the opencast coal site had been taken out of the scheme. Clearly, there had been some consultation with a customer who did not want to get involved in the scheme, or that customer made representations highlighting his situation, and he was taken out of the scheme.
    If that principle can apply to the British Coal Opencast Executive, why can it not apply to my constituents who do not want to take part in the meter trials? There must be some explanation why the British Coal Opencast Executive can suddenly be taken out of the scheme because it does not want to be included, but my constituents, 90 per cent. of whom signed a petition rejecting the meter trial scheme, cannot be taken out. I put it to the Minister that if it is right for the British Coal Opencast Executive to be taken out of the scheme, it is right for the rest of the people who object to be taken out.
    5.15 pm
    In the light of the background to the new clauses and the amendment which are before the House this afternoon, I appeal to the Minister to give careful consideration to the points that we have made and to accept these proposals. We believe that they are in line with the declaration of the Secretary of State and that they are for the benefit of consumers in the meter trial areas.
    Mr. Moynihan: I shall deal first with new clause 1.
    Hon. Members who followed the proceedings of the Committee that considered this Bill will be aware that the Government consider it very important that a full consultation exercise take place in the proposed metering trial areas both before and during the trials. This is why, under clause 4(4) of the Bill, my right hon. Friend the Secretary of State is required, when considering a metering trial scheme for approval, to have regard to the consultations about the proposal or about the implementation, effect and operation of the scheme which have been or are to be conducted with persons who are likely to be or have been affected by the scheme. My right hon. Friend is also required to have regard to the handling of any representations about the implementation, effect or operation of the scheme. Those water authorities and companies that said that they would like to carry out a trial were asked some time ago to keep records of all

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    consultation and its results. I can assure the House that my right hon. Friend the Secretary of State will consider the scope and results of such consultation very carefully indeed when considering schemes submitted for approval.
    Many undertakers have already begun this consultation exercise. We have heard from my hon. Friend the Member for Surrey, South-West (Mrs. Bottomley) about the position in her constituency. They have done this on an entirely voluntary basis. For example, I have a copy here of a letter which the Bristol waterworks company sent out to various bodies likely to be affected by the trials. Those bodies included local Members of this House, councillors, and local branches of the citizens advice bureau, the Confederation of British Industry, Age Concern, Pensioners Voice, the Department of Health and Social Security, the local trading standards office and many more. This is proof, if proof were needed, of how seriously the industry regards the consultation process and the need to allow good time for it.
    The Government are also particularly concerned that individual customers likely to take part in the trials are given full information. This will probably be in the form of an information pack on, for example, the purpose of the trials, customers' legal rights and obligations in relation to metering, how to read and test the meter, what happens if a meter is found to be inaccurate, guidance on typical water consumption, and the name, address and telephone number of someone at the water utility to answer their queries.
    Mr. O'Brien: I am grateful to the Minister for allowing me to make one point. Out of all the information that has been put forward — and I made the point that the Yorkshire water authority is in my constituency—where is there any reference to what it will cost the consumers, what tariff structure will be applied — the Minister reported that there are four different structures — and will it increase standing charges?
    Mr. Moynihan: I am happy to answer the hon. Gentleman's question by drawing to his attention the fact that before the Secretary of State can approve any trial he must give due consideration to each of the points that have been raised by the hon. Gentleman. He must know the tariff structure that will be used and the method of billing, and he will have to take into consideration precisely how each water undertaker that is involved with the trials wishes to use them. I expect that there will be a range of tariff structures. The purpose of the trials is for the Water Authorities Association to look at a range of meters, charging procedures and tariffs. They will be evaluated. That is why so much attention has been given to the proposed site areas by the association. It has used the ACORN model to make sure that a socio-economic cross-section is studied. It has taken particular account of a variety of infrastructure problems that are faced in rural areas and heavily built-up urban areas. All that is very important.
    I take this opportunity in reply to the hon. Member for Houghton and Washington (Mr. Boyes) to say that it is vitally important to emphasise that the trial areas have not been chosen on the basis of party political representation. The trial areas have been proposed by the Water Authorities Association to the Government, and the Secretary of State, in making up his mind whether to
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    approve each of the trials, has to take into account all of the points that I have just mentioned, and indeed each and every one of the points that the hon. Gentleman has raised.
    Mr. O'Brien: I am grateful to the Minister for giving way. He has said that the Secretary of State will want to know everything about tariff systems and charges, but when will customers know about this, and will they have an opportunity to make representations to the Secretary of State if a tariff structure is alien to them? When will they get to know when the structures will be applied?
    Mr. Moynihan: The consumers will know in advance the final proposals that will be put to the Secretary of State, and they will have the opportunity—I stress that —to make representations individually to the Secretary of State about the proposed trials, or they will be able to make representations jointly. They will be able to see in advance of the trial being submitted exactly what the water undertakers wish to put into effect in a trial area. They will have the opportunity to make representations individually, whether they are in favour of the trial, or collectively if they are against it. It saddens me to hear that a mini-referendum or questionnaire has been put out in the trial area that is covered by the hon. Gentleman's constituency, when no firm decision has been reached about holding a proposed trial scheme in that area. That questionnaire has been put out before the people there even know the tariff structure or the cost effect.
    Yorkshire water authority, as the hon. Gentleman has rightly pointed out, has yet to calculate the tariff to be used in its trial. I believe that it has been made known to the hon. Gentleman, who has taken up the issue so assiduously, that it is likely to be dealt with by a rising block tariff, with a relatively low standard charge. It is designed to recover the same amount of charges through the trial scheme that is covered by the rateable values. That is the promise and the water authority is now working on the details. It is a matter not simply of considering the details in the Yorkshire area, but of co-ordinating the scheme with other water authorities. I am glad to have this opportunity of reassuring the hon. Gentleman that the views of consumers and of his constituents will be taken into account fully. Consumers will be able to make direct representations to the Secretary of State.
    We believe that the best means of bringing the full information about the trials to individual consumers is in the form of an information pack. We believe that that might also be the most cost-effective method. An information pack could be retained by consumers for future reference. That could not be achieved by a telephone inquiry or a doorstep visit, as the new clause proposes. The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) said that some people would be alarmed by a telephone approach, although that was written into the new clause that he proposed. He has a point. It is important to find the best way of reaching consumers. The best way to do so, in the Government's view, is by using an information pack.
    Mr. Henderson: Is the Minister aware that polling organisations and other surveyors of public opinion would usually expect no more than a 15 per cent. return from a personalised letter? Does the Minister accept, in the general sense of this point, that people do have some

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    reservations about a personal telephone approach? Does he therefore guarantee that every consumer will be visited personally by a water board official?
    Mr. Moynihan: That is not an undertaking that I can or will give. What I can say is that each and every household in the trial areas will be contacted by post, certainly in the first instance. I expect that some assiduous undertakers will wish to visit each household. That is a decision for them. What is essential is that the Secretary of State is satisfied that an adequate consultation exercise has taken place. If that is not the case, and a number of households in a trial area are not contacted, I would be of the view that that is less than satisfactory consultation. I am sure that the water undertakers will ensure that a comprehensive consultation exercise will take place to make sure that every household is aware of the broad outline and the details of the proposed trial.
    Mr. Henderson: Will the Minister say, in the light of that statement, that he will issue guidelines to water authorities on that specific point, to encourage individual contacts?
    Mr. Moynihan: We have not just issued guidelines; we have written that requirement into the Bill. We have made it clear in clause 4 exactly what we believe the water authorities should do to satisfy the Secretary of State that the proposed metering trial will go ahead and that the methodology is suited to the particular circumstances. That must be right.
    I am confident, not least because of the exhaustive and sometimes exhausting debates in Committee, that water undertakers will take due note of the importance of consultation. Indeed, in response to the hon. Member for Houghton and Washington, who was particularly keen that I should write to the chairman of the Water Authorities Association, may I say that I have done so and brought to his attention the fact that effective consultation was recognised as being very important to those consumers affected by the trials. I am happy to allow a copy of the letter to be sent to any hon. Member who is interested in the subject. It is right and proper that a copy of that letter is sent to every right hon. and hon. Member who served on the Standing Committee.
    As a further safeguard to ensure that customers are given adequate information, clause 5 enables the Secretary of State to make regulations supplementing the provisions in relation to various clauses, including metering. Clause 5(3)(e) will require water undertakers to include with any demand for payment information about the fixing of charges that may be specified by the Secretary of State. My officials have already held talks with the water industry and consumer bodies, such as LACOTs, on the contents of the regulations. As a result, I expect a full range of relevant information will be supplied on or with each demand for payment. I hope that right hon. and hon. Members will agree that new clause 1 is both unnecessary and unworkable, and I call on the House to reject it.
    Turning to new clause 3, let me first deal with drinking water. There has been much misinformed speculation about this in the press and elsewhere. It should not need me to tell the House that our drinking water is perfectly safe to drink; of course it is. Millions of people up and down the land have been drinking the water from their taps all their lives without any harm at all, and they know that perfectly well. There is nothing which passes our lips
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    in the course of a day—hon. Members have experience of many other things which pass their lips—that is more wholesome than the drinking water that is taken from our public supplies.
    Let me make two other points about this. First, right hon. and hon. Members would not find many of their constituents who had as much confidence in supplies of water overseas including those of some of our European Community partner nations. If Members have any doubts about that, they should ask their constituents.
    Secondly, it is deplorable that some irresponsible organisations have attempted to stir up fears about our drinking water. I am thinking in particular of a recent series of advertisements in the national press showing poison coming out of a tap, implying all sorts of harm came from drinking water. That is exactly the sort of mischief-making that could be deeply troubling some readers, and which casts doubts on the credibility of organisations that spread this sort of nonsense. I must say that such things are strongly resented by the thousands of dedicated people in the water supply industry who work hard to ensure the high standard and reliability of our supplies. We owe them a very great deal.
    Mr. Boyes: While recognising the dedication of the people who work in the water industry and putting no blame whatsoever on them, it is still a fact that, according to a written answer of 7 July 1987, the water authorities had been granted 272 derogations under article 9(1)(a) of the EEC regulations. In other words, there were 272 derogations to water authorities where the drinking water was not up to the required standards. That has nothing to do with the people who work in the industry. The Minister cannot hedge his bets by suggesting that we lay the blame on them. We are laying the blame on the Government who are not investing properly in the water industry.
    5.30 pm
    Mr. Moynihan: The hon. Gentleman knows perfectly well that if one compares investment on water by the Labour Administration with that of this Administration, our investment is much better, particularly in view of the cuts that were made by his Government. However, the hon. Gentleman has raised an important point about the directive and about ensuring that we try to reduce the number of derogations and take appropriate action.
    The hon. Gentleman is right about the EC drinking water directive. The directive specifies 44 substances which should not exceed certain concentrations, what are called maximum admissible concentrations, in drinking water. The Government are fully committed to the proper implementation of this directive in the United Kingdom. We did at one time tell the industry that, for some substances, they could interpret maximum admissible concentrations as applying to an average of samples, over a period, rather than to every sample. That meant that occasional instances of samples exceeding the limits for particular substances would not have mattered; and it is important to stress that in no case could that have had any conceivable health implication.
    One example is the iron parameter. Iron is, of course, good for one, and at concentrations well above the limit specified in the directive. The iron limit is there because in some circumstances a high iron concentration may colour the water. That happens only infrequently, and where any

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    damage occurs, for example, to washing, the consumer may be able to claim compensation from the water supplier.
    Ms. QuinIn view of the different figures that have appeared in the press and those that have been quoted by the Water Authorities Association, will the Minister give the House a clear estimate of how much it will cost fully to comply with the EEC directives?
    Mr. Frank Cook: Get out of that.
    Mr. Moynihan: From a sedentary position, the hon. Member for Stockton, North (Mr. Cook) shouts, "Get out of that." However, the hon. Gentleman will know, because, as I am sure the whole House is aware, he is keenly interested in the subject, that extensive discussions are taking place at present with all the water undertakers to make sure that the Government's commitment with regard to the European directives on drinking water quality are met and that appropriate investment is made over a period of time to ensure that those directives are met.
    Hon. Members will know that water must be wholesome, which is what the law provides at present. However, in addition, the Secretary of State will have to be able to state by regulation that water falling below certain standards is not wholesome. The House will recognise that our provisions go beyond what is required by the directive by retaining the important British legal concept of wholesomeness.
    Ms. Walley: I am grateful to the Minister for giving way. In view of the reply that he has just given, can the Minister confirm that water consumers will be paying the full amount of the investment needed to bring water up to EEC standards? Under those circumstances, would it not be better if the Government spent that money in making the necessary investment rather than calling for money to be wasted in installing meters?
    Mr. Moynihan: The hon. Lady knows full well that recovery of the costs to ensure that the water that is provided is of a wholesome nature and within the qualities laid down by the Water Act 1973 and the European directives is, of course, passed on to the consumer. I find the hon. Lady's distinction remarkable — that the Government have money but consumers have a different amount of money. Of course, all the money that is spent by the Government is recovered from consumers through taxation.
    The answer about the water undertakers is that they will have to adhere to the Government's policy, which has been clearly defined, about withdrawing derogations from the directive in respect, for example, of nitrate which apply in 48 areas. We shall be considering with the water authorities affected the implications of that withdrawal for their capital programmes. That will mean further investment over several years and those costs will be passed on to the consumers.
    Mr. John Garrett: I am surprised that the Minister referred to iron oxides as being subject to derogations under the EEC guidelines, when nitrates are much more important, especially in the county of Norfolk. Norfolk suffers from substantial pollution from the run-off from nitrogenous fertilisers into the water supply. Does
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    he agree that iron oxide may not be shown to be inimical to health, but that nitrates certainly are, through the "blue baby" syndrome at least? Will he kindly explain by what means the water authorities will be required, under the regime that he is proposing, to comply with regulations in respect of nitrates?
    Mr. Moynihan: I can answer the hon. Gentleman's question clearly. He will be aware that we are looking at the role that could be played by protecting certain sensitive areas from further nitrate contamination. There are already instances, both here and in other countries, of protective measures reducing nitrate levels significantly. We need to learn from those. I assure the hon. Gentleman that we are discussing with colleagues in other Departments that have a keen interest, not least the Ministry of Agriculture, Fisheries and Food, means of identifying the best possible methods of ensuring that we reduce nitrate concentrations, especially in water authorities such as his, Anglian. As he will be aware, there is also a problem in the Severn-Trent area. It is important that we tackle that because we intend to deal with the derogations and the new maximum admissible concentrations within the directive and the understanding that we publicly announced in this House on, I think, 12 December when my right hon. Friend the Secretary of State made a statement on that subject.
    Clearly, there will need to be machinery to ensure that water undertakers comply with the requirements, and that customers continue to have adequate redress for any loss they may suffer through failure on the part of the undertakers. One significant element will be the role of local authorities in checking compliance of drinking water with the standards laid down. That exists at present, and it will be maintained.
    The next part of the new clause deals with interruptions to water supply. The law on water supply and sewerage was subject to an extensive review, culminating in a consultation paper published in 1986. We shall be incorporating proposals resulting from that exercise in the water privatisation Bill. Questions of relative rights of customers and undertakers were carefully considered in that consultation process.
    I do not consider it right to put a blanket liability on water undertakers for all breaks in supply which last more than 12 hours. Water undertakers naturally go to considerable lengths to provide and maintain reliable supplies of water to their customers. Where interruptions to the piped supply are unavoidable, they provide emergency supplies in bowsers or by standpipes. If, however, they fail to maintain supplies, for whatever period of time, without sufficient reason, they are already liable to be sued for damages and prosecuted in the criminal courts. But the law recognises that acts of God or essential works may lead to interruptions and, quite rightly, it exempts undertakers from liability in such cases. That seems an entirely adequate provision and I see no reason to extend it.
    The third limb of the new clause is intended to provide compensation for the foul flooding of customers' homes. I have every sympathy with those whose property or land is flooded by sewage and it is tempting to look to compensation as a means of redress. In fact, however, I do not believe it to be either necessary or desirable. It is unnecessary first because if the flooding is the result of water authority negligence, it can already be sued for

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    damages. In addition, water authorities generally make exgratia payments when flooding is caused by the failure of their equipment even though they are not technically negligent. Secondly, it is normally possible to insure against the flooding of property.
    Finally, the new clause attempts to make water authorities liable for flooding from the private sewers and drains serving individual buildings even though they are entirely the responsibility of the owners of the buildings. Therefore, I urge the House to reject the new clause.
    We are also considering amendment No. 4, which bears on the consultations which undertakers will have to carry out before and during a metering trial. Although I expect that undertakers will in any event wish to consult the various consumer bodies representing consumers in the areas likely to be affected by the trials, I agree that it would be helpful to put the issue beyond doubt. I am therefore pleased to give an undertaking that the Government will table an appropriate amendment in another place. With that undertaking, I hope that the hon. Member for Houghton and Washington will not press the amendment. However, I urge my hon. Friends to vote against new clause 1 and new clause 3.
    Mr. Boyes: I am grateful to the Minister for his undertaking that a new amendment will be tabled in another place that will satisfy what we sought to do in amendment No. 4. It reflects the continuous bombardment that the Minister has faced from the Opposition about consumer interests. Nevertheless, it is good that he is changing his mind at the last moment. However, we cannot accept his argument on new clause 1, and we shall have to press it to a Division.
    Question put, That the clause be read a Second time:—
    The House divided: Ayes 215, Noes 270.

    Division No. 161]

    [5.43 pm

    AYES

    Abbott, Ms Diane

    Canavan, Dennis

    Adams, Allen (Paisley N)

    Carlile, Alex (Mont'g)

    Allen, Graham

    Clark, Dr David (S Shields)

    Anderson, Donald

    Clarke, Tom (Monklands W)

    Archer, Rt Hon Peter

    Clay, Bob

    Armstrong, Ms Hilary

    Clelland, David

    Ashdown, Paddy

    Clwyd, Mrs Ann

    Ashley, Rt Hon Jack

    Coleman, Donald

    Banks, Tony (Newham NW)

    Corbett, Robin

    Barnes, Harry (Derbyshire NE)

    Corbyn, Jeremy

    Barnes, Mrs Rosie (Greenwich)

    Cousins, Jim

    Barron, Kevin

    Cox, Tom

    Battle, John

    Crowther, Stan

    Beckett, Margaret

    Cryer, Bob

    Bell, Stuart

    Cummings, J.

    Benn, Rt Hon Tony

    Cunliffe, Lawrence

    Bennett, A. F. (D'nt'n & R'dish)

    Cunningham, Dr John

    Bermingham, Gerald

    Dalyell, Tam

    Bidwell, Sydney

    Darling, Alastair

    Blair, Tony

    Davies, Ron (Caerphilly)

    Blunkett, David

    Davis, Terry (B'ham Hodge H'l)

    Boateng, Paul

    Dewar, Donald

    Boyes, Roland

    Dixon, Don

    Bradley, Keith

    Dobson, Frank

    Bray, Dr Jeremy

    Doran, Frank

    Brown, Nicholas (Newcastle E)

    Douglas, Dick

    Bruce, Malcolm (Gordon)

    Duffy, A. E. P.

    Buckley, George

    Dunnachie, James

    Caborn, Richard

    Dunwoody, Hon Mrs Gwyneth

    Callaghan, Jim

    Eadie, Alexander

    Campbell, Menzies (Fife NE)

    Ewing, Harry (Falkirk E)

    Campbell, Ron (Blyth Valley)

    Ewing, Mrs Margaret (Moray)

    Campbell-Savours, D. N.

    Fatchett, Derek

    884

    Faulds, Andrew

    Maxton, John

    Fearn, Ronald

    Meacher, Michael

    Fields, Terry (L'pool B G'n)

    Michael, Alun

    Fisher, Mark

    Michie, Bill (Sheffield Heeloy)

    Flannery, Martin

    Michie, Mrs Ray (Arg'l & Bute)

    Flynn, Paul

    Millan, Rt Hon Bruce

    Foot, Rt Hon Michael

    Mitchell, Austin (G't Grimsby)

    Foster, Derek

    Moonie, Dr Lewis

    Foulkes, George

    Morgan, Rhodri

    Fraser, John

    Morley, Elliott

    Fyfe, Mrs Maria

    Morris, Rt Hon J (Aberavon)

    Galbraith, Samuel

    Mowlam, Marjorie

    Galloway, George

    Murphy, Paul

    Garrett, John (Norwich South)

    Nellist, Dave

    Garrett, Ted (Wallsend)

    Oakes, Rt Hon Gordon

    George, Bruce

    O'Brien, William

    Gilbert, Rt Hon Dr John

    O'Neill, Martin

    Godman, Dr Norman A.

    Orme, Rt Hon Stanley

    Golding, Mrs Llin

    Parry, Robert

    Gordon, Ms Mildred

    Patchett, Terry

    Gould, Bryan

    Pendry, Tom

    Graham, Thomas

    Pike, Peter

    Grant, Bernie (Tottenham)

    Powell, Ray (Ogmore)

    Griffiths, Nigel (Edinburgh S)

    Prescott, John

    Griffiths, Win (Bridgend)

    Primarolo, Ms Dawn

    Grocott, Bruce

    Quin, Ms Joyce

    Hardy, Peter

    Radice, Giles

    Harman, Ms Harriet

    Randall, Stuart

    Hattersley, Rt Hon Roy

    Redmond, Martin

    Healey, Rt Hon Denis

    Rees, Rt Hon Merlyn

    Heffer, Eric S.

    Richardson, Ms Jo

    Henderson, Douglas

    Roberts, Allan (Bootle)

    Hinchliffe, David

    Robinson, Geoffrey

    Home Robertson, John

    Rogers, Allan

    Howarth, George (Knowsley N)

    Rooker, Jeff

    Howell, Rt Hon D. (S'heath)

    Ross, Ernie (Dundee W)

    Howells, Geraint

    Rowlands, Ted

    Hoyle, Doug

    Ruddock, Ms Joan

    Hughes, John (Coventry NE)

    Salmond, Alex

    Hughes, Robert (Aberdeen N)

    Sedgemore, Brian

    Hughes, Roy (Newport E)

    Sheerman, Barry

    Hughes, Sean (Knowsley S)

    Sheldon, Rt Hon Robert

    Hughes, Simon (Southwark)

    Shore, Rt Hon Peter

    Illsley, Eric

    Short, Clare

    Ingram, Adam

    Skinner, Dennis

    Janner, Greville

    Smith, Andrew (Oxford E)

    John, Brynmor

    Smith, C. (Isl'ton & F'bury)

    Johnston, Sir Russell

    Snape, Peter

    Jones, Martyn (Clwyd S W)

    Soley, Clive

    Kaufman, Rt Hon Gerald

    Spearing, Nigel

    Kilfedder, James

    Steel, Rt Hon David

    Kirkwood, Archy

    Steinberg, Gerald

    Lambie, David

    Stott, Roger

    Lamond, James

    Strang, Gavin

    Leadbitter, Ted

    Straw, Jack

    Leighton, Ron

    Taylor, Mrs Ann (Dewsbury)

    Lewis, Terry

    Taylor, Matthew (Truro)

    Litherland, Robert

    Thomas, Dafydd Elis

    Livsey, Richard

    Thompson, Jack (Wansbeck)

    Lloyd, Tony (Stretford)

    Turner, Dennis

    Lofthouse, Geoffrey

    Wall, Pat

    McAllion, John

    Wallace, James

    McAvoy, Tom

    Walley, Ms Joan

    Macdonald, Calum

    Warden, Gareth (Gower)

    McFall, John

    Welsh, Michael (Doncaster N)

    McKay, Allen (Penistone)

    Wigley, Dafydd

    McKelvey, William

    Williams, Alan W. (Carm'then)

    McLeish, Henry

    Wilson, Brian

    McTaggart, Bob

    Winnick, David

    McWilliam, John

    Wise, Mrs Audrey

    Madden, Max

    Worthington, Anthony

    Mahon, Mrs Alice

    Young, David (Bolton SE)

    Marek, Dr John

    Marshall, David (Shettleston)

    Tellers for the Ayes:

    Marshall, Jim (Leicester S)

    Mr. Frank Haynes and

    Martlew, Eric

    Mr. Frank Cook.

    NOES

    Adley, Robert

    Amery, Rt Hon Julian

    Aitken, Jonathan

    Amess, David

    885

    Amos, Alan

    Finsberg, Sir Geoffrey

    Arbuthnot, James

    Fookes, Miss Janet

    Arnold, Jacques (Gravesham)

    Forman, Nigel

    Ashby, David

    Forsyth, Michael (Stirling)

    Aspinwall, Jack

    Forth, Eric

    Atkins, Robert

    Fox, Sir Marcus

    Atkinson, David

    Franks, Cecil

    Baker, Rt Hon K. (Mole Valley)

    French, Douglas

    Baker, Nicholas (Dorset N)

    Gale, Roger

    Banks, Robert (Harrogate)

    Garel-Jones, Tristan

    Batiste, Spencer

    Gill, Christopher

    Beaumont-Dark, Anthony

    Glyn, Dr Alan

    Bellingham, Henry

    Goodhart, Sir Philip

    Bendall, Vivian

    Goodlad, Alastair

    Bennett, Nicholas (Pembroke)

    Goodson-Wickes, Dr Charles

    Benyon, W.

    Gorman, Mrs Teresa

    Bevan, David Gilroy

    Gow, Ian

    Biffen, Rt Hon John

    Gower, Sir Raymond

    Biggs-Davison, Sir John

    Grant, Sir Anthony (CambsSW)

    Blackburn, Dr John G.

    Greenway, Harry (Ealing N)

    Blaker, Rt Hon Sir Peter

    Greenway, John (Rydale)

    Body, Sir Richard

    Griffiths, Sir Eldon (Bury St E')

    Bonsor, Sir Nicholas

    Griffiths, Peter (Portsmouth N)

    Boswell, Tim

    Grist, Ian

    Bottomley, Peter

    Ground, Patrick

    Bottomley, Mrs Virginia

    Grylls, Michael

    Bowden, Gerald (Dulwich)

    Gummer, Rt Hon John Selwyn

    Bowis, John

    Hamilton, Hon A. (Epsom)

    Boyson, Rt Hon Dr Sir Rhodes

    Hampson, Dr Keith

    Braine, Rt Hon Sir Bernard

    Hanley, Jeremy

    Brazier, Julian

    Hannam, John

    Bright, Graham

    Hargreaves, A. (B'ham H'll Gr')

    Brittan, Rt Hon Leon

    Harris, David

    Browne, John (Winchester)

    Haselhurst, Alan

    Bruce, Ian (Dorset South)

    Hawkins, Christopher

    Buchanan-Smith, Rt Hon Alick

    Hayes, Jerry

    Buck, Sir Antony

    Hayhoe, Rt Hon Sir Barney

    Budgen, Nicholas

    Hayward, Robert

    Burns, Simon

    Heathcoat-Amory, David

    Burt, Alistair

    Hicks, Mrs Maureen (Wolv' NE)

    Butcher, John

    Higgins, Rt Hon Terence L.

    Butler, Chris

    Hill, James

    Butterfill, John

    Hind, Kenneth

    Carrington, Matthew

    Hogg, Hon Douglas (Gr'th'm)

    Carttiss, Michael

    Holt, Richard

    Cash, William

    Howard, Michael

    Chapman, Sydney

    Howarth, Alan (Strat'd-on-A)

    Chope, Christopher

    Howarth, G. (Cannock & B'wd)

    Clark, Dr Michael (Rochford)

    Howell, Rt Hon David (G'dford)

    Clark, Sir W. (Croydon S)

    Howell, Ralph (North Norfolk)

    Colvin, Michael

    Hughes, Robert G. (Harrow W)

    Conway, Derek

    Hunt, David (Wirral W)

    Coombs, Anthony (Wyre F'rest)

    Hunt, John (Ravensbourne)

    Coombs, Simon (Swindon)

    Hunter, Andrew

    Cope, John

    Hurd, Rt Hon Douglas

    Cormack, Patrick

    Irvine, Michael

    Couchman, James

    Irving, Charles

    Cran, James

    Jack, Michael

    Currie, Mrs Edwina

    Jackson, Robert

    Curry, David

    Janman, Timothy

    Davies, Q. (Stamf'd & Spald'g)

    Johnson Smith, Sir Geoffrey

    Davis, David (Boothferry)

    Jones, Gwilym (Cardiff N)

    Day, Stephen

    Jones, Robert B (Herts W)

    Devlin, Tim

    Kellett-Bowman, Dame Elaine

    Dickens, Geoffrey

    Key, Robert

    Dicks, Terry

    King, Roger (B'ham N'thfield)

    Dorrell, Stephen

    Knapman, Roger

    Douglas-Hamilton, Lord James

    Knight, Dame Jill (Edgbaston)

    Dover, Den

    Knowles, Michael

    Dunn, Bob

    Lang, Ian

    Dykes, Hugh

    Lawrence, Ivan

    Eggar, Tim

    Leigh, Edward (Gainsbor'gh)

    Evans, David (Welwyn Hatf'd)

    Lennox-Boyd, Hon Mark

    Evennett, David

    Lester, Jim (Broxtowe)

    Fairbairn, Nicholas

    Lightbown, David

    Fallon, Michael

    Lloyd, Peter (Fareham)

    Farr, Sir John

    Maclean, David

    Favell, Tony

    McLoughlin, Patrick

    Fenner, Dame Peggy

    Mans, Keith

    Field, Barry (Isle of Wight)

    Marland, Paul

    886

    Marshall, John (Hendon S)

    Spicer, Michael (S Worcs)

    Martin, David (Portsmouth S)

    Squire, Robin

    Miscampbell, Norman

    Stanbrook, Ivor

    Mitchell, Andrew (Gedling)

    Steen, Anthony

    Monro, Sir Hector

    Stern, Michael

    Moss, Malcolm

    Stevens, Lewis

    Moynihan, Hon C.

    Stewart, Allan (Eastwood)

    Needham, Richard

    Stewart, Andrew (Sherwood)

    Nelson, Anthony

    Stokes, John

    Neubert, Michael

    Stradling Thomas, Sir John

    Nicholls, Patrick

    Sumberg, David

    Nicholson, David (Taunton)

    Summerson, Hugo

    Nicholson, Miss E. (Devon W)

    Taylor, Ian (Esher)

    Page, Richard

    Taylor, John M (Solihull)

    Paice, James

    Tebbit, Rt Hon Norman

    Patnick, Irvine

    Temple-Morris, Peter

    Patten, Chris (Bath)

    Thompson, D. (Calder Valley)

    Patten, John (Oxford W)

    Thompson, Patrick (Norwich N)

    Pattie, Rt Hon Sir Geoffrey

    Thome, Neil

    Pawsey, James

    Thornton, Malcolm

    Peacock, Mrs Elizabeth

    Thurnham, Peter

    Porter, Barry (Wirral S)

    Townend, John (Bridlington)

    Porter, David (Waveney)

    Tracey, Richard

    Powell, William (Corby)

    Tredinnick, David

    Price, Sir David

    Twinn, Dr Ian

    Raff an, Keith

    Vaughan, Sir Gerard

    Raison, Rt Hon Timothy

    Waddington, Rt Hon David

    Rathbone, Tim

    Wakeham, Rt Hon John

    Redwood, John

    Waldegrave, Hon William

    Rhodes James, Robert

    Walden, George

    Rhys Williams, Sir Brandon

    Walker, Bill (T'side North)

    Riddick, Graham

    Waller, Gary

    Ridley, Rt Hon Nicholas

    Walters, Dennis

    Ridsdale, Sir Julian

    Ward, John

    Rifkind, Rt Hon Malcolm

    Wardle, C. (Bexhill)

    Roberts, Wyn (Conwy)

    Warren, Kenneth

    Roe, Mrs Marion

    Watts, John

    Rossi, Sir Hugh

    Wells, Bowen

    Rost, Peter

    Wheeler, John

    Rumbold, Mrs Angela

    Whitney, Ray

    Sackville, Hon Tom

    Widdecombe, Miss Ann

    Sainsbury, Hon Tim

    Wiggin, Jerry

    Scott, Nicholas

    Wilkinson, John

    Shaw, David (Dover)

    Wilshire, David

    Shaw, Sir Giles (Pudsey)

    Winterton, Mrs Ann

    Shaw, Sir Michael (Scarb')

    Winterton, Nicholas

    Shelton, William (Streatham)

    Wolfson, Mark

    Shephard, Mrs G. (Norfolk SW)

    Wood, Timothy

    Shersby, Michael

    Woodcock, Mike

    Skeet, Sir Trevor

    Yeo, Tim

    Smith, Sir Dudley (Warwick)

    Young, Sir George (Acton)

    Smith, Tim (Beaconsfield)

    Soames, Hon Nicholas

    Tellers for the Noes:

    Speed, Keith

    Mr. Richard Ryder and

    Speller, Tony

    Mr. Kenneth Carlisle.

    Question accordingly negatived.

  New Clause 2

    PROVISIONS RELATING TO NEW BUILDINGS
    The requirements of paragraph 1 of Schedule 1 shall not apply until the completion of the metering trials and a report on the metering trials has been approved by Parliament.—[Mr. O'Brien.]
    Brought up, and read the First time.
    Mr. O'Brien: I beg to move, That the clause be read a Second time.
    When the Bill was published, paragraph 1 of schedule 1 was not included. The Minister later decided to amend the schedule to include paras (1)(a) and (1)(b) to apply to the provisions relating to the installation of meters. Paragraph I contains a new power introduced by the Minister to allow the water undertakers to insist that the people responsible for building, adapting or altering

    887
    premises should install a meter in the premises or that plumbing should be arranged to allow a meter to be installed later.
    Paragraph 1 substantially alters the Bill as originally drafted. When amendments to schedule 1 were tabled in Committee, the Opposition raised certain issues. However, because there were no explanatory notes and because the information provided on this matter had been inadequate, we wanted to ensure that all the points were covered when the Bill was brought back to the House. That is why the Minister should consider the new clause carefully and seriously before any action is taken.
    Paragraph 1(2) enables undertakers to insist on the requirements that I outlined earlier being met, even when there is no immediate intention of charging by measure. For example, some undertakers may want to wait for the results of the metering trials before deciding on a move to more widespread metering. That is the basis upon which we present our case. We believe that it would be in the interests of the contractors and of those people altering or adapting a building to wait until a decision has been taken about the metering trials before taking a further decision on widespread metering. Anything other than that would create the impression that decisions on universal metering and the systems that will be applied by the various water companies and authorities have already been made. The impression might also be created that metering trials were introduced to provide information that would be available if universal metering was applied.
    I believe that decisions have already been taken about the application of universal metering, on how the meters will be installed in properties and how the law will apply to contractors building new properties. In other words, paragraph 1 means that all new properties will have a meter or facilities to enable a meter to be installed.
    It was made clear to members of the Committee, to other hon. Members and to the public that some water authorities and water companies have no intention of putting meters in properties. It has been decided by some water companies — and, indeed, put into practice in some areas—that meters for measuring domestic water supplies in bulk should be situated on the footpath or in the curtilage of the dwelling, near the stop tap.
    6 pm
    An exhibition held in the House a few months ago demonstrated a meter designed to fit on a footpath which required no provision or alteration of any plumbing inside the dwelling, and hence no involvement on the part of the consumer outside whose property the meter was installed.
    Surely, if such a metering system successfully meets the requirements of the water industry, and all the problems that can develop in metering trials—including weather and the type and flow of water being used — without disturbing the household, paragraph 1 is redundant. There is little useful purpose in telling contractors, and the people whose properties are to be adapted after a certain date, that they will have to make provision for the installation of a meter, or provide facilities in the property for a meter to be installed. If there is no cause for such an installation, we are surely being premature in accepting such a provision in the Bill.
    I understand that two water authorities are now using the meters to which I referred, and that six private water companies, and the Welsh water authority, are also considering the possibility of their introduction. Meter
    888
    trials are taking place in more ways than one. We feel that it would be in everyone's interest to wait until the trials have been carried out before considering whether provision should be made and expenses undertaken by contractors — and, indeed, by individuals who may be having their properties altered—for the installation of a meter. That might involve plumbing adaptation to enable the meter to be installed in a convenient place, which, under the Bill in its present form, would be at the discretion not of the consumer—the owner or tenant of the property — but of the water undertaking. Such arrangements could be expensive for consumers.
    We would prefer a system of voluntary metering to continue. However, if metering is to be compulsory, we consider it unfair and unjust for people to have to go to the expense of providing for a meter when there is no evidence of the need for one.
    A press release put out by the Water Companies Association on 29 September 1987 states:
    "'It is important', said the Associations"—
    that is, the Water Authorities and Water Companies Associations—
    "'that extensive trials of metering and assessment of their impact in demand take place before decisions are taken on the general use of water meters.'"
    The Minister should consider those views carefully when he is asking his colleagues to reject new clause 2. Unless he can give an assurance that consumers will incur no additional expense as a result of the addition to schedule 1, I believe that to press for the rejection of the new clause would be against the best interests of consumers.
    Page 2 of the press release states:
    "The trials are likely to have a major influence on how we charge for water in the future. Metering could be the answer. Ministers will consider consumer interests before approving any trial scheme."
    Before there is any suggestion of major metering provisions, says the Water Companies Association, we should wait until the trials have taken place and we have evidence of the impact on those living in the trial areas. If we accept that view, paragraph I should not apply.
    I have a considerable interest in the Yorkshire water authority, as the trial area is in my constituency. I know how people are thinking and what provisions they are requesting in the event of a meter trial taking place. A report of a meeting held on 20 October last year between officers of the Yorkshire water authority and members of Wakefield metropolitan district council states:
    "It is important that Yorkshire Water learns how to deal effectively with the many problems which metering on this scale will raise, such as …The practical problems in installing meters—where do we put them—? What should we do about defect on the customers plumbing system?"
    Before any universal metering is considered, the authority would like to study the results of the trials being held in the Normanton area. If we accept paragraph 1, the position described by the Yorkshire water authority will be superseded by the new clause. The authority's points are not being heard or heeded by the Minister.
    The practical operators of the water system wish to obtain information, in line with the Government directive, based on the results obtained where meters were installed in a large geographical area involving different sections of a community. The water authorities want to know the practical problems involved with installing meters and where to put them. The water authority in Yorkshire needs that information to decide whether meters should be

    889
    installed in properties. I believe that it is in the interest of future metering that we should wait until the trials have been considered so that there is evidence to substantiate whether meters should be situated in premises and what installation would mean.
    The Water Companies Association believes that, before decisions are taken on the general use of water meters, careful consideration should be given to the impact on demand and to where the meters should be situated. If we accept the view of the Water Companies Association, we should accept new clause 2.
    On 27 October there was a second meeting between officials of the Yorkshire water authority and members of the Wakefield district council. It was reported that:
    "the Yorkshire Water Board accepted that metering at best would be marginally economic and in submitting the various suggested areas had drawn the Secretary of State's attention to the problems they envisaged. In the end, however, it would have to prove to be an economic proposition for the Board to pursue universal metering throughout its area."
    In other words, the Yorkshire water authority has doubts about the economic viability of the scheme that it wishes to apply in the Normanton area. It believes that it could be "marginally economic". It has submitted suggestions to the Secretary of State regarding the areas involved and it requires proof that the proposition is economic. It believes that that assurance should be forthcoming from the evidence that is obtained from the trial meter area. Such information is required before the Yorkshire water authority can proceed with universal metering throughout its area. The message from the Yorkshire water authority to the Government is, "Please do not extend the area of compulsory metering until we have had the opportunity to see what the tests will reveal".
    In Committee we were informed that the trial areas would be studied for three years. We were also informed that if a scheme, as suggested to the Secretary of State by the water undertakers, was not working as had been thought, it could be amended and then submitted to the Secretary of State for further consideration. Therefore, a scheme could continue for between three years and five years depending on what information was received from the trial area.
    Before the Government insist that additional expense should be incurred by contractors and people involved with the alteration of premises where meters may be installed or provision made to provide a meter, the evidence obtained from the trial areas should be submitted for consideration. Obviously this matter is giving rise to concern not just to Labour Members, but to people outside the House who are following these matters most carefully, including the Water Companies Association. The Water Companies Association is anxious to have all the information before considering the general use of water meters.
    On 17 December the Minister said in Committee:
    "There is nothing to stop consumers in a trial area from putting forward a request to the water undertaker to try some new technology. Consumers may say to their water authority, `We believe that it will assist you in formulating more precise answers to a number of the imponderables if we volunteer ourselves for further trial work.' That would be a matter for the undertaker, but he may decide that it would be helpful." —[Official Report, Standing Committee B, 17 December 1987; c. 598.]
    890
    6.15 pm
    Therefore, within the trial area, a suggestion may be made that there should be an amendment to the scheme that has been installed by the water undertakers. If new technology means that a meter could be changed in a few years, there is little purpose in saying to contractors and people who are having a dwelling built or altered that they must make provision for that meter or adapt the plumbing to take it. Such expense could be wasted after two or three years as a result of new technology. We believe that the Bill will lead to such a situation. For that reason, the Minister must pay careful consideration to the new clause.
    On 19 January I asked the Minister in Committee:
    "Who will carry out the inspection to decide that the pipes are inadequate and who will pay for that inspection? The pipes are not visible for inspection so some excavation will be required. Therefore, there are likely to be problems. Who will be responsible for making that decision and who will bear the cost of any inspections?"
    Such inspections will apply to all properties that are being adapted or improved after the date that has been suggested in the Bill. There remain questions as to who will be responsible for certain charges and costs. In Committee the Minister replied:
    "The latter question is significant, but I should like to answer it a little later as I am in some doubt and wish to clarify the matter with my officials. I am not sure whether the matter would be dealt with by charging a connection fee or whether a separate cost would be levied directly by the water inspectors who would inspect the work.
    The Committee will have noted that there is a shift in emphasis in this legislation, as compared with previous legislation, in regard to who pays. Whereas, in general, there was an onus on the owner of a property to pay under the 1945 and 1951 Acts, in regard to metering, the shift is now towards the undertaker paying". —[Official Report, Standing Committee B, 19 January 1988; c. 672.]
    If we are to accept that argument — I have no reason not to accept it — it poses great questions as to the benefit and the reason for schedule 1, paragraph 1, as introduced at a later stage in Committee. Perhaps the Minister could develop his reply of 19 January as it applies to schedule 1.
    If there are excavations and reasons for extra costs when a property is adapted to meet the requirements laid down in schedule 1, paragraph 1, there will be further problems, as we outlined in Committee, unless we are given the necessary information and assurances. Obviously there are a number of issues that must be considered before we can accept schedule 1, paragraph 1 as presented. "The water briefing", which is a bulletin produced by the Water Authorities Association, refers to charges. The question of charges is very important. People want to know what this measure will cost and are asking, "How much extra will I have to pay? What benefit will I receive? Will it end the question of spiralling charges?" The same questions have been posed to the Water Authorities Association, and I shall quote from the July 1987 issue of "The water briefing". Paragraph 4.1 says:
    "Pricing policies and controls are a key component of the whole regulatory package. Water authorities have made clear that the uniform pricing formula suggested in Professor Littlechild's report, with no compensating factor to allow for the differing circumstances and obligations of different authorities, is unlikely to provide the solution. They will wish to discuss pricing mechanisms and their effects in greater detail with the Government."
    It is important that all the concerns in this regard, including the proposals to make provision to install a meter in new properties, and all the proposals are

    891
    discussed in depth. Consideration will have to be given to all the issues that arise before any legal administration is set up.
    The Minister must pay heed to what the water companies are saying. The Minister should give careful attention to new clause 2 because it must be decided whether the people involved will have to meet the necessary expenditure or whether it will be met by the Government.
    I should like to remind the Minister of the notes on clauses and schedules that were given to members of the Committee. They say that clause 4 establishes
    "a special charging regime designed to protect consumer interests .…."
    Page 12 of the explanatory notes says:
    … The Secretary of State will himself ensure that the interests of customers whose premises are included in the trials are protected."
    We are saying that it is not only the customers in trial areas whose interests should be protected by everyone who could be a victim of these meter trials.
    Before the meter trials have finished and before evidence about them is submitted to the Secretary of State and before we know whether the consumer interests will at all times be safeguarded, the Government are saying that provision shall be made whereby the water undertakings can insist that a meter or service pipe can be installed in new properties for supplying water. Alternatively, it is said that provision will have to be made so that a meter can be installed later.
    That is not in the best interests of the consumer. It contradicts what the Secretary of State outlined in the Bill and in the explanatory notes — that at all times the interest of the customer is paramount.
    The explanatory note on page 15 says:
    "The Government intends to monitor each trial very carefully, and in particular will be looking at the nature of complaints from customers and how they are dealt with."
    It is difficult to apply the principle and practicalities of the explanatory note to people who will be told that they must make provision for a meter in their dwelling before the trial periods are finished and a report submitted to the Secretary of State. An unfair burden will be placed on people who will have to meet that demand. The Minister must give an assurance from the Dispatch Box on this issue.
    New clause 2 is important and has a meaning. If there is to be sincerity in this legislation, which will apply in my constituency and in 10 other areas, we must be assured that hardship will not be experienced by people who will have to install meters when building or adapting new dwellings.
    I remind the Minister that the water companies have said that the metering trials and the assessment of their impact on demand should take place before decisions are taken on the general use of water meters. If the Minister accepts that view of the water companies, he must accept new clause 2. If he does not, how will the Government ensure that people adapting or building new dwellings after the suggested date—when they will have to install provisions for meters or install meters in their properties —will be fairly dealt with? I ask the Minister to answer those questions.
    Ms. Walley: I shall speak briefly in support of new clause 2, which goes to the heart of the Government's legislation.
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    The Minister said in the previous debate that he was prepared to take on board considerations that acknowledged the important role played by consumer bodies, trading standard officers and so on. If he is prepared to be sincere and take account of the well-formulated views of those organisations, he should extend that sincerity and apply it to the Government's arguments for compulsory water meter trials, which are the basis of the Bill. We sat through hour after hour in Committee and were given every assurance by the Minister that, when selecting areas for compulsory water metering, every regard would be given to socio-economic, climatic, geographic and geological factors. It seems odd that these trials will take place in areas that, bar one, are Conservative-controlled.
    We are about to embark on water metering trials to establish the correct way forward to replace the present water rate charges. Why did the Minister, by way of a planted question on 2 December, give an undertaking that he would move an amendment that would provide for the compulsory installation of water meters at the earliest opportunity—certainly as soon as the Bill becomes law?
    The Minister has a chance to prove that the Government are sincere by supporting new clause 2. There must be some reason why the Government are so anxious to rush through this proposal. Why cannot the Government wait until the results in the survey areas are known?
    I find the Minister's reply of 2 December quite contradictory. In reply to the question, he said:
    "We are concerned about metering the consumption and we believe that it would be a far more accurate guide to measure and update consumption figures to assess whether metering is the best way to move forward."
    However, almost in the same breath, in reply to the question,
    "Does my hon. Friend agree that it would be possible to start by introducing compulsory metering of new houses?",
    the Minister said:
    "The simple answer is 'Yes'. For that reason we have introduced an amendment to be considered during the latter stages of the Public Utility Transfers and Water Charges Bill currently in Committee." —[Official Report, 2 December 1987; Vol. 1430 c. 919.]
    The Minister's reply to that planted question—it had to be planted—demonstrated the Government's insincerity. Compulsory water meters either represent an experimental way of deciding the best way forward or they are connected to some preconceived plan that will hasten the privatisation of the water industry. I support the new clause.
    6.30 pm
    Ms. Quin: I add my voice to those of my hon. Friends the Members for Normanton (Mr. O'Brien) and for Stoke-on-Trent, North (Ms. Walley). The announcement made during Environment questions took many of us by surprise, because it was made in answer to the third supplementary question. It seemed to have been slipped in at the end, although it was obviously a matter of fundamental importance to this Bill and to our debates in Committee. It is right that that point should be made.
    Furthermore, the fact that the Government have decided to provide for the installation of meters in all new properties seems to suggest that their mind is firmly made up and that, as my hon. Friend the Member for Stoke-on-Trent, North said, the trials are nothing but a sham. What is the purpose of having trials if the Government have

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    made up their mind already? Perhaps the Minister will reassure us on this point by listing for us the alternative forms of charging for water, other than water metering.
    Mr. Matthew Taylor: I shall not delay the Labour Front Bench spokesman for very long. However, new clause 2 is important because it is a test of the Government's genuine commitment to the metering trials. There are no two ways about it. The Government say that they are serious about a metering trials scheme. They say they wish to try metering to see whether it works and to decide whether to opt for compulsory metering. They say that they are serious about examining the difficulties that will undoubtedly arise for some of the poorest in our society, which need to be taken into account and which may be a bar to such compulsory metering. If they believe that, they should not be proposing measures that clearly pre-empt such a scheme.
    Schedule 1(1) is aimed at preparing the ground for a compulsory metering scheme right across the country before the metering trials have even taken place. Representatives of my local water board raised the issue with me before the Minister had tabled the amendment and before he had publicly announced it. I was asked, "Will you be supporting the Government amendment? We think that it is important so that we can get metering installed as soon as possible after the trial scheme." In effect, they were saying, "This measure is important because it will allow us to put in compulsory metering at the earliest possible opportunity" — in an area where there has been no trial scheme. In other words, the measure is a way of bringing forward privatisation and compulsory metering across the board.
    If Ministers were genuine about wanting a trial scheme the results of which they could examine and from which they were prepared to learn lessons—they might have to decide that compulsory metering as proposed does not allow for adequate consumer protection or for the protection of those who most need it—they would not be putting forward this proposal, which they did not even come up with when they were drafting the Bill. This proposal has been advanced as a result of pressure from the water authorities, which want privatisation pushed through as early as possible—not with any thought for the consumer or the results of a metering trial scheme. I hope that the new clause will be passed because it is important.
    Mr. Boyes: We have had a good debate on this important matter. The Minister must be most embarrassed about the proposal, because, as my hon. Friend the Member for Stoke-on-Trent, North (Ms. Walley) said, he tried to sneak in this change of policy at Question Time. As my hon. Friend the Member for Gateshead, East (Ms. Quin) said, that took us by surprise. It is most unfortunate that the Minister had to have recourse to a planted question to announce a policy change that has serious implications. As my hon. Friends and the hon. Member for Truro (Mr. Taylor) said, it nails the lie about the water metering trials being trials. I suspect that the trials may be intended to establish whether the hardware works. They will have nothing to do with people or consumers. The Government have made up their mind that the trials will be successful whatever happens.
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    During the debate on new clause 1, I reiterated the question that I asked the Minister a dozen times or more in Committee. How will the Government determine whether the trials have been successful? How are they going to analyse the results? We never got an answer to that question in Committee, and this evening I again challenged the Minister to reply to that specific question, which is of great interest to all Opposition Members. We need to know in advance what criteria will be used to judge failure or success so that we can measure the results against them. If the Minister gives us no criteria, it is obvious that he will say that the scheme was successful.
    The other reason why we think that the trials are a sham piece of kidology is that there are two Bills running in parallel — the Public Utilities Transfers and Water Charges Bill and the Local Government Finance Bill. The Minister said in Standing Committee:
    "we have announced, in the Local Government Finance Bill, our intention to abolish domestic rates from April 1990. New domestic properties and dwellings created by conversions will not be rated from that date. They will come under the new system. Therefore, it is necessary that water undertakers have an alternative means of charging for their services to such properties." —[Official Report, Standing Committee B, 14 January 1988; c. 666.]
    In other words, irrespective of how long we take on this Bill or of what happens in connection with it, the Minister, the Secretary of State and others in the Department of the Environment have already determined that water metering for new houses is absolutely essential because of the abolition of domestic rates and their replacement by a poll tax.
    If the poll tax comes in and the Minister has no method of charging for water other than by metering, whatever happens in the trials he will not dare do anything other than announce in one and a half or two years that the trials have been successful. He will have no alternative. Of course this is a sham, of course it is idiocy and of course the Minister, who time after time has proved himself to be extremely intelligent and knowledgeable on these matters, must find it extremely embarrassing to have to push this proposal.
    I am told that the source of the information was the Minister himself.
    Mr. Moyniham indicated dissent.,
    Mr. Boyes: I hope that the Minister is not suggesting that civil servants are accountable. If so, we shall say that civil servants should have better things to do. I do not believe that the information came from a civil servant. I believe that it came from a member of the press who was doodling. According to the Daily Mirror, the Minister made 640 interventions in Committee. He is proud of that, but I take it as a compliment to Opposition Members for having pressed the Government so hard in Committee.
    In Committee, my hon. Friends the Members for Gateshead, East, for Newcastle upon Tyne, North (Mr. Henderson), for Stoke-on-Trent, North, for Stalybridge and Hyde (Mr. Pendry) and for Normanton (Mr. O'Brien) asked the Minister the most difficult, penetrating and pointed questions. As a consequence, the Minister has been forced to intervene on all those occasions. Although he might claim a record—if it is a record, he can take credit for it — I hope that he will explain to his civil servants and to the Secretary of State why he had to make all those interventions.

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    I wish to ask the Minister to comment further on a matter which greatly concerns Opposition Members—the activities of the East Worcestershire Waterworks company. I do not question the integrity of the people who run that company, or of the dedicated staff who work there, but the company has not acted correctly; indeed, it may have acted illegally. I raised this matter in Committee when it was brought to my attention that the company was issuing a letter to customers about water metering.
    Like many other companies, that company offered customers the opportunity of voluntary metering, provided that the cost of installation of the meter was borne by the consumer. In September 1985, the company decided that properties with new supplies should be connected automatically to water meters.
    The letter to customers started, "Dear Customer", so it was not a personal letter to individual consumers. It was a general circular letter, so presumably everyone concerned received the same letter. The letter went on:
    "It has been normal practice for the Water Industry in the United Kingdom to charge for water supplies to domestic properties on the basis of rateable value of the property supplied which is used as a proxy to reflect the quantity of water likely to be used at the property.
    The relationship has come under increasing attack in recent years on the grounds of unfairness."
    That may be a value judgment by the East Worcestershire Waterworks company and many Opposition Members would claim that it is fairer to use rateable values than meters. That is what we have argued in the Bill. However, we do not agree with that judgment.
    The letter continued:
    "In order to overcome this criticism and to make charges which properly reflect the quantity of water used by our customers, the Company adopted a policy of metering all new domestic properties with effect from the 1st September, 1985."
    When the East Worcestershire Waterworks company issued that letter, the proposal to introduce compulsory metering of all new properties was not even a twinkle in the Minister's eye.
    6.45 pm
    As I am not a barrister or a legal expert, I would not know whether the company has acted irregularly or improperly, but I could seek legal advice on that. The letter was signed by Mr. G. A. Booker, chief executive. The letter did not state that metering was optional. As the Minister knows, when people receive an official letter, they believe that the contents reflect the law, and that therefore it must be correct.
    When I raised the matter with the Minister, he agreed to take it up with the East Worcestershire Waterworks company on behalf of Opposition Members. I thank the Minister for that. He has sent me two letters, dated 29 January, which deal with this matter. He sent me a copy of the metered water supply agreement form issued by the East Worcestershire Waterworks company and other documents which deal with completion of a meter card. He also sent me a copy of the terms and conditions for the supply of water by meter.
    I have studied those documents, particularly the agreement that the consumer must sign. When I sign agreements, I am accustomed to there being little red boxes which state the individual's rights under consumer law, so that, if he does not like the goods, he can send them back after so many days, not pay any further instalments and withdraw from the signed contract. The agreement makes
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    no mention of the consumer's rights, nor does it state the conditions under which he can withdraw from the agreement.
    I highlight this company because it was brought to my attention and because the Minister undertook to check with the water authorities and the water companies whether this was a common practice. Again, I thank him for doing so. All the water companies and water authorities may have done this for some time. The letter dated 29 January that I received from the Minister on 1 February, stated:
    "I am now able to let you have the information which I promised in Committee on 21 January (Official Report, Col. 702) about the general practice of water undertakers on the installation of meters in domestic properties under their present powers. I have written to you separately, as on reflection I think was right, about the position of the East Worcestershire Waterworks Company.
    In the time available, it was not possible to consult all the undertakers individually. But I am advised by their Association that the water authorities do not routinely install meters in new domestic properties. They charge for water on the usual RV basis, unless the customer asks for a meter. The Water Companies' Association report that their members have various policies. East Worcestershire is the only one which arranges for the developers to install a meter and then charges by measure as a matter of policy unless the customer asks for RV charging."
    In none of the documentation supplied to me previously, or on 1 February by the Minister, does it say that the East Worcestershire Waterworks company —which is unique—informed people, either by correspondence or by telephone, that they could opt out. That concerns me greatly.
    This squalid little Bill is all about imposing on people something that they may not want. From now onwards, all new houses will have water meters installed in preparation for metering. Rateable values will have to exist for a long time after the introduction of the poll tax because water meters cannot be incorporated into all houses overnight. However, we are concerned that one water company has acted prematurely.
    The Minister has been true to the spirit of the Bill, but the Government have failed to give us sufficient notice of their amendment concerning meters in new buildings. I hope that the Minister will comment on the East Worcestershire Waterworks company. My hon. Friend the Member for Normanton made a lengthy analytical speech and we have given the Minister much to think about. I hope that the strength of our arguments will enable the Minister to concede new clause 2.
    Mr. Moynihan: If this is my 631st intervention—we have the arithmetic talents of a first-rate young lady, Jackie Allen, to thank for that information—the only reason has been my determination to answer the many important interventions put to me. Miss Allen is an assiduous student of the Public Utility Transfers and Water Charges Bill with a remarkable capacity to count. She is to be commended if she has embarrassed me with her comments.
    One important point that she would have drawn to my attention — the hon. Member for Houghton and Washington (Mr. Boyes) was right to refer to it again—is how we shall assess the success or otherwise of the trials. We do not see them as scientific experiments—to use the hon. Gentleman's words — to be judged against defined scientific criteria on which one can say that they have succeeded or failed. We regard all the additional

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    knowledge in a whole range of issues connected with the trial schemes to be important, and each incremental learning curve along which the water authorities move are successes in their own right because they will bring additional knowledge to the water undertakers. That is essential in determining the outcome of their considerations about the best possible form of charging for water after 1990.
    The hon. Member for Houghton and Washington made an important point about the East Worcestershire Waterworks company. I gave him an undertaking that I would try to make a further statement on that point to the House at the appropriate time. I understand that the East Worcestershire Waterworks company generally has meters installed in new properties by developers and asks the new occupier to sign a measured water supply agreement if he wishes his water charges to be based on the measured flow. The vast majority of customers in new properties choose to sign the agreement and pay for water according to measure.
    I now understand that the company has responded to the concern expressed by hon. Members in Committee and decided to amend its literature to make the option of being charged by rateable value or by measure more apparent to occupiers of new properties. As I said when the issue was raised in Committee—I know that all hon. Members understand this point—I cannot give an opinion on the legality or otherwise of the company's position. That is a matter for the company, its customers and its legal advisers. However, I hope that that additional information, which has been taken up in the national press only today, shows that responsible action has been taken by the East Worcestershire Waterworks company. That action is due as much to the representations made by the Government as to the persistent pressure that the Opposition have applied to the issue and brought regularly to the Committee's attention.
    The new clause raises the important issue of whether, within the constraints of legislation, water undertakers should be left to make their own decisions about future charging policy, or whether Parliament should take their decisions for them. In the Government's view, the industry and its eventual shareholders, not Parliament, are best placed to decide whether a move to metering is worth while.
    In particular, the industry needs to make a decision soon on how to charge for water services to new domestic properties and conversions completed after 1 April 1990 which, as a result of our eagerly awaited reform of the rating system, will not be rated after that date. Schedule 1, paragraph 1, would allow each undertaker to decide whether to meter new domestic connections. It does not require them — I emphasise that — to meter such connections. The decision, quite rightly, is left to each undertaker's commercial judgment.
    However, I expect that each undertaker will take full advantage of that new power since it will give them access to the metering option at minimum inconvenience and expense to themselves, their customers and the construction industry. The Government will expect the building industry and consumer groups to be fully consulted by the water industry in drawing up specifications for use under this provision. We expect that that consultation process will take about one year. In consequence, we do not see
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    the provision coming into force until at least one year after the Bill receives Royal Assent, but, for the reasons that I have already mentioned, before 1 April 1990. That, as hon. Members will be aware, would be by commencement order under clause 8(2).
    To postpone the use of those powers until 1993, when the trials are likely to be complete, or later, to allow for the compilation of a report and for approval by Parliament, would, apart from creating enormous problems for the industry in charging for new properties, add to the cost of any later decision to move to more widespread metering. I emphasise that we are talking about new properties, not about requiring water undertakers to meter such connections. We are talking about an opportunity for water undertakers to decide whether to meter such new domestic connections.
    To sum up, the effect of the new clause would be to delay the adoption of widespread metering, if that is what the industry eventually decides to do. I re-emphasise that it is not the Government's intention to pre-empt the outcome of the trials, or to argue at this stage, or indeed at any stage, that their view about charging is sacrosanct and will not take into account the full outcome of the metering trials as the detail of those trials comes to light. Indeed, flat-rate charges are an option which a number of water undertakers are looking at carefully alongside another range of charging systems.
    Some have argued—we looked at this in Committee —that the high level of infrastructural costs that would go towards the traditional standing charges is such that the water supply element would be a small proportion of the total bill. Those who urge that would argue against metering and more in favour of a flat-rate charge. That sort of issue needs to be examined in detail during the metering trials. It is not for the Government to pre-empt the outcome of those; it is for the industry, in the final analysis, to decide on the method of charging that would be most appropriate to its specific circumstances.
    Mr. O'Brien: Has the Minister—or the Secretary of State—agreed with the water industry that charging by rateable value will continue into the next century?
    7 pm
    Mr. Moynihan: No, I have not. From 1990, for 10 years, the industry will be able to continue on rateable value, seeking new charging systems to be introduced during that period and not into the next century. That 10-year period — the hon. Gentleman knows that I always try to answer his questions accurately, and it would be misleading to say that the system was going into the next century—will expire and that option will no longer be in place on new year's day in the year 2000. But it will still be there for the undertakers on new year's eve.
    Mr. Matthew Taylor: What would happen to a water-connected property that was greatly improved during that time? Would it pay on the basis of a rateable value assessment made before those improvements or would it be possible to have some form of assessment done on that property in the intervening period? If the latter is the case — it is the only thing that would make sense — why could not the same be done for new properties or properties that had just been connected to water?
    Mr. Moynihan: The undertaker will be entitled to use that rateable value and to go over the charging system that

    899
    it wanted, in the full knowledge that the rateable value would not be available in the year 2000, at any stage during the 10-year period. This is an enabling power, as the hon. Gentleman knew when we introduced the complex provisions, to allow undertakers to insist that new properties should be fitted with appropriate technology so that metering could be put in place at an appropriate time. Our reasons for doing so were as much to avoid duplication of cost—
    Mr. Matthew Taylor: I understand that, but, unless I am much mistaken, the Minister has not quite got my point. If there is an option for properties to continue to be charged on the basis of rateable value, is it possible to update that rateable value if the property changes? Is there a possibility of a new rating assessment up until the year 2000?
    Mr. Moynihan: I understand that the answer is no. I must correct a point about which I was trying to be specific earlier. I made a minor error: it will not be on new year's eve in the year 1999. Rateable values will continue to be an option until 31 March in the year 2000. Those extra 100 or so days are relevant in the interests of accuracy. I am grateful to those who have reminded me of that important information, which is now on the record.
    I believe that the main points about the new clause have already been covered in my response. I want now to take up one important point about charging that was raised by the hon. Member for Normanton (Mr. O'Brien). Except for certain specific circumstances set out in schedule 1, paragraph 5, the cost of complying with the requirement under the schedule is to be met by the developer. That is critically important, reflecting the shift of emphasis from the consumer to the developer since the earlier legislation of 1945 and 1951. Limited exceptions to the rule in subparagraph (1) are provided for in paragraph 2. They are outlined clearly and concisely. When a meter is installed by or at the request of the undertaker, he must bear the costs of installation and connection, and any expenses of maintaining, repairing or removing a meter in accordance with any requirements of the undertaker; and the expense of any works associated with the installation or connection, or with the maintenance, repair or removal of the meter in accordance with any requirements of the undertaker. Additional limited exceptions are provided in sub-paragraph (2), but I hope that what I have said clarifies the point about charging.
    I ask the House to reject the new clause.
    Question put and negatived.

  New Clause 4

    REPORT TO PARLIAMENT OF COSTS OF ELECTRICITY PRIVATISATION
    The Secretary of State shall report to Parliament all items of expenditure including consultancy fees, incurred by electricity boards or the Electricity Council in facilitating the transfer of their property or functions to another body corporate, arising from the privatisation of the electricity supply industry.—[Mr. Prescott.]
    Brought up, and read the First time.
    Mr. John Prescott: I beg to move, That the clause be read a Second time.
    New clause 4 is a somewhat narrower clause dealing with clause 1, which concerns the electricity industry. I
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    have read the Committee and Second Reading debates on the privatisation of the electricity supply industry. It was a surprise to many of us that the clause should have been included in the Bill. All that I can tell from the debates that have been held is that the Government think that it would be right for the electricity board and the Electricity Council to be able to spend 'their money for consultation and fees on the possible plans that are being prepared for the privatisation of the industry. However, they appeared to fear the fact that NALGO had threatened to take action in the case of a water board, and so the Government have taken this chance to reinforce and state in legislation their view that it would be entirely proper and legal for the electricity board and the Electricity Council to use consultancy fees and to take into account recommendations and considerations on the transfer of their property or functions to another body corporate. The intention of the new clause is to make it clear that the Secretary of State shall report to Parliament all items of expenditure incurred in that way.
    The Opposition's concern is to take this opportunity to debate what sort of reports the Government, or the Electricity Council, have in mind, and why it is necessary to take powers in this way. As the legislation is not yet before the House, one presumes that this is a sort of paving clause. I accept the Minister's statement in Committee that there are no powers in clause 1 — perhaps he will reaffirm that today — to advance any part of the privatisation of the electricity industry. It is merely to prepare the reports and advice that the Government and the CEGB need to prepare and influence the legislation that is to come.
    What are the reports about—the financial problems that will arise from privatisation? Are they about the consumer, the nuclear part of the industry or other ports of call? Those are all essential matters that will be directly affected by the Government's proposals for and commitment to privatisation of the electricity supply industry.
    This debate gives the Government an opportunity to give us an idea of what they had in mind. What has influenced the Government to want to spend their money in this way? If action were taken by NALGO in connection with the moneys used for consultation—presumably the legislation is not retrospective — and the reports had already been prepared by the Electricity Council and the CEGB, had the action been found to be illegal, it would still be illegal and not affected by the Bill. If so, why is this being done? One assumes that the provision will not apply, so why is it in the Bill? There was some discussion about that in Committee, but it is still not clear.
    Our new clause is designed to deal with the Bill as it stands. We want to take into account the sort of things that the Government have in mind. I note that the Minister, replying to queries raised by hon. Members in Committee, said:
    "the authorities would not have to fight lengthy and costly legal battles to defend their position. That would result in extra costs to people who are paying for their services." —[Official Report, Standing Committee B, 10 November 1987; c. 46.]
    It seems that the Minister felt that the costs were not justified and that if there were any fear of them arising he wanted to take the chance to prevent such extra costs being imposed on the consumer. At the end of the day the consumer must pay all the costs. There was a debate in

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    Committee as to whether there would be any limit on the costs. The Minister replied that, because he set the effective rate and the fiduciary duties of nationalised industries, that would control how much was spent on the reports. That is not an effective way of controlling expenditure. He did not answer when several hon. Members asked in Committee what limits would be on the expenditure.
    Even on a most generous assessment of the costs, they pale into insignificance when compared with what taxpayers will have to pay in commission to the City for handling the privatisation of the various industries. I think that about £500 million has been paid to bankers, accountants and solicitors for the 13 or 14 privatisations that we have had. It is peculiar that the Government are concerned about the chickenfeed of costs to be imposed on the consumer when the major cost of the sale of industries —hundreds of millions of pounds—has caused them no concern before. One can only assume that the amount involved in the privatisation of electricity, which will be greater than almost all the others put together, will be of considerable benefit to the City, where people have already been hired.
    I do not know who the people are who are involved in the consultancies. I have tried to find out from the various bodies, but they are extremely secretive about what has been done and how much money has been spent. I know from the limited amount of information that has been published that the Government, the CEGB and the Electricity Council have different bankers and different accountants who will presumably do very well from acting for the different parts of the industry. That is all that I can find out about the people who have already been hired.
    It would appear that the consultancy fees are limited very much to narrow financial obligations. I believe that the only concern of the Government in privatisation is how much money they can get from selling the silver. They are not concerned about the benefit to the consumer or whether the reorganisation that they wish to force on the electricity supply industry will be more efficient and safer for the consumer. Many people in the industry challenge the objects that the Government say they have in mind.
    We want to know from the Minister whether the consultancy fees and other moneys to be paid out are really for the financial sector of the industry — the accountants and bankers — or whether the money is being used to get an assessment of the consequences of breaking up the electricity supply industry. We know from the public debate that the proposal to separate the grid from the CEGB is controversial. The various parties have made strong statements about the consequences for the consumer and for the security of the industry.
    In the Second Reading debate the Secretary of State said:
    "Much preliminary work needs to be done both within the Government and the industry itself. This Bill will ensure that the industry can participate fully in that process."—[Official Report, 21 October 1987; Vol. 120, c. 773.]
    Presumably the process is the privatisation of the industry. In the debate that has gone on since October there have been differing views about the consequences of certain actions that are proposed. It is unfortunate that the Secretary of State has not taken the opportunity to tell the House tonight his thinking on the reports that he has got. We have to watch him on television or read what he has
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    said at a luxury hotel. I do not remember the name—I do not know the luxury hotels — but yesterday in a luxury hotel he lectured the mining industry on the consequences if it began to play politics with the industry. There is no one more politically motivated than the Secretary of State in his actions on the mining industry.
    We have to wait for the press, the television or a side remark to find out about fundamental policy. Why could the Secretary of State not take the opportunity to come to the House and give us some information about the reports that we are asking for so that we may assess for ourselves the consequences of privatisation? The Secretary of State referred on Second Reading to a public debate in which the industry could participate fully; presumably he did not have it in mind that Parliament would take part in that full debate, because he referred only to the industry.
    7.15 pm
    The only reference to Parliament being considered is in complaints about the privatisation of utilities. When the gas industry was privatised many criticisms of the Select Committee about the procedures adopted for privatisation, about the protection of the consumer and about concern that a public monopoly was being turned into a private monopoly have been borne out by events.
    The reason for the Bill is that the Government wish to move from a public monopoly to a private monopoly. Hence our fears about the attempt to break up the generation side and the distribution side, all in the name of competition. We wait to see the consequences.
    In their response to the Select Committee the Government promised that they would issue a White Paper before the privatisation of any other public utility. Yet in this Bill we have a clause which refers to the privatisation of the electricity industry. In Committee the Minister said:
    "The Government have a clear view of the merits of privatising the electricity industry". —[Official Report, Standing Committee B, 10 November 1987; c. 44.]
    What he meant was that he was not sure how they could do it. They did not know what the full effects would be. Presumably that was why they have to have reports. But they are not really interested in the consequences so long as they can get the money for the Treasury. That is all it is about. It is not about the rights of consumers. We have been told by the Minister and the Secretary of State about the exciting period for the consumers. They have exciting ideas about giving rebates if consumers do not get a proper service. We have yet to hear more about that.
    Parliament is not allowed to debate the issues. We have to glean the information from public statements. There is an opportunity in this debate for all the believers in the privatisation of electricity to put forward their views. Much of the money will be made by Government supporters, the people involved in the process. Where are they now? They are not here. They are not interested in whether it is good for the consumer. They have no report to tell them the nuclear industry is to be tacked on. They are not interested in that. All they are interested in is the value of the privatisation.
    The Secretary of State is very good at lecturing miners and everyone else but he cannot come here to tell Parliament how he stands. He cannot do the House the courtesy of coming to listen to the concerns of hon. Members, particularly after the announcement in Scotland today that because of his policies a British Coal contract will be cancelled, which will put thousands of miners out

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    of work and result in the closure of more mines in Scotland. That is just the forerunner of what will happen in the rest of the United Kingdom.
    I ask the Minister specifically what reports he has in mind. What moneys are to be used by the bodies concerned to prepare for privatisation? I would like to assume that the Minister is not solely concerned with the financial effects but may be concerned about the industry. Indeed, there is an obligation on the Department and on the industry to do something about that. But the Government are fast changing the terms of reference of the board, the chairman and the Electricity Council so as to kill off any critical opposition from those in the industry to their plans.
    Have the Government done an assessment to justify the reports that we hear about the split of the CEGB from the national grid? We hear from the people who run the industry that there will be blackouts. I do not know whether that is right or wrong, but security of supply by the publicly owned electricity industry is important. We have been proud of the security of supply and it has been praised on both sides of the House. Indeed, recently during the gales electricity has still been supplied. In the home of privatisation, America, we see the fears of the people about a privatised service. It does not give them the security that we have with our publicly owned system. That is an issue on which there could be a debate, but when the Government decided to break up the CEGB and the grid—if that is their decision—how did they arrive at that view?
    Have the reports been done? If the reports have been done, why have they not been made available to the House so that we can debate them? Is the CEGB to be broken up into two sectors? The industry says that that would cost far more than it would save. We have heard what the Secretary of State says on television, but the industry is saying the opposite. Parliament should be entitled to express a view about those matters.
    I take the view from what we have heard in Committee —I had hoped we might hear differently today—that ideology is behind this. The Government say that they believe in the merits, but they just want to privatise for the sake of privatisation. They have not looked into this; it is a leap into the dark. They will risk this major industry, with a £12 billion turnover and £45 billion of assets; an important industry to the economy and to the industries that depend upon it. Plant manufacturers, the coal industry and the nuclear industry are all dependent on the policies to be pursued in those areas. It is crucial that the Government should make an assessment of what is going on.
    Reports and studies should be carried out, but I am worried as to whether the reports will be independent. If they are independent, will they be taken into account if they arrive at a different conclusion from the Government? The Government do not want to listen to impartial advice. They simply change the chairmen. They have changed the chairman of health bodies, and they would change the chairman of the CEGB when his time is up if he does not carry out what the Government want. The Government should tell us of the consequences for industry of privatisation in the very important areas to which the studies should address themselves.
    I hope that the Minister will tell us whether Parliament will be involved. He should tell us, instead of constantly teasing us, whether there will be a White Paper before the
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    industry is privatised which will assess the consequences and whether the study will be taken into account. I hope that the Minister will make a definitive statement on the suggestions in the press as to whether there is tobe a White Paper. He should answer the question put by the Select Committee on whether there will be a White Paper.
    I hope that the studies will take into account the problems associated with privatisation. We have read in the press of the decisions coming out bit by bit. Taking the nuclear industry as an example, will the Minister request a report on the consequences for the nuclear industry? We have heard from the Secretary of State that, while he believes in market forces, he is scared that if we privatise the electricity industry the nuclear industry may not order any more generating stations, so apparently a decision will be imposed on the privatised electricity industry that 20 per cent. of electricity must be produced by nuclear generation. That is what might be called an energy policy, although the Government constantly tell us that they do not believe in an energy policy; they believe in market forces. If they believe in market forces, why have they come to a judgment—perhaps the report led them along that path — that 20 per cent. of electricity must be produced by nuclear generation? We know the decommissioning cost of Magnox. Will that line be extended and will that bear the cost of privatisation? A legitimate inquiry should be made on how that will affect the price of electricity.
    Have the reports been done? We should be debating the major consequences of privatisation. The Secretary of State has made a statement, and presumably he has made up his mind. If he has made up his mind, why does he need money for reports? Apparently he has made up his mind on the importation of coal. We have heard tonight that the Scottish electricity generating board has taken the view, as the Government have given it higher profit targets and have told them to reduce costs, that the only effective way to reduce costs is to replace British coal with imported coal, so we see the planning agreements for greater imports of coal. Many studies have been done on how many mining jobs will be lost—we are told that it will be 1,700 in Scotland—and what will be the effect on the community and on the balance of payments if we replace domestically produced coal with imported coal. The loss of production of 30 million tonnes could add £1 billion to the balance of payments, which would have an effect on the real economy.
    Are the studies being done by the Government? If they are, why do they want the Bill to provide the money? Is it because the Secretary of State has already come to a judgment? The CEGB and the Scottish electricity board are already applying what the Secretary of State has told them to do, with major and disastrous consequences for the miners and pits, yet the Secretary of State has the audacity to tell us that the miners are playing politics, when he has fixed them in a political ring. They cannot win; there is no future for them. It does not matter how much he refers to pit closures and redundancies, because the Government have made up their mind to import coal and close down pits, to the worst fears of the miners, yet the Minister will come to the Dispatch Box and tell us about confidence in the industry.
    The Parliamentary Under-Secretary of State (Mr. Michael Spicer): This is the most appalling distortion, well below the normal standard of the hon. Member for

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    Kingston upon Hull, East (Mr. Prescott). We have been absolutely clear about the coal industry — that a privatised electricity industry will be free to buy coal in the best markets. We have said that because we are confident that British coal can be competitive if it reforms. We have vast reserves of highly commercial coal and we intend to put money behind that coal so that it will be competitive with foreign coal. It is a total distortion to make any other case.
    Mr. Deputy Speaker (Sir Paul Dean): Order. I remind the House that we are dealing with reports to Parliament. Most Front Benchers are going far too wide.
    Mr. Prescott: I take the point that we are debating reports, and those reports will be presented to Parliament. I am trying to ascertain whether the reports have already been prepared, because the Bill says that the Government want to be assured that they have the authority and legal powers to commission such reports. I find it peculiar that the Government should have to wait for the Bill, as money has already been spent on various reports. It appears that the threat of legal action is there, irrespective of the Bill. I want to know what reports have already been done, because the Bill will give us power to ask the Secretary of State to report to Parliament. What should we do with the reports that have already been prepared?
    The Minister talked about market price. He should apply that to the nuclear industry. Why is he imposing a condition? Why is it strategically right to impose a condition on nuclear generated power if he is not prepared to put the argument for coal? It is vindictiveness against the coal industry. I do not want to open up that debate, but I presume that some reports were done by his Department. Can we have the reports so that we can make an honest judgment as to whether what the Secretary of State has been telling us is correct?
    The point we are making is critical: Parliament must be informed. The Government have nothing but contempt for Parliament, when they constantly use their votes to force things through. The Government have no desire to inform Parliament. A combined Committee unanimously called on the Government to produce a White Paper, and we would have felt that we had made some advances if the Minister had said that that report would be produced. We are worried that we do not have access to reports and we are worried about the continued nobbling by the Government of the chairmen of nationalised industries, either by replacing them or by not making available their reports.
    We do not have the means to judge the independence of reports. If the Secretary of State and Minister want evidence of that, they should look at the reply given to Parliament about the reappointment of Sir Philip Jones. The Government changed the terms of reference of a chairman who had been critical of the Government's proposals and told him to get into line if he wants the job and to carry out the Government's policy. They instructed him, for all to see — I will not quote it, but it was reported in Hansard last Friday. They have nobbled a chairman who disagreed with the Government.
    We have moved the new clause because Parliament must be given the chance to make a judgment about reports. I hope that the Minister will give us more substantial replies than he did in the Committee, when no
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    reports and no answers to questions were given. We must have a satisfactory reply to this. It is crucial to the rights of Parliament to check on the Executive in the privatisation of one of our fundamentally importart industries.
    7.30 pm
    Mr. Geoffrey Lofthouse: Like my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), I am very keen that the reports that have been referred to should be presented to the House so that hon. Members can have an opportunity to decide where they want to go. The House will be aware that there have been expressions of concern that there may be a traumatic spin-off for the mining industry arising out of the privatisation of the electricity industry.
    We know that at present there is an understanding that the electricity industry will take 80 per cent. of the output of British Coal. We are all aware that if privatisation takes place, that understanding will no longer exist; we shall be open to the commercial market. There is speculation that preparations are under way for greater imports of coal into this country. The Associated British Ports (No. 2) Bill and the North Killingholme Cargo Terminal Bill, on the Order Paper today, certainly point that way. If this is not the case, what are they all about?
    I too am interested in the costs of and charges for consultancies, particularly looking at some of the consultants—the Electricity Council, Price Waterhouse, N.M. Rothschild and, when it comes to the CEGB, Lazards. We all know who is involved in that company. It is a man called Sir Ian MacGregor, whom the coal industry will never forget.
    I believe that it is absolutely essential that the House have these reports before there is any further privatisation. It is absolutely right that White Papers should be presented and that there should be discussions before the Government continue on their path of channelling profits to the private sector. I also believe that, if there is to be a massive rundown of the coal industry arising out of the privatisation of electricity, the Government should give serious consideration to the effects of that and not leave us in a similar situation to that in which we have been left previously, with whole communities wiped out and no new employment opportunities provided.
    The House has a right to know what the Government intend to do and how many men are going to be affected by the privatisation of electricity. Will it be another 40,000, as I can pretty well imagine? Indeed, as recently as last year, an eminent economist, Mr. J. McClusker, while giving evidence to the Select Committee on Energy, forecast that the work force in the mining industry would be down to 64,000 by 1990. If the Government have any reports indicating this, the House has a right to know about them. If the young men in the mining industry, where the average age at present is 34, are going to find themselves thrown out of work because of the privatisation of the electricity industry, the House has a right to know.
    The House also has a right to know whether the Government have any reports, or intend making any reports, on the 20 per cent. nuclear power proportion, and if that will need subsidising. I put that question to the Minister because the indications are and my advice is that it could well be that the 20 per cent. will need subsidising. If that is the case, if we have suffered throughout the

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    mining industry because of the withdrawal of subsidy only for it to be transferred to the nuclear sector, the House has a right to know. These reports are absolutely essential.
    I hope that tonight the Minister will be able to say whether the Government are going to publicise these reports, if there are reports, and inform the House of the cost in terms of wiping out jobs in the mining industry. I believe that the Minister has an obligation, on behalf of the Government, to make these facts available before any major decisions on the subject are taken.
    Mr. Bob Cryer: I rise to support the very modest new clause proposed by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), which I expect the Government to accept. All it does is require the Secretary of State to
    "report to Parliament all items of expenditure including consultancy fees, incurred by electricity boards or the Electricity Council in facilitating the transfer of their property or functions to another body corporate, arising from the privatisation of the electricity supply industry."
    The legislation that we are dealing with gives, under clause 1, massively wide powers. For example, under clause 1(3), the Minister will have the power to "do that thing with a view to promoting the interests of—
    (a) any body corporate to which it is proposed to transfer the property or functions."
    The Minister is provided with the power to promote the interests of any body corporate to which it is proposed to transfer the property or functions — not actually a transfer of property or functions, but simply a proposal to do so. This is a massive, sweeping power. It is not unreasonable, therefore, that we should ask that the Minister provide reports to Parliament about the application of the clause.
    After all, we would not want the Minister to be giving kickbacks to the friends of the Conservative party who are contributing to its campaign funds. Under clause 1, the Government could provide a consultancy for or ask for a report from all that legion of organisations which have been giving money to the Conservative party. That would be a corrupt use of taxpayers' money, but it would have the gloss of legality because the Minister has been given such wide powers.
    I expect that the Minister will deny any such activity, and the best way to embark on that denial is to accept the new clause in order to show that the Department of Energy is dealing at arm's length with all those organisations. He could also say that to demonstrate that arm's-length relationship the Government will promote various reports, consultations and so forth. One of the benefits of such reports would be to demonstrate that Government Members who are struggling along like the rest of us on their £24,000 a year are not benefiting from this privatisation measure through the various consultancies on which they are moonlighting and which are included in that very thick tome, the Register of Members' Interests.
    This covers a wide range. Price Waterhouse has been mentioned, for instance. The hon. Member for Beaconsfield (Mr. Smith) is a consultant to Price Waterhouse. This is a rich vein which one could mine for some time. I should have thought that, as the various bodies receive contracts from the Department, the Minister will be only too happy to provide the House with reports. There is in any event a question of general accountability.
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    The Minister cannot say that privatising electricity will lead to safeguards in management or standards. A few recent examples show that private ownership, with its pursuit of profit, sometimes disregards standards of safety. One has only to mention Townsend Thoresen for a shiver to run down people's spines. The private enterprise supervision of that organisation has not exactly become a byword for safety standards.
    In the Bill, however, we are dealing with the electricity industry, which has one of the most dangerous and potentially harmful methods of electricity generation known to mankind. We ought to have some regular reports to know what is going on and to stop the Minister uttering the slick platitude that he uttered a few moments ago—that the electricity generating industry would be allowed to buy coal from the best market. What precisely does that mean? If the Minister wants to say now that that is not what he means, and that he means that coal will be bought in future from British coal mines, let him say so. Let him not talk in platitudes about buying coal from the best market. That generally involves the concept of competition. We have to make a judgment about the best supply of coal in a competitive market place.
    It will be interesting to hear a statement from the Minister that, in carrying out the terms of clause 1, the Government will ensure that no coal is bought from South Africa, where black people are exploited. If he said that, it would at least reassure us. But if any of the bodies corporate to which it is proposed to transfer the property or functions of the electricity generating industry will develop a partnership in South Africa, should riot Parliament know about it? It would be in the interests of the community at large for Parliament to receive reports of such a development.
    I am sure that the Minister will join in with a conventional consensus about apartheid, as some Conservatives do who say that they are against apartheid. Let the Minister demonstrate that to the House by accepting the new clause so that he can report to Parliament. Should any of the nefarious organisations with which the Minister might become involved promote a body corporate to take over electricity generation, the Minister can report to the House. He knows that he will get our backing.
    7.45 pm
    As my hon. Friend the Member for Bolsover (Mr. Skinner) has said about fair competition, what of subsidies that other Common Market countries provide for their mining industries? Will that be dealt with fairly, or will the bodies corporate examine that sort of issue at the request of the Minister, if he is prepared to examine matters on that basis? Will he be prepared, for example, to say that we will not purchase coal from the mines of Colombia, where children are sent to work? We will be pleased to know about that, and he can include the information in the regular reports that the modest new clause asks him to make. The mining community will know then that this is not a vicious vendetta against them, to usurp their position by importing coal from any country where people are exploited to a greater degree.
    In our experience, private industry often cuts corners to make greater profit. We must know what is happening in an industry with such a dangerous form of electricity generation. Indeed, at the moment there is insufficient

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    information with regard to public facilities. The Central Electricity Generating Board frequently diffuses information that is economical with the truth.
    To remind the Minister, not long ago a Government employee called Sir Robert Armstrong, who was paid a fantastic salary because he was a man of such importance, was knighted for lying to a court in Australia. What an extraordinary set of values! If he had been a sweeper-up, lathe operator, turner or weaver in an ordinary firm and caught out for lying, he would have been sacked. But the Government, with their warped values, reward people who are economical with the truth. Therefore, to avoid misunderstanding or the possibility of a charge of duplicity, regular reports to the House could be scrutinised, and judged.
    Although we say that the standards of public utilities are not always of the best, the Minister should think of what happens in private utilities. They cut corners in safety standards to make bigger profits.
    Mr. Michael Jack rose—
    Mr. Cryer: I shall give way to the hon. Gentleman in a moment.
    An overworked and under-staffed nuclear installations inspectorate cannot complete all the work that is required of it. There is a great danger in those circumstances that something could go wrong. In the United States of America, the incident at Three Mile Island occurred in a nuclear installation that was run by a private utility. That was the most dangerous accident before Chernobyl. Therefore, it behoves us to ask for regular reports to Parliament.
    Mr. Jack: I thank the hon. Gentleman for giving way. Will he agree with me that reports are made available regularly and openly by the nuclear installations inspectorate, as well as the Health and Safety Executive and British Nuclear Fuels Ltd., with information on safety standards within the nuclear industry?
    Mr. Cryer: I am grateful to the hon. Gentleman for mentioning those reports. Clearly he is in favour of requiring reports to be produced to Parliament. I am in favour of that too, and there is no difference between us on the issue. Under the new clause, we will be able to supplement such reports with information from the Secretary of State, because he is facilitating the transfer of a major public utility to private resources.
    We want details and technical information, but we also need to have general information about the powers in clause 1 relating to the promotion of bodies corporate. We want to be able to match one sort of information with another. For example, if there was a particularly bad contractor, we should like to know whether the new body corporate will deal with that contractor. We should be able to marry information from the two reports and make a better judgment.
    The Government, with their majority, can get a report through Parliament at the drop of a hat. The number of revolting Tories is very slender; even on a big issue, they get only a dozen revolters. That is all they can manage. The Government know that they can get a report through Parliament, but in a democracy the information should be made available.
    Mr. Frank Cook: In relation to the possibility that existing reports, such as those suggested by the hon. Member for Fylde (Mr. Jack), could be combined with the reports that we seek in the new clause, perhaps my hon. Friend will ponder the gross inadequacy of some reports published now. I will remind him of the type of instance that I mean. A question mark was put over the weld quality assurance records at Hinkley Point B, which were admitted by an individual almost a year ago. The CEGB and the nuclear installations inspectorate were supposed to investigate that and said that they would be open to public scrutiny. I am still waiting to get access to the plant; as are the engineers that I nominated. We are still waiting. The CEGB keeps us outside the gate and denies us the right that it said would be granted nearly 12 months ago.
    Mr. Cryer: I am grateful to my hon. Friend, who has pursued these matters with persistence and devotion to detail. It is one of the strengths of Parliament that it contains people such as my hon. Friend who are not prepared to take bland platitudes from bodies such as the CEGB.
    The standards of public ownership tend to be better than those of private ownership. Publicly owned bodies tend to be more accountable, but, having said that, I accept my hon. Friend's criticisms. The Minister is being given enormous powers to promote bodies that are private and that will not have any element of accountability unless the new clause is agreed. If the Minister has any pretensions to democracy, he should accept the clause.
    A lot of money—about £500 million—has flowed from the taxpayers' revenues to the Government's Tory friends in the City. If the Minister and the Government wish to divest themselves of the taint of lining the pockets of their friends—the wetter Conservative Members may indeed wish to divest themselves of that taint — they should accept the new clause. Of course, the Government may not regard that as a taint; they may regard it as a success story. Indeed, as some of that money has been recycled into the funds of the Conservative party, it is an even greater success story—although many of us would call that corrupt. However, as the Conservative party raises greed to a principle, they could argue that that principle is being carried into effect by their friends in the City who are being greedy and lining their pockets to a huge extent.
    The Government are always talking about how it is not the Government who make the money; it is the taxpayer who provides the money and the Government who spend it. Therefore, if the Government want fairness and some accountability for the taxpayers' revenue, they should, in all equity, accept this modest new clause so that the most important assembly in the United Kingdom, this Parliament—that sounds a bit grand, but by and large it is true — should be able to examine the reports and question the Minister in a way that would not be possible without the new clause.
    I shall be shocked if the Minister does not accept the new clause, because he will then stand adjudged of all my criticisms.
    Mr. Kevin Barron: I wish briefly to support the call that the reports, which presumably are being worked on now and which will be published under clause 1, should be available in the House so that we can consider them. If nothing else, we should do so to ensure

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    that the reports are in the national interest and not in other interests. That applies especially to the question of what will happen to the supply of electricity once this pagan Bill is followed by other legislation and ends by breaking up the electricity supply industry as we have known it for a long time. There is also the question of the protection of consumers under a regime that will be different from the public regime that is the electricity supply industry now.
    However, as has been mentioned, the problems go wider than that. If the press reports are correct, it has been announced today that the South of Scotland Electricity Board is now to seek a market in which to buy its coal which will be much wider than the Scottish coalfield. That could be described as the beginning of the end for deep coal mining in Scotland. It should be remembered that that industry has served Britain for many centuries — certainly for decades—and has helped us to fight wars against the enemies without. However, if todays's press reports are true, the SSEB is to turn its back on the Scottish coal miners and effectively to close the industry. I am certain that in the national interest, any reports would take into account the cost to the nation of any rundown of the industry and the cost to its communities. It would be remiss of the House to pass the new clause without that being said.
    On the question of judging the independence of that national industry, it is important for us to ensure that all the reports are in the national interest and that they do not have any other interest. The question of party political interest in selling off public utilities has been raised. The electricity supply industry will be the biggest single privatisation in terms of the money that the Government will receive. That is important especially in the light of recent legislation which has stated that local authorities are not able to use public funds for party political propaganda. Therefore, it is important to make sure when selling off this great asset of our nation that none of the reports will be used for party political propaganda.
    I hope that any reports drawn up through the use of clause 1 — if the new clause is not accepted — will be available in the Library so that we can truly judge whether the national interest is being served.
    Mr. Michael Spicer: The hon. Member for Kingston upon Hull, East (Mr. Prescott) asked various questions, to some of which I can give him a clear and positive response. That applies especially to his first question in which he asked whether I would confirm that there were no powers in the Bill relevant or concerned specifically with the restructuring of the industry. I am happy to confirm that to him. This is not a Bill of substance so far as the electricity industry is concerned. Certainly, the Bill does not say anything about the nature of the restructuring of the industry.
    The hon. Gentleman went on to ask me why we need the Bill in connection with electricity. He made the point fairly that there have been previous privatisations and that the process of discussion about privatisation has already begun. In that context, the hon. Gentleman asked why the Bill was necessary and what it means in terms of the expenditure that has already been incurred. That is a perfectly fair point and the answer is that the Government have never believed that the Bill is necessary. What we have always said—I said this earlier in Committee—was that, in the context of the litigation which, when the Bill was introduced was live litigation, clearly, in some people's
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    minds, there was doubt about the vires of the expenditure. Rather than all parties being engaged in lengthy litigation which, in our view, would be fairly pointless and wasteful of resources, we should make it clear in legislation that a limited form of expenditure—it is only limited—relating to the advice given by the bodies that are to be privatised, used in assisting the Secretary of State to facilitate or to modify his proposals, should be protected by statute.
    I am not talking just about public sector parties and the effect of their expenditure on the consumer, although the hon. Gentleman is right to say that, ultimately, that expenditure would fall on the consumer. That seems a perfectly reasonable position for the Government to have taken, although we have never had any doubt that the expenditure was perfectly acceptable and legal. Indeed, if the Government had had to fight the matter in the courts, that is the basis upon which we should have fought. However, we felt that it would be a waste of time and a waste of everybody's resources if we pursued the matter in the courts and that it would be better to clear it up through legislation.
    Mr. Prescott: I am grateful to the Minister for that reply. As I presume that some consultancy fees have already been incurred, and as I presume also that the legislation will not be retrospective in such cases, is the Minister saying that the Bill gives the authority —although the Government believe that they already have that — to the next legislation for privatisation for the expenditure on the reports, consultations and consultancy fees that will be incurred while that privatisation Bill is going through the House during the next parliamentary Session?
    8 pm
    Mr. Spicer: I am not sure that I fully understand whether the hon. Gentleman is talking about the past or the future. In the context of the Bill, I am speaking about the present electricity privatisation process. The Bill will give double assurance. We consider that there will be no problem regarding past or future expenditure, but for the sake of efficiency of use of resources we wish to be doubly clear about this matter, because there has been litigation. Rather than people spending their resources and time on wasteful litigation, we wish to make the issue doubly clear in the Bill.
    Mr. Prescott: I am sorry to press the Minister, but presumably some expenses have already been incurred which could not have been covered by present legislation. I was asking whether the real intention of the clause relates to expenditure to be undertaken in the next parliamentary Session, when we shall consider the privatisation Bill. Presumably that is all that it can cover.
    Mr. Spicer: It will apply both to the expenditure incurred when the Bill receives Royal Assent and to future expenditure. I have no idea what that expenditure will be. In the case of electricity, I assume that very little expenditure will have been incurred during the time to which the hon. Gentleman referred.
    The hon. Gentleman asked, very fairly, what advice would be given under the terms of the Bill. Of course, the specific advice will depend on the proposals that the Government will make for privatisation. One thing is clear. We were asked whether we had a mandate to privatise. There is no question about our intention to

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    privatise the electricity industry and our confirmation of that intention is in our general election manifesto. I could list the areas on which advice will be given, such as technical, economic and organisational matters, but the important point is that the precise nature of the advice will depend on the structure that the Government propose.
    The hon. Member for Kingston upon Hull, East asked how that would relate to Parliament. That was the theme behind many of the speeches tonight. The hon. Member for Bradford, South (Mr. Cryer) made the same point. The role of Parliament clearly must be paramount. The structure of the industry that we are proposing under privatisation will be announced in the House. Whether that announcement is accompanied by a White Paper is still being considered by the Government.
    I believe that the most important issue is the nature, contents, specifics and detail of the statement that the Secretary of State for Energy will make to the House. The questioning process and, dependent upon what the House wishes to do, the debates that take place are also important. The probing of the Government's position during that debate or those debates will be critical in regard to how the Government produce their plans for the country. I assure the House that that will be done through Parliament.
    Mr. Prescott: Is the Minister now telling the House that, despite all the press reports, there is a possibility that the Government will ignore the advice of the Select Committee and produce the White Paper before the privatisation of electricity? In response to a request from the Select Committee, the Government said that they would give consideration to its recommendations. Is that all that it is? Would consideration include the possibility that the Government may not produce one, anyway?
    Mr. Spicer: I am saying that the Government have not yet decided but they are certainly considering whether to produce a White Paper.
    The important question that was raised by the hon. Member for Kingston upon Hull, East was that our detailed plans for the privatisation of the electricity supply industry should be presented to Parliament, that Ministers should be probed and questioned and that the policy that we announce should be debated. Surely that is more critical than whether we produce a White Paper. Hon. Members on both sides of the House are discussing whether the statement should be accompanied by a White Paper. They have produced strong arguments, but the critical issue is how we present the facts and the proposals before the House. It may be for the convenience of the House that a detailed statement, questioning and debate should be accompanied by a White Paper. I am not in a position finally to tell the House that the Government have decided on that.
    The hon. Member for Kingston upon Hull, East asked what studies the Government were making of this extremely complex matter. After six months or so of examining the subject, I am bound to concede that it is a complex issue on which there are passionate feelings and technically supported opinions from all sides. Therefore, it would be foolish, to say the least, of the Government not to have engaged in deep technical, economic and organisational analyses of the various options that they were considering. If that was the hon. Gentleman's
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    question, I can happily assure him that very substantive analysis has been made of all the implications of the various proposals that we now have in mind.
    I shall now address the specifics of new clause 4. New clause 4 places certain requirements on the Government regarding the fees and the reports and advice that the bodies would undertake on behalf of the Secretary of State. The central issue is whether all that information should continuously be put before Parliament. My answer is that Parliament is already deeply embroiled in that process.
    Under the terms of the Bill, Parliament restricts considerably the nature of the expenditure which can be undertaken. The hon. Member for Bradford, South said that the Bill was wide-ranging and sweeping. That was a fair rhetorical point, but it is not how the Bill is drafted. Clause 1(1)(a) and (b) are highly restrictive in regard to expenditure. Clause 1(1)(a) states that only advice which is
    "facilitating the implementation of the proposal for the transfer"
    can be accommodated within the terms of the Bill.
    In regard to whether those moneys are likely to be properly spent, the Secretary of State has the responsibility to appoint auditors to ensure that the money is properly spent. He also appoints the members of the boards, who have their own financial responsibilities for the way in which money is spent.
    Fundamentally, Parliament has devolved management responsibility on those nationalised industries. Parliament has said that within certain broad parameters and responsibilities which lie on the shoulders of the Secretary of State, those nationalised industries, within the financial targets set by the Secretary of State and debated in Parliament and within various constraints, must get on with the business of managing themselves and their operations in a way that complies with their broad objectives. It must be said that that kind of highly detailed expenditure, which, as I have already argued, is very limited, must be the responsibility of the bodies concerned. Parliament would want to engage itself with that expenditure on a daily basis, as is implicit under the terms of the new clause.
    That is the substance of my case for voting against the new clause.
    Mr. Prescott: So the Government are going to inform us?
    Mr. Spicer: I suspect that the hon. Gentleman would not agree with me, let alone be informed by me, however long I spoke. Therefore, it might be for the convenience of the House, having made those specific points against the new clause, if I advised that the new clause be withdrawn or that hon. Members vote against it.
    Mr. John Garrett: I had hoped that this brief debate about expenditure to facilitate privatisation would give us the opportunity to establish the Department's thinking about the Government's largest proposed privatisation. I had hoped that we would learn what studies might be undertaken before privatisation so as better to inform the House.
    I found the Minister's reply somewhat less than satisfactory given the major issues raised by my hon. Friends on matters of great consequence about the ultimate effect of privatisation. The Minister said that the

    915
    Department would seek advice from the bodies referred to in the new clause. He said that he was unwilling to list the necessary advice which might be technical or economic and, I assume, social or even political.
    We had expected a White Paper to precede the publication of the Bill. The Minister referred to a statement. What does a statement mean? It amounts to 10 minutes after Question Time for Back Benchers to address questions to a Minister. How is that public accountability? Surely that bears out the authoritarian style that we are so accustomed to in the way in which the Government conduct their affairs.
    I believe that the privatisation of the electricity supply industry should he preceded by several studies which should be reported to the House. I want to add one or two to those mentioned by my hon. Friends.
    On 6 November the Secretary of State admitted that Britain's electricity costs were among the lowest in Europe and lower than those of the United States, Japan and Germany where privatised or semi-privatised electricity supply is dominant. The efficiency of our electricity supply industry derives from the planning control possible under an integrated system, including the security and ability to use the cheapest source of power on any given day. An early study by the Department of Energy might concern the potential benefit of privatisation to the consumer and the cost penalties of the separation of generation and transmission—or have we already seen one effect of the impending privatisation in the 15 per cent. increase in electricity tariffs over the next 18 months? Is that what the Secretary of State meant by talking about making it possible for competitors to enter the business?
    We can learn one major social and economic consequence from gas privatisation. According to the Gas Consumers Council, there has been a 35 per cent. increase in disconnections over the past year. How did that contribute to efficiency? What protection for the poor will there be in electricity privatisation? What will happen to the 2·5 million householders who now receive help with their heating costs, particularly when the social security regulations to be introduced in April will make such help unlikely in future?
    A major study is required, with a report to the House, on the effect of the proposals on fuel poverty. Is the Minister aware of the effects, or will he commission a study to find out? The Secretary of State often refers to the consumer interest. How will that be safeguarded? What will happen to consultative councils? What forms of representation will be available against the activities and performance of private boards and generators? The experience of British Telecom and British Gas is that consumer consultation has been substantially weakened. What is proposed for the Electricity Consumers Council? What machinery will exist for public and consumer accountability? We must assume that security of supply and safety will transcend private profit in these matters.
    The greatest mystery of all surrounds nuclear power. I should have thought that a substantial report would be due to Parliament on what the Department has in mind about nuclear power. How does the Secretary of State propose to reconcile the least cost argument with the desire to preserve a nuclear power capacity? How will the cost of decommissioning nuclear power enter the equation?
    916
    8.15 pm
    The second report of the Select Committee on Energy in 1986–87 includes a memorandum from the Central Electricity Generating Board which states that the total cost of decommissioning a major Magnox station would be £180 million to £330 million with stage 2 taking 15 years. The lower figure assumes that the final stage would be deferred for 100 years. It stated that improved technology over the 100 years would lead to cost reductions in decommissioning. Surely it is more likely that more stringent safety codes will be introduced over that period which would increase decommissioning costs. Safety is not getting cheaper and that might be the subject of a major report to the House.
    Are the Government proposing to exempt nuclear power from privatisation or to discount the cost of decommissioning when striking a price for nuclear generation? Will private generators have to take on nuclear generation or commit themselves to building new nuclear power capacity?
    On 29 January David Fairhall explained in The Guardian:
    "The British nuclear establishment … contrasted its own integrated approach with a US system under which the electricity utilities are largely left to run their own nuclear programmes so long as they obey the Nuclear Regulatory Commission's rules.
    The danger of the US arrangement, as the Americans themselves have conceded, is that the safe operation of a nuclear power station is far too complicated to be susceptible to a set of written rules …
    Britain's nuclear power industry was created for strategic reasons, not short-term commercial ones. It depends on a vast infrastructure of research …and technological expertise …
    No commercial outfit is going to touch it, in other words, without all-risks cover from government and taxpayer."
    Perhaps we can have a report to the House on that novel form of insurance.
    When formulating the guidelines for a new regulatory body, how would fuel costs be treated if they could be passed on to the consumer? How would that encourage efficiency? In assessing allowable costs other than fuel, how would the prudence of investment costs — for example, in safety—be established?
    If a private generator has to be offered a rate of return over the life of a power station of 30 years or so, how will it be possible to run a national merit order to use the cheapest first? If the rate of return to a private generator is guaranteed, surely that must increase prices.
    There is a national interest in R and D, shared by the House, in this area. It is important that a study is carried out into R and D. Profit maximisation will mean that investment and innovation decisions are made on a short time scale. That will lead to a greater buying in of research and development, including from overseas, with a corresponding rundown in United Kingdom expertise. That is likely to mean that either Britain will lose its position at the leading edge of the relevant technologies or that it will become increasingly and dangerously reliant on overseas expertise—or both.
    There is major R and D in the electricity industry, including combined cycle pressurised fluid bed combustion, new technologies for emission control and super conductivity in transmission systems. It is most unlikely that private enterprise will invest in those matters to the detriment of our science and of providing cheap and safe electricity.

    917
    I had hoped that the Minister would offer to instigate studies on those matters and report the results to the House. I suspect that Ministers are not interested in the results. Our major misgivings are not satisfied by the Minister's explanation. We are extremely unhappy about the Government's failure to give a guarantee of a White Paper. A statement is not good enough. The new clause is about public accountability and about telling the truth.
    Mr. Cryer: It is also very modest.
    Mr. Garrett: As my hon. Friend says, it is very modest. I should have thought that the Minister could concede it easily. This is a matter of public and parliamentary accountability. We are dissatisfied with the Minister's reply and we shall divide the House on the clause.
    Question put, That the clause be read a Second time:—
    The House divided: Ayes 217, Noes 252.

    Division No. 162]

    [8.20 pm

    AYES

    Abbott, Ms Diane

    Doran, Frank

    Adams, Allen (Paisley N)

    Douglas, Dick

    Allen, Graham

    Duffy, A. E. P.

    Anderson, Donald

    Dunnachie, James

    Archer, Rt Hon Peter

    Dunwoody, Hon Mrs Gwyneth

    Armstrong, Ms Hilary

    Eadie, Alexander

    Ashdown, Paddy

    Eastham, Ken

    Ashley, Rt Hon Jack

    Ewing, Harry (Falkirk E)

    Ashton, Joe

    Ewing, Mrs Margaret (Moray)

    Banks, Tony (Newham NW)

    Fatchett, Derek

    Barnes, Harry (Derbyshire NE)

    Fearn, Ronald

    Barron, Kevin

    Field, Frank (Birkenhead)

    Battle, John

    Fields, Terry (L'pool B G'n)

    Beckett, Margaret

    Flannery, Martin

    Bell, Stuart

    Flynn, Paul

    Bennett, A. F. (D'nt'n & R'dish)

    Foot, Rt Hon Michael

    Bermingham, Gerald

    Foster, Derek

    Bidwell, Sydney

    Foulkes, George

    Blair, Tony

    Fraser, John

    Blunkett, David

    Fyfe, Mrs Maria

    Boateng, Paul

    Galbraith, Samuel

    Boyes, Roland

    Galloway, George

    Bradley, Keith

    Garrett, John (Norwich South)

    Bray, Dr Jeremy

    Garrett, Ted (Wallsend)

    Brown, Nicholas (Newcastle E)

    George, Bruce

    Brown, Ron (Edinburgh Leith)

    Gilbert, Rt Hon Dr John

    Bruce, Malcolm (Gordon)

    Godman, Dr Norman A.

    Buckley, George

    Golding, Mrs Llin

    Caborn, Richard

    Gordon, Ms Mildred

    Callaghan, Jim

    Graham, Thomas

    Campbell, Menzies (Fife NE)

    Grant, Bernie (Tottenham)

    Campbell, Ron (Blyth Valley)

    Griffiths, Nigel (Edinburgh S)

    Campbell-Savours, D. N.

    Griffiths, Win (Bridgend)

    Canavan, Dennis

    Grocott, Bruce

    Carlile, Alex (Mont'g)

    Hardy, Peter

    Clark, Dr David (S Shields)

    Harman, Ms Harriet

    Clarke, Tom (Monklands W)

    Healey, Rt Hon Denis

    Clay, Bob

    Heffer, Eric S.

    Clelland, David

    Henderson, Douglas

    Clwyd, Mrs Ann

    Hinchliffe, David

    Coleman, Donald

    Holland, Stuart

    Corbett, Robin

    Home Robertson, John

    Corbyn, Jeremy

    Hood, James

    Cousins, Jim

    Howarth, George (Knowsley N)

    Crowther, Stan

    Howell, Rt Hon D. (S'heath)

    Cryer, Bob

    Howells, Geraint

    Cummings, J.

    Hoyle, Doug

    Cunliffe, Lawrence

    Hughes, John (Coventry NE)

    Dalyell, Tarn

    Hughes, Robert (Aberdeen N)

    Darling, Alastair

    Hughes, Roy (Newport E)

    Davies, Ron (Caerphilly)

    Hughes, Sean (Knowsley S)

    Davis, Terry (B'ham Hodge H'l)

    Hughes, Simon (Southwark)

    Dewar, Donald

    Illsley, Eric

    Dixon, Don

    Ingram, Adam

    918

    Janner, Greville

    Pike, Peter

    John, Brynmor

    Powell, Ray (Ogmore)

    Johnston, Sir Russell

    Prescott, John

    Jones, Martyn (Clwyd S W)

    Primarolo, Ms Dawn

    Kaufman, Rt Hon Gerald

    Quin, Ms Joyce

    Kilfedder, James

    Radice, Giles

    Kirkwood, Archy

    Randall, Stuart

    Lambie, David

    Rees, Rt Hon Merlyn

    Lamond, James

    Richardson, Ms Jo

    Leadbitter, Ted

    Roberts, Allan (Bootle)

    Leighton, Ron

    Robinson, Geoffrey

    Lestor, Miss Joan (Eccles)

    Rogers, Allan

    Lewis, Terry

    Ross, Ernie (Dundee W)

    Litherland, Robert

    Rowlands, Ted

    Livingstone, Ken

    Ruddock, Ms Joan

    Livsey, Richard

    Salmond, Alex

    Lloyd, Tony (Stretford)

    Sedgemore, Brian

    Lofthouse, Geoffrey

    Sheerman, Barry

    McAllion, John

    Sheldon, Rt Hon Robert

    McAvoy, Tom

    Shore, Rt Hon Peter

    McCartney, Ian

    Short, Clare

    Macdonald, Calum

    Skinner, Dennis

    McFall, John

    Smith, Andrew (Oxford E)

    McKay, Allen (Penistone)

    Smith, C. (Isl'ton & F'bury)

    McKelvey, William

    Smith, Rt Hon J. (Monk'ds E)

    McLeish, Henry

    Snape, Peter

    McNamara, Kevin

    Soley, Clive

    McTaggart, Bob

    Spearing, Nigel

    McWilliam, John

    Steel, Rt Hon David

    Madden, Max

    Steinberg, Gerald

    Mahon, Mrs Alice

    Stott, Roger

    Marek, Dr John

    Strang, Gavin

    Marshall, David (Shettleston)

    Straw, Jack

    Marshall, Jim (Leicester S)

    Taylor, Mrs Ann (Dewsbury)

    Martlew, Eric

    Taylor, Matthew (Truro)

    Maxton, John

    Thomas, Dafydd Elis

    Meacher, Michael

    Thompson, Jack (Wansbeck)

    Meale, Alan

    Turner, Dennis

    Michael, Alun

    Wall, Pat

    Michie, Bill (Sheffield Heeley)

    Wallace, James

    Michie, Mrs Ray (Arg'l & Bute)

    Walley, Ms Joan

    Millan, Rt Hon Bruce

    Wardell, Gareth (Gower)

    Mitchell, Austin (G't Grimsby)

    Welsh, Andrew (Angus E)

    Moonie, Dr Lewis

    Welsh, Michael (Doncaster N)

    Morgan, Rhodri

    Wigley, Dafydd

    Morley, Elliott

    Williams, Alan W. (Carm'then)

    Morris, Rt Hon J (Aberavon)

    Wilson, Brian

    Mowlam, Marjorie

    Winnick, David

    Mullin, Chris

    Wise, Mrs Audrey

    Murphy, Paul

    Worthington, Anthony

    O'Brien, William

    Wray, James

    O'Neill, Martin

    Young, David (Bolton SE)

    Orme, Rt Hon Stanley

    Owen, Rt Hon Dr David

    Tellers for the Ayes:

    Parry, Robert

    Mr. Frank Haynes and

    Patchett, Terry

    Mr. Frank Cook.

    Pendry, Tom

    NOES

    Aitken, Jonathan

    Biggs-Davison, Sir John

    Alison, Rt Hon Michael

    Blackburn, Dr John G.

    Allason, Rupert

    Blaker, Rt Hon Sir Peter

    Amess, David

    Body, Sir Richard

    Arbuthnot, James

    Bonsor, Sir Nicholas

    Arnold, Jacques (Gravesham)

    Boscawen, Hon Robert

    Ashby, David

    Boswell, Tim

    Aspinwall, Jack

    Bottomley, Peter

    Atkins, Robert

    Bottomley, Mrs Virginia

    Atkinson, David

    Bowden, Gerald (Dulwich)

    Baker, Rt Hon K. (Mole Valley)

    Bowis, John

    Baker, Nicholas (Dorset N)

    Boyson, Rt Hon Dr Sir Rhodes

    Baldry, Tony

    Brazier, Julian

    Banks, Robert (Harrogate)

    Bright, Graham

    Beaumont-Dark, Anthony

    Brittan, Rt Hon Leon

    Bellingham, Henry

    Bruce, Ian (Dorset South)

    Bendall, Vivian

    Buchanan-Smith, Rt Hon Alick

    Bennett, Nicholas (Pembroke)

    Budgen, Nicholas

    Benyon, W.

    Burns, Simon

    Bevan, David Gilroy

    Burt, Alistair

    Biffen, Rt Hon John

    Butcher, John

    919

    Butler, Chris

    Holt, Richard

    Butterfill, John

    Howard, Michael

    Carlisle, Kenneth (Lincoln)

    Howarth, G. (Cannock & B'wd)

    Carttiss, Michael

    Howell, Rt Hon David (G'dford)

    Cash, William

    Howell, Ralph (North Norfolk)

    Chapman, Sydney

    Hughes, Robert G. (Harrow W)

    Clark, Dr Michael (Rochford)

    Hunt, David (Wirral W)

    Clark, Sir W. (Croydon S)

    Hunt, John (Ravensbourne)

    Colvin, Michael

    Hunter, Andrew

    Conway, Derek

    Irvine, Michael

    Coombs, Anthony (Wyre F'rest)

    Irving, Charles

    Coombs, Simon (Swindon)

    Jack, Michael

    Cope, John

    Jackson, Robert

    Cormack, Patrick

    Janman, Timothy

    Couchman, James

    Jones, Gwilym (Cardiff N)

    Cran, James

    Jones, Robert B (Herts W)

    Currie, Mrs Edwina

    Kellett-Bowman, Dame Elaine

    Curry, David

    Key, Robert

    Davies, Q. (Stamf'd & Spald'g)

    King, Roger (B'ham N'thfield)

    Davis, David (Boothferry)

    Kirkhope, Timothy

    Day, Stephen

    Knapman, Roger

    Devlin, Tim

    Knowles, Michael

    Dickens, Geoffrey

    Lang, Ian

    Dicks, Terry

    Leigh, Edward (Gainsbor'gh)

    Dorrell, Stephen

    Lennox-Boyd, Hon Mark

    Douglas-Hamilton, Lord James

    Lester, Jim (Broxtowe)

    Dover, Den

    Lightbown, David

    Dunn, Bob

    Lloyd, Peter (Fareham)

    Dykes, Hugh

    McLoughlin, Patrick

    Eggar, Tim

    McNair-Wilson, M. (Newbury)

    Emery, Sir Peter

    McNair-Wilson, P. (New Forest)

    Evans, David (Welwyn Hatf'd)

    Mans, Keith

    Evennett, David

    Marshall, John (Hendon S)

    Fairbairn, Nicholas

    Martin, David (Portsmouth S)

    Fallon, Michael

    Mates, Michael

    Farr, Sir John

    Mitchell, Andrew (Gedling)

    Favell, Tony

    Moate, Roger

    Fenner, Dame Peggy

    Monro, Sir Hector

    Field, Barry (Isle of Wight)

    Moss, Malcolm

    Finsberg, Sir Geoffrey

    Moynihan, Hon C.

    Fookes, Miss Janet

    Needham, Richard

    Forman, Nigel

    Neubert, Michael

    Forsyth, Michael (Stirling)

    Nicholls, Patrick

    Forth, Eric

    Nicholson, David (Taunton)

    Fox, Sir Marcus

    Nicholson, Miss E. (Devon W)

    Franks, Cecil

    Page, Richard

    Freeman, Roger

    Paice, James

    French, Douglas

    Patnick, Irvine

    Gale, Roger

    Patten, Chris (Bath)

    Garel-Jones, Tristan

    Patten, John (Oxford W)

    Gill, Christopher

    Pawsey, James

    Glyn, Dr Alan

    Porter, Barry (Wirral S)

    Goodhart, Sir Philip

    Porter, David (Waveney)

    Goodson-Wickes, Dr Charles

    Powell, William (Corby)

    Gow, Ian

    Price, Sir David

    Gower, Sir Raymond

    Raffan, Keith

    Greenway, Harry (Ealing N)

    Rathbone, Tim

    Greenway, John (Rydale)

    Redwood, John

    Griffiths, Sir Eldon (Bury St E')

    Rhodes James, Robert

    Griffiths, Peter (Portsmouth N)

    Rhys Williams, Sir Brandon

    Grist, Ian

    Riddick, Graham

    Ground, Patrick

    Ridsdale, Sir Julian

    Grylls, Michael

    Roberts, Wyn (Conwy)

    Gummer, Rt Hon John Selwyn

    Roe, Mrs Marion

    Hampson, Dr Keith

    Rost, Peter

    Hanley, Jeremy

    Ryder, Richard

    Hannam, John

    Sackville, Hon Tom

    Hargreaves, A. (B'ham H'll Gr')

    Scott, Nicholas

    Harris, David

    Shaw, David (Dover)

    Haselhurst, Alan

    Shaw, Sir Giles (Pudsey)

    Hawkins, Christopher

    Shaw, Sir Michael (Scarb')

    Hayes, Jerry

    Shelton, William (Streatham)

    Hayhoe, Rt Hon Sir Barney

    Shephard, Mrs G. (Norfolk SW)

    Hayward, Robert

    Shersby, Michael

    Heathcoat-Amory, David

    Skeet, Sir Trevor

    Heddle, John

    Smith, Sir Dudley (Warwick)

    Hicks, Mrs Maureen (Wolv' NE)

    Smith, Tim (Beaconsfield)

    Hill, James

    Soames, Hon Nicholas

    Hind, Kenneth

    Speed, Keith

    Hogg, Hon Douglas (Gr'th'm)

    Speller, Tony

    920

    Spicer, Michael (S Worcs)

    Waddington, Rt Hon David

    Squire, Robin

    Wakeham, Rt Hon John

    Stanbrook, Ivor

    Waldegrave, Hon William

    Steen, Anthony

    Walden, George

    Stern, Michael

    Walker, Bill (T'side North)

    Stevens, Lewis

    Waller, Gary

    Stewart, Allan (Eastwood)

    Ward, John

    Stewart, Andrew (Sherwood)

    Wardle, C. (Bexhill)

    Stokes, John

    Warren, Kenneth

    Stradling Thomas, Sir John

    Watts, John

    Sumberg, David

    Wells, Bowen

    Summerson, Hugo

    Wheeler, John

    Taylor, Ian (Esher)

    Whitney, Ray

    Taylor, John M (Solihull)

    Widdecombe, Miss Ann

    Tebbit, Rt Hon Norman

    Wiggin, Jerry

    Temple-Morris, Peter

    Wilshire, David

    Thompson, D. (Calder Valley)

    Winterton, Mrs Ann

    Thompson, Patrick (Norwich N)

    Winterton, Nicholas

    Thorne, Neil

    Wolfson, Mark

    Thornton, Malcolm

    Wood, Timothy

    Thurnham, Peter

    Woodcock, Mike

    Townend, John (Bridlington)

    Yeo, Tim

    Tracey, Richard

    Young, Sir George (Acton)

    Tredinnick, David

    Trippier, David

    Tellers for the Noes:

    Twinn, Dr Ian

    Mr. Alan Howarth and

    Vaughan, Sir Gerard

    Mr. David Maclean.

    Question accordingly negatived.

  Clause 4

    METERING TRIALS SCHEMES
    8.30 pm
    Ms. Quin: I beg to move amendment No. 1, in page 5, line 17, at end insert—
    '(c) to whether the charging structure adopted for the purpose of the trial takes into account the imposition of value added tax on water according to EEC practice.'.
    Mr. Deputy Speaker: With this it will be convenient to take amendment No. 2, in page 5, line 17, at end insert—
    '(c) to whether the charging structure adopted for the purpose of the trial meets the following criteria—

    (i) the charging structure must be easily understood by the consumer,

    (ii) the charging structure must be practical and able to be carried out with the available technology,

    (iii) the charging structure must be capable of wider application and use.'.

    Ms. Quin: The amendments relate to the structure and type of charges to which the consumer will be subject during the trial periods. We believe that the issue of the charging structure to be used is important because we have consistently argued that consumers should know what they are paying for when they receive their water bill. That knowledge is particularly important during the trial periods because consumers in those areas, once they have asked the question, "Why us? Why were we chosen for the trial?", will go on to ask, "What will it cost us?". They have a right to know that and they have a right to have a detailed breakdown of the costs.
    Paragraph (c)(i) of amendment No. 2 refers to the fact that we feel that:
    "the charging structure must be easily understood by the consumer"
    We believe that the consumer should know what part of the bill represents fixed costs, what part represents the new measures taken to improve the quality of water and what part represents the charges relating to the volume of

    921
    water consumed. Earlier on in the debate my hon. Friend the Member for Stoke-on-Trent, North (Ms. Walley) made the important point that a large part of gas and electricity bills relates to the volume of supply consumed—she mentioned the figure of 80 per cent. However, for the water industry an entirely different situation obtains. The figures that I have seen suggest that only 20 per cent. of the bill relates to the volume of water consumed. It is right that the customer in the trial areas should have the necessary information relating to the bill. It has been widely reported that metering will lead to an increase in costs. Therefore, the consumers in the trial areas have a right to know how much of the extra cost on their bill specifically relates to metering.
    Amendment No. 1 relates to the question of VAT on water charges. It is not clear whether VAT will be charged on the domestic consumer of water in the future. We certainly hope not and we would be delighted if the Government gave us a clear commitment on that tonight. We hope that the Government will resist any pressure to impose VAT. I understand that the court case that is still to be completed at the European Court of Justice relates to VAT being charged on industrial consumers only. However, I understand that the European Commission's proposals concerning harmonisation of VAT rates in the long term include water charges in their plans for the lower band of VAT. We are concerned about that and we believe that the consumer in the trial areas has a right to be told what is happening about VAT. Perhaps the Government will give us the assurance that we require and tell us that there will be no VAT charged on domestic users of water during the period of the trials and, we hope, thereafter. We wait to hear from the Minister in that regard.
    Subparagraphs (ii) and (iii) of amendment No. 2 are common sense amendments. Subparagraph (ii) states that the charging structure should be practical and should be carried out "with the available technology". Subparagraph (iii) states that the:
    "charging structure must be capable of wider application and use".
    The purpose of subparagraph (ii) and (iii) is to prevent a person in the trial areas being any more of a guinea pig than he or she already is under the system. Certainly we do not want those people to be given an unworkable system or a system that will not be used again.
    We believe that the amendments are practical and common sense. By tabling them we believe that we are providing the Government with some practical advice that will help them conduct the trials in an easier and, perhaps, more acceptable way than would otherwise have been the case. That hope is despite our belief that the trials should not go ahead. However, the amendments are constructive and we have proposed changes that we believe will give extra protection to the households and consumers involved.
    One of my hon. Friends has referred to the fact that all of our amendments amount to a consumer protection charter during the metering trials. Therefore, we hope that the Minister will accept the amendments in the spirit intended because we believe that they represent a constructive way forward.
    Mr. O'Brien: It is not our intention to delay the House on the amendments. Suffice it to say that the real issue is
    922
    the charges to the consumers. Indeed, amendment No. 2 makes it clear that the charging structure that is adopted for the trial should follow certain criteria.
    In the Yorkshire area we are advised that the rising block tariff will be the charging structure applied. Reference has already been made to the old lady living alone who pays the same water charges as the family next door and that is unjust. Unless the base of the charging structure takes that into account I believe that there will be disadvantages and the widow or the single person will suffer an unfairness. If the rising block tariff is not based on the single person or the old lady, but is based on a family of three or four, that old lady will lose out. The amount of water that she will pay for, at the base of the tariff, will be the same as a family of four. There will be great difficulties for single people living in large properties.
    There is also the problem of standing charges. People in my area pay two standing charges to the water authority — one for water and one for sewerage. Unless information is given in the explanatory notes to consumers as to what charges will be, I can foresee immense problems for low-income families in my area.
    These amendments are important. The charging structure must be practical so that the authorities can implement it. There must be no preference whatsoever in the agreed structure. Some sections of the community will benefit from the introduction of meters, but others will be disadvantaged. I hope that no undue preference will be shown in the pricing structure to certain groups of people.
    I ask the Minister to give assurances that people on low incomes will not lose out during metering trials. If there is to be universal metering during those trials, greater problems will arise that will have to be analysed.
    My hon. Friend the Member for Gateshead, East (Ms. Quin) raised some important issues in moving these amendments and I hope that the Minister will answer the questions that have been posed.
    Mr. Moynihan: Although these amendments are unnecessary, for reasons that I shall mention in a moment, they cover some important issues. I am glad that Labour Members have raised them.
    The reasons why the Government regard the amendments as unnecessary and, indeed, restrictive are as follows. Clause 4 sets out a special regime for metering trials schemes. Each water authority or company wishing to carry out a trial must submit proposals to my right hon. Friend the Secretary of State for his consideration and approval. In so doing, my right hon. Friend will be required, by clause 4(3), to have regard to the interests of those customers who are likely to be affected and to various other matters, including the methods and principles by which charges will be calculated and imposed. That is covered by clause 4(4). That will allow my right hon. Friend the Secretary of State ample scope to consider the structure of the charges proposed for each trial, including the rationale between the choice of a particular tariff structure and, most important, the implications for customers.
    In addition, as a result of clause 4(5), in considering a scheme for approval he may also take into account whether the proposed charges are intended, within the constraints of the experimental nature of the trial, to be cost related and whether a charging system would result in undue discrimination against or undue preference for any class of customers. That point is critical, and it was

    923
    raised by the hon. Member for Normanton (Mr. O'Brien). With regard to the trial in his area, I take this opportunity to underline the fact that any charging system must not result in undue discrimination or undue preference. It will be critical to the Secretary of State's consideration of any proposed trial scheme that that criterion is adhered to.
    Those latter requirements are, as hon. Members will have recognised, the cornerstone of the existing customer protection provisions in section 30 of the Water Act 1973, which are re-enacted in clause 3 of the Bill. Thus, the Bill as it stands would enable my right hon. Friend to consider all the matters in these amendments and many more aspects of proposed charging procedures.
    With regard to the various detailed issues raised by these amendments, I should like to assure the House that it is quite true that the industry has tentatively drawn up a list of different types of tariff to be tested in this proposed joint programme—one large scale and 10 small scale trials. However, I emphasise that the final decision on the type and level of each tariff will be a matter for my right hon. Friend the Secretary of State. In considering each proposal, my right hon. Friend will take into account the need for a balanced programme of trials on a nationwide basis.
    I should emphasise the importance that the Water Authorities Association has placed on ensuring that we consider a range of tariff structures. In putting forward a range of proposals to my right hon. Friend, it will have taken into consideration the nature of metering trials and the opportunity to try out a variety of charging structures and tariff bases. It will be incumbent on all water undertakers to make available full details of the proposed tariff structure to everyone in each of the metering trial areas before my right hon Friend the Secretary of State has before him the proposed trial areas for approval. It will be opportune at that stage for individual consumers or groups in a proposed trial area to make representations to the Secretary of State for him to take into account.
    8.45 pm
    Those points are critical, because they are part and parcel of the importance that we attach to consumer interests. It is one of our priorities to ensure that we carry with us those who live within the proposed trial areas. They are important criteria and are of particular concern to customers, and I can assure the House that they will be taken into account when my right hon. Friend considers each scheme.
    The hon. Member for Gateshead, East (Ms. Quin) raised the important issue of VAT. Although the European Commission has been taking proceedings against the United Kingdom for having a zero VAT rating for the supply of various goods and services, including water and sewerage services to industry, the case does not concern domestic supplies. My right hon. Friend the Chancellor of the Exchequer will look at the ruling of the European Court when it is delivered. In the meantime, it is premature to speculate about what the outcome might be. However, I should re-emphasise that the Commission's action does not apply to domestic water supplies.
    I repeat that these amendments are unnecessary and I urge hon. Members, following my explanation to the House, not to press them.
    Ms. Quin: I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Mr. Pendry: I beg to move amendment No. 5, in page 5, line 40, at end insert—
    'In considering the matters in paragraph (a) above, the Secretary of State shall have particular regard to implications for charitable institutions and voluntary sporting organisations.'.
    I wish to say immediately that this is a probing amendment. We wish to show our flexibility, and we hope that the Minister will show some as well. I am sure that it has not escaped the notice of Conservative Members that we are prepared to amend clause 4. Therefore, we hope that the Minister will be flexible.
    I hope that the Minister will not try to improve on his record of interventions. I do not know who Miss Allen is, but when she totted up his interventions, I am sure that she did not take their quality into account. The Minister often had to get up three or four times to make a simple point.
    We are conscious that the Minister wears a number of hats. I got into trouble in Committee when I said that he was in charge of aqua affairs and that I did not know how many other affairs he was in charge of. I did not make the point as clearly as I shall now — the Minister is responsible not only for sport but for the water industry, for environmental protection, for the Countryside Commission and a number of other areas of Government any one of which totals 9·10 per cent. of Ins responsibilities. We are lucky that we are receiving 18·20 per cent. of his responsibilities. I am sure that we shall have a much weightier contribution from him tonight that we have had to date.
    The Minister prides himself on getting on well with the sporting fraternity. Alas, that is wearing a bit thin with water sporting groups. Unless he is more forthcoming, he can say goodbye to the good will that he has built up to date with the many charitable and voluntary sporting groups in this country, who so far have been impressed with his energy. I know from representations that I have received that many of' them feel that with this legislation that good will is disappearing fast. Many of the existing agreements that recreational and sporting groups have with the water authorities are clearly under threat and those groups look to the Minister to protect them. If the amendment is not carried, they will increase their opposition.
    There are many obvious examples. As the Minister perhaps knows—it was referred to in Committee — the National Anglers Council has voiced its worries about the Bill. As the Minister also knows, there are 3·4 million anglers in this country, 1·2 million of whom have fishing licences. The specific price agreements of individual angling clubs are at risk. The Minister should accept the amendment and give clear guarantees to put the anglers and others out of their misery. In my constituency, there is a disabled persons' angling club in the Longendale valley which will be badly hit if prices are forced up. That club is not alone. Many groups in the areas chosen for the meter trials will suffer in the same way.
    I said in Committee and reiterate now that, unless the Minister is clear and unequivocal on the issues worrying the clubs, many groups in the trial areas will suffer loss of amenity by having their running costs forced up, particularly when the main legislation is passed later. Characteristically, the Minister has underestimated the number of regular users of the water environment each year. He puts the figure at about 2 million, when the real figure is closer to 5 million.

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    It is not only those groups that worry us; the amendment addresses itself to a wider range of interested groups. The Minister has become relatively famous as a water sportsman. I discount his boxing prowess, because I have sparred with him and his reflexes are far too slow for him to have been any good at that sport. Is it not ironic that the water sportsmen are turning against him because when that substance is metered it will bring many of them close to extinction?
    Mr. Barry Field: Will the hon. Gentleman give way?
    Mr. Pendry: I am trying to hurry along. The hon. Gentleman has not taken much interest in this Bill; although he is not alone, so I do not wish to single him out from the rest of the breed.
    As we said in Committee, water sports enthusiasts are not alone in feeling apprehensive about the consequences of the Bill. In trial areas, many other sports clubs will find that their premises and services will be hit by the Bill. That applies to football, cricket, tennis and golf clubs—to say nothing of bowling clubs where many of our elderly citizens pass their recreational time. There are many more. Is the Minister really prepared to throw away all the good will that he has generated with the sporting fraternity and impose metering charges on those groups?
    I have received letters from groundsmen of football clubs who are worried about the implications of the Bill. They are worried about the price of sprinkling and of watering their pitches. My hon. Friend the Member for Stoke-on-Trent, North (Ms. Walley) is a great Port Vale supporter. Unfortunately, I heard someone say that, without a wet pitch, that club would not have beaten Spurs on Saturday.
    Ms. Walley: I must put it on record that the abilities of Port Vale football club are second to none. With or without the conditions on the pitch, I have no doubt that they would have been the giant-killers and beaten Tottenham Hotspur on Saturday.
    Mr. Pendry: I would have said exactly the same to the person who made that accusation.
    On an equally light note, because cricket clubs have been affected I am tempted to think that the Minister is perhaps standing up for the dying breed of the English spin bowler. If cricket clubs are to economise with water, more and more dry and dusty pitches will play havoc with the batsman's technique. At the risk of destroying good wickets, it is no good the Minister saying on the one hand that he is prepared to put out the begging bowl to save the Oval while on the other putting the squeeze on a number of small cricket clubs which may go out of business altogether. Exorbitant water metering charges will add to the already crippling costs faced by sports clubs.
    Mr. Barry Field: The hon. Gentleman makes much of the effects of water metering on sporting clubs. As he knows, my constituency is the largest of the test areas to be metered. How does he explain the fact that I have not had one representation from any sporting user of water? I have received many from households but not one from a sporting user.
    Mr. Pendry: I am glad that I gave way to the hon. Gentleman. He should have been making lots of loud
    926
    noises in support of the Government. If his constituents find it as difficult to find him as we have, I am not surprised that he has received nothing.
    The Minister knows that I have a high regard for him. He has done much work for sport, but he has so many hats to wear that he cannot possibly come to grips with his portfolio as he might like to. He must stand up to his boss, the Secretary of State—who was here for five minutes to support him but has just left again—and to his bigger boss, the Prime Minister. Both are known to be sporting philistines. If he does not stand up to them, he will find himself alienated and distanced from his erstwhile supporters. The other day, I asked him to stand tall for sport. I am asking him to stand tall again. In the friendliest possible way, I would say to him that he must place on record tonight his determination to protect the best interests of charitable and sporting organisations from this squalid Bill, and he must say so loud and clear.
    Mr. Moynihan: I know that life in their Lordships' House has been unexpectedly diverse and, on occasions, colourful this evening, but the contribution of the hon. Member for Stalybridge and Hyde (Mr. Pendry) stretched even my imagination to incredulity. The only way that the Bill can affect anglers is if they use a lot of water in their club houses. I do not think that anyone has the intention of even considering the possibility of metering water as it goes past them in the river.
    Mr. Pendry: The Minister was not listening. I was talking about a club in my constituency and other angling clubs. We are talking about clubs.
    Mr. Moynihan: I do not quite see how an angling club in the hon. Gentleman's constituency will be affected by the Bill, as there is no proposed metering trial scheme there. It defies the imagination to raise the issue of sporting clubs. As the hon. Gentleman, as a keen follower of sport, well knows, a large number of sporting clubs, particularly those with large acreages, are already metered. Like industry, they see the benefits and are already metered. One reason why my hon. Friend the Member for the Isle of Wight (Mr. Field) has not received any letters on the subject is that many of the clubs are already metered and see the benefits of it.
    Some of the points raised by the hon. Member for Stalybridge and Hyde would be better directed at the substantive legislation. I am aware that fishing, sporting and recreational interests must be well protected and enhanced, as they will be when the National Rivers Authority is established, but that has nothing to do with this Bill.
    Clause 4(3) requires my right hon. Friend the Secretary of State, when considering proposals, to have regard to the interests of those customers charged by trial schemes and to various other matters. This amendment requires my right hon. Friend, when considering a scheme, to have particular regard to implications for charitable institutions and voluntary sporting organisations. These are, of course, very important groups, and no one takes a keener interest in their activities than I. That is why I hope that hon. Members will accept my advice that the requirement is unnecessary. I explained when we discussed amendments Nos. 1 and 2 that, as part of the special charges scheme regime for the trials, my right hon. Friend the Secretary of State is required to have regard to the interest of customers made subject to charges by each scheme, and

    927
    that, in doing so, he may take into account whether the trial would result in undue discrimination or undue preference to any classes of customer. These requirements should ensure that all classes of consumers, including voluntary sporting organisations and charitable institutions, are treated fairly.
    I therefore urge that the amendment should be withdrawn. Nobody could he more committed to protecting and promoting the interests of sport and recreation than myself. I give a clear undertaking that they will not be affected by the provisions in the Bill.
    9 pm
    Mr. Boyes: The Minister's reply was disappointing and well below his usual standard of excellence. On this occasion, it is a 3 out of 10 job.
    The Minister said that he would ensure that charitable bodies were treated fairly, but what does that mean? Many people are dependent on charitable bodies, especially when Government cuts occur. Many people live in poverty and are abused in different ways. The proliferation of physical and sexual abuse of children is of great concern to us all. Regrettably, more and more people are having to rely on charities for assistance and guidance. When the Minister said that he hoped to treat charities fairly, did he mean that he would do something special for charities? Surely, when their bills increase substantially as a result of water metering, they will be treated extremely unfairly. I had hoped that the Minister would recognise that point.
    The Minister did not mention that fishing is an important aspect of leisure, whether one watches, plays or referees, especially in constituencies such as mine where there is massive unemployment. I had hoped that the Minister would make some helpful comments so that recreational clubs would not be disadvantaged by water metering.
    My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) argued the case well, but the Minister has not given us a glimmer of hope. Charitable bodies will be treated like everybody else: if, as a consequence of metering, they find themselves in reduced financial circumstances, or have to go out of existence, so be it. That is a callous approach from a Minister whom we know to be caring, but who has not shown his concern on this occasion.
    Amendment negatived.

  Clause 5

    PROVISIONS RELATING TO METERS ETC.
    Mr. Matthew Taylor: I beg to move amendment No. 6, in page 7, line 7, at end insert—
    '(dd) require water undertakers to inspect, examine and test meters, free of charge, every twelve months if the customer so desires.'.
    The amendment derives from a number of votes in Committee and, I am sad to say, from the fact that no changes have resulted from several promises that the Minister made to consider the matter.
    Let us consider the essential points for and against the free testing of meters for those involved in the trial schemes, although I should like all those who are metered to have the same opportunities.
    One argument against the free testing of meters is that those at present with meters can call for a test to be
    928
    performed which must be paid for if it shows that there is nothing wrong with the meter. That may be reasonable where people who presently have meters have opted for them, because they see a financial gain in doing so. Therefore, it is argued, if they have a complaint about the meters they can bear the cost of having them checked. However, even that is a fairly mean attitude for a public service.
    If one looks at compulsory metering, particularly in the trial schemes where different meters are being tested and where there are doubts about the effect of the system on different people, about the accuracy of the meters being used and about how well they will work in practice, it is astonishing that the Government should try to limit people's ability to ask for meter tests by forcing a charge where no fault is found.
    That will clearly penalise the poorest in society. Those who are most likely to be affected by a false meter, possibly leading to higher charges than they should be paying, will be most directly hurt, because, when they consider whether to have the meter inspected, they will have to bear in mind that if the meter is accurate they will be penalised for having asked for it to be checked.
    It is a basic element of fairness that people should have the opportunity to have their meters checked. I had hoped that the Minister would follow through his earlier agreement that that is a strong point, and come up with the goods in practice.
    We are discussing a state industry, and there is greater protection under a public corporation than a private industry. I hope that that will be particularly borne in mind as the industry is privatised. The right of the consumer to opt for an independent meter test should be protected. It should be possible to have meters checked, in the safe knowledge that there will be no financial penalty.
    The Minister made it clear that he does not want somebody phoning up every day asking for yet another test, and I accept that. He correctly said that that could result in a few maverick individuals causing high costs for the great majority of consumers. The amendment takes that into account by limiting the right to free testing to once every 12 months. It has been suggested that that should be limited to one, full stop, but that would be lunatic because things can change over time. The fact that a meter has been tested and proved to be accurate one year does not mean that it will not go wrong the following, year. However, I have taken on board the point that the Minister made in Committee, that there needs to be some limit, and that is contained in the amendment.
    If the Minister feels that the amendment is still too open, I refer him to the suggestion made in Committee that testing could be through reference by Members of Parliament, as, for example, when matters are referred to the ombudsman. If he is prepared to make that commitment, I shall be happy to withdraw the amendment and await a subsequent Government amendment.
    It is clear that the Minister saw the strength of this point. In written answers, he made a commitment to contact water authorities to see whether something could be done about it. In the Committee's proceedings on 15 December, the Minister said:
    "We shall discuss regulations, but I place on record that I will consider making provision in regulations by discussing with water undertakers the possibility of establishing a system that will go part way to satisfying the hon. Member for Truro (Mr. Taylor).

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    My greatest worry about going the whole way is that, as the hon. Member for Truro said, some people who did not want meters installed in particular properties will go too far and abuse the system by telephoning each day to demand that meters should be tested." —[Official Report, Standing Committee B, 15 December 1987; c. 532.]
    Later, in reply to another Opposition hon. Member, the Minister said:
    "Following an intervention by the hon. Member for Truro (Mr. Taylor) in Committee on 15 December, I have already given an undertaking to consider the possibility of customers taking part in the trials being offered, free of charge, at least one test of the accuracy of their meters … I hope that Opposition Members will accept that we are not closed in our thinking about a free test, particularly for elderly folk who find new equipment being brought into their houses and are uncertain about reading a water-metering device. In such cases, we must be careful not to charge—certainly on the first occasion—anyone who shows that anxiety.
    We are to hold discussions with the water undertakers to satisfy the points made by Opposition Members."—[Official Report, Standing Committee B, 14 January 1988; c. 652.]
    We are now on Report, and nothing material has been forthcoming. I regret having had to table the amendment. I have made sure that it is couched in terms similar to those that the Minister said he would bring forward. He has not done so, and I ask him now to accept the amendment on the ground that it is in line with what he wanted. It does not go as far as many Opposition Members might want, but it is a step in the right direction, and I look forward to hearing the Minister's support for it.
    Mr. Geoffrey Dickens: Hon. Members will be pleased to hear that my contribution will be brief. As an engineer, I should have thought that the measurement of the flow of a liquid —water, oil or whatever—is probably the simplest and most accurate of techniques.
    Why is the legislation being brought forward? It is here because of public opinion. We have heard about fair play from Opposition Members; we heard the story about the old lady living on her own and about people up the road living three or four to a house and using much more water than her—and how unfair that was. That is, perhaps, a sensible argument, but it is strange to hear it coming from the Opposition who have opposed that sort of argument in the context of the community charge when we have spoken of the old lady living on her own who wants a fair system. However, I must not digress.
    Pilot schemes will include everything. If a domestic user's bill after the pilot scheme happened to be abnormal, I am certain that officials would visit his home and go through the sort of quantities of water that he was using for the bath, watering and sprinkling the garden, the toilet systems and so on, and decide whether there had been some malfunction of the meter. That would happen in the unlikely event of a failure, and it is what a pilot scheme is all about. The Government are responding to public opinion by bringing forward this sensible measure, and it would be a shame to complicate it with this sort of amendment when the pilot scheme takes care of the point raised by the hon. Member for Truro (Mr. Taylor) about a malfunction of the meter. Any malfunctioning will show up from house to house during a pilot scheme; however, it is unlikely.
    As I said at the beginning, measuring fluid through pipes is one of the easiest and most straightforward of techniques. It is far less sophisticated than the measurement of gas, electricity or anything else. The flow
    930
    of liquid is straightforward and I see no great cause for concern. The pilot scheme will sort the problem out. We are starting off gently with pilot schemes to see how the system goes and to meet public opinion and demand. We are targeting the poor in this, as in all the other things we are doing, such as the review of the welfare state and the community charge, where we are helping the old lady who is living on her own. In exactly the same way, with water metering we are helping the old lady living on her own. If a person wants to economise, he need not have a big bath and he can top up the water in the kettle. People can save themselves money if they have a metered system, whereas with rateable values they have no choice but to meet on demand the bill that is sent. I hope the hon. Gentleman is big enough to withdraw the amendment, which is unnecessary.
    9.15 pm
    Mr. Boyes: We will not support the amendment. I do not intend to develop the arguments but wish to make just one point. These are trials and during the trials we expect special conditions to apply. People will be concerned and worried, particularly if they suspect that their bills are higher under metering than when assessed on rateable values. As all hon. Members know, when new techniques are used, the elderly are often worried. I do not see why they should be limited to one inspection per year, particularly if the first inspection shows that the meter is faulty. I accept the view of the hon. Member for Littleborough and Saddleworth (Mr. Dickens) that measuring water is simple, but simple things in the hands of this Government can become complicated.
    We want trial meters to be tested on request. If that means that someone wants a meter tested less than 12 months after the first test, it should be done. We do not want to limit people to one test in 12 months. The water undertaker might argue that because there had been a test within the last 12 months, even though the bill might be higher than the equivalent bill under rateable valuation, the meter could not be tested again.
    To suggest that people will ring in each day is insulting to the vast majority of those taking part in the trials. While many people will not like meters and will have to be cajoled or even forced to have them, they will act responsibly. If they think that the meter needs to be tested, they will request a test. During the trials I hope that if someone feels great anxiety that the meter is not working correctly, proper tests will be done.
    Mr. Moynihan: I am surprised at the contribution by the hon. Member for Truro (Mr. Taylor). I gave him a clear undertaking that I would consider the possibility of customers taking part in the trial being offered free of charge at least one test of the accuracy of their meters. I noted his assent. He was pleased that I gave that undertaking because he recognised, as hon. Members on both sides of the House do, that we must ensure, if possible, that someone who is elderly, say, who is not used to having a meter and who is anxious about its accuracy should have the opportunity to have that anxiety removed.
    One way of removing the anxiety is to have the meter tested or to have proper authorisation of the meter which, as my hon. Friend the Member for Littleborough and Saddleworth (Mr. Dickens) said, is highly unlikely to be inaccurate. Because we wanted to remove anxiety we moved from our original position of saying that there

    931
    would be no free test for meters to the commitment that I gave to the hon. Member in Committee. I also gave that commitment in writing to the hon. Member in a letter dated 21 December. I said that I would look at the matter with all the water undertakers and try to reconcile the concerns and worries expressed by him and by other Opposition Members.
    I am currently taking up that concern. I am sorry that in the three working weeks since Christmas it has not been possible to come to a firm conclusion and to discuss a specific provision with the Water Authorities Association, but I gave a clear undertaking that the anxieties expressed would not be swept under the carpet and would be taken account of, and that I would ensure that they were given further consideration in detailed discussions. I would regret it if the hon. Member pressed the point to a vote, because that commitment was made with integrity, and was so recognised by Labour Members.
    I hope that our discussions will soon reach a final outcome and I will be in a position to give a commitment. The position will become clearer by the time the Bill goes to the House of Lords. If we have not come to a satisfactory solution by then, the hon. Member will have the opportunity to table an amendment in another place. We shall be pushed to try to get a complete answer by then, but I give the commitment that I will do everything I can. If I have not succeeded, the hon. Member and his hon. Friends may wish to pursue the matter in the House of Lords, if they are unsatisfied with the speed of progress.
    I will not go into the detail of the substantive provisions, not least because the Department of Trade and Industry has put forward proposals for accurate regulations to ensure and certify that all meters on the market meet approved European standards as well as national standards. Hon. Members in Committee may have read the detailed brief on that point, so I will not keep the House by repeating that. The commitment I gave in the debate is important. I hope that it will persuade the hon. Member for Truro to allow at least a breather between now and the time that the Bill goes to the House of Lords so that he is in a position to reconsider the thrust of the arguments he has put before the House this evening.
    Mr. Matthew Taylor: I thank the Minister for his reply and his commitment, if possible, to come forward with a firm proposal before the Bill goes to the House of Lords. In view of that commitment, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.

  Clause 8

    SHORT TITLE, COMMENCEMENT AND EXTENT
    Mr. Henderson: I beg to move amendment No. 7, in page 8, line 38, leave out
    'Sections 2 to 6 above and the Schedules to'.
    We have had 20 sittings of the Bill in Committee in order to guarantee and protect our democracy and our parliamentary process. It is clear, from the way that clause 8(2) omits clause 1 from the clauses which are regulated, that this undermines our parliamentary process and therefore our democracy.
    In moving amendment No. 7 we are trying to redress the damage that would be caused if our amendments are not accepted by the Government, because clause 1 relates
    932
    to privatisation and is a eunuch clause. Superficially, clause 1 governs the transfer of powers from existing authorities to future authorities which will be privatised, but the Bill is not an enabling Bill; it circumvents. Water authorities, acting alone or with the Government, can circumvent Parliament in many ways.
    Although clauses 2 to 6 regulate the conditions and circumstances in which water meters will be introduced, the Bill leaves completely unregulated the fundamental question of ownership, control and management of a water authority, and thereby circumvents Parliament in a number of ways. It does so by the extent to which water authorities can spend public money in publicising a sale to the private sector, a sale which I submit has no guaranteed improvement, interest or gain for the consumer. We know of pending litigation in this regard in relation to the Severn-Trent water authority.
    In effect, water authorities can use public money to give away public assets with no or little safeguard for the public interest or for consumers. Water authorities can fatten themselves up for a sale which ultimately can only line the pockets of the private sector.
    It also leaves unregulated the transfer of assets from a water authority to a newly privatised company. A water authority could sell the lucrative side of the business. It could sell reservoirs in which large investments had been made at public expense in recent years. It could sell main piping systems which had been installed, again at public expense in recent years. At the same time, it could retain the liabilities which are unsellable—the liabilities of old water mains systems or smaller piping systems, the kind of systems which in Committee we have referred to in relation to water in much of the Thames area. So the public sector could be left with the old Victorian liabilities while the private sector creamed off the public investment which has been put in to improve our water system.
    As the Bill is currently constructed, clause 8 leaves unrestricted any potential changes in employment. Without reference to Parliament a water authority could completely restructure the labour force. People who had gained skills and experience, much of it at public expense in public training centres, could be cast aside. Contractors could be introduced, with all the cowboy practices and cut price wage levels. All of this, which I believe would seriously undermine the industry, could happen without reference to Parliament. A water authority could even make most of its staff redundant, at enormous cost to the public purse in redundancy payments, and at the same time introduce private contractors. All this would be designed to fatten up the industry for a future sale.
    The Minister stated in Committee that
    "it is not the Government's intention that the Bill should give enabling powers to water authorities to prepare for proposals other than those set down by the Government for the privatisation of the water and electricity industries." [Official Report, Standing Committee B, 12 November 1987; c. 79.]
    That may on the surface seem fair enough, but our point is that that definition is far too wide. If it is taken literally it allows the Government to go ahead without reference to Parliament and virtually to do anything in relation to the sale of the water industry or the electricity industry.
    I believe that, regardless of what we might hear about mandates at general elections and prior notification of Government intentions, the public do not want to see their water industry sold off without further reference to their

    933
    opinion. People still have some faith in the Parliament of this country because they believe that at least there is a chance to air their views. Our point in presenting this amendment is that if the Government do not accept it they are abrogating their commitment to democracy. I believe that Parliament should decide the future of the water industry. If after a debate in Parliament the arguments of the Opposition are lost, at least we have had a chance to refer to important issues and to reflect public opinion that agrees with our views. Likewise, the Government have the opportunity to build up their case.
    We must remember that Parliament has built up protection for the water industry over many years. Victorian sewers did not suddenly appear; sewage in the streets did not suddenly disappear; or dirty water from our taps. We have a sensible system of disposing of dirty water and providing clean water only because in Victorian days and afterwards Parliament decided that that should happen. The legislation came from several political parties rather than one. They all thought that something should be done.
    9.30 pm
    People in this country are proud of our water system. If they travel abroad they say, "I am not having their water. It is not nearly so good as ours. I do not trust it and I will stick to bottled water." We all have experience of that attitude. Often, British people will not drink water even in Sweden where the water system is as good as ours. They do not believe that the water comes from a good system that has stood the test of time in the same way as the British system. That pride should be retained. It is offensive to that pride for the Government to decide to introduce a major change to the structure of the water industry without referring to Parliament.
    Parliament should decide whether this country wants to retain an integrated water industry, with control of the disposal of dirty water and provision of clean water under one authority. The majority of water authorities have argued that that is an important factor in achieving high standards of efficiency in the industry. It was certainly the case until very recently that the chairmen of all the water authorities argued that case. I believe that factor underlies the reluctance of the chairmen of the water authorities to agree to divest any power to the National Rivers Authority. We must remember that all of those chairmen were appointed by the Government. They were not appointees of a previous Government, who were making a political point to the industry. The chairmen were appointed by the Government, who wished to introduce their ideology into the industry. Yet the chairmen say that it makes sense to have an integrated industry, not a divided one.
    The industry could be broken up by an act of Government and not by an Act of Parliament under this so-called enabling Bill. After our argument and debate, it might be decided that it makes some sense to divide the responsibility for our water industry. I do not think that it will make sense. If the case is tested, people surely will accept that there should be one integrated structure for the industry. But it is proper for a division of responsibility to be decided by Parliament, and not by the Government at any particular time.
    934
    I have never been convinced that there was a strong case for the enabling Bill. If the Government wanted to pursue their case to sell the industry, they should have put forward their detailed proposals and made specific points about the National Rivers Authority rather than what we have seen in the White Paper. It says that the arrangements for the water industry might be this way or that way and there might be some advantage in this or that. It was incumbent on the Government to say that this was the kind of structure that they envisaged because it would be efficient and acceptable for the industry. We would like a public debate. After that public debate, they could have come forward with specific proposals on how to change the structure of the industry.
    However, what has actually happened is that, because we have had this Bill, the Government can now prepare the way for effectively doing what they want with our water industry, without any further reference to Parliament, for up to two years from now. Much irreversible change and potential damage could be done to the industry during that period of time and that would be wrong.
    Mr. Sydney Bidwell: Unlike the observation made earlier from the Conservative Benches, my hon. Friend's suggestion reflects the great deal of public fear, which could only become entrenched, especially about the reductions in the standards of water purification in the system that we have come to revere.
    Mr. Henderson: I thank my hon. Friend for making that key point. That is another area in which hon. Members of all parties would recognise that there is a problem, even with our pride in our water supply. If our water supply now—good as it has been in the past — does not match the required European standards—and there is much evidence that it probably does not at this stage — money needs to be spent on the industry to ensure that we comply with those standards. I am glad that my hon. Friend raised that point because people who believe that that is the case do not know, if they agree to selling off the industry, whether a new privatised company would be prepared to accept that liability. After making a killing in the sell-off, the privatised company may end up being subsidised by Government to achieve the necessary reforms to which anyone with a sensible knowledge of public health standards would want to ensure that we adhere.
    If the Bill is passed without our amendment, in effect, the public and Parliament would not have any control and would be excluded from the process of selling off and changing the structure of the industry. I was tempted to say "breaking up the industry" but I can live with the phraseology of "changing the structure of the industry".
    The important point is that that would be an abnegation of our democracy. The Minister has shown that he is, at least in part, prepared to listen to some of the arguments that were put to him in Committee, so I hope that he will recognise that the amendment is fundamental and that he will understand its importance and say to the Secretary of State, "I think that we should accept this amendment to make sure that public control is returned to the people."
    Mr. Dickens: I am pleased that Opposition Members are not pressing their amendment, so I do not want to antagonise them at this stage. However, there is an

    935
    important point that they may not have thought about. Millions of people throughout the United Kingdom have what are described as "unadopted sewers", not because those sewers are actually unadopted but because of sloppy work by earlier councils, bad minute taking, and because they were not delineated on maps, which means that those people cannot prove to the satisfaction of the local authority that the sewers have been adopted.
    If there is a breakage in any of those sewers, a bill of apportionment goes to each household out of the blue. These people are sitting on timebombs. I am talking about millions of people who will look to the privatisation of water Bill as perhaps providing them with some relief. It may be possible— I do not put it more strongly than that — for the Department, when it is negotiating, to encourage the water authorities to take on those sewers as part of the deal. That would be the very best, but, at the very worst, perhaps the Department could encourage the water authorities to come to some financial arrangement with those millions of people throughout the country whereby they could reach a financial settlement to free themselves from the timebombs on which they are sitting.
    I know that Opposition Members hold sincere views, but I remind them that millions of people look to the water privatisation Bill as perhaps the only way of getting out of a great dilemma about old sewers that may not have been adopted. In most cases they have been adopted, but that cannot be proved.
    Mr. Moynihan: The results of the sewerage law review are being considered by my colleagues in the Department. I can give the hon. Gentleman the undertaking that his comments have been well aired, Will be taken into account and that the outcome of those considerations will in part be reflected in the main Bill. I can assure the hon. Member that his points about the future shape of the water industry will be at the heart of the substantive legislation that will be prepared during the coming months and brought before Parliament in the autumn. The detailed consultation exercise, not least on the National Rivers Authority, will be critical.
    The amendment is proposed to clause 8 which deals with the commencement and extent of the provisions of the Bill. When first presented to e House, subsection (2) provided that clauses 2 to 6 and the schedules to the Bill would come into force two months after Royal Assent. That provision was amended by me in Committee to make the coming into force of those provisions dependent upon an order or orders made by the Secretary of State through statutory instrument appointing a day or days for commencement. As I explained in Committee, the amendment served to give flexibility and to help the consumers and the undertakers. I offered various examples of the way in which we expected to use that flexibility. Our amendment allows the Secretary of State to delay the coming into force of that provision until undertakers have had sufficient opportunity to let their metered customers know about the new requirement. I explained in Committee that the Bill's other provisions, in particular clause 1, would come into force on Royal Assent. The Opposition amendment would mean instead that those other provisions would require an order, or orders, made by the Secretary of State to come into force.
    We do not consider that this additional procedural requirement is either necessary or appropriate for the other provisions. We wish to see neither delay nor the
    936
    prospect of delay between the enactment of the Bill and the availability to water authorities and the electricity supply industry of the express power provided to them by clause 1.
    Once the will of Parliament has been expressed and Parliament has approved the Bill, the water authorities will wish to put the clause 1 power into use and make progress towards the new structure for the industry that we have proposed. The amendment seeks to introduce an unnecessary procedural hurdle into the work of preparation and it should be withdrawn. Despite having had a rather wide-ranging debate on an amendment which I followed with interest, I am not completely sure how closely it followed amendment No. 7.
    Mr. Boyes: My hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) has covered the amendment extremely well and left little for me to say. I can only reiterate that the proposals for privatisation in the Bill allow the authorities to do virtually anything. We argued at length in Committee about that. We are concerned about the undermining of democracy and the circumventing of Parliament—two key themes—in that the role of Parliament is continuously reduced by the activities of Ministers. Opposition Members are adamant that we shall ensure that the main enabling Ball is vigorously opposed.
    The Minister has not explained why it is necessary to have an enabling Bill. I beg the Minister's indulgence to ask a further question about the relationship between the privatisation proposals and VAT. When the Minister answered the question from my hon. Friend the Member for Gateshead, East (Ms. Quin) he did not appear to realise that the European Court decision to which my hon. Friend referred related specifically to industrial users of water. The Minister should get hold of an article in The Independent on Tuesday 8 December 1987 in which there is a discussion of the Commission's general VAT rate and harmonisation measures. It refers to a 4 per cent. to 9 per cent. charge on water users. Presumably that applies to both industrial and domestic users. Water supply is included among the list of half a dozen possibilities for VAT, which also includes foodstuffs. The Minister may not wish to respond immediately; he may want to consider that point carefully. There is a clear distinction in this case. The Minister is honest and has never misled us and I accept that he gave his earlier reply with all integrity.
    9.45 pm
    Ms. Quin: The Government have given a commitment that they would not apply VAT to food, children's clothes or fuel. However, they have not given an assurance that they would not impose it on books, newspapers, periodicals or water charges, despite the case in the European Court. As I understand it, the European Commission's general proposals for VAT harmonisation include water charges, which would relate to industrial and domestic users.
    Mr. Boyes: As the Minister is aware, my hon. Friend the Member for Gateshead, East is still a Member of the European Parliament and she follows Commission matters closely. We are trying to be helpful as well as trying to elicit information. If the Minister prefers to have a little time on this matter, it would be acceptable if he gave us a written reply. However, we disagree with his argument on amendment No. 7.
    Mr. Moynihan: It would be foolish of a Minister to stand at the Dispatch Box and pre-empt any possible decision that the Chancellor of the Exchequer may take about the Budget. I would not wander down that road on any of the issues raised by the hon. Gentleman and that covers every aspect of the budgetary process. Opposition Members must be aware that I would not do that. However, the Commission's proceedings against the United Kingdom are relevant. I want to make it clear—and I repeat this point—that the case does not concern domestic supplies. It is only relevant for industry and I place that on the record.
    Amendment negatived.

  Schedule 1

    PROVISIONS RELATING TO METERS ETC.
    Ms. Walley: I beg to move amendment No. 8, in page 13, line 30, leave out 'so much' and insert 'no part'.
    Mr. Speaker: With this it will be convenient to take amendment No. 9, in page 13, line 31, leave out
    `as is attributable to compliance with a request'
    and insert
    'if a reasonable request is'.
    Ms. Walley: I want to be brief. If the amendment was accepted it would amount to a reasonable amendment to the Bill as any "reasonable request" by a water consumer would mean that where it was necessary to adjust or change the siting of a water meter in someone's home the water undertaker or water company would meet the cost rather than the individual consumer.
    It is important to put the amendments into the context of the legislation as a whole. Consumers have every right to be concerned about the legislation's financial effects, not only on those who are facing increased charges as a result of the installation of water meters in the compulsory metering areaa, but on those throughout the country who will have to meet the extra costs incurred as a result of paying off outstanding debts to water authorities to pave the way for privatisation. On top of that, consumers are likely to face a position whereby water authorities will state that a water meter must be sited in a particular position in a home. The consumer will have to meet the cost should it be necessary to change the position of that water meter.
    It would be easy to extend the references made earlier about consumer protection to some kind of charter for consumers which would include the right for any consumer to make a reasonable demand or suggestion to the water authority about where a meter should be sited. It seems to us entirely wrong and unfair that consumers should be forced to have a meter in their own homes, in a totally unsuitable place, or to meet the cost of putting such meters elsewhere. It is on the basis of extending consumer rights in the water industry that we have tabled these reasonable amendments.
    Mr. Moynihan: The amendments would place on most undertakers an unacceptable burden of needless expenditure. Undertakers would not be able to recover the extra costs associated with resiting a meter in a position other than that reasonably proposed by the undertaker.
    The question of reasonable location for meters would be governed by regulations on siting to be made under clause 5. The hon. Lady is aware of the three options for
    938
    siting: close to the curtilage of the property, either outside or inside the boundary; as near as possible to the outer wall of the building, and as close as possible to the entry point of the supply pipe into the building; or inside the building, as close as possible to both the internal stop tap and the entry point of the supply pipe into the building or dwelling. Undertakers should respond to reasonable requests to resite meters, and it will be open to them, in some exceptional circumstances, not to make a charge for that.
    If that were as far as we went, I would feel that the hon. Lady had a case. However, the most important and critical part of the argument that I am developing is that, in cases of dispute, there is scope for arbitration under schedule 1, paragraph 9. The hon. Lady mentioned the possibility of a totally unsuitable place. I would argue that the possibility of a meter being placed in a totally unsuitable place might well be covered in arbitration. However, it is unacceptable for undertakers always to be required to bear the full cost of resiting meters, especially when the original positioning of the meter complies with regulations to be made under the Bill. Undertakers could be forced into lengthy arbitration about what constitutes a reasonable request, for which all their customers would pay through future Bills.
    I hope that my explanation of the importance that we attach to the need for arbitration will find agreement coming from Opposition Members as well as my hon. Friends, and I invite the House to reject the amendment.
    Mr. Boyes: The Minister has talked about scope for arbitration. However, it is interesting that, in replying to the important points made by my hon. Friend the Member for Stoke-on-Trent, North (Ms. Walley), he never once mentioned the word "consumer". His reply was all about the annoyance, inconvenience and concern of the water undertakers. It never entered his head that we had handed him on a golden platter the opportunity to disprove much of what we have been arguing this evening, and for many hours in Committee: that Opposition Members are concerned first and foremost with the consumers' needs, concerns and worries. Once again, the Minister stands up and says, "Well, it might inconvenience the water undertaker if someone wanted a meter moved." Of course it might, but that is the kind of business that we are in. Water undertakers may find themselves inconvenienced from time to time.
    We are on the side of the consumer. We shall continue to fight for the consumers' rights and to lobby for the consumer. We accept that the final vote this evening will go the Government's way. However, many people will be concerned with water meter trials, and, after that, with universal metering. Right up to the end of the Bill, we shall continue, with strengthened arguments, to protect the rights of the consumer.
    Amendment negatived.
    Order for Third Reading read.
    9.54 pm
    Mr. Moynihan: I beg to move, That the Bill be now read the Third time.
    This is a short Bill, but one which is important both to the Government's privatisation programme, and the future arrangements for charging for water supplies. We have had an exhaustive examination of it in Committee, and I believe that we represent the Bill to the House with some significant improvements.

    939
    I confess myself deeply impressed by the knowledge of hon. Members on the various subjects, but perhaps chiefly by the expertise of the hon. Member for Normanton (Mr. O'Brien) whose past service in the water industry was frequently in evidence to assist the elucidation of many otherwise obscure points.
    In Committee, we amended the metering and charges provisions. In particular, we introduced a new provision to enable water undertakers to require the installation of meters in new or converted houses, or to stipulate that plumbing he suitable for later installation of meters.
    Provided that the House gives the Bill a Third Reading tonight, as I am confident it will, it will go from here to another place significantly strengthened and improved not least, indeed foremost, in the interests of the consumer. Those of us most concerned can now turn our attentions to the policy objectives that the Bill enables us to implement. We look forward with confidence to the successful introduction of privatisation legislation, both for water and electricity, and to the programme of metering trials and the lessons that we in Government, and the water industry, will learn from that.
    I commend the Bill to the House.
    9.55 pm
    Mrs. Virginia Bottomley: Much has been made of the importance of the metering trials and much of what the Minister has said will reassure people. Many may be ignorant of the fact that we have had metering of water since the end of the 19th century.
    The most important feature of the Bill is that it prepares the way for privatisation. The privatisation policies of the Government have been one of our major successes. More than a third of those previously working in the public sector are now working in the private sector. People are more responsible for their own lives, managing their own companies and keeping Whitehall further away from their concerns.
    Many will be reassured by the proposals for a National Rivers Authority providing for integrated river management and pollution control. Recently, there has been worry about the quality of our rivers: our constituents will bear testimony that this is a subject of growing concern.
    This may be one of the last opportunities to discuss the substantive issues involved in privatisation before the Government finalise their proposals. Before moving forward, at this stage I would like my hon. Friend to give full consideration to the model offered by the statutory water companies. Much is made of the fact that 25 per cent. of water is already supplied by the 28 statutory water companies. I have the privilege to be a director of one of those companies. My friend, Sir John Page, the former Member for Harrow, West, now chairman of the Water Companies Association, previously had a similar responsibility.
    The Labour party has frequently spoken about the needs of the consumer. Statutory water companies, based on a philosophy of service, act as mutual companies together with the consumers. The dividends are limited by law and surplus funds must be applied to reducing future water rates. With the provision of water serious consideration must be given to long-term investment. Each generation provides the long-term infrastructure necessary to supply water for future generations. If we
    940
    move towards plcs, primarily focusing on the returns to the shareholder, there may be serious implications for the water industry.
    I ask my hon. Friend to follow the advice offered by my noble Friend Lord Nugent the other day who asked that the model of the statutory water company, a tried, tested and trusted model, should be given every consideration before the Government moved further with legislation for water privatisation. Nevertheless, I wholeheartedly support this Bill.
    9.58 pm
    Mr. O'Brien: We have discussed at great length tonight certain issues that will be affected by the Bill. However, there is one issue to which we have not referred, but which I consider to be the most important. When the trial schemes were suggested or introduced by water undertakings no opportunity was given to the people involved in those trial areas to decide whether they wanted to be included. We consider that to be totally undemocratic.
    The people who are taking part in the trial areas have been dragooned into the trials and on that premise we shall divide the House on Third Reading. We consider the Bill to be totally unfair, unreasonable and undemocratic. Against that background we suggest that the Government should withdraw the Bill or we shall vote against it.
    10 pm
    Mr. Moynihan: By leave of the House, I should like to express my thanks to those hon. Members who served on the Standing Committee and those other hon. Members who have contributed to our deliberations today.
    I spoke earlier of the contribution of the hon. Member for Normanton (Mr. O'Brien), but I should like to place on record my appreciation of the efforts of all the Committee members in scrutinising and testing the Bill's provisions.
    The Bill is concerned with two of Britain's most essential industries. The attention that it has received has been commensurate with the importance of the subject. The Bill has been thoroughly considered in Committee and our discussions today have allowed further examination of some of its most important aspects. It is now ready to go to another place, and I commend it to the House.
    Question put, That the Bill be now read the Third time:—
    The House divided: Ayes 267, Noes 223.

    Division No. 163]

    [10 pm

    AYES

    Adley, Robert

    Biffen, Rt Hon John

    Alison, Rt Hon Michael

    Biggs-Davison, Sir John

    Allason, Rupert

    Blackburn, Dr John G.

    Amess, David

    Blaker, Rt Hon Sir Peter

    Arbuthnot, James

    Body, Sir Richard

    Arnold, Jacques (Gravesham)

    Bonsor, Sir Nicholas

    Ashby, David

    Boscawen, Hon Robert

    Aspinwall, Jack

    Boswell, Tim

    Atkins, Robert

    Bottomley, Peter

    Atkinson, David

    Bottomley, Mrs Virginia

    Baker, Nicholas (Dorset N)

    Bowden, Gerald (Dulwich)

    Baldry, Tony

    Bowis, John

    Banks, Robert (Harrogate)

    Boyson, Rt Hon Dr Sir Rhodes

    Beaumont-Dark, Anthony

    Brazier, Julian

    Bellingham, Henry

    Bright, Graham

    Bendall, Vivian

    Brittan, Rt Hon Leon

    Bennett, Nicholas (Pembroke)

    Brooke, Rt Hon Peter

    Benyon, W.

    Bruce, Ian (Dorset South)

    Bevan, David Gilroy

    Buchanan-Smith, Rt Hon Alick

    941

    Buck, Sir Antony

    Hayes, Jerry

    Budgen, Nicholas

    Hayhoe, Rt Hon Sir Barney

    Burns, Simon

    Hayward, Robert

    Burt, Alistair

    Heathcoat-Amory, David

    Butcher, John

    Heddle, John

    Butler, Chris

    Heseltine, Rt Hon Michael

    Butterfill, John

    Hicks, Mrs Maureen (Wolv' NE)

    Carlisle, Kenneth (Lincoln)

    Hill, James

    Carrington, Matthew

    Hind, Kenneth

    Carttiss, Michael

    Hogg, Hon Douglas (Gr'th'm)

    Cash, William

    Holt, Richard

    Chapman, Sydney

    Hordern, Sir Peter

    Chope, Christopher

    Howard, Michael

    Clark, Dr Michael (Rochford)

    Howarth, Alan (Strat'd-on-A)

    Clark, Sir W. (Croydon S)

    Howarth, G. (Cannock & B'wd)

    Colvin, Michael

    Howell, Rt Hon David (G'dford)

    Conway, Derek

    Howell, Ralph (North Norfolk)

    Coombs, Anthony (Wyre F'rest)

    Hughes, Robert G. (Harrow W)

    Coombs, Simon (Swindon)

    Hunt, David (Wirral W)

    Cope, John

    Hunt, John (Ravensbourne)

    Cormack, Patrick

    Hunter, Andrew

    Couchman, James

    Irvine, Michael

    Cran, James

    Irving, Charles

    Currie, Mrs Edwina

    Jack, Michael

    Curry, David

    Jackson, Robert

    Davies, Q. (Stamf'd & Spald'g)

    Janman, Timothy

    Davis, David (Boothferry)

    Johnson Smith, Sir Geoffrey

    Day, Stephen

    Jones, Gwilym (Cardiff N)

    Devlin, Tim

    Jones, Robert B (Herts W)

    Dickens, Geoffrey

    Kellett-Bowman, Dame Elaine

    Dicks, Terry

    Key, Robert

    Dorrell, Stephen

    King, Roger (B'ham N'thfield)

    Douglas-Hamilton, Lord James

    Knapman, Roger

    Dover, Den

    Knowles, Michael

    Dunn, Bob

    Lang, Ian

    Dykes, Hugh

    Lawrence, Ivan

    Eggar, Tim

    Lee, John (Pendle)

    Emery, Sir Peter

    Leigh, Edward (Gainsbor'gh)

    Evans, David (Welwyn Hatf'd)

    Lester, Jim (Broxtowe)

    Evennett, David

    Lilley, Peter

    Fairbairn, Nicholas

    Lloyd, Peter (Fareham)

    Fallon, Michael

    Maclean, David

    Farr, Sir John

    McLoughlin, Patrick

    Favell, Tony

    McNair-Wilson, M. (Newbury)

    Fenner, Dame Peggy

    Marshall, John (Hendon S)

    Field, Barry (Isle of Wight)

    Martin, David (Portsmouth S)

    Finsberg, Sir Geoffrey

    Miscampbell, Norman

    Fookes, Miss Janet

    Mitchell, Andrew (Gedling)

    Forman, Nigel

    Moate, Roger

    Forsyth, Michael (Stirling)

    Monro, Sir Hector

    Fox, Sir Marcus

    Moss, Malcolm

    Franks, Cecil

    Moynihan, Hon C.

    Freeman, Roger

    Neale, Gerrard

    French, Douglas

    Needham, Richard

    Gale, Roger

    Neubert, Michael

    Garel-Jones, Tristan

    Newton, Rt Hon Tony

    Gill, Christopher

    Nicholls, Patrick

    Glyn, Dr Alan

    Nicholson, David (Taunton)

    Goodhart, Sir Philip

    Nicholson, Miss E. (Devon W)

    Goodlad, Alastair

    Page, Richard

    Goodson-Wickes, Dr Charles

    Paice, James

    Gorman, Mrs Teresa

    Patnick, Irvine

    Gow, Ian

    Patten, Chris (Bath)

    Gower, Sir Raymond

    Pawsey, James

    Greenway, Harry (Ealing N)

    Peacock, Mrs Elizabeth

    Greenway, John (Rydale)

    Porter, Barry (Wirral S)

    Griffiths, Sir Eldon (Bury St E')

    Porter, David (Waveney)

    Griffiths, Peter (Portsmouth N)

    Powell, William (Corby)

    Grist, Ian

    Price, Sir David

    Ground, Patrick

    Raffan, Keith

    Grylls, Michael

    Rathbone, Tim

    Gummer, Rt Hon John Selwyn

    Redwood, John

    Hamilton, Hon A. (Epsom)

    Rhodes James, Robert

    Hampson, Dr Keith

    Rhys Williams, Sir Brandon

    Hanley, Jeremy

    Riddick, Graham

    Hannam, John

    Ridley, Rt Hon Nicholas

    Hargreaves, A. (B'ham H'll Gr')

    Ridsdale, Sir Julian

    Harris, David

    Roberts, Wyn (Conwy)

    Haselhurst, Alan

    Roe, Mrs Marion

    Hawkins, Christopher

    Rossi, Sir Hugh

    942

    Rost, Peter

    Thornton, Malcolm

    Rumbold, Mrs Angela

    Thurnham, Peter

    Ryder, Richard

    Townend, John (Bridlington)

    Sackville, Hon Tom

    Tracey, Richard

    Sainsbury, Hon Tim

    Tredinnick, David

    Scott, Nicholas

    Trippier, David

    Shaw, David (Dover)

    Twinn, Dr Ian

    Shaw, Sir Giles (Pudsey)

    Vaughan, Sir Gerard

    Shaw, Sir Michael (Scarb')

    Waddington, Rt Hon David

    Shelton, William (Streatham)

    Wakeham, Rt Hon John

    Shephard, Mrs G. (Norfolk SW)

    Waldegrave, Hon William

    Shersby, Michael

    Walden, George

    Skeet, Sir Trevor

    Walker, Bill (T'side North)

    Smith, Sir Dudley (Warwick)

    Waller, Gary

    Smith, Tim (Beaconsfield)

    Ward, John

    Soames, Hon Nicholas

    Wardle, C. (Bexhill)

    Speed, Keith

    Warren, Kenneth

    Speller, Tony

    Watts, John

    Spicer, Michael (S Worcs)

    Wells, Bowen

    Squire, Robin

    Wheeler, John

    Stanbrook, Ivor

    Whitney, Ray

    Steen, Anthony

    Widdecombe, Miss Ann

    Stern, Michael

    Wiggin, Jerry

    Stevens, Lewis

    Wilkinson, John

    Stewart, Allan (Eastwood)

    Wilshire, David

    Stewart, Andrew (Sherwood)

    Winterton, Mrs Ann

    Stokes, John

    Winterton, Nicholas

    Stradling Thomas, Sir John

    Wolfson, Mark

    Sumberg, David

    Wood, Timothy

    Summerson, Hugo

    Woodcock, Mike

    Taylor, Ian (Esher)

    Yeo, Tim

    Taylor, John M (Solihull)

    Young, Sir George (Acton)

    Temple-Morris, Peter

    Thatcher, Rt Hon Margaret

    Tellers for theAyes:

    Thompson, D. (Calder Valley)

    Mr. Mark Lennox-Boyd and

    Thompson, Patrick (Norwich N)

    Mr. David Lightbown.

    Thorne, Neil

    NOES

    Abbott, Ms Diane

    Clwyd, Mrs Ann

    Adams, Allen (Paisley N)

    Coleman, Donald

    Allen, Graham

    Cook, Robin (Livingston)

    Anderson, Donald

    Corbett, Robin

    Archer, Rt Hon Peter

    Corbyn, Jeremy

    Armstrong, Ms Hilary

    Cousins, Jim

    Ashdown, Paddy

    Cox, Tom

    Ashley, Rt Hon Jack

    Crowther, Stan

    Ashton, Joe

    Cryer, Bob

    Banks, Tony (Newham NW)

    Cummings, J.

    Barnes, Harry (Derbyshire NE)

    Cunliffe, Lawrence

    Barron, Kevin

    Cunningham, Dr John

    Battle, John

    Dalyell, Tarm

    Beckett, Margaret

    Darling, Alastair

    Beith, A. J.

    Davies, Ron (Caerphilly)

    Bell, Stuart

    Davis, Terry (B'ham Hodge H'l)

    Benn, Rt Hon Tony

    Dewar, Donald

    Bennett, A. F. (D'nt'n & R'dish)

    Dixon, Don

    Bermingham, Gerald

    Dobson, Frank

    Bidwell, Sydney

    Doran, Frank

    Blair, Tony

    Douglas, Dick

    Blunkett, David

    Duffy, A. E. P.

    Boateng, Paul

    Dunnachie, James

    Boyes, Roland

    Dunwoody, Hon Mrs Gwyneth

    Bradley, Keith

    Eadie, Alexander

    Bray, Dr Jeremy

    Eastham, Ken

    Brown, Nicholas (Newcastle E)

    Ewing, Harry (Falkirk E)

    Brown, Ron (Edinburgh Leith)

    Ewing, Mrs Margaret (Moray)

    Bruce, Malcolm (Gordon)

    Fatchett, Derek

    Buckley, George

    Faulds, Andrew

    Caborn, Richard

    Fearn, Ronald

    Callaghan, Jim

    Field, Frank (Birkenhead)

    Campbell, Menzies (Fife NE)

    Fields, Terry (L'pool B G'n)

    Campbell, Ron (Blyth Valley)

    Flannery, Martin

    Campbell-Savours, D. N.

    Flynn, Paul

    Canavan, Dennis

    Foot, Rt Hon Michael

    Carl Me, Alex (Mont'g)

    Foster, Derek

    Clark, Dr David (S Shields)

    Foulkes, George

    Clarke, Tom (Monklands W)

    Fraser, John

    Clay, Bob

    Fyfe, Mrs Maria

    Clelland, David

    Galbraith, Samuel

    943

    Galloway, George

    Moonie, Dr Lewis

    Garrett, John (Norwich South)

    Morgan, Rhodri

    Garrett, Ted (Wallsend)

    Morley, Elliott

    George, Bruce

    Morris, Rt Hon J (Aberavon)

    Gilbert, Rt Hon Dr John

    Mowlam, Marjorie

    Godman, Dr Norman A.

    Mullin, Chris

    Golding, Mrs Llin

    Murphy, Paul

    Gordon, Ms Mildred

    Nellist, Dave

    Graham, Thomas

    Oakes, Rt Hon Gordon

    Grant, Bernie (Tottenham)

    O'Brien, William

    Griffiths, Nigel (Edinburgh S)

    O'Neill, Martin

    Griffiths, Win (Bridgend)

    Orme, Rt Hon Stanley

    Grocott, Bruce

    Parry, Robert

    Hardy, Peter

    Patchett, Terry

    Harman, Ms Harriet

    Pendry, Tom

    Heffer, Eric S.

    Pike, Peter

    Henderson, Douglas

    Powell, Ray (Ogmore)

    Hinchliffe, David

    Prescott, John

    Holland, Stuart

    Primarolo, Ms Dawn

    Home Robertson, John

    Quin, Ms Joyce

    Hood, James

    Radice, Giles

    Howarth, George (Knowsley N)

    Randall, Stuart

    Howell, Rt Hon D. (S'heath)

    Redmond, Martin

    Howells, Geraint

    Rees, Rt Hon Merlyn

    Hoyle, Doug

    Richardson, Ms Jo

    Hughes, John (Coventry NE)

    Roberts, Allan (Bootle)

    Hughes, Robert (Aberdeen N)

    Robinson, Geoffrey

    Hughes, Roy (Newport E)

    Rogers, Allan

    Hughes, Sean (Knowsley S)

    Rooker, Jeff

    Hughes, Simon (Southwark)

    Ross, Ernie (Dundee W)

    Illsley, Eric

    Rowlands, Ted

    Ingram, Adam

    Ruddock, Ms Joan

    Janner, Greville

    Salmond, Alex

    John, Brynmor

    Sedgemore, Brian

    Jones, Martyn (Clwyd S W)

    Sheerman, Barry

    Kaufman, Rt Hon Gerald

    Sheldon, Rt Hon Robert

    Kilfedder, James

    Shore, Rt Hon Peter

    Kirkwood, Archy

    Short, Clare

    Lambie, David

    Skinner, Dennis

    Lamond, James

    Smith, Andrew (Oxford E)

    Leighton, Ron

    Smith, C. (Isl'ton & F'bury)

    Lestor, Miss Joan (Eccles)

    Snape, Peter

    Lewis, Terry

    Soley, Clive

    Litherland, Robert

    Spearing, Nigel

    Livingstone, Ken

    Steel, Rt Hon David

    Livsey, Richard

    Steinberg, Gerald

    Lloyd, Tony (Stretford)

    Stott, Roger

    Lofthouse, Geoffrey

    Strang, Gavin

    McAllion, John

    Straw, Jack

    McAvoy, Tom

    Taylor, Mrs Ann (Dewsbury)

    McCartney, Ian

    Taylor, Matthew (Truro)

    Macdonald, Calum

    Thomas, Dafydd Elis

    McFall, John

    Thompson, Jack (Wansbeck)

    McKay, Allen (Penistone)

    Turner, Dennis

    McKelvey, William

    Wall, Pat

    McLeish, Henry

    Wallace, James

    McNamara, Kevin

    Walley, Ms Joan

    McTaggart, Bob

    Wardell, Gareth (Gower)

    McWilliam, John

    Welsh, Andrew (Angus E)

    Madden, Max

    Welsh, Michael (Doncaster N)

    Mahon, Mrs Alice

    Wigley, Dafydd

    Marek, Dr John

    Williams, Alan W. (Carm'then)

    Marshall, David (Shettleston)

    Wilson, Brian

    Marshall, Jim (Leicester S)

    Winnick, David

    Martlew, Eric

    Wise, Mrs Audrey

    Maxton, John

    Worthington, Anthony

    Meacher, Michael

    Wray, James

    Meale, Alan

    Young, David (Bolton SE)

    Michael, Alun

    Michie, Bill (Sheffield Heeley)

    Tellers for the Noes:

    Michie, Mrs Ray (Arg'l & Bute)

    Mr. Frank Haynes and

    Millan, Rt Hon Bruce

    Mr. Frank Cook.

    Mitchell, Austin (G't Grimsby)

    Question accordingly agreed to.
    Bill read the Third time, and passed.

Industrial Training Levy
10.12 pm
The Parliamentary Under-Secretary of State for Employment (Mr. Patrick Nicholls): I beg to move,
That the draft Industrial Training Levy (Engineering Board) Order 1988, which was laid before this House on 13th January, be approved.
Our debate tonight takes place because any industrial training levy order which involves a levy exceeding 1 per cent. of an employer's payroll must receive parliamentary approval under the Industrial Training Act 1982. In the case of the Engineering Industry Training Board, one part of the levy proposals—that covering site employees in the mechanical and electrical engineering construction sector—establishes a levy rate of 1·12 per cent. and requires approval under the affirmative resolution procedure.
The board's levy proposals for 1988 show no change from those approved by the House in March of last year. The board anticipates that it will raise some £19·6 million from the levy, after allowing for exemption. The levy will apply to those firms which fall within the scope of the board between the date the order comes into force and 31 August 1988.
The levy proposals are in two parts, the first applying to mainstream engineering, and the second to the mechanical and electrical engineering construction industry. I shall briefly outline the proposals in both sectors.
For mainstream engineering establishments the board proposes a total levy of I per cent. of an employer's payroll. For an establishment with fewer than 1,000 employees, 0·08 per cent. of payroll will be non-exemptible; larger establishments will pay a non-exemptible levy of 0·08 per cent. in respect of the first 1,000 employees and 0·072 per cent. in respect of the remainder. The bulk of the levy is therefore non-exemptible— that is, employers who train satisfactorily will be given credit for this and will not be required to pay the maximum levy to the board. In addition, firms employing 40 workers or fewer will be excluded totally from paying levy. Some 68 per cent. of firms employing 12 per cent. of the work force will be excluded from levy because of their size.
For the mechanical and electrical engineering construction sector, again the levy proposals are the same as those approved last year. In this sector, arrangements differ for workers employed on site, and those employed off site. For on-site employees no levy is payable on the first £50,000 of payroll; above that, a non-exemptible levy of 1·12 per cent. will apply, and 31 per cent. of establishments employing 0–5 per cent. of the work force will be below the levy threshold.
For off-site employees, establishments with up to 30 employees will be excluded from levy; this will mean that some 79 per cent. of establishments employing 11 per cent. of the work force will not pay levy. Establishments with more than 30 employees will be levied at 1 per cent. of payroll. The non-exemptible element of this levy will be 0·15 per cent.
The raising of a non-exemptible levy in excess of 0·2 per cent. in the on-site sector means that the board must satisfy another requirement of the Industrial Training Act 1982 — that there should be a proven employer consensus in the industry for the proposals. Employer

945
organisations representing more than half the employers liable to pay levy, and also representing employers liable to pay more than half the total levy between them, have confirmed their agreement to the proposals, thus satisfying the conditions of the Act.
The proposals before the House that we are debating tonight were approved unanimously by the board and the Manpower Services Commission. They show no change from those approved by the House in March last year. Therefore, I commend them to the House.
10.16 pm
Mr. Barry Sheerman: As usual, the Opposition support the order and congratulate the board on its past work and proven desire to adopt and adapt to the changing realities of training. Some of us get used to the routine of supporting orders such as this and I welcome the Minister to yet another late night session.
Since last year, a number of initiatives have come out of the Engineering Industry Training Board which has long recognised that, even with the levy exemption system and a statutory board for this sector of industry, there is still a failure adequately to train sufficient highly skilled men and women to maintain this leading, indeed the largest, sector of our manufacturing industry.
Even with the small economic upturn that we have seen in recent months, and against the backdrop of an industry which now employs only 1·9 million workers when as recently as 1979 it was employing 3 million workers, we are already experiencing dreadful skill shortages in the industry which strike dangerously at the heart of our ability to compete successfuly as an industrial nation and successfully to create wealth by meeting the challenges of technology and international markets.
Only last month a report—I wait for the Minister to listen to this because it is something that he should digest and think about — from the National Institute of Economic and Social Research revealed the appalling gap that exists, and progressively opens, between us and the major countries with which we are in direct competition in the engineering sector.
The report reveals that between 1975 and 1985—a period of 10 years — compared with Germany and France we have done appallingly badly at producing a trained work force with engineering qualifications. Between 1975 and 1985 France increased by 60 per cent. the numbers of people obtaining craft-level vocational qualifications. In the same period, Germany increased its numbers by 35 per cent. And what did Britain do? The United Kingdom achieved a decrease in the numbers of these skilled personnel of 30 per cent. That is a depressing picture to paint on a night when we are discussing the Engineering Industry Training Board and its ability to carry out its functions on its present levy and on the levy proposed tonight. Let me put the percentages in real numbers of how many people obtained craft engineering qualifications: 10,800 received them in 1985 in this country; in France, 27,000 qualified—two and a half times as many; in Germany, 55,000 qualified—five times more.
Even on a night when we agree with the order, I recommend that the Minister read the national institute's report seriously and examine its recommendations. They are not all to be swallowed at one gulp, but the report
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shows that France and Germany, using different methods from ours, are taking training in the engineering industry seriously and attempting to do something about it. France, like us, started from well behind the Germans, but recognised that there was a problem and used its own institutions in its own way to meet the challenge. The problem with our country is that the Government do not recognise the problem or react to the challenge.
Why, in spite of the training board and the levy, does our country fail to produce the skills that we need? I shall suggest some reasons; we have rehearsed them before, but it is worth telling the House about them tonight. First, only 50 per cent. of those working in the engineering industry work in the engineering sector as described in the Industrial Training Act 1982. Fifty per cent. work outside in the service industries, the financial sector and beyond. They are beyond the remit of the board and outside its scope. One might agree with some of the engineering employers who ask why they should train qualified engineers when they will be recruited by someone who paid nowt for their training.
Secondly, employers with fewer than 40 employees are on the register but are not included in the liability for the levy. That is a large percentage. This country has many small engineering workshops with about 20 or 30 men. So 12·5 per cent. of the industry goes out, because firms with fewer than 40 are excluded. Thirdly, some of the small and large companies that have long been regarded as reasonable trainers have never understood the crucial fact that British companies, unlike our international competitors, seem unable to grasp, which is that our companies too often regard training not as an investment but as a cost. That is a sad reflection on what is happening to the training of the work force in this country.
Over the past nine years the Government have abolished all but a handful of statutory training boards. I am sorry to say that the recent Anderson report for the Manpower Services Commission shows what has happened to the sectors of the industry for which the boards were abolished. We know how disastrous that has been for all those sectors, apart from the few examples that the reports picks out as shining lights in a dark and tragic picture.
The Government have spent most of their money on programmes centred on the unemployed. That is not surprising, as unemployment has risen under the Government's policies. So most of the wealth put the way of training has been for programmes that are not so much for training but for income support aimed at the unemployed. What has been wrong with the country and what has happened to the Engineering Industry Training Board—even with its levy—has been an inability to do as much as can and should be done to train the work force in work, which is the fastest route to increasing productivity and wealth creation.
The Government have never understood the central lesson that other competitive countries have learned, that the sum of individual companies pursuing their individual training progammes, their own company interests and their own company benefits, will never add up to a training programme for this or any other sector of industry. What is more, it will never add up to anything that produces a training policy in the national interest.
There is only one body responsible for the national interest—the Government. But this Government have a total lack of a national strategy. It has always been

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replaced by a potent and corrosive ideology. The Engineering Industry Training Board has informed the Government often of the crisis in engineering training. We faced a crisis last year and the year before; we have faced it over the last nine years. [Interruption.] The Minister's hon. Friend seems to be running a book; it would be interesting to know what he is betting on. I should not like to run a book on the crisis in the engineering industry. If hon. Members want to bet on the British racehorse in terms of competitiveness, it is not a very good one to bet on under this Government. We are in the midst of a steel crisis and we are facing bottlenecks, steel shortages and a loss of competitiveness internationally.
The Government are still obsessed with the myth that the free market will deliver what the country needs with no real Government direction. The Labour party says that what is needed is leadership and commitment to provide a trained base of human resource without which we cannot succeed, as every industrial nation knows. We should look to the future, not towards yesterday or how well we did 20 or 100 years ago.
At the beginning of the week I had a meeting with the Engineering Employers' Federation. It was a disturbing and worrying experience. When I have talked to its counterparts in the United States, Germany and France, I have found people who want to move into innovation and who have prepared themselves and their country for future challenges and for being in the forefront of technology and engineering. What I found with the Engineering Employers' Federation here was a great desire to remain in the past, to look only to the short-term future of their own companies and not to the future of their sector or their country. I find that profoundly depressing and disturbing.
Some of the nostrums so popular in organisations like the Engineering Employers' Federation will be the epitaph of British industry in years to come unless we have a Government who say that they have a national interest to train. There must be a strategy to train. We must take it forward in a leadership role. I suspect that the Government will allow organisations like the Engineering Employers' Federation to lead. Indeed, the proposals to change the complexion of the board and the nature of the Manpower Services Commission lead me to believe that there is no longer a national strategy for training but merely a wish to follow the dictates of individual companies. I repeat that that does not open the way to a strategy for training that will benefit this country in the years to come.
So I end on a profoundly pessimistic note. Yes, we have an Engineering Industry Training Board and it is doing a relatively good job. But much more needs to be done in this sector. Mechanisms, plans and an impetus from Government are needed so that training in this sector is taken on as never before.
I refer to a report in the Financial Times only this week which I think gets to the heart of the problem. A study of the training programmes of major companies in this country shows that often even the large companies—and in terms of the engineering industry this means those with tremendous clout and with more than 1,000 employees —have little real direction in their training programmes. They do not know what their training is supposed to secure. They do not have a training plan that prepares the company to face the future. Indeed, many of the training programmes described by the Manpower Services
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Commission only this week are more a laying on of hands, to be able to say that they are training, doing the basics rather than doing what our competitors in the United States, Germany and Japan are doing. How can we put ourselves in the forefront of training for the new, innovative age of the next 10 or 20 years?
We shall not oppose this order, but we are profoundly worried about the direction of engineering training in this country.
Question put:—
The House proceeded to a Division—
MR. MARK LENNOX-BOYD and MR. DAVID LIGHTBOWN were appointed Tellers for the Ayes but no Members being willing to act as Tellers for the Noes, MADAM DEPLTY SPEAKER declared that the Ayes had it.
Resolved,
That the draft Industrial Training Levy (Engineering Board) Order 1988, which was., laid before this House on 13th January, be approved.
Mr. Kenneth Hind: On a point of order, Madam Deputy Speaker. Is it in order for an Opposition spokesman to say from the Dispatch Box that the Opposition will not oppose the order, but for the Opposition Whip who is on duty to shout in a very loud voice, along with his colleagues, demanding a vote on the matter? Clearly the left hand does not know what the left hand is doing in the Labour party.
Madam Deputy Speaker (Miss Betty Boothroyd): That is not a point of order for the Chair.

PETITIONS

  Rating Reform (Scotland)
  10.36 pm
  Mr. John Home Robertson: I am grateful for the fact that a Division was called, thus giving me the opportunity to leave a Standing Committee and come to the Chamber to present this petition on behalf of 235 members of the Prestonpans Labour party club. It calls on the House to repeal the legislation imposing a poll tax in Scotland.
  It is well known that there is universal feeling in Scotland that the legislation is pernicious and unfair and is likely to cause terrible hardship for many people on low incomes. There is universal feeling in Scotland that the House would be well advised to repeal this damaging legislation. I have no hesitation in supporting the petition on behalf of my constituents.
  To lie upon the Table.
  10.37 pm
  Mr. George Foulkes: For the convenience of the House, I shall present two petitions together, which are both for the repeal of the iniquitous poll tax legislation that is euphemistically entitled the Abolition of Domestic Rates Etc. (Scotland) Act.
  The two petitions are from all the members of the Cumnock and district branch of the National Association of Widows, and from the residents of Rankinston, a mining town in my constituency. The petition was carried out by S. McColgan of Scenery Hill cottage, Rankinston.

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  The number of signatures on the petition is 420, which is almost all the adult population of Rankinston. They vote almost 100 per cent. Labour—and all the better for it.
  Both the Cumnock and district branch of the National Association of Widows and the residents of Rankiston petition the House for the repeal of the Abolition of Domestic Rates Etc. (Scotland) Act, the iniquitous poll tax measure, because it is unworkable and it will be much more costly to raise the same amount of money, or in some cases less money, raised by the present rating system. Above all, it is unfair.
  To lie upon the Table.
  10.39 pm
  Mr. Calum A. Macdonald: With your permission, Madam Deputy Speaker, I beg leave to present a petition on behalf of almost 1,000 residents of the Western Isles. The petition complains that the introduction of the community charge, or poll tax, will impose upon the people of the Western Isles and upon the people of Scotland in general an unfair tax that is inefficient, to boot. It will hit particularly hard those who are already poor and also rural areas. It will be expensive to administer and it will entail intolerable intrusions upon privacy to administer.
  The petition concludes with a prayer to repeal the tax.
  To lie upon the Table.

Confectionery (Value Added Tax)
Motion made, and Question proposed, That this House do now adjourn.
10.36 pm
Mr. Doug Henderson: I am very grateful for this opportunity to consider the removal of value added tax from crisps, nuts and confectionery, including chocolate biscuits. I am also pleased that some Conservative Members are present, and I hope that at least one of them will take part in the debate.
I understand the convention that it is difficult —perhaps awkward—for the Minister to make a specific response to the matter that I am raising, certainly in quantitative terms. However, I hope that, after listening to the contributions, he will accept that issues of taxation principle are at stake and that he will feel able to refer to those principles and to give the Government's view on them, even if he enters a caveat on when any Government action might take place or the extent to which that Government action might alter the current position. I hope that the Minister will not hide behind convention —indeed, I urge him not to do so—and I hope that he will explain the Government's view on what I believe is an important issue, affecting nearly everyone in the country.
For more than a decade, hungry mouths in nearly every home have been eating crisps, nuts, confectionery, biscuits and so on, on which value added tax has been paid. At the same time—this is not a criticism; it is a comparison—food at the rich man's table, where there have, perhaps, been smoked salmon and caviar to eat, has been tax-free. Countless other luxury food items are also tax-free.
The schoolkid who likes, and can perhaps afford no more than, a packet of crisps or a chocolate biscuit at what I used to call piece-time, although I think that playtime is a more appropriate term, pays a VAT charge on those items. That child's mother, who might feel a bit peckish in the middle of the morning and, on the weeks when she is not on the Cambridge diet, might enjoy some nuts to help her out, pays value added tax on those nuts. Working men and women in industry who have an energy gap halfway through an afternoon or night shift, will often have recourse to a chocolate biscuit to give them an energy boost; they pay value added tax on that biscuit.
I am sure that hon. Members of all parties regularly visit pensioners' organisations and we all see chocolate digestive biscuits emerging at the pensioners' coffee mornings. Those biscuits attract value added tax also. All of us who, from time to time, take a break and often consume a well-known product, again a chocolate biscuit, pay value added tax on that biscuit.
The tax law on food is not only discriminatory; I would argue that it is in a muddle because some confectionery and some biscuits are taxed while others are not. A digestive biscuit is untaxed, but even if the same digestive biscuit is of the high-fibre type, which, according to the nutritionalists is better for us, if it is coated with chocolate, it is taxed. It cannot be argued that the relevant question is whether chocolate is involved in the product, because a number of other products, with a high chocolate content are tax-free.
I do not want to advertise particular brands, but I cannot think of a generic name for Jaffa cakes, which are
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untaxed, as are chocolate puddings. One of my favourites is sponge pudding, which is absolutely saturated with chocolate, and that too is untaxed if it comes out of a tin and is eaten at home.
Mr. Michael Shersby: I should like to declare an outside interest in the sugar industry. I am following the hon. Gentleman's points with great attention, because it seems a supreme irony that a tax is put on the confectionery which goes into the lunchboxes of many working men and women, when it is the Government's policy to have no tax on food.
It is interesting to consider whether, in the forthcoming Budget, the Government will suggest that that anomaly should be removed. I recall that, when the right hon. Member for Leeds, East (Mt. Healey) introduced the tax, he mentioned a number of reasons for doing so. One was that he had 400 million reasons for introducing the tax —all of them green ones. He meant that he needed the money.
The Government do not need the money now, and I hope that they will take the opportunity to remove that anomalous tax on part of the food supply in Britain. The hon. Member for Newcastle upon Tyne (Mr. Henderson) has done a great service in drawing the matter to the attention of the House.
Mr. Henderson: I am grateful to the hon. Member for Uxbridge (Mr. Shersby) for making that important point, especially in relation to packed lunches. I have been a tittle reticent about raising that subject, in case it was thought that I was arguing a particular corner.
I would have thought that the Minister might wish to associate himself with that point. I hear that, because of the austerity of the civil service, beer and sandwiches are being consumed at Treasury meetings, and that it is common for civil servants to bring packed lunches. I am sure that Treasury officials and Ministers would not want to feel that they are being discriminated against.
I shall return to the muddle. The best illustration of the muddle relates to the cookie that contains some chocolate. I always have problems with what have been called sexist comments, but I have watched my wife— and I have done it myself — prepare the ingredients. If chocolate pieces are added to a bowl of sugar and fat and the other ingredients to make cookies that contain chocolate pieces, those cookies clearly would not be taxable. However, if the same ingredients are used to bake cookies with chocolate on the outside, it is arguable the same cookies, with the same contents, will become taxable—and under existing law, they would attract VAT. That is the real muddle.
It is not surprising that there is confusion. Her Majesty's Customs and Excise must have great difficulty in determining which confectionery products should be liable for VAT. I am sure that an unnecessary amount of public expenditure goes into that determination, which should be clarified by Parliament.
Mr. Conal Gregory: I congratulate the hon. Member for Newcastle upon Tyne, North on his success in Mr. Speaker's ballot with this important debate.
In my constituency, confectionery is the No. 1 industry. I should like to follow one specific point that the hon. Gentleman raised about the uses of confectionery. I hope that my hon. Friend the Minister will explain why certain types of confectionery are zero-rated in the same way as other foods. Confectionery that is used for sacramental

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purposes is zero-rated. That was the case in 1973; the hon. Gentleman alluded to that. Earlier today, we heard in the House of the great popularity of a certain type of confectionery to which the hon. Gentleman alluded. The Minster for Employment said that 40 Kit-Kats are consumed every second—such is the industry of his Department in doing research.
We have moved away from the times when confectionery was a special item at Christmas and on Mother's day and Valentine's day — which now approaches. I conclude that we have reached the stage of snacking on confectionery, and it is right that the Treasury consider that point and the use of a whole variety of confectionery at times other than purely special occasions.
Mr. Henderson: I am grateful to the hon. Gentleman for emphasising that point. It reinforces the general argument that I am trying to present.
There is a muddle, and Customs and Excise has a very difficult job to perform. Therefore it is hardly surprising that a number of cases have ended up in court. A recent court case, Commissioners of Customs and Excise v Quaker Oats Limited, related to a chewy bar. Tax liability was determined on the basis of whether the main manufacturing process was baking or another process. That is unacceptable and far too lax. It demonstrates the inherent weakness of the law and the need for change.
We in this country are conscious of the fact that a different attitude is adopted towards the taxation of food. Value added tax is levied on food in some EEC countries, albeit at a reduced rate. I hope that I shall not embarrass the Minister by mentioning that, at the last general election, rumours were rife that, after it was over, VAT would be levied on a wide range of foods. I remember that the Government denied those rumours. I am glad that the Government were able to make their position clear about defending the interests of consumers.
There is, however, an inconsistency, because about 20 per cent. of our food—food that falls into the category of crisps, nuts and confectionery—is subject to tax. The Government accept that those items are food. When the Government prepare their statistics for the family expenditure survey, for product surveys in Economic Trends, for unemployment, for the retail price index or for overseas trade, they include all those items as part of the calculation — and rightly so. However, that shows the inconsistency of the law and the need to address that contradiction.
The Government ought not to say that they cannot comment on that point. It would be difficult for the Government to clarify the position in their Budget proposals, but the position should be established before the House decides what would be practicable. Some may argue that it would be unwise to remove taxation from some of those products, because it would inevitably lead to an increase in consumption that would be damaging to health. I do not accept that view.
Nutritionists do not agree on what is an ideal diet. However, they agree that the diet should be balanced and that it should include a combination of carbohydrates, fats and protein. The Biscuit, Cake, Chocolate and Confectionery Alliance has argued convincingly that its products contribute 22 per cent. of the carbohydrates, 15 per cent. of the fats and 7 per cent. of the protein
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consumed in this country, and that their products amount to about 15 per cent. of the average person's diet. To classify those products for taxation purposes as non-food items—as luxuries that people consume at the weekend in small quantities—flies in the face of both logic and equity.
I hope that the Government will not argue that, although they would like to do something about this, they would encounter difficulties from the European Commission. In the current case that was referred to in an earlier debate, which relates to whether we should be able to zero-rate certain services, the Advocate General for the European Court of Justice cited the instance of zero-rating food as an acceptable application of the rules within Europe. He stated that that acceptability was based on social grounds.
If the Government accept some of the arguments that I and other hon. Members have presented tonight, they cannot maintain that there is a European obstacle. The Government have a strong defence under article 28.2 of the sixth directive, which allows a review of the items that are included as VAT-exempt or VAT-reduced. Under article 17 of the directive, the Commission allows certain products to have the reduced rate introduced on social grounds.
Some of my colleagues did not like the way in which the taxation was originally applied, and I am sure that some Conservative Members felt the same. Notwithstanding the arguments, we have an obligation to the House to start with a clean sheet and examine the whole question of what is and what is not food. We should recognise that an untenable position currently exists.
Of course, revenue implications are inevitable whenever a proposition like this is put to the test in the House. In the short time that I have been a Member of the House, I have noticed that, whenever revenue implications arise, uncomfortable twitching occurs among Treasury Ministers. I do not expect anything different this evening.
However, we are not talking about the loss of all the tax revenue on these foods. I am sure that the Treasury team, understanding the secondary impact of economics, will realise that at present £590 million is raised in taxation on those products, of which about £450 million is raised from confectionery and biscuits. I know that the Minister will be aware that, by changing the law to apply taxation in the way that I and my colleagues are suggesting, he would not lose the full £590 million, or £450 million in the case of confectionery. There is a plus side to the account.
The Minister will understand that there will be benefits from the impact that reducing VAT would have on increasing the demand for products. Three of four major conglomerates which control the industry have given a commitment to control the price should taxation be removed. They know that the Government will gain from other indirect taxes and through the saving of unemployment benefit and social security as a result of increased employment in the industry. The estimate is for an additional 14,000 jobs. I would not suggest that that is a precise figure, but it is a sign of the order of the increase in employment.
Increased taxes and national insurance would accrue to the Treasury through the employment of more people in the industry and increased taxes on profits. I estimate that the net cost to the Treasury might be about £240 million in the case of confectionery and perhaps another £50 million for nuts and crisps.

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I hope that the Government will accept that the case has been made that there are inconsistencies and that the people who have suffered are in the lower and middle income groups. Packed lunches have suffered badly from the way in which taxation is levied at the moment.
I asked the Chancellor of the Exchequer about this on 26 November 1987. He replied that I should take up the matter with my right hon. Friend the Member for Leeds, East (Mr. Healey), who first introduced that tax. I do not think that that sort of dismissive reply—which we have not heard from the Minister this evening—is sufficient. We must tackle the whole question of taxation consistency, logic, equity and fairness. The issue is not one of party policy, as is clear from the support that it has received on both sides of the House.
I ask the Minster to agree to early discussions with his colleagues, and particularly with the Chancellor of the Exchequer, on the possibility of assenting to my proposals.
11 pm
Mr. Conal Gregory rose—
Madam Deputy Speaker (Miss Betty Boothroyd): Has the hon. Gentleman agreement for a second intervention?
Mr. Gregory: I sought to raise just one point, Madam Deputy Speaker.
Madam Deputy Speaker: The hon. Gentleman has already been allowed one long intervention. Has he agreement for another?
The Economic Secretary to the Treasury (Mr. Peter Lilley) indicated assent.
Mr. Gregory: I should like to delay the House for a few moments before my hon. Friend responds, mainly on financial matters, on which he is particularly competent.
First, I wish to endorse the comment by the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) about the comparison with other EEC countries. I hope that my hon. Friend will make some response on that. We are trying, under the treaty of Rome, to obtain consensus; we are out of line, particularly with Italy and West Germany, in not zero-rating confectionery, or putting it on at the same rate as other foods.
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Secondly, some 14,000 new jobs would be created if my hon. Friend sought that approach. Thirdly, may I ask him to counter the comment made, I believe erroneously, in the last Parliament by the hon. Member for Oldham, West (Mr. Meacher) that, if Labour returned to power, a tax would be imposed on sugar? That would be very regressive, and most unfortunate for the industry.
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The Economic Secretary to the Treasury (Mr. Peter Lilley): I congratulate the hon. Member for Newcastle upon Tyne, North (Mr. Henderson) on obtaining this debate, and on the eloquence and command of detail with which he has presented his case. I know that he has taken a deep interest in this subject for some time, and has great knowledge of it, as well as concern not just from the constituency angle, but for the wider principles that it raises.
I also pay tribute to my hon. Friends the Members for Uxbridge (Mr. Shersby) and for York (Mr. Gregory) for their contributions. They too have a long-standing interest in the subject and great knowledge of it, and I am grateful to them for making their points today. I am grateful, too, to the hon. Member for Newcastle upon Tyne, North for acknowledging that I am constrained by the long-standing convention that Treasury Ministers do not make substantive comments on fiscal matters during the Budget purdah period, and I hope that he will understand that.
I have listened attentively to what the hon. Gentleman and my hon. Friends have said, and I will consider it deeply and discuss it with my colleagues. I hope that the hon. Gentleman will understand that I cannot go further than that today.
I will add one point: when the hon. Gentleman spoke about what he saw as anomalies, as did my hon. Friends, I felt that the ghost of Sir Gerald Nabarro was hanging over the Chamber, and remembered that he had made a whole career on the subject I very much hope that the hon. Gentleman does not follow suit, as I would he the principal butt. However, I am grateful to him for the points that he has raised.
Question put and agreed to.
Adjourned accordingly at three minutes past Eleven o'clock.